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973 A meeting of the Board Of Governors of the Federal Reserve SYstem was held in Washington on Thursday, June 27, 1946, at 10:30 a. m. PRESENT: Mr. Mr. Mr. Mr. Eccles, Chairman Szymczak Draper Evans Mr. Carpenter, Secretary Mr. Morrill, Special Adviser Mr. Thurston, Assistant to the Chairman Mr. Vardaman was absent on official business visiting the ?ederal Reserve Bank of New York. The action stated with respect to each of the matters here— inafter referred to was taken by the Board: The minutes of the meeting of the Board of Governors of the Reserve System held on June 26 1946, were approved unani— The minutes of the meeting of the Board of Governors of the ped„,1 Reserve System with the executive committee of the Federal kilrisory Council held on June 26, 1946, were approved unanimously. Memoranda dated June 17 and June 19, 1946, respectively/ tr°n1 Mr. Thomas, Director of the Division of Research and Statistics, l'ecommending that the basic annual salaries of the following employees 41 that Division be increased as set forth below, effective at the beginning of the first pay roll period following approval by the 8°ard: 974 6/27/46 Name Lloyd A. Metzler, Viola A. Hodson, Rervey A. Robinson, Esther G. Crews, Uary White, Uary F. Weaver, Melba A. Coone, Eleanor Wirth, Evelyn K. Hempstead, Florence R. Cox Title Economist Clerk Clerk—Stenographer Ittf Proposed Increase To From $6,230 $5,600 3,090 2,980 2,870 2,760 2,650 2,496 2,650 2,430 2,298 2,496 1,980 2,100 2,100 2,232 2,232 2,100 2,298 2,100 Approved unanimously, effective June 30, 1946. Memorandum dated June 21, 1946, from Mr. Morse, Assistant Di— /lector of the Division of Research and Statistics, recommending that Miss Juliet P. Tillema be appointed as a Clerk in that Division for 4 Period of not to exceed four months, with a basic salary at the rate c)f $1,902 per annum, effective as of the date upon which she enters Upon the performance of her duties, after having passed the usual Physical examination. The memorandum also stated that in view of the temporary nature of her appointment Miss Tillema would not become a raelither of the Federal Reserve retirement system. Approved unanimously. Letter to Honorable James M. Mead, United States Senate, Ilashington, D. C., reading as follows: "This refers to the letter of Mr. Christian B. Jebsen, 3165 29th Street, Astoria, New York, dated April 22, 1946, which you referred to us under date of June 13 for our consideration and a report. Jebsen affirms that the Board's security loan reg— ulations prevent him from borrowing on securities in order to meet living expenses. Although he does not state just how this 975 6/27/46 -3- "happens, it is implied that he holds the securities in a margin account with a broker, since otherwise his borrowing would not be restricted by these regulations. "In the event that Mr. Jebsen's securities are already Pledged for a loan in a margin account with a broker, the pressent provisions of Regulation T would prevent him from using the same collateral for both the existing loan, which would have been incurred to purchase or carry securities, and the additional loan he would like to obtain for living expenses. Such an additional loan would be equivalent to a withdrawal of cash or securities from a margin account, which is prohibited by the present provisions of the regulation because it would in effect be an increase in the loan by the broker for the purpose of carrying securities. "The regulation does not prevent anyone under such circumstances from withdrawing his equity in a margin account pro'Tided he pays his entire indebtedness to the broker. Hence, if Jebsen's problem arises from inability to borrow on his equity in a margin account, the difficulty may in fact be due to his desire to continue carrying securities on borrowed money. "The Board naturally has no desire to prevent people from borrowing money for living expenses or other purposes that do not harm the public interest. These security loan regulations, issued under the authority of the Securities Exchange Act of 1934, are designed only to prevent the excessive use of credit for purchasing or carrying securities. Regulation U, which applies to banks, does not regulate loans made for purposes other than the Purchase or carrying of securities. Regulation T, applying in general to securities brokers and dealers, specifically provides that they may make loans for other purposes under certain conditions which help to prevent the credit getting into the securities markets. "The provision of Regulation T which may be restricting Mr. Jebsen's loan -- the prohibition against withdrawals from margin accounts unless the entire debt on them is paid off -le in our opinion one of the most necessary and effective provisions of the regulation. Any relaxation of this requirement, we believe, would not only give present holders of margin accounts an unfair advantage over those who have not yet entered th e market, but also would seriously weaken the effectiveness of the regulation as a part of the Government's anti-inflation Program. "As requested, your correspondent's letter is returned herewith." Approved unanimously. 976 6/27/46 -4Letter to Mr. Douglas, Vice President of the Federal Reserve sank of New York, reading as follows: "The Board of Governors approves the changes in the personnel classification plan of the Federal Reserve Bank of New York, involving the establishment of -the position of Head Porter and the elimination of the positions of Head Night Porter and Head Day Porter, as submitted with your letter of June 211 1946." Approved unanimously. Letter to Mr. Rainey, Director of Personnel at the Federal Reserve Bank of Atlanta, reading as follows: "In accordance with the request contained in your letter of June 21, 1946, the Board of Governors approves the payment of salaries to the following employees at the rates indicated which are more than 15 per cent in excess of the maximum annual salaries established under the personnel classification plan for the respective positions: Name W. S. Dennis, Jr. Beulah Knapp Levings Laney I.H.Martin Grace McCullough Title Annual Salary Senior Clerk$3,120 R.F.C. Custody Senior Clerk2,420 Statistical & Analytical ManagerAssistant 3,600 R.F.C. Custody Manager4,300 Check Collection Teller Sorting Currency 21580" Currency and Coin Approved unanimously. Memorandum dated June 26, 1946, from Mr. Thomas, DirectOr of the 1)1 , vision of Research and Statistics, recommending that Mr. David L. Grovel jr1 Economist in that Division, be granted an advance of funds in the el111 of t250 for use in helping to meet the expenses of his forthcoming 977 6/27/46 -5- triP, approved by the Board on June 25, 1946, for travel to the Pablic of Guatemala. As security for this advance Mr. Grove has consented to the deduction from any amount due him for accumulated a-111111-1 leave, through separation from service at the Board, of any araount due and refundable to him in the event of his failure to account properly for any moneys advanced to him by the Board of Governors, Approved unanimously. Thereupon the meeting adjourne Sec etary.
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