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tr; Minutes of actions taken by the Board of Governors of the Federal Reserve System on Monday, May 15, 1950. The Board met in the Special Library at 2:35 P" PRESENT: Mr. Mr. Mr. Mr. McCabe, Chairman Eccles Szymczak Vardaman Carpenter, Secretary Sherman, Assistant Secretary Kenyon, Assistant Secretary Morrill, Special Adviser Thurston, Assistant to the Board Riefler, Assistant to the Chairman Vest, General Counsel Millard, Director, Division of Examinations Mr. Horbett, Assistant Director, Division of Bank Operations Mr. Solomon, Assistant General Counsel Mr. Baumann, Assistant General Counsel Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. At Chairman McCabe's request, Mr. Riefler reported on developments in connection with proposed bills to aid financing of small business. He stated that, in accordance with the understanding at the meeting on May 9, 1950, there had been presented to the Budget Bureau a suggested revised draft of Part II of the proposed Small Business bill and that the Budget Bureau had, in turn, suggested several changes in that draft. The most important change suggested by the Budget Bureau, Mr. Riefler said, was that the definition of the types of small business to be financed by the national investment companies be placed in the Department of Commerce rather than in the Board. This, he felt, Would be unsound organization and in conflict with the suggestion to Place administration of the national investment company provisions 5/15/50 -2- under the Board and should, therefore, be resisted strongly in any further discussions with the Budget Bureau. Another change suggested by the Budget Bureau would delete the directive for the Secretary of Commerce to utilize the national investment companies as his agent Insofar as practicable in the administration of the plan for insuring bank loans. This too, Mr. Riefler felt, should be strongly resisted, although it was not of as much importance as the determination of the types of loans authorized by the investment companies. The Budget Bureau also indicated some objection to the idea that only Reserve Banks could apply for a charter for a national investment comPsnY and, while Mr. Riefler felt this was a sound requirement in order to assure suitable sponsorship for the companies in each case, it might be possible to compromise the issue by allowing others to apply f°1 'charters when they could supply the necessary $5 million dollar minimum capital and meet the requirement that no person own more than 10 per cent of the stock. Other changes suggested by the Budget Bureau in the draft submitted by the Board's representatives were the elimination of the Policy Council or the substitution for it of an Advisory Council, elimination of the statement of purposes in Title II, elimination of the three public directors of the national investment companies, separation of the investment company provisions so that they would stand as a part of the Small Business bill instead of as an amendment to the Federal Reserve Act, and inclusion of specific tax provisions in the draft of bill. All of those suggestions, Mr. Riefler 5/15/50 felt, could Could be accepted since, for reasons which he stated, they were not important enough to make issues of. Following a discussion, Mr. Riefler was authorized to present to the Budget Bureau the views outlined in the foregoing paragraph in connection with further discussion of the proposed legislation. Messrs. Riefler, Vest, and Solomon withdrew at this point. Before this meeting the Federal Advisory Council submitted E memorandum covering topics discussed at a separate meeting of the Council on May 14, 1950, which were to be reviewed with the Board at E joint meeting to be held at 10:30 tomorrow morning. The Board con- sidered the topics listed and it was agreed that Chairman McCabe would state the views of the Board substantially as recorded in the minutes of the joint meeting. At this point all of the members of the staff with the exception of Messrs. Carpenter, Sherman, and Kenyon withdrew, and the action stated with respect to each of the matters hereinafter referred to was taken by the Board: Minutes of actions taken by the Board of Governors of the Federal Reserve System on May 10, 1950, were approved unanimously. Minutes of actions taken by the Board of Governors of the Federal Reserve System on May 12, 1950, were approved and the actions recorded therein were ratified unanimously. Memorandum dated May 10, 1950, from Mr. Noyes, Assistant 603 5/15/50 -4- Director, Division of Research and Statistics, recommending the aPPointment of Miss Joyce E. Latham as a clerk in that Division, On a temporary indefinite basis, with basic salary at the rate of $2,450 per annum, effective as of the date upon which she enters Upon the performance of her duties after having passed the usual Aysical examination. Approved unanimously. Letter to The Commercial National Bank of Greenville, Greenville, Mississippi, reading as follows: "The Board of Governors has given consideration to your fiduciary application and grants you authority to act, when not in contravention of State or local law, as trustee under the certain first mortgage 4 per cent bond issue of the First Methodist Church of Greenville, Mississippi. The exercise of such authority shall be subject to the provisions of the Federal Reserve Act and the regulations of the Board of Governors of the Federal Reserve System. "This letter will be your authority to exercise the fiduciary power granted by the Board Pending the preparation of a formal certificate covering such authorization, which will be forwarded to you in due course." Approved unanimously transmittal through the for Federal Reserve Bank of St. Louis. Letter to Mr. Hugh Leach, Chairman, Committee on Operations, Conference of Presidents, c/o Federal Reserve Bank of Richmond, Richmond 13, Virginia, reading as follows: "This refers to your letter of May 4 regarding the adoption of the two-day maximum 604 5/15/50 - "period of deferment for cash items. "It is noted that the Committee on Operations and a majority of the Presidents feel that the matter of working out the necessary details to have the change effective in all districts as of the same date should be delayed Pending a discussion at the next meeting of the Conference of Presidents of certain important questions raised in the recent report of the Committee on Collections. "The Board does not object to this procedure." Approved unanimously. Letter to Mr. Emil Schram, President, The New York Stock Exchange, 11 Wall Street, New York, New York, reading as follows: "As you know, the New York Stock Exchange from time to time in the past few years has surveyed its member firms to determine the number of margin accounts and has kindly informed us of the results. "Another survey of the number of margin accounts, as of June 30, 1950, would be of interest and value to us, and we believe it would also be of value to the Exchange. "We appreciate your cooperation in sending us these figures." Approved unanimously. Memorandum dated April 19, 1950, from Mr. Nelson, Director of the Division of Personnel Administration, recommending that Mr. R°dge, Technical and Legal Adviser to Mr. Evans in the Clayton Act Proceeding against Transamerica Corporation, be allowed actual necessary transportation expenses in accordance with the Board's travel regulations on the same basis as would be allowed the head of a division and a per diem in lieu of subsistence of 9.0O while he is away from Chicago and performing service for Mr. Evans after C,05 5/15,/50 -6-- termination of the hearing at San Francisco, with the understanding that per diem in lieu of subsistence at the increased rate of $14.04 would be allowed him while in Washington, D. C. Approved unanimously. Approved: Chairman.
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