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439 A meeting of the Board of Governors of the Federal Reserve SYstem Was held in Washington on Saturday, March 27, 1943, at 11:30 a.m. PRESENT: Mr. Eccles, Chairman Mr. Draper Mr. 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 hereinutter referred to was taken by the Board: Memorandum dated March 22, 1943, from Mr. Morrill, recommend- 14 that Howard A. Shorter be appointed as a guard in the Secretary's (Irtice on a temporary basis for an indefinite period, with basic salary 4't the rate of $1,500 per annum, effective as of the date upon which he liters upon the performance of his duties after having passed satisfact°1113r the usual physical examination. Approved unanimously. Memorandum dated March 24, 1943, from Mr. Morrill, recommendinp approval of (1) increases in salaries of employees in the Secretary's Orri ee as listed below, and (2) the appointments of Ruby C. Corcoran and le B. Lerch as junior file clerks in the Secretary's Office on a perr(111tent basis, all effective April 1, 1943. Name Corcoran, Ruby C. Lerch, Lillie B. Breeden, Virginia C. Designation Junior File Clerk Junior File Clerk Junior File Clerk Salary Increase To From $1,440 1,440 1,440 41,560 1,560 1,560 440 3/27/43 —2— Name (Continued) Hatch, Cora Lee Mackey, Alice M. Simpson, Evelyn L. Simpson, Hazel Lee Jones, M. Elizabeth Andrews, Ruby S. Miles, Maria D. Designation Junior Junior Junior Junior Junior Junior Junior File File File File File File File Clerk Clerk Clerk Clerk Clerk Clerk Clerk Salary Increase To From $1,440 1,440 1,440 1,500 0,560 1,560 1,560 1,620 1,560 1,680 1,620 1,680 1,740 1,740 Approved unanimously. Letter to Mr. Paddock, President of the Federal Reserve Bank Boston, reading as follows: "This is to advise you that the Board of Governors n°tes without objection the salaries paid to employees of Your Bank as of January 1, 1943, as shown in the statement accompanying your letter of March 10, 1943." Approved unanimously. Letter to Mr. Sproul, President of the Federal Reserve Bank or ew York, reading as follows: "As requested in your letter of March 20, 1943, the 12?ard of Governors approves payment of salaries to the of— zlcers of your Bank, for the year beginning April 1, 1943, at the following rates as fixed by your Board of Directors: Annual Salary Name Title Allan President $45,000 Sproul 34,000 Leslie R. Rounds First Vice President Ray M. Gidney 20,000 Vice President L. Werner Knoke 20,000 Vice President Walter S. Logan Vice President and 25,000 General Counsel James M. Rice 17,500 Vice President 19,500 Robert G. house Vice President John H. Williams 1_/ 22,000 Vice President Edward 0. Douglas 10,000 Asst. Vice President 10,000 -qtalla l__Ferguson Asst. Vice President 1/ During period of part time service to the Bank, which will involve Mr. Williams' spending two days a week at the Bank, the salary paid him by the Bank to be at the rate of one— third of his regular annual salary. 441 3/27/43 "Name (Continued) J. Alson Jones Herbert H. Kimball Silas A. Miller Arthur Phelan Harold V. Roelse Horace L. Sanford Valentine Willis Todd G. Tiebout Rufus J. Trimble Loren B. Allen Dudley H. Barrows Harold A. Bilby Harry M. Boyd Wesley W. Burt Felix T. Davis Norman P. Davis Edwin C. French 'Llarcus A. Harris William A. Heinl Norris 0. Johnson William Kettner Daniel J. Liddy MYles C. McCahill Robert F. McMurray William F. Sheehan Insley B. Smith Frederick Stocker Charles N. Van Houten John H. Wurts Robert H. Brome William F. Treiber Wm. H. Dillistin Donald J. Cameron -3Annual Salary 0_5,000 10,500 10,500 13,000 12,500 9,500 14,000 11,000 12,000 7,000 9,500 8,000 Title Asst. Vice President Asst. Vice President Asst. Vice President Asst. Vice President Asst. Vice President Asst. Vice President Asst. Vice President Asst. General Counsel Asst. General Counsel Manager, Credit Dept. Manager, Cash Dept. Manager, Check Dept. Manager, Savings Bond Redemption Dept. Manager, Govt. Bond Dept. Manager, R.F.C. Custody Dept. Manager, Foreign Funds Control Dept. & Security Loans Dept. Manager, Collection Dept. Manager, Securities Dept. Manager, Personnel Dept. Manager, Research Dept. Manager, Security Custody Department Manager, Foreign Dept. Manager, Service Dept. Manager, Safekeeping Dept. Manager, Bank Examinations Dept. Manager, Bank Relations Dept. Manager, Cash Custody Dept. Manager, Foreign Funds Control Department Manager, Govt. Bond Dept. Asst. Counsel and Asst. Secretary Asst. Counsel & Secretary General Auditor Asst. General Auditor 6,000 8,500 8,200 8,500 10,000 6,500 6,500 7,000 5,500 6,000 8,000 8,500 13,000 7,000 6,000 8,000 6,500 6,500 9,500 15,000 9,500 442 3/27/43 -4"Name (Continued) Reginald B. Wiltse Halsey 6. Snow George J. Doll Title Buffalo Branch Managing Director Cashier Asst. Cashier Annual Salary $10,000 7,500 4,800" Approved unanimously. Letter to Mr. vicLarin, President of