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547 A meeting of the Board of Governors of the Federal Reserve 8Yatein was held in Washington on Tuesday, March 24, 1942, at 11:30 PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Eccles, Chairman Ransom, Vice Chairman Szymczak McKee Draper Evans Mr. Mr. Mr. Mr. Morrill, Secretary Bethea, Assistant Secretary Carpenter, Assistant Secretary Clayton, Assistant to the Chairman The action stated with respect to each of the matters herein— after r eferred to was taken by the Board: The minutes of the meeting of the Board of Governors of the Pederai Reserve System held on March 23, 1942, were approved unani— Memorandum dated March 20, 1942, from Mr. Nelson, Assistant Seceta -.7, r ecommending, that Joseph E. Scott be appointed as a guard in the Secretary's Office on a temporary basis for an indefinite pe— riod, . wIth salary at the rate of 1,1,380 per annum, effective as of the date Upon which he enters upon the performance of his duties af— te vi hang Passed satisfactorily the usual physical examination. Approved unanimously. liemorandum dated March 20, 1942, from Mr. Nelson, Assistant -J, recommending that, because of approaching confinement, Mrs. Rot., .e se Fr eeman, a clerk in the Correspondence and Publications Section 548 3/24/42 of the -2- Secretary's Office, be granted leave of absence without pay 1'14°111 May 26, 1942 (when her accumulated and current accrued annual and sick leave will have been substantially exhausted), for approxiniatelY six months, in accordance with the Board's policy on confineMent eases adopted November 10, 1941. The memorandum stated that, inasmp "ell as Mrs. Freeman was a member of the Civil Service Retirement SYstem, i+ -- would not be necessary for the Board to make any contributiOns to the retirement system on her behalf. Approved unanimously, with the understanding that in accordance with the Policy adopted on November 10, 1941, Mrs. Freeman's reemployment would not take place automatically but only after review of the situation by the Board upon recommendation of the Secretary. In connection with this action, Mr. Ransom, who had voted against the policy adopted by the Board with respect to confinement leave of absence, stated that he was still opposed to the policy. Letter to the board of directors of the "Prattsburgh State ank Pr attsburg, New York, stating that, subject to conditions of Illerabernh. --110 numbered 1 to 3 contained in the Board's Regulation H and the f °11°wing special condition, the Board approves the bank's appli3 Cation for membership in the Federal Reserve System and for the appro- 141-ate amount of stock in the Federal Reserve Bank of New York: 4. Prior to admission to membership, such bank, if it has not already done so, shall charge off or Otherwise eliminate estimated losses aggregating 5/962, as shown in the report of examination of 549 3/24/42 -3"such bank as of December 1, 1941, made by an ex— aminer for the Federal Reserve Bank of New York." Approved unanimously, together with a letter to Mr. Sproul, President of the Federal Reserve Bank of New York, reading as follows: "The Board of Governors of the Federal Reserve Sys— tem approves the application of the 'Prattsburgh State Bank', P sr attsburg, New York, for membership in the Federal Reserve Ystem, subject to the conditions prescribed in the enclosed let er_l. which you are requested to forward to the Board of !s.i-rectors of the institution. Two copies of such letter are couiso enclosed, one of which is for your files and the other of ,1:;hich you are requested to forward to the Superintendent Joanks for the State of New York for his information. ,2 "It has been noted that there is a recognized weakness the active management and that steps are being taken to Btrengthen the situation. It is assumed that the Reserve nk will, of course, follow the case closely until the manage question has been satisfactorily resolved." Telegram to the Presidents of all Federal Reserve Banks, read— ing as follows: of "Supplementing my wire March 21 regarding advisability a regulating open credits under Regulation 11, it will be lpreciated if you will consider an additional question to designated 5 G as follows: Would you favor as an alter— ne, v l'e Plan the freezing of all outstanding consumer credit cih.provision for gradual reduction over a limited period an time? If you would favor such a plan, would there be -? types of credit which you would except from the re1ired reduction? Do you think conditions at the present -ale would warrant reducing such outstanding indebtedness P„ercentagewise month by month? If your answer to this ruld be no, then what conditions do you think would war— rant such action?" e Approved unanimously. Ne,1 0 Telegram to Mr. G. A. Leukart, General Manager of the National r Market Report, Inc., Chicago, Illinois, reading as follows: 550 3/24/42 —4— "Re wire to Dembitz, Board will gladly consider data supporting requested additional designations." Approved unanimously. Letter to the Deputy Comptroller of the Currency, reading as follows: "This refers to your letter of February 4, 1942, in which you state you have given a good deal of thought to the matter of requiring national banks to report a .1,1e ,t figure of 'due to' and 'due from' other banks and ".?.t, you contemplate making the necessary change in your f ca'l report instructions to effect that change, and ask or any views the Board may wish to present bearing on L'hls proposal. "The Board has had this matter reviewed, from the st andpoint of both the call report and the weekly reports submitted by member banks in 101 leading cities, and has le3oncluded that it would be desirable to have all member ,anks report reciprocal demand balances net when they .re between banks in the United States (except private _anks and American branches of foreign banks). So far " we know, there are no statistics to show whether there are any reciprocal time balances between banks or recipa"al balances, either time or demand, between member banks in foreign countries, but it does not seem to the n e Board a that it is necessary to show any such balances ! a t even if they do exist. As you know, also, such balances are not deductible from deposits in computing reserve requirements. 1 , "There is enclosed a copy of the Board's form F.R. used by State bank members in submitting condition reports on ,, ti which changes have been indicated in red which c;f Board would like to see made upon the adoption of the frrIge in method of reporting, and a copy of the short chrm used on Spring and Fall calls, on which similar drahges have been indicated. There is also enclosed a ca t of instructions which we propose to include in the report letter if it is decided that the reciprocal 'a-Lances should be reported net. 'It will be appreciated if you will advise the Board iether you concur in the procedure set forth herein and the enclosures and, if so, whether you will find it Z r 551. 3/24/42 —5— convenient to make the change effective for the next call reports. "A copy of this letter, and its enclosures, has been f°rwarded to the Federal Deposit Insurance Corporation." Approved unanimously. Memorandum dated March 23, 1942, from Mr. Wingfield, Assistant General Counsel, recommending that there be published in the April is- 81/e of the Federal Reserve Bulletin statements in the form attached to the '440randuni with respect to the following subjects: Purchase of Government Obligations Amendment to Section 14(b), Federal Reserve Act Advances on Government Obligations Amendment to Regulation A Reserves Balance in "Differential Account" Set Up Upon Purchase of Instalment Paper Consumer Credit Interpretations of Regulation W Censorship Communications Ruling Issued by Director of Censorship War Relocation Authority Executive Order Establishing Office Alien Property Custodian Executive Order Establishing Office Temporary Delegation of Powers to the Secretary of the Treasury 552 3/24/42 -6Foreign Funds Control Special Regulation Issued by the Federal Reserve Bank of San Francisco as Fiscal Agent of the United States General Rulings, General Licenses, Public Circulars and Public Interpretations Issued by the Secretary of the Treasury Approved unanimously, with the understanding that the statement with reference to the amendment to section 14(b) of the Federal Reserve Act contained in the Second War Powers Act would be included only if the President signed the bill before publication of the April Bulletin. Thereupon the meeting adjourned. thhi Chairman. Secretary.
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