The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
991 A meeting of the Board of Governors of the Federal Reserve kretem was held in Washington on Tuesday, June 20, 1944, at 11:15 PRESENT: Mr. Mr. Mr. Mr. Mr. Eccles, Chairman Ransom, Vice Chairman Szymczak Draper Evans Mr. Morrill, Secretary Mr. Bethea, Assistant Secretary Mr. Carpenter, Assistant Secretary Clayton, Assistant to the Chairman Mr. Thurston, Special Assistant to the Chairman Mr. Leonard, Director of the Division of Personnel Administration Mr. Szymczak stated that sometime ago he had been a4-17,roached tY. the Foreign EconomAc Administration aq to the possibility of his kakine a trip tc London fnr the Administration in connectin with the aliPPlies and materials that Belgium would need and would purchar, fr-T, the u . tilted States following the war, that he had taken the position that 1, ue woi1d not be able to reach P decision on the matter pending the 'tlIrrt l of Messrs. Eccles and Ransom to Washington, and that this kornt "he had had another call from the Foreign Economic Administra— 'n connectinn with the matter. He said that it was contemplated th4t he wmad be away from Washirotnn for a period of about six weeks, " .ng sometime durino- J,'ly rind returninP the egrly part of September. ai8 ° stated that 11P had tnld the representative of tile Foreign 1, 311 Administration with whom he had discussed the matteThe was an appointee of the President it would be necessarv to 992 6/20/44 -2- have the trip approved by the President, and that before he (Mr. Szymczak) cotild make a commitment on the matter he would have to take it up with the Board. The matter had already been taken up with the State DepartSzymczak said, and had been approved by it, and if and when Merit ' thematter was approved by the President the letter of approval would be sent to the Board. Mr. Szymczak added that following the telephone con nl'ersation he discussed the proposed trip with Chairman Eccles, who h" sUggested that it would be well for him to be back in Washinciton terthe meetings of the Federal Open Market Committee and the Presicilhltee Conference which it was anticipated would be held during' the )neic of September 10. to the He also said that the matter was being brought attention of the Acard at this time to ascertain whether there )r" °bjection on the part of any member of the Board to his making the trip. Chairman Fccles said that since Mr. Szymczak would be making the tr-P with the approval of the President there would seem to be no 111,160 11 for objection on the part of the Board. He did not think that the matter called for action by the Board and that, so far as the records 0f the aholad Board were concerned, all that was necessary was that the record Show that Mr. Szymczak reported the matter to the Board and that tlo 01— e LIJ ction was made to the proposed trip. The other members of the togra Present were in agreement with the opinion expressed by Chairman Etcles4 993 -3Ur. Szymczak then referred to the action taken by the Board on 4111729, 1941, in fixing maximum salaries for the positions of President and First Vice President at the respective Federal Reserve Banks, and stAted that at the time of the last Chairmen's Conference the -"ea of the Federal Reserve Banks of Richmond, Kansas City, and 8 discussed with him informally the desirability of increasing the , Latim salaries of the Presidents and First Vice Presidents at t6104 -414.0111110nd, 418 Atlanta, Kansas City, and Dallas Banks to ft25,000 end r. respectively. The suggestion had been made that the Chairmen q the p ederal Rserve Banks of St. Louis and Minneapolis did not join lr1 the request for the possible reason that the salaries of the Presidents of these Banks had been fixed at 25,0O0 prior to the establishof the maxi mum of $20,000 for the six Banks referred to, Before this meeting copies of a memorandum addressed to Governor ezak IDY Mr. Leonard under date of June 10, 191), in which the major (illeeti°118 raised by the request of the three Chairmen were set forth, 44(1 been sent to the members of the Board, and the matter was discussed 14.1 +1, -41e 1. -Light of those questions. As pointed out in the memorandum, if the Board should decide that the request of the three Chairmen ehquid be granted, there was a question whether such action would be apPNIT,-. vvIet e or possible under the existing salary- stabilization regulations 0413,t 0 that increases in maximum annual salaries are permissible correct gross inequities. 994 6/20/0,1, -4In the discussion nf the matter, the members of the Board present indicated that, they would be disposed to review the salary maxi- rmlnis for all, the Banks at sr, no future time, it did not appear that thee stablished maximums could be increased as lonc, as the present stabilization regulations remained in effect. Tn this connec- ti ll, it wp, tated that it shor1 0 he clearly understood that a7reement 117c)ri the desirability of a review at an appropriate time did not neces"lY imPly agreement that increases would be favored, since it would be luallY possible to remove any disparity in maximums by adjustments -.mar& At the conclusion of the discussion, upon motion by Mr. Szymczak and by unanimous vote, Mr. Leonard was requested to prepare for consideration by the Board a draft of letter to the Chairmen of the four Federal Reserve Banks