the Federal Reserve Bank orlitlanta, reading as follows: "The increasesin maximum annual salaries as set forth ,111 Certificates Nos. 1 to 5 forwarded with your letter of 'larch 9, 1943, with two slight changes which were discussed with Mr. Clark, are approved by the Board of Governors. The ?hanges referred to were the reduction from $1,320 to $1,200 „?.n the proposed'maximum annual salaries for the positions of Alessenger-A at the Head Office and New Orleans Branch. As suggested by Mr. Clark, these reductions were made in the certificates in view of the fact that the proposed maximum salary of $1,320 was in excess of the maximum prevailing rate .'or comparable positions in the area as shown in the certificates. "As requested in your letter, approval of the establishment of the position of Stenographer and Clerk in the Service Department at the Head Office and the increase in maximum an11112.1 salary for the position of Junior Clerk-A at the Birmingnam Branch is made effective as of February 1, 1943. "The other changes in the Personnel Classification Plan are approved as submitted. In view of the many changes, atb ed for your convenience is a list of the positions in the taan as now revised." Approved unanimously, together with the following letter to the Joint Committee on Salaries and Wages: "Under the procedure established by General Order No. 19, Of the War Labor Board and the authority granted by the Commisloner of Internal Revenue, transmitted herewith are the orig, 1-na1 and four copies of certificates Nos. 1 to 5 of the Federal xleserve Bank of Atlanta with respect to increases in the maxiannual salaries, under the personnel classification plan, ,Or certain positions at the Head Office and each of the four 41.ranches. 443 -5- 3/27/43 "These increases have been approved by the Board of Governors of the Federal Reserve System. "These adjustments are in connection with a comprehensive revision of the personnel classification plan of the Federal Reserve Bank of Atlanta, the first since 1936. One of the purposes of the revision was to obtain greater uniformity in the personnel classification plans of the various Branches. "In transmitting this certificate, attention is called to the fact, which has been discussed with representatives of the iiar Labor Board and of the Commissioner of Internal Revenue, that the maximum annual salaries approved under the personnel classification plan are not, in general, established rates paid for all employees coming within the respective groups. They represent instead maximums within Which adjustments, including increases due to individual merit and earned through long service, may be made by the Reserve Bank without further reference to the Board of Governors." Letter to Mr. Mulroney, Vice President of the Federal Reserve of Chicago, reading as follows: "In accordance with the request contained in your letter of March 22, 1943, the Board approves the designation of Ralph E. Young as a special assistant examiner for the Federal Reserve Bank of Chicago." Approved unanimously. Letter to Mr. Hitt, First Vice President of the Federal Reserve tatik of St. Louis, reading as follows: "In accordance with your request the Board of Governors approves the changes in the personnel classification plan of the Federal Reserve Bank of St. Louis and Louisville Branch, as submitted with your letter of March 24, 1943". Approved unanimously. Letter to Mr. Ashley, Assistant Federal Reserve Agent at the eciel'aa- Reserve Bank of Dallas, reading as follows: "In accordance with the request contained in your letter Of March 16, 1943, the Board of Governors approves the 444 3/27/43 -6- "appointments of lessrs. Caldwell Jefferson Saunders and John William Digings as Alternate Assistant Federal Reserve Agents with annual salaries at the rates of $3,480 and $2,220, respectively, with the understanding that they will be placed upon the Agent's payroll and will be solely responsible to him, or, during a vacancy in the office of Agent, to the Assistant Federal Reserve Agent, and to the Board of Governors, for the proper performance of their duties. When not engaged in the performance of their duties as Alternate Assistant Federal Reserve Agents they may, with the approval Of the Federal Reserve Agent, or during a vacancy in the office of the Federal Reserve Agent, of the Assistant Federal Reserve Agent, and the President, perform such work for the Bank as will not be inconsistent with their duties as Alternate Assistant Federal Reserve Agents. "It is noted that the bonds for Messrs. Saunders and Ligings, after examination by your Counsel, will be forwarded to the Board, together with advice as to the date when their appointments become effective, and as to action to be taken With respect to releasing the bonding company from liability for any acts committed by Messrs. Thaxton and Segelhurst subSequent to the termination