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115 A meeting of the Board of Governors of the Federal Reserve SYstein was held in Washington on Saturday, January 24, 1942, at 1130 a.m. PRESENT: Mr. Mr. Mr. Mr. Eccles, Chairman Ransom, Vice Chairman McKee Draper Mr. Mr. Mr. Mr. Morrill, Secretary Bethea, Assistant Secretary Carpenter, Assistant Secretary Clayton, Assistant to the Chairman The action stated with respect to each of the matters hereinreferred to was taken by the Board: The minutes of the meting of the Board of Governors of the Pede— " 41 Reserve System held on January 23, 1942, were approved unani1401.181.7. Bond in the amount of l',10,000, executed under date of January 13, 19 42, by Margaret R. Newcomb as Alternate Assistant Federal Reserve Agerlt at the Federal Reserve Bank of Philadelphia. Approved unanimously. Letter to Mr. Homer F. Berry, Cumberland, Maryland, reading t°1101vs: "Receipt is acknowledged of your letter of January Z' 1942 regarding Regulation W. You state that you placed zitc order early in November with a mail order house for oftfurniture selling for $73.95 with a deferred balance 0.25. The furniture was delivered on December 1. a balance on previous orders was then 1,79.32, making : a. 43tal of 448.57. You wish to consolidate these bal' wIL?es into one contract with payments of $10 per month, "'eh would pay out in 15 months. However, the mail 116 1/2 V42 "order house says that it cannot consolidate the obligations, and requires 8 per month on the new purchase, which would pay out in 9 months. "In order to give you a definite answer, it will be necessary to know (1) the size of the monthly instalments which you were paying on the previous balance of 79.32, (2) whether these previous purchases were made before or after September 1, 190 (when Regulation Wbecame effective) and (3) what kind of articles they were (because .different rules would apply if they were articles listed in the Supplement to Regulation L., than would apply if they were not listed). "The administration of RegulationW has been decentralized, and therefore this information should be sent the Baltimore Branch of the Federal Reserve Bank of Richmond, Baltimore, Maryland. We have sent a copy of your letter to the Baltimore Branch so that it will be able to advise you upon receipt of the information. "Your stamped self-addressed envelope is returned herewith.fl Approved unanimously, together with a letter to Mr. Milford, Managing Director of the Baltimore Branch of the Federal Reserve Bank of Richmond, in the following form: "Enclosed are copies of a letter dated January 7, 1942) from Mr. Homer F. Berry, 731 Oldtown Road, Cumberland, Ma 17 and, and of our reply of this date. "It seems likely that the mail order house was acting er.a strict interpretation of section 4(g) of Regulation whlch some of the mail order houses had adopted prior to e issuance of W-105 on October 22 (see particularly the econd paragraph of W-105). The mail order house also may have felt that, since the 111, ,e sales were made prior to the effective date of Amendt0 ,I1°. 2, Option 9 under section 8(b) was not available , r.'" However, it seems that under Y-19, which applied (3 to the effective date of Amendment No. 2, similar eges were available to the mail order house. Morel ) even if this were not the case, under the principle ste a; stated in l':-114 permitting a pre-December credit to a to be revised on the basis permitted by the new ctlOn 9(f), the mail order house, in view of W-105, r It7 1/24/42 —3-- could nov, revise under Option 2. "It may be noted, of course, that under section 9(i) of the regulation the company always has the right to apply terms stricter than those required under the regulation." Letter to Ur. Leland H. Ives, Manager of the Corinth Office, The Llanufacturers National Bank, Corinth, New York, reading as follows: "Receipt is acknowledged of your letter of January stating that Union Free School District /17, Corinth, "w York, owns a residence, which is occupied by the , iSu perintendent of Schools, and wishes to purchase an oil uurner for it; that the School District cannot make the required down payment or -pay for the oil burner in full, and that therefore the purchase would be on the basis of an °Pen account until the first of July, when the District will borrow in anticipation of taxes sufficient funds to pay the open account. "From the facts stated in your letter it would appear that there would not be an extension of instalment j c edit as defined in section 2(c) of Regulation because t,ste price of the oil burner will apparently be paid by ,e School District in one payment. It seems probable that the money borrowed in anticipation of taxes Till also not be borrowed on an instalment basis. The administration of the Regulation has been de.17 ,ntralized and therefore it is suggested that any furinquiries which you may have should be addressed to ' cue Federal Reserve Bank of New York, New York City. A of your letter and of this reply have been sent to uat bank for its information." Approved unanimously. Colancil Letter to Mr. E. E. Drown, President of the Federal Advisory 'Prepared in accordance with action taken at the meeting of the 80 ard on January 22, and reading as follows: e, "Your letter of January 19, 1942, with further refto the proposed amendment to section 7(d) of the oneurltles Exchange Act of 1934, was received by the Board - january 21, 1942. On the Previous day Sr. Parry, Chief 118 1124/42 -4- H of the Board's Division of Security Loans appeared bethe House Committee in connection with the amendment Bind since it is not anticipated that there will be any urther appearance of a representative of the Board before the Committee it will not be possible to comply with the request contained in your letter that when the Board's testimony on the bill is presented it state that the Fed7 ' .41 Advisory Council would like to reserve the right to 411e.a memorandum with the Committee dealing with the ection. However, the Board has transmitted your request Chairman of the House Committee on Interstate and gn Commerce in a letter, a copy of which is enclosed, 41:Id as soon as a reply is received we shall communicate wlth you further. ."The Board has asked me to say that it will be pleased to discuss the proposed amendment with you and the other raembers of the Council at the time of the Council's scheduled m?et g on February 15-17 or before that time should you deinsre Approved unanimously, together with a letter to Congressman Lea, Chairman of the House Committee on Interstate and Foreign Commerce, in the following form: "On January 21, 1942, the Board received a letter from. IT -4. E. E. Brown, President of the Federal Advisory 0011r, m requesting that when the Board presented testi2J1,Y before your Committee with respect to the proposed to section 7(d) the Securities Exchange Act of of 1934 It J-934 it be stated that the Federal Advisory Council taks °1 .1d like to study the testimony presented in regard to aZis section, to discuss it with the Board of Governors, c, t° reserve the right to file a memorandum before the vranlittee dealing with this section. si "As you know, Mr. Parry, Chief of the Board's Divith°r1 of Loans, testified before your Committee on nr, !Proposed amendment on January 20 and it is not anticithat there will be any further appearance of a reprewilgative of the Board before the Committee in connection Ines : , the amendment. Therefore, the Board is adopting this n8 of transmitting Mr. Brown's request to you. tas ."The next meeting of the Federal Advisory Council in hington will be held on February 15-17, 1942, at which 119 1/2 4/42 -5-- .;IT.e it is anticipated that the amendment to section (Act) will be discussed by the Council with the Board of G governors. It may be that following that discussion, the may wish to file with you a statement of its posi taon. in connection with the amendment. "In order that we may inform Mr. Brown, it will be much appreciated if you will advise the Board whether L1118 arrangement will be satisfactory to your Committee." yox.7 Thereupon the meeting adjourned. Chairman.
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