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83 A meeting of the Board of Governors of the Federal Reserve PYstem was held in Washington on Friday, January 18, 1946, at 10:30 PRESENT: Mr. Mr. Mr. Mr. Mr. Eccles, Chairman Ransom, Vice Chairman Swmczak McKee Draper Mr. Carpenter, Secretary Mr. Hammond, Assistant Secretary Mr. Connell, General Assistant, Office of the Secretary Mr. Morrill, Special Adviser Mr. Thurston, Assistant to the Chairman Mr. Smead, Director of the Division of Bank Operations Mr. Vest, General Attorney There were presented telegrams to Mr. Flanders, President of the Federal Reserve Bank of Boston, Messrs. Treiber and McCreecly, Secretaries of the Federal Reserve Banks of New York and Philadelphia, lieePectively, Mr. McLarin, President of the Federal Reserve Bank of Atlanta, Mr. Dillard, Vice President of the Federal Reserve Bank of Chieago, Mr. Stewart, Secretary of the Federal Reserve Bank of St. 4111-81 and Mr. Mangels, Vice President of the Federal Reserve Bank Of San Francisco, stating that the Board approves the establishment vithout change by the Federal Reserve Banks of St. Louis and San Fran— elect, °n January 15, by the Federal Reserve Bank of Atlanta on January 16) bY the Federal Reserve Banks of New York, Philadelphia, Chicago, arid e, oan Francisco on January 17, 1946, and by the Federal Reserve 13atlip of Boston today, of the rates of discount and purchase in their 84 1/18/46 —2-. existing schedules. Approved unanimously. Mr. Vest stated that late yesterday he received a telephone call from*. Agnew, Counsel for the Federal Reserve Bank of San Francisco, advising that the Reserve Bank had received a nomination as a Class B director of Mr. Robert S. Erb of Lewiston, Idaho, who was president and manager of a local hardware company and also presi— dent of the First Federal Savings and Loan Association of that city, and inquiring whether, in view of his connection with the savings and 1°an association, the Board would consider him eligible to serve as a Class B director Ur. Vest pointed out that the Board had ruled that a Federal savings and loan association was not a "bank" within the meaning of the Clayton Act and within the meaning of Section 19 of the Federal Reserve Act relating to reserve requirements and had taken the posi— ti°14 that such an association was not a "bank" within the meaning of 8ecti0n 4 of the Act which prohibits a Class C director of a Federal Ilese , 've Bank from being an officer, director, or stockholder of any bank. He felt, however, that the similarity between the functions of bank 8 and savings and loan associations raised a question of policy INhether an officer of such an association should be permitted to serve 48 a Class B director of a Reserve Bank in view of the fact that the law Prohibited a Class B director from being an officer of any bank. 85 1/18/46 -3In the ensuing discussion of the matter, the members of the Board concluded, for the reasons brought out in the discussion, that Mr. Vest should call Mr. Agnew on the telephone and advise him that the Board felt that an effort should be made to have the bank which nominated Mr. Erb withdraw the nomination, that if Mr. Erb should be elected the Board would take the position that he was not qualified to serve as a Class B director unless he resigned as president °f the First Federal Savings and Loan Association, and that the Board w°1-11d leave up to the Reserve Bank the question whether Mr. Erb should be included in the list of candidates to be voted on, in the event the effort to obtain the withdrawal of the nomination were next, successful. Later in the meeting Mr. Vest reported that he had talked Irith 11.r. Agnew who stated that the Reserve Bank would follow the course indicated and would advise the Board of the results by letter. There was then presented a memorandum dated January 5, 1946, fl'°111 Mr- Szymczak, submitting a letter under date of December 271 1945, from Mr. Davis, inquiring whether the Board would see any objection to a payment by the Bank of from $500 to $1,000 toward a fund being raised by the United States National Expansion Memorial Associati°11 to finance a national contest for the best plan and design for the Jefferson National Expansion Memorial which would be located in St. L . ouls one block east from the Federal Reserve Bank building which " 11 1n the heart of the area most directly affected by the proposed 86 1/18/46 —4— memorial. Mr. Szymczak's memorandum gave additional information with respect to the contemplated project and, after referring to the ap— proval for by the Board in 1935 of a contribution to a fund being raised preliminary expenses in connection with the project, recommended that the Board interpose no objection to the further contribution sug— gested by Mr. Davis. The file had been circulated among the members of the Board be— fore this meeting and this morning a second letter was received from Mr. stating that the matter had been considered by the board of direc— tors of the Bank at its meeting on January 10, 1946, and