of their duties as Alternate Assistant Federal Reserve Agents." Approved unanimously. Letter to 2.r. Day, President of the Federal Reserve Bank of rancisco, reading as follows: "In accordance with your request, the Board of Governors aPProves page 136-a of your Personnel Classification Plan, as submitted with your letter of March 18, 1943, establishing the Position of Research Specialist in the Research Department with a maximum annual salary of 5,600. "In submitting the request, you state that the creation ?f the new position is necessary because of the increasing ac1lvities of the Division of Research resulting from the enarged research program and that it is necessary to employ economists capable of carrying on advanced research of a more sPecialized type than has heretofore been done. t "iihile you have reouested the Board of uovernors to obsaln approval of the new position by the Joint Committee on alaries and Viages established by the National Labor Board !fld the Commissioner of Internal Revenue, in view of the cirfiMstances described above and the fact that the maximum an"ual salary is materially less than the salary which had been 445 3/27/43 -7- approved for the position of Head of the Department, which Position was canceled last year, it is believed that the matter is not one which needs to be referred to the Joint Committee." Approved unanimously. Letter to the board of directors of the "Bank of Gouverneur", Gouv erneur, New York, stating that, subject to conditions of membership 11/111thered 1 to 6 contained in the Board's Regulation H and the following 8Pecia1 condition, the Board approves the bank's application for memberF1143 in the Federal Reserve System and for the appropriate amount of Stock in the Federal Reserve Bank of New York: 117. Prior to admission to membership, such bank, if it has not already done so, shall charge off or otherwise eliminate estimated losses of 42,24O, as shown in the report of examination of such bank as of November 19, 1942, made by an examiner for the Federal Reserve Bank of New York." The letter also contained the following special comment: "According to the examiner for the Federal Reserve Bank, Operations of the trust department receive little formal suPervision and the records are inadequate. It is understood that the trust officer, who is executive vice president of the .'ank, has had little experience in trust administration and ti i.hat he does not have sufficient time to devote to trust matnrs. Acceptance of trust business entails serious responsi°11ities and if the bank intends to continue to hold itself ?ut as being a qualified corporate fiduciary, as a member bank it will be expected to take the necessary steps to give the trust department adequate and efficient supervision and to eTllp itself to handle the business in conformity with recognized principles of sound fiduciary practices." 1 Approved unanimously, together with a letter to Mr. Sproul, President of the Federal Reserve Bank of New York, reading as follows: 446 3/27/43 -8-- "The Board of Governors of the Federal Reserve :.-ystem approves the application of the'Eank of Gouverneur', Gouverneur, New York, for membership in the Federal Reserve 'System, subject to the conditions prescribed in the enclosed letter which you are requested to forward to the Board of Directors of the institution. Two copies of such letter are also enclosed, one of which is for your files and the other of which you are requested to forward to the Superintendent of Banks for the State of New York for his information. "Standard condition of membership numbered 6 has been Prescribed in order that its provisions may be invoked at any time in the future if necessary, but as in other cases and in accordance with the general authorization previously granted by the Board, you are authorized to waive - compliance with the condition until further notice insofar as the condition applies to funds which are given statutory preference in the State of New York. "It seems to be agreed that the management of the bank needs strengthening by the addition of an experienced and qualified executive officer. President Sheldon, who is reported to be the dominant figure in the bank, is 79 years of age and apparently there is no one in the bank properly qualified to take his place. The president has been rather severely criticized by the F.D.I.C. for his liberal loan and investment policies and his tendency to retain substandard siecurities, and the assistant supervising examiner for the apparently does not feel that the management has given adequate attention to the program agreed upon for correcting matters of criticism. "It is assumed of course that the Reserve Bank will follow the situation closely until the management problems have been resolved satisfactorily and appropriate attention las been given the other matters subject to material criticism, including