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1600 A meeting of the Board of Governors of the Federal Reserve S:Memwas held in Washington on Friday, October 20, 1944, at 3:00 PRESENT: Mr. Mr. Mr. Mr. Mr. Ransom, Vice Chairman Szymczak McKee Draper Evans Mr. Morrill, Secretary Mr. Bethea, Assistant Secretary Mr. Clayton, Assistant to the Chairman Mr. Paulger, Director, Division of Examinations Mr. Dreibelbis, General Attorney Mr. Vest, Assistant General Attorney Mr. Wyatt, General Counsel Messrs. Cagle and Pollard, Assistant Directors, Division of Examinations Mr. Dreibelbis, who had returned to Washington this morning traol the Vest Coast, reported in Some detail on the proceedings, October 9-10, 1944, before Judge Michael J. Roche in the District Court c)f the United States, Northern District of California, Southern DiviSan Francisco, California, in connection with the suit brought bY the Peoples Bank, Lakewood Village, California, against the Federal Reserve Bank of San Francisco, the Board of Governors of the Federal Reserve SYstem, and Henry F. Grady, Federal Reserve Agent. Mr. Dreibelb. le also advised the Board concerning the present status of the litigation. Following Mr. Dreibelbis' report, Messrs. Paulger, Cagle, and --rcl withdrew from the meeting and Mr. Goldenweiser, Director of 1601 10/20/44 -2- the ni,4 30 of Research and Statistics, and Mr. Hammond, Chief, Cor- reePondence and Publications Section of the Secretary's Office, entered. Mr. Morrill referred to the letter of September 12 from Eduardo 11asenor, Director General of the Banco de Mexico, to Mr. Hammond e°ntaining a suggestion that closer relations be developed among the tec hn.Lcal staffs, particularly the economists, of neighboring central bank 8* dated He said that subsequently Mr. Hammond had prepared a memorandum October 9, which had been circulated among the members of the Board Prior to this meeting, commenting in some detail on the proposed Plan for h -emisphere central bank conferences, and that, since Mr. Szymczak would be going out of town at the end of this week, the Board might wietto consider at this time what disposition should be made of the matter. Mr. Hammond then made a statement which in substance was the sa-me as thatcontained in his memoranda of September 29 and October 9, c°Pies of which are in the Board's files. McKee recalled that Mr. Villasenor was one of the proposed " 11 directors Inversiones Latinas, S. A., a corporation organized a year or two ago "- under the laws of the Republic of Mexico in which the Chase Balik2 an Edge Act Corporation and a subsidiary of the Chase National 411k of New York, proposed to purchase stock with the consent of the Board ' He said that when the matter was considered by the Board in 1_602 10/20/44 -3- "T141943 Chairman Eccles had taken it up with Mr. Berle, Assistant Secretary of State, and that subsequently the Board took the position t it would not favor the proposed purchase. Mr. McKee thought that 111 view of Mr. Villasenor's connection with the formation of this Private investment company, which was sponsored by certain American and Mexican interests, primarily Kuhn, Loeb & Company and the Banco ilaci°nal de Mexico, it would be all the more desirable to consult the State Department before taking action with regard to the proposal now tinder onsideration. A discussion ensued during which Mr. Goldenweiser stated that, While he had not had any conversations with representatives of the Central Dank of Mexico relating to this subject, on the basis of information available to him he would favor the proposed central bank e°11ferences. Mr. Morrill suggested that the Board might take a favorable P°sition at , uhis time, subject to consultation and clearance with the 8tat' e -ePartment. Upon motion by Mr. Szymczak, the members of the Board agreed that it would be desirable to cooperate in carrying out the suggestion from the Banco de Mexico, if it should be found that the State Department saw no reason for objection. It was further understood that the matter would be handled under the direction of Mr. Evans. At this point Messrs. Goldenweiser, Dreibelbis, Vest, 'Wyatt, 1603 -4kid Hammond withdrew from the meeting, and the action stated with respect to each of the matters hereinafter referred to was then taken IDY the Board: The minutes of the meeting of the Board of Governors of the Federal Reserve System held on October 19, 1944, were approved unani1114% Telegrams to Messrs. Treiber and McCreedy, Secretaries of the Federal Reserve Banks of New York and Philadelphia, respectively, and 14eesrs. Dillard and Earhart, Vice Presidents of the Federal Reserve Banks of Chicago and San Francisco, respectively, stating that the 13°ard approves the establishment without change by the Federal Reserve 4flk of R -an Francisco on October 17 and by the Federal Reserve Banks of New York, Philadelphia, Chicago, and San Francisco on October 19, 191.1 Of the rates of discount and purchase in their existing schedules. Approved unanimously. Telegram to Mr. Clouse, Secretary of the Federal Reserve Bank Of Cleveland, stating that the Board approves the establishment by the Fede„, --"4- Reserve Bank of Cleveland, effective October 20, 1 944, of a Ittaxinatim emmitment rate on loans under section 13b of the Federal Reserve A et guaranteed under Regulation V of 1/4 per cent per annum, based on the average daily unused balance of the maximum principal e°°11tit of the loan, or in the alternative a flat fee of not to exceed 450; and that, otherwise, the Board approves the establishment without 1604 10/20/44 —5- change by the Federal Reserve Bank of Cleveland on October 19, 1944, of the rates of discount and purchase in its existing schedule. Approved unanimously. Memorandum dated October 18, 1944) from Mr. Morrill recommending that Mrs. Elizabeth D. Adams be appointed as an elevator operator the Secretary's Office on a temporary basis for an indefinite period, with basic salary at the rate of $1,200 per annum, effective as of the date upon which she enters upon the performance of her duties after hayrig Passed satisfactorily the usual physical examination, with the understanding that if anything derogatory develops in the investigation of her references her services may be terminated immediately. The memcl ' alidum stated that Mrs. Adams had been a member of the Civil Service l'etirement system and that it was assumed she would continue her membership in that system. Approved unanimously. Memorandum dated October 17, 1944, from Mr. Goldenweiser, Director of the Division of Research and Statistics, recommending that Miss 11)-,,* J-lscilla Deane Nettz be appointed as a clerk in that Division °n a temporary basis for an indefinite period, with basic salary at the rate of $1,680 per annum, effective as of the date upon which she erlters upon the performance of her duties after having passed satisil.t4etcrv -the usual physical examination and subject to a satisfactory Check of her references. Approved unanimously. 1605 -6Memorandum dated October 18, 1944, from Mr. Goldenweiser, Director of the Division of Research and Statistics, recommending that the basic salary of Miss Alice Bourneuf, an economist in that Division, be increased from $4,200 to $4,600 per annum, effective November 1, 1944, Approved unanimously. Letter to Mr. Nayne, Vice President of the Federal Reserve Bank of Richmond, reading as follows: In accordance with the request contained in your letter of October 16, 1944, the Board approves the desig— nation of Elmore Vaughan as a special assistant examiner for the Federal Reserve Bank of Richmond." Approved unanimously. Thereupon the meeting adjourned. Vice Chairman.
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