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A meeting of the Board of Governors of the Federal Reserve SYstem was held in Washington on Tuesday, June 23, 1942, at 11:00 a.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Eccles, Chairman 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 June 22, 1942, were approved unanimously. Memorandum dated June 19, 1942, from Mr. Goldenweiser, Direct°1 'of the Division of Research and Statistics, recommending (1) that Alfred Bettman of Cincinnati, Ohio, be appointed on a part-time basis 144 Special Consultant in that Division, in connection with Mr. Hansen's w°1'k on urban redevelopment, with salary at the rate of ,;50.00 for e4ch day worked up to a total of 60 days, and (2) that Mr. Bettman be rei 41rSed for his actual necessary travel expenses between Cincinnati ' " 4 Washington in connection with trips to Washington for consultation with the Board's staff and to and from other points to which he might be ent under proper written travel authorization on official business of the Board. Approved unanimously, with the understanding that Mr. Bettman would not be required to take the usual physical examination and that he would not become a 6/23/42 -2member of the retirement system. Memorandum dated June 16, 1942, from 'Mr. Goldenweiser, Direct°1* of the Division of Research and Statistics, recommending that jUllua Margolis be appointed as a junior economist in that Division °I1 a temporary basis for a period of not to exceed three months, with eslarY at the rate of $225 per month, effective as of the date upon Ithieh he enters upon the performance of his duties after having passed satisfactorily the usual physical examination. Approved unanimously. Memorandum dated June 19, 1942, from Mr. Wyatt, General Counsel l'ec°111111erlding that, effective July 1, 1942, (1) the salary of Jerome W. N'be increased from $3,200 to $3,800 per annum and his title changed fr°s1 law clerk to Assistant Counsel, and (2) the salary of Nilson L. HOofp 4* / a law clerk, be increased from $3,300 to $3,600 per annum. Approved unanimously. Memorandum dated June 11, 1942, from Mr. Goldenweiser, Direc- tor Of the Division of Research and Statistics, recommending that Mrs. .6"ret Collier, a clerk-stenographer in that Division, be granted a lkke-ve of absence for a period of not to exceed six months from June 15 to 'December 15, 1942. The memorandum stated that Mrs. Collier's accumulateA " and accrued annual leave would carry her through 4=45 p.m.. on July 16, lo ' 42, after which she would be absent 152 days and one hour with- °tit and that during her absence without pay it was proposed that t 6/23/42 -3- neither she nor the Board would contribute to the retirement system On her behalf. The reason for the leave was that Mrs. Collier was tlecent4 married to Raymond Collier, an employee of the Board now on Itetive duty in the Navy, and that she desired to spend the time with 4111 in Boston, Massachusetts, where he was stationed prior to being sent abroad at some later date. Approved unanimously, with the understanding that this action will not constitute a precedent except in an exactly similar case. Letter to Mr. Sproul, President of the Federal Reserve Bank of iletr York, reading as follows: "It is noted from your letter of June 12, 1942, that at the meeting of the Executive Committee of your Board of Directors held on June 11, 1942, Mr. H. A. Bilby was appointed a Manager and has been assigned by you as Manager, Check Department; also, that Mr. Bilby will continue as Assistant Secretary. The Board approves payment of sal7 to Mr. Bilby, Manager, Check Department and Assistant Secretary, at his present rate of $7,500 per annum for the period ending March 31, 1943. "It is also noted from your letter that on June 10, 1942, Mr. C. N. Van Houten, formerly Manager, Security Custody Department, was assigned to the Foreign Property Control Department with the title of Manager, Foreign •Property Control Department." Approved unanimously. Letter to Mr. Gidney, Vice President of the Federal Reserve Bank or York, reading as follows: "Receipt is acknowledged of your letter of June 16, ?42 with regard to the proposed termination of the afIlliate relationship between J. P. Morgan & Co. Incorporated 1 1274 6/23/42 "and Morgan Grenfel1 & Co. Limited, which affiliate relationship was referred to in the Board's letter of April 23/ 1942 approving the application of J. P. Morgan & Co. for membership in the Federal Reserve System. You enclosed a letter from Mr. Henry C. Alexander, Vice President of J. P. Morgan & Co., requesting the Board to rule that, upon certain steps having been taken, the affiliate relationship Will be terminated. "It appears that it is expected that at an election of directors of Morgan Grenfell & Co., which will be held at an early date, the number of shares voted will be more than twice the number of voting shares of the company owned or controlled by J. P. Morgan & Co. It also appears that at an early date J. P. Morgan & Co. will transfer to certain trustees the legal title and voting rights to all of the voting shares it owns in Morgan Grenfell & Co. in accordance 'with the terms of a trust agreement, a copy of which you have forwarded to the Board. It is provided in such agreement that it shall continue in force until June 1, 1952, or until prior termination thereof upon the happening of certain contingencies over which J. P. Morgan & Co. does not have a control. We are also advised by Mr. Alexander that neither J. P. Morgan & Co. nor any of its officers or directors control or possess the power to control ln any manner the trustees named in the proposed trust agreement. "On the basis of the information which has been submitted, the Board is of the opinion that, upon the steps described above having been taken, the affiliate relationship between Morgan Grenfell & Co. and J. P. Morgan & Co. Will have been terminated. As indicated, the Board's Yiews are expressed on the basis of the facts now before lt and, of course, if there should be any change in such Iacts the Board's conclusion as to the affiliate relationship may be different. "Please advise J. P. Morgan & Co. of the Board's views in the premises." Approved unanimously. Letter to the Pentson Corp. of New Jersey and the Home and For" ecurities Corporation, both of Jersey City, New Jersey, reading f°11ows: "This refers to your joint letter of June 8, 1942, transmitted through the Federal Reserve Bank of New York, 6/23/42 -5- "relating to the status of your corporations as holding company affiliates. "The Board understands that Pentson Corp. of New Jersey owns a majority of the common stock of Home and Foreign Securities Corporation; that Home and Foreign Securities Corporation owns 12,722 shares, and its subsidiary, Oils &Industries, Inc., owns 7,062 shares, of the 40,000 outstanding shares of stock of Colonial Trust Company, New York, New York, the total (19,784 shares) being more than 50 percentum of the number of shares (26,677 shares) voted for the election of directors of the trust company at the preceding election; and that neither Pentson Corp. of New Jersey nor Home and Foreign Securities Corporation °Mla or controls any stock of, or manages or controls, any banking institution other than Colonial Trust Company. "In view of these facts, the Board has determined that your corporations are not engaged, directly or indirectly, as a business in holding the stock of, or manag!ng or controlling, banks, banking associations, savings or trust companies, within the meaning of section .fk e) of the Banking Act of 1933, as amended, and, accordnay, your corporations are not holding company affiliates any purposes other than those of section 23A of the Federal Reserve Act. "If, however, either of your corporations should at any time own or control a substantial portion of the stock or manage or control, more than one banking institution, this matter should again be submitted to the Board for its determination. The Board reserves the right to make further determination at any time on the basis of the .6hen existing facts." Approved unanimously, for transmission through the Federal Reserve Bank of New York. Telegram to Mr. Woolley, Vice President of the Federal Reserve of Kansas City, reading as follows: "Your wire June 22. Item 5 in Group A in section 13(a) of Regulation Wincludes batteries and accessories for trucks." Approved unanimously. Thereupon the meeting adjourned.
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