Full text of Minutes of the Board of Governors of the Federal Reserve System : Meeting Minutes, October 31, 1941, Volume 28, Part 4

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1520

A meeting of the Board of Governors of the Federal Reserve
System was held in Washington on Friday, October 31, 1941, at 10:30
a.ras
PRESENT: Mr. Szymczak
Mr. McKee
Mr. Draper
Mr. Bethea, Assistant Secretary
Mr. Carpenter, Assistant Secretary
Mr. Clayton, Assistant to the Chairman
The action stated with respect to each of the matters hereinafter

referred to was taken by the Board:
Telegrams to Mr. Young, President of the Federal Reserve Bank

Of Boston, Messrs. Sanford and Post, Secretaries of the Federal Reserve
134111cs of New York and Philadelphia, respectively, Mr. Bowman, Assistant
viee P
resident of the Federal Reserve Bank of Atlanta, Mr. Dillard,
8
ecretary of the Federal Reserve Bank of Chicago, Mr. Caldwell, ChairIllan of the Federal Reserve Bank of Kansas City, and Mr. Clerk, First
viee P
resident of the Federal Reserve Bank of San Francisco, stating
that
the Board approves the establishment without change by the Federal
Rese—
've Bank of Kansas City on October 25, by the Federal Reserve Bank
Of San Francisco on October 28, by the Federal Reserve Banks of New
Y°11, Atlanta, and Chicago on October 30, 1941, and by the Federal Ree Banks of Boston and Philadelphia today, of the rates of discount
Purchase in their existing schedules.
Approved unanimously.
Meraorandum dated October 30, 1941, from Mr. Nelson, Assistant




,

10/31/41

-2-

Secretary, recommending that the temporary appointment of Arthur Norris
as a messenger in the Board Members' section be extended until the close
of business on
November 15, 1941, in order to give him the benefit of
the accumulated annual leave which he has earned during the period of
his services.
Approved unanimously.
Letter to Mr. D. B. Vaughan, Chief of the Administrative ManDivision of the Economic Defense Board, reading as follows:
"Your letter of October 27, referring to the Economic
Defense Board's desire to employ Mr. Nathaniel Weyl as
senior economist, has been received.
"The Board of Governors interposes no objection to
the release of Mr. Weyl to the Defense Board. Furthermore, in accordance with the suggestion in your letter,
the Board is willing to detail Mr. Weyl to the Defense
Board on a reimbursable basis, at his present salary of
$3400 per annum, pending his transfer. In order, however,
to enable the Board to rearrange its own work promptly,
it is understood that this arrangement will be effective
for a period not exceeding thirty days."
Approved unanimously.
Telegram to the Presidents of all Federal Reserve Banks, reading as follows:
"Reg. W-108. Amendment No. 2 to Regulation Wwill
affect certain interpretations previously issued by the
Board, and the following comments will be pertinent to
the interpretations indicated:
W-15 See sec. 9(f) as amended relating to
'Farmer Plans'.
W-16 Even if not instalment sale credit,
transaction would involve a 'purpose
loan' under sec. 5(a) as amended.
16-19, W-28, 1;-49 and W-65 Note postponement




1522
10/31/41

-3-

W-25,

W-33

W-45
W-92

W-24,
W-35

"of effective date of secs. 8(a) through
8(d) as amended; note the provisions of
amended sec. 8(b) relating to add-ons;
and note provisions relating to the statement of necessity now contained exclusively
in sec. 8(d) as amended. Otherwise the
principle stated in W-19, W-28, W-49 and
W-65 will not be affected.
W-26, W-27, W-30 and W-48 Not affected,
but note that sec. 6(a) has been amended
and broadened.
Note amendment of sec. 5(a) as to 'purpose
loans'; and note amended sec. 4(e) relating to down payments.
Note that the figure in sec. 5(b) as amended
is $1,500.
Note that sec. 6(a) has been amended and
broadened, and note change to $1,500 in
sec. 5(b), as amended.
W-36, W-37 and 1A-53 will be obsolete after
November 30.
will be obsolete after December 31. See
sec. 5(d) as amended."
Approved unanimously.

