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1073 A meeting of the Board of Governors of the Federal Reserve 8P.rten, - lias held in Washington on Thursday, May 28, 1942, at 11:00 adil• PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Eccles, Chairman Ransom, Vice Chairman Szymczak McKee Draper Evans Mr. Mr. Mr. Mr. Morrill, Secretary Bethea, Assistant Secretary Carpenter, Assistant Secretary Clayton, Assistant to the Chairman The action stated with respect to each of the matters hereinerred to was taken by the Board: The minutes of the meeting of the Board of Governors of the Nte ' 1 6'1 Reserve System held on May 27, 1942, were approved unanimously. M"lorandum Hated May 26, 1942, from Mr. Nelson, Assistant Se l'etar.7) ' / ecommendin, , - that Raymond J. Collier, a Junior 7;conomist th, -ecretaryts ‘jegirial. Office, be granted a leave of absence without pay 'laY 23, 1942, so that he might enter active duty with the 6tate5 Naval Reserve, and that he be granted the benefits proed in the policy adopted by the Board on November 14, 1940, and .111erldeci thItted August 20, 141, for all employees entering military service. Approved unanimously. et '-1110randum dated May 22, l9L2, from Mr. Nelson, Assistant submittino- the resignation of Jefferson J. Larson as a the -ecretar's Office, to become effective as of the close 1074 5/28/42 -2-business on June 18, 1942, and recommending that the resignation be accePted as of that date. The resignation was accepted. Letter to Mr. McLarin, Presideat of the Federal Reserve Bank of Atla4ta, r eading as follows: "In accordance with the recommendation contained in letter of May 23, 1942, the Board of Governors apPtro°ves, effective June 1, 1942, the payment of a salary C. Frazer, Manager, Foreign Funds Control De) li.-r Quent, at the rate of '',5,300 per annum, which is 800 Dreire4cess of the maximum annual salary provided in the 1. sonnel classification plan of your Bank for the posi6141r1 occupied by Mr. Frazer." Your Approved unanimously. Letter to the board of directors of "The Bank of Mount Eaton atv, molint Eaton, Ohio, stating that, subject to conditions of membetiehi P riumbered 1 to 3 contained in the Board's Regulation H, the Board 4PProvp. : ter the bank's application for membership in the Federal Reserve ' ericl for the appropriate amount of stock in the Federal Reserve of n1 ‘' LeVeland. ' Approved unanimously, together with a letter to Mr. Fleming, President of the Federal Reserve Bank of Cleveland, reading as follows: telaiBoard of Governors of the Federal Reserve SysCoillza aPPr°Ires the application of 'The Bank of Mount Eaton Rea;, - .Y, Mount Eaton, Ohio, for membership in the Federal . the "e SYstem, subject to the conditions prescribed in the relosed letter which you are requested to forward to slAch )8*I'd of Directors of the institution. Two copies of rile let are also enclosed, one of which is for your 8 and the other of which you are requested to forward 1075 5/28/42 —3-- 'to the Superintendent of Banks for the State of Ohio Or his information. It is assumed, of course, that the Reserve Bank follow the matter of bringing the savings account and the time certificate of deposit form, mentioned on page 16 of the report of examination for membership, into onformity with the provisions of law and the Board's regulations.” Letter to the board of directors of "The Twin Valley Bank", e t exandria, Ohio, stating that, subject to conditions of member°red 1 to 3 contained in the Board's Regulation H, the Board a•PProves the bank's application for membership in the Federal Reserve Sretell and for the appropriate amount of stock in the Federal Reserve 134at of Cleveland. Approved unanimously, together with a letter to Mr. Fleming, President of the Federal Reserve Bank of Cleveland, reading as follows: The Board of tem Governors of the Federal Reserve SysNetet3r°ves the application of 'The Twin Valley Bank', ' 4exandria, Ohio, for membership in the Federal Reserve SYstem, subject to the conditions prescribed in the Boarred letter which you are requested to forward to the letterof Directors of the institution. Two copies of such and the e also enclosed, one of which is for your files 811.. 1?.le of which you are requested to forward tothe tove lntendent of Banks for the State of Ohio for his intirlation. cash "15th the exception of the nominal amount representing Or L?rtages, the estimated losses classified in the report nation for membership are reported to have been t'ege d off; therefore, the usual condition of membership ;"*Ing elimination of losses has not been prescribed. the ex:2,Page C of the report of examination for membership Pos1A -7'ner calls attention to a statement regarding deriotance in the savings pass books, which statement altogether correct. It is assumed that you will 1 076 5/28/42 -4- "A"-lertake to see that appropriate changes are made in the passbooks at the first opportunity." Letter to Mr. Longmire, Director of the Viar Production Loan geticY at the Federal Reserve Bank of St. Louis, reading as follows: m "This is to acknowledge receipt of your letter of 0817 25, 1942, enclosing a copy of illustrative examples of the operation of sections 5 and 6 of the standard