Full text of Minutes of the Board of Governors of the Federal Reserve System : Meeting Minutes, November 10, 1948, Volume 35, Part 4

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a,

Minutes of actions taken by the Board of Governors of the
teserve System
on Wednesday, November 10, 1948.
PRESENT:
Mr. McCabe, Chairman
Mr, Szymczak
Mr. Draper
Mr. Evans
Mr. Vardaman
Mr. Clayton
Mr.
Mr.
Mr.
Mr.

ere'l

Carpenter, Secretary
Sherman, Assistant Secretary
Morrill, Special Adviser
Thurston, Assistant to the Board

Rinntes of
actions taken by the Board of Governors of the FedReserve
System on
November 92 1948, were approved unanimously.

Merrloranduz dated
November 8, 1948, fr°m Mr. Thomas, Directc'r or
the
Division of
Research and Statistics, recommending that
t4
rai€raation of
thq,
MissR::
Vicars, a clerk-stenographer in
u4i81-°/1, be
accepted to beVi
effective, in accordance with her
-VIest, at
the
close of business November 18,
1948, with the
11114r8tElzicling that
a lump
would be made for annual
sum
PaYment
reillail1i4g to her
credit as of that date.
Approved
Mctl°11tricium dated
November unanimously.
5, 1948, from the Division of perAdzitistration,

stating that Willis H. Mitchell, Supervisor
clt the 411 RePort,
Section in the Division of Bank Operations,
/4°1k1,1
reach
he,
hhD
ic
e:ember 11, 1948, and t at
'011341 retirement age of 65 o:
1141
retire on
March 1,
is within the 90-day
-131'
1949,
PrOltided
der
Section 3(1)(a) of the Rules and Regulations




8Si
1111048

-2Qf the
Retirement

System of the Federal Reserve Banks.
Noted.

Letter to Mr.
Sproul, President of the Federel Reserve Bank
y
ork p
prepared in accordance with the action taken at the
Itleetite of
the Board
on Oct b
s follows:
din
1 1 8

(If

1948 "This refers to the Board's letter of March 29,
bi.i.,and other
correspondence concerning the applicae
:V
of
section 32 of the Banking Act of 1933, as
torilded, to the
service of Mr. Ralph Dubin as a direcas al°
1f mThe ,
m
terchants Bank of New York, New York, and
Newycle
rioYee of the firm of Hirsch & Co., New York,
det ,fl September 30, 1948 Mr. Arnold Markel, Fret.
q/re,
- The Merchants
'
Bank, conferred with represenjcone
'
of the
Board and presented additional informa ion
aide
:
I
:Pig
this matter. The Board has carefully cone,this
ii
additional information and in the light
Of the
'nformation before it regarding this matters
Tiizariiy. °Pinion that the firm of Hirsch & Co. is
in
4ett ellgaged in the
types of business describe
Markeihi„
t will be appreciatsd if you will advise Mr.
-nd Mr. Dubin of
the Board's decision in this
tia "a suggest to Mr. Dubin that he take such steps
be
shin
nee!BSary to bring his interlocking relation- 11.1e4 icor,l'ormity
with the statute not later than
j) 1949."

Approved unanimously.
Letter
Cozzis

to the Fair
Employment Board, United States Civil

slon, reading as follows:
h Thi
1948) Z
- si
a
October 21,
tTgtatecil‘-="estin cknowled e your letter of
despersonwith
the
regarding
g
informationon
information
Fa
b-111 liCirlia.n
.48
;
Officer in connection
'-'41tieric-"stration within the agency of the f1/
0-em0.
tp P°1icies stated
cer ha.s
in Executive Order 99
r
(-1
,-'
Past several years, the Personnel fi- the operating responsibility for carrying




1887
11/10/48
—3—
the Board's
fair employment policies and will con—
ue to serve
in this capacity.
th "The
official address of the Personnel Officer of
e Board's
staff is listed below:
Mr. Herbert A. Johnson,
Personnel Officer,
Board of Governors of the
Federal Reserve System,
Washington 25, D. C.
REpublic 1100, Extension 434.
Approved unanimously.
Letter to
Mr. Leedy, President of the Federal Reserve Bank
or4arlsas
C4Y, reading
as follows:
"Thiq
uctoberrefers further to your letters of October 12
A
29, 1948 regarding a proposal to amend Reg'. in order to make the negotiability requirement
to
gul
Reaton
commit
.oan
inapplicable to notes evidencing
izelit'°clucers where
such locns are subject to a
to
under
its
Purchase by Commodity Credit Corporation
--Lee support
program.
Propos7 board has
given careful consideratiol?, to this
the p4.,14^ and, as you
know, has requested the views of
sligge:',:eral Reserve
Banks as to the desirability of the
amendment
to the Regulation.
that iterle of the
Federal Resee
Reserve Banks has indicated
in ord„,1821°rs the proposed amendment, but feels that,
f'
,..1.4.ther.
-%0 be of
value to member banks in its District,
'ice.tes —f-nges would
be necessary to make the certi—
lltder cr,.1 i
nterest in pools of producers' notes issued
141cler
cotton loan program eligible for discount
1111?
Federal Reserve Act.
N4.ess,.. of the
other Federal Reserve Banks have either
st:Ngq'h,,,t.12.el-,r_ disapproval of the proposal or, while
141
'
104r0r
they would not object, have indicated an
estioe'le re
action. Several of the Reserve Banks have
,
e41
neecl the need for
such an amendment at this time
;ely
e(Pressed the view that member banks
should,Ci.Tt
to
l
o
Credit Corporation's commitment
t,
II
s''ue
Paper
in question or, if necessary, should
,
le4a R d
Paper as
from
advances
the
Fe
for
security
eserve
erve
Act Banks under
section 10(b) of the Federal
Some have indicated their disapproval of

