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1879 A meeting of the Board of Governors of the Federal Reserve SYttela was held in Washington on Wednesday, November 28, 1945, at 10:30 PRESENT: Mr. Eccles, Chairman Mr. Draper Mr. Evans Mr. Carpenter, Secretary Mr. Connell, General Assistant, Office of the Secretary Mr. Thurston, Assistant to the Chairman The action stated with respect to each of the matters heretnafter r eferred to was taken by the Board: Memorandam from Mr. Bethea, Director of the Division of 41414istrat1ve Services, dated November 27, 1945, recommending t114t the basic annual salary of Mr. Karl J. Steger, Guard in that be increased from $1,980 to $2,034 per annum, effective the beginni ng of the next pay roll period on December 2, 1945. Approved unanimously. Pecteral Letter to Mr. Creighton, Federal Reserve Agent at the Reserve Bank of Boston, reading as follows: "In accordance with the request contained in t(3ur letter of November 19, 1945, the Board of Govnrn°rs approves, effective December 1, 1945, the vAaYTent of salary to Mr. John F. Mooney as Alternate ;esistant Federal Reserve Agent at the rate of $4,540 arinum, and supplemental compensation at the same , e e Paid to the employees of the Federal Reserve Bank Boston.ft Approved unanimously. 1880 11128/45 -2Telegram to Mr. Clark, Vice President of the Federal Reserve Bank of Atlanta, reading as follows: "Retel November 24, Board approves designation of C. D. Owens as special assistant examiner for Federal Reserve Bank of Atlanta." Approved unanimously Letter to Er. C. M. Stewart, Secretary of the Federal Reserve Bank of St. Louis, reading as follows: "This is in reply to your two letters of November 19, 1945, advising of the program of postwar salarY adjustments approved by the Board of Directors at itS meeting of November 8. "The Board of Governors authorizes your Bank to exceed adjusted maximum annual salaries under the pere°anel classification plan of your Bank in individual cases by as much as 15% of the first 31000 of annual !alary, provided that the total annual salary, includl f any such excess over the adjusted maximum annual !c"-arY under the personnel classification plan, shall Liot exceed 0,500. "In accordance with the discussion at the recent ed-at meeting of the Board with the Conference of Pres_dents this authorization is granted as a temporary asure to take care of individual cases in the postwar sltuation pending a comprehensive revision of the perel classification plan. t "It is noted that under the authorization contiallned in the Board's letter of October 31, 1945 (S-881), a4 e Program as approved by the directors includes the :1:scontinuance of supplemental compensation as such 7Ifective as of the close of business November 30, 1945, the merger of supplemental compensation with the anlelic salary together with increases in the maximum to ual salaries under the personnel classification plan „Provide for the merger of supplemental compensation --"h basic salary effective December 1, 1945. irice You are correct in your interpretation that, sup under the authorization granted heretofore no cr2lemental compensation can be paid which would in'ase the total of basic salary and supplemental corn- l 7 1881 11/28/45 -3- Pensation beyond the rate of $6,000 per annum, the P!oardts letter S-881 does not authorize any increase in maximum annual salaries under the personnel classification plan beyond $6,000 to provide for the inclusion of supplemental compensation. "The Board of Governors also approves payment of salaries to the following officers for the period vecember 1, 1945, to May 31, 1946, inclusive, at the rates shown which are the rates fixed by your Board of Directors for the purpose of converting supplemental compensation now received into basic salary: Annual Salary Head Office G. 0• Hollocher Assistant Vice President $5,940 Howard H. Weigel Assistant Vice President 5,540 L. K. Arthur Assistant Vice President 4,940 Little Rock Branch Clifford Wood Clay Childers Assistant Manager Assistant Manager $5,240 4,440 Louisville Branch Fred Burton 8 . B. L. Jenks S. Moore Assistant Manager Assistant Manager Assistant Manager $5,340 4,240 3,840 Memphis Branch 8. K. C. E. Belcher Martin H. C. Anderson Assistant Manager Assistant Manager Assistant Manager $5,540 5,340 3,940" Approved unanimously. or 8 Letter to Mr. Wm. A. Day, President of the Federal Reserve all Francisco, reading as follows: "Thank you for your letter of November 151 enclosing a list of the positions under the ' 8' sonn eel classification plan of the Federal Regel Bank of San Francisco and its Branches tot ,-er with maximum annual salaries adjusted to '<lade supplemental compensation heretofore 194C j 1882 11/28/45 -4authorized. "It is noted from your letter that the adjusted maximum annual 'salaries are to become effective January 1, 1946, and the Board's copy of Your personnel classification plan will be changed accordingly as of that date. "It is further noted that, at the next