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1313 A meeting of the Board of Governors of the Federal Reserve System was held in Washington on Friday, September 10, 1943, at 10:30 a.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Eccles, Chairman Ransom, Vice Chairman Szymczak McKee Draper Evans Mr. Bethea, Assistant Secretary Mr. Carpenter, Assistant Secretary Mr. Clayton, Assistant to the Chairman Mr. Goldenweiser, Director of the Division of Research and Statistics Mr. Smead, Chief of the Division of Bank Operations Mr. Leonard, Director of the Division of Personnel Administration Mr. Vest, Assistant General Attorney Mr. Wyatt, General Counsel There were presented telegrams to Messrs. Treiber and Clouse, 'l'ies of the Federal Reserve Banks of New York and Cleveland, et l'e8PectivelY, Mr. Leach, President of the Federal Reserve Bank of Richra °Ild, Mr. Dillard, Vice President of the Federal Reserve Bank or Chicago, Mr. Stewart, of the Federal Reserve Bank of St. Secrtayl'51is, Mr. Powell, First Vice President of the Federal Reserve Bank °r1Ainneapolis, Mr. Caldwell, Chairman of the Federal Reserve Bank of 1Carteas City, Mr. Gilbert, President of the Federal Reserve Bank of 411as, and Mr. Hale, Secretary of the Federal Reserve Bank of San Plralle4co, stating that the Board approves the establishment without bY the Federal Reserve Bank of San Francisco on September 7/ tlY41. Pederal Reserve Bank of Kansas City on September 8, and by the 1314 9/10/43 -2- Pede 1 Reserve Banks of New York, Cleveland, Richmond, Chicago, St. totti. "°) minneapolis, Kansas City, and Dallas on September 9, 1943, of the rates of discount and purchase in their existing schedules. Approved unanimously. There was then presented a memorandum dated August 11, 1943, Nal the Personnel Committee, which had been circulated among the mem,. ber's Of the Board, and in which it was recommended (1) that the Chair4.11 of the Federal Reserve Bank of New York be requested to ascertain inforraea4 Whether Mr. Robert D. Calkins, Dean of the School of Busirie4 of Columbia University, would accept appointment as a Class C dirbeet°r of the Federal Reserve Bank of New. York for the unexpired P°ttion of the term ending December 31, 1943, and that the appointZellt be tendered to him if he would accept, and (2) that Mr. William 1.uer8, Who was appointed a Class C director of the Bank on January 1, 1943, be designated as Deputy Chairman. There was a discussion of Mr. Calkins' qualifications as disclosed by the information that had been developed by the Personnel Committee with respect to him, at the conclusion of which, upon motion by Mr. Szymczak, the recommendations of the Personnel Committee were approved, Mr. Ransom voting "no" with respect to the appointment of Mr. Calkins as a Class C director of the New York Bank. At this point Mr. Goldenweiser left the meeting. Before this meeting Mr. Szymczak had placed in circulation the members of the Board a memorandum dated August 21, 1943, amead summarizing the principal features of a report agreed 131_5 9/1W43 -3- - V the members of the Insurance Committee of the Presidents' Conte rence at a meeting held in Chicago on August 9, 1943, which set felith the conditions which the committee agreed should be incorporated the -fleurance agreement of the Federal Reserve Banks, if such agreeraetit, w ere to be extended to cover bankers' blanket bond and registered -- express risks now covered by purchased insurance. Mr. Smead 0114c" 'esed the principal features of the report of the Insurance Comrilittee / calling attention to the fact that a majority of the members Or the committee were opposed to the cancellation of purchased insur- Eince coverin these risks. (Only the representatives from Atlanta, e4Pc1ie, Kansas City, and Dallas were in favor of the bankers' 01.Etrik et bond portion of the plan, and only the representatives from LlChrn ncl, Kansas City, Dallas, and San Francisco were in favor of the Nist ered mail portion of the plan). He also stated that it was an- Pated that the report would be submitted for consideration at the r41eet1.11 g of the Presidents' Conference to be held in New York during the 1 ' atter part of the week of October 11. In the course of a discussion of the report, the opinion was e orA. by Chairman Eccles, and concurred in by the other members "the 13, -aPd, that every effort should be made while the Presidents are -n Washington during the week of October 18 to reach an agreement N4,11 r_ "Peet to the extent to which the existing insurance agreement e exPanded. 