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, Minutes of actions taken by the Board of Governors of the Federal Reserve System on Tuesday, October 30, 1951. The Board met Intl.'e Board Room at 10:30 a.m. PRESENT: Mr. Mr. Mr. Mr. Martin, Chairman Szymczak Norton Powell Carpenter, Secretary Sherman, Assistant Secretary Murff, Assistant Secretary Kenyon, Assistant Secretary Thurston, Assistant to the Board Riefler, Assistant to the Chairman Thomas, Economic Adviser to the Board Vest, General Counsel Townsend, Solicitor Fauver, Assistant Director, Division of Selective Credit Regulation Mr. Youngdahl, Chief, Government Finance Section, Division of Research and Statistics Mr. Leach, Economist, Division of Research and Statistics Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Thomas reported on recent developments in the Government 4eUrities market, and at the close of his report Messrs. Youngdahl and Leant. withdrew from the meeting. Mr. Norton referred to a memorandum from the Personnel Committee, , 4 co 4"Y of which was sent to each member of the Board under date of September 1951, with respect to the midyear review of the Board's 1951 budget and the Pl'oPosed form and scope of the budget for 1952. He stated that in 1114Itibr. -.416 the review of the performance under the 1951 budget in accordance Vith 'lie statement of budget principles and procedures adopted by the on June 12, 1951, the Personnel Committee had held discussions with 21 10/30151 Z -2- 411 division heads and had visited all offices and divisions of the Board. Iii this connection, Mr. Norton called attention particularly to the fol- 14)14ing paragraph contained in the above-mentioned memorandum: "In making this study, the Committee found the various division heads and their personnel to be responsive and cooperative in every way; it is the considered opinion of the Committee that the staff is alert, diligent, and capable." 141'. Norton went on to say that the Committee would like to have the benefit of any suggestions which any member of the Board might wish to make on the 1951 budget performance or in connection with preparation of the 1952 budthat it had hoped the matter could be discussed at a meeting when Mr. V414aman was present, but that in view of the preliminary work to be done berore next year's budget could be submitted for the consideration of the 41%onnel Committee or the Board, he had brought the matter up at this illeeting so that the Board could give any instructions it might wish to issue 0 how the Committee should now proceed, particularly as to whether any " tivities presently being carried on should be eliminated in preparing 1114get estimates for 1952. In response to a question from Chairman Martin as to a time for e048ideration of the budget by the Board after Mr. Vardaman had returned, kr u I Alorton said that if the staff could proceed to prepare the 1952 budget "cordance with a form and draft of instructions prepared by the Budget 4114 4-cer for the Personnel Committee, he hoped it would be possible for the ittee to have a preliminary budget for next year by the end of November. 3430/51 -3- lie emphasized, however, that in view of the work involved in assembling the required data, which had already been delayed considerably,it would be necessary to proceed without further delay if this were to be accomlplished. During the ensuing discussion, none of the members of the Board were present indicated that there should be any change in the anticikted scope of activities of the Board, and Chairman Martin suggested that ill the absence of objection) it be understood that the staff would proceed llith the preparation of the 1952 budget for the consideration of the l'ersonnel Committee and the Board in accordance with the procedure adopted on June 12, 1951. This suggestion was approved unanimously. Mr. Murff withdrew from the meeting at this point. Mr. Norton then referred to his memorandum dated October 29, 1951, es of which were sent to the members of the Board before this meeting, ate.tillg that consideration was being given to an amendment to Regulation W, 0 'czsumer Credit, which would exempt instalment credits to purchase pre1946 model automobiles and recommending that the staff be authorized to eiarve Y the Federal Reserve Bniks and hold consultations with the automobile 841(1 inancing trades with a view toward developing a recommendation to the "4`1 as to such an amendment. He added that the matter had been discussed b t -e-LePhone with Mr. Evans, who had expressed the view that the proposed %lieIra vtment should be explored and who had also commented that the elimination 3430/51 Of such Such automobiles from the scope of the Regulation would seem to be aesirable. Following a discussion, the recommendations in Mr. Norton's memorandum of October 29, 1951, were approved unanimously, with the understanding that a notice also would be placed' in the Federal Register inviting comments concerning the proposed amendment. At this point all of the members of the staff with the exception ct Meesrs. Carpenter, Sherman, and Kenyon withdrew, and the action stated respect to each of the matters hereinafter referred to was taken by the Board: Minutes of actions taken by the Board of Governors of the Federal Reserve System on October 261 1951, were approved unanimously. Minutes of actions taken by the Board of Governors of the Federal 4sel've System on October 29, 1951, were approved and the actions recorded t4rein were ratified unanimously. Memorandum dated October 29, 1951, from Mr. Bethea, Director, 111//ision of Administrative Services, recommending the appointment of 14188 Etta M. Bailey as a Page in that Division, on a temporary indefinite buts ) with basic salary at the rate of $2,500 per annum, effective as of the °late upon which she enters upon the performance of her duties after '1.6 passed the usual physical examination and subject to the comple'a satisfactory employment investigation. (31 Approved unanimously. 