form Orderrantee Agreement approved for use under Executive r No. 9112. It is understood that you contemplate . , 13r(3ducing copies of these illustrations for distribu-n among banks in your district. er„„ 1 "The question whether such illustrations of the opOf sections 5 and 6 of the Guarantee Agreement pre -i be Prepared for distribution was discussed in a th0,-;:;ary way by representatives of the Board and of War When theand Navy Departments and the Maritime Commission form of Guarantee Agreement was in course of timPparati°n; but no final decision was reached at that to ;* Accordingly, we feel that it would be inappropriate ' ess any views with respect to the suggested MustraJPI t" enclosed with your letter without first consultthe agencies concerned. wa "We shall be glad, therefore, to confer with the A r and Navy Departments and the Maritime Commission as -°°/1 as possible and we will then advise you further." 4 Approved unanimously. Telegram to the Presidents of all the Federal Reserve Banks, g as follows: acco "Charge account of partnership and personal charge er hzeta ridere lzits aortion indi wvidual partners are separate accounts unW. Therefore default in account of partwould not of itself create default in personal : of partner and vice versa. However, see section Approved unanimously. 1077 5128/42 -5Telegram to the Presidents of all the Federal Reserve Banks, re4ding as follows: tn too "Xerence to 'charge account' in clause (1) of „5 of Regulation IV is a cross-reference to section 6(p) and means a charge account arising in whole or Part from the sale of a listed article. This means a single-payment loan made on or after May 6 which a tat? R ,egistrant knows was used to retire a charge account ,f1sing wholly from the sale of unlisted articles may be ' ai?wed or extended under section 7(c)(1) or 7(c)(2) with da,lrial maturity not exceeding twelve months from the Le of the original loan." Approved unanimously. Letter Of chi__ 0 to Mr. Dillard, Vice President of the Federal Reserve Bank ''ac.01 reading as follows: en "Reference is made to your letter of May 13 and the gatel"ed letter of May 12 from the Merchandise National to" of a theirChicago regarding the application of Regulation t 'Check Credit Plan', and a copy of the form of greemenL entered into between the bank and the customer. 25.n'The agreement gives the customer an option to borrow acc,'° from the bank by drawing against the Check-Credit off, 3 and the option revives as soon as the loan is paid tio 'lath the result that the customer may exercise the opo0repeatedly. The question is whether the Statement of pur:, 17er can be used as a continuing agreement covering the of the successive loans. rec . The revised form of Statement of Borrower, which you old%ved since your letter was written, is similar to the thro In so far as it relates to this matter, and refers to this lo'. 11. 4thughout 1, an Therefore it could not be used 401,00-esPect to all loans made pursuant to the agreement. theas a practical matter, it might be argued that loan' a Lement would have little value with respect toa the bmade months after the Statement had been filed with Tlk and after a number of intervening loans. the a., °17ever, it is evident that the loan is really in 11-11re of a mechanical convenience for the customer, 1078 5/28/42 —6— ” • .sznce it is of such short maturity and since the amount 18 small, and the matter is therefore receiving further (c/r181deration together with a number of related questions. tfecordingly, any additional comments which you or the ulerchandise National Bank would care to make would be apPreciated,” Approved unanimously. Letter to Honorable Wendell Berge, Assistant Attorney General, reax14_ -4-ag as follows: "This is to acknowledge with appreciation your let°f May 27, 1942 (B:IvILM:rh 146-17-012), with regard 34o/ the cooperation of the Department of Justice in the 55 program to secure compliance with the provisions or its Regulation W. to 4. "Vie are today transmitting copies of this program he various Federal Reserve Banks and, pursuant to ' th' 1 request, we are transmitting to you 400 copies of Pr°grain, together with 400 copies of Regulation 17 as re un.revised effective May 6, 1942, for distribution to calted States Attorneys. Le shall appreciate it if we be furnished with 50 copies of the circular letter W inhich ch You propose to send to your United States Attorneys Res°rcler that we may furnish copies of it, to the Federal erve Banks for their information." i Approved unanimously. kicago Letter to Mr. W. B. Anderson, Editor of The Market Record, Inc., 1 Illinois, reading as follows: notiP"Thie will acknowledge your letter of May 19,194?-, daC'Ylng the Board that you are changing the publication to 3,.°f Your next issue of The Market Record from June 1 1, and that you intend to notify all users of the sl 171-laY, tAple: • 1942' issue that it is to be used during June tendetion to the months for which it was originally in- 1079 5/28/42 -7"The Board has no objection to the use of the 'April1942' issue during June for purposes of Regulation Approved unanimously. Thereupon the meeting adjourned. Chairman.
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