1316 9110/43 At the conclusion of the discussion, Ur. McKee moved that a draft of letter to Mr. Day, as Chairman of the Presidents' Conference, be prepared for consideration by the Board, in which it would be stated that the Board felt that a determination of the matter should be made at the forthcoming meeting of the Board with the Presidents in October and that it was the hope of the Board that at the next Conference of Presidents a program could be agreed Upon that would be acceptable to the Board. This motion was put by the chair and carried unanimously, with the understanding that before the meeting with the Presidents the matter would be given further consideration by the Board for the purpose of determining the kind of program it would like to have put into effect in the event a satisfactory proposal was not agreed upon at the next Presidents' Conference. At this point Messrs. Smead, Leonard, Vest, and Wyatt withdrew trh 411 the meeting, and the action stated with respect to each of the ' 414tte Pe hereinafter referred to was then taken by the Board: The minutes of the meeting of the Board of Governors of the '4- Reserve System held on September 9, 1943, were approved unani- Memorandum of this date from Mr. Nelson, Assistant Secretary, Ntmme "ing that Mrs. Caroline R. Poore be appointed as a charwoman t4 the - ecretary's Office on a temporary basis for an indefinite period, ' ' 171th b "lc salary at the rate of $1,200 per annum, effective as of the late la Pc'n Which she enters upon the performance of her duties after 1317 9/10/43 -5- Passed satisfactorily the usual physical examination, with the un,_ L'erstanding that if anything derogatory should develop in the t117est' lgation of her references her services may be terminated immediately. Approved unanimously. Letter to Mr. Dillard, Vice President of the Federal Reserve tank of Chicago, reading as follows: f "The Board of Governors approves the payment of a ..ee of $20 to directors of the Head Office for attendat Executive Committee meetings and to the direc2. ' 1 8 of the Detroit Branch for attendance at meetings the Board of Directors, in accordance with the excerpt t!onl the minutes of the meeting of the Board of Directors of the Federal Reserve Bank of Chicago held on August 25, ,94943.3, which was submitted with your letter of August 30, -L n Approved unanimously. Letters to the "Lockport Exchange Trust Company", Lockport, New 1°1* he "United States Trust Company of Paterson, New Jersey", Pater'th 4 New Jersey, the "Citizens Bank of Hattiesburg", Hattiesburg, 144i88iPpi, and "The Bank of Holyrood", Holyrood, Kansas, reading as tollow s: a, "The Board is glad to learn that you have completed p'l arrangements for the admission of your bank to the h!cleral Reserve System and takes pleasure in transmitting her a formal certificate of your membership. "It will be appreciated if you will acknowledge re-1-pt of this certificate." Approved unanimously. 1318 9110/43 -6Telegram to Mr. Knoke, Vice President of the Federal Reserve krat of New York, reading as follows: "Referring your wire September 9, Board approves Federal Reserve Bank of New York advising of its will1ingrie8e to make advances, and the making of such ad1 . to Banque Mellie Iran against United States easury certificates, for not more than 90 days, at rue rate of one per cent per annum, in amounts up to 114 face value of the collateral, subject to possible 1, 4- unitation of the total outstanding if deemed desirable." j Approved unanimously, and the Secretary's Office was authorized to inform the other Federal Reserve Banks that the Board approves their participation in any advances made by the New York Bank under this authority. Thereupon the meeting recessed and reconvened in executive aeesion at 3:30 p.m. with the members of the Board and Mr. Leonard oent Following the afternoon session the Secretary's Office was Eichrised that the following actions had been taken: Recommendations having been made in memoranda submitted by the respective division heads, the following increases in basic annual salaries of employees of the Board were approved effective September 16, 1943, Mr. McKee voting "no" on the increases proposed for the three employees in the Division of Research and Statistics and Mr. Draper voting "no" on the increase proposed for Mr. Bach: Nara Se kreteta e. y- s Office vonne Shaw Designation Secretary to Mr. Morrill esearch and Statistics (1` kirke Knapp Economist '4; L. Bach Economist 11.1411'd A. Musgrave Economist Date of Memorandum Salary Increase To From 6/26/43 2,800 t2,9OO 8/25/43 8/25/43 8/25/43 5,000 5,000 5,000 5,600 5,600 5,600 1_319 9/10/43 -7Approval was also given to the following letter prepared for Mr. Leonard's signature as Chairman of the Board's Committee on Deferment to Mr. Robert M. Barnett, Chairman of the Review Committee on Deferment of Government Employees of the 'War Manpower Commission. On this action Messrs. McKee and Draper voted "no": "Under the provisions of Section IV, 1-b, of Execu16.e 11r Order 9309, the Agency Committee submits herewith 4,11 triplicate, a request for the deferment for six months iirolu September 30, 1943, of Mr. J. Burke Knapp, Assistant ,,:ad of the International Section of the Board's Division v4 and Statistics. m, "Since our letter to you of July 7, the situation ' - 11 respect to the work of our International Section has wlanged in two respects: 1. As indicated in a letter dated September 3, from Lieut. Colonel Shoemaker of the Military Government Division, the work being done for the Military Government Division of the War Department has been expanded beyond the original plans of the Military Government Division. A copy of Colonel Shoemaker's letter of September 3 regarding this expansion is attached. 