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Minutes of actions taken by the Board of Governors of the Federal Reserve System on Wednesday, March 9, 1955. The Board met in the Board Room at 10:00 a.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Martin, Chairman Szymczak Vardaman Mills Robertson Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Carpenter, Secretary Sherman, Assistant Secretary Kenyon, Assistant Secretary Thurston, Assistant to the Board Riefler, Assistant to the Chairman Thomas, Economic Adviser to the Board Vest, General Counsel Bethea, Director, Division of Administrative Services Young, Director, Division of Research and Statistics Johnson, Controller, and Director, Division of Personnel Administration Solomon, Assistant General Counsel Koch, Assistant Director, Division of Research and Statistics Molony, Special Assistant to the Board The following matters, which had been circulated among the memipers or the Board, were presented for consideration and the action taken in each instance was as indicated: Memoranda from appropriate individmils concerned recommending Personnel actions with respect to members of the Board's staff as follows: Appointment, effective upon the date of assuming duties 4ame and title Roberta S. Black, Stenographer Division Legal Basic annual salary *3 415 -2- 3/9/55 increases, effective March 13, 1955 Name and title Division Basic annual salary From To Research and Statistics Paul B. Simpson, Acting Chief, Business Finance and Capital Markets Section Helen R. Grunwell, Chief Draftsman Mary P. McCormick, Draftsman-Illustrator Nell Tyson, Library Assistant $9,800 5,685 5,810 4,830 4,955 3,495 3,575 3,535 3,795 3,190 3,270 2,552 2,632 Examinations Robert N. Westmoreland, Jr., Assistant Federal Reserve Examiner Personnel Administration Rubye Zacharay, Clerk Administrative Services James R. Jordan, Messenger .112.q.pati2i1 effective February 28, 1955 Jean Startup, Special Assistant Federal Reserve Examiner, Division of Examinations. Approved unanimously. Letter to the Honorable H. E. Cook, Chairman, Federal Deposit Insurance Corporation, Washington, D. C., reading as follows: Reference is made to your letter of February 23, 1955, concerning the application of Richmond County Bank, 3/9/55 -3- Rockingham, North Carolina, for continuance of deposit insurance after withdrawal from membership in the Federal Reserve System. No corrective programs have been urged upon the bank or agreed to by it which, in the opinion of the Board of Governors, would be considered desirable to incorporate as conditions to the continuation of deposit insurance. Approved unanimously. In considering the aforementioned appointment of Mrs. Roberta S. Black, the Board noted that a sister-in-law (Miss Winifred J. Black, Clerk-Stenographer in the Division of International Finance) is a present employee of the Board. The matter was considered in the light of state- mentscontained in a memorandum dated February 25, 1955, from the Division of Personnel Administration, which pointed out that the regulations of the Civil Service Commission permit the employment of two members of a family in the same agency, that, in addition, the regulations have been interpreted by the Attorney General as meaning that the term "members of a family" does not include in-laws, and that a more restrictive practice on the part of the Board would place it at a disadvantage in recruiting for positions which it is difficult to fill. With respect to Mrs. Black, it was pointed out that at present it is difficult to obtain stenographers in the Washington area, that her position would not be in the same division as that of her sister-in-law, and that her experience in the employ Of a legal firm especially qualified her for the position for which she was recommended. 83 3/9/55 At the conclusion of a discusthis matter, it was concerning sion should continue Board the agreed that of not practice general to follow the relative a when individuals employing is a member of the Board's staff but that the rule should be considered a flexible one to be set aside whenever, in the opinion of the Board, circumstances warrant. Reference was made to a draft of letter to Mr. Johns, President Of the Federal Reserve Bank of St. Louis, which had been circulated to the members of the Board, concerning the request of the Lincoln Bank and Trust Company, Louisville, Kentucky, (made in a letter dated February 16, 1955, from Mr. Noel Rush, President of the bank, which was transmitted to the Board by President Johns) for relief from the limitation contained in the Board's letter dated August 6, 1954, which approved the establishment of a branch on Shelbyville Road, east of Hubbard's Lane, upon the condition that the branch not be opened prior to June 1, 1955. This con- dition was stipulated by the Board because a smaller nonmember bank had received authority from the State authorities and the Federal Deposit Insurance Corporation to establish a branch in the same area and the Board felt that the immediate opening of two branches in the area was unnecessary and would not be in the public interest. The Board also felt that the bank which had filed its application first should be granted a reasonable time in which to become established. Governor Robertson stated that he had received a request by telePhone from the office of Senator Clements, of Kentucky, that Senator 3i9 -5- //v3/9/55 Clements, Mr. Rush, and Mr. William A. Ballantine, a director of Lincoln Bank and Trust Company, be permitted to meet with the Board tomorrow at 3:30 p.m. for the purpose of stating reasons why they felt that the Board Should remove its condition and permit Lincoln Bank and Trust Company to open