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1_952 A meeting of the Board of Governors of the Federal Reserve Systera Was held in Washington on Tuesday, October PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. 6, 1942, at 3:00 p.m. Eccles, Chairman Ransom, Vice Chairman Szymczak McKee Draper Evans Mr. Morrill, Secretary Mr. Carpenter, Assistant Secretary. Mr. Clayton, Assistant to the Chairman MT. Smead, Chief of the Division of Bank Operations Mr. Dreibelbis, General Attorney Mr. Vest, Assistant General Attorney Mr. Wyatt, General Counsel Mr. Thomas, Assistant Director of the Division of Research and Statistics Mr. Roland Robinson, Senior Economist in the Division of Research and Statistics Mr- McKee stated that, in accordance with the action taken at thle illeeting of the Board on October 2, the War Loans Committee had fixed tObe 19) 20, and 21 as the dates for the meeting in Washington of ePre eeatatives of the Federal Reserve Banks handling war loan matters Iltth *cePresentatives of the Board and the services. At this point, Mr. Horbett, Assistant Chief of the Division of Perations, joined the meeting. Before this meeting the attention of the members of the Board : 114q bee n called to a memorandum dated September 30, 1942, from Messrs. keElci Goldenweiser in which it was stated that for some time it 11" been - felt that the loan schedule in the member bank call report clici net give the Board adequate information as to the purposes for 1953 10/6/42 -2- which bank credit was being used, and that it might be well to improve it in this respect and to make certain other changes in the interest or inore accurate reporting. The memorandum submitted a copy of a pro- Posedrevised loan schedule which would also take the place of the "ParA4 --e schedule on consumer credit which the banks are now required t° 8/1bIllit with the call report, and stated that, if the Board approved the 11 4-11°14sed schedule, the loan classification now furnished by weekly rePortir, -g member banks would have to be modified so as to make it con"e t with the new loan schedule. The further statement was made in the m ellicrandum that, if the Board were inclined to favor the adoption or a revised schedule similar to that proposed, it was suggested that Messr ' s Smead and Goldenweiser be authorized to discuss the matter with the_ rice of the Comptroller of the Currency, the Federal Deposit In— ce Corporation, other interested Government agencies, the Federal Reeer7 Banks, and perhaps a few member banks and representatives of the erican Bankers Association, it being understood that some changes 14 det 11 a-- might be suggested in the light of these discussions. The kezior alldllm also said that it would be desirable, if it could be ar141geci to take the loan schedule entirely out of the call report and N11, the investment schedule as well, and to ask all member banks to once or twice a year, separate schedules classifying their 10E14s 11c1 investments, and perhaps to ask weekly reporting member banks tp z„, `113Mit reports quarterly on the more detailed form. 1954 10/6/42 Following a disucssion of the unsatisfactory results that 1111(1 been obtained from the separate schedule on instalment loans and °r the sirability of taking the loan schedule out of the call de Ot the suggestion Suggestion was made that the entire matter be referred to Mee, Ransom, Evans, and McKee with power to act. This suggestion was approved unanimously. Reference was then made to the discussicm3with the Presidents or the Pedral Reserve Banks while they were in Washington last week °tEt reduction in the discount rates in effect at the Federal Reserve —63 On loans and advances under sections 13, 13a, and 10(b) of the Reserve Act and the establishment of a preferential rate on adaecured by direct obligations of the United States with a matIllltY Of one year or less. It was stated that the understanding with th"l'esidents was that the Reserve Banks would not be expected to take 11th respect to a reduction until receipt of advice from the 11041.ci to whether it would ftwor a reduction in the general discount rete °r the establishment of a preferential rate. There was a discus- 8104 the reasons which might be advanced for and against a general r"Iletton as compared with the establishment of a preferential rate. While this discussion was in progress, Mr. Goldenweiser, Directo), Of the Division of Research and Statistics, and Mr. Rouse, Vice ent of the Federal Reserve Bank of New York, entered the room 1955 10/6/42 "iith a drat f statement which they had prepared in response to a re- made by Secretary Morgenthau while representatives of the System t the Treasury this morning, and Chairman Eccies suggested that eting of the Board adjourn so that the members of the Federal erket Cortunittee who were in Washington might have an opportunity 4sider the statement. Thereupon the meeting adjourned.
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