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652 A meeting of the Board of Governors of the Federal Reserve SYstem was held in Washington on Tuesday, May 27, 1941, at 10:30 a•m. PRESENT: Mr. Mr. Mr. Mr. Eccles, Chairman Szymczak McKee Draper Mr. Morrill, Secretary Mr. Bethea, Assistant Secretary Mr. Carpenter, Assistant Secretary Mr. Clayton, Assistant to the Chairman Mr. Thurston, Special Assistant to the Chairman Mr. Wyatt, General Counsel Mr. Smead, Chief of the Division of Bank Operations Mr. Dreibelbis, Assistant General Counsel Mr. Vest, Assistant General Counsel Mr. Williams, Assistant Counsel There was presented a letter dated March 20, 1941, from Senato lb Tett to Chairman Eccles, with which were enclosed copies of Senate n - 45 and 952, and which stated that these bills were introduced by se nator Taft to carry out the recommendations of the Board of Gover4,the Presidents of the Federal Reserve Banks, and the Federal -80r7 Counsel in their special year-end report, that the bills were l'er"red to the Committee on Banking and Currency, and that Senator 11asp, Acting Chairman of the Committee, had stated Vint he had introdile "a bill to extend the existing powers with respect to the stabilization fund and alteration of the weight of the dollar and that this bill would be called up shortly. The letter also stated that 4" /1 01. Taft would be very much obliged if the Board would let him 653 5/27/41 -2- whether it Still adhered to the position taken in the year-end report and whether it would support the two bills introduced by him ir he should ask Senator Glass to conduct hearings thereon, and stated that in case the two bills were not satisfactory in every respect, he (Senator Taft) would be glad to discuss with the Board their modification to conform more closely to the desires of the Boerd. During a discussion of Senator Taft's letter and the action t0 be taken in connection therewith, it was stated that the Board had received the usual routine requests from the Senate Banking and Currency Committee for reports on the two bills introduced by Sellator Taft, as well as on S. 1540 introduced by Senator Glass to eltend the time within which the existing powers relating to the stabilization fund aAd alteration of the weight of the dollar might be "ercised, but that in accordance with the agreed practice of the Board no reports had been prepared on the bills. Reference was 818° Made to the fact that the Board had taken the position that l'elX)rts with respect to pending bills should be submitted to the 115131.°Priate Congressional committees, upon request of the committees, l'ther than to an individual member of such committees. At the conclusion of the discussion it was agreed unanimously that Chairman Eccles should advise Senator Taft, either by telephone or letter whichever he thought would be more satisfactory in the circumstances, that so far as he knew there had been no change in the position taken in the year-end report, that it was his feeling that a comprehensive program as proposed in the year-end report would be a sound and proper approach to the problem of establishing monetary and credit controls, that while it was 654 5/27/41 -3difficult to say at the present time how important these controls were, they were not as important at this time as direct controls through control of prices, priorities, and taxes, that the monetary and credit problem should not be dealt with as a piecemeal matter, that the question of renewal of the powers relating to the stabilization fund and alteration of the weight of the dollar was largely an academic matter for the reason that these powers likely would not be Used and therefore were the least important part of the credit and monetary picture, that the Administration had responsibility for economic, social and monetary problems, and that if the Administration desired an extension of the powers referred to in the bill introduced by Senator Glass that was sufficient reason for the Board, under the circumstances, not to oppose the extension. During the discussion of the above matter Mr. Parry en- tered the room, and at the conclusion of the discussion Messrs. T ston, parry, and Williams withdrew from the meeting. Reference