2. For the use of the State Department in international negotiations and discussions With other countries, the Board is undertaking, at the request of the Secretary of State, to assemble and analyze information regarding the financial situation of a large number of foreign countries. The full resources of the International Section and the services of Mr. Knapp in particular will be needed in this work. ma "In the circumstances, Mr. Knapp is truly a necessary Whom it would be exceedingly difficult, if not impos'la, to replace at this time. ,:As I stated previously, Mr. Knapp is uniquely fitted 1.141.111s work in the International Section. Following grad11..'1°n from college in 1933, where he majored in economics, -was a Rhodes Scholar at Oxford University in England 1_320 9/10/43 -8- for three years and then for three years was associated with an international banking firm serving in the Berlin a d London offices. He has been in the Board's Internaj j°nal Section since February 1940, when he returned from ..-urope.11 Unanimous approval was given to the following statement which had been prepared with the thought that, if approved by the Board, a copy would be delivered to the employees' committee at a meeting to be held tomorrow of that committee and the Board's Personnel Committee: t, "Since the two committees met last May, considerable ,4*1-Ight and discussion have been given to the matters dis18sed at that time and some developments have occurred. ' Q_QLthe Retirement System "Distinct progress is being made in the revision of both the regular plan and in the formulation of a special Plan for the Board's employees. The Board has approved a revision of the Retirement SYstem submitted by the Presidents' Conference liberaliz- g the benefits, particularly for the lower paid employees. ul 4pesent rights of employees will not be adversely affected bed in nearly all cases the revision will increase the en/rts. The Board's employees will have the option to iri','111-le under this revised Bank plan or to elect the proof the so-called Board of Governors plan discussed It i.; expected that the board of trustees of the .;;met s i) ( !3,4 stem will have approved the revised Bank plan IV ctober O. pr "Meanwhile, the Board of Governors plan has been ape red by the Board in principle. This plan has been dis: /CTed with members of your subcommittee on retirement. s expected that the various technicalities and formali' ti t will be completed so that the final draft can be sub! mie to the employees in sufficient time for them to 0,1?are the two plans and make their election by the end T..t, November. 44,The leave policies with respect to maternity leave t0 the use of accumulated leave for short periods 1321. 9/10/43 -9nw_ re modified and liberalized in July. These changes were discussed with your committee before adoption. Benefits ."The benefits which had been accorded to the employees ' 71ng to enter military service had been limited to emother than temporary. In June, this was modified to 0 the extent that a payment of unearned salary in varying Qurlts, depending upon the length of employment, is made temporary and indefinite employees who have been in the a210Y of the Board for nine consecutive months or more who leave to enter military service. This change was 4.4elass discussed with your committee before adoption. s Qton Piart el "Much thought has been given to the question of the haaselfication plan, which, your committee has reported, f,8 been a matter of concern to a number of the employees -r some time. pi "The basic policy that the Civil Service Classification ?'rld Pay Scales be considered as a guide in acting upon cll'es of all positions in the Board's organization below those' of Assistant Chiefs of Divisions and exclusive of th in tecTe the Board Members' and Fiscal Agent's Offices is be t, continued without change. The following changes as ' Procedure will be put into effect: a. The present classification procedure and the staff classification committee will be discontinued. b. The Civil Service terminology as to grades, for example, CAF-3, P-2, etc., will be dlscontinued and there will be a straight alphabetical or numerical designation of the salary brackets. C. The Division of Personnel Administrat10n will have the responsibility for allocating, after consultation with the respective division heads, an appropriate salary bracket for each employee. The allocations will be made on the basis of (1) work description sheets reflecting the work actually performed, (2) discussions with the respective divisions as to duties and resPonsibilities of the individual employees, (3) surveys as to practices in other Federal Agencies. In making the allocations, the best Civil Service r g 1322 9110/43 -10- "Standards and practices will be followed in so far as practicable. d. An individual employee upon request will be advised of his allocation. If he wishes to discuss his individual allocation, he should take the matter up with the head of his office