The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
199 A meeting of the Board of Governors of the Federal Reserve 8Yetem was held in Washington on Friday, February 6, 1942, at 10:30 PRESENT: Mr. Mr. Mr. Mr. Mr. Eccles, Chairman (latter part of meeting) Ransom, Vice Chairman Szymczak McKee Draper Mr. Morrill, Secretary Mr. Bethea, Assistant Secretary Mr. Carpenter, Assistant Secretary Mr. Clayton, Assistant to the Chairman Mr. Wyatt, General Counsel Mr. Paulger, Chief of the Division of Examinations Mr. Dreibelbis, Assistant General Counsel Mr. Wingfield, Assistant General Counsel Mr. Leonard, Assistant Chief of the Division of Examinations Mr. Cagle, Assistant Chief of the Division of Dr.i nations There were presented telegrams to Mr. Young, President of the Peder 41 Reserve Bank of Boston, Mr. Sanford, Secretary of the Federal Reser ve Bank of New York, Mr. Davis, Vice President of the Federal Reaerve ank of Philadelphia, Mr. Leach, President of the Federal Reserve tallat , Of Richmond, Mr. Bowman, Assistant Vice President of the Federal rteserv e Bank of Atlanta, Messrs. Dillard and Stewart, Secretaries of the pea eral Reserve Banks of Chicago and St. Louis, respectively, Mr. Zieitler 'Vice President of the Federal Reserve Bank of Minneapolis, and kr. 'el Secretary of the Federal Reserve Bank of San Francisco, stat— t4 a that the Board approves the establishment without change by the a-1- Reserve Bank of San Francisco on February 3, by the Federal 2/6/42 -2- Reserve Banks of New York, Richmond, Atlanta, Chicago, St. Louis, and 141ntlea --po.Lis on February 5, 1942, and by the Federal Reserve Banks of 13"t°11 and Philadelphia today, of the rates of discount and purchase in their existing schedules. Approved unanimously. Before this meeting there had been circulated among the member. ' of the Board a memorandum dated January 30, 1942, from Mr. Draper 811gges tlng that the Board approve the procedure outlined in a memodated January 29, 1942, from Mr. Goldenweiser, Director of the Divisi °11 of Research and Statistics, reading as follows: It is recommended that the Board request member -A.8 to submit for a trial period monthly reports giv;:ng certain information about individual 'Commercial or industrial loans' made during the month. A copy 4. a proposed reporting form with accompanying instrucvlons is attached. 4, "It is suggested that the proposed form be sent to ;fle Federal Reserve Banks for their comments and for 111! 11 suggestions as they may wish to obtain from selected D.er banks before adopting a final form of inquiry. ' tlL4 ' s Proposal was discussed with Reserve Bank representa7es at the recent conference in New York and the sug1'2tions then received were considered in preparing the -a:ached form. A copy of a proposed letter to the RerveBanks is attached. di "Member banks can enter on the attached form each be ". " 1-ual loan at the time it is made, and it would not v....necessary for them to tabulate data from back records. the form is comprehensive and may appear complex, to , 18 in fact fairly simple to fill out; most of the inap;,mation requested can be given simply by checking the IX:°Priate column. Figures are requested for the amount fld the rate of interest charged on individual loans in for certain totals. To avoid the necessity of reportvery small loans, central reserve city banks would 4 201 2/6/42 -3- "be requested to report only loans of $5,000 and over, reserve city banks only those of !,2,500 and over, and couatry banks only those of ')].1000 and over. At the end of the month the report forms would be forwarded to the Federal Reserve Banks. It is recommended that the first report be requested for the month of March. "These reports would provide important information as to types of borrowers and purposes of bank loans currently being made, which is needed at this time in order to choose between alternative credit policies. At present 1:e do not know what types of business are borrowing from auks or what types would be shut off by restriction on ?redit. It is not known to what extent borrowing is by industries engaged in producing war goods or by others. "Representatives of the War Production Board whom we have consulted have expressed a desire for information on the volume of defense and of non-defense loans of banks. . "Information of the sort provided by the survey would 24 in analyzing the relationship of bank credit to busiess fluctuations. It would likewise be useful in our analyses of methods of financing different types and .zes of businesses, where at present information is largely limited to the corporate security markets. For -i-DtaniPle, public utility borrowing is fully analyzed so 4.0n g as it is done through the securities markets, but soon as it shifts to bank loans information is no '°nger available." T banks Mr. McKee stated that, in view of the reports that member were now required to submit, the difficulties that they were havin g in the:1. 