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777 A meeting of the Board of Governors of the Federal Reserve SYstem was held in Washington on Thursday, May 23, 1946, at 10:00 a. m. PRESENT: Mr.. Eccles, Chairman Szymczak Mr. Draper Mr. Evans Mr. Carpenter, Secretary Mr. Hammond, Assistant Secretary Mr. Thurston, Assistant to the Chairman Mr. Leonard, Director of the Division of Personnel Administration Mr. Vest, General Counsel As stated in the minutes of the meeting on May 8, 1946, Mr. Val'daman was absent on official business. In connection with an informal discussion of a proposal f°k'tlirther adjustments in salaries of employees at the Federal e Bank of Chicago, as set forth in a memorandum addressed to +I, ""e Board by Mr. Leonard, under date of May 22, 1946, the sugg"ti°11 was made that the proposals raised a question of System PcjlicY during the period that the revision of the personnel clas4itieati0n plans of the Federal Reserve Banks was under way. The latter was discussed in the light of the action taken by the Pliesiclentst Conference with respect to salaries of employees and the actions With respect to such salaries taken by the Bank with the approval of the Board. Mr. Leonard stated briefly what the balike were doing in connection with the revision of their personnel ification plans and Chairman Eccles suggested that the rel'131°11 should have as one of its objectives the preparation of plans .411411 would be as uniform as possible for all Federal Reserve Banks, 5/23/46 -2- rec ognizing differences in size, and which would generally be in harmony with Civil Service classifications. At the conclusion of the discussion of this suggestion, unanimous approval was given to the following letter to the Presidents of all the Federal Reserve Banks, with the understanding that when the Board met with the Presidents in June they would be given the views of the Board as expressed at this meeting with respect to the personnel classification plans, that is, that the plans should be patterned generally after the Federal Civil Service classifications and be made uniform for all Federal Reserve Banks, bearing in mind the differences in size and functions of the Banks, and with substantielly the same flexibility with respect to application of the plan to the organization of the Bank as is provided under Civil Service: "One of the Reserve Banks has advised the Board that the present authorization with respect "° -Limitations on salaries of employees is not broad : 11°ugh to meet the needs and has suggested broader _Ilthorization. The specific proposal is that the °rization to exceed maximum annual salaries under th __e personnel classification plan by as much as 15% : 1- the first $3,000, provided this does not increase a 041arY beyond $7,500, be increased to 30%, subject to the O're ' limitation of $7,500. "Since the authorization to exceed maximum salbeees within stated limits was given last year there have n further developments in the salary situation and a selv of the Reserve Banks have requested and received °t1ewhat broader authorizations than those originally given. info ;r4ally i "The Board believes that a general question of Sym. 1. ,:;-elm policy is involved and that it would be preferto establish a pattern within which all the Reel*ve Banks could operate. Accordingly, the Reserve 779 5/23/46 "Bank raising the present question has been advised that the action on its proposal would be deferred pending ?onsideration of the general question at the forthcoming Conference of Presidents. "The question of wage and salary determination is on the agenda for the Conference and it will be appreciated if the Presidents will come to the Conference Prepared to discuss the general question of additional measures, if any, required to meet immediate needs. "The Board also feels that the revision of the personnel classification plans should be pressed with ?.11 dispatch in order that salary matters may be handled accordance with a regular and established plan rather 'Lhan through temporary expedients as at present." Mr. Leonard stated that it was still extremely difficult IQ +1, -“e Washington area to get competent stenographic and clerical P and he inquired whether in these circumstances there would 4°w be any objection to the employment of a sister of one of the 13(lardis clerical employees or the employment in minor clerical Positions of twin sisters who were just finishing high school. Re felt that if these persons, who were the best qualified indilrid1a1s available for the particular positions, were added to the 8taff it might be an aid to the Board in its contacts with the high schools as a source for additional employees in the c*Ierioal grades. The members present were in agreement that there would be no objection to the employment of relatives during the present emergency period of labor shortage, it being understood that as soon as conditions would permit the Board would return to the policy followed be- 7, 5/23/46 forethe war of not employing relatives of individuals al— ready on the Board's staff. At this point Messrs. Hammond, Leonard and Vest withdrew fl'olu the meeting and the action stated with respect to each of the matters hereinafter referred to was then taken by the Board: The minutes of the meeting of the Board of Governors of the Federal Reserve System held on May 22, 1946, were approved lananimously. Memorandum dated May 20, 1946, from Mr. Parry, Director °t the Division of Security Loans, recommending that Miss Alice 874indlehurst, a clerk in the Division of Research and Statistics, be tr ansferred at her present salary of $2,650 per annum, to the Dividon of Security Loans, as a clerk, effective June 16, 1946. The memorandum also stated that the transfer had been discussed vith the Division of Research and Statistics and is agreeable to it. Approved unanimously. Memorandum dated May 21, 1946, from Mr. Bethea, Director °t the Division of Administrative Services, submitting the resig— n of Miss Afton Romney, stenographer in that Division, and l'ee°rItilerlding that the resignation be accepted, effective at the los. - of business May 24, 1946, and that proper payment be made 1*(4' an unused annual leave remaining to her credit at that time. 781 5/23/46 Approved unanimously. Letter to Mr. Johns, General Counsel and Secretary of the Federal Reserve Bank of Kansas City, reading as follows: "This is to acknowledge receipt of your letter of April 30, 1946, enclosing a copy of the oPinion of the District