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420 Minutes of actions taken by the Board of Governors of the edern, '4-L. Reserve hystem on Friday, March i, lr PREaNT: Mr. Mr. Mr. Mr. Mr. Mr. Mr. Martin, Chairman ..._„'Aymczak Evans Vardaman Powell Mills Robertson Mr. Carpenter, Secretary Mr. Sherman, Assistant Secretary Minutes of actions taken by the Board of Governors of the ktieral Reserve System on March 13, 19)2, were approved unanimously. T n to the Federal Reserve Banks of Hew York, Cleveland, elegra-' hiri°1111) ChicaEo, St. Louis, Minneapolls, Kansas City, and DaTlas tatilIP'i that the Board approves the establishment w:thout charie by the e stated Reserve Panks on March 13, P the -ates of Co Urit 8-1111 purchase In their existinc, schedules. Approved unanimously. 11"1"andum dated March II, 19)2, from Mr. Youn, Director, t or Research and Etatistics, recommendinr, an increase 'n the E'411/4, Nra$3 — Y. of Gretchen L. Geit7enmueller, Clerk in that Di_vision, 190 to 0,33, per annum, effective March 1r, 191)2. ' Approved unanimously. rbl Memo randa recommending that the basic annual L;alLres rf the 4 era P oyees be increased in the amounts .':ndicatcd, effective (1941 3134/52 -2Salary Increase To From Name and Title Memorandum from Mt. Young, Director, Division of Research and Statistics Date 3/10/52 Helen R. Grunwell, Chief Draftsman Helen A. Lupton, Assistant Chief Draftsman Mary P. McCormick, Draftsman-Illustrator Elizabeth N. Tyson, Library Assistant $5,185 $5,310 4,705 4,830 4,205 4,330 3,175 3,255 $6,000 $6,125 $2,950 $3,030 Memorandum from Mr. Sloan, Director, Division of Examinations 2/25/52 J. E. McGeary, Assistant Federal Reserve Examiner Memorandum from Mr. Allen, Director, Division of Personnel Administration 3/12/52 Raye M. Zacharay, Clerk Memorandum from Mr. Bethea, Director, Division of Administrative Services 3A/52 3/5/52 H. W. Young, Mechanical Superintendent Donald W. Moon, Clerk, Procurement Section Karl J. Steger, General Mechanic Evelyn M. Lewis, Elevator Operator Saul Clanton, Assistant Gardener Morris Mayhew, Gardener Approved unanimously. $5,E85 *5,810 3,785 3,910 3,635 3,735 2,770 2,840 2,552 2,632 3,4)4 3,534 A f) gr1 Kw; 3/14/52 -3Letter to the Honorable Margaret Chase Smith, United 2tates ttias ngt°11) D. C., reading as follows: "This refers to your letter of MEI-eh 4, 19)2, which Tioted a letter you had received from Mr. Frank Barrett, •da.rrett Motors, 469 Elm Street, Biddeford, Maine, concern14g ReFulation 1.--Consumer Credit. t. 'Mr. Barrett's thoughtful letter suggests that i'kebula, ' 1311 I4 be relaxed, at least in the maximum maturity provision automobiles. He feels that with materials for durable g°°as becoming more plentiful there are likely to be more ..!°,c43.ds available than there are customers and that deflation a'her than inflation is indicated particularly in certain v°11sumer goods lines, including automobiles. co The Board is watching developments in the markets for bellsizier durable goods closely and recognizes that there has IDpen a considerable decline in demand in these markets comC ired with the high peaks reached a year ago. At the same as Mr. Barrett points out, there has been some easle of materials supplies, especially steel, aluminum and l inalthough the continuing shortage of copper still seems ati, elY to be a limiting factor in any early expansion of 0trio '.bile output. ha "Meanwhile, it appears that automobile demand generally ciesi been more or less in balance with production, since reters' inventories of new automobiles, as a whole, have ee-"qined at comparatively low levels in recent months. Some th:6°4a1 increase in automobile demand normally occurs in sho4Pring. With production still curtailed by material /3111,-1:!ge8 and heavy defense expenditures expected to maintain sing power at high levels, there would seem to be relativ '-LY little prospect of any considerable deflation developifl the automobile field over the immediate future. ko.b. Although the amount of money borrowed to purchase auto12 ; es would normally be expected to decline when production as Mr. Barrett suggests, this has not happened to T,he past year. The amount of instalment credit extended le.glarchase automobiles in 1951 is estimated to have been as cile as the 7.3 billion dollars extended in 1950. Lhile new raa6:110bile sales declined in 1951, the proportion of sales tlev °I1 a credit basis increased. The average proportion of cettP"senger cars sold on instalment credit rose from 4( per till.° 14 1950 to 48 per cent in 1951; in the )months, August un December 1951, the proportion has averaged nearly Go enate, A :el 3/A/52 It Per cent. These figures suggest that the decline in automobile sales has reflected fewer cash sales rather than a curtailment Of credit sales. It is also indicated that the regulation has eUrbed outstanding instalment credit through accelerating repayents rather than by unduly restricting credit sales. Limita-MB of production, of course, do not in themselves reduce 24and; in fact, they add to the inflationary pressures that 4.13Ult from demand in excess of supply. /I Regulation W, as you know, is but one of the measures airected toward protecting the purchasing power of the dollar. , though there recently has been a comparative balance between ,Illationary and deflationary forces in the economy as a whole, Prospect for a heavy Federal deficit later this year, and "e Possibility of renewed waves of inflationary buying, in c e Board's opinion, require the maintenance of effective redlt restraints in the public interest at this time. "We appreciate having this opportunity to comment on Mr. 17,rrettle letter and assure you that the views he expresses be considered carefully in the Board's continuing study ur the effects of consumer credit regulation." T V f j Approved unanimously. Letter to