1. were maintaining adequate personnel, and the expense to which being put in connection with the war effort, he was of the n that the request contemplated in Mr. Goldenweiser's memorandum tor additional information should not be made at this time. Mr. Draper stated that some information with respect to cm,4Lel'eial and industrial loans was being collected by the American tanker 8 Association, but that it was felt that it would be desirable 202 2/6/42 -4t° have the information called for in the suggested report form come clilbset4 to the Board as it would be of considerable assistance to the In connection with the determination of credit policies and also beca , Use representatives of the War Production Board had requested that It be obtained. After a brief discussion, Mr. Draper moved that the procedure recommended in Mr. Goldenweiser's memorandum be approved. This motion was put by the chair and carried, Mr. McKee voting "no". There was then presented a letter to Mr. Beardsley Ruml, as cha fllan of the Conference of Chairmen, reading as follows: ber "Referring to your letter of January 29, each mem, of the Board of Governors of the Federal Reserve Sys,Jeak has carefully read the report of the Committee of the sllairmen's Conference, enclosed with your letter, with reto the Balderston study on 'Executive Development in the e Federal Reserve Banks', and concurs in the Objectives Personnel Development as stated therein. "With respect to the recommendation that officers n 'raining at Federal Reserve Banks should have the opof a tour of duty at the offices of the Board ' 40vernors, the Board welcomes the opportunity to coe1:ate in carrying out such a plan. It will provide a floe space for officers on tours of duty at the Board el.r its senior staff will see that such officers have 77 oPportunity of observing the work of each division i" of becoming fully acquainted with the functions per°Ilned in all parts of the Board's organization." 4 3 Approved unanimously. At this point, Chairman Eccles, Mr. Goldenweiser, Director of the tilrision of Research and Statistics, and Mr. Gardner, Senior Econoklet in the Division of Research and Statistics, entered the room. 203 2/6/42 -5In response to a request for information with respect to the Stalitlis of the report of the American technical mission to Cuba relating to the creation of permanent financial machinery for the Republic c3f Cuba, Mr. Gardner stated that the report would recommend the creation of a central bank and that the mission was working on the details Of the organization and functions of the bank, of a currency stabilizatict und, and of a proposed agricultural bank. He said that, because Of the currency situation in Cuba, it was difficult to make provision the oPsning of the bank with earning assets or with powers to re- 8tIlict or expand credit, that for an undetermined time Cuba would be facecl with an extremely favorable balance of payments because of the demand for sugar which, in the absence of effective preventive measures, 17°1241 result in the Cuban peso going to a substantial premium, and that the Treasipm. 4J members of the mission proposed to meet that situation in rtilleh the same manner as the Treasury of the United States purchased (31c1 chlring the depression Years. He said that this would be accom1114hed bY the Cuban stabilization fund borrowing from the central bat* without interest for the purpose of purchasing dollars, which Itr°111c1 Create large excess reserves and place the central bank in some1414 the same position as the Federal Reserve System was in the 1930s en it was without power to exercise effective credit restraint. He ' -414e the f urther statement that he and Mr. Vest, the Federal Reserve of the mission, had proposed that the stabilization fund should 204 2/6/42 -6- Sell its notes in the market for the purpose of obtaining funds with which to purchase dollars much as had been done in England and that th 4041d make it possible for the central bank to be set up in such 41119411er that it would be in a position to accomplish its primary 131111/°8e of controlling the domestic credit situation. At this point, Mr. Vest, Assistant General Counsel, and Er. Bean, Economic Assistant in the Division of Research and Statistics, joined the