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Minutes of actions taken by the Board of Governors of the Federal Reserve System on Thursday, May 1, 1952. The Board met in executive session in the Board Room at 10:00 a.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Martin, Chairman Szymczak Evans Vardaman Mills Robertson At the conclusion of the executive session Mr. Carpenter, Se cretarY, and Mr. Allen, Director of the Division of Personnel Administration, were called into the meeting. The Secretary was informed that during the executive session unanimous approval was given to authorizations for travel by Chairman Martin to Minneapolis, Minnesota, on May 18 and 19, and to Chicago, Illinois, on May 27, 28, and 29, 1952. Reference was made to the following matters relating to Federal Reserve Bank personnel: Letter to Mr. Sproul, President, Federal Reserve Bank of New York1 reading as follows: "The Board of Governors approves the payment of salary to Mr. Lawrence E. Quackenbush as Acting Manager, for the period April 21, 1952, to March 31, 1953, at the rate of $10,000 per annum, which is the rate fixed by the Board of Directors as reported in your letter of April 21, 1952. "It is noted from your letter that Mr. Quackenbushls ePPointment as Acting Manager and his assignment to the Bank Examinations Department were occasioned by the recent special service retirement of Ir. Osterhus." -4.- It was voted unanimously to turn the file on the above matter over to Governor Robertson for review with the understanding that unless there was some reason why he wished to bring the matter back to the Board for further con— sideration, the proposed salary for Mr. Quackenbush was approved and the proposed letter to Mr. Sproul would be sent. Secretary's Note: Following the meeting Governor Robertson approved the letter to Mr. Sproul and it was sent under date of May 2, 1952. Letter to Mr. Weigel, Secretary, Federal Reserve Bank of St. Louis reading as follows: "Thank you for your letter of April 21, advising that on April 14, Mr. Fred Burton reassumed his duties as Assistant Manager of the Louisville Branch. "Accordingly, the Board of Governors approves the Payment of salary to Mr. Burton as Assistant Manager, Louisville Branch, at his present rate of $8,000 per annum for the period April 14, 1952 through May 31, 1952,” After a discussion of comments by Governor Vardaman as to the inadequacy of salaries and competency of management at the Louisville Branch and at certain other branches of Federal Reserve Banks, the letter to Mr. Weigel was approved unanimously. In connection with this action Governor Vardaman stated that he had raised the question of management and inadequacy of salaries at the branches because he felt that it was a matter that called for consideration on a System basis and that he wished particularly to stress the existing unsatisfactory situation at the Louisville, Nashville, New Orleans, and Jacksonville branches. 5/1/52 -3Letter to Mr. Wilbur, Chairman, Federal Reserve Bank of San Francisco, reading as follows: The Board of Governors approves the payment of salaries to the following officers of the Federal Reserve Bank of San Francisco and its Branches, for the Period July 1, 1952, through April 30, 1953, at the rates indicated, which are the rates fixed by the Board of Directors as reported in your letter of April 8, 1952. Name Title Annual Salary R. E. Everson Senior Assistant Manager, Seattle Branch $10,500 C. H. Mercer Assistant Manager, Portland Branch 7,500 M. J. Davies Assistant Manager, Los Angeles Branch 7,000 A. H. Price Assistant Cashier, Head Office 7,000" Approved unanimously. Governor Szymczak stated that when he was in Chicago recently Nsident Young and others in the Federal Reserve Bank of Chicago inwhen the Board was going to take further action on the salary re rifliendations that had been submitted with respect to officers of the Batik, 3 and that the comment had been made that the Board's letter of 4111 10, 1952 approved certain salaries, but that it was important that Consideration be given to other salary increases recommended by the D -ank in order to provide for proper internal salary alignment. Mr. Allen stated that when the matter of official salaries at th. r'Tn 'ederal Reserve Bank of Chicago was under consideration prior to the letter of April 10, the Chicago Bank was informed that the Board, ''1:7179 5/1/52 la carrying out the policy set forth in its letter of February 26) would not be willing to approve all of the salary increases proposed by the Chicago Bank and that accordingly the Bank might wish to review the increases previously proposed and make such adjustments as would keep the total increases within six per cent of aggregate officerst salaries and at the same time maintain proper internal