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1213 A meeting of the Board of Governors of the Federal Reserve System was held in Wash' PRESENT: ton on Tuesday, July 17, 1945, Mr. Mr. Mr. Mr. at 11:00 a.m. Ransom, Vice Chairman Szymczak McKee Evans 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 herefter referred to was taken by the Board: The minutes of the meeting of the Board of Governors of the Reserve System held on July 16, 1945, were approved unanimously. Letter to Mr. J. Rafael Oreamuno, Vice Chairman of the Inter- keri 'can Development Commission, Commerce Department Building, reading aa follows. "In the absence of Mr. Eccles, I am answering your letter of July 9. "I am glad to advise you that this Board has taken favorable action on the request made of us by the Commission Mr. McClintock's letter of June 25 and that we shall make Tr. Triffin's services available for the purpose of assisting the Guatemalan Government in the proposed reorganization of the monetary and banking system of that country. "Our experience with previous missions of a similar character to other Latin American countries clearly indicates the desirability of organizing such work in as flexible and : 1 ,11formal a manner as possible. Following the practice of the f vrevicus missions, our representative would not publish any (31"al recommendations of his own, but would discuss the Problems freely with government officials and others in ?uatemala and would then prepare the final projects of leglelation in full collaboration with responsible Guatemalan agencies. The legislative projects would thus emerge, not 1214 7117/45 -2- as the work of foreign experts, but as recommendations of Guatenalan officials to their own Congress. This method insures thorough consideration of local needs and problems and Promotes a better understanding of the legislation and of its Purposes by the officials who, ultimately, will be placed in charge of it. It also has the advantage of enlisting the interest and sympathy of local people, thereby increasing the chances of concrete action on the pro:)osals that may be made. "With these considerations in mind, we are glad to accept your suggestion that the monetary and banking mission be carried out as a Federal Reserve mission to assist officials of the Guatemalan Government. While the mission would provide this assistance in accordance with out established method of Procedure and independent of the work of the other experts, we should be glad to have Mr. Triffin keep in close contact with ,uhe members of the Inter-American Development mission, discuss vtvil...uth them problems of common interest, and make available to e Commission the results of his work. The Board is prepared to Pay the expenses of its staff members on this mission. "I might mention that monetary and banking legislation has already been introduced in the Guatemalan Congress by the .?°vernment. The monetary bill submitted to Congress follows closely a legislative draft prepared by Mr. Triffin last December at the request of the Costa Rican Goverment. The matter thus one of real urgency. Legislative action may take place before the mission as a whole has had time to complete its recommendations. "Mr. Triffin is leaving Washington in about two weeks on a 4414 -Liar mission to the Dominican Republic. We hope, howeverlthat uhe v-u.1 be able to proceed to Guatemala in the latter part of Auga.181 . Another member of our staffliir. David L.Grove,vho has accomp. d l?d Mr. Triffin on previous missions to South America, will be -slgnated to assist him in Guatemala. "Mr. Triffin holds himself at your disposal for the discuss.; -Lon of all other matters relating to the mission. "The Board appreciates the confidence which your request 1P1Ies in nh, the usefulness of its work in the Latin American field will do whatever is in its power to contribute to the success Your undertaking." Approved unanimously, with the understanding that a copy of the above letter would be sent to Mr. John C. McClintock,Special Advisor of the Inter-American Development Commission. Ott,. Memorandum dated July 51 1945, from Mr. Thomas, Director of the On of Research and Statistics, recommending that Mr. Ernest J. L,1118 'an Economic Specialist in the Division of Research and Statistics, 01)1,, 1215 7/17/45 —3— be retained for an additional period of six months, when his temporal'iYaPPointment expires at the close of business August 15, 1945, at the Present base salary of $6,020 per annum, plus overtime of $330.29 Pel'annum, for a 44-hour week. The memorandum stated that Mr. Hopkins 1811°t a member of the Federal Reserve Retirement System and that it is as— Q"med he will continue to be excluded because