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1623
Minutes of actions taken by the Board of Governors of the FedReserve System on
Thursday, November 14, 1946.
PRMENT:
Mr.
Mr.
Mr.
Mr.
Eccles, Chairman
Ransom, Vice Chairman
Draper
Evans
Mr.
Mr.
Mr.
Mr.
Carpenter, Secretary
Sherman, Assistant Secretary
Morrill, Special Adviser
Thurston, Assistant to the Chairman
As
stated in the minutes of October 30, 1946, Mr. Vardaman was
/D erlt, on offi
cial business,
lanutes of actions taken by the Board of Governors of the Fed-
e"al Reserve
System on November 13, 1946, were approved unanimously.
Memorandum dated November 6, 1946, from Mr. Thomas, Director
D.
IvIsion of Research and Statistics, recommending that the
toarcl a
°r the
1313r°ve increases in the basic annual salaries of the following
eqa.oyees
of that
Division, effective November 17, 1946:
Nezne
T.
,411e1 L. Nelson
Evans
tlizaboth P.
Te
Trlessa B.
rYAksbu
Hemminger
Designation
Research Assistant
Clerk
Clerk
Secretary to
Mr. Morse
Salary Increase
To
From
3,021.00
3,648.00
3,522.60
3,397.20
3,271.80
2,619.72
2,770.20
Approved unanimously.
tilebt .Memorandum dated November 4, 1946, from Mr. Smead, Director of
1)('tiot
bate :
0
11
cf Bank Operations, recommending the appointment of Mrs.
P°I'd as a clerk in that Division, with basic salary at the
2339400 per annum, effective as of the date upon which she
1624
11/14/46
-2-
eliters8 upon the
performance of her duties after having passed the
1181161 PhYsical examination.
The memorandum also stated that it was
cortemplated that Mrs. Ford would become a member of the Federal Reserve
retirement system.
Approved unanimously.
Letter
Reserve
to Mr. Rainey, Director of Personnel of the Federal
Bank of Atlanta, reading as follows:
th
"The Board of Governors approves the changes in
e
classification plan of the Federal leth:ve Bank of Atlanta, consisting of an increase in
eh - maximum annual salary for the position of Manager,
theek C
ollection Department, and the establishment of
Position of Assistant Manager, Currency and Coin
Depart
JPart
-ment, as
submitted with your letter of November
(3 1946."
Approved unanimously.
LettE.tr to Mr. Hill
Vice President of the Federal Reserve
13141k of p .
h
lladelphia, reading as follows:
191, "Reference
is made to your letter of October 17,
001-z, su
bmitting the request of the l'iilmington Trust
liel?,! Wilmington, Delaware, for permission to estabthe ,- °ranch at
Newport, Delaware, in connection with
Triletvl‘°Posed absorption through merger of the St. Georges
la?mpany, Newport, Delaware.
Pron,The Board of Governors does not feel that the
gerWsed transaction
will result in a change in the
or
character of the assets of the trust company
thebralr
tac)adening in the functions exercised by it within
it i,---"J-ng of the condition of membership to which
- subject,
the Lin
n 'View of your recommendation, the Board approves
e1
lishment and oPeration of a branch in Newport,
IDelaw
a41,
re3
, by the V.ilmington Trust Company, Wilmington,
l'ected.-e2 Provided the absorption through merger is efsllbstantially as proposed, theassets of the St.
1625
11/14/46
3-
"Georges Trust Company classified III and IV in the
report of
examination made as of September 14, 1946,
are
charged off or otherwise eli.Linated, and the
prior approval
of the appropriate State authorities
es ob
tained. It is understood, of course, that
,ertlfied copies of the various documents relating
t? the
merger and the establishment of the branch
,11 be
obtained and reviewed by Counsel for the
aeserve Bank."
Approved unanimously.
Letter to Mr. Fulton, Vice President of the Federal Reserve
8allk or
Cleveland
reading as follows:
1946 "Reference is made to your letter of November 1,
and
submitting the request of the Lawrence Savings
IrUst Company, New Castle, Pennsylvan'..a, for pers ?loll to
establish a branch at Ellwood City, PennaY
eclianiay in connection with the proposed purchase of
ePtable assets and assumption of deposits of the
Peoples
National Bank of Ellwood City.