salary align• Allen added that the Bank had been unwilling to do this and for approval of the salary increases as set forth in the Board 1S letter of April 10, and that, in the absence of further action by the Board with respect to System salary policy, it was not expected that any furtheraction would be taken this year on the salaries for officers of the Federal Reserve Bank of Chicago. The members of the Board concurred in Mr. Allents statement and it was understood that he would call President Young by telephone and advise him accordingly. There then ensued a discussion of salary increases proposed by the boards of directors of the Federal Reserve Banks of Boston, Philacl"-ta, Cleveland, and San Francisco for officers of these banks for the Period May 1, 1952 to April 30, 1953. During the course of this discussion it was agreed unanimously that in addition to the matters transferred on April 24, 1952, to Governor Robertson for primary consideration, there —5— should be assigned to him examination of Federal Reserve Banks and examination of institutions engaged in foreign banking subject to sections 25 and 25a of the Federal Reserve Act. In connection with the consideration of the salaries proposed for officers of the Federal Reserve Bank of Boston, reference was made to a letter received from President Erickson under date of April 21, 1952, in which he submitted a request of the board of directors that, for the reasons outlined in the letter, the Board approve a contribution by the Bank of approximately $10,700 to the Retirement System to suPPlement the retirement allowance of Joseph P. Moran, former Manager °f the Check Collection Department of the Bank, who had been involuntarilY separated from service prior to reaching age 55. The matter was considered by the Board in the light of the reasons stated in Mr. Ericksonfs letter for the action of the board of directors of the Bank and in the light of the reasons for the policy set forth in the Board's letter of March 17, 1944 (S-741) authorizing sPecial contributions to the Retirement System in the case of employees --Luntarily separated from service after reaching age sion 55. The discus- Lasclosed that the members of the Board were sympathetic with the Pr°13°30d payment for the reasons which prompted its authorization by the , sooston directors but the view was expressed that there were reasons -6'thy the Board should not depart from the policy set forth in its letter of March 17, 1944. At the conclusion of the discussion, during which various procedures for handling cases of this kind at the Federal Reserve Banks were discussed, the proposed payment was approved with the understanding that President Erickson would be advised of the Board's action in a letter reading substantially as follows: "In accordance with the request contained in your letter of April 21, 1952, the Board of Governors approves a payment to the Retirement System of the Federal Reserve Banks of approximately $10,700 by the Federal Reserve Bank of Boston on behalf of Mr. Joseph P. Moran, formerly Manager of the Check Collection Department. "In approving this payment the Board of Governors was reluctant to depart from the principle prescribed in its letter S-741, i.e., that an employee must be 55 years of age and have rendered 25 years of service, because it ls of the opinion that exceptions to established principles should be made only in the most unusual circumstances. "The Board was not unmindful, however, of the amount of thought which you and your directors have given to this Problem, and its approval was based primarily on this fact and your assurance that all of the alternatives had been considered carefully." At the conclusion of the discussion of Federal Reserve Bank salaries, unanimous approval was given to letters to the Federal Reserve Banks of Boston, Philadelphia, Cleveland, and San Francisco, reading as follows: Letter to Mr. Hod kinson Chairman Federal Reserve Bank of Boston "The Board of Governors approves the payment of salary to Mr. Joseph A. Erickson as President at the rate of $25,000 per annum and to Mr. Alfred C. Neal as 5/1/52 -7- "First Vice President at the rate of $18,000 per annum for the period May 1, 19520 through April 30, 1953, provided these rates are fixed by your board of directors. "The Board of Governors also approves the payment Of salary to the following officers at the rates indicated, which, according to Mr. Erickson's letter of April 1, 1952, are the rates which were fixed by your directors for the period May 1, 1952, through April 30, 1953: Name Title Annual Salary Robert B. Harvey Vice President and Cashier $ 16,000 E. 0. Latham Vice President 16,000 Carl B. Pitman Vice President 17,000 O. A. Schlaikjer Vice President and 17,000 General Counsel R, F. Van Amringe Vice President 14,000 