meeting of the Board of Directors, consideration will be given to an equalizing adjustment in the salaries Of officer s receiving less than $6,000 per annum." Approved unanimously. Letter to Mr. R. B. Wiltse, Vice President of the Federai Reserv e Bank of New York, reading as follows: "Reference is made to your letter of November 153 1945, submitting for the consideration of the c ard the proposal of the First Trust & Deposit °mPanY, Syracuse, New York, to acquire the assets assame the deposit liabilities of The First 14.aional Bank and Trust Company of Baldwinsville, -cL-Ldwinsville, New York. "It is understood that the proposed absorption CIO e s not involve the establishment of an additional l'ranch by the First Trust and Deposit Company but Lhat the business acquired will be handled by its , , exl-sting branch in Baldwinsville, and that the pro'fsal has been tentatively approved by the Recon'ruction Finance Corporation. "The Board concurs in your opinion that the 14Posed transaction will not result in a change in ' ols general charact er of the assets nor broadening D the functions exercised by the First Trust and ,,sePosit Company within the meaning of condition of Irership numbered 4 to which it is subject and will tiLsrpose no objection to complet ion of the transacpr°11 as proposed provided prior approval of the apro°Priate State authorities is obtained and counsel Reserve Bank will review and satisfy himself e. p;•0 0 the legality of all steps taken to effect the °Posed absorption." Approved unanimously. 1883 11/28/45 -5Letter to Mr. Wm. A. Day, President of the Federal Reserve of San Francisco, reading as follows: "This refers to your letter of November 21, 1945, with respect to the question whether a person engaged exclusively in certified public accounting is eligible to serve as a Class B director of a Federal Reserve Bank and, if not, whether he would be so qualified if he is serving on the board of directors of one or more manufacturing concerns. "A certified public accountant would appear eng g t it in thesame category as a lawyer or any other ed in a profession and, accordingly, in the absence of facts other than those stated in your letter, it is believed that such a person could not Properly be regarded as actively engaged in 'commerce, grioulture or some other industrial pursuit' within the meaning of section 4 of the Federal Reserve Act. ."The question whether such a person would be e-Ligible to serve as a Class B director by reason of !embership upon the board of directors of one or more ; nufacturing concerns cannot well be determined by "e Board without information as to the nature of the Particular business carried on by such concerns and 'e extent of the in individual's active participation in 84'1'h business. We shall, of course, be glad to consider this question further, if you desire; and, if an opinion , 4 the Board is deemed necessary, we would appreciate : L etatement of all the pertinent facts, together with 'fle views of your Counsel." Approved unanimously. Letter to Honorable William E. Hess, House of Representa"' 17aehington, D. C., reading as follows: s of Nov , is with reference to your communication , elnuer 13, 1945, concerning the Board's Regula" a which relates to consumer credit. "As you know, this regulation is a part of the Gove , to l'u'aetit's anti-inflation program and is designed essen the influence of credit dollars in expanding 1884 4/28/45 —6— the demand for goods in short supply, particularly in the field of consume rs' durable goods. "The Board is responsible for the administration of this regulation, subject in matters of general policy to such directives as may be issued bY the Office of Economic Stabilization or the Office of War Mobilization and Reconversion. There is also a consultative committee consisting of the Secretary of the Treasury, the Federal Loan Administrator, and the Administrator of the Office of Price Administration. "The Board is of the opinion that the regulation should be continued until such time as supply is in better relation with demand. With little or no production during the war of goods with which the regulation is most concerned and with current demand increas ed by a higher level of income, certainly the demand will be far greater than sup• T for some time to come. The offices referred to ]-11 the previou s paragraph are in accord with th ese views. The present circumstances, including .t c1.1.0es recited, seem to the Bon.d to be quite suffitlent to constitute an emergency of the kind con,!mPlated by the act under which Executive Order No. °d43 and Regulat ion Vi were issued. "Modification will be made in the regulation fr ' xn. time to time to meet changes in the underlying le3ituati0n. There will be occasional revisions in the taste mechanism when required to enable credit grantor s ac ! l i deal with new problems. Credit terms will be liberI.C! .z d when production has increased to higher levels. intsuould be emphasized that the regulation will not nr !rfere with the growth of production. High-level 4?uucti0n and employment are essential to the wellholng of the national economy. Their achievement, 42rever, would be serious ly endangered by a postwar '4flat1on and deflation. question has been asked about the applicability °f the"A regulation to small business. It is our opiniu ra that the regulation is applicable to all credit who engage in the kinds of business that are With. has in its scope, regardless of size. Our experience mos, bsen that the regulation is regarded favorably by ' operators of the smaller establishments. the"We appreciate this opportunity to comment on administration of the regulation." Approved unanimously. 