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730 Minutes of actions taken by the Board of Governors of the l'ederal Reserve System on Thursday, June 8, 1950. PRESENT: Mr. Mr. Mr. Mr. Mr. McCabe, Chairman Eccles Szymczak Draper Vardaman Mr. Carpenter, Secretary Mr. Sherman, Assistant Secretary Mr. Kenyon, Assistant Secretary Minutes of actions taken by the Board of Governors of the e4 " 8-1 Reserve System on June 7, 1950, were approved unanimously. Memorandum dated May 26, 1950, from Mr. Young, Director of the Division of Research and Statistics, recomm ending the appoint°C Mis" Katherine A. Podolsky as a research assistant in that 4visi°1) with basic salary at the rate of $3,100 per annum, effecttve as of the date upon which she enters upon the performance of her' duties after having passed the usual physical examination. Approved unanimously. Memorandum dated June 5, 1950, from Mr. Young, Director of the Di . vision of Research and Statistics, recommending that the res14;rletion Of Mrs. Helen B. Arnold, a clerk in that Divisi on, be "eePted to be effective, in accordance with her request, at the close of r business June 23, 1950. Approved unanimously. the Di Memorandum dated June 5, 1950, from Mr. Young, Director of 173-8iOn of Research and Statistics, recommending that Gerald 1 731 6/8/50 -2P. Millea, en analyst in the Division of Bank OperEtions, be transferred to the Division of Research and Statistics as an Administrative Assistant, at the rate of $4,600 per annum, effective as of the date upon which he enters upon the performance of his ilew duties. The memorandum also stated that Mr. Leonard was EtEreeable to this transfer. Approved unanimously. Memorandum dated June 6, 1950, from Mr. Young, Director of the n. -lvision of Research and Statistics, recommending increases in the basic annual salaries of the following employees in that Dion, effective June 11, 1950: Name 19,, (31'ge H. Cleaver Elva Morse zatrieia A. Mickelsen alloa C. Driver rieia H. Richardson !! Title Economist Clerk Clerk Clerk Clerk Salary Increase From To $4,450 $4,325 3,115 3,195 2,955 3,035 2,650 2,730 2,690 2,770 Approved unanimously. Letter to Mr. McLarin, Jr., President of the Federal Reserve 13krik of Atlanta, reading as follows: "The Board of Governors approves the payment of salary to you es President at the rate of 1t25,000 per a., 11flum and to Mr. L. M. Clark as First Vice President at, the rate of $18,000 per annum for the period June 1, 1950, through February 28, 1951, the date your stetutorY terms of office will expire, provided these : 1 ates are formally fixed by your board of directors. cording to your letter of June 2, 1950, these rates flsave been approved by mail vote and will be confirmed 'Y 1. a formal vote at the June meeting of the directors. 6/8/50 "The Board of Governors also approves the payment of salary to the following officers at the rates indicated for the period June 1, 1950, through May 31, 1951, provided these rates are formally fixed by your board of directors. According to your letter of June 2) 1950, these rates have been approved by mail vote and will be confirmed by a formal vote at the June nleeting of the directors. Narne Title Annual Salary. !owman, V. K. Vice President $12,000 wchuessler, S. Vice President P. 10,000 Denmark, J. E. Vice President 10,000 Bowden, James H. Assistant Vice President 8,000 Camp, C. R. Assistant Vice President 8,000 Martin, F. H. Assistant Vice President 7,000 Martin, I. H. Assistant Vice President 6,500 Milling, R. E. Assistant Vice President 6,500 Ra Jine-, Edward Carr Assistant Vice President 7,000 RaietY, Lloyd B. Assistant Vice President 9,500 Rauber, Earle L. Director of Research 10,500 Patterson, Harold T. General Counsel 11,000 Adams, R. DeWitt General Auditor 6,500 BIRMINGHAM BRANCH B eavers, P. L. T. Vice President & Manager 10,000 Frazer, H. C. Assistant Manager 8,000 Ill'quhart, H. J. Cashier 7,000 Starr, Leo W. Assistant Cashier 6,000 JACKSONVILLE BRANCH L anford, T. A. Vice President & Manager 11,000 Clark, T. C. Cashier 8,000 Ford, C. Mason Assistant Cashier 6,000 SnYder, J. Wyly Assistant Cashier 7,000 NASHVILLE BRANCH Fort, Joel B. Jr. Vice President & Manager 10,000 7 6/8/50 -4IERe Harrison, E. R. Moody, Robert E. Jr. Paris, E. P. Shaw, Morgan L. Sewell, W. H. Chapman, Lawrence Y. Vasterling, F. C. Title NASHVILLE BRANCH Cashier Assistant Cashier NEW ORLEANS BRANCH Vice President & Manager Assistant Manager Cashier Assistant Cashier Assistant Cashier Annual Salary 41; 7,500 7,000 14,000 8,800 7,200 5,700 5,100" Approved unanimously. Letter to The First National Bank of Pennington, Pennington, Nevi. jerseY, reading as follows: "The Board of Governors of the Federal Reserve ‘ _"stem has given consideration to your application 'Or fiduciary powers, and grants you authority to When not in contravention of State or local as trustee, executor, administrator, registrar °f stocks and bonds, guardian of estates, assignee, receiver, committee of estates of lunatics, or in nY other fiduciary capacity in which State banks, trust companies or other corporations which come tut° competition with national banks are permitted 4:! aet under the laws of the State of New Jersey, Zue exercise of all such rights to be subject to 'he provisions of the Federal Reserve Act and the r T,egulations of the Board of Governors of the Federal l'eserve System. "This letter will be your authority to ex61*cl-se the fiduciary powers granted by the Board Pending the preparation of a formal certificate vering such authorization, which will be forwarded You in due course." Z Approved unanimously, for transmittal through the Federal Reserve Bank of Philadelphia. Letter to Gulf National Bank of Gulfport, Gulfport, leeiPPI, reading as follows: f 6/8/50 "The Board of Governors of the Federal Reserve System has given consideration to your application for fiduciary powers, and grants you authority to act, when not in contravention of State or local law, as trustee for bond issues and registrar of stocks and bonds, the exercise of all such rights to be subject to the provisions of the