meeting. In response to an inquiry, jr. Gardner said that the proposed LuAtirai. bank would be a separate corporation which would be owned tY the rl -40vernment and that the central bank mould have power to redise°11nt Paper for the agricultural bank and to purchase its obligations. MI% Ransom referred to the confusion that had resulted in the thlited States from the creation of an increasing number of Federal agene ies. He stated that it appeared to him that the creation Of separate agricultural bank in Cuba in the manner outlined by Mr. 41‘ciner might be the beginning of a similar confused situation there, " 4 that he would like to know whether it would be practicable for the 41"1°n to suggest the creation of a mechanism in Cuba under which 411 c't the domestic credit functions of the Government would be the l'e5P°r1sibility of the central bank. kelitz b There was a discussion of Mr. Ransom's suggestion and of corn- 31* Mr. Gardner as to the plans being made for the capitalization 205 2/6/42 'she —7— selection of the directors and management of the bank. Mr. Gar _ said that although the Board would not be expected to take a P°8iti°11 With respect to the report of the mission it would be helpful toillim and Mr. Vest if they could know how the members of the Board reit with respect to the matters to which he had referred. During the course of the discussion, the members of the Board eXPree sed agreement with the proposal of the Federal Reserve members °f th --"ission with respect to the relationship of the central bank to the st abilization fund. They also indicated that the position of the central bank should be one in which, as an arm of the Government charged with the primary responsibility of carrying out domestic ciedt P°1icies, it would have an opportunity effectively to present lt'Iriews with respect to such policies, and that all Government credit %lotions should be included in the central banking function or should be 811bsidiary to it. The suggestion was also made that the report In:Ight present the arguments for and against different plans that might be aci°13ted and that the mechanism suggested should be as simple as Possible without any of the ideas that in recent years had been proved t° he fi ctitious. At the conclusion of the discussion, a request was 41cle that Ma% Gardner keep the Board advised of the progress made in thePreParati on of the mission's report. the At this point, Messrs. Vest, Gardner, and Bean withdrew from rileeting. 206 W42 -8Further reference was made to Mr. Goldenweiser's memorandum of januarY 29, 1942, with respect to reports on commercial and indust11-8-1 loansby - member banks, and Chairman Eccles indicated that he W°111d not favor asking for the reports for the same reasons as those 8ivell by Mr. McKee. Thereupon, Mr. Draper moved that, in order that this matter might be given further consideration, the action taken earlier in this meeting with respect to it be reconsidered. Mr. Draper's motion was put by the chair and carried unanimously. In the ensuing discussion, Mr. Goldenweiser stated that it b e e-n suggested on numerous occasions that information with respect to c °Illnlercial and industrial loans be collected by the Board, that in the Present instance the request had come from the War Production kard ) and that the form now suggested for use in reporting the into 4 --Lon had been greatly simplified. Mr. Ransom suggested that the information requested mould be e311%eillelY helpful to the Board in the determination of credit policies I' be less of the present war emergency, and that consideration should erl to the possibility of discontinuing requests for any other into rmation from member banks which does not serve such a useful pur13°8e• He also pointed out that the procedure suggested in Mr. Goldenmemorandum contemplated that only the comments and suggestions th e Federal Reserve Banks would be obtained at this time and that 207 2/6/42 -9- the Board would have another opportunity to pass upon the final form or the request before it was made. At the conclusion of the discussion, Mr. Draper moved that the procedure outlined in Mr. Goldenweiser's memorandum of January 29, 1942, be approved. This motion was put by the chair and carried, Messrs. Ransom, Szymczak, and Draper voting "aye" and Messrs. Eccles and McKee voting "no". The letter to the Presidents of all Federal Reserve Banks, referred to in Mr. Goldenweiser's memorandum was approved unanimously as follows: "Because of the pressing need for more complete information on bank loans, the Board of Governors is considel :ing conducting for a trial