1885 "/28/45 -7Letter to Honorable Charles H. Elston, House of Represent- aqves, Washington, D. C., reading as follows: "This is with reference to your letter of November 13, 1945, enclosing a letter from Mr. Y. J. Bachrach, President, Leeds Inc., Cincinnati, Ohio. Mr. Bachrach asks several questions about the Board's Regulation V7 *ich relates to consumer credit. "As you know, this regulation is a part of the Government's anti-inflation program and is designed to lessen the influence of credit dollars in expanding the demand for goods in short supply, particularly in the field of consumers' durable goods. "The Board is responsible for the administration of this regulation, subject in matters of general Policy to such directives as may be issued by the Office of Economic Stabilization or the Office of War Mobilization and Reconversion. There is also a consultative committee consisting of the Secretary of the Treasury, the Federal Loan Administrator, and the Administrator of the Office of Price Administration. "The Board is of the opinion that the regulation is_11°uld be continued until such time as supply is in better relation with demand. With little or no produring the war of goods with which the regula17.°11 is most concerned and with current demand increased y a higher level of income,certainly the demand will be0 far greater than supply for some time to come. The fices referred to in the previous paragraph are in accord with these views. The present circumstances, uding . those recited, seem to the Board to be quite 7 4 -Lficient to constitute an emergency of the kind con.',,A1Plated by the act under which Executive Order No.8843 ' v441. Regulation W were issued. Modification will be made in the regulation from 't.1111e to time to meet changes in the underlying situation. There will be occasional revisions in the basic mechanism pr ut required to enable credit grantors to deal with new ti° 'ems. Credit terms will be liberalized when produchas increased to higher levels. It should be that the regulation will not interfere with the e growth of production. High-level production and employecrit are essential to the well-being of the national enT°111Y. Their achievement, however, would be seriously arlgered by a pdstwar inflation and deflation. V 4 1886 11/28/45 -8- "A question has been asked about the applicability of the regulation to small business. It iS our opinion that the regulation is applicable to all credit grantors who engage in the kinds of blIsiness that are within its scope, regardless of !ize. Our experience has been that the regulation is regarded favorably by most operators of the smaller es tablishments. "We appreciate this opportunity to comment on the administration of the regulation. Mr. Bachrach's letter is returned herewith." Approved unanimously. Letter to Mr. Allan Sproul, President of the Federal Reserve ° New York, reading as follows: "This will acknowledge your letter of November 41 in which you refer to correspondence between the Illaranty Trust Company of New York and Chairman Eccles, Which you were not fully apprised at the time, and -L4,ggest that it would be helpful both to the Board and ie Federal Reserve Banks if correspondents would send eir communications to the Board through the Federal Re: "eserve Bank of the district. "Such a routing of communications, as you know, iS b°th preferred by the Board and generally encouraged. We A . , 10 find, however, that exceptions are bound to occur, Pa when the correspondent feels that he is tfessed by a deadline or happens to set special store Washington contacts of one sort or another. In this particular case certain previous communicatior, on the subject had been sent directly to us because iLl the urgency of time, with the understanding, however, 13„ , a copies were being furnished to the Federal Reserve of New York. It was for this reason that we assumed Glin "' a copy of the letter of October 23, 1945, from the -ralltY Trust Company had been sent to your Bank. The Board feels that exceptional cases when communa 10/"Is are sent directly to the Board should be kept to Res imum, and in such cases we will endeavor to keep the erve Bank promptly and fully informed." Z Approved unanimously. Thereupon the meeting adjourned
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