Federal Reserve Act and the regulations of the Board of Governors of the Federal Reserve System. "This letter will be your authority to exercise the fiduciary powers granted by the Board pending the preparation of a formal certificate covering such authorization, which will be forwarded to you in due course." Approved unanimously, for transmittal through the Federal Reserve Bank of Atlanta. Letter to Mr. Roger W. Jones, Assistant Director, Legislett v- Reference, Bureau of the Budget, Washington 25, D. C 4641-11g as follows: "In your letter of June 6, 1950, you request expression of views on an amendment which has l'een proposed by the Housing and Home Finance Agency 0 the draft 'Secondary Mortgage Credit Act', copy of the draft bill having been sent to the Board with Your letter of May 15. "The matter has been discussed with Mr. Reeve nd Mr. Eckert of your Bureau. It is understood from callem that the Housing and Home Finance Agency has xPressed the feeling that the organization of at east one private mortgage corporation (private FNMA) ifb c,' the type which would be authorized in the draft L'econdary Mortgage Credit Act' would be considerably facilitated if Federal savings and loan associations lylere authorized to participate in its financing. 'or that purpose the HHFA has proposed an amendment, set out in your letter, which would authorize each rederEl savings and loan association to acquire stock and obligations of the proposed private mortgage corPorations subject to the limitations that (1) not t rl 1 ,`735 6/8/50 -6more than 1/2 of 1 per cent of the assets of any savings and loan association may be invested in the stock of all such corporations, and (2) not more than 5 per cent of the assets of any savings and loan asso ciation may be invested in the obligations of all such corporations. "In addition to these limitations, any acquisitions of stock or obligations by any savings and loan association would be subject to the approval of the Home Loan Bank Board. The draft language contalned in your letter would not require such approval as to obligations, but it is understood that this was due to inadvertence and that the language will be changed to require such approval in both cases. Accordingly we have considered the proposed amendment as if it required such approval. ."The Board feels strongly that it is unsound at his time for FNMA, or any other Government agency, 42 Pour Government funds into the mortgage market in '"e manner that FNMA has been doing. FNMA should, at most, serve only as a standby or emergency source of mortgage liquidity. To the extent that the or of private national mortgage corporations could help to correct the situation by shifting the /110rtgage financing from Governmental to private channels, the Board as you know, would favor legislation to facilitate setting up such corporations. "At the is the same time the Board is convinced that re real danger to the economy in an unsound extension of the activities of savings and loan asinto fields for which they are not suited. is especially true with savings and loan activ.'ies having Governmental backing in the form of savngs and loan insurance and the access to Treasury borrowing which is proposed in other legislation now Pending,; s in Congress. Accordingly, an amendment authorizing Federal savings and loan associations to Participate in the financing of the proposed private ,c)rtgage corporation should not be enacted unless it Clearly understood by all the agencies concerned that the amendment would be recognized for what it -- a special provision that is confined to a spetype of mortgage investment and is not a precedent for any other extensions of authority. "In the circumstances and with the understandings 1111 http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis 11 111■ 736 6/8/50 -7"indicated above, the Board would not object to the Proposed authorization with the safeguards indicated." Approved unanimously. Letter to Mr. Christian C. Luhnow, Editor and Publisher, l'I'"t8 and Estates, 50 East 42nd Street, New York 17, New York, l'eadtng as follows: "This refers to your letter of May 10, 1950, addressed to Mr. Thurston, relating to your desire to obtain copies of the annual audit reports of common trust funds. "As indicated in our letter of December 7, 1949, we have serious reservations with respect to the advisability of publication of statistics based upon Information contained in common trust fund audit reports, even though the particular common trust funds nuld not be identified and the published statises would be in the nature of a composite summary. Since we do not feel that we should give our approval to the publication of such statistics, we question Whether it is appropriate for us to furnish you with a letter which you might use in soliciting copies of c°111m0n trust fund audit reports from banks for use in e?mpiling statistics with the view that after further clearance the statistics might ultimately be published AnY such letter might well be misunderstood by the l?anks oper&ting common trust funds and could be a step fl breaking down the restrictions upon the publicaion of information contained in the audit reports. "Undoubtedly you have given much thought to the problem of publication of common trust fund statis4'es and are cognizant of the various considerations involved. These include, among others, questions With respect to the purposes, if any, which would be served by the publication of the statistics, and the !?ssibility of misinterpretation and misuse of the -r,atistics, ill-informed and unfair comparisons of Particular funds with composite figures, and encour,gement of the use of common trust funds for general investment purposes rather than strictly as a mechism for the collective investment of funds for bona fide trusts. t 737 6/8 So "In view of the many ramifications of this prob1 $ an informal discussion of the whole subject might be helpful, and if you have occasion to be in gashingwe shall be glad to have the opportunity to talk With you about it."
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