Memorandum dated October 28, 1941, from Mr. Parry, Chief of

the n;

--Lvision of Security Loans, recommending that the Board (1) approve

f'llowing letter to the Presidents of all the Federal Reserve Banks
and the
registration
form (a copy of which is attached to these minutes)
and other
c)f

enclosures mentioned in the letter, (2) authorize the printing

slifficient number of copies of the registration statement to serve

the
purposes of the System (possibly 500,000 or more), and (3) authorize
44

increase in the printing and binding classification of the Service

Nnetions budget
of the Secretary's Office to cover the cost of printing

the statement:
"A form of registration statement for purposes




1523
10/31/41

-4-

"of Regulation W (Form F.R. 563) has been approved by
the Board, and several mimeographed copies are enclosed
herewith. The form is now being printed here on single
sheets, 8-1/2 by 11 inches, with the instructions on the
reverse side. Please notify the Board as to the number
of printed copies that you will require.
"The distribution of these forms will be, in general,
in the hands of the Federal Reserve Banks and will be effected by such means as they may determine. It is assumed
that ordinarily two copies of Form F.R. 563 will be needed
by each prospective Registrant, one to be returned to the
Reserve Bank of the district in which his head office is
located and the other to be retained by him. The facilities of trade associations, chambers of commerce, and
local banks may be used in distributing these forms to
whatever extent you consider desirable. The Board has
agreed, however, to supply forms to the Federal Home Loan
Bank Board for distribution to all building and loan associations, to the Farm Credit Administration for distribution
to all Federal credit unions, and to the Credit Union National Association for distribution to all State-chartered
credit unions. Building and loan associations and credit
unions, therefore, will not as a rule have to obtain their
forms or notices from the Reserve Banks.
"There are enclosed a suggested form of notice to acCompany the forms distributed by the Federal Reserve Banks,
and a form of 'Registration Certificate' to be used by the
Reserve Banks in acknowledging the completed statements received. It is requested that each Reserve Bank determine
for itself whether to use the suggested form of notice,
either as it stands or with modifications, but that all
Reserve Banks use a 'Registration Certificate' in the
form enclosed. Each Reserve Bank will in any event arrange for its own printing.
"Your attention is invited to the fact that Form F.R.
563 includes a note suggesting that Registrants with questions or difficulties should direct their problems to the
Reserve Banks. In order to assure a uniform treatment of
these problems and in order to deal with many minor points
that were suggested at the time the first draft of the
registration statement was circulated, some additional
notes for the use of the Reserve Banks (but not for distribution to the Registrants) have been prepared, and
several copies are enclosed herewith.
"The Board's staff is working on plans for the tabulation of the information that will be brought in on these




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10/31/41

—5—

II

registration statements, and there will be further communications in due course on this subject."
Approved unanimously.
Letter to Mr. Fry, Vice President of the Federal Reserve Bank
of Richmond,
reading as follows:
"Reference is made to your letter of October 8 and
to our reply of October 14 regarding a meeting at the
Board's offices desired by the Mohawk Home and Improvelent Company and certain other Virginia concerns engaged
ln the roofing and siding business.
"It would be convenient to the Board's staff to have
the meeting at 2:30 p.m. Friday, November 7. Will you
Please communicate this information to the interested persons and let us know whether the time and place is also
agreeable to them?"
Approved unanimously.
Memorandum dated October 30, 1941, from Mr. Bethea, submitting
suramarY of the replies received from the Federal Reserve Banks to

the

Board's letter of October 11, 1941, R-901, and recommending that

the Board
approve a letter to the Presidents of all Federal Reserve
Banlr
--s as set forth below relating to the discontinuance of the monthly
bayo,
relations
reports submitted by the Banks, with the understanding
that ,
the Board's examiners would review the bank and public
relations
4et3vities at each Federal Reserve Bank in the course of the regular
eca
'
111/-nation of the Bank. The memorandum stated that it was proposed
that
the initial
survey of such activities made during the next succeeding examination of each Federal Reserve Bank, beginning with the
exami
natl°n of the Federal Reserve Bank of New York now in progress,
Would
be somewhat more in detail and the examiners' findings would




1525

10/31/41
be

-6-

incorporated in a supplemental report or a separate memorandum, and

that these initial reviews would be broad enough to cover not only procedure and personnel
but also the objectives of the individual Reserve
Banks and their
programs for attaining such objectives if definite programs had been formulated.