of the nature of kis a Ppointment. Approved unanimously. Letter to the Presidents of all Federal Reserve Banks, reading as follows: "In order to simplify procedure, the Board has decided to e liminate the maximum annual salaries under the personnel classification plans of the Reserve Banks for the position of l'esistant Federal Reserve Agent and for the position of Federal Reserve Agent's Representative at the branches. "Accordingly, the plans will continue to carry the job de • ecrlption of those positions but without reference to maxIJin annual salaries. Appropriate changes have been made in he Board's copies of the various plans and it is requested "at the maximum salaries for such positions be cancelled in Your copies of the plan. d. , "This change is made because the original appointment or A'-Lgnation as Assistant Federal Reserve Agent, Alternate Federal Reserve Agent, or Federal Reserve Agent's Repr 4 aepre sentative, together with the salary, must be specifically esentative 111. ?r°ved by the Board in advance, and under the procedure which been established for years, no changes should be made withthe prior approval of the Board in the salaries of employs ing such positions. or,"In those cases where the Assistant Federal Reserve Agents t. l'ederal Reserve Agent's Representatives devote most of their atTe to other duties, such other duties are taken into considerion in in fixing their salaries. For salary stabilization puro„ , -e, maximum salaries established for such other positions 11;; °e used as a guide and for those employees whose duties kne.„been largely in connection with Federal Reserve Agent's ea "i°ns, the maximum annual salaries which are now being ncelled can serve as the established pattern." Approved unanimously. 121_6 7/17/45 -4Letter to Mr. Willett, First Vice President, Federal Reserve BaIlk of Boston, reading as follows: "This is in reply to your letter of July 11, 1945, with reference to the continuation of the payment of salary to Mr. Walter F. Farrar as a clerk in the Discount Department at the rate of $4,000 per annum, which 14:,8_ $13600 in excess of the maximum established under 'us personnel classification plan for the position he "cuPies. "It is noted from your letter that Mr. Flanders would like to discuss this matter with the Board of Govel'Ilors when he next visits Washington early in September. "In view of the circumstances and in accordance with your request, the Board of Governors approves the e° itinuation of the payment of salary to Ir. Farrar at the_ rate , r. Flandue-Irs„!4,000 per annum pending the discussion with Approved unanimously. Letter to Mr. Rice, Vice President New ,ork, Federal Reserve Bank of reading as follows: th "The Board of Governors approves the change in 8,! personnel classification plan of the Federal Reserve 'LliK of New York involving the establishment of the : P D sition of Administrative Assistant in the Research , Partment, as submitted with your letter of July 10 2 Approved unanimously. Letter to Mr. Caldwell, Federal Reserve Agent at Federal Reserve tank or. lc ansas City, reading as follows: K"In accordance with the request contained in nor oPpang's letter of July 6, 1945, the Board of Goveryo 8 approves the payment of salary to Mr. William R. ter v.g as Federal Reserve Agent's Representative at the yel Branch at the rate of $3,420 per annum, effective 3 1945.11 Approved unanimously. 1217 7/17/45 — Letter to Mr. Koppang, First Vice President of the Federal Re- serve Bank of Kansas City, reading as follows: "The Board of Governors approves, effective July 1, 1945, the changes in the personnel classification plan of the Fede! Reserve Bank of Kansas City and its Branches as submitted With your two letters of July 6, 1945." Approved unanimously, with the understanding that letters would be sent to the Wage Stabilization Division, National War Labor Board, and to the Salary Stabilization Unit of the Commissioner of Internal Revenue, with respect to the above salary changes at the Bank and its branches. Letter to Mr. Koppang, First Vice President of the Federal Resee Bar k of Kansas City, reading as follows: "In accordance with the request contained in your letter July 6, 1945, the Board of Governors approves, effective '6u-LY 1, 1945, the payment of salary to Mr. George E. Moran, , eneral Clerk, Accounting Department, at the rate of $2,880 er annum, which is 4180 in excess of the maximum established ,ner the personnel classification plan for the position to nnich he is assigned." Approved unanimously, together with a letter to the Wage Stabilization Division, National War Labor Board, transmitting copies of a certificate of the Federal Reserve Bank of Kansas City, with respect