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4 A meeting of the Board of Governors of the Federal Reserve SP"stemwas held in Washington on Monday, May 11, 1942, at 10:30 a.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Eccles, Chairman Ransom, Vice Chairman McKee Draper Evans Mr. Bethea, Assistant Secretary Mr. Carpenter, Assistant Secretary Mr. Clayton, Assistant to the Chairman The action stated with respect to each of the matters hereinafter referred to was taken by the Board: The minutes of the meeting of the Board of Governors of the Fede ral Reserve System held on May 9, 1942, were approved unanimously. Memorandum dated May 7, 1942, from Mr. Wyatt, General Counsel, ree°L7riending that Miss Doris M. Engel be appointed as a stenographer ill the Office of General Counsel, with salary at the rate of ,(!1,440 Per annum/ effective as of the date upon which she enters upon the Perf°rmance of her duties after having passed satisfactorily the usual PhYsical examination. Approved unanimously. Memorandum dated May 6, 1942, from Mr. Paulger, Chief of the of Examinations, recommending that Charles T. Malone, a Fed"al Re"r - ye Examiner in that Division, be granted leave of absence thout pay beginning May 20, 1942, so that he might enter active duty the United States Army, and that he be granted the benefits 5/11/42 Provided in the policy adopted by the Board on November 14, 1940, and amended August 20, 1941, for all employees entering military service. Approved unanimously. Memorandum dated May 7, 1942, from Mr. Goldenweiser, Director f the Division of Research and Statistics, recommending that, because of illness, Mrs. Julia Haigh, a clerk-stenographer in that Division, be granted a leave of absence without pay beginning June 22, 1942, and continuing through August 31, 1942, and that during such absence the Board continue its contributions to the retirement system on her ehalf provided that she continue her own contributions. Approved unanimously. Letter to Mr. Meyer, Assistant Cashier of the Federal Reserve Bank of Chicago, reading as follows: "The Board of Governors approves the changes in the Personnel classification plan of your Bank as requested In your letter of May 5, 1942." Approved unanimously. Telegroun — to the Presidents of all the Federal Reserve Banks, Xeag as follows: t. ."A question has been raised as to necessity of con°In113.-ng Board's present practice of sending telegrams , 111°ting entire :rmed services authorization memoranda received from or Maritime Commission regarding guarantees 'o be executed under Executive Order No. 9112. Since 5/11/42 -3- "the Reserve Banks presumably await receipt of signed authorizations before executing guarantees, wire advices vi?.th respect to such transactions will be confined, beginning today, to brief statements of actions taken, i.e., whether an application has been approved or denied or INI:lether alternative conditions have been suggested. All signed authorization memoranda from the armed services or the Maritime Commission will be sent to the Reserve banks immediately upon receipt, usually by air mail. Board does not wish to take any action which would slow dOWn operations under Executive Order and, if your experience indicates need for more comprehensive telegraphic advices, please advise us." Approved unanimously. Letter to the Presidents of all the Federal Reserve Banks, l eading as ' follows* "Enclosed the STATEVENT are 25 copies of a new specimen form of OF BORROVvER which the Board has prescribed for use pursuant to the provisions of sections 6(d) and 40) of Regulation W as revised effective May 6, 1942. new specimen form, which has been designated as Form F-R. 564-a, is a revision of present Form F.R. 564. "In connection with this new form of Statement the Board stated in its telegram of May 5 that until July 31, 42, a Registrant may at his option continue to use old oral F-R. 564, provided that Question 2 thereof is deleted 4 :,,fld the word 'Instalment' is deleted from Question 3. reasonh for this permission was to minimize the wastage of old forms by any Registrants having large supplies. 04., "It is intended that the printing and distribution it the new Form F.R. 564-a be accomplished along the same , : I ries as were followed when Form F.R. 564 was printed and ',-,listributed. At that time the Board said (in its letter It 932 dated December 13, 1941): The forms for actual use by Registrants will not be printed by the Board or by the Reserve Banks, but specimen forms are to be dised by the Federal Reserve Banks to the trade so that Registrants may secure a supply either by printing or otherwise reproducing them or by obtaining them from p nta 5/11/42 -4- "stationery or supply houses. The notice at the top of the form indicates the restrictions on reproduction. It is suggested that your Bank print a supply of the specimen form in such number as will Permit a distribution of one copy to each Registrant in your District who appears to be engaged to any extent in the business of extending instalment loan credit. Such additional specimen copies as you deem necessary may be distributed to Registrants and others for sample