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Minutes of actions taken by the Board of Governors of the Federal. Reserve System on Wednesday, November 12, 1950. 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 p eclerea Minutes of actions taken by the Board of Governors of the Reserve System on November 14, 1950, were approved unanimously. Memorandum dated October 30, 1950, from Mr. Marget, Director of the Division of International Finance, recommending an increase the basic salary of Harry A. Gillis, Jr., an economist in that bivisi °II 'from $3,950 to $4,200 per annum, effective November 26, 1950. Approved unanimously. Me moranda from the heads of the Divisions indicated below recoMMending increases in the basic annual salaries of the followtrig employees in those Divisions, effective November 26, 1920: 141/ISION AND E tirtiM0 INATIONS 3 50 . R. PhilipCorkhum C. Rachford ,40444[IST TIVE 11 13 50 , ;qtlle tele,. Turner M. TITLE Asst. Federal Reserve Exam. Asst. Federal Reserve Exam. SERVICES Wilson Love lierbert W. 13undY Stenographer Cafeteria Helper Laborer Operator (Mimeograph) SALARY INCREASE TO FROM $3,450 3,700 $3,57 3,825 3,035 2,190 2,120 2,572 3,115 2,260 2,190 2,652 Pr. irir-' u/15/50 -2Approved unanimously. Memorandum dated November 13, 1950, from Mr. Young, Director Of the 11 JAvision of Research and Statistics, recommending that Miss Doris In‘, cTeer, a clerk-stenographer in the Division of Bank Operations, bet Asferred to the Division of Research and Statistics as a clerkWith no change in her present basic salary of $2,650 1°e1* annual, effective as of the date on which she enters upon the Performance of her duties. The memorandum also stated that Mr. Leciaard Was agreeable to this transfer. Approved unanimously. Of Memorandum dated November 13, 1950, from Mr. Young, Director the n ' 4:vision of Research and Statistics, recommending that the l'esigliation of Miss Dorothy R. Perkins, a clerk-typist in that Divi81°11, be accepted to be effective, in accordance with her request, 4t the close of business November 17, 1950. Approved unanimously. Memorandum dated November 13, 1950, from Mr. Young, Director (If the D ivision of Research and Statistics, recommending the appointkellt of Mrs. Jane Marie Beckman Lashley as a clerk-typist in that bivision, on a temporary indefinite basis, with basic salary at the rate of $2,690 per annum, effective as of the date upon which she eaters upon the performance of her duties after having passed the '411lia physical examination. 11/15/50 -3Approved unanimously. Memorandum dated November 14, 1950, from Mr. Bethea, Director of the Division of Administrative Services, recommending the appointet °I" Miss Patricia Ann Murphy as a page in that Division, with basic salary at the rate of $.,200 per annum, effective as of the clate Upon which she enters upon the performance of her duties after ha7i nig Passed the usual physical examination. Approved unanimously. Letter to Mr. Young, President of the Federal Reserve Bank Of chic ago, reading as follows: "Reference is made to Mr. Diercks' letter of October o1950, submitting the application of The !°1and-State Bank, Poland, Indiana, for permission Lo exercise fiduciary powers. "In view of the Reserve Bank's recommendation al, .1,(1 the information submitted, the Board of Governors % 1 the Pederal Reserve System grants the applicant ofilnission, under the provisions of its condition po membership numbered 1, to exercise the fiduciary orll?fs now or hereafter authorized under the terms "s charter and the laws of the State of Indiana. Bank "You are requested to advise The Poland-State / Poland, Indiana, of the Board's action." Approved unanimously. Letter to Honorable Maple T. Hari, Chairman, Federal Deposit 111.ance C orporation washington 25, D. C., reading as follows: 6,197Reference is made to your letter of November sia 50, concerning the application of the 'South yo!Bank of Bay Shore, N. Y.', Bay Shore, New cirr''' for continuance of insurance after withfrom membership in the Federal Reserve System. 729 11/15/50 -4"No corrective programs have been urged upon the bank, or agrPed to by it, in connection with 'which the Board of Governors would consider it tl, sirable de to incorporate conditions with respect 0 continuance of insurance. "The asset condition of the bank is considered sound and its management satisfactory. ' laso, capital has been increased regularly and substantially through conservation of earnings. Approved unanimously. Letter to the Presidents of all Federal Reserve Banks, read4 __ , - 44g as follows: "The Board has on several occasions in the Past requested reports from the Federal Reserve inks as to the number of member and nonmember i„eering ci banks which deposit in its Federal Reserve Bank or Branch a daily average of more than 300 _ash items Payable in the territory of another Federal Reserve Bank or Branch. The latest request 1948such r reports was made under date of December 9, "In information as to theorder that we may have current exist, still which cases number such of it will be appreciated if you will furnish the Board 1.7, ) -th a list showing the names of banks which