to the above salary change at the Bank. Batik or Letter to Mr. Fletcher, Vice President of the Federal Reserve Cleveland, reading as follows: Pani "Reference is made to your letter of June 8, to Mr. cc,—ger, inquiring whether the Board would be willing to ider the application for membership of The Bank of relPsic Company, Leipsic, Ohio, a bank which underwent a 111 ! .1. rganizat10n involving a deposit waiver in 1932, and the reorganization Plan and subsequent agreements the b e business of the bank is not conducted and controlled the board of directors as is contemplated under applile provisions of State law. V A 1218 7/17/45 -6 'It is understood that the terms of the reorgan— izatiOn plan and subsequent agreements provide that, until the waived deposits have been repaid in full, the 111ving depositors shall select five of the nine direc— '?rs of the bank and the stockholders four; that provi— sion was also made for a depositors' committee of nine 112,11bers and all matters for board consideration must rIrst be presented to a joint meeting of the directors ,a_nd the depositors' committee. The directors are bound °Y the decisions reached by majority vote of those present at such joint meetings. Three members of the depositors' committee also attend meetings of the Finance Committee of the bank and participate in the voting. "You point out that the State Banking Department and the Federal Deposit Insurance Corporation have been gnizant of this situation for many years but have no steps to change the method of management and hat it would be difficult to obtain new agreements betweent, the bank and the waiving depositors. You state that While the procedure has caused some friction at in the past, it seems to be working smoothly at the Present; and that it has not been detrimental to the ' 4 n e best interests of the institution as the assets have 4groved steadily. The bank is now said to be in excell— m 1' asset condition, and your membership admission com3"ee has approved the application feeling that the bank t;' ) uld not be denied membership because of the complica— °ns involved. It is understood in this connection ellat the Board's Legal Division and your Counsel, after Znsultation, have concluded that the unusual restrictions the directors' control of the institution does not con— me llte a legal reason why the bank may not be admitted to Ship. In the circumstances, if upon review of the ,e'leation it were found that the bank was otherwise d2ePtable for membership, the Board of Governors would not 71137' the bank membership in the System because of such restrict. r j Z Approved unanimously. Letter to Mr. Mangels, Vice President of the Federal Reserve c)f san Francisco, reading as follows: pi n'here is enclosed a copy of a letter from the djst Trust and Savings Bank of Pasadena, California, -ed July 11, 1945, which the Board received directly 1219 7445 "from the bank, with further reference to the provisions of ra embership condition numbered 8, relating to additional in— vestment in bank premises. "You are authorized to advise the bank that it is con— sidered unnecessary to comment further with respect to the /3.0ardt5 position in this matter, which has been stated fully 111 Previous letters." Approved unanimously. Under date of June 29, 1945, the Board received a letter from 14i11ett, First Vice President of the Federal Reserve Bank of Boston, —'smatting an application of The First National Bank of Boston, Boston, -sachusetts, for permission to establish a branch at Rio de Janeiro, 4.44r al District, United States of Brazil, and a recommendation of the Reserve Bank of Boston that the application be approved. Accordingly, the following order was adopted by the Board: "ORDER OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM July 17, 1945 ch "VdiEREAS The First National Bank of Boston, Boston, Massa— Feretts has made application to the Board of Governors of the 0,eral Reserve System, pursuant to the provisions of section 25 ,- tit:he Federal Reserve Act, for permission to establish a branch Ao de Janeiro, Federal District, United States of Brazil; and autl "IYHEREAS it appears that the said bank may properly be tr,orized ," to establish a branch at Rio de Janeiro, Federal Dis— ' et, United States of Brazil; of "NOW THEREFORE IT IS ORDERED that The First National Bank at '1m4;°8ton be and it hereby is authorized to establish a branch 11, -L0 de Janeiro, Federal District, United States of Brazil, atfl the condition that unless the branch hereby authorized is "lallY established and opened for business on or before SyT. t, 18t 1, 1946, and the Board of Governors of the Federal Reserve em advised in writing that the branch has been so