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182 A meeting of the Board of Governors of the Federal Reserve SYstem was held in Washington on Thursday, February 7, 1946, at 11:00 PRESENT: Mr. Eccles, Chairman Mr. McKee Mr. Draper Mr. Carpenter, Secretary Mr. Connell, General Assistant, Office of the Secretary Mr. Morrill, Special Adviser Mr. Thurston, Assistant to the Chairman The action stated with respect to each of the matters hereinafter referred to was taken by the Board: Memorandum dated February 1, 1946, from Mr. Thomas, Director c't the n-; -4-vision of Research and Statistics, submitting a request from the T, ' ePartment of State for an extension of the period in which the eervie es of Paul Hermberg, an Economist in the Division of Research alld Stat. lstics, would be available W. Aa gell, United States Member of ti-one The memorandum recommended °t the , iepartment of State for Mr. for work on the staff of Mr. James the Allied Commission on Reparathat the Board approve the request Hermberg's services for a period 11°*t to extend beyond March 31, 1946, with the understanding that the 11111cial arrangement would be the same as in the past, i.e., that the 11°41'cl w°111d continue to pay Mr. Hermberg's salary at the usual rate 41 that the Department of State would pay Mr. Hermberg's expenses Per diem during his absence from Washington. Approved unanimously. 183 2/7/46 —2— Memorandum dated February 4, 1946, from Mr. Thomas, Director °f the Division of Research and Statistics, recommending that the salarY of Miss Margaret F. Mills, a clerk-stenographer in that Divi81°11 be increased from g2,100 to $2,364 per annum, effective as of the be of the first payroll period following approval by the Board. Approved unanimously, effective February 10, 1946. Memorandum dated February 6, 1946, from Mr. Bethea, Director the Division of Administrative Services, recommending that Mrs. Ital' aret Driscoll be appointed as a charwoman in that Division on a telliP°1 ' 41.7 basis for a period of not to exceed two months, with salary at the rate of 4,440 per annum, effective as of the date upon which she ealt_ s the us Upon the performance of her duties after having passed 1141 Physical examination. The memorandum stated that Mrs. tria c°11 was a member of the Civil Service Retirement System, and it was assumed that she would continue as a member of that System. Approved unanimously. Telegram to Mr. McCreedy, Secretary of the Federal Reserve 84/1Ic of Philadelphia, reading as follows: "As requested in your telegram of today, Board apProves H. appointment by the Board of Directors of Mr. Alfred v. 411liams as President and of Mr. W. J. Davis as First 111: President of the Federal Reserve Bank of Philadelphia, h for five year terms commencing March 1, 1946." Approved unanimously. 184 2/7/46 -3Letter to Mr. Willett, First Vice President of the Federal Re- " .e Bank of Boston, reading as follows: "Reference is made to your letter of January 31, 1946, submitting for the consideration of the Board of Governors, under the provisions of condition of member3111P numbered 8 to which the member bank is subject, the Proposal of the Union Trust Company of Springfield, Massachusetts, Springfield, Massachusetts, to invest $175,000 ln a site for a proposed new bank building. "In view of your recommendation and the information Ilipmitted the Board will interpose no objection to the Investment as proposed." Approved unanimously. Letter to Mr. Hill, Vice President of the Federal Reserve Bank Or Philadelphia reading as follows: 1946 "Reference is made to your letter of February 2, , submitting the request of the Girard Trust ComPnY, Philadelphia, Pennsylvania, for approval, under the Provisions of Section 24A of the Federal Reserve Act,. of the expenditure of approximately $500,000 for vuteration and improvement of banking premises. "It is understood that the proposed expenditures are not to be capitalized and, in view of your recomndation, the Board approves the proposed expenditure ubstantially in accordance with the plan as submitted." r Approved unanimously. Telegram to Mr. Fletcher, Vice President of the Federal Reserve Of Cleveland, reading as follows: "Under the decree entered in the District Court the United States for the Eastern District of Michi/tn, Southern Division, on July 20, 1945, the Consumers ' 0111ipment Company is enjoined from further violaegulaton W. No subsequent investigation of the c uooks and records of the Registrant has yet been °nducted and the Board believes that the Registrant's 185 2/7/46 -4"various branches and subsidiaries should be investigated at this time to determine the extent of their compliance with Regulation Vir. "It is, therefore, requested that you arrange to conduct a reinvestigation of the Registrant's branches at Cleveland, Columbus, Cincinnati, Pittsburgh, and Erie before March 1, 1946, if possible, and forward one copy of the report, including photostatic copies or other c°Pies of such contracts, records and customers' stateinents as may be obtained, to the Board and another copy °f the report and attached papers to the