involved along the lines suggested during the discussion. At this point Mr. Leonard withdrew from the meetir,- and Mr. f Director of the Division of Security Loans, entered the room. Mri r. 4,41and r is aansom presented a memorandum addressed to the Board by U M under date of June 15, 194h, in which it was recom- ricied nì5 that the Board adopt the following' amendment to Recrulation W. er Credit: "AMENDMENT NO. 13 TO REGULATION W "Issued by the Board of Governors of the Federal Reserve System "RePulation W is hereby amended effective June 22, 995 6/20/44 —5-"1944, by striking out subsection (b) of section 12 and substituting the following: "(I)) Extension of Qredit for Mixed Purposes. - In !aaa an extension of credit is partly subject to one secof this regulation and partly subject to another secthe amount and terms of such extension of credit shall °a such as would result if the credit were divided into tw° or more parts and each part were treated as if it stood alone. In case an extension of credit is partly subject !.0 this regulation and nartly not subject to the regulaion, the amount and terms of such extension of credit shall be such as would result if the credit were divided !Ind the part subject to the regulation were treated accordln to the applicable provisions of the regulation; the Part not subject to the regulation may be treated as if the regulation did not exist." At Mr. Ransom's request, Mr. Parry discussed briefly the l'eaeoris for, and the effect r,f, gl'eater A While nr:sed amendment as outlined in in the memorandum of June 1, and Mr. Ransom stated ijP mendment had nr,t, been slIbmitted to the Consultative Commit tee, . lt had ben discussed informally with Mr. Francis Bonner of the Orr ' ce of Prlce Administration who expressed his willingness to concur. VT that tl„ , c7r.eement on the part of the members of the Board present "e amendment was not of sufficient importance to justify its -810n to the members of the Consultative Committee. Upon motion by Mr. Ransom and by unanimous vote, the amendment was approved to become effective June 22, 1944, with the understanding that it would be sent by wire to the Federal Reserve Banks and that they would be requested to print this amendment and Amendment No. 12, approved by the Board on June 16, 1944, and make the necessary distribution in the respective Federal Reserve districts. It was also understood that a statement for the press regarding the two amendments would be released in a form a:Troved by Mr. Ransom. 996 6144/44 -6Before this meeting there had been circulated among the mem- bers of the Board a memorandum addressed to Mr. Draper by Mr. Parry Illider date of June 16, 1944, in -which the question was raised whether aetion should be taken by the Board at this time to reduce from 60 t°)per cent the maximum loan value of securities prescribed in the BOardt S Regulation T, Extension and Maintenance of Credit by Brokers, Deala'I's/ and Members of National Securities Exchanges, and Regulation 11,14, 4 .ans by Banks for the Purpose of Purchasing or Carrying Stocks Red , L•ered on a National Securities Exchange. Mr. Draper discussed brie„ ""-Y the reasons which might prompt action by the Board at this tijfl These reasons were discussed, and it was agreed that the matter Quould be given further consideration at the meeting of the Board 7 he on Friday, June 23, 1944. At this Point Messrs. Thurston and Parry withdrew from the keettri, fs, and the action stated with respect to each of the matters hel'einafter referred to was then taken by the Board: The minutes of the meetinr, of the Board of Governors of the Reserve System held on June 19, 1944,approved unaniwere lik311sls Y or Letter to Mr. Fleming President of the Federal Reserve Bank , Cle"eland, reading as follows: sal "The Board of Governors approves the payment of arles to the officers of the Federal Reserve Bank 997' 6/20/44 -7-- "Of Cleveland and its Branches for the period July 1, 1944 through April 30, 1945, at the rates as fixed by Your Board of Directors and reported in your letter of June 15/ 1944, as follnws: Annual Name Title M. J. $25,000 President Fleming R. B. Hays 16,500 First Vice President W. H. 15,000 Vice President Pletchp” A. H. 9,000 Tice President and Cashier W. F. TAning 10,000 Taylor Vice President K. H. MacKenzie 8,000 Vice President E. A. 7,500 Carter Assistant Vice President W. D. 7,000 Fulton Assistant Vice President H. B. J. 7,000 Smith Assistant Vice President W. M. Morrison 6,500 Assistant Vice President C. j. Bolthouse 6,500 Assistant Cashier W. L. 6,500 Aps;stant Cashier F. J. Findeisen Blake Assistant Cashier 5,492 Roger R. Clouse Secretary 7,500 P. V. Grays(7,1 9,000 Auditor B. J.fl.Lrancfl 11,000 Lazar Vice President R. N. Ott 7,200 Cashier Salmon Brown 5,000 Assistant Cashier P. J. Geers 5,000 Assistant CashiPr R. G. 5,500 Johnson Assistant Cashier 4t,t bl J.W. argh_Bra11ell 11,000 Kossin Vice President A. G. 9,000 Foster Cashier Clyde Harrell 6,700 Assistant Vice President W. H. Nolte 4,7!4,0 Cashier Assistant J. A. 5,500 Schmidt Cashier Assistant R. J. 5,000 Cashier Steinbrink Assistant a "The Board of Governors also approves the payment of atretainer fee to the firm of Squire, Sanders and Dempsey 4,the rate of 85,000 per annum for the period July 1, 1944 Lqmough April 30, 195'" Anproved unanimously. trikei TeleTram to Mr. W. Eratten