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1805 :anutes of actions taken b,y the Board of Governors of the Federal Reserve System on Monday, November 20, 1950. in The Board met the Soeci el Library at 2:30 p.m. PRESENT: :Ir. 1:.r. Mr. Mr. Mr. McCabe, Chairman Eccles Evans Vardaman PaJell Carpenter, Secretary T:r. Sherman, Assistant Secretar3, RieCler, Assistant to the Chairman Mr. Leonard, Director, Division of Bank Operations :37. Vest, General Counsel 1:r. Young, Director, Division of Research and Statistics Mr. Noyes, Assistant Administrator, Office of Kcal Estate Credit Arthur Phelan, Vice President of the Federal Reserve 8ank of New York, ,tho is temporarily assistin:, the Board in the °rCanizati "of ibs work on Regulation Aeal _state Credit, Consumer Credit, and Reg— as also present. 2er°re this meeting the Federal Advisor,/ Council submitted araernorandum coverin,7; topics discussed at a separate meeting- of the C°1111cil °fl llavember 19, 1950, ::hich Jere to be revieed Jith the at a joint meeting to be held at 10:30 tomorro:; morning. The %ard considered the topics listed and it Jas agreed that Chairman 40uld state the views of the Board substantially as recorded d-11 the minutes of the joint meeting. * 35YrIlozak joined the meeting during the discussion. Chairraan McCabe stated that in accordance with the under— 1806 1V20/50 -2- stalldinC at the meeting on October 15, 1550, he talked aith Al*I ' lleY General 1:cGrath and Deputy Attorney General Peyton Ford OilFr'iday, November 17, concerning steps that might be taken to devel°P voluntary agreements between financing institutions to restrict e xtensions of credit pursuant to Section 708 of the Defense ?roduction Act of 1 950, at Jhich time it was stated to the Attorney General that the position set forth in his letter of October 19 ia.s such as to influence the counsel of any bank to advise against the bankta participation in any such agreements, that voluntary agreeraents in the finance field 'ere different from the problems in other fields covered by the Defense Production Act, that it was difficult tO see in tho highly competitive field of finance banks and 11(3 iris,urance companies could get together in an effort to create a and that there was a possibility or effective action in field to achieve the objectives of the Act to curtail the use Of credit. Chairman McCabe also said that both the Attorney General alld 11.r. Ford indicated their agreement Ath the approach he outlined ' r1(1 that Llr. L:cGrath stated he could not conceive of any monopolistic e°1111ectiori. The Attorney General suggested, Chairi,A,an HcCabe stated, rai,:;ht that 'be desirable to prepare a mel%orandun covering the objectives of such agreements so that it could be determined 'ahether their features Jould be objectionable to the Department of and that the Board might arrange a meeting of one of the 11/20/50 -3- ''111)8 of bankers at which a representative of the Department of Justice would be present who could assure the bankers that there aas not to be feared by them insofar as the Department was concer fled. Chairman McCabe added that it was understood in their discussion that the Attorney General -gould send the Board a letter O tneraoranchma indir.atinc, that the Department of Justice would have lic°bjection to arranging for a meeting of bankers to discuss a P°ssible liest agreement and that it was suggested by Mr. Ford that Ur. PrePare a draft of such a letter. r. Vest stated that he had prepared such a draft and at Cha irtlaal TT -cCabe's request he described its content. Following a discussion, Mr. Vest was authorized to submit a draft of the proposed letter to Deputy Attorney General Ford for such use as he might wish to make of it. Secretary's Note: Mr. Vest reported to the Secretary that on NoveMber 21 he handed Mr. Ford a draft of letter which the Attorney General might send to Chairman McCabe reading as follows: re "I. ish to confirm our conversation of last Friday ing•arda% - meetings and discussions which might be held DefearrYing out the objectives of section 708 of the a„ense Production Act of 1950 with respect to voluntary e:geements betaeen financing institutions to restrict ensi°ns of credit. Ge, °Under date of October 19, 1950, Deputy Attorney paun'al Ford addressed a letter to you regarding the ofr!'lolpation by