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753
Minutes of actions taken by the Board of Governors of the
Ne,
'eaReserve System on Tuesday, May 11, 1948.
PRESENT:
Mr.
Mr.
Mr.
Mr.
Mr.
Szymczak
Draper
Evans
Vardaman
Clayton
Mr.
Mr.
Mr.
Mr.
,,ertti.
-8
Carpenter, Secretary
Sherman, Assistant Secretary
Morrill, Special Adviser
Thurston, Assistant to the Board
of actions taken by the Board of Governors of the
eeervle System on
May 10, 1948, were approved ImAnimously.
Memorandum dated May 10, 1948, from Mr. Carpenter recom1%1* that the reslgna.tlon of Mrs. Ludmila G. Pelletier, a file
qeritin
the Se
cretary's Office, be accepted to be effective, in
1114./Ice
with her
request, at the close of business May 6, 1948,
411(itliett
appropriate payment
made for
It) I*
be
annual leave remaining
credit as
of that date.
Approved unanimously.
)4e111°randum dated May 6, 1948, from Mr. Bethea, Director
ott4bivision. Of
Administrative
as Services, recommending that
tivilatissett be appointed
acafeteria helper in that
.4441°4,
on a
temporary basis fora period of two months with
'14114r7 at
the rate of $1,822 per annum, effective as of
11('
kte 14304
which he enters upon the performance of his duties
754
5/10,8
-2111
hIM.ng Passed
the usual physical examination.
als° stated
that because of the temporary nature of his appointment,
/3issett would
ft'int sytez.
lit.
The memorandum
not become a member of the Federal Reserve retire-
Approved unanimously.
letter to the Honorable J. Edgar Hoover, Federal Bureau of
°111 Washington, D. C., reading as follows:
Paul Alexander Baran is employed as an Eco/.
liese ln the Foreign Research Division of the Federal
collt e Bank of New York, and as such he has access to
other-:latial information on international, foreign and
be vii.nancial matters unless this information would
litlateld from him. As you know, the Federal Reserve
New York is an important part of the Federal
'"re SYstem.
give:
It Will be appreciated if you will be able to
regarj abl),Y. information you may have in your files
tation'llg the loyalty of Mr. Baran. For your infor111e/A r
-Lthere is attached a copy of the history state"nished
by Mr. Baran to the Federal Reserve Bank
yor,
,°Iir courtesy and cooperation in this matter will
be t
Approved unanimously.
l'etter t
oMr. Peyton, President of the Federal Reserve Bank
°1111113°118
'reading as follows:
-Ln ac
cordance with the request contained in your
11.ktsr,,?,r May 5, 1948, the Board approves the appointt:: 0Yrus C. Bloomquist and Robert C. Johnsona
of
'
1114;
4 examiners for the Federal Reserve Bank
1/4ti%
)
,,118. Please advise us of the salary to be
t-- zen in their new positions and inform us as
755
5/4/48
-3the
effective dates of their appointments if they
'
re not
made effective July 1, 1948, as planned."
Approved unanimously.
Letter to the Honorable Charles W. Tobey, Chairman, Committee
claBazking and
Currency, United States Senate, prepared in accoN
allee
with the
action taken at the meeting on May 10, 1948 and
l'eaclillg as
follows:
Etge "At the
request of the Bureau of the Budget, several
ing the Board, submitted reports on an
R. 2799 which had been drafted by the
%N oll-31:g and Home Finance Agency. In the Board's report,
gest,ted to several provisions of the draft, and sug'
4 certain changes which would be agreeable to us.
consultation with the Bureau of the Budget, the
46 and Home Finance Agency rewrote the proposed
4Me1114;
eilt, and, with the approval of the Bureau, but
'qthoi,#
the r„:" further consultation with the Board, submitted
-vised amendment to your Committee. This amendr(111.. Committee now has under consideration.
the '
04 11 leir• Foley's letter transmitting the amendment to
flhteilt144.-ttee, there is the implication that the amend"
- e present form meets the objections raised
hiLle-;
),IDY the Board and the other agencies consulted.
amendment has eliminated certain provisions
the Board raised objection, it continues to
ther features which are felt to be objectionable.
1)Ir'es8701'111-ting this letter, therefore, to correct any im644ertZwhich Mr. Foley's letter may have conveyed in1Y regarding the Board's position.
Proposed amendment contains three undesirable
ItTr
authorize
the Q1.- Section 3 of the amendment would
bi i'rcretary of the Treasury to purchase up to 1
go;
a-'on dollars of the obligations issued by the
riL°Eln Banks. The Board believes that such auth ja
de;i:,4ation, if provided, should be limited to well
'
ed emergency situations.
Se 1,• Section 6 of the amendment would direct the
c-e'arY of the Treasury to loan to the Federal
756
-4"Savings and Loan Insurance Corporation up to 770
Million dollars, at the request of the Home Loan
Board. The Board feels that if this authority
to be granted, the Corporation should be required
60 accelerate the accumulation of adequate reserves
1,
3*8 far as practicable and thus avoid any unnecessary
uurden upon the Treasury.
3. Section 8 of the amendment would make ini
sllred share accounts of savings and loan associations
8341)10- investments for public funds. The Board does
regard such shares as appropriate investments for
11ulic funds. Furthermore, the fact that they were
:
Proved as
such would, in the Board's opinion, convey
%investors a misleading impression of liquidity.
14 shlin'aeically, changes such as these would give investors
e8 of savings and loan associations an expectation of
a(
Z
s
ciati
r degree of liquidity than the nature of such asso41.111:"Ils would warrant. The burden of providing this greater
1)e.rracslitY would be borne by the Treasury, to the possible em°r ti
of future fiscal policy. In addition, changes
loat'
character would tend to transform the savings and
cErte .stlY
,stem into another banking system and further complicl it'ke already
difficult job of administering national
POlicles
kre e"'t will be noted that our reasons for these objections
itaiinsselatially the same as those we have advanced against
%YroPosals in the past, especially in our letter of
180 e. -`)) 1947, reporting on the bills S. 103, S. 179, S.
or the
lid S. 810 to the Committee on Banking and Currency
'enate."
J
Approved unanimously.
L
ette„
- 60 the Honorable Jesse M. Donaldson, The Postmaster
wattia,
Washi
'
llgt°n, D. C., reading as follows:
Board of Governors has asked me to reply to
t1-1 "' er of April 30, 1948, in which you request
e1/(3d
P a working chairman in connection
the
rel
solicitation of funds to raise $370,000 for
fund of The Salvation Army.
to restr
tin,the
Past it has been the policy of the Board
-Lct the
solicitation of donations of this kind
757
5/11/
-5"t0 rw +4
tizec-4'-Lonal campaigns such as the Community Chest, the
r0
;
4-eall Red Cross, and the 'Mile O'Dimesl. The reason
1/0;
oth18 has been that to undertake a wider activity
sh;44 constantly raise questions as to where the line
with ci be drawn. Therefore, it would not be consistent
trib °lir Policy actively to solicit employees for conOtis to the Salvation Army Rebuilding Fund Camsote "While our organization is comparatively small,
vort. of the
members of the staff are interested in the
ho
:°f the
Salvation Army. Therefore, if you will
84:worT!arded to Mr. Herbert Johnson, Personnel Officer,
that li.c.;,"44telY 50 pledge cards, we will be glad to see
to '
th- 8 employees are advised that they may contribute
e ce4Paign through his office if they so desire."
Approved unanimously.
@FedFRASER