Court of Saunders County, Nebraska, in the case of Placek v. Edstrom, and Your letter of May 14 to Mr. Vest advising of further developments in this matter. "It is noted from your letter of May 14, 1946, that the transcript on appeal in this case is expect?d to be filed in the Supreme Court of Nebraska within the next week and that the case is expected to be set for argument in that Court in the autumn of this Year. It is also noted that Mr. David W. Swarr, of 0unsel for the Omaha Association of Credit Men, has Indicated that the Attorney General has agreed that Mr. Swarr and his associates will prepare the first draft of the brief to be filed by the Attorney General. Mr. Swarr feels that one brief, if satisfactory, is Preferable to two or more briefs and hopes, therefore, that there will be no occasion for him to file a separate brief as a friend of the Court. "It is understood also that Mr. Swarr intends to invite such assistance and comments as you may have to offer in connection with the drafting of the brief and that he would appreciate it if the brief could 150 be submitted to the legal staff of the Board of u'overnors for consideration. In this connection, of course, the Board's General Counsel will be available to lend any assistance that may be possible and it is assumed that at the proper time you will forward to 41m the draft of the brief proposed to be filed by the Attorney General. "The Board of Governors is not disposed at this t:ime to favor the filing of any brief as amicus curiae In this case either by the Federal Reserve Bank or by ttie Board itself. However, the Board is in agreement With your feeling that the desirability of the filing °f one or more briefs by credit men's associations or ther commercial organizations is a matter which might well receive further consideration by the interested Parties; and it will be appreciated if you will advise 9 78:4 5/23/46 -6- "the Board's General Counsel of any further developments along this line." Approved unanimously. Letter to Mr. Koppang, First Vice President of the Federal Reserve Bank of Kansas City, reading as follows: "This refers to your letter of May 13 regarding the penalties of $51.37 and $25.40 incurred by The Internationnl State Bank, Raton, New Mexico, as a result of deficiencies in reserves for the periods ended April 15 and April 30, 1946. "It is noted that your Bank has waived the frst penalty, incurred during the reserve computation period within which the bank became a member, under the provisions of paragraph B of the rules (8-902-a) enclosed with the Board's letter of March 5, 1946; and it is assumed that the second penalty exceeds the amount that could be waived under paragraph D of the rules. In the circumstances stated in Your letter, the Board authorizes your Bank not to make the assessment of $25.40 for the second penalty incurred during the period ended April 30." Approved unanimously. Letter to Mr. Gilbert, President of the Federal Reserve 13411k of Dallas, reading as follows: "Receipt is acknowledged of your letter of May 13., 1946, advising that the directors had authorized the Bank to assume two-thirds of the cost of providing hospital care and surgical benefits for officers and !mployees of the Reserve Bank and their dependents under the Blue Cross and the Blue Shield programs at an estimated cost to the Bank of approximately $28,800 per Year, based on a survey of personnel made in April 1945 and assuming 100 per cent enrollment. "The Board approves the expenditure under the Program as submitted. "The time of the announcement of the program to Your employees is entirely at your discretion." Approved unanimously. 783 5/23/46 -7Letter to Mr. Sproul, President of the Federal Reserve Bank of New York, reading as follows: "In your letter of May 9, 1946, you state the board of directors has approved the adoption of a more comprehensive surgical benefit plan than was contemplated at the time your hospitalization and surgical benefits program was approved by the Board. "It is noted that the more comprehensive surgical benefit plan will increase the previously estimated cost of $77,500 by approximately $150300. "The Board will interpose no objection to your adopting the more comprehensive surgical benefit plan." Approved unanimously. Letter to Mr. Leach, President of the Federal Reserve Bank of Richmond, reading as follows: . "This is in reply to your letter of May 11, advising that at their meeting on May 9 the directors elected Mr. N. L. Armistead an officer of the Federal Reserve Bank of Richmond without change in his title of Chief Examiner or in his present salary of.,000 Per annum. "In accordance with your re4uest, the Board approves payment of salary to Mr. Armistead as an officer of the Bank with the title of Chief Examiner at the rate 5 $6,000 per annum for the period May 9, 1946 through AtaY 31, 1947. "Also, in accordance with your request, page 35, 5escribing the nonofficial position of Chief Examiner, nae been eliminated from the personnel classification Plan of your Bank. Approved unanimously, with the understanding that a statement substantially as follows would be made at the forthcoming meeting of the Board with the Presidents of the Federal Reserve Banks: "The position of Chief EXaminer has been considered generally a nonofficial position at the Federal 784 5/23/46 -8- "Reserve Banks and is included in the personnel classification plans. Until recently the only exception to this was at New York, where the Chief Examiner is an officer of the Bank. "Recently the directors of the Federal Reserve Bank of Richmond made the position of Chief Examiner an official one and the Board of Governors approved the elimination of the position from the personnel classification plan and payment of salary to the Chief Examiner as an officer of the Bank. "The nature of the position of Chief Examiner iS not altogether uniform among all the Banks as the division of responsibilities between the officer in Charge of the bank examination work and the Chief Examiner varies somewhat at the various Banks. The Change at Richmond, however, is brought to the attention of the Presidents in order that should they wish to have the position of Chief Examiner considered an Official one at their respective Banks, they may take the matter up with the Board. It is suggested that this be done informA1ly before any formal action is taken.fl Thereupon the meeting aA;i0,31.6c) , Chairman. ir Secretary.
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