was made to memoranda dated May 22 and 23, 1941, i Mr, Szyraczak in which he raised, for consideration in the ' *()L light of the Balderston salary report, certain questions with reto maximum salaries for Presidents and First Vice Presidents tPederal Reserve Banks, and presented recommendations with re8Pect to salaries fixed by the boards of directors of certain INadera, Reserve Banks for officers of the respective Banks. It was agreed unanimously that the questions relating to maximum salaries of Presidents and First Vice Presidents should be placed on the docket for consideration at the regular meeting of the Board to be held on Friday, June 13, 1941, when it was believed that all of the members of the Board would be present. C55 5/27/41 _4The following actions with respect to salaries of officers Of Federal Reserve Banks were then taken: Salaries of officers of the Federal Reserve Bank of New York for the period from April 1, 1941, to March 31, 1942, inclusive, were approved unanimously as follows: Name Title Federal Reserve Bank of New York Ray M. Gidney Vice President L. Werner Knoke Vice President Tames M. Rice Vice President George W. Ferguson Assistant Vice President X. Wilson Tones Assistant Vice President Herbert H. Kimball Assistant Vice President Xohn W. McKeon Assistant Vice President Silas A. Miller Assistant Vice President Assistant Vice President Arthur Phelan Assistant Vice President Harold V. Roelse Assistant Vice President Valentine Willis Wesley W. Burt Manager, Government Bond Department Donald T. Cameron Manager, Foreign Department Edwin C. French Manager, Collection Department Myles C. M.cCahill Manager, Service Department Wm. F. Sheehan Manager, Bank Examinations Department Prede-rick Stocker Manager, Cash Custody Department Rufus T. Trimble Assistant General Counsel R. H. Brame Assistant Counsel X. H. Wurts Assistant Counsel Wm, H. Dillistin General Auditor Robert M. O'Hara Reginald B. Wiltse Halsey W. Snow Buffalo Branch Managing Director Assistant Manager Cashier Annual Salary 020,000 20,000 17,500 10,000 14,000 9,500 12,000 9,500 11,000 12,000 13,000 8,000 9,500 10,000 8,000 13,000 5,500 12,000 5,000 5,000 15,000 12,000* 9,000 7,000 *Por the period beginning April 1 and ending December 31, 1941 when Mr. O'Hara's retirement will become effective. The Secretary was requested to advise Mr. Ruml, Chairfl of the Federal Reserve Bank of New York: 656 5/2'7/41 (1) That the Board was unwilling to approve salaries at the rates of $27,500 and 0.0,000 per annum fixed by the directors for Walter S. Logan, as Vice President and General Counsel, and Todd G. miebout, as Assistant General Counsel, but approves for the period from April 1, 1941, to March 31, 1942, inclusive, a salary at the present rate of $25,000 per annum for Mr. Logan and a salary at the rate of 9,500 per annum for Va... Tiebout if fixed by the directors at such rates. On the action with respect to :kir. Logan's salary Mr. Szymczak voted "no", as he felt that an increase to the rate of 826,500 per annum would be justified. (2) That the Board approves the salary fixed by the directors at the rate of $17,500 per annum for P. G. Rouse as Vice President for the month of Tune 1941, that it was not willing to approve for 1,:r. Rouse the salary fixed by the directors at the rate of $20,000 per annum for the period from July 1, 1941, to March 31, 1942, inclusive, but approves a salary at the rate of 018,500 Per annum for that period if fixed by the directors at that rate. (3) That the proposal that the Federal Reserve Bank Of New York pay the expenses incurred by Mr. Williams in traveling between Cambridge and New York presents tam questions which make it appear desirable to the Board that the part-time arrangement with Mr. Williams be reviewed, that, accordingly, Mr. Szymczak would discuss the matter with Messrs. Tluml and Sproul in the near future, Ilnd that in the meantime the Board approves for Mr. " 1 .11iams, for the month of Tune 1941 a salary at the rate °f 22,000 per annum with the understanding that he will spend two days a week at the Bank and that the salary paid him by the Bank will be at the rate of one-third of his regular annual salary. Action with respect to salaries fixed by the