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142 A meeting of the Board of Governors of the Federal Reserve System wa.s held in Washington on Tuesday, January 30, 1945, at 2:30 PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Eccles, Chairman Ransom, Vice Chairman Szymczak McKee Draper Evans Mr. Morrill, Secretary There was presented a memorandum dated January 20, 1945, from Chairman Eccles stating that the resignation of Mr. Clayton, Assistant t° the Chairman, would necessitate some rearrangement of the work in the Chairman's office, that he was not prepared at this time to rem wend the a PPointment of another assistant, but that he would recommend that the r°1-1-0wing changes be made effective February 1, 1945: 1, 2. That the title of Elliott Thurston be changed from Special Assistant to the Chairman to Assistant to the Chairman and that his salary be increased from In.4,000 to $15,000 per annum. That the salary of Madeleine E. Benton, secretary to mr. Thurston be increased from $2,800 to $3,000 Per annum. 3. P:lat Mabel Goepfert be retransferred to the Legal Division as a secretary with no change in her pres— ent salary at the rate of $2,600 per annum. 4.. yhat the payroll designation of Charles R. Norris a be changed from messenger to the Chairman to clerk nd that his salary be increased from $1,800 to ft,980 per annum. The changes recommended by Chairman Eccles were approved unanimously, together 143 1130/45 —2— with a change in the payroll designation of Sidney ':ashington from messenger to clerk and the following changes in sal— aries in the Board Members Section, ef— fective February 1, 1945: Lame AnzTe* I. Cotten Sidney Washington Designation Secretary to Mr. Ransom Clerk Salary Increase To From $3,800 $3,600 1,680 1,560 In a memorandum dated December 14, 1944, Mr. Goldenweiser l'econtnended that his title be changed from Director of the Division of Research and Statistics to Economic Adviser, that Ildr. Woodlief Mcdilas be made Director of th e Division of Re3earch and Statistics, al4d that Mr. Howard S. Ellis be appointed as Assistant Director of the Division with salary at the rate of 410,000 per annum. In ac— %Nance with a suggestion made by Chairman Eccles in a memorandum Qated December 16, 1944) action on these recommendations had been cleferred until after the first of the year to afford the Board r4nlbers an th Mr. Ellis' opportunity f.0 amiliarize themselves with -anfamiliarize b4ekground and recoltinen ability, at this meeting of the Board the dations were presented by Chairman Eccles for further %Ilqderatio n. The following actions ;ere taken by unanimous vote effective February 1, 1945: 1;11r.,,G oldenweiser's title was changed from Director tconomic Advisor with no cnraage in his present 8alarY at the rate of 15,000 per annum. Mr. Thomas was appointed Director of the Division 144 1130/45 —3— of Research and Statistics with salary at the rate of $15,000 per annum. 3. Mr. Howard S. Ellis was appointed Assistant Director of the Division of Research and Statistics with basic salary at the rate of )10,000 per annum. Chairman Eccles stated that he wished to discontinue his ex— °Irrici° membership on the Personnel Committee of the Board and sug— gested that in the future the committee consist of the two members aPPointed by the Board in accordance with the existing plan of ro— tation. There was unanimous agreement with this suggestion, and it was understood that beginning immediately Messrs. Ransom and Evans (the present appointed members) would constitute the committee until the expiration on February 28, 1945, of the period for which they were appointed. In accordance with the usual order of rotation, it was understood that Messrs. Szymczak and Evans would be nominated to serve with Chairman Eccles as members of the executive committee of the Federal Open Market Committee for the year beginning March 1, 1945, and accordingly Messrs. WIcee and Draper were appointed to serve as members of the Board's Personnel Commit— tee for the year beginning March 1, 1945. Chairman Eccles then stated that, in view of the resignation or kr. 0 tee, he laYton Who had served as his alternate on the Wea. Loans Commit— w°111d suggest that the committee be abolished and that the -- Previously performed by the committee be added to the matters to mr. Draper for initial consideration as a member of the 145 1130/45 —4Chairman Eccles' recommendation was approved unanimously, effective immediately, With the understanding (1) that, as in other matters assigned to Mr. Draper for initial consideration, Mr. Evans would serve as Mr. Draper's alternate in the latter's absence or disability, and (2) that war loans matters requiring consideration by the Board would be handled in the same manner as other matters requiring Board consideration. The positions of Counsel and Secretary to the War Loans Committee were abolished and the titles of Administrator for War Loans Committee held by Mr. Smead and Assistant Administrator for War Loans Committee held by Mr. Boothe were changed to Administrator for War Loans and Assistant Administrator for War Loans, respectively. Chairman Eccles made a report to the Board in regard to a e0 4terence which he had attended at the Treasury Department this morntrig 0 n the subject of proposed holding company legislation. The subof his report was as follows: trig Preceding the conference at the Treasury this morn, a number of bankers called upon Mr. McKee in regard _the status of holding company legislation and Mr. McKee erred them to Congressman Patman. It seems that ConHoessman Patman took them to see Chairman Spence, of the ch