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Oir Minutes of actions taken by the Board of Governors of the Pederal Reserve System on Tuesday, March 1, 1949. 14 then The Board met Room at 2:50 p.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. McCabe, Chairman Eccles Szymczak Draper Vardaman Clayton Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Carpenter, Secretary Sherman, Assistant Secretary Morrill, Special Adviser Thurston, Assistant to the Board Riefler, Assistant to the Chairman Thomas, Director of the Division of Research and Statistics Vest, General Counsel Leonard, Director of the Division of Bank Operations Young, Associate Director of the Division of Research and Statistics Solomon, Assistant General Counsel Lewis, Chief of the Consumer instalment Credit Section of the Division of Bank Operations Pawley, Division of Bank Operations Reference was made to a memorandum addressed to Chairman 14QC .be from Edgar F. Kaiser, Vice President and General Manager of er-Prazer Corporation. The memorandum referred to the informal (11"114104 which Mr. Kaiser had with Chairman McCabe and some other t4elet cq* the Board late yesterday afternoon with respect to Regulatio W Consumer Instalment Credit, and, among other things, it urged ' thEtt 131, the Board take action to relax the Regulation along the lines °141Y Pressed by Kaiser-Frazer Corporation. 4 3/1149 -2The memorandum was read and Mr. Szymczak stated that it 14U unimibtedly for the purpose of making a record, and that he felt consideration of an amendment to the Regulation involved consideration also of the response to be made to Mr. Kaiser's memoranaura In a discussion of this point Mr. Vest expressed the opinion that there was nothing in the letter that required a reply on the 't of the Board and that he was doubtful that the Board should P41 41114 a reply. At the conclusion of the discussion it was agreed that no reply should be made. Chairman McCabe then referred to the recommendation made by tIlt staff committee on Regulation W at the meeting of February 21 7 t the Regulation be amended to provide for maturities of 18 7 thill on Group A and B articles and unclassified loans,,and. for a 111cti°11 in the down payment on Group B articles from 20 to 15 per : at 4e Stated that he felt the Board should give further considerat1(41 to4 the informal understanding reached at that meeting that such 4°1114erldment to the Regulation be adopted and he called upon Mr. th 11411 t° Present his current views with respect to revision of Mr. Leonard stated that, although the staff group had not eal 0 PPortunity to consider the matter, the members of his " ,n 3/1/49 _3_ 41810n who worked on Regulation W were agreed that the amendment 11 ' Qxmad provide a maturity of 21 months on Group A and B articles and (311 unclassified loans, and a reduction in the down payment on Group B all eles from 20 to 15 per cent. He also recommended that Section 7(g) vhich exempted credits for the purchase of entire residential 111414131g8 be amended to exempt credits for the purchase of entire residential units such as house boats, house trailers, and coopet ive apartments, and, if maturities were extended as recommended, t1341 Part 3 of the supplement to the Regulation be amended to provide tor a maximum maturity of 24 months for any refinancing pursuant to "'satement of changed conditions. Consideration was given to a number of other forms the libu of the Regulation might take. During the discussion kr, ciarton stated that he would like to see the Regulation amended 41-1.13 time to provide for maturities of 18 months for both Group A 644415. articles and for a down payment of 15 per cent for Group B e'lliele8 but that, for reasons which he discussed, he felt a greater iberalization of maturity provisions for Group A articles was not hetir led at the present time. Mr. Eccles stated that he felt that action at this time premature. retNpo The other members of the Board indicated that they would r the amendments proposed by Mr. Leonard. Chairman McCabe suggested that the matter be given further atio over night and that another meeting be held at 3/1/49 -4- 1113° a.m. tomorrow morning for the purpose of taking final action °lathe amendments. Mr. McCabe's suggestion was approved unanimously. At this point Messrs. Riefler, Thomas, Vest, Leonard, Young, 8°1c4a°7a) Lewis, and Pawley withdrew and the action stated with reNAtt to each of the matters hereinpfter referred to was taken by the Board: Minutes of actions taken by the Board of Governors of the Ifetier e-1- Reserve System on February 28, 1949, were approved unaniblic111313r. Minutes of the meeting of the Board of Governors of the Net 41 Reserve System with the Presidents of the Federal Reserve