that for reasons tated in the letter the directors, subject to approval by the Board of Governors, had approved a contribution of 1,-2,500 for the purpose stated. The matter was discussed in the light of the Board's letter of januarY 16O, 1945, to the Federal Reserve Banks relating to expenditures bY the Reserve Banks, and question was raised whether the proposed PaYtilent would be for a purpose which could be regarded as so related to the affairs of the Bank as to justify the contribution. Mr. Morrill was requested to call Mr. Davis on the telephone and advise him of the tenor of the discussion during the Board meeting, including the proposal that a let— ter be sent to ell Federal Reserve Banks clarifying and amplifying the position taken in the Board's letter of January 16, 1945. It was agreed that if it should develop dur— ing Mr. Morrill's conversation with Mr. Davis that the latter would feel that he or the Fed— eral Reserve Bank would be placed in an em— barrassing position if the Board disapproved the proposed payment, Mr. Morrill could say to Mr. Davis that the Board would not inter— pose any objection to the payment of the sum of $1,000 as recommended by Mr. Davis. 87 1/18/46 —5— It was understood that Messrs. Ransom, Morrill, and Carpenter would prepare for con— sideration by the Board a draft of letter to all of the Federal Reserve Banks along the lines suggested during the meeting. At this point Messrs. Smead and Vest withdrew from the meet— The action stated with respect to each of the matters herein— after referred to was then taken by the Board: The minutes of the meeting of the Board of Governors of the Pederal Reserve System held on January 17, 1946, were approved unani— Inously. Memorandum dated January 15, 1946, from Mr. Carpenter recom— raencling that John C. Brennan, who has been on military leave, be re— instated in his position as a General Assistant in the Secretary's °ffiCey with basic salary at the rate of $3,310 per annum, effective as of the date upon which he enters upon the performance of his duties 4ftel 'having passed the usual physical examination. Approved unanimously. Letter to Mr. Flanders, President of the Federal Reserve Bank of Boston, reading as follows: "Receipt is acknowledged of your letter of January 14, 1946, advising of the various actions taken at the meeting of the Board of Directors held on that day. "It is noted that all officers of the Bank were : 1 eaPpo1nted for the remainder of the year 1946, with the exception of the President and First Vice President, whose terms are fixed by statute, and that Mr. Alfred C. 1/18/46 -6- "Neal was appointed Director of Research effective upon his reporting for duty and until December 31, 1946. "It is also noted that Mr. Charles E. Spencer, Jr., President of the First National Bank of Boston, was selected as the member of the Federal Advisory Council to represent the First Federal Reserve District for the year 1946, and that he has informally accepted the appointment. "The Board of Governors approves the reappointments of Messrs. Carl P. Dennett, Paul A. Draper, Edward M. Graham, Ralph E. Thompson and J. Colby Lewis as members Of the Industrial Advisory Committee for the First Federal Reserve District to serve for terms of one year each beginning March 1, 1946, in accordance with the taken by your Board of Directors." Approved unanimously. Letter to Mr. Caldwell, Chairman of the Federal Reserve Bank of Tc -aneas City, reading as follows: "Receipt is acknowledged of your letter of January 13 .-, 1946, advising that at the meeting of the Board of Dlreetors held on January 10, all officers of the Federal Re?erve Bank of Kansas City and its Branches were reapPointed for the year 1946, with the exception of the P/:esident and First Vice President, whose terms of office are fixed by statute. "The Board of Governors approves the payment of salaries to the following officers for the period JanuarY 1, 1946, to May 31, 1946, inclusive, at the rates OWtI ur Board of Director? for Z11011 e:Er i EF, converting s o 17-stid with your letter. Name Annual Salary Title Head Office E. U. Sherman Assistant Cashier 5,656 F. W. Alexander Assistant Cashier 4,956 Denver Branch F. H. Larson Cashier H. L. Stempel Assistant Cashier 4,956 Hubert G. Duck 4,156 Assistant Cashier Oklahoma City Branch L. B. Assistant Cashier Davenport $4,956 F. R. Fritz Assistant Cashier 4,956 89 1/18/46 —7"Name Annual Salary Title Omaha Branch John K. Friedebach $5,156 Cashier U. S. Berry Assistant Cashier 4,956 William P. Doran 4,156 Assistant Cashier "It is noted that the title for Mr. T. Bruce Robb has been changed to Director of Agricultural Research and, accordingly, the Board of Governors approves the c?ntinuation of the payment of salary to Mr. Robb in his new position at his present rate for the period January 10, 1946, to May 31, 1946, inclusive." Approved unanimously. Letter to Mr. Peterson, Vice President of the Federal Reserve Bank of St. Louis, reading as follows: "In accordance with the request contained in your letter of January 9, 