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194-7 A meeting of the Board of Governors of the Federal Reserve SYstein waS held in Washington on Tuesday, October PRESENT: 6, 1942, at 11:00 a.m. Mr. Eccles, Chairman Mr. Ransom, Vice Chairman Mr. Szymczak Mr. McKee Mr. Draper Mr. Evans Mr. Morrill, Secretary Mr. Carpenter, Assistant Secretary Mr. Clayton, Assistant to the Chairman The action stated with respect to each of the matters herein- tex. to was taken by the Board: The minutes of the meeting of the Board of Governors of the ?eae Reserve System held on October Memorandum dated October 5, 1942, were approved unanimously. 6, 1942, from the War Loans Committee, trig the resignation of Kenton R. Cravens as Administrator for thEut to become effective as of the close of business on Ottobe r 9) 1942, and recommending that the resignation be accepted as or that , - wAte and that the following letter to Mr. Cravens be approved: acknowledge receipt of your letter of Sey,4 "This will .eue.tber 9, 1942, tendering your resignation as Adminis;rat0r for the War Loans Committee, effective on a date t1 °i 117enient to the Board, but preferably not later than ilitY days from the date of your letter. "The Board is sorry that by reason of a reduction in the it * official staff of the Cleveland Trust Company, you find incumbent upon you to return to your position with the as soon as possible. It feels, however, in view of the e °riginal understanding that your services would be Irat1able to the Board only during the continuation of a e8-7e of absence from the Bank, that it should not urge , '°11 to remain in Washington beyond the limit set in your i 1_948 10/6/42 -2- "letter. In the circumstances, the Board accepts your realEnation with sincere regret, effective as of the Close of business October 9, 1942. "Tour advice and counsel have been most helpful to the Board in the formulation of policy and procedure in with the conduct of operations under Executive Order vraar No. 9112. The task of organizing the Tar Loans activity and maintaining proper liaison between the Services and the Federal Reserve Banks, under the direction or the Board's War Loans Committee, has required a high egrae of ability and initiative. The sense of loss which stems from your relinquishment of your present post is tempered only by your assurances that you have a continu' ng interest in the System's welfare and that the Board mal. feel free to call upon you from time to time in a consUltative capacity." The resignation was accepted and the letter was approved unanimously. Letter to the United States Civil Service Commission, prepared 1.4 e, eccIrdance with the action taken at the meeting of the Board on Oelkoz) • 2) 1942, and reading as follows: (, (D "In accordance with your request of September 30, 1942 Circular No. 379), submitted herewith is a list of triplicate of the positions on the staff of the Board of ;vvernors of the Federal Reserve System which are directly with the war effort or with essential supporting activitis, the adequate performace of the duties of which • 81t10n8 requires (a) special skills or abilities, and (b) e°11eiderable period of training or experience. "In considering the positions listed, a brief statement as + i..i .0 the nature of the Board's activities and responsibili' ' 4 es mbe helpful. "The Federal Reserve System was created by the act of Cori gress approved December 23, 1913. That act provided for a e"`gillY decentralized organization which functions at the pres1,n time through the Board of Governors and the 12 regional G.''eral Reserve Banks with their 24 branches. The Board of €to"rnors is composed of members appointed by the President eild confirmed by the Senate. Under the provisions of the FedReserve Act and other legislation the Board is charged -Ith broad responsibility for the maintenance of sound credit monetary conditions, with the supervision of the Federal 1949 10/6/42 -3- "Reserve Banks, and with responsibilities for regulation cf the bankino. systemconditions have greatly increased the Board's rneZ aresponibilities rsn i the fields of credit and monearY control, supervision of the Federal Reserve Banks, and , s_uPervision of the banking system. In addition, the war has n'ought new responsibilities. Among these are responsibili11;les in connection with: the regulation of consumer credit 4flder Executive Order Nc. 8843 as a measure designed to aid .11. combating inflation; operations under Executive Order No. ')L12 which relates to the financing of war contracts; and rticipation in the formulation of policies regarding 8-,2hsurY financing, the financing of war production, price consumption controls, anti-inflationary measures, and 1,11 various phases of the Government's international economic aelations; and the Chairman of the Board of Governors has been .1)(3inted a member of the Economic Stabilization Board ere-bed under the provisions of the recent Executive Order No. 9250 r 2 "The attached list of classes of positions includes heads and assistant heads of divisions and certain other *r