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meeting of the Board of Governors of the Federal Reserve System was held in Vashington on Tuesday, January 4, 1944, at 11:00 a.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Ransom, Vice Chairman Szymczak McKee Draper Evans 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 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 3, 1944, were approved unanimously. Memorandum dated January 3, 1944, from Mr. Paulger, Chief of the Division of Examinations, submitting the resignation of Harold T. Krug (who was to be inducted into the United States Army) as an Assistant Federal Reserve Examiner, to become effective as of the close of business on January 5, 1944, and recommending (1) that the resignation be accepted as of that date and (2) that he be granted the benefits provided in the policy adopted by the Board on June 16, 1943, for all temporary and indefinite employees entering military service. 1/4/44 -2Approved unanimously, with the understanding that the payment of his benefit of 22-1/2 days' salary would be at the rate of basic salary plus overtime. Memorandum of this date from Mr. Morrill, submitting the resig- nation of Mrs. Dorothy McHenry as a cafeteria helper in the Secretary's Office, effective as of the close of business on December 31, 1943, and recommending that the resignation be accepted as of that date. The resignation was accepted. Telegram to Mr. Meyer, Assistant Cashier of the Federal Reserve Bank of Chicago, reading as follows: "Board approves changes in the personnel classification plan covering four positions in the Research and Statistics Department as submitted in your letters of December 18 and 29, 1943." Approved unanimously, together with the following letter to the Joint Committee on Salaries and Wages: "Under the procedure established by General Order No. 19 of the War Labor Board and the authority granted by the Commissioner of Internal Revenue, transmitted herewith are the original and four copies of Certificate #4 of the Federal Reserve Bank of Chicago with respect to increases in the maximum annual salaries for three positions in the Research and Statistics Department of that Bank. "These increases have been approved by the Board of Governors of the Federal Reserve System as submitted. "As stated in the attached certificate, the positions of Industrial Economist, Agricultural Economist, and Financial Economist were established at a time when the Research and Statistics Department of the Reserve Bank was in the process of being reorganized. The subsequent development and expansion of the department and the increased demands being made upon it are in accordance with a definite policy 1A/44. -3- "of the Board of Governors to expand the research work at the Reserve Banks. "In transmitting the certificate, attention is called to the fact, which has been discussed with representatives of the \Car Labor Board and of the Commissioner of Internal Revenue, that maximum annual salaries approved under the personnel classification plan are not, in general, established rates paid for all employees coming within the respective groups. They represent instead maximums within which adjustments, including increases due to individual merit and earned through long service, may be made by the Reserve Bank without further reference to the Board of Governors." Approved unanimously. Letter to Mr. Rounds, Chairman of the Retirement Committee of the Retirement System of the Federal Reserve Banks, reading as follows: "This is in reply to your letter of December 4, 1943, regarding the prior service credit under the Retirement System of Mr. W. S. McLarin, Jr., of the Federal Reserve Bank of Atlanta. "It is understood that, according to the record submitted by the Federal Reserve Bank of Atlanta, Mr. McLarin's creditable service started October 15, 1920, that Mr. McLarin was first employed by the Bank on July 17, 1916, and that during some part of the period between that date and October 1920, he was in military service. "It is noted that you feel that Ir. McLarin should be given full credit for all prior service rendered, including military service, and that the matter can be handled either by providing a special benefit under Section 9 of the Rules and Regulations with the approval of the Board of Governors, or by the Board indicating that, in the light of the circumstances, a correction of the record may be made without requiring the approval of the Board. "In the circumstances of this particular case, it is believed that the question is essentially one of fact as to the amount of prior service rather than the question of a special benefit. Accordingly, the Board will interpose 1/L/44 -4- "no objection to the correction of the record so as to reflect the full amount of creditable service to which the Fetirement Committee feels Mr. McLarin is entitled upon the basis of the facts as ascertained. "The Board shares your desire that the matter be handled in a way to avoid embarrassment either because of criticism of the manner in which the case is handled or in an attempt to use the case as a precedent, and the cooperative attitude evidenced in your letters of December 4, 1943 is indeed appreciated." Approved unanimously. Letter to Eatson et Pasco & Brown, Lawyers of Pensacola, Florida, reading as follows: "This refers to your letter of December 27, 1943, relating to the right of a national bank located in Alabama to exercise its fiduciary powers in the State of Florida. "The Board has frequently expressed the opinion that a national bank which has received permission to exercise fiduciary powers under the provisions of the Federal Reserve Act may, without other authority, exercise the powers granted not only in the State in which the bank is located but also in any other State the laws of which do not expressly or by necessary implication prohibit the exercise of those powers by national banks located in other States. The Board has expressed the opinion, however, that in any such case the national bank would have to conform to those laws of any such other State in which it is acting which relate to the exercise of fiduciary powers by a foreign corporation. We are.enclosing for your information a copy of a ruling to this effect published in the Federal Reserve Bulletin for July 1921 at page 816. "Copies of your letter and this reply are being furnished to the Federal Reserve Bank of Atlanta and if you have any further questions concerning the matter it is suggested that you communicate with that institution." Approved unanimously. 11 1/4/44 •••• Thereupon the meeting adjourned. Approved: Vice Chairman.
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