Dana D. Sawyer Assistant Vice President 10,500 L. A. Zehner Assistant Vice President 10,000 Elliot S. Boardman Assistant Cashier 9,000 F. C. Gilbody Assistant Cashier 9,500 William R. King Assistant Cashier 8,400 E. W. O'Neil9,000 Assistant Cashier John J. Rock Assistant Cashier 8,250 James D. MacDonald Chief Examiner 9,000 Agsgar R. Berge Secretary and 12,000 Assistant Counsel D. L. Strong General Auditor 9,500 "It is understood that Vice Presidents Fogg and Hult are to retire March 31, 1953, and June 30, 1952, respectively. Since the Board has already approved their salaries through these dates, Messrs. Fogg and Hult are not included 111 the above list." Letter to Mr. Williams President Federal Reserve Bank of Philadelphia "Reference is made to your letter of March 26, 1952, submitting salaries for the officers of the Federal Reserve Bank of Philadelphia which have been approved by your Board Of Directors for the year beginning May 1. "The Board of Governors approves the payment of sa3Ary t° You as President of the Federal Reserve Bank of PhiladelPhia at the rate of $25,000 per annum and to Mr. VY, J. Davis 5/1/52 -8- "as First Vice President at the rate of $18,000 per annum for the period May 1, 1952, through April 30, 1953. "The Board also approves the payment of salary to the following officers at the rates indicated for the period MaY 1, 1952, through April 30, 1953: Name Title Annual Salary Philip M. Poorman Vice President $17,000 Ernest C. Hill Vice President 16,000 Karl R. Bopp Vice President 16,000 Robert N. Hilkert Vice President 16,000 William G. McCreedy Vice President and Secretary 15,000 James V. Vergari Counsel and Asst. Secretary 14,000 Richard G. Wilgus Cashier and Asst. Secretary 12,000 Wallace Ii, Catanach Assistant Vice President 10,500 Norman G. Dash Assistant Vice President 10,000 George J. Lavin Assistant Vice President 9,500 Evan B. Alderfer Industrial Economist 10,000 Clay J. Anderson Financial Economist 10,000 Herman B. Haffner General Auditor 9,000 Fred A. Murray Manager of Plant 8,500 Hugh Barrie Machine Methods Officer 7,800 Roy Hetherington Assistant Cashier 8,500 Henry J. Nelson Assistant Cashier 8,000 Edward A. Aff Assistant Cashier 7,500 Ralph E. Haas Assistant Cashier 7,500 HarrY H. Roeder Assistant Cashier 6,000" Letter to Mr. Braina rd Chairman Federal Reserve Bank of Cleveland "Reference is made to your letter of March 14, 1952, t° Mr. Virden's letter of April 10, 1952, and Mr. Gidney's letter of April 11, 1952. "The Board of Governors approves the payment of salary to Itr. Ray M. Gidney as President at the rate of $25,000 per annum, for the period May 1, 1952, through April 30, 1953, and to Mr. William H. Fletch er as First Vice President at the rate of $18,000 per annum for the period May 1, 1952, to the date of his resignation or December 31, 1952, provided these rates are fixed by your board of directors. )4.,4-7foil 5/1/52 _9_ "The Board of Governors also approves the payment of Salary to the following named officers at the rates indicated for the period May 1, 1952, through April 30, 1953, provided Your directors set these rates if they have not already done so: Name Title Annual Salary Wilbur T. Blair Vice President, Counsel, 4 12,50 and Secretary Roger R. Clouse Vice President 12,500 A. H. Laning Vice President and Cashier 14,000 Martin Morrison Vice President 14,000 Paul C. Stetzelberger Vice President 13,000 Donald S. Thompson Vice President 15,500 He E. J. Smith Assistant Vice President 10,500 C. J. Bolthouse Assistant Cashier 9,500 Elwood V. Denton Assistant Cashier 7,700 Phillip B. Didham Assistant Cashier 9,350 G. H. Emde Assistant Cashier 9,50.0 J. R. Lowe Assistant Cashier 9,500 Jos. M. Miller Assistant Cashier 9,500 G. R. Rose Assistant Cashier 9,000 H. M. Boyd Chief Examiner 9,500 H. B. Flinkers Assistant Secretary 7,700 L. M. Hostetler Manager, Research 10,000 Department C. F. Ehninger General Auditor 11,500 Cincinnati Branch W. D. Fulton Vice President 15,500 H. N. Ott 11,500 Cashier P. J. Geers Assistant Cashier 9,500 C. Harrell 9,500 Assistant Cashier R. G. Johnson 9,500 Assistant Cashier Pittsburgh Branch 16,5oo Kossin Vice President A. G. Foster 12,500 Cashier W. H. Nolte 9,000 Assistant Cashier J. R. Price 8,500 Assistant Cashier A. Schmidt 9,500 Assistant Cashier Roy J. Steinbrink Assistant Cashier 9,500" 5/1/52 Letter to Mr. Wilbur —10— Chairman Federal Reserve Bank of San Francisco "The Board of Governors approves the payment of salary to Mr. C. E. Earhart as President at the rate of $25,000 per annum and to Mr. H. N. Mangels as First Vice President at the rate of $18,000 per annum for the period MaY 1, 19521 through April 30, 1953, as fixed by your board of directors. "The Board of Governors also approves the payment of salary to the following named officers at the rates