positions in the various divisions of the Board's staff. ate list is submitted with the understanding that the inclun of a class of positions does not necessarily carry with ij implication that a request for deferment would be made the men occupying such positions. "The comments with respect both to the work of the Bo ard and its relation to the war effort and to the various 113 sitions listed have purposely been kept brief and are to s- reurded as merely indicative, rather than as fully de4,cr1Pt17e. Any additional information desired will be gladly tI rnished. "The attached list refers only to positions in the staff or the Board of Governors. The 12 Federal Reserve Banks and 24 branches, operating under the supervision of the t ard of 4overnors, perform functions of vital importance to w e war effort. k substantial and increasing volume of their serk is as fiscal ai,ents for the Government. Their normal activities, such as those in connection with the clearing en4 collection of checks, the supplying of the currency and lesJill needs of the country, the provision of discount facili, operations in the Government security market, the .a 1,thering and interpretation of financial and economic data, z," eXamination and supervision of banks, the issuande and eclemPtion of Government securities, are of even greater imrthnee in war times than in peace times. In particular, ederal Reserve Banks have broad responsibilities in conneci°n with the financing of the war. The Board of Governors, thQ f an P i 1950 10/6/42 "the Federal Reserve Banks, and the Federal Open Market Com7./ittee have the responsibility for helping to maintain stabilized conditions in the money markets. In addition to *these activities, new functions of the Federal Reserve Banks, !uch as the administration of the provisions of Executive Order No. 8843 and the Board's Regulation W relating to conlraer credit, operations under Executive Order No. 9112 and the Board's Regulation V relatirw to the financing of war ; °ntracts, and operations in connection with the handling of ' l c)zen funds are directly related to the war effort. , :Tour Departmental Circular No. 379 and the War Manpower ; 01!amission's Directive No. XI relate to Federal employees. .11.11e the officers and employees of the Federal Reserve Banks alie not Federal employees, they are employees of essential 1, eneies of the Government. This mention of the work of the tederal Reserve Banks is made in order to bring to the at0.entl0n of the War Manpower Commission the importance to the °vernment and the war effort of the activities of the Reserve Banks and to serve as a point of reference should it be necessary to consider the manpower situation of the Federal Banks in the future." T Approved unanimously. Letter to Mr. Alex Cunningham, Vice President and Treasurer of the Western Life Insurance Company, Helena, Montana, reading as follows: "1 have brought to the attention of the members of the Boal,A of Governors your letter of September 17, submitting ;'11r resignation as a member of the Board of the Helena because of your entering active military service. "As you know, ii has been a point of special effort on the ore Part of the Board of Governors to select as directors the Federal Reserve Banks and Branches men who can bring to co the meetings of the directors the benefit of constructive ae/Itacts with the problems with which business, industry, " t agriculture are faced. It is with sincere regret, therethat the Board of Governors accepts your resignation 8 e director of the Helena Branch. "The members of the Board join in expressing their apDrQ -elation of your contribution during the period of your s eel'vlee as a director and hope that you will feel free to 11 upon them and the Board's staff whenever you are in : 6as hington." Approved unanimously, together with a letter to Mr. Peyton, President of the Federal Reserve Bank of Minneapolis, transmitting copies of the incoming letter and the above reply. 1951 10/6/42 -5Letter to MT. Drinnen, First Vice President of the Federal Re- serve m. ' auk of Philadelphia, reading as follows: "Your letter of September 30, 1942, in which you !tate that payments on account of the new building (!ltaled $581,590.78, or $974.34 in excess of the maximum !mount heretofore estimated, has been brought to the attention of the Board. It is noted that expenditures for rUrniture and furnishings, which were estimated at $33,000, t°teled 132,746.56, or l::253.44 less than the estimate." Approved unanimously. Letter to the Comptroller of the Currency, reading as follows: "It is respectfully requested that you place an "cler with the Bureau of Engraving and Printing supthe order of June 17, 1942, for printing of ederal Reserve notes of the 1934 series in the $5 dein the amounts stated for the following ' ecleral Reserve Banks: Number of Amount sheets 840,000..:,50,400,000 "Cleveland 40,800,000 680,000 Chicago 10,080,000 168,000 Xansas City 5,040,000" 84,000 Dallas Approved unanimously. Thereupon the meeting adjourned.
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