e Banking and Currency Committee, and that they told Thflnan SPence that they had been to see Mr. McKee. is21Y advised Chairman Spence as to their viewpoint regardding company legislation and Chairman Spence said h°1 Reat he was willing to introduce a bill if the Federal Re rve Were to ask him to do so. Thereupon he called ' Apparently Chairman Spence was not aware of the alicl McKee contents of our Annual Report for 1938 on this subject por241% McKee sent him a marked copy. Mr. McKee then reabi ?d to me what had developed. I questioned the advis‘ - 1tY of our participation in handling the matter in l W 146 1/30/45 5- the way suggested by Chairman Spence. I doubted whether lt was desirable to ask him to introduce the bill or to !end the bill to him for introduction because he might l'hen say that it was being introduced at the request of 'dile Federal Reserve Board and this might not be the most ?ffective way of getting action upon it. After discussing the matter with Mr. McKee and considering alternative Irthods of handling the matter, we decided it would be Ae tst for me to discuss the situation with the Treasury. our request, Mr. Dreibelbis worked up a memorandum on fle "Giannini Empire", a copy of which has been placed fl the Board's files. I talked to Under Secretary Bell last Week and told him that I wished to discuss the matter with the Secretary. Mr. Bell arranged a conference ',or this morning at 11:00 o'clock. In addition to the ?retary, there were present Mr. Bell, Comptroller ietano, and an attorney from the Comptroller's Office. c tdolld the Secretary what had happened and that I had at we would have to send some kind of a letthat ter Spence enclosing a draft of a bill which he t_might introduce. I then gave the Secretary the pice of the situation as outlined in Mr. Dreibelbis' -ellic3randurn. i7 The conference lasted about 40 minutes and the Secre,6 thears very interested and very attentive throughout 1, c°nference. The Secretary said that he would like a -LT,tle time enable him for his staff to study the situation and to to consider the matter, as he did not want to gi ve:an answer today. He said, however, that he would let in another day or two, and I understood definitely that 1!0eltly hear from him before the end of this week. The Se said that he was very much impressed with th: nt°rmation which I had given him and was very sympawe— +le with our position. I pointed out to him that if get the mandeant b• legislation introduced, it would show that we so far as the Administration was concerned would be at least a deterrent to Giannini. star Ur. Bell raised the question whether the Treasury all f had seen the bill and I told him that they had been °ver it with Mr. Dreibelbis. .kuee14.r. Delano asked whether there had been any changes ' -ast June and I told him it was the same bill. He 147 1130/45 -6- whether it was the one that Dreibelbis had gone rer with them and I told him that was the case. The attorney from Mr. Delano's office said that he had been over lt. I told the group briefly what the bill contained. Bell said that one difficulty with the bill might be th?.t it was obviously directed against one group, but I 11,301nted out that if it were not for this one concern there be no occasion for raising the issue now and that the power of the Government had not been challenged except by this one group. .The Secretary asked what the Securities and Exchange J)111mission had been able to do and I told him that the 1iTcurities and Exchange Commission was still stymied in . 11e Courts and that, if the Securities and Exchange Comlilulsclon should win out, all that they would accomplish 8°1;Ild be the delisting of the stock of Transamerica: I 4ald that nothing short of legislation is really going '° get at the heart of the problem. a , Mr- Bell then pointed out that the bill did not have Lleath sentence in it. I told him that that was true because if we attempted to put a death penalty into the i'LL! we would not get the legislation. It would result aLllning up all the holding companies on Giannini's side Ift-o uniting all the opposition, with the result that we have a big fight that nobody would like. I pointed ; 1, . 1t that the problem was not so much one of obtaining a stss°111tion of the holding company set-up as it was to : 13 them from getting control of banks through the hold&tic ac OmPanY device when it would not be permitted if the ' co cltion of such banks as branches were subject to the nsent of the Comptroller or the consent of the Board. e. j)co pointed out that Giannini had obtained 21 banks in Am4-el°rn1a which were operating outside of the Bank of because he has not been permitted to convert them oranches. I said that if we succeeded in getting pell*,? legislation through and then, after we had had exthj .cnce with it, if it did not turn out to be adequate, sen.t̀: would be the time to introduce a bill with a death pr,ence, but I did not think that this was the time to -Pose such a bill. 148 1130/45 —7— Mr. Bell referred to the fact that in 1943 consider— had and that the Secretary been given to proposed legislation had made the statement that he was not in favor jcq" doing anything about it until it had been cleared with °?s President. I pointed out that a great deal had happened .sta.n?e then, which had undoubtedly changed the situation ma— terlallY, and Mr. Bell said that he agreed. I felt ex— encouraged by the attitude shown by the Secretary oughout the conference. The action stated with respect to each of the matters herein— referred to was then taken by the Board: The minutes of the meeting of the Board of Governors