deposit With your Bank or its Branches, during the week bef li ing December 4, 1950, a daily average of more eaa'" 300 cash items payable in the territory of t °ther Federal Reserve Bank or Branch, such reports include an analysis showing the number of such ' R ems that are drawn on banks located in Federal eeserve alnk or Branch cities and the number of such °ulltrY items that are payable in 'split states'. "It will also be appreciated if you will ac re °mPanY your reports with complete information eting to those cases, if any, which exist in YoUr district." t Approved unanimously. Letter to Mr. A. L. Trotta, Manager and Research Director, 1.780 11/15/50 -5Credit m 'ellagement Division, National Retail Dry Goods Association, 10° west 31st Street, New York 1, New York, reading as follows: "This will acknowledge and thank you for your letter of November 8 on the subject of the proposition 2f including charge accounts within the scope of IlegUlation W. The information and views you submit are i nteresting indeed. "AS you know, the Board's staff has been making :11 extensive study of the subject and the data you are helpful. The Board at present does not have the question under consideration." Approved unanimously. Letter to Mr. Lionel Moss, Moss Motor Company, 302 East 14°114tai, - -,venue, Fort Collins, Colorado, reading as follows: " mbThank you for your thoughtful letter of er 4, 1950 relative to the Board's Regula' i(311 W concerning consumer credit. We appreciate Y°1-11" concern over the situation that you described. is a "We feel certain that you will agree that it ifficult to consider Regulation W and its intended Purpose apart from other monetary and fiscal : DI l1cies all of which are directed at reducing the tend Pressures of excessive purchasing power which cluT: t° Push upward on the entire price structure e apart from the movement of prices for any one .le/ such as automobiles, for a short period of timec Nove 1 artZ "The regulation of course, is designed speci: h 0 r* 4ampen demand for consumer credit because impact of such credit throughout the Dr:11.°71 during a period such as the present when aressrs generated by increases in the money supply pr„ 1--mical to the public interest. It was these theures which the Board, after appraisal of all asz factors, found unabated and which caused it to °Pt the recent amendment to the regulation. su ,"We recognize that in the administration of any 12" measure as Regulation IN there are bound to be 4a.rciships to particular businesses and individuals. i 11/15/50 -6- %e sincerely trust that its present limitations 14111 not have the unfortunate consequences which YOU Predict. While it is likely •that the restraint °4 the continuous rapid expansion of purchasing Power imposed by present fiscal and credit policies will result in readjustments all along the line, it would seem that once these readjustments are made to 11. more sustainable level of expenditures and the Present inflationary spiral is checked, the general and business will benefit. On the other hand If the inflationary spiral is not restrained exeeec.lingly serious consequences will accrue to the nation as a whole. "You may be certain that the Board will continue to 1.11.7Y the regulation in the light of all the facts 144 .?h come to its attention and in that connection " el 1 welcome any additional data that automobile ealers may care to submit." Approved unanimously. Telegram to Mr. DeMoss, Vice President of the Federal Reserve ta.1.11,c. Of Dallas, reading as follows: ."Retel November 9 concerning exemptions under sect i°1 5(g) of Regulation X. Exemption granted a tlelilder under section 5(g) is applicable to a longrisrm Mortgage loan to the builder to finance the t2/ construction. However, if builder is a Registrant, the Provisions of section 4(a)(6) must be taken into '_'°.n.s,ideration if he subsequently sells the property 611bJect to such mortgage loan." Approved unanimously. Letter to ae as the Presidents of all Federal Reserve Banks, follows: or your information and guidance in connection with the of " execution of V-loan guarantees on behalf the D ePartments of the Army, the Navy, and the Air -°orce, there is enclosed a copy of a memorandum 11/15/50 -7- "addressed by Mr. Robert C. Lovett, Deputy Secretary of Defense, to the Secretaries of the Military Depart!!nts, the Assistant Secretary of Defense, and the Chairman of the Munitions Board, dated October 14, 1950. "This memorandum establishes basic contract fina cing policies for the Department of Defense, in Policies with respect to guaranteed loans, !ncL sets UP a Contract Finance Comraittee composed 17 ):_re presentatives of the Assistant Secretary of reuse, the Munitions Board, and the Departments of the A trmy, the Navy, and the Air Force. It will be noted hat, with respect to matters involving eranteed loans, a representative of the Board of 'xoNrernors may be invited to meet with the Committee." Approved unanimously. Letter to the Presidents of all Federal Reserve Banks, l'eading as follows: by "For your information, we have been advised the eneral Services Administration and the DePoEitrtnt G of Interior that those