the operations of the trust department. It is assumed also that the bank will be required to fulfill any commitment to the F.D.I.C. with respect to increasing Common stock as debentures are retired. The application has oeen approved with that understanding." I Letter to the board of directors of "Me State Bank of Defiance Colt, .JanY", Defiance, Ohio, stating that, subject to conditions of member1- numbered 1 to 3 contained in the Board's Regulation h and the followtrig s Pecial condition, the Board approves the bank's application for 447 3127/43 —9— membership in the Federal Reserve System and for the appropriate amount °Ib stock in the Federal Reserve Bank of Cleveland: "4. Prior to admission to membership, such bank, if it has not already done so, shall charge off or otherwise eliminate estimated losses of 0,902.64, as shown in the report of examinetion of such bank as of February 20, 1943, made by an examiner for the Federal Reserve Bank of Cleveland." Approved unanimously, together with a letter to Mr. Fleming, President of the Federal Reserve Bank of Cleveland, reading as follows: , "The Board of Governors of the Federal Reserve System approves the application of'The State Bank of Defiance Company', Defiance, Ohio, for membership in the Federal Reserve System, subject to the conditions prescribed in the enclosed letter Which you are requested to forward to the Board of Directors of the institution. Two copies of such letter are also enclosed, one of which is for your files and the other of which You are requested to forward to the Superintendent of Banks for the State of Ohio for his information. "It has been noted that consideration is being given to increasing the common stock to •200,000 by the sale of new stock and the distribution of a stock dividend, at which time the debentures outstanding will be retired. The present basic capital of $50,000 is of course not in keeping with the size of the bank and it is assumed that you will encourage a program, and its consummation as early as is feasible, which will bring the basic capital to a more nearly commensurate figure. "It is assumed, also, that you will follow the matter of the bank's bringing into conformity with the provisions of law and the Board's regulations the requirements with respect to savings deposit withdrawals and the savings accounts listed on Page 16-(1) of the report of examination for membership." Letter to the board of directors of the "Commercial State Bank Of elvin", Lelvin, Illinois, stating that, subject to conditions of members • 11113 numbered 1 to 3 contained in the Board's Regulation h, the Board 414)rn -ves the bank's application for membership in the Federal Reserve System 448 3/27/43 -10- 411 for the appropriate amount of stock in the Federal Reserve Bank of Chicago. Approved unanimously, for transmission through the Federal Reserve Bank of Chicago. Letter to the Presidents of all the Federal Reserve Banks, l' irLD; as follows: "We are in receipt of a memorandum from Ir. William A. Coolidge, Assistant Lhief of Finance Section, Navy Department, reading as follows: 'Please notify all Federal Reserve Banks that all sums Of money which they owe to the Navy Department, either because of overpayment of interest, collections on loans or for any other reason, should be remitted by a check drawn to the order of the Treasurer of the United States and sent in to the Finance Section.' "It will be appreciated if you will comply with the request of Mr. Coolidge. "It is understood, of course, that this does not apply to guarantee fees which should be credited to the general account of the Treasurer of the United States in the usual manner as provided in instructions of the Navy Department to all Eederal Reserve Banks, dated May 13, 1942, enclosed with our letter of May 19, 1942." Approved unanimously. Letter to the Presidents of all the Federal Reserve banks, l'14-ing as follows: "For your information there is enclosed a copy of a memorandum, dated March 25, 1943, received from Lt. Colonel aul Cleveland, Chief, Loan section, Advance Payment and '-'0an Branch, in reply to an inquiry from a Federal Reserve .-ank (with respect to extensions of maturities of guaranteed loans under delegated authority). "A copy of Lt. Colonel Cleveland's memorandum is being sent to each Liaison Officer." f Approved unanimously. 449 3/27/43 -11Memorandum dated March 26, 1943 from Mr. Smead, Acting Admin- lstrator for the War Loans Committee, recommending, for the reasons stated in the memorandum, that the sum of $100 be added to the miscellaneous item the 1943 non-personal budget of the Office of the Administrator for the 164 'Loans Committee to cover the expense of bus transportation for a mes44ger between the Board's building and the War Department Pentagon Build- Approved unanimously. Thereupon the meeting adjourned. Apt)
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