period of three months a survey ° 1D." new commercial and industrial loans made by member anks. A suggested report form, with instructions, is enclosed. The general plan of the inquiry was discussed at the conference of System economists held in New York on December 30. "According to present plans, each member bank will be asked to fill out the form, which calls for detailed 4-nfor1Tatio1- on each commercial or industrial loan above ai -Linspecified size made during the period of one month, renewals but excluding commitments. To avoid the rl idcen of reporting very small loans, central reserve city -s will be asked to report only loans of $,000 and °ver, reserve city banks those of $2,500 and over, and ec)untry banks those of $1,000 and over, except that in ea t a bank should make less than 10 commercial or indus11 , 1-al loans of above the minimum size it shall report its ' largest loans made. "For reporting purposes, all member banks will be segre .4. roughly comparable groups, and each of hr ed into tee ZI2'gatese groups will report one month, except that in addic1c41 a number of the largest banks--perhaps 100 for the A°1-Intry as a whole--will be asked to report all loans of : 100,000 or over for the other two months. Thus informa' 4OR will be obtained for all three months as to most of Z 208 2/V42 -10- "the large loans made with a broad sample for each month as to smaller loans. Further details of the sampling procedure will be forwarded to you after final decision as to the project is made. "The total amount of commercial and industrial loans below the specified size made during the month and the total amount of all commercial and industrial loans outsanding at the beginning and the end of the month will ;'"Le° be reported, but without detailed information on i ndividual loans. "Any suggestions which you may have on the form, instructions, sampling procedure, or other aspects of :the survey will be appreciated. It is also requested that you discuss the proposal with some of your member preferably both large and small, on an informal anks'to basis ascertain whether there are points in the form or Instructions which seem to them likely to be misunderod or particularly difficult to follow. We should -Like to collect these data beginning March 1. Will you Please therefore send any suggestions and comments which Yon. have to reach us by February 19. "The Board fully appreciates the burden being inPosed on member banks by the reports which they are now jequlred to submit, and with a view to diminishing this . 1 as much as possible, the Board in the near future review the situation and communicate with you further regarding it. In the meantime if you have any comb nts or suggestions to make in this connection we will e glad to receive them." .2 F ollowing the discussion of this matter, Mr. Goldenweiser left the meeting. III% McKee referred to the discussion at the meeting of the °n. January 22, 1942, with respect to the application of the Pe°P1 8 Igt. e -ank of Lakewood Village, California, for membership in the 8Zrtem arld to the inquiry from the First Trust and Savings Bank of PA , 88.de na., California, (control of which had been recently acquired 1)11 Tra 48azerica Corporation) as to the steps to be taken to obtain 209 2/6/42 -11- Permission for the establishment of two branches, and stated that, in aee°rclance with the action taken at that meeting, the matter had been tak en uP with Mr. Crowley, Chairman of the Federal Deposit Insurance C°1‘P0 ration, and Mr. Delano, Comptroller of the Currency. In response to a request from Mr. McKee as to the recommendation of the Division of Examinations in connection with the application of the Peoples Bank of Lakewood Village for membership, Mr. Paulger stated that, if the bank were to be a bona fide local instithe Division would recommend approval of the application since there appeared to be room in Lakewood Village for a bank, the manage- teht and capital of the bank appeared to be adequate for the amount et business which it reasonably might expect to develop within the "al' future, and the outlook for successful operations appeared to be reasonably good, at least for the immediate future, since the 444ty was served by certain substantial war industries. He added that i n view of certain indications that the bank was associated in waY or another with Transamerica Corporation or its associated s:111111allies, principally through loans with respect to about 40 per cent or the eaPital stock of the bank, the application presented a question 1 " . °440Y for the Board to consider. According to the information