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Minutes of actions taken by the Board of Governors of the N[eral Reserve System on Thursday, November 1, 1951. The Board met in the Board Room at 10:30 a.m. Chairnien Mr. Sz:;.Tmczr.k.. horton Lr. rowell Mr. Carpenter, Secretary. Mr. Vest, General Counsel Mr. Allen, Director, Division of Personnel Administration The Secretary stated that in accordance with the action tPAen 1)7 the Board on July ly, 1951, a Eroup life insurance contract had been Ileeotlated wIth the Connecticut General Life Insurance Company covering the „ `411Ployees of the federal Reserve Banks and the Board of Governors) 411(i that the draft of contract was sent to the l'ederal Reserve Banks the no At s letter of October 16, 19')1. e also said that the Insurance N'exttient , xeouted of the State of Illinois, where the application would be e ct4141'le contract delivered, had su3rTsted certain minor chanes in the corltlet Ilhich had been incorporated, that Mr. Youn6, President of the federal tie erve 13,01k of Chicaco, had advised that he had received from the .:!ederal 11%,11,. U1ks and the Board of Trustees of the Retirement System authorizat1 °'1 or the execution of the application on their respective behalfs, and 1414 if the Board of Governors was prepared to authorize the Bank to execute t11. 4 Dlication on behalf of the Board, Mr. You would sien the aunlication l'c4' the T)°licY in ChicaEo today with the understandin6 that the contract 111V51 140104 become effective as of 12:01 a.m. on November 1. Mr. Szymczak stated that he and Mr. Norton had participated in the negotiation of the contract and had reviewed the changes proposed by the Insurance Department of Illinois and recommended to the Board that the a/tended contract be approved. He added that the proposed contract he.dbeen cleared with the Salary Stabilization and Wage Stabilization 4ards. Mr. Szymczak pointed out that the maximum amount of insurance 14i()/id-ed by the contract for any one employee would be limited to $20,000 411c1 that) while under'the law the Connecticut General Life Insurance Corncould not guarantee the amount of the net premium cost of the contract, the c cmpetitive bid submitted by the Company was based on the present diviormula which would not be changed without a compelling reason. It was also stated that the bid of the Connecticut General was the 1°'"rest s ubmitted by any of the insurance companies invited to bid and that the 0 0111Illon • had been expressed by the firm of Towers, Perrin, Forster and of Philadelphia, who had served as consultants in the negotiation f tale contract, that as a practical matter any reputable company would be loath to deviate from the net premium estimates which had been subkittecia Upon motion by Mr. Norton the proposed contract was approved and unanimous approval was given to the following telegram to Mr. Young, President of the Federal Reserve Bank of Chicago: 1)-7,1 95!.4 -3- 11/1/51 "With reference to the Board's letter of October 26, 1951, relating to the proposed contract for group life insurance for Federal Reserve System employees, your Bank is hereby authorized to execute the application for such group life insurance on behalf of the Board of Governors." In connection with the above matter unanimous approval was also given to an increase in the appropriate classification of the Board's budget for 1951 by an amount equal to the first annual premium covering employees of the Board under the group insurance policy. IA this point all of the members of the staff with the exception 14.1% Carpenter withdrew, and the action stated with respect to each of th° Matters hereinafter referred to was taken by the Board: Minutes of actions taken by the Board of Governors of the Federal Ileserve System on October 31, 1951, were approved unanimously. Memorandum dated October 30, 1951, from Mr. Williams, Assistant ir'eete.r, Division of Research and Statistics, recommending that the l'e8igliation of Donald Fort, Economist in that Division, be accepted to be .ective, in accordance with his request, at the close of business (3";°13er 31, 1051. Approved unanimously. Memorandum dated October 30, 1951, from Mr. V4i1liams, Assistant bite , et°r, Division of Research and Statistics, recommending that theiOfl of Alfred H. Conrad, Economist in that Division, be accepted t°13 "fective, in accordance with his request, at the close of business 471" -4- 11/1/51 October 28, 1951. Approved unanimously. Memorandum dated October 29, 1951, from Mr. Powell, recommending 44 increase in the basic salary of Miss Helen B. 'Wolcott, Secretary to Mr. Powell, from $5,200 to 5,500 per annum, effective November 11, 1951. Approved unanimously. Memorandum dated October 29, 1951, from Mr. Williams, Assistant 1)4ector, Division of Research and Statistics, recommending an increase illthe basic salary of Mrs. Elizabeth B. Sette, Economist in that Divisic) 4) from '5,685 to $5,810 per annum, effective November 11, 1951. Approved unanimously. Memorandum dated October 30, 1951, from Mr. Bethea, Director, D1'11810/1 of Administrative Services, recommending an increase in the bEtG 4 salary of Arthur S. Myers, Operating Engineer in that Division, (4. , Y3,035 to $3,735 per annum, effective November 11, 1951. Approved unanimously. Memorandum dated October 30, 1951, from Mr. Marget, Director, 1 is "of International Finance, recommending an increase in the 1)4 .0 salary of Miss Eleanor M. Ballinger, Research Assistant in that from $3,190 to $3,410 per annum, effective November 11, 1951. Approved unanimously. 