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1476 A meeting of the Board of Governors of the Federal Reserve System was held in Washington on Thursday, October 7, 1943, at 11:00 a.m. PRESENT: Mr. Ransom, Vice Chairman Mr. Draper Mr. Evans Mr. Mr. Mr. Mr. Morrill, Secretary Bethea, Assistant Secretary Carpenter, Assistant Secretary Clayton, Assistant to the Chairman The action stated with respect to each of the matte rs hereinafter referred to was taken by the Board: Memorandum dated October 5, 1943, from Mr. Goldenweiser, Director of the Division of Research and Statistics, recommending (1) that Randall W. Hinshaw be appointed as a junior economist in that Division, with basic salary at the rate of 1'3,200 per annum, effective as of the date upon which he enters upon the performance of his duties after taking the usual physical examination, and (2) that, if he should not pass the physical examination, he be brought into the Federal Reserve retir ement system on a restricted basis by waiving death and disability benefits for 10 years. Approved unanimously. Memorandum dated October 5, 1943, from Mr. Goldenweiser, Director of the Divis ion of Research and Statistics, recommending that Miss Mary Jane Putnam be appointed as a junio econo r mist in that Division on a temporary basis for an indefinite period, with basic salary 1477 10/7/43 -2- at the rate of 2,600 per annum, effective as of the date upon which she enters upon the performa nce of her duties after having passed satisfactorily the usual physical examination. Approved unanimously. Memorandum dated October 4, 1943, from Mr. Goldenweiser, Director of the Division of Rese arch and Statistics, recommending that Jorge Tejada be appointe d as an economic assistant in that Division on a temporary basis for a period of approximately two months (from the early part of October through November 30, 1943), with basic salary at the rate of t1,300 per annum, effective as of the date upon Which he enters upon the performance of his duties after having passed satisfactorily the usual physical examinat ion, with the understanding (1) that an exte nsion of Mr. Tejada's temporary appointment may later be recommended if his assistance is needed for an additional period, and (2) that he will not become a member'of the retirement system. Approved unanimously. Memorandum dated October 5, 1943, from Mr. Morr ill, recommending that the appointment of William A. Kline, printing clerk in the Secretary's Office whose temporar rein statement for a period of not y to exceed 90 days was approved by the Board on July 10, 1943, after two periods of training in the United States Arm/ Air Corps Reserve, from which he subsequently resigned, be made permanent, with no change 1478 10/7/43 -3- in his present basi sala c ry at the rate of 1'2,600 per annum, effective as of the expiration of his present temporary appointment at the Close of business on October 7, 1943. Approved unanimously. Memorandum dated October 1, 1943, from 'Mr. Paulger, Chief of the Division of Examinations, recommending that the appointment of Mrs. Helen K. Berg as a stenogra pher in that Division be made permanent, effective as of the expirati on of her present temporary appointment at the close of busi ness on October 6, 1943, and that her basic salary be increased from $1,620 to $1,800 per annu m, effective October 16, 1943. Approved unanimously. Memorandum dated October 5, 1943, from Mr. Goldenweiser, Director of the Divi sion of Research and Statistics, submitting the resignation of M. Louise Frederic k as a clerk in that Division, to become effective as of the close of business on October 5, 1943, and recommending that the resignation be acce pted as of that date, with the understandin g that appropriate refund will be made for 2 hours and 50 minutes of unea rned annual leave. The resignation was accepted. Letter to Mr. Young, President of the Federal Reserve Bank of Chicago, reading as follows: "In accordance with the requests containe in d Mr. Diercks' letters of October 4, 1943, the Board appr oves 1479 10/7/43 -4- "the appointments of Harris Childs Buell, Jr., and Eugene Irving Burke, Jr., as assistant examiners for the Federal Reserve Bank of Chicago. Please advise us of the date s Upon which the appointments become effective." Approved unanimously. Letter to the Presidents of all the Federal Reserve Banks, reading as follows: "Further reference is made to the Board's letter S-627, dated March 27, 1943, with whic h was enclosed a copy of a memorandum from the War Department, sign ed by Colonel Paul Cleveland, dated March 25, 1943. "For your information and guidance there is enclosed a copy of a memorand um from the War Department, dated October 4, 1943, signed by Colonel Paul Clevelan d, Chief, Advance Payment and Loan Branch, relative to exte nsions of maturities of guarante ed loans under delegated authority.” Approved unanimously. Letter to the Presidents of all the Federal Reserve Banks, read ing as follows: "There is enclosed for your information a copy of a.memorandum date d October 6, 1943, received from Mr. William A. Coolidge, Chief of Finance Section, Office of Procurement and Material Navy Depa rtment, in which , he asks that an addi tional sentence be inserted in his memorandum of October 1 on VT loans furnished you with our letter S-693 of Octo ber 2, 1943." Approved unanimously. Letter to the Presidents of all the Federal Reserve Bank s, reading as follows: "Recently, articles have appeared in the press corn meriting on a letter written by the Comp troller General of the United States to Senator James E. Murray, Chairman of the Senate's Special Comm ittee to Study Problems of 1480 10/7/h3 -5- "American Small Business. The Comptroller General's letter, which was given