available to the Board, the prinrelations of the proposed new bank to Transamerica Corporation Were the following: 21_0 2/6/42 1. -12Mr. John S. Griffith, who is one of the proposed directors of the Peoples Bank and who subscribed 1,000 shares or 20 per cent of the bank's capital stock, stated that he made the subscription upon the advice of Mr. A. P. Giannini and that he borrowed the full cost of the stock (25,000) on an unsecured basis from Transamerica Corporation. Mr. Griffith was informed by Mr. Giannini that if he wanted to dispose of his stock Transamerica interests would buy it. 2. West Coast Securities Company, San Francisco, which also subscribed 20 per cent of the stock of the Peoples Bank, is one of the enterprises of Mr. A. O. Stewart, who has been closely identified with the Transamerica group. The company has been borrowing from organizations in the group. 3. The subscription to stock of Peoples Bank on behalf of West Coast Securities Company is said to have been submitted by Mr. E. A. Mattison, Assistant to the President, Bank of America National Trust & Savings Association. 4. Mr. Griffith stated that he tried to persuade Mr. A. P. Giannini to establish a branch of Bank of America in the vicinity of Lakewood Village, but that a permit could not be obtained from the Comptroller of the Currency. An application of Bank of America for permission to establish a branch at Lakewood Village was rejected by the Comptroller on February 6, 1941. 5. 6. 7. Capital Company, a subsidiary of Transamerica, has loaned fixtures and safes to the Peoples Bank for use in the bank's temporary quarters. The accounting system of Peoples Bank was being installed and forms were being prepared after consultation with and upon the advice of Mr. B. F. Lane, Assistant to the Comptroller of Bank of America. Mr. E. V. Pauley, one of the proposed directors of Peoples Bank, is identified with the Giannini interests. 211 2/6/42 —13— During the discussion, it was pointed out that Peoples Bank Of La kewood Village had been chartered and that it had made prepara118 to begin business but that the State Banking Department had taken „ 'ne position that it would not issue an authorization to com— e b usiness until arrangements had been made for the institution to Pe as an insured bank. No application for insurance had been fileA With the Federal Deposit Insurance Corporation, the bank having elloeen to apply for membership in the System which, if granted, would carry • with it insurance of the bank's deposits. Mr. McKee stated that, when the matter was taken up with Messrs. eirsowl. eY and Delano, he and Chairman Eccles met with them and reviewed . the ntlre situation, including the reasons for the policy of the of— of the Comptroller of the Currency of not approving the request Of t of America National Trust & Savings Association for permission to p,. -etablish additional branches. At that meeting, he said, there was 141anim °118 agreement that the three Federal supervisory agencies should Nt a uniform policy of refusing to grant permission for the acquisitiorl °r est ablishment of additional banking offices or any substantial 141t„ est therein by Bank of America National Trust & Savings Association, Tranzeal erica Corporation, or any other unit under the direct or indirect colitrol vt of Transamerica Corporation, and that if that did not meet the Ilatic'n the three agencies should undertake to prepare legislation Mlich 11°111d prohibit further expansion of bank holding companies. In 212 2/6/42 —14— thiS connection, reference was made to legislation now pending in Con— es8 which would go so far as to require dissolution of bank holding e° Panies. Mr. McKee also said that Mr. Delano had stated that permission hadbeen given to the Bank of America National Trust and Savings Asso— levtion to establish branches in 12 different localities, with the un— derstanding in each case that a branch in another location would be cintinued, and that it was the policy of his office in all cases to disa.pprove applications of the national bank for permission to es— tablish additional branches. Mr. McKee made the further statement that Er. Crowley had addr essed a letter to the Board under date of January 18, 1942, read8'8 f011OWS : "Recently we were advised that our Supervising Ex— t_inliner for the San Francisco district was asked for an 17pression of opinion with respect to a proposed new for Lakewood Village,California. According to our information, the new bank is to be a member of the Federal, Reserve System. We are further informed that vlG least a part of the money for the enterprise is