View original document

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

1630
Minutes of actions taken by the Board of Governors of the
Federal Reserve System on Monday, November

8, 1954. The Board met

in the Board Room at 10:00 a.m.
PRESENT:

Mr.
Mr.
Mr.
Mr.
Mr.

Martin, Chairman
Szymczak
Mills
Robertson
Balderston
Carpenter, Secretary
Sherman, Assistant Secretary
Kenyon, Assistant Secretary
Young, Director, Division of
Research and Statistics
Mr. Johnson, Controller

Mr.
Mr.
Mr.
Mr.

The following matters, which had been circulated among the
members of the Board, were presented for consideration and action taken
as indicated:
Memorandum dated November 3, 1954, from Mr. Marget, Director,
Division of International Finance, recommending that Mr. Katz, Economist
in that Division, be granted permission to serve as an examiner of candidates for certain advanced degrees at The American University. The
memorandum stated that the honorarium attached to this activity was $10
and that the work would be done outside Mr. Katz' working hours at the
Board.
Approved unanimously.
Letter to Mr. Diercks, Vice President, Federal Reserve Bank of
Chicago, reading as follows:
In accordance with the request contained in your letter
of October 26, 1954 the Board approves the designation of
Herbert A. Dolowy as a special assistant examiner for the
Federal Reserve Bank of Chicago. Please advise as to the
date upon which the designation is made effective and as to
salary rate.




Approved unanimously.

1631
11/8/74

-2-

Letter to the Board of Directors, The Plainfield Trust Company,
Plainfield, New Jersey, reading as follows:
Pursuant to your request submitted through the
Federal Reserve Bank of New York, the Board of Governors approves the establishment of a branch by The
Plainfield Trust Company, Plainfield, New Jersey, on
Martine Avenue between South Avenue and La Grande
Avenue in the Borough of Fanwood, New Jersey, provided
the branch is established within nine months from the
date of this letter.
Approved unanimously, for
transmittal through the Federal
Reserve Bank of New York.
Letter to the Board of Directors, Equitable Security Trust
Company, Wilmington, Delaware, reading as follows:
Pursuant to your request submitted through the
Federal Reserve Bank of Philadelphia, the Board of
Governors has reconsidered and now approves the establishment of a branch by Equitable Security Trust Company, Wilmington, Delaware, in the Newark Shopping
Center near East Main and North Chapel Streets, Newark,
Delaware, provided the branch is established within
six months from the date of this letter, and the approval given by the Board of Bank Incorporation of the
State of Delaware with respect to such branch is effective at the time it is established.
Approved unanimously, for
transmittal through the Federal
Reserve Bank of Philadelphia.
Letter to the Comptroller of the Currency, Treasury Department,
Washington, D. C., (Attention: Mr. G. W. Garwood, Deputy Comptroller of
the Currency), reading as follows:
Reference is made to a letter from your office
dated October 13, 1954, enclosing photostatic copies
of an application to convert the Fidelity State Bank
of Austin, Texas, into a national bank and requesting
a recommendation as to whether or not the application
should be approved.




1632
11/8/54

-3-

Information contained in a report of investigation
of the application made by an examiner for the Federal
Reserve Bank of Dallas discloses favorable findings with
respect to the factors usually considered in connection
with such proposals. The Board of Governors, therefore,
recommends approval of the application.
The Board's Division of Examinations will be glad
to discuss any aspects of this case with representatives
of your office, if you so desire.
Approved unanimously.
Memorandum from the Office of the Secretary dated November 2,
1954, recommending that arrangements be authorized for obtaining an
appropriate number of holiday greeting cards for transmittal from the
Board to the heads of foreign central banks, directors of the Federal
Reserve Banks and branches, members of the Federal Advisory Council,
and presidents of the Federal Reserve Banks.
Approved unanimously.
Reference was made to a memorandum from Mr. Young dated October
29, 1954, regarding a proposed arrangement under which a group of outstanding authorities In the field of money and banking would be invited
to come to Washington for several days during 1955 to discuss questions
of monetary policy with the Board and some of the members of the senior
staff.