purposes. The Board requests that the Reserve Banks, in preparing sample copies, adhere strictly to the size of the sheet and the style of type used for the specimen copy. "The Board has continued for the present the designation of the existing Form F.R. 565, STATEMENT OF NECESSITY 10 PREVENT UNDUE HARDSHIP, for use pursuant to the provisions OF section 10(d) of Regulation W as amended. In some cases nieh require the use of this form, as when a charge account ! ' r single-payment loan is being converted or revised, the ; ''1rord 'instalment' in the text of the form is inappropriate, .ecause the indebtedne ss being refinanced is not instalment ?.ndebtedness. cases, the word 'instalment' should such In be deleted by the Registrant using the form. "In case any of the Reserve Banks care to make any ;"°Inmendations with respect to the possible revision of (31.11,1 F.R. 565, the Board will be glad to receive such sugsk,ions. It is not believed necessary for the Federal Reserve Banks to send copies of this form to persons who are itelcoraing subject to Regulation Wbecause they extend credit tohi:hm founts, but some such persons may inquire about in view of the provisions of section 5(d)(3) of_ the regulation as amended -- and the Reserve Banks should, t . course, be ! prepared to send a sample form and an explanacf its use to those who inquire." r By unanimous vote the letter was approved and the form of Statement of Borrower referred to therein, a copy of which has been attached to these minutes, was prescribed subject to the understanding set forth in the second paragraph of the letter, for use pursuant to the provision of sections 6(d) and 7(d) of Regulation Tv as revised effective May 6, 1942. Telegram to Mr. Stroud, First Vice President of the Federal Reserve 5/11/42 -5- Bar* of Dallas, reading as follows: "Your wire May 9 regarding NR-1. Regulation W does not prohibit a series of renewals and revisions of a singlePayment loan which was originally made prior to May 6, 1942." Approved unanimously. Letter to the Holland Furnace Company, Holland, Michigan, readtrig as follows: "Your letter of May 4, 1942, asked about the applicatl°n of the Board's Regulation W to credit sales of circulating fans which are installed in existing furnaces. lls type of equipment, unless sold at or about the same ' 41/le as the furnace in which it is to be installed, is not considered to be included in the classification 'household furnaces and heating units for furnaces (including Oil burners, gas conversion burners, and stokers)'. Consequently, no down payment is required in connection with such sales. . "On the other hand, if the circulator is sold along With the furnace, it is considered to be an accessory and down payment is determined upon the basis of the price ul the complete heating installation. "It should be noted that even if the circulator is .801 separately the credit is subject to the maximum maturity provisions of the regulation, now 12 months, unless -t;' ito be installed in connection with an existing .tructure that is designed exclusively for non-residential TI _2e Approved unanimously. Letter to Mr. Irvin Wesley, Lincoln Loan Company, Indianapolis, ans., reading as follows: "This is in reply to your telephone inquiry of May ep to mr. /v . Dembitz, about the application of Regulation 8,t,to a case in which a Registrant is asked to make an in; alnlent loan for the purpose of paying off an instalment sale contract which was made before May 6, which arose _ ut of the sale of an article that was unlisted when the was made but became a listed article on May 6. Undera section 10(c) of Regulation W, and assuming the of conditions permitting a Statement of Necessity Wider -'4er section 10(d) the lender may not extend terms fii 5/11/42 -6- 11 more liberal than those which were granted by the seller, or those to which the seller would be permitted to revise his contract under the applicable provisions of the regulation. "To determine the applicable rule for the revision after May 6, 1942, of an instalment obligation growing Out of the sale before that date of an article added to the list by Amendment No. 4, section 10(a) must be read in connection with the last part of section 12(f). When read together, these state that in such a case the obligation may not be revised to terms which, when reckoned from the date of the sale, would not be permitted under the Ar.riendrrient. For example, suppose a coat was sold with an eight months' maturity in March 1942, when the transaction was not subject to the regulation. If the obligation is vised after May 6 when coats have become listed articles, maturity may be increased by only four months since this would result in a total maturity of twelve months, the longest permitted under the Amendment for such credit. "An instalment loan made for the purpose of paying off 2, - such a sale contract would, therefore, be limited to the maturity of the sale contract being paid off, or to a maturity of twelve months from the date of such original tc-Le contract, whichever is longer. If the loan is partly ° Pay off such a sale contract and partly for other pur1?