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A. meeting of the Board of Governors of the Federal Reserve Sys- toz "118 held 11 Washington on Wednesday, September 1, 1943, at 11:00 a.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Eccles, Chaiman Ransom, Vice Chairman Szymczak McKee Draper 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 matters hereinafter retelll'ecl towas taken by the Board: The minutes of the meeting of the Board of Governors of the Fed- eri. Reserve °1'the System held on August 31, 1943, were approved unanimously. blerlorandum dated August 31, 1943, from Mr. Goldenweiser, Director bivision of Research and Statistics, recommending, with the concur44" ot the Division of Examinations, that Miss Lillian H. Schiller, a te4c)grapher in the latter Division, be transferred to the Division of ileaereh atd Statistics, with no change in her present basic salary at the °r $1,620 per annum, effective September 1, 1943. Approved unanimously. the ttrlitez° ndura dated August 31, 1943, from Mr. Leonard, Director of 181.°11 of Personnel Administration, recommending that, effective '1943, (1) William H. Drake be transferred from Governor 1111)" l : s °trice to the Division of Examinations as a messenger, with no 1268 M/43 -2el18-11ee in his present basic salary at the rate of ::1,560 per annum, and (2)141chael L. Jamison, a laborer in the Secretary's Office, be transreea to Governor Draper's office as messenger on a temporary basis for 11111clefinite period, with an increase in his basic salary from $1,320 Per annum. The memorandum stated that these changes had been 44ellseedwith, and were agreeable to, Governor Draper, the Division of carilillations, and the Secretary's Office. Approved unanimously. Letter prepared for the simature of Mr. Dreibelbis, General or 67 'to Mr. Neth L. Leachman, in care of Mr. Agnew, General Counsel the e"ral Reserve Bankof San Francisco, reading as follows: "This is with reference to our previous discussion and 70 c°nrirmation of the employment as of August 1, 1943, of ezr.firm in connection with the current examination of Transfl of certain material involving a determination of irotivuer there has been a violation of the application for a ng Permit and voting permit agreement executed by the corv°ration i bill "It -s understood that all fee bills for services and sub is f°r actual expenses will be fair and reasonable and . eireet to the approval of the Board of Governors whose den.-u Will be final. in 7011,: connection with bills for expenses I am enclosing slib r forms which I suggest be filled out each month and : tl, j"tted to the Board. These should cover actual reasonable swoM exPenses while you are out of your office and should be ted in duplicate. Since the forms are not adaptable to tr rea:,'int9 expenses as such it will be satisfactory to make a flable itemization on a plain sheet of paper and attach it t +; ""e formot Approved unanimously, with the understanding that the appropriate items in the budget for the Legal Division would be increased by whatever amounts were necessary 4269 911/43 to cover the legal fees and other expenses referred to in the letter, and that the vouchers submitted by the firm for actual expenses, as distinguished from fees for services, would be paid upon advice from the General Attorney that the vouchers as submitted were fair and reasonable. Letter to Mr. Rice, Vice President of the Federal Reserve Bank of New Yoro 1) reading as follows: pe "The Board of Governors approves the changes in the °flnal classification plan of the Federal Reserve Bank ofr : wit'," York submitted with your letter of August 12, 1943, let : the subsequent revisions submitted with :Mr. Douglas' uer of August 27, 1943. "In order to preserve the numerical sequence of the I-tTre la the plan, a new page has been prepared indicating orcit PageS 164 to 168 have been removed, due to the transfer ch,e.!rtain positions from the Collection Department to the cu-e4 Department. This page will be placed in the Board's eollY"Your personnel classification plan and a duplicate P7 i8 enclosed for your use." Approved unanimously. tt, .48 Letter to the board of directors of the "Farmers and Merchants cum -PallY", Greenville, Pennsylvania, stating that, subject to condiOtmellibershiP numbered 1 to 6 contained in the Board's Regulation H, ard a pproves the bank's application for membership in the Federal Pe 4rve ' -''Ystem and for the appropriate amount of stock in the Federal Re,4414 of Cleveland. The letter also contained the following special comment: Whim,"It appears that the bank may possess certain powers