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Minutes of actions taken by the Board of Governors of the Federal Reserve System on Thursday, June 30, 1955. The Board met in the Board Room at 9:30 a.m. PRESENT: Mt. Mt. Mr. Mr. Mr. Martin, Chairman Balderston, Vice Chairman Mills Robertson Shepardson Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Carpenter, Secretary Sherman, Assistant Secretary Kenyon, Assistant Secretary Thurston, Assistant to the Board Riefler, Assistant to the Chairman Thomas, Economic Adviser to the Board Vest, General Counsel Sloan, Director, Division of Examinations Marget, Director, Division of International Finance Garfield, Adviser on Economic Research, Division of Research and Statistics Solomon, Assistant General Counsel Cherry, Legislative Counsel Mr. Exter, Vice President, Federal Reserve Bank of New York Mt. Mills, First Vice President, Federal Reserve Bank of Minneapolis Pursuant to an invitation extended by the Board, Vice President Exter was present to comment on his trip to Europe earlier this year, during the course of which he had discussions with central bank officials in some dozen European countries. In addition to reporting his observa- tions concerning general economic and financial conditions, including contrasts between countries Mr. Exter summarized remarks which were made to him by central bankers regarding the movement toward currency 1166 -2- 6/30/55 convertibility. He discussed particularly considerations involving the timing of possible action to make the pound sterling fully convertible and questions surrounding a flexible rate for sterling as opposed to a fixed rate. After some discussion based on his report, Mr. Exter withdrew from the meeting along with First Vice President Mills and Messrs. Marget, Garfield, and Solomon. The following draft of letter to the Board of Directors of The County Trust Company, White Plains, New York, which had been circulated to the members of the Board, was presented for consideration: The Board of Governors approves the establishment of a branch by The County Trust Company, White Plains, New York, at 96 West Post Road, White Plains, New York, provided the branch is established within six months from the date of this letter. Approved unanimously, for transmittal through the Federal Reserve Bank of New York. At this point Mr. Hackley, Assistant General Counsel, entered the room. In accordance with the understanding at the meeting of the Board yesterday, Mr. Thurston had prepared a revised draft of statement concerning bank holding company legislation to be given by Chairman Martin on July 5, 1955, before the Senate Banking and Currency Committee. Since it had been ascertained that the bill introduced by Senator Robertson (S. 2350) was in accord with the Board's previously expressed views regarding bank -3- 6/30/55 holding company legislation, the draft took a position in support of that bill as representing the best form of legislation to deal with bank holding company problems. The draft also would state that the Board con- sidered appropriate legislation essential and long overdue. During a discussion of the revised draft, Governor Vardaman joined the meeting. There being agreement with the approach taken in the draft, several suggestions for changes in language were offered and the statement was then approved unanimously in the revised form. Minutes of actions taken by the Board of Governors of the Federal Reserve System on June 29, 1955, were approved unanimously. At this point Mr. Johnson, Controller, and Director, Division of Personnel Administration, entered the room. Prior to this meeting there had been sent to the members of the Board copies of a memorandum from the Division of Personnel Administration dated June 28, 1955, which stated that the President of the United States had signed the Federal Employees Salary Increase Act of 1955, increasing the rates of compensation of certain officers and employees of the Federal Government by approximately 7.5 per cent effective as of the first day of the first pay period which began after February 28, 1955. For reasons stated, the memorandum recommended that the Board of Governors take the following actions effective March 13, 1955 (the first day of the first pay period which began after February 28, 1955): 1168 -4- 6/30/55 1. As to employees covered by the Board's regular salary schedule Increase salary steps of each group in the Board's regular salary schedule in accordance with an attached table corresponding with increases established for equivalent salary steps by the Federal Employees Salary Increase Act of 1955; and adjust basic compensations accordingly. 