its Shelbyville Road branch on or about March 14, 1955. Governor Robertson was authorized to advise the office of Senator Clements that the Board would be glad to meet with Senator Clements, Mr. Rush, and Mr. Ballantine at the time suggested. There was presented a request from Miss Burr, Assistant Director, Division of Research and Statistics, for authority to travel to Dayton, Ohio, during the period April 10-12, 1955, to address a workshop on economic education. Approved unanimously. Reference was made to a memorandum dated March 7, 1955, from the Division of Personnel Administration which recommended that effective with the pay roll period beginning March 13, 1955, the guard and messenger Positions in the Division of Administrative Services be converted to salary groups in the Board's regular pay schedule equivalent to those in the Civil Service general schedule and that certain salary adjustments be Made incident to the conversion. The memorandum, copies of which had been sent to the members of the Board, stated that as provided in the Fringe Benefits Act of 1954, determinations had been made in accordance with instructions of the Civil Service Commission as to which positions in 90 3/9/55 -0- Government agencies would be converted from the crafts, protective, and custodial pay schedule to the Civil Service general schedule effective not later than March 13, 1955, and that, while the Act was not applicable to the Board's organization, it was assumed that the Board would wish to continue, for salary administration purposes, to keep its pay schedules in line with those of other Government agencies. At the request of the Board, Mr. Johnson made an explanatory statement in which he pointed out, among other things, that the transfer of certain positions from the crafts, protective, and custodial pay schedule to the general schedule would have the effect of reducing the number of salary groups used, that this would also be true in converting to equivalent salary groups in the Board's pay schedule, that under the Fringe Benefits Act the remaining crafts, protective, and custodial positions would be transferred to wage board rates by September 1955, and that recommendations as to transfer of such positions would be made to the Board by the Division of Personnel Administration at the appropriate time. Chairman Martin then suggested that the matter be considered further in executive session and there was agreement with that suggestion. Messrs. Bethea and Johnson then withdrew from the meeting. In accordance with the understanding at the meeting yesterday, a revised draft of statement to be given by Chairman Martin before the Senate Banking and Currency Committee on credit and stock market developments had been prepared and copies had been distributed to the members of 391 —7— 3/9/55 the Board before this meeting. The revised draft was reviewed and a number of suggestions were made for additional changes. Accordingly, it was understood that a new draft would be prepared in the light of the comments made at this meeting and that copies thereof would be sent to the members of the Board with a view to further consideration at the meeting tomorrow. Minutes of actions taken by the Board of Governors of the Federal Reserve System on March 8, 1955, were approved unanimously. All of the members of the staff then withdrew from the meeting and the Board went into executive session. The Chairman subsequently informed the Secretary that during the executive session further consideration was given to the memorandum from the Division of Administrative Services referred to hereinbefore concerning the transfer of guard and messenger positions in the Division of Administrative Services to salary groups equivalent to those in the Civil Service general schedule, and that in accordance with the recommendation contained in that memorandum the transfer of the positions was approved unanimously, together with the following salary adjustments, effective March 13, 1955: Name and title L. N. Bertol, Captain of the Guard William Hyde, Sergeant Bruce M. Unger, Sergeant Basic annual salary From To 740 , ci)4,795 3,680 3,735 3,760 3,815 392 -8- 3/9/55 Salary increases, effective March 13 1955 (continued) Basic annual salary From To Name and title Charles R. Norris, Head Messenger Henry A. Bates, Messenger Fletcher E. Brown, Messenger James E. Caldwell, Messenger Charles Carey, Messenger William E. Hardy, Messenger john H. Hunley, Messenger James R. Jordan, Messenger Esmond C. Langley, Messenger James H. Newton, Messenger W. Lucius ThalleY, Messenger 3,454 2,952 2,980 3,032 3,060 2,792 2,820 3,032 3,060 3,032 3,060 3,112 3,140 2,632 2,660 2,792 2,820 3,112 3,14o 3,032 3,o6o The Chairman also informed the Secretary that during the executive session the Board considered the recommended appointment of Charles E. Rollins as Economist in the Division of International Finance, with basic annual salary of *5,435, and that the Board requested Governor Szymczak to look into the question of whether the services of Mr. Rollins were needed in the Division of International Finance and, if so, to authorize the appointment of Mr. Rollins. Secretary's Note: Governor Szymczak subsequently reported to the Chairman 393 -9- 3/9/55 that he had consulted with Messrs. Marget, Director, Division of International Finance, and Johnson, Controller, and Director, Division of Personnel Administration, that he had come to the conclusion that the position for which Mr. Rollins was recommended should be filled, and that, accordingly; he had authorized Mr. Rollins' appointment, effective as of the date he assumes his duties. The meeting then adjourned.
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