reol;' are not being exercised and which are not necessarily aa';',red in the conduct of a banking and trust business, such telitze power to act as surety in certain circumstances. At" is invited to the fact that if the bank desires to exer ' -e se any powers not actually exercised at the time of 1°P) 4.0 t 9/1/43 -4HaAm, 'lesion to membership, it will be necessary under condition or me mbership numbered 1 to obtain the permission of the Board aevernors before exercising them. In this connection, the 130ara co understands that there has been no change in the scope of rporetepowers exercised by the bank since the date of its a , vPlication for membership." Approved unanimously, together with a letter to Mr. Fleming, President of the Federal Reserve Bank of Cleveland, reading as follows: pro "The Board of Governors of the Federal Reserve System ap8 the application of the 'Farmers and Merchants Trust Com11e7 ) Greenville, Pennsylvania, for membership in the Federal cir,:rve System, subject to the conditions prescribed in the en. 0 -:!ed letter which you are requested to forward to the Board elsulrectors of the institution. Two copies of such letter are whi° enclosed, one of which is for your files and the other of ch You are requested to forward to the Secretary of Banking the of Pennsylvania for his information. : It has been noted that all of the losses estimated in the reb, 0?-ju of examination for membership were eliminated at the close in If3 examination except an accumulation of cash shortages amount-g to $4 31.99 and for which provision was to be made at the end or or the bank ts accounting period. Therefore, the usual condition prmembership regarding the elimination of losses has not been eecribed. lattsa "The bank applied for membership in 1933 but, due to an xeritt!sfactory asset condition and the criticisms of the manageEippi -Lor its speculative tendencies and unsound practices, the exe ication was not approved by the Board. The then principal Utive officer has been replaced and the bank is now reported 14; ! 4 irlY satisfactory asset condition, however, as brought out presue v current report of examination for membership and your %48 1701 1%f : on memorandum, the management is still not impressive the improvement now apparent in the asset condition ; isoeffectea - only recently, after a conference between the superthe rY authorities, the active management and directors following xamination as of February 6, 1943. It is assumed, of course, tht,lj ado„You will follow the case closely until the corrective program rie:ed at the recent conference has been completed, including DracZTarY improvement with respect to supervision and operating ces of the trust department, and until you are satisfied t4t: ' here will not be a reversion to the management policies vhieb caused past unsatisfactory conditions. Z to; 1271 911/43 _5_ "It is assumed also that you will follow the matter of bellk's bringing into conformity with the provisions of 41 and the Board's regulations the savings accounts listed On Page 16 of the report of examination for membership." the Letter to Honorable Jesse H. Jones, Secretary of Commerce, reading 8.8 follows: "This refers to our letter of August 3, 1943, and your oe l'fl*,7 of the same date granting permission for representatives pi the Board to review certain files of the Reconstruction 11, 1rnee Corporation relating to loans made by the Reconstruction D:nce Corporation to Bank of America, Bankitaly Mortgage Comfi,Y1 and PacCoastfic Cost Mortgage Company. A review of these 1111?s indicates that there may be additional information re01,41 4; to these loans in the files of the Federal Reserve Bank Aan Francisco acting as Custodian and in the files of the mg aineY of the Reconstruction 'Finance Corporation at San Francisco th;eh would be helpful to the Board. It will be appreciated, ter°rs, if the Board may have your permission for its repressar ves to review these files at San Francisco. lAnY information which may be obtained by the Board from these files will be maintained in confidence by the Board and not be released without your consent." T Approved unanimously. Letter to the Comptroller of the Currency, reading as follows: witl :It is respectfully requested that you place an order 01,d 1 °Is Bureau of Engraving and Printing, supplementing the ReRn_of XUne 15, 1943, for printing of $20,040,000 of Federal 04,7-'fe notes of the 1934 series for the Federal Reserve Bank Boston in the $5 denomination." Approved unanimously. Thereupon the meeting adjourned. Allproired: Chairman.
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