The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
982 A meeting of the Board of Governors of the Federal Reserve SYstem was held in Washington on Wednesday, June 30, 1943, at 12:00 noon, PRESENT: Mr. Mr. Mr. Mr. Ransom, Vice Chairman Szymczak Draper Evans Mr. Morrill, Secretary Mr. Carpenter, Assistant Secretary Mr. Clayton, Assistant to the Chairman Mr. Dreibelbis, General Attorney Mr. Leonard, Director of the Division of Personnel Administration ALSO PRESENT: Mr. Young, President of the Federal Reserve Bank of Chicago Mr. Leonard stated that Mr. Harris, Vice President in charge of the Detroit Branch of the Federal Reserve Bank of Chicago, had submitted 4 Change in the personnel classification plan of the Branch to provide f°r the new position of building superintendent in the Service Departand the positions of carpenter and painter in the Maintenance Der rtment, that the description of work in the new positions had been * written to cover the increased duties resulting from the expansion of the activities of the Branch, -,nd that the matter was being referred to at this time because of the question whether the proposal to establish the new positions represented in effect an increase in the salary r men continuing to do the same work as in the past or whether it rep- resented the establishment of new positions calling for higher degrees 983 6/30/43 -2- of skill than were renuired for the positions previously provided in the Classification plan under the designation of utility man. Mr. Leonard stated that for the reasons set forth in a memowhich he addressed to the Board under date of June 28, 1943, it Was his recommendation that the change in the personnel classification Plan be approved and that this recommendation was concurred in by the Board's Personnel Committee. Upon motion by Mr. Szymczak, the following letter to Mr. Young, President of the Federal Reserve Bank of Chicago, was approved unanimously: "In accordance with the reouest contained in a letter dated June 26, 1943, from Mr. Harris, the Board of Governors approves the changes in the personnel classification plan of the Federal Reserve Bank of Chicago to provide for the following new positions at the Detroit Branch: Maximum Page Salary Annual Position of Title Department Number nt 4,000 Superintende Building Service 5-A 2,700 Carpenter Maintenance 53-D 2,520 Painter Maintenance 53-E "The proposed reduction from $3,000 to 4.p2,700 in the maximum annual salary for the position of Carpenter at the Branch has been discussed with Mr. Harris and meets with his approval." At this point Chairman Alccles joined the meeting. Mr. Leonard then stated that since 1938 the Federal Reserve Banks had been paying overtime in accordance with the requirements of the Pair Labor Standards Act to all employees of the Banks except those 17110 Were in supervisory positions as interpreted by the respective Federal Reserve Banks, that under the President's "hold-the-line" Executive °1'clor the Banks were now prohibited from paying overtime to employees in 811Pervisory positions, end that this was resulting in some cases in the 984 6/30/43 lower-saleried peo -le being paid more than the supervisory personnel. He said that the matter had been under discussion with representatives of the Bureau of Internal Revenue since April of this year, that a formula had been worked out which, it was widen:tope, informally, wculd be approved by the Bureau of Internal :Lew:nue, and that it was now proPc)ced, with the concurrence of the Personnel Committee, to submit the f°rmul in a letter to the Bureau of Internal hevenue for formal ap- Proval. In considering the matter, Mr. Leonard said, Mr. A. L. Burford, Uept1, Commissioner of Internal Revenue, had taken the tosition that, viel, of the work which the Federal Reserve Banks were doing for the Golrernment, there was ample justification for the approval for them of a M°dification of the formula relating: to the payment of overtime to Government employees, and that the formula that had been worked out colild be approved on that basis. Mr. Leonard then r-ad a draft of let- 1:hich had been prepared for snbmission of the matter to Mr. Burford the following form: "The Federal Reserve Banks have been paying overtime tr, their employees in accordance with the standards of the Fair Labor Standards Act. With the substantial amount of overtime being worked at the Reserve Banks, this has resulted in manifest injustices in the case of the so-called exempt employees to whom the standards of the Fair Labor Standards Act do not apply and who have not been receiving overtime. "This situation has been discussed with you and members of your staff by members of the Board's staff. In the light of those discussions and subject to your approval under the salary stabilization regulations, the Board of Governors proposes to authorize the Federal Reserve Banks 985 , 6/30/43 —4— "to pay overtime within the following limitations to socalled exempt employees: Subject to such further limitations or conditions as a Reserve Bank may find appropriate, a Reserve Bank may pay overtime, in accordance with the following program, to employees (including officers) who are regarded as exempt under the Fair Labor Standards Act Overtime may be paid to officers or exempt 1. employees within the following rates a. At the rate of time and one-half on the first *2,400 of basic annual salaries up to and including 0,000. b. At the rate of time and one-half on the first $1,800 of basic annual salaries of more than $5,000 but not more than $6,000. C. At the rate of time and one-half on the first a,200 of basic annual salaries of more than6,000 but not more than $7,000. 