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1514 A meeting of the Board of Governors of the Federal Reserve System was held in Washington on Saturday, October 16, 1943, at 11:00 a.m. PRESENT: Mr. Mr. Mr. Mr. Eccles, Chairman McKee Draper Evans Mr. Mr. Mr. Mr. Morrill, Secretary Bethea, Assistant Secretary Carpenter, Assistant Secretary Clayton, Assistant to the Chairman The action stated with respect to each of the matters hereinafter referred to was taken by the Board: The minutes of the meeting of the Board of Governors of the Federal Reserve System held on October 15, 1943, were approved unanimously. Memorandum dated October 7, 1943, from Mr. Morrill, recommending that the following increases in basic annual salaries of stenographers in the Secretary's Office be approved, effective October 16, 1943: Salary Increase From To Name Mary Louise Oddsson Frances B. Florence Helen G. Conley Dorothy J. Horning $1,680 1,740 1,740 1,560 $1,800 1,800 1,800 1,680 Approved unanimously. Memoranda dated October 5 and October 7, 1943, from Mr. Goldenweiser, Director of the Division of Research and Statistics, 1515 10/16/43 -2- recommending that the following increases in basic annual salaries of employees in that Division be approved, effective October 16, 1943: Salary Increase _Ig_ From Designation Name M. Margaret Hough Lillian H. Schiller !1,920 1,620 Clerk-stenographer Stenographer $2,040 1,740 Approved unanimously. Memorandum dated October 12, 1943, from Mr. Smead, Chief of the Division of Bank Operations, recommending that the following increases in basic annual salaries of stenographers in that Division be approved: Salary Increase From Name Margaret C. Griset Dorothy Werner $1,740 1,740 $1,800 1,860 Approved unanimously, effective October 16, 1943 Memorandum dated October 11, 1943, from Mr. Dreibelbis, General Attorney, recommending that the basic salary of Miss Jean Crosby, a stenographer in the Legal Division, be increased from 41,800 to 41,920 Per annum. Approved unanimously, effective October 16, 1943. Memorandum dated October 13, 1943, from Mr. Parry, Chief of the Division of Security Loans, recommending that the basic salary of Miss Ruth L. Dehn, a stenographer in that Division, be increased from $1,800 to 1,920 per annum, effective October 16, 1943. Approved unanimously. 151G 10/16/43 -3- Letter to Mr. Williams, President of the Federal Reserve Bank of Philadelphia, reading as follows: "This refers to your letter of August 24, 1943 and subsequent correspondence with respect to the proposal of your Bank for changes in the basis for paying overtime and particularly the proposal to change from a plan based on a fluctuating or variable work-week to a plan based on a fixed work-week. "The Board offers no objection to the plan as set forth in your letter of August 24 provided that appropriate approval for the change from a fluctuating to a fixed work-week is obtained from the regional office of the National War Labor Board. However, a question is raised as to whether the proposal in paragraph number 1 of your letter to pay to employees not classified as 'administrative, executive or professional' overtime on the first $2,400 of annual compensation will conform to the standards of the Fair Labor Standards Act. It is assumed, however, that any plan adopted by your Bank in this respect will conform to the standards of such Act and in this connection it is suggested that you consult with your counsel in the matter. "We have taken up informally with the National Lar Labor Board the question raised by Mr. Hilkert as to whether your Bank might seek the approval of the regional office of the National War Labor Board of the proposed plan to change from a fluctuating work-week to a fixed work-week basis rather than follow the certification procedure contained in General Order No. 19 of the National War Labor Board as stated in our letter of September 21. We are advised that since this matter presents questions not ordinarily contemplated by the procedure for the adjustment of salaries, and also because of the local situation regarding the payment of overtime by the large Philadelphia banks, there is no objection to your taking the matter up with the regional office of the National Itvar Labor Board and being governed by any decision it reaches in the matter. "In accordance with the request contained in the last paragraph of your letter of August 24, you are authorized to pay supper money to guards and building employees who are required to work overtime, thereby placing them on the same basis as other employees." Approved unanimously. 1517 10/16/43 -4- Letter to the board of directors of the "Northport Trust Company", Northport, New York, stating that, subject to conditions of membership numbered 1 to 6 contained in the Board's Regulation H, the Board approves the bank's application for membership in the Federal Reserve System and for the appropriate amount of stock in the Federal Reserve Bank of New York. Approved unanimously, together with a letter to Mr. Sproul, President of the Federal Reserve Bank of New York, reading as follows: "The Board of Governors of the Federal Reserve Sysapproves the application of the 'Northport Trust Comtem pany', Northport, New York, for membership in the Federal Reserve System, subject to the conditions prescribed in the enclosed letter which you are requested to forward to the Board of Directors of the institution. Two copies of such letter are also enclosed, one of which is for your files and the other of which you are requested to forward to the Superintendent of Banks for the State of New York, for his information. "Standard condition of membership numbered 6 has been prescribed in order that its provisions may be invoked at any time in the future if necessary, but as in other cases and in accordance with the general authorization previously granted by the Board, you are authorized to waive compliance with the condition until further notice in so far as the condition applies to funds which are given statutory preference in the State of New York." Letter to Mr. Diercks, Assistant Vice President of the Federal Reserve Bank of Chicago, reading as follows: "This refers to your letter of September 20, 1943, enclosing a letter addressed to you by Mr. Bennett, Secretary and Treasurer of Wisconsin Bankshares Corporation, requesting a ruling with respect to the reserve of readily 1518 10/16/43 —5— "marketable assets required of holding company affiliates under the provisions of section 5144 of the Revised Statutes of the United States. "As you know, section 5144 provides that the reserve of readily marketable assets may be used by the holding company for replacement of capital in banks affiliated with it and for losses incurred in such banks. On the other hand, securities deposited by the holding company with the State Treasurer, as required by section 221.56(3) of the Wisconsin statutes, are apparently held by the State authorities solely for the purpose of satisfying assessments on the stocks of noninsured banks or trust companies held, owned, or controlled by the holding company, when such assessments are ordered by the Banking Commission. "After carefully considering the apparent intent and purpose of these two statutes, the Board has reached the conclusion that the securities deposited with the State Treasurer are not held for substantially the same purpose as the reserve of readily marketable assets. The Board's reasoning is as follows: (1) The State statute contemplates the use of the securities only after the banking authorities have ordered a stock assessment, whereas the Federal statute authorizes the use of the reserve at any time to replace capital or make up losses; (2) The State statute contemplates action only by the banking authorities to order the use of the securities, whereas the Federal statute authorizes the holding company itself to use the reserve; and (3) The State statute contemplates the use of the securities only to satisfy stock assessments on noninsured banks or trust companies, whereas the Federal statute authorizes the use of all or any part of the reserve to assist any bank affiliated with the holding company. "Therefore, the Board is of the opinion that securities pledged by Wisconsin Bankshares Corporation with the State Treasurer may not be considered as part of the reserve of readily marketable assets required to be maintained by section 5144. "In this connection, the Board requests in future cases when an interpretation of the law is necessary, that an opinion of the Reserve Bank's Counsel be obtained 1519 10/16/43 -6- "before the matter is submitted to the Board for determination as he is more familiar with the local situation and the manner in which the State statutes have been interpreted by the courts or administrative authorities." Approved unanimously. Thereupon the meeting adjourned. Secretary. Approved: Chairman.
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