to s e'°111e from Transamerica or affiliated companies and that °111e of the individuals identified with the enterprise have always been closely associated with the Transamerica -oup. Lakewood Village, incidentally, is the same com— aunitY in which the Bank of America attempted sometime ° to establish a branch. Its application in this con— :ction was disapproved by the Comptroller of the Cur4sney. T j /sumo,"For some time we have been greatly concerned over tio -s that Transamerica intends to establish an addi— „nal State bank group in California. As the insurer ‘ ri-L the Bank of America and other affiliated banks of ransamerica, we are unalterably opposed to further ex— by- this group. We feel that the risk of the 213 2/6/42 -15Corporation in the California area is already suffic?-ently concentrated and that further expansion, intenslfYing this concentration, is highly undesirable from the Corporation's viewpoint. We feel, furthermore, that there is grave danger that the Transamerica group may seek to establish uninsured State units should the Federal authorities refuse to cooperate with their program, ..,11d, with this in mind, we intend to ask the Congress for -Legislation requiring all units of a group of holding ZITI,11Xy banks to be insured if any unit thereof is inis 4 "We are not now concerned whether Lakewood Village -al need of additional banking facilities. In our judgIllent, this is not the question. The primary question is of principle. But we do have a real concern over the 'uescapable fact that we are the insurer of the Transallierioa System to the extent of :;1,190,000,000." With respect to an inquiry received from the First Trust and nes Bank of Pasadena, California, it was explained that up to the 131 e1"1-t time no formal application for the establishment of branches the First Trust and Savings Bank of Pasadena had been received by the Board. At the conclusion of the discussion, there was unanimous agreement that, in view of all the circumstances involved, the Board, the Comptroller of the Currency, and the Federal Deposit Insurance Corporation should under existing circumstances adhere to a policy of declining permission for the acquisition, directly or indirectly, of any additional banking offices or any substantial interest therein by Transamerica Corporation, Bank of America National Trust & Savings Association, or any other unit of the Transamerica group. Thereupon, upon motion by Mr. McKee, it was voted unanimously to request the Legal Division and Division of Examinations 214 2/6/42 -16to prepare drafts of letters to the Federal Reserve Bank of San Francisco requesting that the bank inform (1) the Peoples Bank of Lakewood Village that the Board is unwilling to approve the bank's application for membership in the Federal Reserve System on the basis of the information now before it, (2) the First Trust & Savings Bank of Pasadena that the Board had reached the conclusion that it should not approve the establishment by the bank of branches at Alhambra and Temple City on the basis of the information now before it, and (3) Transamerica Corporation of the position taken by the Board with respect to the acquisition by the Corporation or any unit of the Transamerica group of additional banking offices. At this point, Messrs. Wyatt, Paulger, Dreibelbis, Wingfield, tec3narcl, and Cagle left the meeting, and the action stated with respect to each of the matters hereinafter referred to was then taken by the 13card: ped eraa The minutes of the meeting of the Board of Governors of the Reserve System held on February 5, 1942, were approved unani- Memorandum dated February 3, 1942, from the Personnel Committee, recolaz endIng that the following increases in salaries of employees in thet, 4-vision of Research and Statistics be approved, with the understand,n 4- g that such approval shall not be regarded as a precedent for action and that the procedure and guiding principles established the Board on March 27, 1940, shall remain unchanged. The memorandum 215 2/6/42 -17180 stated that it was understood that the Division of Research and Statistics would proceed as rapidly as possible to prepare and submit sad job description sheets to the Committee on Personnel Classificati°1 ' and that in the future the Division would comply in all respects with the existing procedure and salary policy of the Board: Name Designation Piser, Leroy M. Horse A B Longstreet, Victor M. 8ergelin, John O. Robinson, Roland I. elzian, n 'hindleberger, Charles P. Claytoeh G. L. '414.8, Margaret F: 1,1,11orrie, tendell E. Frederick C. fla1315, J. Burke Gunhild 11-'11113son, Paul