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2047 A meeting of the Board of Governors of the Federal Reserve Sys— tem was held in Washington on Thursday, October 22, 1942, at 11:00 a.m. PRESENT: Mr. Eccles, Chairman Mr. Draper Ur. Morrill, Secretary Mr. Bethea, Assistant Secretary Mr. Clayton, Assistant to the Chairman The action stated with respect to each of the matters hereinafter 4terred to was taken by the Board: Memorandum dated October 20, 1942, from Mr. Morrill, recommending that 418s Cora Lee Hatch be appointed as a junior file clerk in the Sec-/ s Office, with salary at the rate of $1,440 per annum, effective as . 0 -L the date upon which she enters upon the performance of her duties atter having passed satisfactorily the usual physical examination. Approved unanimously. Memorandum dated October 17, 1942, from Mr. Goldenweiser, Direc— 'Jr the Division of Research and Statistics, stating that, in accordance qth t he policy on confinement cases adopted by the Board on November 10, 1941 'Mrs. Eleanor S. Frase, a junior economist in that Division, would be re4.111. l'ed to take leave on November 1, 1942, because of approaching confine—. 14t1t, ' 4114 recommending, (1) in view of the urgent need for her services in the rt, 4j1Iiision, that she be granted permission to remain at the office from .erab er 1 through November 15, 1942, and (2) that she be granted leave 81)8ence from November 16, 1942, to May 31, 1943, inclusive, the period may 25 to May 31, 1943, inclusive, to be without pay, with the under' 4 flg that in accordance with the policy adopted on November 10, 1941, 2048 10/22/42 -2her r eemPloyment would not take place automatically but only after a re- • Of the situation by the Board upon recommendation of the division 484. The memorandum also stated that during Mrs. Frase's absence with- • Par the Board would continue to make its contributions to the retire141t system on her behalf provided she continued her own contributions t(It' the same period. Approved unanimously. Letter to Mr. Davis, President of the Federal Reserve Bank of 8t, Louis 3 reading as follows: . "This will acknowledge your letter of October 8, 1942, vising that First Vice President F. Guy Hitt has been desgnated as the officer in charge of the Bank Examination De?artment. This designation meets with the approval of the !°.ard and the Board approves also the appointment of Mr. Hitt "an examiner for the Federal Reserve Bank of St. Louis." Approved unanimously. Letter to "The Capital National Bank in Austin", Austin, Texas, reacti • as follows: "The Board of Governors of the Federal Reserve System • given consideration to your application for fiduciary c)wers, and grants you authority to act, when not in convention of State or local law, as trustee, executor, ad, • lnistrator, registrar of stocks and bonds, guardian of es,a end' receiver, the exercise of all such rights to be , Ilbject to the provisions of the Federal Reserve Act and the egulations of the Board of Governors of the Federal Reserve °Ystem. "This letter will be your authority to exercise the fi01,!ciary powers granted by the Board pending the preparation a formal certificate covering such authorization, which "al be forwarded to you in due course. ha& t Approved unanimously. 2049 10/22/42 . -3- Letter to jr. McLerin, President of the Federal Reserve Bank "Atlanta, reading as follows: "We have received and read with interest your letter eT. October 13, 1942, and enclosures regarding your discusOn on October 7 of the unsatisfactory features of the conclition of the American Bank & Trust Company, New Orleans, committee Louisiana, with members of the bank's executive c,n7: representatives of the Louisiana Banking Department. "It is encouraging to note the assurances of future cooperation given at the conference by President Legier and his associates. It is hoped and expected that full and adequate steps will be taken by them without undue delay to translate into action the pledges made for elimination of criticisms of the institution and its continue management. It will be appreciated if you will to keep the Board advised of developments in this situation." Approved ununimously. Reserve Banks,ex.Letter to the Presidents of all the Federal Cleveland, reading as follows: a "For your information there is enclosed copy of Federal a from inquiry an to letter written in response earnings Peserve Bank with respect to the treatment in and expense reports of Federal Reserve Banks of guarantee fees paid on loans guaranteed pursuant to Executive Order 9112." Approved unanimously, the letter referred to above reading as follows: "This is in further reference to your letter of August 18, 1942, inquiring as to whether guarantee fees Paid by Federal Reserve Banks on advances made by them under Section 13b of the Federal Reserve Act and guaranteed by the War Department, Navy Department, or Marior tine Commission should be included with expenses deducted from gross earnings. to "After further reviewing this matter, it seems from deducted las on the whole that such fees should be Cross earnings and it will be appreciated if you will have them so deducted in reports submitted to the Board by your Bank." 2050 1°/:)2/1,2 !emorandum dated October 21, 1942, addressed to the War Loans C tlittee by Mr. Vest, Assistant General Attorney, reading as follows: "There is attached a memorandum from the War Department With reference to Government loans and advance payments to a borrower whose previous borrowing has been guaranteed pursuant to Regulation V. Very briefly, the memorandum states that: The loan agreement may permit the borrower to accept advance payments or Government loans if the financing inatitution is first given an opportunity to extend the necessary credit and fails to do so and a Financial Contracting Officer of the War Department approves. "If such a provision is put in the loan agreement, the guarantee agreement may, upon request of the financing institution, provide that in the event that the aggregate indebtedness of the borrower exceeds a certain sum, then the financing institution and the guarantor will undertake bY negotiation to agree to an adjusted percentage of the guarantee, and, if they cannot agree, then the guarantee Will be stepped up automatically to a certain percentage Which is to be specified in advance. In such event the Percentage of the guarantee fee will be increased. "The War Department requests that the information in the memorandum be sent to the Federal Reserve Banks, and there is attached a letter for that purpose." Approved unanimously, together with a letter to the Presidents of all the Federal Reserve Banks, referred to in the above memorandum, reeding as follows: "The Board has received from the Tar Department a Memorandum dated October 19, 1942, signed by Lieutenant Colonel Paul Cleveland, relating to the inclusion in loan aereements of provisions relating to the acceptance of advance payments and Government loans by borrowers whose loans have been guaranteed; and a copy of the War Department's memorandum is enclosed herewith. It will be noted that this memorandum supplements and modifies the War Deof which Partment's memorandum of September 7, 1942, a copy 1942." 12, September Was enclosed with the Board's letter of Thereupon the meeting adjourned. ' ecret 1: A 0•7e0:
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