2. As to employees not covered by the Board's regular salary schedule (a) Employees in the Board Members' Offices Increase the annual salaries of the employees in the Board Members' Offices in the following amounts: Name Catherine T. Broderick Madeleine Benton Dorothy Duke Dorothy S. Mooney Virginia J. Ogilvie Elsie M. Westman Helen B. Wolcott Anne I. Cotten Margaret N. Muehlhaus Elnyr D. Newcome Catherine L. Schmidt Ruth E. Morris Doris I. Abell Athens J. Messick Otto Branic Fredrick L. Frost Bishop Hart Michael L. Jamison Henry Tate Henry Tidwell Title Secretary to Secretary to Secretary to Secretary to Secretary to Secretary to Secretary to Secretary Secretary to Secretary to Secretary to Secretary to Stenographer Stenographer Messenger Messenger Messenger Messenger Messenger Messenger the Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Present Proposed Salary Salary $6,100 $6,560 Chairman 5,800 6,235 Mills 5,800 6,235 Vardaman 6,235 5,800 Robertson ,66o 2./ 4,330 Szymczak Shepardson 5,800 o,235 6,235 Balderston 5,800 5,485 5,100 5,85 5,100 Thurston 5,100 Thomas 5,485 5,485 5,100 Riefler 4,890 4,545 Fauver 3,910 4,210 4,075 21 3,785 3,150 3,385 3,150 3,385 3,385 3,150 3,150 3,385 3,150 3,385 3,150 3,385 1.7 Without adjustment for salary increase effective July 3,1955, which was approved by the Board on June 28, 1955. 1169 6/30/55 (b) Per diem employees Increase the salary of Elsie Mae Hart, Substitute Maid, Division of Personnel Administration, from $9.50 to $10.25 per day. Increase the salary of Mary A. Weikel, Substitute Telephone Operator, Division of Administrative Services, from $13.00 to $14.00 per day for the retroactive period beginning on March 13 through June 22, 1955. Grant no increases for the Substitute Nurses, as salaries for these positions are based upon the prevailing rate for Registered Nurses in the District of Columbia. (c) Employees covered by the Printing Grade Salary Schedule (The Salary Increase Act does not increase salaries established under a prevailing rate schedule except for certain of those employees who have been transferred, with their positions, to this schedule since January 1, 1952. It specifically provides protection against their prevailing rate compensation being less on the date of enactment of the Act than if they had Increase the annual remained in their former salary schedule.) salary of Herbert Wm. Bundy, Operator, Duplicating Devices, Division of Administrative Services, from $3,474 to $3,600, as he was transferred with his position to the Board's printing grade salary schedule on February 27, 1955, and had his position remained in the Board's regular schedule, his salary would have been $3,600 under the proposed increase. 3. As an exception to the equivalent salary step increase Increase the annual salary of James F. Hamilton, Messenger, Division of Administrative Services, from $3,150 to $3,285. 4. As to retroactive provisions (a) Make the initial salary increases effective March 13, 1955, or as of the date of employment by the Board, if later, with all subsequent increases, if any, to correspond to the equivalent steps of the new salary schedule. (b) Provide that only those employees on the Board's rolls as of the date of the approval of this recommendation be entitled to retroactive pay. -6- 6/30/55 (c) Provide that retired employees whose retirements have taken place during the retroactive period be given retroactive pay covering the amount of the increase from March 131 1955, to the date of retirement. (d) Provide that employees deceased during the period beginning March 13, 1955, and ending as of the date of approval of this recommendation be entitled to retroactive pay. 5. As to adjustments of salaries approved by Board effective July 3, 1955 Adjust these salary increases to the commensurate step in the new salary schedule if the new schedule is adopted prior to July 1955. 