Anderson 71'1'Q'teY, Mary M. "11, K atharyne P. Caroline ItIloorstein, Edward -t,e1-°11c1) Lyndall C. p't1.18t, Rosa 441s1eY, C. R. Senior Economist Associate Economist Associate Economist Associate Economist Associate Economist Associate Economist Associate Economist Associate Economist Junior Economist and Executive Assistant Junior Economist Junior Economist Junior Economist Junior Economist Junior Economist Economic Assistant Economic Assistant Economic Assistant Economic Assistant Economic Assistant Economic Assistant Economic Assistant Salary Increase To From 4,800 4,800 4,600 4,400 4,200 4,200 4,000 M,400 5,400 5,400 5,400 5,400 5,000 5,200 4,200 3,800 3,700 3,500 3,500 3,300 2,800 2,400 2,400 2,300 2,200 2,200 2,100 2,000 4,100 4,000 4,400 4,400 3,800 3,300 2,600 2,600 2,600 2,600 2,400 2,300 2,600 Approved, effective February 16, 1942, subject to the understandings set forth in the memorandum. On this action, Mr. Ransom voted "no", for the reason that he did not agree with the proposed increases unless Mr. Goldenweiser's recommendation, which was not approved by the Personnel Committee, that the salary of Susan Burr Litchfield, Senior Economist, be increased from 5,60,0 to $6,000 were reinstated. 21f,.; 2/K2 -18Memorandum dated February 4, 1942, from Mr. Goldenweiser, Di- Or of the Division of Research and Statistics, submitting the resigria.tiOrl of Mrs. Louise Sissman as a junior economist in that Division, to became effective as of the close of business on February 1, 1942, 4" recommending that the resignation be accepted as of that date. The resignation was accepted. Letter to Mr. Coffey, Chairman of the Board of the Federal Re- 8erire 'al* of Minneapolis, reading as follows: ill "In accordance with the recommendation contained Y°ur letter of January 28, 1942, the Board of Goverrs approves the appointment of Mr. Clayton E. Tillander Assistant Federal Reserve Agent and of Mr. Walter S. Fellrian as Alternate Assistant Federal Reserve Agent at Y o; 11 Bank. The Board also approves a salary at the rate 4,520 per annum for Mr. Tillander and at the rate of t4 120 per annum for Mr. Ferrian. "The appointment of Mr. Tillander is approved with "s understanding that he will be placed upon the Agent's l ya ,Y roll and will be solely responsible to you, or, dure"g a vacancy in the office of Agent, to the Board of GovOrs, for the -proper performance of his duties. The sZP°intment of Mr. Ferrian is approved with the underror i cling that he will also be placed upon the Agent's pay ; 1 ev c:rn will be solely responsible to you, or, during e ci, ly n the office of Agent to the Assistant Federal pe,,serve Agent, and to the Board of Governors for the proper -/I°r4lanoe of his duties. as A 'Then not engaged in the performance of their duties ma...'rsnsistant or Alternate Assistant Federal Reserve Agents, Idllander and Mr. Ferrian may, with the approval of : 14 Federal Reserve Agent, and the President, perform such for the Bank as will not be inconsistent with their le s as Assistant or Alternate Assistant Federal Reserve A gents. "Ur. Tillander and Yr. Ferrian should each execute the usual oath of office and surety bond in the amount 2_1'7 2/6/42 -19- "of *10,000, and they should not enter upon the performance of their duties as Assistant Federal Reserve Agent , 8 :nd Alternate Assistant Federal Reserve Agent until the °°nds have been examined by your counsel to determine whether their execution complies fully with the rules Printed on the reverse side of form of bond 182, following lihich the bonds should be forwarded to the Board promptly 10r approval. "Please advise the date Mr. Tillander and Mr. Ferrian assume their duties as Assistant Federal Reserve Agent and Alternate Assistant Federal Reserve Agent." Approved unanimously. Letter to Mr. R. A. Young, President of the Federal Reserve ank of Boston, reading as follows: ,, "Receipt is acknowledged of your letter of January ;.° enclosing a copy of a letter which you have received .,.' 1°R1 Mr. Benjamin F. Goldman regarding a problem of en-Lorcement of Regulation W. 