1946, the Board approves the appoint— ment of John K. Keirsey (who resigned his position as an examiner for the Federal Reserve Bank of New York effec— tive August 18, 1942, to engage in military duty) as an examiner for the Federal Reserve Bank of St. Louis. Please advise us of the date upon which the appointment becomes effective. "As Mr. Keirsey's appointment at the Federal Reserve of New York was effected several years ago, it will .be 11e appreciated if you will submit at your convenience the -Lnformation concerning him as requested in the Board's letter 3-178 of August 25, 1939, together with the sup— plementary information usualiy transmitted." Approved unanimously. Letter to Mr. Volberg, Vice President of the Federal Reserve 138-4k of San Francisco, reading as follows: "In accordance with the request contained in your letter of January 2, 1946, the Board approves the desig— ati°n of the following as special assistant examiners : -Ior the Federal Reserve Bank of San Francisco; effective anuary 1, 1946: 90 1/18/46 -8- "Head Office Albert W. Dorny Kenneth M. Gardner Geo. H. Maude Harry 0. Miegel Harry J. True Portland Branch Los Angeles Branch Charles V. Hinman D. Barsch L. C. Jensen E. J. Hickman O. A. Irving T. E. Palmer O. R. Poole R. W. Ward "Appropriate notations have been made in our records of the names reported as deletions. "It is noted that the following special assistant examiners, whose designations have heretofore been approved, have now returned from military leave: W. G. Landell and D- J. Tough, Head Office; J. S. Leisinger and M. E. Lile, Los Angeles Branch. "Upon checking the list enclosed with your letter, certain discrepancies were observed in the spelling of the ames of several special assistant examiners as may be noted from the following tabulation: Date Date Your Name as shown on Board Name as 119.21 1 12t Approved approved by Board your 1-1-46 list 1°- 3-34 G. D. Hartlin 10- 6-34 C. D. Hartlin 12--31_42 R. N. Hellman 1-11-43 R. N. Hellmann 11-15-40 L. Wilbur 11-19-40 L. A. Wilbur 3- 9-45 Howard H. Lowry 3-20-45 H. H. Lowry 8-14-45 James A. Randall J. M. Randall 8-23-45 1- 2-46 D. Barsch * This date D. Barsh 2- 1-36 Thomas M. Simmons 2- 8-36 T. M. Simmons !It is assumed that this is the correct spelling. In the absence of advice from you to the contrary, it will be assumed that the names as approved by the Board are correct.n Approved unanimously. Telegram to Mr. McLarin, President of the Federal Reserve Batik of Atlanta, stating that, subject to conditions of membership rlutub ered 1 to 6 contained in the Board's Regulation H, the Board ap- 111‘°17e8 the applicat ion of the "First Savings SC Trust Company of Tampa," Texarla ' 3 rlorida, for membership in the Federal Reserve System and for 91 1/18/46 the -9- appropriate amount of stock in the Federal Reserve Bank of At- lanta. The telegram requested that the Federal Reserve Bank advise the applicant bank of the Board's approval of the application and conditions of membership prescribed, together with necessary instructions as to the procedure for accomplishing membership, and stated that a letter containing detailed advice regarding such approval Would be forwarded to the applicant bank through the Reserve Bank. The tele gram contained the following additional statement: "It is assumed that you will follow the matter of the bank's bringing into conformity with the provisions of law and the Board's regulations the savings account mentioned on page 16 of the report of examination for membership and it is assumed also that the service of Mr. O. P. Stallings as a director of the applicant bank and the Morris Plan Bank, Tampa, Florida, will be brought into conformity with the provisions of Section 8 of the Clayton Act." Approved unanimously. Letter to the "First Trust and Savings Bank," Galva, Iowa, ream_ -4-ug as follows: "The Board is glad to learn that you have completed all arrangements for the admission of your bank to mem4 ership in the Federal Reserve System and takes pleasure ' 44 transmitting herewith a formal certificate of your membership. . "It will be appreciated if you will acknowledge receipt of this certificate." Approved unanimously. Telegram to Mr. Leedy, President of the Federal Reserve Bank Or lca. . "as City, reading as follows: 92 1/18/46 —10— "Retel January 17. It is recognized that there are reasons in favor of Regulation U applying to loans for Purchase of investment company shares when assets of in— vestment company consist largely of registered stocks. However, present regulation does not apply to such a loan lf Investment company shares are unregistered." Approved unanimously. Memorandum dated January 17, 1946, from Mr. Bethea, Director of the m -ivision of Administrative Services, recommending, for the reas^ vns stated in the memorandum, that the 1945 budget account, Divi— sio" " of Administrative Services, "General," for Postage and Expressage, be i ncreased by $2,150. Approved unanimously. Thereupon the meeting adjourned. Chairman.
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