of the Federal 44184. Reserve System held on January 29, 1945, were approved unani— Memorandum dated January 26, 1945, from Mr. Pollard, Assistant 1)4ect°r of the Division of Examinations, recommending that Miss Helene 1,r,ea Ille7 be reappointed as a clerk—stenographer in that Division, th basic salary at the rate of $2,100 per annum, effective as of the date Pon vihich she enters upon the performance of her duties after haltinn. Passed satisfactorily the usual physical examination. The mem— (41q1d—__ '411 stated that Miss Kearney had not withdrawn her funds from the Padel,al 6 Reserve retirement system and would continue to be a member of that systEm4 Approved unanimously. elter Mealorandum dated January 29, 1945, from Mr. Parry, Director i vlsion of Security Loans, recommending that Mrs. Louise tOn, Secretary to Mr. Parry, be granted leave without pay for 149 ape. /ritilthe of not to exceed six months, beginning February 16, 1945/ understanding, concurred in by the Division of Research and Statistics, that upon her return she will be reassigned to a position illths ' t Division. Mrs. Leverton is a member of the Board of Governors til'enlent plan with death benefit insurance, and the memorandum l'ee°1111nended that the Board authorize continuation of her death benefit irisllratice for the period of her leave without pay provided she makes 81) Pror.,-* v.vlate contributions therefor. Approved unanimously. Letter to Mr. Peterson, Vice President of the Federal Reserve 11,111t or r, t. Louis, reading as follows: "In accordance with the request contained in your l ett Doir,er of January 24, 1945, the Board approves the ap— of Burnette A. Wagner as an assistant examiner Or 'ae Reserve Bank of St. Louis. Please advise or Ne,,the date upon which the appointment becomes effec— o . Approved unanimously. NA Let ter to Mr. Logan, Vice President and General Counsel of the Reserve Bank of New York, reading as follows: 194c "This is to thank you for your letter of January 24, colg advising us that in view of the settlement of the aricivergy between the Marine Trust Company of Buffalo Hellings, representing the heirs of Robert J. exanilt°113 deceased, the motion for leave to inspect the vithpation reports of the Marine Trust Company has been te,2 .vin 4ra and the matter closed without any judicial ae— ezZ-nation of the question as to whether the reports of ItI.t,,tion might be inspected by the special guardian. Rs stated in your letter, Mr. Babcock of the firm 150 1130/45 —9— "_. vl Babcock, Hollister, Newbury and Russ, was retained t° represent the Federal Reserve Bank of New York and Board in the above—mentioned matter, and Mr. Babcock th he ras presented his bill amounting to 1,')1,533.26 for pro— disbursements. The Board approves tielesi°nal services and e PaYment of this fee and disbursements by your Bank." Approved unanimously. Letter to Mr. Williams, Chairman, Presidents' Conference Com- v4ittee 0 n Research and Statistics, Federal Reserve Bank of Philadelphia, readi, -44'g as follows: "We have received from Mr. Sienkiewicz copies of hue mlnutes of the meeting of the Presidents' Conference ,.eld on December 8-9, 1944 and have noted the action record on pages 18-19 with respect to recommendations the System Research Advisory Committee. the"In accordance with the understanding reached during discussions which have taken place on this subject, the ste Research Advisory Committee will send copies of its c c°mInendations to the Research Committee of the Presidents' rarTence and if at any time the Presidents' Research Com2tee has any question or suggestions regarding these rec— t 0rnd ations that it would like to discuss with the Board, tie Ijcard would be pleased to be advised and to defer ac— mir upon any such recommendation until the Research Corn— Confertee has had an opportunity to present its views or to with the Board regarding them." Approved unanimously. Letter eralls to Brigadier General Frank T. Hines, Administrator, Vet— . `ctdral nistration, reading as follows: 41 A8 You know, last fall the Board offered informally to : sr=ans Administration the cooperation of the Fed— ! 1,ail‘ Serve System in connection with the administration erthe S ervicemen's Readjustment Act of 1944, and the vices of the Reserve Banks have been utilized in the 151 11V45 —10- "distribution to commercial banks of sample copies of regulations and forms. The Reserve Banks have also, up( . )n request of the Veterans Administration, made certain ni regarding procedure available to all banking s rMtrs. 1111fZi "It is understood that sample copies of the three regulations have now been distributed by the Federal Reserve Banks; that the distribution of all sample forms relating to the guaranty of home loans has been completed; the Reserve Banks have completed the distribution which is now under way, of the following sample °Illas relating to the guaranty of farm loans and to the .8 j,laranty of business loans, the distribution of any addi°nal forms, handbooks, etc., that may be printed from to time will be made through the field offices of Veterans Administration or channels other than the Reserve Banks. Guaranty of Business Loans Loans Forms: 1821 Forms: 1841 1842 1822 1842a 1822a 1824 j 88 84F 1845 We" -“8-1-1. be glad to be advised whether our understanding is correct. er "We hope that we have been of some service to the Vetsee'tle Administration in arranging through the Federal Relwr_Ye Banks for the distribution of sample copies of reguulons and forms." Approved unanimously. Thereupon the meeting adjourned. 4131) 1tveci: Chairman.
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