te,hu —41 held on February 28, 1949, were approved unanimously. Memorandum dated February 270 1949, from Mr. Nelson, Direc- tot r the Division of Personnel Administration, recommending that basic annual salary of Miss M. Callie Wickline, nurse in that 81°41 be increased from $3,476.40 to $3,601.80 per annum, ef- 1e March 6, 1949. Approved unnnimously. Memoranda from Mr. Bethea, Director of the Division of Ad- 01, 1atr4t " Services, recommending that the following employees that --1aion be appointed on a permanent basis to be effective 3/1/149 480f the expiration of their temporary appointments at the close c)f business on the dates indicated below: tate of Memo Title Name v,28/49 / 1/14 Mrs. Ida C. Sutphin Miss Jane Hamill Cafeteria helper Cafeteria helper Salary $2,020 2,020 Expiration of appointment 34 7449 3/10/49 Approved unanimously. Letter prepared for Chairman McCabe's signature to the HonorEke, "tight Patman, Chairman, Select Committee on Small Business, 0 e Of Bepresentatives, reading as follows: "This refers to your letter of February 21 which , 1 !Tived on February 24 and which requests certain ! -1°I.nions and information with respect to Regulation W. 0,, The Board, of course, is glad to supply any ev4nions and information that it can and to lend averY possible assistance to your Committee. We having the material referred to in your letter c'8eettibled in the form you request and we will be Meased to send it to you as quickly as possible." Approved unanimously. Letter prepared for Chairman McCabe's signature to the Honor--esut Patman, House of Representatives, reading as follows: to 4 "In response to your letter of February 22 in regard to ; , 11e regulation of consumer instalment credit, I regret -Ind that you apparently misunderstood my reference to: re' Ile excerpts from unsolicited letters which we have ved. I mentioned these only incidentally in connec48-4 vith the principal purpose of my letter which was, ittestatedo 'to assure you again that the Board is watch%Jhe situation most carefully and will give utmost tieration to your views, as well as to other perfacts. As I told you last Monday, we are in the 3/1/49 -6- , process of analyzing the latest reports from our field offices as well as those gathered from all sections of the country, together with the latest views I brought back from my trip.' "The viewpoints of those seeking a change in or the elimination of the regulation have been presented not °IalY to you but also to us, especially by or through large organizations, many of whom are fundamentally °111Posed to any form of Governmental regulation. It eeemed likely that there had not been brought to your attention other points of view that had been expressed :tO us in unsolicited communications. If the regulation tad not had some effect in accomplishing its purposes we might not have heard from either side. "I know that with your long experience in Congress You do not give weight only to organized campaigns for esenting one side of an issue and that you have always eet willing to give consideration to different points view. It was merely with this thought in mind that felt that you would be interested in knowing such .evPoints as expressed to us, and since they were un: :°licited expressions of the writers' personal views 4-` 14ould not seem appropriate for us to release their 4kMes. "May I again assure you that all decisions of the l rd in connection with the regulation are aimed at , )s lleving the greatest benefit for the entire country." ' r t Approved Imanimously. Letter to Mr. McConnell, Vice President of the Federal ReZerve el* of Minneapolis, reading as follows: tr_ "This refers to your letter of February 7, 1949, tiouxtsmitting copies of the report of examination of orrthest Bancorporation, Minneapolis, Minnesota, as yo NOVeMber 29, 1948, and requesting that we advise whether the Board has any objection to your fura. copy of the report to Mr. C. B. Upham, —4/let Chief National Bank Examiner. tici It is noted that national bank examiners parin the examination of the holding company Natilt/e`cle a simultaneous examination of Northwestern -°11a1 Bank of Minneapolis. In the circumstances, 406 3/1/49 -7- are authorized to furnish a copy of the report of examination of the holding company to the Chief National Bank FYAminer at Minneapolis, if he requests for his confidential information and use. "It is suggested that, at the time of the transof the report to the District Chief National Bank Examiner, you inform him that the report will not be submitted to Northwest Bancorporation, in order that he may govern himself accordingly in the confidential use of the report." Approved unanimously. 1411(yired:
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