°ses, the various parts of the loan may, of course, be uonsolidated in accordance with the provisions of section j Approved unanimously. Memorandum dated April 30, 1942, from Mr. Gardner, Senior ECOMY-2 "44 'St in the Division of Research and Statistics, and Mr. Vest, A8Bistant General Counsel, reading as follows: "The Cuban Mission expects within the next few days t0 Zend Ilin a letter through the regular channels to the ster of Finance of Cuba commenting upon a draft of the moneta law which he left with the Mission on his ryecnt visit to Washington. Attached is a copy of the Proposed letter and it is our purpose, unless objection irelTild be raised, to acquiesce in the transmission of a Liter in substantially this form. 94,A0 5/11/42 -7- "Without attempting to summarize the attached letter, it may be said that among the principal points approved by the Mission in the proposed letter are the following: A prohibition against the coinage of gold; a prohibition on Private ownership of gold; purchase by the Cuban Government °f.all gold offered to it at a price equivalent to that maintained by the United States Treasury; and authority to the Stabilization Fund in certain circumstances to recommend to the President of the Republic that there be adopted after necessary legislation a new gold content for the Pee() with a corresponding change in the price of gold. . "This memorandum is submitted for the Board's information and requires no action unless there is objection to the procedure indicated." Noted without objection. Letter to Mr. F. J. Bailey, Assistant Director of Legislative Refer . -nee, Executive Office of the President, reading as follows: "Your letter of April 17, 1942, addressed to Chairan Eccles, transmitting a proposed letter from the SecretarY of the Treasury to Senator Robert F. Wagner, Chair?:11 of the Committee on Banking and Currency, regarding ,Lf 2393 'Relating to the publication in places where branch banks are operated of statements of resources and li abilities of banks, the deposits of which are insured lilnder the provisions of section 12B of the Federal Reserve Act, as amended', has been received. "S. 2393 would not only require each insured bank .cPerating branches outside of the city, town or village : : 11 which the head office is located to publish its condition report in each city in which one of its branches is tocated, hut would also require it to publish in each of nch places a separate exhibit setting forth the book value of the loans and discounts made by and payable at each nch branch, the book value of the branch banking house, owned by the bank, the book value of its other real estate holdings, and the total of all demand and time dej P sits, both public and private, carried on the books of s ' 4 7, branch. In many cases the publication of such branch izdtements might be more misleading than informative to '"e Public served by the branch. This is true in part 5/11/42 " .because of the different ways in which branch accountIng records are kept. For example, in some cases branches are operated on what may be called the 'memorandum' plan, in which case all or practically all of the transactions of: the branches are reflect ed on the books of the head office, the branch merely reporting amounts due to or due from the head office. In most cases out-of-town branches carry both loans and deposit s on their own books, but even In many of such cases all securities, real estate holdings, etc., are carried on the books of the head office. "Legislation requiring publication of a separate exhibit reflecting the busines and operati s ons of each branch Ipuld not serve the purpose of informing the public of the uank's condition since the measure of a bank's safety as a. cl stitut eposita ion,is ry the financial strength of the entire innot of any department or branch thereof. The Publication of figures representing a given branch might, therefore, be misleading to the public. . "In these circumstances, and since a31 banking instiutions, the deposits of which are insured under section -1-13 of the Federal Reserve Act, are examined by examiners o-,,the office of the Comptroller of the Currency, the Federca. Reserve Banks, or the Federal Deposit Insurance CorPtoration, and deposits in every such bank are insured up 1 5,000 for each deposit or, approximately 98 per cent of all deposit accounts being insured in full, the Board ,does not believe that banks should be asked to go to the nPense of publishing statements in each place in which 611eY have an office as provided in S. 2393. The whole restion of publication of condition reports is one that -?ds further consideration and the Board may wish to sub7 certain recommendations with respect thereto at a later date." Approved unanimously. Letter to Mr. C. B. Upham, Deputy Comptroller of the Currency, rear14- ug as , follows: c ."It is noted from your letter of May 1 that you conin the procedure set forth in the Board's letter of 1:' al eh 24 and accompanying enclosures, as to the manner of pePorting reciprocal bank balances, except that you prethat no change be made on the face of the report and the form of published statement. 