10/30/51 -5- Memorandum dated October 29, 1951, from Mr. Bethea, Director, 1)11T1s1on of Administrative Services, recommending the appointment of Merrill W. Snider as a Key Punch Operator in that Division, on a t"IPorary basis for a period of six months, with basic salary at the rate or 3,030 per annum, effective as of the date upon which he enters 4°11 the performance of his duties after having passed the usual physical eaillination and subject to the completion of a satisfactory employment ilivestigation. Approved unanimously. Letter to Mr. Harvey, Vice President and Cashier of the Federal lleserve Bank of Boston, reading as follows: "In view of the circumstances described in your letter of October 25, 1951, the Board of Governors approves the payment of salary to the following employees at the fates indicated, which exceed the maximum established for the grades in which the respective positions are classified: Annual Salary Title Name Loretto Bishop Invoice Clerk, $2,970 Expense Department RaYMond Stanley Adjustment Clerk, 3,700 Check Collection Dept. Joseph E. O'Brien Adjustment Clerk, 3,600" Check Collection Dept. Approved unanimously. Letter to Mrs. Valerie R. Frank, Secretary of the Retirement te (;) — of the Federal Reserve Banks, c/o Federal Reserve Bank of New r "ding as follows: "For the reasons outlined in your letter of Octo-r 25, 1951, the Board of Governors approves the extension IDe 10 30/51 -6- "of inactive membership in the Retirement System of the Federal Reserve Banks until the date of their re-employment with the Detroit Branch for the two employees, Grace C. L. Mundt and Margaret T. Wisniewski." Approved unanimously. Telegram to the Presidents of all Federal Reserve Banks, except /3°sten, New York, and Philadelphia, reading as follows: To throw some light on the question whether there 8 year ago in volume and terms of loans to finance cattle in feed lots and on ranges or to increase breeding herds, please contact representative banks in your district engaged in making such loans with a view to your answering the following specific questions and explaining in a general way any reported changes: A. Is there any indication that (a) the amount loaned per head or (b) term of (1) feed-lot loans or (2) range loans have been changed In the last two months as compared with a year ago, and if so, how? B. Is there any indication that such loans are being renewed or extended to a greater extent now than a year ago? C. Approximately what percentage change has there been in the (a) volume of loans and (b) number of borrowers for these purposes compared with a year ago? Is there any indication that funds for such loans are being solicited or received from correspondent banks and other sources in regions outside of your trade territory? If so, from what sources? E. Is there any indication that cattle ranges are overstocked at the present time in relation to feed supplies? F. Indicate the factors that are important in the current increase in cattle numbers. 0. What principal factors account for the reported shifts in the proportions of cattle being shipped to the principal markets as compared with last year? haS been a substantial change since 10/30/51 -7- "Please supplement your answers with statistics cornParing agricultural loans of representative banks engaged ln cattle financing on the basis of June 30 and October 10, 1951 call reports compared with corresponding reports for 1950, and where substantial changes are shown please indicate, on the basis of such general information as you have, Whether the changes probably reflect changes in cattle loans. "It will be appreciated if you will telegraph your answers to above questions as early as practicable so that they may be summarized in time for the November 15 meeting of the Voluntary Credit Restraint Committee." Approved unanimously. Letter to The Jefferson County National Bank of Watertown, c/o 4e Watertown National Bank, Watertown, New York, reading as follows: "This refers to the resolution adopted on January 11, 1951, by the board of directors of your bank, signifying the bank's desire to surrender its right to excercise fiduciary Powers heretofore granted to it. "The Board, understanding that your bank has been discharged or otherwise properly relieved in accordance with the law of all of its duties as fiduciary, has issued a forMal certificate to your bank certifying that it is no longer ia3uthorized to exercise any of the fiduciary powers covered the provisions of section 11(k) of the Federal Reserve et, as amended. This certificate is enclosed herewith. "In this connection, your attention is called to the fact that, under the provisions of section 11(k) of the ,1:ederal Reserve Act, as amended, when such a certificate ( 1as been issued by the Board of Governors of the Federal ieeerve System to a national bank, such bank (1) shall no . nger be subject to the provisions of section 11(k) or the f ; egulations of the Board of Governors of the Federal Reserve rY estem made pursuant thereto, (2) shall be entitled to have viturned to it any securities which it may have deposited 0 , th the State authorities for the protection of private 0 ;court trusts, and (3) shall not exercise thereafter any the powers granted by section 11(k) without first applyfor and obtaining a new permit to exercise such powers '''rellant to the provisions of section 11(k). 1 `2-i R9 10/30/51 -8- "Since it may be necessary for you to file a certified copy of the Board's certificate with the State authorities in connection with the release of the securities which you have deposited with them, such copy is enclosed herewith." Approved unanimously.
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