01*11




- 888
1

"/10/48
-4-to the negotiability requirement
Q!1°11exceptions
ofReun,
A; others

feel that the proposed amendment might
th
q°11rage member banks
to hold unduly large amounts of
lq 8 t7Pe of paper. It has also been suggested that it
a.cUld be i
nconsistent with the general discounting poliof the
eserve Banks to accept for discount or as
tQUateral
for advances notes endorsed by a member bank
with
out r
Lig loans ecourse' as are the notes of producers evidencmade by banks under Commodity Credit Corpora- iProgram.
Rese
,
"41 the light of the views expressed by most of the
srei've Banks, the
Board feels that, as a matter of genpl,
(The113°11cY, the
suggested Emendment to Regulation A is
time. 'Y unnecessary and
perhaps undesirable at this
ter t We shall,
of course, be glad to consider the matif your bank or any other Reserve Bank should
feel
raro, Ilthsrth"
-t the
situation at any time is such as to warIur h
consideration

Approved unanimously.
Letter +
to Mr.
the r
Johns, Vice President and General Counsel of
4 ederei
:
,1 8
4 erlre Bank of
City, reading as follows:
HI
ellcios.'"-Ls refers to
your letter of October 23, 1948,
AUto
a coPY of a letter to your Bank from western
ber ijuPPlY C°mPany, Kansas City, Missouri, dated Octo%Ito 1
.a / ;'948, relatinr,
to
application of Regulation
lation
rente
)
- P'an
Proposed by the Company concerning
and sale
The ,uOve of electric ironers.
c ,r,
thatyi1
0
a7der
/'•opo
!
eaee the correspondence indicates
sale
of
electric ironers, the
use i'es to
Z1., rent and
deliver
to interested persons for
e ch4teir homes,
electric ironers for one month at
°I $5 under a
written rental agreement which
'
1'onsr.- fir() bl
igation or option for the purchase
30-,4a
of the
.1"7ev'r, before the expiration of the
'her there would be a sale of an ironer, ()and
Neohdc
irc3
t
'ner
that was
delivered would be returned to,In
tar,li ev.,1;1°11r bY, the
Company for sale elsewhere.
;;;,°' a completed
hi
delivered to
sale, the lessee-purchaser
;."1
'retain the
ironer previously
th
a new ironer. If the former should oc
,1'4°ecih: ;egular
retail purchase price would be resuch
secilletiv04;
11 but if the
lntter should occur, no
Price would be made. The reduced purchase

X

L


1_889
11/10/48

—5—
''lea or the reo.ular
purchase price, as the case may be,
l ould be
treate;it'as the selling price subject to the down
Payme
nt, maturity and
monthly payment provisions of the
obi. "The
absence from the written rent2.1 agreemeat of af
co gati°n or option to buy would not be deemed to beo
vc-ur0111
, Jig s
ignificance in circumstances such as these.
u in their
ell° toward the entirety, the transactions in question
'
completion of a sale and, at the outset,
ext
°11
,
164 e°mPlY with the Regulation either as an ordinary
etpa
et-s
'
.-L°r1 of instalment
credit or as a delivery in an
an instalment sale under section
6(g) of the

10ETe

anlerZs,
You know, Amendment No. 1 to the Regulation
Qaction 6(g) thereof to provide that, if certain
ed conditions
are followed, the seller may allow
viousial
period of not more
than 10 days without preY ob
taining the required deposit or the down payNIpalllie
li.7e3317 in an Instalment sale. In view of
the
8A(apParent satisfaction with the amendment to
n7.-\gi, we hope
that they may be able to adjust
(/f thE
posed plan so as to aualify for the benefits
'
endruent.

a trtl

Approved unanimously.
Letter 4
to
114,,
„ollrees t
Mr. Arthur M.
Hill, Chairman, National Security
oard, Wa
shington, D. C., reading as follows:
oin
ChaINI

c°mPliance with your request of October 29,
e
l;Ific
et:
elilajtts
eignated Mr. Frank R.,;rf
i,i
leld
f
the
Board
to
assisti
the
clozestr'lon and
review of certtin assumptions
the
Lzati.1 al,ld
forei,rn economic fields for use innmobining by menbers of the staff of Tr
diqolla s '1r- G
arfield is Chief of the Business
14Ltis4ctic)
4ste ;'e8, n of the Board's Division of Research and
Chairman McCabe would also like toilliams
'140 --rternate
to Mr. Garfield Mr. Kenneth W .
the
°f
of the
National Income and Labor Section 2
4")t11$7°41'dls Division of
Research and
6trfiold and Mr. Williams are engaged
in
Statistics.act'it111141.cTich would
have a bearing upon the problem
Your staff is
concerned."




Approved unanimously.

1_890
11/10/48
-6-

taut

Ilemorandu:1 dated November 8,
1948) frou Pr. Riefler, A_ssis-

te

zezorand

Chairman, recommending, for the reasons stated in the
that the
voucher attached to the memorandum covering

for

e t-enses in
connection with a trip to Hot Springs, Virginia,

Ineeting of the
Business Advisory Council be approved in the
en°11/1t submitted.

Approved unanimously.
tor of ,Memorandum dated November 8, 1948, from Mr. Smead, Directne
Division of Bank
rea,
Operations, recommending, for the
8tated in
the memorandum, th,-i.t the following items in
the 1,)
48 non
-personal budget for that Division be increased by
in
dicated:

the E'101.4.1t

Printing and Binding
Furaiture and Equipment
Books and
Subscriptions
Repairs and Maintenance
(Furniture und Equipment)




Approved unanimously.

Chairman.,

20900
500
25
75