11/1/51 Letter to Mr. Milton Rosen, Commissioner of Public l'orks, Department of Public Works, St. Paul, Minnesota, reading as follows: "This refers to your letter of October 17, 1951 concerning the application of Regulation 1,4 to garbage incinerators. In this connection, you indicate that individually owned domestic incinerators offer a solution to the garbage and trash disposal problem that has arisen in the City of St. Paul because of the growing inadequacy in the number of farmers collecting garbage Under the present licensing system. You point out In addition that while a number of such incinerators are being installed in compliance with the prevailing terms Of the regulation, a much greater number must be installed lf an adequate system of garbage disposal is to be maintained. "By an interpretation published at page 1310 of the 1950 Federal Reserve Bulletin, and at page 6630 of 15 Federal Register, October 3, 1950, the Board took the Position that garbage incinerators were covered by the regulation as residential repairs, alterations, or imProvements and, therefore, were subject to the applicable down payment or maximum loan value, monthly payment arid maximum maturity provisions of the regulation. The Present required down payment is 10 per cent (maximum loan value 90 per cent), and the maximum maturity is 36 months. However, you referred to section 7(m) of the regulation as possibly affording an exemption in the circumstance described in your letter. "As you indicated, the exemption contained in sectio n ((m) applies, in certain limited cases, to the .1.118ta11ation of sewerage and necessary related facilities _ilicluding plumbing and plumbing fixtures). However, by the specific language of that section, it does not apply 1,11.1ess the particular installation is 'required in order comply with a statute, ordinance, or regulation of to United States, a State or political subdivision , lereof t. The 1949 ordinance referred to in your letter ?Pears merely to specify the intervals for garbage colAection. If, in a given case, the ordinance constituted 'i. requirement, there would remain the question whether 4e particular installation so required otherwise satisfied "ction 7(0. 9,c4 11/1/51 -6- "In specifying the terms applicable to home modernization and repair, an important consideration Was the necessitous nature of some such work. The low down payment of ten per cent, together with the extended maturity of 36 months, reflect an effort by the Board to acuommedate such cases in a manner consistent with the purposes of the regulation and statute. In other areas covered by the regulation, a substantially higher down Payment is required, and the maximum maturity is only half as long. "The Board is not unmindful of the difficulties that appear to have arisen in your city, and the matter has received its sympathetic consideration. However, on the "basis of the facts and circumstances as presented in your letter, it does not appear that the present reulation affords an applicable exemption of the kind suggested. however, if there are other or additional aspects of this matter which you desire to call to our attention, we will be glad to reconsider the matter in that light." Approved unanimously, with a copy to Mr. Strothman, Vice President of the Federal Reserve Bank of Minneapolis. Letter to Mr. William H. Fletcher, First Vice President of the ?ecier al Reserve Bank of Cleveland, reading as follows:' "Receipt is acknowledged of your letter of October 22 1 / 951, regarding the case of Best Radio Shop, Cleve-` 11(1, Ohio, which was referred to the Board because of a-aeged violations of Regulation W. You state that, pursuant to a request by Mr. Towns i encl, your Bank endeavored to obtain customer statements connection with the alleged violations, but that your irlvestigators did not obtain any evidence of willful viov tions although they attempted interviews in connection reth almost half of the transactions of which you have a zae , c)rd. Moreover, a reinvestigation which was recently to'! of this registrant's place of business with respect o - ransactions subsequent to your disciplinary conference 0 disclosed no violations of the regulation. In the nA/51 -7- "circumstances you recommend that no proceedings against this registrant be instituted at this time. "The Board agrees with your recommendation." Approved unanimously. Notice for publication in the federal Register, prepared in Eteckprdance with the action of the Board on October 30, 19)1, reading as folaows: "Regulation W - Consumer Credit - issued by the Board of Governors of the Federal Reserve System pursuant to section 601 of the Defense Production Act of 1950, as amended, regulates instalment credit, including such credit in connection with the purchase of certain articles listed in Part 1 of secOn 9 (the Supplement to the regulation). Among these articles are 'utomobiles' as listed in Item I, Group A, Part 1 of such section 9. "The Board is considering whether or not it uould be Practicable and otherwise az)oropriate to exclude from Item 1, ?r°uPA, Part 1 or section 9 (the Supplement to the regulaion) older model used automobiles. "To aid in the consideration of this matter, the Board 14111 be glad to receive from interested persons any relevant el(Planations, data, or other information. Any such material Mould be submitted in writing to be received by the Board not later than November 15, 1951." Approved unanimously.
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