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2172 A meeting of the Board of Governors of the Federal Reserve Systern was held in Viashington on Monday, November 16, 1942, at 10:45 a.m. PRESENT: Mr. Eccles, Chairman Ur. Ransom, Vice Chairman Mr. Szymczak Mr. McKee Mr. Draper Mr. Evans Mr. Morrill, Secretary Ur. Bethea, Assistant Secretary Mr. Carpenter, Assistant Secretary The action stated with respect to each of the matters herein- after referred to was taken by the Board: The minutes of the meetings of the Board of Governors of the Federal Reserve System held on November 14, 19420 were approved unaniniousiy. Memorandum dated November 13, 1942, from Mr. Goldenweiser, Diof the Division of Research and Statistics, recommending that Lopm— C. Trueblood be appointed as a junior economist in that Division, th salary at the rate of $3,000 per annum, effective as of the date 'Pori which he enters upon the performance of his duties after having Passed satisfactorily the usual physical examination. Approved unanimously. Memorandum dated November 6, 1942, from Mr. Morrill, recommend(1) that, effective November 16, 1942, the temporary appointment of Alden J. Kieffer, apprentice operating engineer in the Secretary's Office, be made permanent, with no change in his present salary at the l'ate of $1,740 per annum, and (2) that, effective November 15, 1942, 2173 11/16/42 the -2- temporary appointment of J. Frank Bell, a chauffeur in the Secre- taqls Office, be extended for an indefinite period on a temporary basis, with no change in his present salary at the rate of $1,380 per annum. Approved unanimously. Memorandum dated November 11, 1942, from Mr. Paulger, Chief Of the Division of Examinations, recommending that the salary of John R. Radford, Jr., a Federal Reserve Examiner, be increased from. $4,600 tO OUU per annum, effective November 16, 1942. Approved unanimously. Memoranda dated November 13, 1942, from. Mr. Morrill, recommendthat Walter L. Peregory, operator (duplicating devices), and Thomas 14* 81ackley, telegraph operator, in the Secretary's Office, be granted leelies of absence without pay beginning November 2 and 16, 1942, re6Pectively, so that they might enter active duty with the United States 47 ' 41-Reserve, and that they be granted the benefits provided in the Pc)licY adopted by the Board on November 14, 1940, and amended August 20, 1941, for all employees entering military service. Approved unanimously. Letter to Mr. Rounds, First Vice President of the Federal Reserve telik of New York, reading as follows: "In accordance with your request the Board of Governors approves the changes in the personnel classification plan of ttie Federal Reserve Bank of New York, as submitted with your letter of October 22, 1942." Approved unanimously. 2174 11/16/42 _3_ Letter to Ur. Rounds, First Vice President of the Federal Reserve Bank of New York, reading as follows: 'This refers to your letter of November 9, 1942 relating to the payment of supplemental compensation at your Bank. "In the light of your statementthatthe arrangement for suPplemental compensation was formally announced to your staff on September 18, 1942, your assumption seems to be correct that your Bank may continue to pay such supplemental Compensation as heretofore. This is in line with the information contained in our telegram of November 6." Approved unanimously. Letter to Mr. McCabe, Chairman of the Federal Reserve Bank of Plliladelphia, reading as follows: "At the completion of the examination of the Federal Reserve Bank of Philadelphia, made as of September 11, 1942, by the Board's examiners, a copy of the report of examinatIon was left for your information and that of the directors. A copy was also furnished President Williams. "The Board will appreciate advice that the report has been considered by the Board of Directors. Any comments You may care to offer regarding discussions with respect to the examination or as to action taken or to be taken as a result of the examination will also be appreciated." Approved unanimously. Letter to Mr. Young, President of the Federal Reserve Bank of tLioago, reading as follows: "This refers to your letter of November 4 to Chairman Eccles, enclosing a copy of a draft of a letter which you Propose to send to approximately 100 banks in the Seventh Federal Reserve District, suggesting that they qualify as war loan' depositaries. "In addition to what is said in the draft of your letter you might point out that the use of war loan accounts simplifies the procedure of making subscriptions to new Government issues and makes it unnecessary for a bank to 2175 11/16/42 -4- "provide immediately available funds at the time that subscriptions are allotted, that the proceeds of subscriptions by the bank's customers can be retained on deposit at the bank until called by the Treasury., and that the required collateral against war loan deposits may consist of the securities for which subscription is being made by the bank on its own account. "You may wish to omit the reference to banks outside New York and Chicago, contained in the first paragraph, since it might create the impression that such banks are not doing their part in war financing. The first sentence Of the third paragraph might also be omitted since, under the present practice, the Treasury withdraws a percentage of its aggregate credit balance from all issues. "It is understood that the Treasury expects to send a letter to all Federal Reserve Banks presently on this subject. Accordingly, it is suggested that your proposed letter be deferred until you hear from the Treasury." Approved unanimously. Letter to Honorable John Edgar Hoover, Director of the Federal au of Investigation, Department of Justice, reading as follows: "This refers to your letter of October 10, 1942 (which reached the Board on October 23, 1942) addressed to the Board's Chairman and requesting advice regarding investigative activities of the Board. "Under the responsibilities placed upon it, the principal investigative activities of the Board involve examination of State banks which are members of the Federal Reserve System and their affiliates and holding company affiliates, and lenders not otherwise supervised and vendors subject to the Board's Regulation W relating to consumer credit. Expminers or investigators who perform such investigative functions are appointed under the direction of the Board of Governors by the 12 Federal Reserve Banks located in various parts of the United States, and they operate out of the head offices or branches of the Federal Reserve Banks. Pursuant to your request, there is enclosed a list giving the location of the head offices of the 12 Pederal Reserve Banks, together with the location of each Of their branches. The Board, through examiners operating out of the Board's offices in Washington, periodically examines the Federal Reserve Banks and foreign banking corporations which are chartered by the Board or operate subject to agreements with the Board. 2176 "In addition to the examinations above referred to, it should be mentioned that the Board has certain legal authority to examine national banks, nonmember banks subject to its Regulation W, and brokers and nonmember banks subject to the Board's Regulations T and U issued pursuant to the Securities Exchange Act of 1934. However, through cooperation With the Securities and Exchange Commission and bank super7180rY agencies, the necessary examination of these institutions for the Board's purposes is made by the approPriate agencies rather than by examiners appointed under the Ilirection of the Board. lithile it is not entirely clear that it comes within the scope of your inquiry, it may also be mentioned that representatives of the Federal Reserve Banks have occasion from time to time to make investigations in connection with extensions of credit. "I trust that this will give you the information you desire but if there is any further information we should furnish you please let us know. You may be assured of the full cooperation with your office of the Board and the Federal Reserve Banks in this matter, and if you should receive from other sources any information which you believe will be of interest to the Board or the Federal Reserve Banks we shall be glad to be advised of it." Approved unanimously. Thereupon the meeting adjourned. 6gAt,tio Chairman. Secret
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