The memorandum made the further statement

that from
a long-range point of view it had been the thought that the
SecretarY's Office, through its Correspondence and Publications SecCould be instrumental in bringing about better coordination and
reasonable uniformity in the field of public relations, and the reports
f the
Board?s examiners should provide valuable background information
to that
end.

The letter to the Presidents of all the Federal Reserve

Banks) referred to in the memorandum, read as follows:
"Replies to the Board's letter (R-901) of October
'1941, indicate that all of the Federal Reserve Banks
11
favor the discontinuance of the monthly Bank Relations
I!.eports. Accordingly, the Board herewith rescinds the
Instructions
contained in its letters X-9680 and X-9793
(F.R.L.S. 3943 and 3944) of August 25, 1936 and January
13) 1937, respectively.
,
"Several of the Banks, however, have stated that
hey would
like to continue receiving figures showing,
by
Federal Reserve districts, the number and aggregate
4,epo5it5
of State banks currently admitted to membership
In the Federal Reserve System. Therefore, such informat1°n will in the future be made available a few days after the
end of each month, in mimeographed form and with211t a covering letter, by the Board's Division of Bank
erations. The enclosed table shows, among other
things,
trm=b
elir aggregate deposits of State banks admitted
during 1940 and the first nine months of
1941.1t

j




Approved unanimously, together with
letters to Mr. Gidney, Vice President of

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10/31/41

-7the Federal Reserve Bank of New York, and
Messrs. Fleming and Leedy, Presidents of
the Federal Reserve Banks of Cleveland and
Kansas City, stating in each case that,
since only two other Reserve Banks had expressed an interest in reports on the number of visits made by representatives of
the Reserve Banks, the Board had decided
not to require the Banks to report these
figures, at least for the time being. The
letter to Mr. Fleming also stated that his
suggestion that a meeting of the men in
charge of public relations activities at
the Federal Reserve Banks be held in Washington had received consideration and that
although the Board recognized that the suggestion had a great deal of merit, in view
of the pressure of other activities, it
did not favor calling such a meeting at
this time.

Memorandum dated October 29, 1941, from Mr. Parry, Chief of
the
'-tvlsion of Security Loans, recommending, for the reasons stated
in the

memorandum, that $500 be added to the item of Furniture and

gAilment in the 1941 non-personal budget of that Division.
Approved unanimously.

Thereupon the meeting adjourned.

Assistant Secretary.

4Proved
:




or,,11;

41A
/
,
ember.o

:rhi8
etas.rant is iouelent is

1526o-

to be filed with the Federal Reserve Bank of
the district in which the main office of the
ki °re answ .1ited, and should be
sent to reach the Federal Reserve Bank on or before December 31, 1941.
911N. "
the3'p..
tog the que8v
len about
ious, please read the instructions on the back of this form. If you have
‘‘teerve Bank. this
is form which is not covered by the instructions
on the back, please communicate with

Form F. 11. 563

Please lea,e

this space blank

REGISTRATION STATEMENT
Date
1941
Thi$ State
'
444 to Exenb.1, tiled in accordance
with the provisions of Regulation W issued by the Board of Governors of the Federal Reserve System
uutive Order No. 8843
issued by the President of the United States relating to consumer credit.
.......

