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Minutes of actions taken by the Board of Governors of the Federal Reserve System on Tuesday, May 29, 1951. PRESENT: Mr. Mr. Mr. Mr. Mr. Szymczak, Chairman pro tem. Evans Vardaman Norton Powell Mr. Carpenter, Secretary Mr. Sherman, Assistant Secretary Mr. Kenyon, Assistant Secretary Minutes of actions taken by the Board of Governors of the Pederal Reserve System on May 28, 1951, were approved unanimously. Memorandum dated May 28, 1951, from Mr. Sloan, Assistant krect or of the Division of Examinations, recommending an increase in the b aslo salary of Adrien P. Francoeur, Assistant Federpl Reserve 4arainm -r in that Division, from $3,575 to $3,700 per annum, effective j114e 10, 1951. Approved unanimously. M emorandum dated May 23, 1951, from Mr. Young, Director of the ni -vision of Research and Statistics, recommending that the resig41.tio 11 Of LeRoy Dunn, Research Assistant in that Division, be accepted t).be et fle feetivel in accordance with his request, at the close of business 1)1951. Approved unanimously. morandum dated May 24, 1951, from Mr. Young, Director of the ,JjArisi TN, or of Research and Statistics, recommending that the resig114-Li Of Richard W. Lindholm, Economist in that Division, be accepted 5/29/51 -2- to be effective, in accordance with his request, at the close of basiness June 15, 1951. Approved unanimously. Memorandum dated May 24, 1951, from Mr. Young, Director of the Division of Research and Statistics, recommending that the resignaqon of Mrs. Mary M. Donohoe, Clerk-Typist in that Division, be accepted to be effective, in accordance with her request, at the close Of business May 23, 1951. Approved unanimously. Memorandum dated May 25, 1951, from Mr. Noyes, Director of the Division of Selective Credit Regulation, recommending the appoint11" °f Miss Lois Marilyn Moye as a Clerk-Stenographer in that Divi1 °n a temporary basis for a period of three months, with basic Sala , 'dt at the rate of $2,650 per annum, effective as of the date upon sh --e enters upon the performance of her duties after having passed the u sual PhYsical examination, and subject to the completion of a satisfactory employment investigation. Approved unanimously. Memorandum dated May 24, 1951, from Mr. Bethea, Director of the bivisi or kies -on of Administrative Services, recommending the appointment Katherine Robinson as a Page in that Division, on a temporary baai,8 for a Period of three months, with basic salary at the rate of t2,200 Per annum, effective as of the date upon which she enters upon 5/29/51 the Performance of her duties after having passed the usual physical ex8nination, and subject to the completion of a satisfactory employment ihve stigation. Approved unanimously. Memorandum dated May 21, 1951, from Mr. Young, Director of /he Division of Research and Statistics, recommending that Roland I. It°billson be employed as a Consultant in that Division for a period 111°t to exceed December 31, 1951 to assist with work on the Voluntary Credit Restraint Program, that he be paid $40 for each day of service the Board, and that he be allowed actual necessary transportation eric'ell8es in accordance with the Board's travel regulations applicable t°Pers°113 other than heads or assistant heads of divisions and per diem in lieu of subsistence of $9 while away from his home, Evanston) on Board business. Approved, Mr. Vardaman voting "no". Letter to Mr. Gilbert, President of the Federal Reserve Bank 11as, prepared pursuant to the action taken at the meeting of the 8 c/al'd on May 15, 1951, reading as follows: and As requested in your letters of April 20, 1951, pav,„"taqr 25, 1951, the Board of Governors approves the in7 4,erit of salary to the following officers at the rates 19`5*42-oated for the period June 1, 1951, through May 31, 5/29/51 Name R. B. Coleman E. B. Austin L. G. Pondrom H. R. DeMoss W. H. Irons Mac C. Smyth Harry A. Shuford Morgan H. Rice Title Annual Salary Vice President a5,000 13,000 Vice President Vice President & Cashier 13,000 13,000 Vice President Vice President 13,000 Vice President 10,500 10,500 Counsel Assistant Vice President 10,200 Secretary of the Board J. L. Cook 9,000 Assistant Cashier Howard Carrithers Assistant Cashier 8,400 W. D. Waller Assistant Cashier 7,800 T. W. Plant Assistant Cashier 7,500 H. •Kilman Assistant Cashier 7,500 Leon Daniels 10,000 General Auditor E. H. Berg Assistant General Auditor 7,000 George F0 Assistant Counsel 5,000 Rudy Houston Branch ! 