members of industry in the activities Industry advisory committees. It was not the pur-., Pose of that letter, however, to affect, or to prescribe 1. SOS 11/20/50 0 arW requirements concerning, meetings or consultations vdlich might be held among representatives banks, insurance companies, or other financing institutions with a vier to the !. rorking out of vol„ 1,,111tarY agreements under section 708 of the Defense 1-roduction Act. agree with you that it is desirable under _"e inflationary conditions now existing to assist dnd e ncourage in every way possible the making of volagree s among financing institutions which would : lu in checking any expansion of credit that is not :ssential in connection Jith the defense effort. The -,,1,/,,Ictions conferred upon the President by section u61(a) and 708(b) of the Act were delegated by the Gr , esidentis Executive Order No. 10161 to the Board of C overnors of the Federal Reserve System Jith respect car ancing, and I understand that you feel that, in eoltict ) the purposes of section 708, it would be have meetings from time to time and in inl: sferent localities among representatives of banks, stilrance companies, or possibly other financing inmentuti°ns, to consider what types of voluntary agreethe and programs might be worked out pursuant to msnt;:w and to prepare initial drafts of such agree.°I agree with you as to the desirability of such roeta-ngs and I understand from our conversation that re1 , 1 'all take steps to arrange for such a meeting among invr,esentatives of financing institutions, to be held wel e-4 York or other appropriate place. It might be Of 1.-1,at such a meeting to draw up a genei'al statement reCi!? objectives of the proposed voluntary agreements ou :ulng to financing, in order that your office and wh%'7 be informed of the nature of the agreements wo-'" would be later submitted for approval. If you ofuld like, je will be glad to have a representative ordthe Department of Justice attend the meeting in LO er be of any assistance he can in this connection. Pleas let us know the time and place of the meeting ij A aould like to have our representative present. ajlmilar arrangement might be followed with respect to Qsequent meetings, if desired. assj,:Please be assured that we wish to be of maximum ' - ance in cooperating in accomplishing the objectil,: Of the law I Srtg 11/2o/50 -5At this point all of the members of the staff Ath the excePtion of Messrs. Carpenter and Sherman withdrevr, and the action stated ' cith respect to each of the matters hereinafter referred to :en by the Board: '4as tal' Idinutes of actions taken by the Board of Governors of the Fderal Reserve Terle System on November 17, 1950, dere approved unanimously. randum dated November 7, 1950, from Lir. Yount-, Director Of the ision of Research and Stntistics, recorimandin the apointDoris Plass .arncr as an economist in that Division, aitli basic salary at the rate of 05,400 per annum, effective as of the date upon Which she enters upon the performance of her duties ter havina Passed the usual physical examination. raert of Approved unanimously. ,r.emorandum dated November 17, 1950, from Mr. Bethea, Dime°1-' the Division of Administrative Services, recommendinE; the aPPointrzent of Alliam Russell Smith as a laburer in that Division tempo a-u;J basis for a period of tNo months, Nith basic salary at the ra.e t 01 %2,120 per annum, effective as of the date upon :fhich he ento,s tor r the , passed 11.P°n the performance of his duties after havinE, US] physic , :::tion, and subject to a satisfactory in: : : : fe el ra Approved unanimously. j'ellorandura dated November 16, 1950, from Lr. 3ethea, Arco,Of t' 1-3,visi0n of Administrative Services, recommending that I8 0 -6the resignation of rs. Mary E. Maloney, a page in that Division, be accepted to be effective, in accordance with her request, at the Close of business December 1, 1950. Approved unanimously. i,Lemorandum dated November 16, 1950, from Yr. Young, Director of the Division of Research and Statistics, recommending that the t411)()rarY indefinite appointment of ass Reba Driver, a clerI in that Division, be extended on a permanent basis, effective November 2°, 1950, rith no change in her present basic salary at the rate c)f ;$2,730 per annum. Approved 'inanimously. rlemorandum dated November 10, 