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Minutes of actions taken by the Board of Governors of the Federal Reserve System on Tuesday, May 16, 1950. PRESENT: Mr. Mr. Mr. Mr. Mr. McCabe, Chairman Eccles Szymczak Draper Vardaman Mr. Carpenter, Secretary Mr. Sherman, Assistant Secretary Mr. Kenyon, Assistant Secretary Minutes of actions taken by the Board of Governors of the Federal Reserve System on May 17, 1950, were approved unanimously. Memorandum dated May 12, 1950, from Mr. Leonard, Director of the Division of Bank Operations, recommending that the resignation of Mrs. Evelyn Lane Woodley, a statistical clerk in that Division, be accepted to be effective, in accordance with her requ est, at the close of business June 15, 1970. Approved unanimously. Memorandum dated May 15, 1950, from Mr. Millard, Director °f the Division of Examinations, recommending increases in the 13"ie annual salaries of the following employees in that Division, effective May 28, 1950: Name T. B. Abernathy Carl A. Smith Title Assistant Federal Reserve Examiner Assistant Federal Reserve Examiner Approved unanimously. Salary Increase To From $3,4)0 4,075 $3,77 4,200 9 5/16/5o -2Memorandum dated May 1), 1950, from Mr. Bethea, Director of the Division of Administrative Services, recommending increases in the basic annual salaries of the following employees in that D ivision, effective May 28, 19)0: Name Helen B. Wolcott John Kakalec F ranklin Taylor Alfred W. Minutolo Beniamin D. Berry Claiborne Johnson Ralph A. Sherrod Ethelyn M. Palmer Pearl Wade PeggY W. Morgan Alton W. Cassidy Title Secretary to Mr. Bethea Accounting Clerk Operator (Dup. Dev's.) Operator (Tab. Equip.) Foreman Operator (Mim.) Mail Clerk Operator (Dup. Dev's.) Clerk-Stenographer Clerk-Stenographer Clerk-Stenographer Laborer Salary Increase To From $4,200 075 3,4>0 3,)7) 3,100 3,0)0 3,050 3,0)0 2,890 2,810 2,260 3,355 3,22) 3,130 3,130 3,130 3,035 2,970 2,890 2,330 Approved unanimously. Letter to Mr. Stetzelberger, Vice President of the Federal Reserve Bank of Cleveland, reading as follows: "Reference is made to your letter of May 10, 1950, regarding the request of The Elyria Savings & Trust Company, Elyria, Ohio, for a six months' extension of time within which the establishment of its proposed branch at Avon Lake, Ohio, may be accomplished under the approval granted by the Board of Governors on November 16, 1949. "In view of your recommendation, the Board extends to November 16, 19)0, the time within Which establishment of the branch may be accomplished." Approved unanimously. Letter to Mr. Maurice Frere, Chairman, Bank for International Settlements, Basle, Switzerland, prepared for the signature of the Chairman, reading as follows: 4 7/16b0 -3- "Thank you very much for your kind invitation to attend the Annual General Meeting of the Bank for International Settlements. "I very much regret that I, myself, shall not be able to attend, and I fear that the same is true of the other Board members. "However, Mr. Frank M. Tamagna, of the Board's staff, is now in Europe; and I understand that M. Auboin, of the Bank for International Settlements, intends to arrange to have an invitation extended to Mr. Tamagna. I am very glad that a representative of the Board's staff will be able to attend, and I can only repeat my regrets that I, myself, shall be unable to be there." Approved unanimously. Letter to the Presidents of all Federal Reserve Banks, Prepared pursuant to the action taken at the meeting of the Board on April 2) ., 19')O, reading as follows: "Recently the Board received a telegram from the publisher of a newspaper stating that an officer of a branch of a Federal Reserve Bank had participated aggressively in and allowed his name to be used on the stationery of the Federal Reserve Bank concerning a purely local Political matter, that this officer appealed to the voters of the county to elect a county Judge, and that such action was in violation of the Hatch Act and of every ethic of good government and of the fine record which the Federal Reserve System has set in not interfering in lccal political matters. In making his Protest, the publisher expressed the hope that such actions would not be tolerated. "Upon investigation through the Federal Reserve Bank, the Board learned that the officer had written a letter on a letterhead of the branch to the candidate for office in effect endorsing him and commenting at length on the spending policies of the Government. While V16/jo "the officer subsequently said that the letter was meant entirely as a personal letter endorsing the candidate, it carried a postscript stating that the candidate might use it in any way he saw fit. Such a statement constituted consent to use the letter as campaign material, public or otherwise, and placed the officer in a position of permitting his connection with the Federal Reserve System to be used as a 'springboard' for political purposes. "The executive committee of the Federal Reserve Bank concerned promptly took action, advising the officer that his letter had been embarrassing to the Federal Reserve Bank and the Board of Governors and that it should not have been written. The Board concurred in the position taken by the executive committee and suggested that the Bank emphasize to the branch officer that the incident had been embarrassing to the Board as well as the Federal Reserve Bank, particularly in view of the position which the System has taken over the years with respect to political activities by officers and directors of the Federal Reserve Banks. It also stated that for obvious reasons, the Banks and the Board should not be identified an the public mind with partisan politics, and that the Board felt it important that the officer concerned be advised that a recurrence of a similar situation could not be countenanced and that he should take every precaution not to be drawn into a further discussion of the matter or to become involved in a similar situation in the future. "The publisher who brought the matter to the Board's attention later communicated with members of the Banking and Currency Committees and the Board received a number of telephone calls and letters concerning the matter. The Board responded to these inquiries by stating that action had already been taken in the matter and that the officer had been advised that a recurrence of a similar situation could not be countenanced by the Federal Reserve Bank or the Board of Governors. indicating that no further action was believed to be necessary, the Board expressed its regrets concerning the Officer's failure to observe the long established System Policy and stated that it was satisfied there would not be a similar occurrence. 5 16 50 "This letter is being sent to you for your information and for such action as you may believe to be desirable to prevent such a situation arising at your Bank." Approved unanimously. Approved: 6 11011e41 ), _,<L_ Chairman.
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