...............................................
Name of Registrant (print or type); state also trade name if different from legal name

...................
.
City

I,

County

State

-41eate b,
check mark
whether Registrant is in business as an individual
, partnership
, corporation
, or other
( cif)..
..........
eneral nature ...................................................................................................
of
(Check the
business
III. Credit outstanding and sales
A.
(Whether or not subject to Regulation W)
Principal business of Registrant)
PInancial
A. Registrants in classes 1 to 6 please report the (In even dollars, cents
business
omitted; where amount
1.
unpaid balance of retail and personal instal- is none, write "none")
Sales
finance company
ment paper held at close of business Septem3. Coultnercial bank or trust company
ber 30, 1941:
Industrial
4...
loan company or bank
ir-11 5. State-licensed
1. Retail instalment paper purchased......... $
small loan company
Credit
6. Other union
2. Retail instalment credit (loans) extended
financial business
directly
(specify)
.
..................
................................................. ,••••
3. Personal instalment cash loans
ealer, co
B. Registrants in classes 7 to 16 please report the
I:1 7. D ntractor, or other business
following data:
0
9. ePartinent or general store
Retail sales--12 months ending September 30,
Ei 10. Automobile dealer
k`niture
1941:
it. ,1101Iseholdor house furnishings store
12.
appliance or radio store
Llectric or gas
4. Total net sales
13. liartiware or utility company
5. The sales reported in item 4 were approxiautomotive
accessory store
Uealer or
mately:
contractor in heating, plumbing or
E:i 14
a.
Instalment sales (incl. down-payments)
tr-ecnditioning
equipment
eettler
15. ‘pair or contractor in other construction or
b. Other credit sales
materials
M
e. Cash sales
(specify type of product)
Retail receivables—unpaid balance at close
.................
le,
..................................................................•••
of business September 30, 1941:
o
ther (specify)....................................
6. Instalment receivables
............ I ...........
forr

(-1

o.

..... .......

........
...............................................................

*

7. Other receivables

tit
address
% have

any branches on September 30, 1941?
If so, how many?
(Please attach a list of branches and
nless the Registrant is a bank insured by F. D. I. C.)
146°% er
u
114)re of Registrant's voting stock owned or controlled directly or indirectly by any other company?
If so, please fill in:
.................

.................................................................................

................

Name of controlling company

ticon
'
illation, if
................

3,

State

Street address

Nature of business of controlling company

Which Registrant may
wish to add.

.................................................................................................................................... .............................................................................
to
ell are eertify that
estimated to the best of my knowledge and belief the foregoing statement is correct (except as to any items marked "est."
in good faith).
of
Ott

.
h.re

Wh
the flame
".e sig„tur

....and official title
e
http://fraser.stlouisfed.org/ appears at the right
Federal Reserve Bank of St. Louis

Authorized signature

INSTRUCTIONS FOR REGISTRATION STATEMENT
(Numbered to correspond with questions on Registration Statement)

GENERAL INSTRUCTIONS:
III.—Instalment credit should include credit for which the agreed
repayment is in two or more parts. Instalment sales should include
sales made on instalment credit.
In case the records of the Registrant are kept on such a basis that
receivables held on September 30, 1941, and sales for the 12 months
ending on that date are not readily available, the Registrant may
instead report the amount of receivables held on some other date
within 15 days before or after September 30, and sales for the year
ending on such other date—in which case the date used should be stated.
Businesses which were not in operation on September 30, 1941, please

lesrlY
convenient, c_,
footY
answer question III for such later date as is
slince coedf4
to'
organized
eating the date used. A business concern
the concern°
concern doing similar business should report for
if possible.
which the
exienv
offices at
IV.—Branches should include stores or
otherwise
10011
or
trant is engaged in making instalment sales
maid°
or
discounting
instalment credit, or purchasing or
instalment obligations.
official ordinal.'
VII.—This statement may be signed by any
ized to sign statements for the Registrant.