Federal Reserve Bank of Chicago. The Board has been advised that an auditor of the General Finance Corporation will be at ! egistrant's branch in Cincinnati from January 31 to r.ebruary ^, ') in Erie from February 20 to February 28, In Cleveland from March 1 to March 13, in Pittsburgh Irom March 14 to March 26, and to avoid any inconvenience t° him it is suggested that your reinvestigation be scheduled for a different time. "You will recall that the Registrant's method of °P?ration concealed violations of the down payment reent of the regulation and that such violations were ?.sclosed only after customer contact had been established. ,n this connection, the Board's telegram of June 28, 1 945/ !nd letter of the same date outlined the details with re:Peet to certain types of violations previously encountered the procedure to be followed. Because the General 11111`.1hce Corporation represents that it has been checking segletrant's books and records carefully in order to inCompliance with the regulation, it is doubtful if records would show violations even if they have ocCurred; for this reason, it is requested that a representa41_-;Te.number of customers be interviewed in order to esZ12 . h successfully whether or not the Registrant is .5 0 alning the required down payments and is otherwise Perating in compliance with Regulation W." p Approved unanimously, together with similar telegrams to the Federal Reserve Banks of Boston, New York, Philadelphia, Richmond, Chicago, and St. Louis. Letter to Mr. Sproul, Vice Chairman of the Presidents' Confer'e adlng as follows: 186 2/7/46 -5- "This is to advise you that the Board is in favor of the general plan to provide hospitalization and surgical benefits to employees of the Federal Reserve Banks under an arrangement, as recommended by the Presidents Conference, whereby the Reserve Banks mould assume twothirds of the cost of providing the benefits under individual, husband and wife, or family membership, as the case may be. "Subsequent to the Conference, however, President Flanders raised the question of whether, if the general Plan were approved the Federal Reserve Banks would have ome freedom of choice as to providing the coverage A hrcrugh insurance companies or through the Blue Cross : ssociations, and indicated the preference of the Boston ' 4ak for providing the benefits under a contract with an insurance company. "The Board has not answered the question directly but refers back to the Presidents Conference for further consideration the question of how the proposed benefits should be provided. of "The Board has not undertaken to appraise the merits one plan as compared with another; its concern is that ."e Program finally adopted be the best one for the System all of the circumstances. This referral back to the Ljesidents Conference, therefore, does not indicate in any :Pee a preference for one form of coverage or another, 2" merely the desire that the final decision as to how (6)1,lie benefits are to be provided be made with the benefit a'L a recommendation by the Presidents Conference based on current review of the situation." Z Approved unanimously, together with a letter addressed to Mr. Sproul, as President of the Federal Reserve Bank of New York, reading as follows: "Reply to your letter of November 23 regarding the apby your directors of the assumption by the Bank of 2%-althirds of the cost of providing individual, husband Wife, or family membership, as the case may be, in the 3D-3-an for hospitalization and surgical facilities provided by -she local Blue Cross Association, or equivalent organiwn°11, for each employee and officer of the Bank who may pe8u.t0 avail himself of the privilege, has been deferred ndlng action on the general program as recommended by r°1r 1 187 W46 -6- "the Presidents Conference. "As you were advised in a letter addressed to you today as Vice Chairman of the Presidents Conference, the Board approves the general plan of providing such benefits under an arrangement whereby the Reserve Banks would assume two-thirds of the cost, but has referred back to the Presidents Conference the question of whether the Proposed benefits should be provided through the Blue uross Associations or under some insurance contract. "Further reply to your letter with respect to the New York proposal, therefore, will be made after the recommendation of the Presidents Conference has been received.n Memorandum dated February 4, 1946, from Mr. Thomas, Director q the n4 --Lvision of Research and Statistics, recommending that the Feder al Reserve System continue in 1946 its cooperative study with the ahd Robert Morris Associates of the financial experience of medium -size manufacturing and trade concerns, approved by the BoarA ' on March 9, 19/14, and submitting a revised schedule for securing ri llanoial data for 1945 and the subsequent transition period, Which had been prepared jointly by officers of the Robert Morris Ases and members of the Board's staff. Approved unanimously. Thereupon the meeting adjourned. Secretary. APProved: Chairman.
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