or division and if he should desire to pursue the matter further, then with the Division of Personnel Administration. In case either the head of the respective division or the Division of Personnel Administration so desires, the matter will be submitted to the heads of all divisions who as a group will constitute a review committee. It is expected that in working out the details of the '--vised 'Procedure, the Employees' Committee will be consulted. a b It is the Board's stated policy to fill positions Promotions from within as far as practicable. The DivibeeI°4 of Personnel Administration checks to see whether are qualified employees for whom the position would - a Promotion and who are available for the position. There are, however, two sides to this question of th:ler. The Board desires the employees to benefit ta. ugh promotion. There is also the necessity for mainlning an efficient organization. 8, "The desire of an employee to transfer from one divieon to another, or from one job to another can not always 134ta.illet, particularly with the difficulty these days of obmellliqg competent replacements. Transfers frequently may inan that two inexperienced people would have to be trained 17411. tead of one. It sometimes happens that an employee who available because heghtbe qualified for another job is not ca can not be spared from his present position. In such sa.”3, however, the individual should not be penalized fo'arYwise because of the fact that he is not available , Promotion to another position for which he is qualified arvr re sPecial consideration is given to see that no injustice ' 8ults to the employee. as It is expected that any employee who is not satisfied thet° his job, his progress, or his prospects, will discuss cl4 matter first with the head or assistant head of his e liision or office and then, if he wishes, with the Divi°I1 of Personnel Administration. J a "The Employees' Committee has referred to the con! lderation of salary advances as being somewhat haphazard. Under standing instructions, a division is required to reeach salary in the division at least annuaJiy. A recent survey shows that 75 per cent of the employees, ex, 0/183-Ile of heads and assistant heads of divisions and asto the Chairman, who were in the employ of the rd oh July 1, 1943 and had had a year or more of servi1,`„'e received salary increases during the period July 2, aA4 - August 16, 1943. This would indicate that the saleZmg .s have not been haphazard as suggested by your I :w r "The employees who had not received increases for a or more included: 1. Some who have retired or are approaching retirement. 2. Some who have reached the maximum salary for the position. 3. SOMB who apparently have reached the maximum of their capabilities and value to the organization. 4. The remainder, for whom further salary adjustments may be contemplated in due course, have been and are under review. • D's of "The Employees' Committee has referred to the 'Lack ov a responsible person with whom an employee can talk sul, er his problems and have a hearing of his case with aswh:rice of unprejudiced consideration, in those instances 141-re.resort to regular channels of discussion had proved 84t1sfactory or appears inadvisable to the employee': and "Aong the responsibilities of the heads of divisions fa. ces is the duty of dealing sympathetically and foll:rlY with the employees under their supervision. Therewhie, whenever any employee feels that he has a question Nijh should be considered, he should take the matter up its- °tie of such supervisors. The Board is confident that 1.111 employees can rely upon fair treatment. Moreover, 11,13r?Judiced consideration will be given to matters taken 4 ;with the Division of Personnel Administration. Either cut; Leonard, Mr. Johnson, or Mrs. Bangs is available for su ltation on such matters. es' hal ,. "The Employees' Committee is now about a year and onehair It is understood that the committee has some unitstalntY as to its place in the scheme of things and as to functions and responsibilities. Year 1324 9/10/43 "It is believed that the committee's greatest conI.ributions can be: 1. Bringing to the attention of the Division of Personnel Administration and of the Personnel Committee any personnel policies which the committee feels should be considered. 2. Serving as a group through which representative opinions can be obtained as to the viewpoint of the employees on questions of personnel policy. v It is believed that this can best be accomplished 02r2ugh informal meetings and discussions with the Division rersonnel Administration or the Board's Personnel Cointee. f.,_ s "The normal procedure should be to submit any matter tVs t to the Division of Personnel Administration. However, request a meeting with the Employees' Committee may also Personnel Committee of the Board on any question of perTheel policy which it feels warrants further discussion. me lersonnel Committee will endeavor to arrange such a etlng promptly." Thereupon the meeting adjourned. Assistant Secretary. Chairman.
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