Full text of Minutes of the Board of Governors of the Federal Reserve System : Meeting Minutes, May 6, 1944, Volume 31, Part 2

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

721

A meeting of the Board of Governors of the Federal Reserve
8Ystem was
held in Washington on Saturday, May 6, 1944, at 11:30 a.m.
PRESENT:

Mr.
Mr.
Mr.
Mr.

Eccles, Chairman
Szymczak
McKee
Draper

Mr. Morrill, Secretary
Mr. Carpenter, Assistant Secretary
Mr. Clayton, Assistant to the Chairman
The action stated with respect to each
of the matters hereinreferred to was taken by the Board:
Federal

The minutes of the meeting of the Board
of Governors of the
Reserve System held on May 5, 1944, were approved unanimously.
Memorandum dated May 3, 1944, from Mr. Goldenweiser, Director

ot the

Nr1.14_
4

D4 .

441-eion of Research and Statistics, recommending that Miss
Bramlet be appointed as a clerk-stenographer in that Division

tempo

the

basis for an indefinite period, with basic salary at

rate of
$2,000 per annum, effective as of the date upon which she
enters
Upon the
performance of her duties after having passed satisfactollay
the usual physical examination, with the understanding that if
her
references and services prove satisfactory she will be recommended
tor n
Permanent appointment.
Approved unanimously.
M
the t. emorandum dated May 3, 1944, from Mr. Paulger, Director of
111-eion of
Examinations, submitting the resignation of Dwight L.
eraYs
-e a Federal
Reserve Examiner, to become effective as of the




5/6/44
-2Close of business on June 15, 1944, and recommendinfr that the resif,
nation be
accepted as of that date.
The resignation was accepted as
recommended.
Letter to Mr. Fletcher, Vice President of the Federal Reserve
Bark of
Cleveland, reading as follows:
"In accordance with the request contained in your
letter of May 2,
1944, the Board approves the appointment of Albert
Joseph Shipacasse as an assistant examiner.for the Federal Reserve Bank of Cleveland. Please
advise
us of the date upon which the appointment becomes
effective
and also of the salary rate."
Approved unanimously.
Letter to the Presidents of all the Federal Reserve Banks, reading a.s
follcrws:
"Under date of Arril 8, 1944, the Board received
letter from Mr. D. ill. Bell, Under Secretary of the
11:elleurY, in which he referred to his letters of February
7) 1942 and June 2, 1943, concerning the assortment of
41Per currency according to fitness for further circulation
Mr. Bell stated that recently the Division of Loans
Currency of the Treasury had examined the lower halves
Of
Federal Reserve notes sent in for redemption and found
hat a
relatively large percentage of the notes appeared
.:) be fit for further circulation. He pointed out, however, that
examination was made on half notes and that
o
rr the
examination been on whole notes the percentage
ch,fit might have been reduced. Subsequently Mr. Rusch,
84'ef of the Federal Reserve Issue and Redemption Divi.‘"_;° of the Office
of the Comptroller of the Currency,
nised us that the uppers showed a considerable percentage of
fits although a much lower percentage than

V
j
t




723
5/6/44
-3"that found by the Division of Loans and Currency with
respect to lowers.
"In view of the differences in the apparent fitness
of the upper and lower halves, it was decided to bring
the upper and
lower halves together for the purpose of
ascertaining the
degree of fitness before cancellation.
Re
presentatives of the Division of Loans and Currency of
.
t_A:le.Treasury,
of the Federal Reserve Issue and Redemption
0 -Sion of the Comptroller's Office, of the Board and
from one Federal Reserve Bank visited the Bureau of Enraving and Printing for this purpose. Mr. Rusch furnished one counter and Mr. Baczenas, Head of the Money
Section of the Currency Redemption Division, furnished
a.
counter. The uppers were given to one counter and the
lowers to
another with instructions to each of them to
Pick out the
notes they would consider fit. In a package
of 20's one of
the counters picked out 38 and the other
72 as fit. When the two halves were matched 22 notes
were considered
fit for further circulation by the reppsentatives present, with many being on the border line.
same process was used with respect to 10's, with 18
Whole notes
being considered fit. While no attempt was
'_441e.to match the lower
and upper halves of 5's, such
anlnation as
was given to them indicated that the percentage of
fitness among 5's was much less than among
1-0's and
20's.
"In
Of money view of the very large increase in the amount
i,
in circulation, the large printings which are
Prospect for the fiscal year 1945, approximately 44,000,000
:nests of 12
notes each, and the shortage of manpower, it
t! believed that
some reduction in the standard of fitness
1- the
tore, currency would be justified. It is suggested, therethat the officer in charge of your currency operations
Special attention to this matter with a view of reductrig the standard
of fitness where or to the extent that
conditions seem to justify."
Approved unanimously.
Letter to Mr. Clerk, First Vice President of the Federal Reserve
ktld Of
San
Francisco, reading as follows:
April This will acknowledge receipt of your letter of
24 regarding the use of Hawaiian overprinted Federal




724
5/6/44
-4notes of the Federal Reserve Bank of San Francisco in the Central Pacific area.
"After seeing a reference to this use of Hawaiian
overprinted currency in the newspapers, we got in touch
with the Treasury Department and were furnished with a
copy of the Department's press release of February 9, of
Which you have a copy. Subsequently, Governor Szymczak
talked with Mr. Bell over the telephone about this matter and
Mr. Bell promised to write the Board a letter
4.n regard thereto. Not receiving a letter within a
reasonable period, Governor Szymczak wrote a note to
Bell calling his attention to his promise to write
,he Board
about the overprinted Federal Reserve notes
.,Used in the Central Pacific area. A copy of Mr. Bell's
letter dated March 2, 1944, to the Board in this respect
is
attached.
I.lest
:
"The
o
for some questions raised by you have been in our minds
timeand it is or
vi
this
intention to review
o
with the Treasury before any further authoriza;;lons are given for the production of Hawaiian overprinted
Reserve notes. The Board agrees with you that
it
tc' might be well for the Presidents to consider this matter at
their next Conference."
Approved unanimously.
Memorandum dated May 3, 1944, from Mr. Smead, Director of the
141145i°11 of Bank Operations, referring to the approval by the Board on
Pebri18.17 4) 1944, of an increase from 86 to 87 in the per diem allowfor the
e
'ners participating in the examinations of the Federal
11"ellre Banks and
their Branches for the period January 15, 1944, to
Ileee4lber 31, 1944, inclusive, and recommending that the same allowance
the same
conditions be authorized for employees of the Division
(1118641k °Aerations who visit the Federal Reserve Banks for the purpose
Of l'eviewing
operating costs, with particular reference to the cost of
114"liag fiscal
agency operations.




725
-5-Approved unanimously, effective immediately, with the understanding that, if
conditions became more nearly normal at anytime during that period and apparently justified a return to the $6 per diem, the whole
subject would be reviewed and a report submitted to the Board.

Thereupon the meeting adjourned.

Secrezary.

APProved.




Chairman.