The memorandum expressed the belief that provision for such a

conference should be made in the 1955 budget of the Division of Research
and Statistics and stated that $3,600 had tentatively been allocated for
consultants' fees, along with $1,000 for travel expenses incurred by the
consultants.

The memorandum also stated that the budget estimate would

allow for time spent by the consultants in work prior to, or subsequent
to, actual participation in whatever conferences might be scheduled.




- 633
1
-4-

11/8/54

In the course of discussion of this proposal, which had been
discussed informally by the Board in general terms at times in the past,
the view was expressed by members of the Board that although any conference of the type referred to admittedly would be in the nature of an
experiment and it was difficult to predict with any degree of accuracy
the benefits which the Board might obtain therefrom, it would be worth
while, particularly in view of the relatively small expenditure involved,
to plan such a meeting in 1955 in order that the Board might test the
value of such a program as an aid in deliberations with regard to questions in the field of credit and monetary policy.
Accordingly, it was agreed
unanimously that provision should
be made in the Board's 1955 budget
for a program along the lines described in Mr. Young's memorandum
of October 29, with the understanding
that the actual scheduling of any
conference, the selection of participants, and the selection of subjects
to be discussed would be matters for
specific Board approval at a later
date.
Mr. Johnson then withdrew from the meeting and Messrs. Vest,
General Counsel, and Marget, Director, Tamagna, Chief, Financial Operations and Policy Section, and Olson, Economist, Division of International
Finance, entered the room.
Reference was made to a telegram of November 4, 1954, from Mr.
Exter, Vice President of the Federal Reserve Bank of New York, which
stated that the Bank's officers had recommended and the Board of Directors




-1634
11/8/54

-5-

had that day authorized, subject to the approval of the Board of Governors,
a short-term loan or loans on gold not to exceed

$4 million in the aggre-

gate to Banco Central de Reserva de El Salvador.

Copies of this telegram

had been sent to the members of the Board prior to this meeting, along
with copies of a memorandum from Mr. Marget dated November

5 which dis-

cussed the situation and recommended approval of the credit by the Board
of Governors and copies of the following proposed telegram to Vice President Exter:
Your wire November 4. Board approves granting of
loan or loans by your Bank to Banco Central de Reserva
de El Salvador not to exceed $4,000,000 on the following terms and conditions:
A. Such loan or loans to be made up to 98
per cent of the value of gold bars set
aside in your vaults under pledge to
you;
B. Such loan or loans to mature in three
months but to be repayable at any time
before maturity;
C. Any such loan or loans to be requested
and made on or before December 6, 1954;
D. Each such loan shall bear interest at
the discount rate of your Bank in effect on the date on which such loan is
made;
E. The amount advanced at any one time and
the amount repaid at any one time to be
in round amounts of $1,000,000.
It is understood that the usual participation will
be offered to the other Federal Reserve Banks.




Following a statement by
Mr. Marget, who summarized conditions in El Salvador which
had created the need for shortterm assistance, unanimous approval was given to a telegram
to Vice President Exter in the
form set forth above.

- .635
1
-6-

11/8/54

Minutes of actions taken by the Board of Governors of the
Federal Reserve System on November

5, 1954, were approved unanimously.

All of the 'members of the staff then withdrew and the Board
went into executive session.




The Secretary subsequently
was informed that in accordance
with the procedure suggested in
a memorandum dated November 2,
1954, from Mr. Sprecher, Assistant
Director, Division of Personnel
Administration, and pursuant to
the recommendation of Governor
Robertson, the Board approved
unanimously during the executive
session the appointment of Alice
Nesbitt as Clerk in the Division
of Personnel Administration, to
serve as Librarian in charge of
the Recreational Library, on a
part-time basis (four hours per
day) and with basic salary at the
rate of $1,475 per annum, effective November 21, 1954; this action
being taken with the understanding
that the position would be bonded
for $1,000 and that the premium
would be paid by the Reserve Board
Club.
The meeting then adjourned.