directors for officers at the Federal Reserve Bank of Chicago was deferred pending a further discussion by Mr. Szymczak with President Young. The Secretary was requested to advise Mr. Force, C hairman of the Federal Reserve Bank of San 7rancisco, 657 5/27/41 -6- that the Board had given further consideration to the salaries fixed by the directors of the San Francisco Bank for Ira Clerk, as First Vice President, and W. M. Hale, as Vice President, and approved salaries at the rates of $19,000 per annum for Mr. Clerk and 0_6,500 Per annum for Ur. Hale for the period from May 1, 1941, to April 31, 1942, inclusive, if fixed by the directors at those rates. Salaries of Officers of other Federal Reserve Banks for the period from June 1, 1941, to May 31, 1942, inclusive, were approved unanimously as follows: Name Title Annual Salary Federal X. S. Walden, Jr. X. G. Fry George H. Keesee Edward Waller, Jr. Waller W. Dillard Albert S. Johnstone Claude L. Guthrie Roger W. Mercer Maxwell G. Wallace R. s. Brock, Jr. Reserve Bank of Richmond First Vice President Vice President Cashier and Secretary Assistant Cashier Assistant Cashier Assistant Cashier Assistant Cashier Assistant Cashier Counsel Auditor W. R. Milford Tohn R. Cupit Xohn A. Johnston Donald F. Hagner Baltimore Branch Managing Director Cashier Assistant Cashier Assistant Cashier 12,000 6,500 5,000 4,500 W. T. Clements Robert L. Cherry Louis D. Brooks Charlotte Branch Managing Director Cashier Assistant Cashier 7,500 5,000 4,000 0.4,000 12,000 9,000 7,500 6,500 6,000 5,800 6,000 8,000 5,400 Action on the salary at the rate of $25,000 per annum fixed by the directors of the Federal Reserve Bank Of Richmond for Mr. Leach as President of the Bank for the Year beginning June 1, 1941, was deferred pending consideration of the questions of policy raised by Mr. 22Ymczak relating to salaries of Presidents and First Vice Presidents. 658 5/27/41 Name -7Title Annual Salary Federal Reserve Bank of Atlanta President $17,500 Tr. 10,500 First Vice President Malcolm H. Bryan 7,500 H. F. Conniff Vice President 7,000 V. K. Bowman Assistant Vice President 5,500 C. R. Camp Assistant Vice President 5,500 X. E. Denmark Assistant Vice President 4,600 X. R. McCravey, Xr. Assistant Vice President and Secretary S. P. Schuessler 5,500 Assistant Vice President 7,000 E. P. Paris Auditor General 4,500 Counsel Pollard Turman v. S. M.cLarin, Birm4gham Branch Managing Director Cashier Assistant Cashier 6,000 4,200 3,600 Tacksonville Branch Geo, S. vardeman, Tr. Managing Director T. A. Lanford Cashier Assistant Cashier Winslow E. Pike 6,500 5,000 3,600 Xoel B. wort, Tr. E. R. Harrison Nashville Branch Managing Director Cashier 6,500 L. M. Clark M. L. Shaw P. C. Vasterling New Orleans Branch Managing Director Cashier Assistant Cashier 12,000 5,000 4,000 Savannah Menu. Manager Assistant Manager 4,000 2,400 P. L. T. Beavers H. X. Urquhart Leo W. Starr X. H. Bowden Earle M. Looney Federal Reserve Bank of St. Louis President Chester C. Davis P. Guy Hitt First Vice President Olin H. Attebery Vice President C. M. Stewart Cashier and Secretary A. H. Haill Assistant Cashier Assistant Cashier S- P. Gilmore Assistant Cashier P. N. Hall G. O. Hollocher Assistant Cashier 5,000 25,000 18,000 15,000 10,000 7,500 7,000 6,000 4,500 659 5/27/41 Name -8- Title Annual Salary Federal Reserve Bank of St. Louis (Continued) $ 7,000 Lewis H. Carstarphen General Counsel 6,600 L. H. Bailey General Auditor 6,500 Assistant Vice President Henry H. Edmiston 3,600 Assistant Vice President Howard H. Weigel Charles A. Schacht Fred Burton Stanley B. Xenks W. H. Glasgow S. K. Belcher C. E. Martin Arthur F. Bailey Clifford Wood Clay Childers Louisville Branch Managing Director Cashier Assistant Cashier 8,000 4,200 4,000 Memphis Branch Managing Director Cashier Assistant Cashier 10,000 5,300 4,800 Little Rock Branch Managing Director Cashier Assistant Cashier 9,000 4,800 3,600 Federal Reserve Bank of Minneapolis X. N. Peyton 25,000 President 0. s. Powell 15,000 First Vice President and Secretary E. w. Swanson 10,000 Vice President H. I. Ziemer 9,000 Cashier and President Vice H. c. Core 6,500 Assistant Cashier 0. R. Preston 6,500 Assistant Cashier A. R. Larson 5,500 Cashier Assistant W. E. Peterson