indicated for the period May 1, 1952, through April 30, 193, which are the rates approved by your board of directors, according to Your letter of April 8, 1952: Head Office Name Title Annul Salary E. R. Millard Vice President $ 16,000 H. F. Slade Vice President 16,000 Ronald T. Symms Vice President and Cashier 11,500 0 . P. Wheeler Vice President 14,000 R. E. Everson Assistant Vice President 9,500 R. H. Morrill Assistant Vice President 9,500 • Jo Swan Assistant Vice President 10,500 J. L. Barbonchielli Assistant Cashier 8,000 T. W. Barrett Assistant Cashier 8,000 H. E. Hemmings Assistant Cashier 8,000 R. C. Milliken Assistant Cashier 8,000 G. D. Parker Assistant Cashier 7,500 J. A. OrKane General Counsel 12,000 H. Armstrong General Auditor 10,000 Los Angeles Branch L. C. Meyer Assistant Manager $ 8,000 J. R. Robinson Assistant Manager 7,800 Ws Je Thomas 7,200 Assistant Manager C. H. Watkins Assistant Manager 10,500 Portland Branch S. A. MacEachron Vice President $ 13,000 J. A. Randall 10,000 Assistant Manager D• E. Bent Assistant Manager 7,500 J. P. Blanchard Assistant Manager 6,500 * raW(1 r 5/1/52 -11- "Salt Lake City Branch Name Title Annual Salary W. L. Partner $ 14,030 Vice President E. R. Parglebaugh 9,500 Assistant Manager A. L. Price 7,200 Assistant Manager T. M. Simmons 6,800 Assistant Manager Seattle Branch J. M. Leisner $ 15,000 Vice President and Manager B. A. Russell Assistant Manager 9)500 * W. R. Sandstrom 7,500 Assistant Manager D. E. Simms Assistant Manager 8,500 * Salary approved only to date of retirement. "The salaries of Messrs. Volberg and Bold at the Los Angeles Branch are already above the maximums for the positions Which they occupy and, accordingly, the increases proposed in Your letter of April 8 would carry them further beyond these maximums and would not be in accordance with the regulations of the Salary Stabilization Board. As indicated in the Board's letter of February 261 the Board is not prepared to approve such increases at this time pending the adoption of a permanent salary plan. Therefore, the Board approves the payment of salary to Vice President W. F. Volberg at the rate of $16,000 per annum and to Assistant Manager Fred C. Bold at the rate of $13,000 per annum for the period May 1, 19521 through April 30, 1953) provided these rates are fixed by your board of directors." Thereupon Mr. Allen withdrew from the meeting. Governor Szymczak distributed copies of (1) a memorandum prePar'ed under date of April 29, 19521 by Messrs. Powell and Mills with l'sPect to investment policies and procedures for the Retirement System r the Federal Reserve Banks, and (2) a memorandum relating to the duties r the Presidents and First Vice Presidents of the Federal Reserve Banks. W.3 understood that there would be a discussion of the two memoranda at an early meeting of the Board. 770 -12The following additional actions were taken by the Board: Minutes of actions taken by the Board of Governors of the Federal Reserve System on April 30, 1952, were approved unanimously* Letter to Mr. Koppang, First Vice President, Federal Reserve Bank of Kansas City, reading as follows: "This refers to your letter of April 25, regarding the penalty of $378.08 incurred by the Westport Bank of Kansas City, Missouri, on a deficiency in its reserves for the period ended April 15, 1952. "It is noted that the deficiency resulted from a . mlsunderstanding by the subject bank of the newly inaugurated procedure of handling its clearings through the Federal Reserve Bank rather than its correspondent bank; that the bank is a well operated institution; and that It has not had a reserve deficiency since February 19149. "In the circumstances, the Board authorizes your Bank to waive the assessment of the penalty in this case." Approved unanimously. Telegram to Mr. Slade, Vice President, Federal Reserve Bank of San F rancisco, reading as follows: "Reurtel addressed Sloan. Suggest that reply to bankis letter be restricted substantially to the following: IFID.r purposes of the examination referred to in our letter dated April 21, 1952, we consider your bank to be affiliated with Transamerica Corporation. We would appreciate receiving the information requested.? "If information is not furnished and you need informa. tion not contained in existing reports of examination Please advise Board and arrangements to secure information 5/1/52 -13- "will be made with the Comptroller of the Currency." Approved, Governor Vardaman voting "no". Memorandum dated April 10, 1952, from Mr. Carpenter, Secretary, recommending that there be included in the Annual Report of the Board fOr '1951 entries, in the form submitted with the memorandum, covering 22 Policy actions taken by the Board during the year 1951. Approved unanimously.
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