n

SPECIAL INSTRUCTIONS FOR FINANCIAL BUSINESSES:
(Sales finance company, bank, loan company, credit union, or other financial business).
III-A.—Any hypothecated payments or deposits which are for the
purpose of retiring loans should be deducted before reporting the
unpaid balances of such loans. In case a Registrant cannot readily
secure an exact division of its outstandings between items III-A-1,
2 and 3, the division may be estimated.
III-4-1 and 2.—Include the unpaid balances of all instalment
credits arising from the retail sale of and secured by articles,
whether or not listed in Regulation W,such as automobiles, trucks,
household appliances, furniture, clothing, jewelry, etc., including also
loans for building repair or modernization (whether or not insured
under FIIA Title I and whether or not secured). Any retail instalment
paper purchased from or rediscounted for dealers or others

to 0'

direetlYtild be ft
made
loans
ticles sh°0boile
should be reported in item III-A-1 and
such ar
sumers for the purchase of and secured by
to defilers sto
loans made
Ic)orted in III-A-2. Do not include
secured bY
if
even
mpanies on their own promissory notes,
asectillei
of instalment paper.
ed soddia
ti tlic,°
,
seeor
all
of
III-4-3.—Report the unpaid balances individuals,
°It, 5tte0
instalment loans which were made to
debts, medicai logai rr
deraflo such purposes as consolidation of
not inelucle sanfoYr Oil/
general rpersonal expenditures, etc. (but do
concerti pal e5t3
business
ported in item III-A-2, nor loans to
other liens °I3 ror
mortgages
purposes, nor loans secured by
nor agricultural loans).
OP"
the011ni$ti
represent 0
should
III-B-6 and 7.—Retail receivables
l)°° ifirlud:.
represented by rinte'
t ciotl
plo;
whether
balances of all receivables,
Begi°
by the
arising from retail sales appliances,
furniturnott ls'5°10
hen,
'
sales off automobiles, trucks, household
hether °r suc
modernization (w inelucluet shetilJ;,f
jewelry,Hbuilding repair and
receivables should
istrant, n lice or ot
underryF IA Title 1), etc. Retail
Reg
ged as security for loans to the bank or fin9
even if
el
a
jairl% d
its sold to (or discounted with)
include credits
1
company with or without recourse.
recei
to holding 1,1v1,::13-6111:1;:sseoificii,.
of Iintscoav‘semareRteagilisstaralenst,in
hatsed.temosr
ich aro sle
,
(reportable agains 1
type
latter
'
holds receivables which were pure
tile
of
receivables
end
rei
y the Registrant, the
gr°1.4,,, cotoll'g V
items in
tit' l'Iotip III'
be reported against the appropriate
ublic
p
or
Registrants—such as some manufacturers
under gr 110.)
rep
t 00PI,
may have no retail sales or retail credit to P under g UP ith°11,," tole"
loans
exactly, wpies
should report their purchased paper or
' '
determine
to
unable
In case the Registrant is
ceild,
re
ts
i
of
or expense, the division
estir139't
be
may
division
instalment and other credit, this

SPECIAL INSTRUCTIONS FOR DEALERS, CONTRACTORS, AND OTIIERS:
III-B-4.—Give net retail sales figure (gross sales less returns and
discounts), but do not deduct trade-ins. A store should include sales
of leased departments for which it arranges and holds retail credit.
A Registrant which is engaged in manufacturing or other business
should report only the sales which it makes at retail. A Registrant
who is a contractor should include receipts from repair work and the
like. There should be excluded from item III-B-4, however, sales of
electricity or gas by a Registrant who is a utility company and sales
of real estate (and receivables arising from such sales should also be
excluded from items III-B-6 and 7).
A concern which was in business on September 30 but was not in
operation throughout the 12 months ending on that date, should
report sales for only that part of the period for which it operated, indicating clearly the length of such period.
III-B-5.—"Instalment sales" should include all sales on instalment
credit, regardless of whether the paper is sold or discounted or held
by the Registrant, and should include the down payment (whether
cash or trade-in) as well as the amount deferred. "Other credit sales"
should include those on open credit, charge account, or similar basis.

9

eStP
ill

NOTE:—Section 3(d) of Regulation W provides in part as follows:
a, either
the Boar
"The license of any Registrant may, after reasonable notice and opportunity for hearing, be suspended by
reto.
following grounds:
or as to particular activities or particular offices or for specified periods, on any of the
nt the
statement;
registration
the
in
made
negligently
or
willfully
(1) Any material misstatement or omission
Boar
requirement of the
(2) Any willful or negligent failure to comply with any provision of this regulation or any