2. Overtime shall be paid on basic annual salary and not on supplemental compensation. Subject to the over-all provision that an ad3. ditional eaualizing payment may be made when necessary to provide that for working the same number of hours no one will receive less compensation (including basic annual salary, overtime, and supplemental compensation, if any) than is received by another individual . with the same or lower basic annual salary "It will be appreciated if you will advise the Board of your approval Governors whether the proposed procedure has tions. regula n izatio stabil Under the salary "Enclosed for your information is a copy of the letter Which the Board of Governors plans to send to the Federal Reserve Banks upon receipt of advice that the program is approved." The letter to the Federal Reserve Banks read as follows: "With the increased hours of work at the Federal Reserve Banks, several of the Banks have pointed out the injustices resulting from the lengthened hours of work and the payment of overtime in accordance with the standards of the Fair Labor Standards Act with no provision for overtime to the sothat some provicalled exempt employees, and have requested to me employees who overti sion be made for the payment of have been classified as exempt. "Payment of overtime to such employees comes within the scope of the salary stabilization regulations issued by the to meet the situation Commissioner of Internal Revenue. Action 986 6/30/43 —5— "had been initiated by the Board but was necessarily suspended in view of the 'Hold-the-Line' Executive Order of April 8. In the meantime, however, the matter has been the subject of discussions with the office of the Commissioner of Internal Revenue in the effort to work out a solution to the problem. As a result of such discussions and in accordance with a program approved by the Commissioner of Internal Revenue, the Board authorizes the payment of overtime by the Federal Reserve Banks within the following limitations to so-called e::empt employees. "Subject to such further limitations or conditions as a Reserve Bank may find appropriate, a Reserve Bank may pay overtime, in accordance with the following, program, to employees (including officers) who are regarded as exempt under the Fair Labor Standards Act Overtime may be paid to officers or exempt 1. employees within the following rates a. At the rate of time and one-half on the first $2,400 of basic annual salaries up to and including $5,000. b. At the rate of time and one-half on the first $1,800 of basic annual salaries of more than $5,000 but not more than $6,000. C. At the rate of time and one-half on the first $1,200 of basic annual salaries of more than 6,000 but not more than $7,000. 2. Overtime shall be paid on basic annual salary and not on supplemental compensation. 3. Subject to the over-all provision that an additional equalizing payment may be made when necessary to provide that for working the same number of hours no one will receive less compensation (including basic annual salary, overtime, and supplemental compensation, if any) than is received by another individual with the same or lower basic annual salary. "This authorization does not require any change in a practice with respect to payment of overtime to so-called exempt e mployees which was in effect at time of the issuance of the salary stabilization regulations. "The foregoing provisions have been purposely drafted in sUch form so as to permit each Bank to work out a program best fitted for its own situation and with the expectation that appropriate administrative procedure will prevent any abuse of the authorization. In particular, it is expected that payment 987 -6-- 6/30/43 "of overtime under the authorization will apply only to overtime worked in accordance with established hours or to overtim properly authorized or approved as being necessary. It is also expected that overtime will not be paid to officers and senior personnel for occasional or small amounts of overtime but that it will be paid only in cases Where the hours have been definitely increased or where officers or senior personnel are required to work substantial amounts of overtime." At the conclusion of the discussion, and on motion by Mr. Szymczak, the letter to Mr. Burford and draft of letter to the Federal Reserve Banks were approved unanimously, with the understanding (1) that the letter to the Federal Reserve Banks would be sent upon advice from the Bureau of Internal Revenue of approval of the formula for overtime payments, (2) that the letter to Cleveland would authorize the payment of overtime at the head office in accordance with the formula beginning June 4, and (3) that the letter to Chicago would authorize such payments at the Detroit Branch beginning April 1, 1943. Mr. hansom stated that Mr. Harrison, Vice President of the Federal Advisory Council, had called on the telephone stating that he had tried to reach Chairman Lccles but had been unable to do so, and that ill view of the fact that Messrs. Brown and Fleming and possibly other Illernbers of the executive committee of the Federal Advisory Council would not be able to attend the meeting which was scheduled to be held in WashOn July 7 he (Mr. Harrison) would like to