Cashier Assistant 5,500 A. W. Mills 6,000 Auditor 5,500 Thos, H. Hodgson Assistant Counsel R. E. Towle A. A. Hoerr C. X. Larson Helena Branch Managing Director Cashier Assistant Cashier 8,000 4,500 4,250 Federal Reserve Bank of Kansas City* Vice President and Cashier 13,200 X* W. Helm R. P. Tyner Assistant Cashier 6,800 M. w. E. Park Assistant Cashier 6,000 (360 5/27/41 -9- Name Title Annual Salary Federal Reserve Bank of Kansas City* (Continued) D. W. Woolley $ 6,000 Assistant Cashier Wm. Phillips 5,000 Cashier Assistant T. Bruce Robb Manager, Research and Statisti- 6,000 cal Department S. A. Wardell 8,000 Auditor L. H. Earhart G. A. Gregory 0. P. Cordill Omaha Branch Managing Director Cashier Assistant Cashier X. R. Olson S. A. Brown H. L. Stempel Denver Branch Managing Director Cashier Assistant Cashier G. H. Pipkin R. 0. Wunderlich R. L. Mathes Oklahoma City Branch Managing Director Cashier Assistant Cashier 10,000 6,000 4,800 10,000 5,400 3,600 8,100 5,700 4,300 *The directors of the Kansas City Bank fixed the salaries of the above officers for the period from Tune 1 to December 31, 1941, inclusive, and it was understood that the Board's letter to 1r. Caldwell would state that the Board approved the salaries for that period and also for the period from /anuary 1 to May 31, 1942, inclusive, if fixed by the directors at the rates shown for the latter period. The Secretary was requested to advise Mr. Caldwell, Chairman of the Federal Reserve Bank of Kansas City: (1) That the Board approves a salary for H. G. Leedy as First Vice President at the rate of $16,000 per annum for the period from June 1, 1941, to February 28, 1942, inclusive, and that it also approves a salary at that rate for Mr. Leedy for the period from March 1 to May 31, 1942, inclusive, if fixed by the directors at that rate. (2) That the Board is unwilling to approve the salary at a rate of 0,000 per annum fixed by the directors for John Phillips, Ir., as Assistant Cashier of the Bank, but approves a salary for him 661 5/27/41 -10at the rate of $7,500 per annum for the period from Tune 1 to December 31, 1941, inclusive, if fixed by the directors at that rate, and that it also approves for Mr. Phillips a salary at the same rate for the period from Tanuary 1 to May 31, 1942, inclusive, if fixed by the directors at that rate. Name Title Federal Reserve Bank of Dallas President First Vice President and General Counsel R. B. Coleman lace President W. T. Evans Vice President and Secretary W. 0. Ford Cashier E. B. Austin Assistant Cashier L. G. Pondrom Assistant Cashier R. 0. Webb Assistant Cashier Mac C. Smyth Assistant Cashier W. H. Holloway General Auditor R. R. Gilbert E. B. Stroud Annual Salary $20,000 17,000 11,000 9,500 9,000 7,200 6,600 6,000 4,800 5,500 X. L. Hermann Allen Sayles El Paso Branch Managing Director Cashier 6,000 4,200 W. D. Gentry E. R. DeMoss Houston Branch Managing Director Cashier 9,000 4,800 San Antonio Branch Managing Director Cashier 7,500 4,800 M. Crump W. E. Eagle The meeting then recessed and reconvened at 2:55 p.m. with the same attendance as at the conclusion of the morning session ecept that Mr. Vest was not present. Mr. Szymczak referred to the action taken at the meeting of the Board on May 15, 1941, in requesting that there be prepared data 17ith respect to the hoarding of currency in the United States, and stEtted that at his request memoranda on the subject have been k'ePared by Mr. Smead and by Mr. Cherry, Assistant Counsel, and that 662 5/27/41 -11— Mr* Cherry's memorandum had been circulated among the members of then i-,card. The information contained in the memoranda as to the Steps that might be taken to prevent the hoarding of currency, and the most effective means of preventing the improper use of currency bY i ndividuals unfriendly to the United States, were discussed and the members of the Board indicated agreement with the opinion that Plan along these lines would probably have to be based on an executive order by the President in order to be fully effective. Chairman Eccles suggested that the Legal Division be reTlested to prepare a memorandum setting forth (1) the reasons for 11 decision if made by the Board, under its existing authority, riot to issue further