6. As to pending appointments Adjust salary to the commensurate step in the new salary schedule for any employee whose appointment has been approved by the Board but who has not yet reported for duty. 7. As to administration and procedure Authorize the Office of the Controller and the Division of Personnel Administration to use Government rulings and interpretations with regard to the current Salary Increase Act as guides in deciding questions of administration and procedure. There had also been sent to the members of the Board, with the aforementioned memorandum from the Division of Personnel Administration, copies of a memorandum dated June 27, 1955, from Mr. Vest, General Counsel, discussing the legal applicability of the Federal Employees Salary Increase Act of 1955 to the Board's employees. Following an explanatory statement by Mr. Johnson concerning the pay increase act, all of the members of the staff except Mr. Johnson withdrew from the meeting. -7- 6/3055 The Secretary subsequently was informed that the Board approved the recommendations contained in the memorandum from the Division of Personnel Administration dated June 28, 1955; and that, acting pursuant to the recommendation contained in a memorandum from Governor Robertson dated June 29, 1955, the Board also approved increases in the annual salaries of certain members of its official staff, as follows, effective March 13, 1955: Name and title Frank R. Garfield, Adviser on Economic Research, Division of Research and Statistics J. E. Horbett, Assistant Director, Division of Bank Operations Guy E. Noyes, Assistant Director, Division of Research and Statistics Frederic Solomon, Assistant General Counsel Gardner L. Boothe, II, Administrator, Office of Defense Loans Susan S. Burr, Assistant Director, Division of Research and Statistics Alfred K. Cherry, Legislative Counsel Howard H. Hackley, Assistant General Counsel David B. Hexter, Assistant General Counsel Albert R. Koch, Assistant Director, Division of Research and Statistics Merritt Sherman, Assistant Secretary Kenneth B. Williams, Assistant Director, Division of Research and Statistics Annual salary To From 13,500 $14,515 13,500 14,515 13,500 14,515 13,500 14,515 13,000 13,975 13,000 13,975 13,000 13,975 13,000 13,975 13,000 13,975 13,000 13,975 13,000 13,975 13,000 13)975 •-•4-1 4,1 6/30/55 -8- Name and title Annual salary To From Henry Benner, Assistant Director, Division of Examinations Liston P. Bethea, Director, Division of Administrative Services G. Howland Chase, Assistant General Counsel Lewis N. Dembitz, Assistant Director, Division of International Finance Edwin J. Johnson, Controller, and Director, Division of Personnel Administration Arthur H. Lang, Chief Federal Reserve Examiner, Division of Examinations Robert C. Masters, Assistant Director, Division of Examinations Charles Molony, Special Assistant to the Board Fred A. Nelson, Assistant Director, Division of Examinations $12,500 $13,440 12,500 13,440 12,500 13,440 12,500 13,440 12,500 13,440 12,500 13,440 12,500 13,440 12,500 13,440 12,500 13,440 Glenn M. Goodman, Assistant Director, Division of Examinations C. C. Hostrup, Assistant Director, Division of Examinations Lowell Myrick, Assistant Director, Division of Bank Operations 12,000 12,900 12,000 12,900 12,000 12,900 11,000 11,825 11,000 11,825 Clarke L. Fauver, Special Assistant to the Board H. Franklin Sprecher, Jr., Assistant Director, Division of Personnel Administration Ill 6/30/55 -9- Name and title M. B. Daniels, Assistant Controller Joseph E. Kelleher, Assistant Director, Division of Administrative Services Kenneth A. Kenyon, Assistant Secretary Annul Salary From To *10,000 $10,750 10,000 10,750 10,000 10,750 In taking the above actions, the Board approved a recommendation by Mr. Johnson that to the extent that expenditures resulting from the actions caused the divisions of the Board to exceed their approved 1955 budgets for personal services, the divisions be relieved from the established procedure which requires submitting to the Board, through the Controller, a request for approval of a budget excess. The meeting then adjourned. Pursuant to the procedure approved by the Board on November 1, 1954, and in accordance with the recommendation contained in a memorandum dated June 29, 1955, from Mr. Young, Director, Division of Research and Statistics, the appointments of those individuals previously approved as consultants through June 30, 1955, to work on the evaluation of available economic statistics in fulfillment of the request of the Congressional Joint Subcommittee on Economic Statistics were continued on an unchanged basis through December 31, 1955, to provide for such further consultant work as might be needed during the remainder of the year.
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