the Honorable James J. McInerney, Assistant Attorney vcroa 1 ot Ttatts Department of Justice, Washington, D. C., in regard to the matter T3right, Inc., Baltimore, Maryland, a registrant under Regulation e°11811Mer Credit, reading as follows: "Pursuant to Section 21 of the Securities Exchange Act made applicable to the Board of Governors by Secti tt 6O4 of the Defense Production Act of 1950, the Board ' ce c'vernors is transmitting to you herewith a report conacts: and practices which appear to the Board to 1117titute violations of its Regulation W by Temus Bright, Temus Bright, President,and Anna C. Bright; Secretary, tia ;711rer and sole stockholder. This report is sent to you rder that you may, in your discretion, institute criminal -ceedings.” or I Approved unanimously. -5Letter to Mr. Olson, Vice President, Federal Reserve Bank of Nee. €4), in regard to the matter of Joe Coffey, doing business as Coffey 4e-c, 529 E. North Street, Decatur, Illinois, a registrant under 4:111ati°n INT, Consumer Credit, reading as follows: 1 "Receipt is acknowledged of your letter of March 11, i952, regarding the above matter, enclosing reports of (1.;Zest1gations and other material, pursuant to paragraph ") of the Board's letter of January 18, 19)2 (W-179). t , "In In view of the fact that the violations found in a"a investigation were few in number and were larently due to the acts of an employee who has been vlscharged, you are of the opinion that the registrant tl.,11 now comply with the Regulation, and you recommend that the Board take no action at this time pending the 4_ 8111t of a further investigation of this registrant tliitatively scheduled for the first week in June 1952: be t 'Your recommendation is adopted, and no action will aken at this time." p Approved unanimously. accome. Letter to the Presidents of all Federal Reserve Banks prepared in Iles with the understanding at the meeting on March 6, 1952, reading roliovs: been "Attached hereto is a copy of a statement which has colin submitted today for publication in the Federal Register eer4 ing record-keeping provisions of Regulation W. : t Y1311 will note that the three specific proposed changes Vere-e regulation in this regard relate to matters which vith included on the list of possible changes forwarded lthe Board's letter to all Reserve Banks dated January 1" 952. That list was the subject of helpful discussions at t.; e Inter-Bank Conferences in January and February. Howtitle;as the attached statement indicates, the Board's coneti°n of this matter is not limited to the three specific P -Poseas. 3/14/52 -6- "It is our thought that the Reserve Banks may wish to glis the matter more consideration than may have been postBible in connection with the Inter-Dank Conferences. Wh:le 1118 applies particularly to the three snecific pro7,ose1s, Y°11 may well have other suggestion, for improvinr the record -keeping provisions of the regulation. t We would appreciate receipt of your views or comments, 2gether with copies of any submissions received by you from v4hsr5, not later than April 8, 1952." Approved unanimously, together with the following statement for publication in the Federal Register: 00 _ "Regulation W--Consumer Credit, issued by the Board of : ternors of the Federal Reserve System pursuant to section 601 °f the Defense Production Act of 1950, as amended, roprovis 7 ons c° ates instalment credit and contains certain , arli ' cllcerninr, records from which compliance with the statute regulation by those subject thereto may be determined. v; . The Board !_b considering the sufficiency of the 2ro0/I5 of the regulation concerning such records, includte the des'rabiliLy or necessity of clarifying certain of e Drovisions in question along the lines Indicated below: Bect.l. By amending subparagraph (3) of parag,raph (c) of 'On 6 to read as follows: ca6h (3) The amount of the Purchaser's down payment (i) in a 2t and (ii) in property accepted as trade-in, tcf;etner with faitatement of the monetary value assigned thereto in i-oed ert h and such specific description as will perm't t'ae pro),J to be readily identified; By deleting the word 'and' at the end of slAlparacrrarh ( \)) of , ; for tL Daragraph (c) of section 6; by substituting (0) he Period at the end of subparagraph (6) of paragraph (6\ °f section 6; and by inserting after said subparacra,-,h ' the following new subparagraph (7): (7) The date of delivery of the article or, in the case of theez article listed in Group D, the date of completion of agreed upon repairs, alterations, or Improvements. tiorl * By amending the first part of paragraph (a) of sec' -f) to read as follows: lial..t k a.) Records, Reports, and Inspections. Every Registrant keep or make such books of account and other appropr;r:te 3/14/52 -7- It records as may be necessary to establish whether or not a credit qualifies for exemption under section 7, or whether or not it is otherwise in conformity with or subject to the : 1 e.qu1rements of this regulation. All such books or records 0 -ncluding, in addition, any statements, agreements, or records required by or obtained pursuant to other provisions this regulation) shall be preserved for the life of the 2u1jgation to which they relate; provided, however, that the '10!gistrant may preserve photographic reproductions in lieu r such books or records. v. "To aid in the consideration of this matter, the Board e ll be glad to receive from interested persons any relevant m Dlanatiens, data, or other information. Although such ;71terial may be sent directly to the Board, it is preferable t" it be sent to the Federal Reserve Bank of the district s lch will forward it to the Board to be considered. .3_1 ch material should be submitted in writing to be received 'lot later than April 2, 1952." Secretary.
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