Evans, President of the Tennessee 0111PanY, Nashwille, Tennessee, readiny. as follows: 998 6/20/0; "The Board of Governors of the Federal Reserve System has appointed you director of the Nashville Branch of the Federal Reserve Bank of Atlanta for the unexpired portion of term ending December 31, 1946, and will be Pleased to have yollr acceptance by collect telegram." Approved unanimously. Letter to "The First National Bank of Pleasantville", Pleasant1]4 m " 1Ply Ylrk, re ding as follows: "This refers to the resolution adopted on April 29, 1944) by the board of directors of your bank, signifying the bank's desire to surrenier its right to exercise fiduciar.7 powers heretofore granted to it. "The Board, understanding that your bank has been discharged or otherwise properly relieved in accordance with the law of all of its duties as fiduciary, has isa forwil certificate to your bank certifying that is no longer authOrized to exercise any of the fidu!?rr powers covered by the nroviqions of section 11(k) the Federal Reserve Act, as amended. This certificate 18 enclosed herewith. t , "In this connectn, your attention is called to fact that, under the proviFinns of section 11(k) of the Federal Reserve Art, as amen(led, when such a certifi;ate has been issued by the Board of Governors of the tilesdeP 1 Reserve System to a national bank, such bank (1) no longer be subject to the provisions of section 4,kk) of the Federal Reserve Act or the regulations of 1-112e Board of Governors of the Federal Reserve System td4e pursuant thereto, (2) shall be entitled to have re-11111ed to it any securities which it may have deposited 7:th the State or similar authorities for the protection °r Private or court trusts, and (3) shall not exercise any ) 1:. the Powers conferred by section 11(k) of the Federal 0 : 8erve Act except with the permission of the Board of 'Irernors of the Fedel Reserve System. "Since it may be necessary for you to file a certified 1T°113Y of the Board's certificate with the State authorities ha e°nnection with the release of the securities which you ve deposited with them, such a copy is enclosed herewith." Approvod iman;_mously. 999 6/20AL —9— T'le'ram to Mr. Leed7, President of the Federal Reserve Ban': ofKansas City, readir,r, aq follows: "Board has rr)coivod following letter dated June 16 Geor, P Klein, Vice President Colorado National Bank, Denver, Colorado: 'One of our customers, to whom we issued a time certificate of deposit in April of this year, is desirous of cashing the same for the purpose of investing the entire rroceeds in United States Bonds offered in the Fifth War Loan Drive. It is understood, of course, that accrued intereF Will be forfeited. 'May we have your authority to cash said certificate upon the siPning of "an application describing fully the circumstPnces" and, in fact, we ourselves actually selling the Government bonds to the holder of the certificate. We have Offered to "make rl loan to the del- clitor upon the security- of his time denosii.", 1-mt he has refused the same.' You will recall that Bon-rit-f DeoPmber 17, t - 0-1401) stated that withdrawal of time certifiue f" purchase of defense bonds does not constitute Q.ere'ency within meaning of section 4(d) of Regulation „,, Since inauguration of war bond campaigns matter of m Tphdrawal of time certificates of deposits before matuTI.Yfor purchase of war bonds has been discussed with thraUry Department on several occasions and given careconsideration but it has not been deemed advisable to i' cre any action permitting such withdrawals. Will you ndlY reply to Mr. Klein in light of the above." Z q Armroved unanimously. Letter to the PrP idPnt9 of all the Federal Reserve Banks. relAd&ilea 8 f°110Ws: se "There is enclosed a memorandum to all Federal Recorve Banks from the Navy Department, June 17, 1944/ t4Y , Icernin a form of report on canoolled contracts to be "d under section 6(F) of guarantee agreement form of 1600 6/20//4, -10- "APri1 6, 19431 together with a copy of the proposed form. "The form of report is approved by the War Department and the Maritime Commission as well as the Navy Department. You will note that, while the form may be prescribed bY.the Reserve Banks, the Services feel they should not relre use of this particular form until the Reserve Banks ,_ave had an opportunity to comment on it and until it has en "subject ed to the test of experience." r Approved unanimorsly. Letter to Mr. C. N. Nichols, Managing Director of Northeastern 4t)fing, Siding and Insulating Contractors Association, Tic., New York, !kilo y —, "K, reading as follows: "This will acknowledge your letter of June 151 1944, ncerning a possible change in the application of Reguation VI to credits for 'insulated brick siding'. "My letter of June 13 was not intended to foreclose 1°u from bringing to our attention any additional informa',:ion which you might obtain. We shall be glad to have lurther data on the question of production. n "As indicated in the letter of June 131 however, a° new factual information has appeared up to this time fld "neequent1 7 it does not seem possible to reopen the question now. You will understand that a change in the ! ) , ' 1°duction situation would not necessarily call for a revel'sal of the Board's decision." r Approved unanimously. Thereupon the meeting adjourned. _fbgicat, App Chairman. Secreta I.
@FedFRASER