to the press by Senator Murr ay, relates to a report submitted to the Committe enti tled e 'War Contract Termination Legislation' , which report contains the text of a proposed bill 'To facilita te the termination of war production contracts and subcontr acts, establish uniform contract termination policies and , for other purposes'. "Contrary to the impression gained from certain published comments with respect to the letter from the Comptroller General, that letter does not take an adve rse position with respect to present Regulati on V loans. It deals with the settlement of cancelle contract d s and particularly with the proposals contained in the prop osed bill referred to above. A copy of the Comptroller General's letter, with the accompanying pres stat ement of s the Senate Special Committe e on Small Business, is enclosed for your information. "In sending you a copy of this letter, it may be pointed out that the statements of the Comp troller General represent the position taken by his offi ce but do not necessarily represent the position which will be finally Incorporated into legislation by the Congress . As you perhaps know, the position taken by the Comptroller General is contrary in many resp ects to that taken by the Armed Services." Approved unanimously. Letter to Mr. Hale, Vice President of the Fede ral Reserve Bank of San Fran cisco, reading as follows: "This is in answer to your letter of Septembe r 21 enclosing copy of a letter from Barker Bros ., of Los Angeles, which relates to the 'freezin g' of charge accounts of a business enterprise, and to that part of your letter of September 25 (commenting on Proposed Amendment No. 11 to Regulation W) whic h deals with the same subject. "The proposal to exempt from the regu lation sales of the type referred to by Barker Bros., as you know, has been under study for a long time. It is still in the study stage, main ly for reasons suggested in your 1481 10/7/43 -6- "letter of September 25 - (1) that if decision to eliminate restrictions on charge accounts should be made in the near future, there would no longer be any need for an amendment to deal with charge sales to business conc erns, and (2) that otherwise a special amendmen t on this subject, like special amendments to deal with othe prob lems that r are pending, should not be brought out by itself but included at some early date in a set of amendmen ts. This is much the same line of reasoning that is developed in your letter of September 25, and that we have developed ourselves, for postponing action on the matter of small shortages in down payments on mail orders. "You will recall that the question of an extensiv e revision of Regulation W is to be discussed by Gove rnor Ransom and Mr. Parry at the forthcoming Presiden ts' Conference. It is now contemplated that after that discussion a System Conference of operatin g men will be called, at which questions of revi sion or amendment, as well as questions of enforcement, will be canvassed in some detail." Approved unanimously. Letter to the Presidents of all the Federal Rese rve Banks, reading as follows: "The Board has approved a change in the procedur e for the collection of reports on Form F. R. 240 from member firms of national secu rities exchanges. In the future, no reports will be requ ired of member firms of any exchange other than the New York Stoc Exch k ange. The 15 New York Stock Exchange firms that are now reporting monthly will continue to report monthly. All other New York Stock Exchange firms that carry margin accounts will report semiannually as of June 30 and December 31, but New York Stock Exch ange firms that do not carry margin accounts will discontinue reportin g. "These changes have been made in order to cons erve the manpower used in maki ng the reports, small though it may be. The customer s' debit balance figures for firms other than the New York Stoc k Exchange margin firms have never been very large. They have never totalled as much 1482 10/7/43 -7- "as 5 per cent of the balances of the New York Stock Exchange margin firms. Furthermore, they have fluctuat ed in close correspondence with the latt er. "Future developments will determine whether or not, at some later date, reportin g by firms now exempted should be resumed, and it might be deci ded on occasion to make a special survey to ascertain if any chan ge in the situation has occurred." Approved unanimously. Letter to Mr. Rounds, Chairman of the Reti rement Committee of the Retirement System of the Federal Reserve Banks, reading as follows: "Referring to your letters of September 27 and October 5, the Board of Governor s has considered the amendments proposed in the Rules and Regu lations of the Retirement System to make effective the reco mmendations of the Presidents' Conferen ce and has authorized me to advise you that it will approve the amendments if adopted by the Board of Trus tees of the Retirement System in the form submitted with your lett er of September 27 as modified by your letter of Octo ber 5. Every effort will be made to advise you of the Board's approval of the amendments promptly after rece ipt of advice from you that they have been adopted by the Board of Trustees. "It is noted from your letter that it is planned to submit the amen dments covering the proposed Board of Governors Plan to a meeting of the Board of Trustees as reorganized after adoption of the above-mentioned amendments. In accordance with your suggestion the Board will formally approve these amendmen ts, following their adoption by the Board of Trustees, simultaneously with the formal adoption of the Board of Governor s Plan." Approved unanimously. Thereupon the meeting adjourned. iTO Vice Chairman. Secretary.
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