know whether there "uld be any objection on the part of the Board if the meeting were postWith the understanding that, if anything should arise to warrant the meeting might taKe place later in the month. Mr. Ransom stated that he had assumed the responsibility of advising Mr. Harrison that the 988 6/30/43 Board would have no objection, whereupon Mr. Harrison replied that he would advise Mr. Lichtenstein, as Secretary of the Council, accord- The members of the Board who were present indicated that they were in agreement with the position which Mr. Ransom had taken. Secretary's note: Following a telegram was received from stating that the meeting had subject to the understanding the meeting Mr. Lichtenstein been postponed set forth above. Under date of June 25, 1943, Mr. Leonard addressed a memorandum to the Board with which he submitted a telegram received from Mr. Y°1-Ing, President of the Federal Reserve Bank of Chicago, in which it waS stated that a CIO labor union claiming to represent a majority of the guards at the Detroit Branch had requested by letter that the 131"anch recognize the union as the sole, exclusive bargaining agent for 411 of the guards at the Branch and to set a time for necotiation, prefablY on June 27. ' el This memorandum was circulated among the members of the Board. Mr. Dreibelbis stated that when Mr. Szymczak was in Detroit lest Week he discussed the matter with Mr. Harris and subsequently over the telephone with Mr. Leonard and himself (Mr. Dreibelbis), and that after the matter had been discussed by some of the members of the Board and 48 staff the decision was reached that the position should be taken that, since salaries at the Branch were not determined by the Branch but by the Federal Reserve Bank of Chicago subject to the approval of 989 6/30/43 the Board of Governors, and since the National Labor Relations Act did "t apply to the United States or States or political subdivisions thereof, the Board was not in a position to negotiate or to approve a negotiation by the Federal Reserve Bank or the Detroit Branch with representatives of the labor union. Mr. Dreibelbis added that this morning a telegram was received from Mr. Harris transmitting a copy of a letter received from Frank H. Bowen, Director of the National Labor Relations Board for the Seventh Region, in which it was stated that a petition for certification of representatives pursuant to Section 9(c) of the Ilational Labor Relations Act had been filed by the International Union, United Automobile, Aircraft, and Agricultural Implement Workers of America (UAW-CIO) involving the Branch, that Field hxaminer Ruth Greenberg had been assiTned to the case and in her normal course of investigation would contact the Branch, and that its cooperation with her would be appreciated. (A subseouent wire was received from Ur. Harris quoting 4 subsequent letter from Mr. Bowen stating that the labor union involved was the Amalgamated Plant Protection Local Union No. 114 (UAW-CIO) intead of the International Union, United Automobile, Aircraft, and Agri-. ellitural Implement Workers of America, and that the record should be changed accordingly.) There was agreement on the part of the members of the Board (1) that the informal position previously taken should be adhered to and (2) that Mr. Szymczak should call the National Labor Relations Board and arrange for an informal discussion of the matter by Messrs. Leonard and Dreibelbis with members of the National Labor Relations Board staff. 990 6/30/43 —9— It was also understood that Mir. Young would advise Mr. Harris of this decision and that Mr. Young would take the matter up with the directors of the Chicago Bank with a view to ascertaining whether they would ratify the infora1 actions that had been ta's.en. Mr. Szymeza'c reported that while he was at the Federal Reserve BaIT4 of Dallas on June 21, 1943, he attended a meeting of the directors with Mr. Stroud, First Vice President and General Counsel, at which it Wa8 agreed that Mr. ) , to en— Stroud had recovered his health sufficientl, able him to return to work by the end of this month. Accordingly, it aS understood that Mr. Wingfield, Assistant General Attorney in the ' 13° -rd's Legal Division, who had been loaned to the Dallas Bank to do its legal Work during Mr. •Stroud's absence, would return to Zashington this week. At this point Messrs. Dreibelbis, Leonard, and Young withdrew er'°m the meeting, and the action statod with respect to each of the mat— ters hereinaftc,r referred to was then taken by the Board: The minutes of the meeting of the Board of Governors of the Fed— el'al Reserve System held on Juno 29, 1943, were approved unanimously. The minutes of the meeting of the Board of Governors of the e‘deral Reserve System with the Presidents of the Federal Reserve Banks held on June 29, 1943, were approved unanimously. Memorandum dated June 25, 1943, from Mr. Paulger, Chief of the olon of Examinations, reco=ending that, effective August 2 1943, and subject to his passing satisfactorily the usual physical examination, Carl A. Smith be appointed as an Assistant Federal Reserve Examiner on 4 te-aporary basis for an indefinite period, with basic salary at the rate of •2,400 per annum, and with official headquarters at Little Rock, 41`kansas. 