1 ., H. Holloway Vice President in Charge 11,500 H, K. Davis Cashier 7,800 B0 J. Troy Assistant Cashier 6,900 San Antonio Branch W. E. Eagle Vice President in Charge 10,500 A. E. Mundt 6,900 Cashier P. C. Magee 6,300 Assistant Cashier El Paso Branch 0, M. Rowland 9,000 Vice President in Charge Alvin E. Russell 6,600 Cashier T. C. Arnold 6,000 Assistant Cashier on The Board regrets that it was unable to take action ,. these salaries prior to the meeting of your Board of iiirectors on May 10." Approved unanimously. Letter to Mr. James H. McCarthy, 660 Burleigh Drive, Pasadena, lforn4 reading as follows: co "Thank you for sending to the Board of Governors a ta°f Your letter of May 9, 1951, to Representative Carl e concerning the application of credit controls to 411-6-l ulng houses. As you know, the Board does not now have °IltY to regulate credit on existing houses. A bill 5/29/51 -5- "is under consideration by the Congress which mould provide such authority, however, and in a recent statement before the Senate Banking and Currency Committee, Chairman Martin presented the Board's view on this matter as follows: To make restrictions of mortgage credit adequately effectjve, the authority over such credit needs to be extended to cover loans made on existing properties. Since passage of the Derense Production Act, prices of old as well as new houses have increased significantly, thereby raising the loan values of old properties and adding to the potential volume of credit based on this type of asset. Price increases for old properties in turn tend to support increases of prices of, and the amount of credit extended on, new houses. Thus, restriction of credit extended on existing properties would help to make the restraint of new construction credit more effective as well as to limit inflationary mortgage credit expansion generally. The amount of mortgage credit extended on old hones during 1950 was the largest on record, almc)st 9 billion dollars or about three-fifths of all the credit extended on all 1- to 4-family properties. In the first quarter of 1951, lending on old houses was maintained at a very high rate and continued to account for a large share of the total volume of mortgage credit extension. The President, as well as the Council of Economic !dvisers, and the Joint Committee on the Economic I.LePort, have recommended that authority be granted rr control credit on purchases of existing houses. zhe Board joins in this recommendation and urges that the authority provided in the bill presently under consideration be granted. Total mortgage debt outstanding on 1- to 4-family aouses, new and old combined, is 2-1/4 times what it v;as at the end of World War II. Continuation of such va,Pid expansion of mortgage debt would not only ,eaten the stability of real estate markets, but ' 4-30 have a serious inflationary impact on the whole econonw. exi :Icu may be sure that if authority to regulate credit on PpPa-ag houses is delegated to the Board of Governors of the eXe,ne• Reserve System, the Board will do all that it can to 13e it in the national interest." 5/29/51 —6— Approved unanimously. Letter to Mr. Carroll Gunderson, Secretary, National Bank ipivisicn, American Bankers Association, 12 East 36th Street, New York, Nevi York, reading as follows: "The Board of Governors has been informed that a Special committee of the National Bank Division of the American Bankers Association has recently completed a Study and will soon publish a booklet which gill discuss the policies of commercial banks relating to investments municipal bonds, offer suggestions as to factors to r considered in their selection, suggest forms for mainairing credit information on individual issues, and list 8°uroes of information regarding municipal obligations. "For a great many years, the Board of Governors and the Federal Reserve Banks have actively encouraged member banks to maintain adequate credit information on loans 2-nd other investments, and the Board feels that the Naicnal Bank Division should be commended for its efforts r develop and maintain conservative, yet progressive, Vestment policies regarding municipal obligations : 111101-1 are such an important part of the portfolios of loank3. Approved unanimously. Memorandum dated May 28, 1951, from Mr. Carpenter, Secretary °r the Boa stating that the Annual Report to the Congress covering the calen _ dar year 1950 was ready for approval and would be sent to the titer for final printing should members of the Board so indicate. Approved, with the understanding that copies would be sent to the Speaker of the House of Representatives and the President of the Senate as soon as it was printed, with a letter of transmittal signed by former Chairman McCabe under date of March 31, 1951.
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