The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
1774 A meeting of the Board of Governors of the Federal Reserve stem was held in Washington on Thursday, November 8, 1945, at 10:30 PRESENT: Mr. Mr. Mr. Mr. Mr. Eccles, Chairman Szymezak McKee Draper Evans Mr. Hammond, Assistant Secretary Mr. Connell, General Assistant, Office of the Secretary Mr. Morrill, Special Adviser Mr. Thurston, Assistant to the Chairman The action stated with respect to each of the matters herein— after referred to was taken by the Board: The minutes of the meeting of the Board of Governors of the Pederal Reserve System held on November 7, 1945, were approved unani— kolisky. Letter to Mr. Sproul, President of the Federal Reserve Bank of New York, reading as follows: "In connection with the agreed procedure to be fol— With respect to foreign missions, it was stated in th:dBoard's letter of June 1, 1945, that the informal staff er°uP referred to in the letter would be under the chair— rnanship of Mr. Thomas. "Recently Mr. Burke Knapp, formerly of the Board's plvieion of Research and Statistics, returned to the em— or of the Board as Special Assistant to the Chairman to orK on matters arising in connection with the Chairman's uel oithership on the National Advisory Council on International Wary and Financial Problems created by the Bretton Agreements Act. It has been suggested that, because Of the other demands made on Mr. Thomas' time, he be re— beeved as chairman of the staff group and that Mr. Knapp asked to serve as chairman in his stead. The Board lov 1775 -2"of Governors approves this change, and it will be appreciated if you will advise if it is agreeable to you." Approved unanimously. Letter to Mr. Meyer, Assistant Cashier of the Federal Reserve 884* of Chicago, reading as follows: "The Board of Governors approves the change in the Personnel Classification Plan of the Federal Reserve Bank of Chicago, involving an increase in the maximum annual salary for the position of Janitor in the Cafeteria Department, as submitted with your letter of October 31, Approved unanimously. Letter to the board of directors of the "First Trust and Sav14g8 Bank,u Galva, Iowa, stating that, subject to conditions of member- al443 numbered 1 to 6 contained in the Board's Regulation HI the Board approves the bank's application for membership in the Federal Reserve and for the appropriate amount of stock in the Federal Reserve 134* '‘ of Chicago. The letter also contained the following special comillent: "The Board is prescribing the conditions of member"-LP ordinarily prescribed for banks exercising fiduciary ! ) 1°17ers when they are admitted to membership, and it will 1°.!: be necessary under condition of membership numbered o obtain the permission of the Board before exercising : sell powers. It will be expected, of course, that when ' t ell business is undertaken, your bank will be equipped 0 handle it in a proper manner." Approved unanimously, for transmission through the Federal Reserve Bank of Chicago. 1776 11/8/45 —3— Letter to the Presidents of all the Federal Reserve Banks read- ing as follows: "During the period between the enactment of the Banking Act of 1935 and the beginning of World War II, When member bank reserve balances were growing rapidly, there was a good deal of discussion at the Board's ofandf in other quarters of the desirability of mak'rig some changes in the statutory member bank reserve requirements. The discussions at that time were concerned principally with possible ways and means of absorbing or controlling the tremendous volume of excess reserves resulting from the inflow of gold. Consideratlon was also given, however, to the possibility of workirlg out a more rational and realistic basis for differentials in reserve requirements--perhaps without regard to the location of banks in central reserve cities, reserve cities, and nonreserve cities. 'While member banks now hold only a relatively smPll v0111me of excess reserves and the reserve problem is con!!quently somewhat different than it was a few years ago, e fundamental inequities in the method of determining quired reserves probably are as much in need of correc:°n now as they ever were in the past. This was brought ' tail when the August 1, 1945 amendment to Regulation D and e termination of the reserve city designation of Savannah :?re under consideration, and the Board came to the conclu17:0n that this might be an appropriate time to study the Whole question of reserve requirements. In this connection,rm the Board's Division of Bank Operations has submitted ' rnemorandum containing tentative proposals for changing reserve requirements by eliminating the distinction between in• ntral reserve, reserve, and nonreserve cities, establishrequirement on interbank deposits than on • of er demand deposits, and including vault cash as part Go the legal reserve. Pursuant to the statement made by covernor McKee at the recent Presidents' Conference, three " at . of the memorandum outlining these proposals and of n ftrandum by the Division of Research and Statistics Onhmn'It1LIng thereon are sent you herewith. the 1, The Board will appreciate it if you will let it have benefit of your comments on the proposals and of any w• ;''r suggestions or proposals which may have been deat your Bank for improving the method of determining r j 1777 4/8/45 -4- required reserves. It may be that an entirely different aPproach to the reserve problem would be more effective fram an equitable and credit standpoint. It has been suggested that, after the comments of the Reserve Banks have been summarized, copies of the summary should be furnished to the Board and the Reserve Banks and that consideration might later be given to the desirability of referring the matter to a System Committee for the purpose of making a thorough study of the subject and preparing definite proposals for legislation. • 'You will recall that at the last meeting of the Press with the Board the question was raised whether there enould be any discussion of this matter with member banks and it was the general opinion that, inasmuch as the study was merely in a preliminary stage, it should not be taken 1110 with the member banks or other parties at this time. •ccordg1y it will be appreciated if, for the time bel ling' you will see that this letter and its enclosures are hey 'in confidence by the executive officers of your Bank their assistants and not discussed with representa17es of member or nonmember banks." r Approved unanimously. Letter to the Presidents of all the Federal Reserve Banks reading as follows: h. "Enclosed for your information are two copies of a orandum which the Securities & Exchange Commission 04 , ' -l ed on October 16, 1945, in the United States District Ir,;4.1rt for the Northern District of Ohio, in connection !4-th.the Commission's application for an injunction based Qn v lolations of Regulation T." M Approved unanimously. Letter to the Presidents of R.J1 the Federal Reserve Banks readthe frol w4.-LOWS: "Referring to the Board's letter of September 13, with regard to a further broadening of the delega°n of authority by the Navy Department to the Federal 194 i78 11/8/45 -5- "Reserve Banks in connection with Regulation V loans, there are enclosed herewith for your information and guidance two memoranda signed by George W. Cook, Jr., Commander, USNR, Chief of the Finance Division of the Navy Department, one relating to further delegation of authority with respect to outstanding V-loans and the Other with respect to T-loans." Approved unanimously. Thereupon the meeting adjourned. Assistant Secretary. Chairman.
@FedFRASER