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Minutes of actions taken by the Board of Governors of the Federal Reserve System on Monday, June 15, 1953. The Board met in executive session in the Board Room at 10:00 a.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Martin, Chairman Evans Vardaman Mills Robertson Thereafter, the Secretary was informed that during the executive session unanimous approval was given to a request that C. David Persina, Consulting Architect to the Board, be authorized to travel to anneapolis„ Minnesota, during the period June 27-30, 1953, to consult with the management of the Federal Reserve Bank of Minneapolis, pursuant to the request of President Powell, regarding plans for an addition to the Bank building. The meeting then adjourned. During the day the following additional actions were taken by the Board with all of the members except Governor Szymczak present: Minutes of actions taken by the Board of Governors of the Federal Reserve System on June 12, 1953, were approved unanimously. Letter to Mr. Harvey, Vice President and Cashier, Federal Reserve Bank of Boston, reading as follows: "In view of the circumstances described in your letter of June 8, 1953, the Board of Governors approves, for the period ending December 31, 1953, the continuation of the payment of salary to Mr. Carleton J. Bath°, -2- 6/15/53 "Credit Proof Clerk, Check Collection Department, at his present rate of $31600 per annum, which is $60 in excess of the maximum established for the grade in which his position is classified." Approved unanimously. Letter to Mt. Neely, Federal Reserve Agent, Federal Reserve Bank of Atlanta, reading as follows: "In accordance with the request contained in your letter of May 291 1.953, the Board of Governors approves, effective June 1, 19531 the payment of salaries to the following members of the Federal Reserve Agent's staff at the rates indicated. Jacksonville Branch Annual Salary Title "Name Agent' Federal Reserve William L. Hicks $5,54o Representative Agent's Federal Reserve J. R. Moser, Jr. 5,54on Representative Approved unanimously. Letter to Mr. Denmark, Vice President, Federal Reserve Bank of Atlanta, reading as follows: "In accordance with the request contained in your letter of June 91 19531 the Board approves the appointment of Charles Ray Chapman as an assistant examiner for the Federal Reserve Bank of Atlanta. "If the appointment is not made effective July 1, 19531 as planned, please advise us." Approved unanimously. Letter to Mr. Diercks, Vice President, Federal Reserve Bank of Chicago, r ading as follows: 6/15/53 -3- "Referring to your letter and recommendation of June 4, 1953, the Board of Governors further extends until August 1, 1953, the time within which the Merchants and Mechanics Bank, Flint, Michiganlmay establish a branch on Dort Highway near Atherton Road in the city of Flint, Michigan, as approved by the Board under date of September 10, 1952." Approved unanimously. Letter to the Board of Directors, Genesee County Savings Bank, Flint, Michigan, reading as follows: "Pursuant to your request submitted through the Federal Reserve Bank of Chicago, the Board of Governors approves the establishment and operation of a branch at 3301 Corunna Road, Flint, Michigan, by the Genesee County Savings Bank, provided (a) formal approval is issued by the appropriate State authorities, and (b) the branch is established within one year after the date of this letter." Approved unanimously, for transmittal through the Federal Reserve Bank of Chicago. Letter to Mr. Dawes, Vice President, Federal Reserve Bank of Chicago, reading as follows: "This supplements our letter of April 29, 1953 and relates to the question presented in Exhibit II of the letter from Mr. Day, Vice President of the Midwest Stock Exchange, which you forwarded with your letter of April 16, 1953. Exhibit II restates and asks review of a question under Regulation T which was the subject of our letter to you of April 1, 1953. "It appears from Exhibit II that a certain broker in Spokane, 4ashington purchases securities for his customers through a certain broker in Chicago. The usual practice is for the securities to be transferred into the non-negotiable form desired by the Spokane broker's customer before they are delivered to the Spokane broker. The Spokane 6/15/53 —4— "broker apparently makes payment before he receives this delivery of the securities, and, accordingly, the time required for the transfer into non-negotiable form would not seem to present a problem. "Exhibit II states, however, that: 'From time to time, the geographical distance between Chicago and Spokane has resulted in remittance delays on which' the Chicago broker has had to request extensions of time. "The question asks, in effect, whether the need for such extensions of time can be eliminated either by including the transactions in a 4(f)(3) account (which relates to certain payment-against-delivery transactions between brokers and dealers) or by relying on section 4(c)(4) (which permits additional time for getting payment in a special cash account when time is required because of any shipment of securities incidental to the consummation of the transaction). "The Board agrees with the Chicago broker that these transactions do not qualify for inclusion in a 14(f)(3) account. Since the delays here apparently do not arise because of shipment of securities, payment apparently being made more or less without regard to problems of shipment, it seems unlikely that section 4(c)(4) would apply. "It is not entirely clear, however, what circumstances give rise to the problem. The seven full business days specified in section 4(c) permit considerable latitude for solving problems relating to distance or difficulty of communication. Furthermore, if the Chicago broker is a member of a national securities exchange and the purchases in question can qualify for inclusion in the 'special omnibus account' provided by section 4(b) of the regulation, he could execute them in that account, where they would not be subject to the time limits which apply under section 4(c). "As indicated in section 4(b), purchases can qualify under the section if the Chicago broker is an exchange member and accepts in good faith a signed statement from the Spokane broker that the latter is subject to the provisions of Regulation T (or does not extend or maintain I 6/15/53 -5- 'credit except in accordance therewith as if he were subject thereto) and also receives from the Spokane broker written notice pursuant to a rule of the Securities and Exchange Commission concerning the hypothecation of customers' securities by brokers or dealers (Rule X-8C-1 or Rule X-15C2-l), to the effect that all securities carried in the account will be carried for the account of customers of the Spokane broker. "It is hoped that these comments will be helpful in solving the problems presented, and if further difficulties remain in that connection, the Board will, of course, be glad to give them consideration on the basis of the actual facts of particular cases, including a description of the billing and payment practices and procedures of the Chicago and Spokane brokers and an explanation of the causes of any delays involved." Approved unanimously. Letter for the signature of the Chairman to The President, The White House, reading as follows: "Receipt is acknowledged of your directive of May 251 .1953, setting forth the conditions under which classified security information may be made available to foreign nationals. The Board of Governors will comply fully with this directive." Approved unanimously.
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