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59
A meeting of the Board of Governors of the Federal Reserve
System was held in Washington on Tuesday, January 15, 1946, at 10:30
PRESENT: Mr.
Mr.
Mr.
Mr.
Eccles, Chairman
Ransom, Vice Chairman
Szymczak
Draper
Mr. Carpenter, Secretary
Mr. Connell, General Assistant,
Office of the Secretary
Mr. Thurston, Assistant to the Chairman
The action stated with respect to each of the matters hereinafter referred
to was taken by the Board:
The minutes of the meeting of the Board of Governors of the
Federal Reserve System held on January
14, 1946, were approved unanimously.
Letter to Mr. McCabe, Federal Reserve Agent at the Federal Reserve Bank of Philadelphia, reading as follows:
"In accordance with the request contained in Mr.
Drinnen's letter of January 8, 1946, the Board of Governors approves the payment of salary to Mr. J. Frank
Rehfuss as Alternate Assistant Federal Reserve Agent at
the rate of
$5,950 per annum, effective January 1, 1946.
"In view of the authority contained in the Board's
letter of October 31, 1945, S-881, to discontinue supplemental compensation as such and to merge supplemental
compensation into basic salary, the Board's records have
been changed, effective January 1, 1946, to reflect this
conversion with respect to the following members of the
Federal Reserve Agent's staff, as indicated:
Annual
Name
Title
Salary
Elwood J. Braker
Alternate Assistant
Federal Reserve
$2,553.00
Agent
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1/15/46
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"Name
Mrs. Margaret R. Newcomb
Title
Alternate Assistant
Federal Reserve
Agent
Annual
Salary
$2 318.40"
Approved unanimously.
Letter to Mr. Young, President of the Federal Reserve Bank of
Chicago, reading as follows:
"The Board of Governors approves payment of salaries
to the following officers for the period January 3 through
March 31, 1946, at the rates indicated, which are the rates
iixed by your directors as reported in your letter of January 4:
Salary
Name
Title
Mark A. Lies
Assistant Vice
$9,000
President
Louis G. Meyer
Assistant Vice
9,000
President
John W. Garvy
Assistant General
8,000
Counsel
Orville C. Barton
6,450
Assistant Counsel
E. A. Heath
Assistant Cashier
and Assistant
7,000
Secretary
"Under the customary procedure, salaries for the salary year beginning April 1 are reviewed during the month
of March, and you will be advised later as to the recommendations reported in your letter of January 4 for salaries for the new salary year."
Approved unanimously.
Letter to the Presidents of Rll the Federal Reserve Banks read.rig
a8
follows:
"Reports received by the Board in response to its
letter of March 29, 1945, regarding conditions with which
amall business would be faced upon discontinuance of profor war and the resumption of full-scale peacetime operations have proved of real help to the Board
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1/15/46
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"in its study of the financial needs of small business.
Since that time it has become apparent that small business was well supplied with funds to meet reconversion
problems. The amount of T-loan financing has been much
less than anticipated, and it now appears that in general
small business enterprises are in sufficiently sound condition to obtain whatever termination financing they need
Without guarantees under Regulation V. There may continue
to be, however, some worthy small business enterprises
that are unable to obtain financing adequate for their
7quirements on a reasonable basis from the usual financing
institutions, and the Board believes that developments in
this field should be carefully watched by the Federal Reserve Banks.
"While the monthly reports called for by the Board's
letter of March 29, 1945, have served their purpose and
may now be discontinued, it will be appreciated if you
Will advise the Board at least semi-annually of any cases
coming to your attention of inadequate financing facilities for small business enterprises. When submitting
such reports, the Board will be pleased, of course, to
have any comments with regard to them you may care to
submit."
Approved unanimously.
Letter to Mr. Baer, Director of Wabash County Veterans' Afre"irs, Wabash, Indiana, reading as follows:
"This is with reference to your letter of December
10 suggesting a special concession to veterans under the
Board's RegulationW which deals with consumer credit.
"As you know, this regulation is a part of the Government's anti-inflation program. The supply of goods,
Particularly consumers' durable goods, is so short that
it has been considered in the best interests of the public
as a whole that purchasing on credit be limited.
"We have been much concerned about the problems of
the veterans, who are inevitably finding difficulties in
reestablishing themselves in civilian life and in creating
homes. Our conclusion so far has been that veterans as a
group would be hurt rather than helped by a special concession under Regulation W.
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1/15/46
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"Veterans have as much interest as, perhaps more than,
the general public in the program to hold back inflationary
price rises. They will suffer serious losses if they are
encouraged by liberal credit terms to load up with wartime
merchandise and saddle themselves with debts they cannot
repay.
"Moreover, veterans and their families will form a
very large part of the population. Almost everyone has
a serviceman among his relatives and the serviceman could
blly for non-veterans. In consequence, any concession for
veterans would go a long way, possibly all the way, in
nullifying the regulation. Feeling as we do that inflation presents a serious danger to all of us, and particularly to the veterans who must depend upon peacetime pay,
we cannot believe that it would be well to break down even
a part of the program which is just barely holding back
the tide of price rises. We think that, all in all, the
regulation along with other measures will bring about a
fairer distribution of the limited supply at prices the
veterans can afford.
"Same of the people who are working most closely with
returned veterans, as we have noted with interest, do not
seem to share the view that Regulationll in its present
form is detrimental to the best interests of the individual
veteran. This is illustrated, for example, by statements
which appeared some months ago in a publication of national
circulation ('Retailing Home Furnishings') in an article
entitled 'Help Vets Budget Sensibly, Service Center Advises
Stores.' The article relates to the experience of the
Veterans' Service Center of New York City, which, in the
18 months during which it had then functioned, is said to
have been consulted by almost 75,000 members of the armed
forces. Two quotations from this article are as follows:
The most important service home furnishings retailers can give the returning veteran
trying to set up a home is to help him budget
sensibly within his means.'
'Interestingly enough, the New York Service Center has no complaints to report against
Regulation V; by servicemen. One spokesman said,
however, that he felt there was definite danger
in the prewar long-term instalment systems because they might induce the veteran to commit
himself for too much.'
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1/15/46
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"Fundamentally, the solution to the veterans' difficulties can only come with large-scale production. Until
that time, it is possible that something might be accomplished by a priority plan such as is being worked out for
housing, but such a plan would appear to be very difficult
Of administration in the consumer durable goods field.
"We were glad to receive your letter and appreciate
the spirit in which it was written."
Approved unanimously.
Letter to Mr. Knoke, Vice President of the Federal Reserve Bank
of New
York, reading as follows:
"Receipt is acknowledged of your letter of January
8 enclosing material regarding the plan of the Banco di
We obNapoli to establish representation in New
serve that in your proposed draft of letter to the Banco
dl Napoli you express the understanding that the bank
Proposes to establish an office in New
for the collection and furnishing of information and the facilitating
of trade, and that it is not intended to carry on any
banking business or activities that would require a license under Article V of the Banking Law of New
This proposed draft seems to us to cover the matter satisfactorily. We sharl be interested, of course, in receiving a copy of the bank's reply."
Approved unanimously.
Thereupon the meeting adjourned.
Secretary.
I '4144
Chairman.
@FedFRASER