established 4 4 1220 7117/45 -8- Opened for business, all rights hereby granted as to such branch shall be deemed to have been abandoned and the a?thority hereby granted as to it shall automatically terate; but, if the branch shall have been established and 2Pened for business on or before said date and the Board of u!vernors of the Federal Reserve System shall have been so 48 ..,'4_vlsed in writing, the said bank may operate and maintain ;',"e same subject to the provisions of section 25 of the rederal Reserve Act." In connection with the above matter, the following letter to Mr. Willett was approved unanimously: "Reference is made to your letter of June 29, 1945, transing the application of The First National Bank of Boston, ston, Massachusetts, for permission to establish a branch at 1° de Janeiro, Federal District, United States of Brazil. Res"Pursuant to the provisions of section 25 of the Federal erve Act, the Board of Governors of the Federal Reserve stem has authorized The First National Bank of Boston to estb„lish a branch at Rio de Janeiro upon the condition that the b'anch be actually established and opened for business on or +,e_f°re August 1, 1946 and the Board advised in writing that '"e branch has been so established and opened for business. , b "There is enclosed a certified copy of the Order adopted the Board authorizing the establishment of the branch which ' a°11 will please deliver to the bank. There is also enclosed c°PY of the Order for your files. ca -LL, is observed that the bank has set aside 000,000 as brP-Ltal for the conduct of the business at the proposed new thanch. Please inform the bank that neither Federal law nor ofe,Boardls regulations require the segregation of any part lts capital for the conduct of the business of a foreign ' t.anch. the "It will be appreciated if you will advise the Board of .date the branch is actually established and opened for -81ness.n s Z A letter to the Comptroller of the Currency in the following form was also unanimously approved: a "There is enclosed herewith for your information and files sys( t )PY of an Order of the Board of Governors of the Federal Reserve a 1, em authorizing The First National Bank of Boston to establish ' ranch at Rio de Janeiro, Brazil." 1221 7/17/45 —9-. Letter to Mr. Hill, Vice President of the Federal Reserve Bank r Philadelphia, reading as follows: "Reference is made to your letter of July 3, 1945, sub— 'tatting the request of the York Trust Company, York, Penn— .?Ylvania, for approval of the establishment of a branch in the Borough of North York, Pennsylvania. "It is understood that approval of the State Banking Department r has been obtained and, in accordance with your ecoun endation, the Board approves the establishment and ,17 ) 'Pel:ation of a branch in the Borough of North York, Pennsyl— 42111a, by the York Trust Company, provided that counsel for '"e Reserve Bank will review the steps taken to establish the Proposed branch and satisfy himself as to the legality thereof." Approved unanimously. Letter to the Presidents and Chairmen of the Federal Reserve Banks reading as follows: "There is enclosed a copy of a letter dated July 10, 1945, receivedv by the Board from Yr. J. M. Johnson, Director of De— tense Transportation, in which he refers to the difficult trans— o1.0rtation situation that will exist during the period required 2r the redeployment of troops to the Pacific theater of war, 71 states that now, as never before, cooperation is essential reduce travel to a minimum. "Mr. Johnson has been informed that so far as the Federal Z!erve System is concerned every effort will be made to coop— in the program for travel curtailment to the fullest pos— thuiLe extent consistent with essential business, and that to Boa6 end copies of his letter are being distributed in the ardts organization and sent to a11 of the Federal Reserve Banks." i7 Approved unanimously, with the under— standing that copies of Mr. Johnson's letter would also be distributed within the Board's organization. Memorandum dated July 13, 1945, from Mr. Thomas, Director of the n of Research and Statistics, submitting a voucher for reimburse— 111 ett for, tiraveling expenses incurred by John 0. Bergelin, an Economist in Lkt s. 1". The memorandum stated that, because of the unavailability 1222 7117/45 Of piturn an accommodations allowed under the Board's travel regulations, was necessary for Mr. Bergelin to purchase drawing room accommoda— tion, Qfrorn Dallas to St. Louis, and recommended that payment of the voucher, -nclUding the additional charge for the drawing room, be approved. Approved unanimously. Thereupon the meeting adjourned.
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