'The Board agrees with you that the time has come 1-'or the adoption of a uniform policy and procedure with ; ssPect to the enforcement of the Regulation, and the t°ard's staff has been giving consideration to the matYou will of course, be kept advised of all de.e. Lopments. to '.Regarding Mr. Goldman's letter, it would be proper Point out to him that although the Board and the Re; erve Banks are concerned with violations of Regulation a his statements that he believes 'nothing was ever paid' ld that 'the whole transaction was a washed out proposiI °n' would indicate that there was, in fact, no sale. titi that event, of course, there would be no violation of t e Regulation. Furthermore, it appears that he wishes s? set aside a contract or conveyance as fraudulent, and, cr1;11” Regulation was not intended to enforce private JtIbractual rights or collect private debts, its provi'Tls would be of no assistance to him in accomplishing Purpose even if the Regulation had been violated." j J Approved unanimously. Letter to Mr. Hays, Vice President and Secretary of the Federal 218 2/6/42 -20- aeserve Bank of Cleveland, reading as follows: "Reference is made to your letters of December 31 and January 12 asking certain questions regarding Group in Regulation W. "Your first question relates to screens, awnings and storm windows. You state that you believe that these should be included in Group E, and the Board agrees, because, ueoause, although they are readily removable without damage . t43 the building, they are made to fit a particular buildg and, as a general proposition, would not be suitable °P use elsewhere without alteration. They are, in effect, part of the building. "Your second question relates to electric signs, Shelving, counters, and special lighting equipment used ,or business purposes. You state that you believe these Items should not be included, and the Board agrees, because they may be removed without substantial damage and e usable elsewhere without material alteration. Need, e88 to say, any such items which require structural changes or their installation, or which can not be removed without materially weakening or damaging the structure, would " it 4ve to be classed as materials used in connection with al terations or improvements' under Group E. "In addition, you inquire as to prefabricated marcr,l111888, and express the opinion that they should be in,!ded under Group E. This, as you state, is a rather ,la'ficult question. Normally, of course, a marquee is a vo_rt of the building to the same extent as the cornice but if the marquees in question are designed and intended, like signs, to be installed and removed by i_he tenant, it would seem to be proper to classify them the same manner as signs for the purpose of Regulation l It is probably not possible to lay down any general 1) rw' ;, 8_ regarding prefabricated marquees, since there are t, l (4)ablY some which are no less substantial or permanent "an those in front of large hotels." p 7 V Approved unanimously. Letter to Mr. Lewis, Chairman of the Federal Reserve Bank of 4g0, reading as follows: "The members of the Board of Governors were very 219 2/6/112 —2,1— sorry to learn that you were unable to attend the Chair— Conference on January 26 because of illness and °I.eY hope that you have entirely recovered. "The Chairmen have adopted the practice, as you know, °f holding two meetings with the Board each year. The Board has understood from the Chairmen that they look i llyon these conferences as very desirable because they af— good opportunity for an interchange of views and !discussion of System policies as to subjects in which Ipe Board and the Chairmen are currently interested. The ,?ard shares this feeling of the Chairmen, especially in "-Lew of the fact that each Chairman is the Board's official representative at the Federal Reserve Bank. To be most ! ffective for the purpose in view, however, the Board Ieels that all of the Federal Reserve Banks should be : 1 ePre8ented at each meeting. By this means, aside from the fact that there may be full participation in any dis— ! sions, the Board has the opportunity to get the bene— Til of the points of view of all the districts and the .rectors of every Federal Reserve Bank may receive -L031.rst hand reports of the discussions and conclusions r the Chairmen's Conferences. "With these thoughts in mind, the Board feels that, wIlenever there is a possibility that a Chairman cannot I,tend, it would be desirable if he would arrange with ci.17 Deputy Chairman to attend the conference when the 0 , airman cannot. In case of the unavoidable absence _ t the Deputy Chairman, as well as the Chairman, the nher Class C director should attend. It is particularly 171,sable that such arrangements be made in advance hra the Chairman is away or likely to be array from wiT_? for other purposes. The Board feels sure that you agree with it as to the desirability of adopting u'Lls practice." Z Approved unanimously, together with similar letters, with appropriate changes in the first paragraph, to the Chairmen of the other Federal Reserve Banks. 220 -22- Thereupon the ae ting adjourned.
@FedFRASER