agencies, as a matter 13°11-cY, applications or V-loan will be willing to consider guarantees of loans made for the purpose as financing facilities or plant construction, as well gUarantees of loans for working capital purposes." Approved unanimously. Letter for the signature of the Chairman to Mr. H. J. Heinz II, °hal-11184, United States Council of the International Chamber of C°rre:nerce) Inc., 18 East 41st Street, New York 17, New York, reading at follows: "I wish to thank you for sending me a copy of a '141-u que stionnaire on 'The Future of ECA and °EEO in : ' 81-ming World', which I understand was sent also to 0th lis; -1. members of the Board of Governors of the Federal thselZrZstem and to members of the Senior Staff of A -8"The topic that you have chosen is certainly one Of very great interest to us; and the three premises stated in the introduction to your questionnaire represent e' Position with which we are definitely in accord. I i sure, therefore, that you will understand that the decision indicated below in no way implies any lack Of sYmPathy with your project or any lack of desire to asst in every way possible. 'The difficulty which stands in the way of our Providing formal answers to your questionnaire is that Most of the questions covered are questions which are 2 10W under interdepartmental discussion here in Washing6°11. It is expected that this interdepartmental diseUssion will result in a unified Governmental position Or all the issues involved. Under the circumstances, re reel that it would be improper for us to provide 6ePar”e formal answers to the questions raised. s It goes without saying that if we can be of :hsistance to your project in some other way, we : 3-1 do what we can. In any event, you may be assured, of our continuing interest in your project and in the results it may yield." r Approved unanimously. Memorandum dated November 9/ 1950, from Mr. Evans, recommend.that the -11. -oard's representatives who find it necessary to proceed to the West Coast in connection with resumption of hearings in the elayto, Act Proceeding against Transamerica Corporation, be allowed reito— uursement for travel expenses on the same basis as applied earlier this ye ar When the hearing was being held on the West Coast, i.e., that in addition to the applicable per diem in lieu of subsistence a4a Other allowances authorized by the Board's official travel „ i'LleY be allowed reimbursement for the rental of a small seal 48:1i5hed apartment or suitable hotel room accommodations in eisco as shown by receipted bills. 11115/50 -9Approved unanimously. Memorandum dated November 14, 1950, from Mr. Carpenter, Secret arY of the Board, reading as follows: "In connection with the appointments of Messrs. Charles T. Fisher, Jr., on September 13, 1950, R. J. Saulnier on September 15, 1950, and William A. Clarke O n. October 5, 1950, to assist in the Office of Real Estate Credit, it was provided that they would be compensated at the rate of $50 per day for each day they were away from Detroit, New York, and Philadelphia, ! esPectively, in connection with their assignments. -!-xl the case of the appointment of Ernest M. Fisher on Au gust1950, as consultant to the Division of Research and Statistics in connection with theregulationof real estate credit, it was provided that he be Paid, a fee of $50 a day for each day worked for the Board, and in the appointment of Nicholas Stevens on November 8, 1950, to assist in the Office of Real Estate$i Credit, compensation was to be at the rate of r each day worked for the Board. In all cases f°there also Provision for per diem in lieu of subb and for travel expenses. and.'In the cases of Messrs. C. T. Fisher, Jr., Saulnier, Clarke the references to compensation at the rate ic) icf ) $50 per day for each day they were away from their v ine cities should have read the same as the recommenda:ns for Messrs. E. M. Fisher and Stevens, i.e., 'for Ch day worked for the Board', and the reference to day away from' their home cities was intended to vv-LY to the per diem in lieu of subsistence. ela "This memorandum is submitted for the purpose of ;1'Y-14g the understanding in connection with the 8.13 , 11 ° 11tments of Messrs. C. T. Fisher, Jr., Saulnier, ar ' Clarke in order that appropriate compensation may be for services performed in their home cities , of" „ 111 -LieLroit, Philadelphia, and New York, respectively.' sten:: Approved unanimously. Memorandum dated November 17, 1950, from Mr. Williams, Acting Asist nt a-- Director of the Division of Research and Statistics, 1v15/50 -10- ree°Intlending that the Board approve the subscription to the R. L. P°4 8. 4 Co. statistical reporting service on sales of new passenger tO objl on an experimental basis for a period of two months. The Die morandum stated that approximate cost of the service would be $1,350 Per month or not to exceed $2,700 for the two-month trial Period) and recommended that the appropriate classification in the 1/11dget of -- theli Division of Research and Statistics be increased, —047 to take care of expenses for the trial subscription. Approved unanimously.
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