"The Board
concurs in your opinion that the pro't:,et'led t
ransaction will not result in a change in the
or 1731'41 character of the assets of the trust company
the 111
ening in the functions exercised by it within
Ah
ealling of condition of membership numbered 2 to
is subject.
tvr.,
the
view of your recommendation the Board approves
Citv-%ablishment and operation of a branch in Fllwood
Cola rennsYlvania, by the Lawrence Savings and Trust
Of'
a-TLY, New Castle, Pennsylvania, provided the purchase
bets and
assum-Aion of deposits of the national
atoel„is effected substantially as proposed, the capital
t11,„i of the trust
company is increased to 500,0001 and
or
to ;-'500,000, by the sale of ,;200,000 nar value
or ti;'; coulmon
stock for $400,000, and the prior approval
a
141th
e
PProPriate
State authorities is obtained; and
will the
understanding that Counsel for the Reserve Bank
all jeview and satisfy himself as to the legrlity of
br. `'ePs taken
to effect the establishment of the
'
411chol
Approved unanimously.
1626
11/14/46
-4-
Letter to Mr. Gilbert, President of the Federal Reserve Bank
Qf Dallas,
reading as follows:
"The Board of Governors of the Federal Reserve
q,L04.8tem has considered the recommendation of the ExecUive
Committee of your Bank contained in Mr. DeMoss'
letter of
October 24, 1946, and, pursuant to provisions
() Section ln
7 of the Federal Reserve Act, grants perip lesion to Fair Park National Bank of Dallas, Dallas,
'
aTas, to maintain the same reserves against deposits
!
re required to be maintained by bcnks located outof central reserve and reserve cities, effective
'
of the date it
opens for business.
act. "Please advise the member bank of the Board's
fa
in this matter, calling its attention to the
ateL tht such
permission is subject to revocation
Re enY time by the Board of Governors of the Federal
sexy
"System.”
Approved unanimously.
Letter to Mr.
Joseph D. Goodman, 1500 Walnut Street Building,
delPhia 2, Pennsylvania, reading as follows:
rsiat trrhie refers to your letter of November 2, 1946,
e to section 4(c)(8) of this Board's Regulation
T.
escti2°u sUggest that the present prohibitions of this
to
are unduly restrictive and ought to be modified
Pert
ease
creditore to make exceptions in justifiable
con
le 1,e are fully aware that your position has
to cilderable
merit, nonetheless it has not been possible
Ilow"ise a rule more liberal than the present one which
slrat;' net permit
and possibly even encourage widespread
th41°n of the basic principles of the regulation. In
esetien°447ction it is essential that the provisions of
4(e)(8) be appraised in terms of the other reciltir
aware—"Ls of the regulation. As you are doubtless
"Iret Prior to increasing margin rec,uirements to a
eableT-five Per cent level, the general rules appliRov,e1;
cash accounts were considerably more liberal.
it "as
1„ er3
aS margin trading provisions Tere stiffened
,
rec°
that an increased volume of trades
1627
4/14/46
-5-
„7-`4-Lu be effected in cash accounts. For that reason
-,‘,`” was essential that rules applicable to cash accounts
strengthened
in order to prevent 'in-and-out' trading
111 such
accounts without payment. Naturally, when margin
r_equirements were raised to one hundred per cent these
'crisiderations were evEn more comee111%.
To date we have had no indication that present proresult in genuine hardship in any considerable
er of instances. It would seem that such cases could
°ecur fresiuently since the cash account restriction
h?Lles only when a security has been sold prior to its
p;
iring been P
- aid for in full. Use of the cash account
toesuPPoses promot cash payment in accordance with eusgernarY trade practices so that it is unlikely that many
adnuille investors find themselves estopped from making
tovaritageous sales, without penalty, by reason of failure
insTake prior payment. It is recognized that in rare
uin ances the hardship imposed by the rule may be genet and for that reason it is provided that in such
priaZnees a creditor may apply for relief to an approa 4a4,committee of a national securities exchange or
'-°nal securities association.
Menti
MaY be sure that the considerations which you
been , %vial continue to be given attention. e have
8pir.g•Lad to have your comments and appreciate the
lt in which you write."
Approved unanimously
Secretary.
@FedFRASER