amounts of Federal Reserve notes in denominati0118 larger than $20; (2) the steps to be taken, and the reasons therefor, to require all currency of over $20 denominations to be 811-rrendered before a specified date, to require all persons SUr- l'elldering such currency after that date to give their names and how the acquired the currency, end to authorize the imposition of ri4e8 or other appropriate penalties in case of evasion of the 'der to surrender; and (3) to require all banks to report all °1 tlit'ure Payments of unusual amounts of currency. Chairman Eccles' suggestion was arproved unanimously with the understanding that Counsel's office would be requested to have the memorandum prepared in time for consideration by the members of the Board prior to the meetings of the Federal Open Market Committee and the Presidents' Conference in Washington on June 10 and 11, 1941. 663 5/27/41 -12There was presented a letter addressed to Chairman Eccles by Secretary of the Treasury Morgenthau under date of May 23, 1941, and reading as follows: "I have read with interest your letter of April 24, 1941 and the enclosures, all relsting to the bank holding company bill recently introduced by Senator Glass. I find nothing in the material submitted which persuades me that the bill introduced by Senator Glass does not provide an effective way of meeting what is admittedly a problem. "The Board apparently believes that existing bank holding companies should be permitted to continue to exist, but that some slight change should be made in the governIllental machinery regulating their activities. Such a position is clearly in conflict with my views, and, in my judgment, with the recommendation made to Congress by the President in his monopoly message in 1938." The letter was discussed but no action was taken. At this point Messrs. 'Wyatt, Smead, and Dreibelbis left the and the action stated with respect to each of the matters herereferred to was then taken by the Board: The minutes of the meeting of the Board of Governors of the liecierel Reserve System held on May 26, 1941, were approved unanimous- Memorandum dated May 26, 1941, from Mr. Thomas, Assistant Dior of the Division of Research and Statistics, submitting the l'esigrlation of Miss Dorothea Paetow, a clerk in that Division to be- colae effective as of the close of business on May 25, 1941, and recAdinE that the resignation be accepted as of that date. The resignation was accepted. 6.64 5/27/41 -13Memorandum from Mr. Nelson, Assistant Secretary, submitting the resignation of Miles R. Ellison as a clerk in the Office of the Secretary, to become effective as of the close of business on May 31, 1941 and recommending that the resignation be accepted as of that date. The resignation was accepted. Mbmrandum dated May 26, 1941, from Mr. Morrill, Secretary, 811t111itting the resignation of Mrs. Elva H. MdEnew as a clerk in the Se eretaryt s Office, to become effective as of the close of business vniMaY 25, 1941, end recommending that the resignation be accepted as Of that date. The resignation was accepted. Memorandum dated May 26, 1941, from Mr. Nelson, Assistant Seer„ 'barY, recommending, with the concurrence of Mr. Clayton, that lars• Frederica R. Lockhart, Secretary to Mr. Clayton, be transferred t0 the position of clerk in the Office of the Secretary, with no ehell'ge in her present salary at the rate of 2,000 per annum, effec- tive as of June 19 1941' Approved unanimously. Letter to Mr. Curtisa,'Chairman of the Federal Reserve Bank °t Boston, reading as follows: "It is noted from your letter of May 19, 1941, that arrangements for a special election by member banks in 665 5/27/41 -14- "Group 2 will be made to choose a successor to Mr. Edward S. French, who has resigned as a Class B Director effective July 1, 1941. "The Board does not contemplate making any changes in the classification of member banks in your District for electoral purposes, and, in view of your statement that yoa know of no reason why such classification should be changed, the classification which has been in effect since August 1935, will apply for the special election." Approved unanimously. A pproved: Chairman.
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