922 5/11/42 -9- "The omission of the proposed change from the face of the report and the published statement is agreeable to the Board." Approved unanimously. Thereupon the meeting adjourned. Assistant Secretary. p, Form F. R. 564 -a SPECIMEN FORM th kegistra “P°RMATIoN OF RI Ef tit or Additions t printer shall GHIST RANT OR PRINTER ONLY—NOT TO BE PRINTED AS PART OF FORM: In reproducing this form, anY the wording and .arrangenhieeLs t of the front and back of the form, but may vary the spacing as desired. addlthe itionnfeal e f°!*m, such as an a(c)ivcg Since received a copy, are permitted provided they do not call for the obtaining ment by the borrower that information from maY he changed trIliee\xviiec:tigly from time to time, it is suggested that Registrants do not stock large supplies of the form. 922k STATEMENT OF BORROWER ?rescribed by the Board of Governors of the Federal Reserve System under its Regulation W,issued pursuant to Executive Order No. 8843 of the President of the United States. TO BE FILLED IN BY REGISTRANT (Amount of Loan) (fate of Loan) Is any f ing $11 ° the Money from this loan to be used to buy a Listed Article cost5.00 or more? (See list on back of this sheet). 2, Is an loan, Ya:f the money from this loan to be used to pay all or pafrot f any Purchaseyd ristalment contract, or any charge or other accountfor goods (Answer "Yes" or "No") (Answer) 3. Is any of the money from this loan Purchase to be used as a down payment on the of a Listed Article? (Answer) Iis (Answer) n deter • Whether tru ed bany article e and Yrsthe lendet% I certify involved in this loan is a Listed Article, I have been guided by information that, to the best of my knowledge, the information given by me on this sheet rliPlete (Borrower's Signature) 4. II;' glut berrowerS • TIO N 1 HAS BEEN ANSWERED "YES", the following information must be obtained from Listed Article Purchase Price Trade-in Allowance Amount To Be Borrowed Have of th Y°11 borrowed y e Listed Articieash money elsewhere, aive )o? or do you intend to borrow any elsewhere, to be used in buying any specified If "Yes", how much? $ (Answer "Yes" or "No") it()th-Qho tirrS ow 'reirC3 :14 2 HAS BEEN ANSWERED "YES", the following information must be obtained a•ge of person Holding Debt Total Unpaid Balance If Instalment Debt, Indicate Terms Amount To Be Paid Off Ttit QISTRANT RECEIVING THIS STATEMENT MUST KEEP IT ON FILE LISTED ARTICLES The following classes of articles are the "Listed Articles" under Regulation W as of May 6, 1942: TO AIR CONDITIONING EQUIPMENT AIRCRAFT ATTIC VENTILATING FANS AUTOMOBILES, TIRES, TUBES, BATTERIES AND ACCESSORIES BEDDING, BLANKETS, CURTAINS, DRAPERIES, LINENS AND TOWELS BICYCLES AND MOTORCYCLES BINOCULARS, FIELD GLASSES, OPERA GLASSES AND HAND TELESCOPES BOATS AND BOAT MOTORS BUILDING MATERIALS AND SERVICES USED IN CONNECTION WITH REPAIRS, ALTERATIONS OR IMPROVEMENTS CLOCKS AND WATCHES CLOTHING, FURS, SHOES, HATS AND HABERDASHERY COOKING STOVES DISHES, GLASSWARE, CUTLERY AND KITCHEN UTENSILS ELECTRIC APPLIANCES ELECTRIC DISHWASHERS FLOOR COVERINGS FURNACES, OIL OR GAS BURNERS, Alwv-ssf,5 FURNITURE, BED SPRINGS AND MATTg'" HEATING STOVES AND HEATERS N'f JEWELRY LOS FIXTLAMPS, LANTERNS, LIGHTING EQUIPMENT TRININIEIZS LAWN MOWERS, EDGERS AND TOILET LUGGAGE, PURSES, HANDBAGS, AND UMBRELLAS PHOTOGRAPHIC EQUIPMENT .1%fii51 PIANOS,ELECTRIC ORGANS AND 011-1— INSTRUMENTS PLUMBING AND SANITARY FIXTURES RADIOS AND PHONOGRAPHS REFRIGERATORS AND ICE BOXES SEWING MACHINES SILVERWARE SPORTS', ATHLETIC, OUTING AND GAMES' EQUIPMENT SW VACUUM CLEANERS AND CARPET MACHINES WASHING OR IRONING WATER HEATERS AND PUMPS YARD GOODS Articles may be added to or taken from the list at any time. In determining whether an article j egst loan is a "Listed Article" a borrower may be guided by information furnished by the lender, and ‘ must keep themselves informed as to changes in these "Listed Articles". WARNING '011 01 I 4 11 ,tro ° .11 or misstatement Regulation W provides that no borrower shall willfully make any material ; gulaqe in his Statement. The law under which the President's Executive Order was issued reads in Part ever willfully violates any of the provisions of this subdivision or of any license, order rule or' `-013Y ho issued thereunder, shall, upon conviction, be fined not more than $10,00o, or, if a natural ' Pers°11 ; tioti imprisoned for not more than ten years, or both; and any officer, director, or agent of any corPor-0 knowingly participates in such violation may be punished by a like fine, imprisonment, or both. NOTICE TO LENDER.—The lender, acting in good faith, may rely upon the statements made hYthe I) in answer to the questions on this form. However, this form does not provide all of the inforniatotioll i, may be necessary for the lender to have if he intends to avail himself of certain provisions of K. egfol‘ingfi, In any case as to which the lender must obtain additional information in order to be protected , 111' rt particular loan under consideration, the facts themselves will govern. This however, does not arle;,,,risi°' of the lender to rely upon statements of fact obtained from the borrower 1;ursuant toapplicable P, the Regulation.
@FedFRASER