1950, from 1.:r. Vest, General Collrisel, re commending a change in title from Assistant Counsel to Assistant General Counsel, and an increase in basic salary from 49,400 to 10,500 per annum, for Hoxard H. Hackley, effective ?e1)1"Ilary 1, 1951. Approved unanimously. Illemorandum dated November 10, 1950, from 1.:r. Vest, General „eel 3 th ° roll reCOMZendin7 increases in the basic annual salaries of . employees in the Legal Division, effective November 263 ''r 1950: Naj e ecleriC'Solomon 4/'01Tie 1.V. Shay Title Assistant General Counsel Assistant Counsel Salary Increase To From *11,000 7,800 $11,500 8,400 11/20/50 -7Approved unanimously. Memorandum dated November 10, 1950, from 1:r. Vest, General C°114sell recommending a change in title from Law Clerk to Assistant Counsel, and an increase in basic salary from al600 to 14;5,000 Per annaml for gilliam H. Tinsley, effective November 26, 1950. Approved unanimously. Memorandum dated November 10, 1950, from Mr. Vest, General C°11113e1) recommending the appointment of gaiter H. Young, as hsistant Counsel in the Legal Division, with basic salary at the rate o8,80Q per ann "Iers %al 1 effective as of the date upon which he upon the performance of his duties after having passed the physical examination. Approved unanimously. eollnzei Memorandum dated November 15, 1950, from Mr. Vest, General recommending an increase in the basic salary of Alfred K. Cherrv . Pissistant Counsel in the Legal Division, from 49,400 to 9,8o° Per annum, effective November 26, 1950. Approved unanimously. Memorandum dated November 10, 1950, from Mr. Vest, General OK)Iltsel, recommending that the following appointments be authorized: (1) (2) That the appointment of an additional stenographer in the Legal Division be made as soon as a properly l c uallfied one can be found, to be placed in Group / with a salary range of 42,650-0,130. 111.at the appointment of a Clerk in the Legal Division to assist in the work on our legal files be 812 11/20/so -8made as soon as a properly qualified person can be obtained, and to be placed in Group I, with a salary range of !;2,650-$3,130. Approved unanimously. Memorandum dated November 16, 1_950, from Mr. Evans, recclilillendirlg that in connection with Mr. Gregory O'Keefe's trip to the paci _ c 1-1 Coast in connection with resumption of the hearings in the Board Is Clayton Act proceeding against Transamerica Corporation, the Present per diem in lieu of subsistence of 4l4 which Mr. O'Keefe been receiving while on assignment in Washington be continued le he is away from ':iashington on official business of the Board, arid that he be allowed reimbursement for other travel costs on the basis of ar ra-ugements authorized by the Board's official travel Ofl Alrnished bY Plus reimbursement for the rental of a small, modest, apartment or suitable hotel-room accommodations as shown n.4 bills) while on the West Coast. Approved unanimously. ' Letter to Dr. E. A. Goldenaeiser, 30 North Stanworth Drive, rrleeto n3 New Jersey, reading as follows: "This letter is in confirmation of Leonard aes snd ts conversation with you regarding your .,s-uance in connection with the Board's proceed'4g against Transamerica. it i Xhen the hearing reconvenes in San Francisco, 80142 "Pected that you will take the stand to pm rebuttal testimony, and that you will spend some : all with Mr. Townsend preparing for such testimony, Q1,0 P°ssibly also advising him in connection with the thes8-examination of any additional economists which respondent may call. 1,813 11/20/50 -9- has approved an arran"Accordingly, the Board gement similar to that which was in effect in c°nnection with your previous appearance on the stand, under which you will be compensated at the rate 050.00 per day of your employment for the PurPoses of the Clayton Act proceeding, as outlined ab"e, and you will be allowed your necessary transp?rtatio n expenses and a per diem in lieu of subsistence of 91.00 in accordance with the Board's /jficial travel regulations applicable to heads of i°ns, together with such supplemental alloaance fl other expenses as may be approved by the available embrsl of the Personnel Committee. tio "Again, we wish to express to you our appreciam n for your willingness to continue to help in this atter." Approved unanimously.
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