991 6/30/43 -10By unanimous vote, and subject to his passly the usual physical examinasatisfactori ing Smith was appointed on a A. Carl tion, Mr. an indefinite period as an for basis temporary Reserve Banks, memFederal examine to examiner System, and Reserve Federal the ber banks of the provisions of under operating corporations Federal Reserve Act, the of 25(a) sections 25 and Act and Reserve Federal the for all purposes of to expertaining Congress of all other acts of the direction under or for, aminations made by, of the Board of Governors of the Federal Reserve System, and was designated as an Assistant Federal Reserve Examiner, with official headquarters at Little Rock, Arkansas, and with basic per annum, effec1 salary at the rate of .2,400 tive August 2, 1943. Memorandum dated June 21, 1943, from Mr. Paulger, Chief of the D •. ivision of Examinations, recommending that Mrs. Helen K. Berg be apPcinted as a stenographer in that Division on a temporary basis for a Period of not to exceed three months, with basic salary at the rate t1,620 per annum, effective as of the date upon which she enters Upon the performance of her duties after having passed satisfactorily the usual physical examination, with the understanding (1) that if her services prove satisfactory she will be recommended for a permanent apPcintment and (2) that if anything derogatory should develop in the investigation of her references her services may be terminated imqediately. Approved unanimously. Memorandum dated June 25, 1943, from Mr. Morrill, recommending that Miss Virginia Eggemeyer be appointed as a junior file clerk in the SeeretarY's Office on a temporary basis for a period of not to exceed stx months, with basic salary at the rate of $1,440 per annum, effective as of the date upon which she enters upon the performance of her 992 6/30/43 —11- duties after having passed satisfactorily the usual physical examination, with the understanding (1) that if her services prove satisfactory she will be recommended for a permanent appointment and (2) that if anything derogatory should develop in the investigation of her references her services may be terminated immediately. Approved unanimously. Memorandum dated June 25, 1943, from 'Ir. Leonard, Director of the Division of Personnel Administration, recommending that the follow— ing increases in basic annual salaries of employees in that Division be aPProved, effective July 1, 1943: Name Desip;nation Salary Increase From To Interviewer Bangs, Olga W. Secretary to Mr. Leonard Shock, Dorothy M. Poundstone, Florence M. Clerk Stenographer Moore, June A. 2,600 $2,800 2,040 2,300 2,100 2,300 1,800 1,920 Approved unanimously. Letter to "The Saline Savings Bank", Saline, Michigan, reading as follows: "The Board is glad to learn that you have completed all arrangements for the admission of your bank to the Federal Reserve System and takes pleasure in transmitting herewith a formal certificate of your membership. "It will be appreciated if you will acknowledge receipt Of this certificate." Approved unanimously. Letter to Mr. Gidney, Vice President of the Federal Reserve Bank Of New York, reading as follows: . "Reference is made to your letter of June 17, 1943, sub— mitting for consideration of the Board the proposal of The 993 6/30/43 -12- "County Trust Com2any, White Plains, New York, to purchase assets and assume the de2osit liabilities of The First National Bank of Pleasantville, Pleasantville, New York, and to move the location of its branch now operated in Pleasantville diagonally across the street into the quarters now occupied by The First National Bank. "The Board concurs in your opinion that the transaction . Will not result in a change in the general character of assets of, or broadening in the functions exercised by The County Trust Company within the meaning of condition of membership numbered 5 applicable to that institution, and that the proposed change in the location of the branch can be effected Within the permission previously granted The County Trust Company for the operation of a branch in Pleasantville. Therefore, the Board will interpose no objection to the consummation of the transaction substantially as proposed provided prior approval of the appropriate State authorities is Obtained and counsel for the Reserve Bank is to be satisfied as to the legal aspects involved. "It is understood that The County Trust Company will acquire at agreed true value the furniture and fixtures and the safe deposit equipment of The First National Bank of Pleasantville but, otherwise, will acquire no fixed assets, substandard securities, nor other real estate. It is underStood also that the capital account of The County Trust Company is to be increased by C200,000 in connection with the transaction, through the issuance of that amount of capital debentures." Approired unanimously. Letter to ".ir. Knoke, Vice President of the Federal Reserve Bank Ilew York, reading as follows: "With further reference to your letter of June 11 and our reply of June 25, 1943, there is enclosed a copy of a letter received under date of June 28, 1943, from the Commlssioner of Customs with respect to the procedure for handling communications between the Federal Reserve Bank Of New York and the Banque Nationale Suisse with reference to the accounts on your books in the name of the latter institution. "As indicated in our letter of June 25, we shall be Pleased, if you so desire, to endeavor to work out with the C)ffice of Censorship and the Dureau of Customs a practicable procedure for the handlin, of these communications." Approved unanimously. Thereupon the meeting adjourned.
@FedFRASER