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ii A meeting of the Board of Governors of the Federal Reserve 8:18tera Was held in Washington on Friday, September 12, 190, at 11:30 PRESENT: Mr. Ransom, Vice Chairman Mr. Szymczak Mr. Draper 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 herein- atte referred to was taken by the Board: Telegr to Messrs. Sanford and Hays, Secretaries of the Fed- "al Reserve Banks of New York and Cleveland, respectively, Mr. Leach, Ident of the Federal Reserve Bank of Richmond, Messrs. Dillard 44(1 St m toe1P-r", Secretaries of the Federal Reserve Banks of Chicago and Ileae respectively, Mr. Swanson, Vice President of the Federal Bank of Minneapolis, MT. Thomas, Deputy Chairman of the Fed- "erve Bank of Kansas City, Mr. Gilbert, President of the Federal R "erve Bank of Dallas, and Mr. Hale, Secretary of the Federal l't aerve eztabii Bank of San Francisco, stating that the Board approves the c. shm'ent without change by the Federal Reserve Bank of Kansas SePtember 8, by the Federal Reserve Bank of San Francisco on 4Ptenlbel' 10, and by the Federal Reserve Banks of New York, Cleveland, Chle 1941) go, St. Louis, Minneapolis, and Dallas on September 11, the rates of discount and purchase in their existing schedules. Approved unanimously. raNij 9/12/41 -2Memorandum dated September 10, 190, from Mr. Wyatt, General C/Illsel, recommending that Miss An L. Downing be appointed as a sten- °gIltPher in the Office of General Counsel, with salary at the rate of '1 ' 68° Per annum, effective as of the date upon which she enters upon the Performance of her duties after having passed satisfactorily the Aysical examination. Approved unanimously. Memorandum dated September 9, 1941, from Mr. Goldenweiser, 1)il'ect°r of the Division of Research and Statistics, recommending that Robert W. Bean be appointed on a temporary basis for a period °Irnot to exceed one year as an economic assistant in the Division c)t1Q`esearch and Statistics, with salary at the rate of 2,L00 per 841t111111, eff ective as of the date upon which he enters upon the pertOan cal e 0f his duties after passing satisfactorily the usual physi- Xamlnatio n. Approved unanimously. tarl Lette,, to LP. Clark, Vice President of the Federal Reserve Of Ati, nt reading as follows: lett:11 accordance with the request contained in your tionZ' of September 8 the Board approves the designaDenmark as a special examiner and Vesus 314 Robert aes.", R. Andrews and D. E. Plaster as special that8tant examiners, with the understanding of course Peri/1,12.one of the individuals named will be transferred uentl Proval. Y t0 eAokmination work without the Board's ap- d: of J. 1,-. 9/12/41 -3"With the deletion of the three names listed in your !-etter, our records agree with yours as to the individuals on -L your bank who have been approved as special examiners r special assistant examiners." Approved unanimously. Letter to Mr. Bailey, Assistant Director in Charge of LegisReference of the Bureau of the Budget, prepared in accordance with th e action taken at the meeting on September 9, l941, and read11 as follows: lative 191, "Receipt is acknowledged of your letter of August 27, addressed to Chairman Eccles, with which you enclosed Y of a report relating to the price control bill (S. 1,4-u) s -shed ubmitted to your Bureau in accordance with estabprocedure by the Secretary of Commerce prior to its Zeirassion to the Chairman of the Senate Committee on Icing and Currency. Your letter states that before re,to the Secretary of Commerce the Bureau of the A Budget viZ aPpreciate receiving an expression of the Board's sjegarding the enactment of the proposed legislation. to t. you may know, Chairman Eccles has been requested test ' before the House Committee on Banking and Curthis. legislation. A recess has been taken by the this; re and Chairman Eccles is absent from the city at riot tu'lle. In these circumstances, the Board would prefer terino undertake the preparation of a report during the in' It is realized, however, that you may wish to adthe report of Commerce with respect to his prosed viel,Is vithout waiting for an expression of the Board's you thand, 'cherefore, the Board has requested me to advise Depart it has no objection to offer at this time to the ' 641ent of Commerce report." is.n Approved unanimously. Lett er to 11111, Mr. ;Aercer, Vice President of the Federal Reserve c).1 ' Lunond, reading as follows: 9/12/41 "In accordance with the recommendation contained in Your letter of September 10, the Board extends to OcOber 13, 1941, the time within which The Munsey Trust ' °r4PanY, Washington D. C., may accomplish membership in the System." Approved unanimously. Letter to Mr. Mulroney, Vice President of the Federal Reserve of Chicago, reading as follows: in"In accordance with the recommendation contained Your letter of September 4, 1941, the Board interposes objection, under the provisions of the bank's condi,, c)n of membership numbered 1, to the exercise of comer' or" banking powers by The Merchants and Mechanics Bank or F,lint, Flint, Michigan, which institution at the time 4.68 admission to membership in the System, was not engaP that type of business. The Board's action is : . a L6r1 the understandinF that the proposed conversion into Aercial bank receives the formal approval of the ap' ;2,Priate State authorities and that your counsel is satwith the legal aspects involved." Approved unanimously. Te egram to Mr. West, Vice President of the Federal Reserve liatik of 8 an F rancisco, reading as follows: San F"YoUl: letter September 8, Federal Reserve Bank of der j ano-Lsco is powers untee "egulation T authorized to exercise such as are given to business conduct commitspe8.1,111der section 4(c) in respect to exceptional cases in cl'led in that subsection. Bank is authorized to act neen case involving any creditor having a place of busior -Ln the twelfth Federal Reserve district. Aggregate ex,'Pell-ods referred to in clause 6 of section 4(c) may eed 35 days." Approved unanimously. re,4clirt Telegram to the Presidents of all of the Federal Reserve Banks az follows: 770 9/12/41 -5"Reg q-56. Inquiry has been received whether section- 4(c) prohibits sale of automobile with first monthly instalment of '()5 and remaining 17 monthly instalments of 23, "Section 4(c) is worded in the alternative, and in:talments must either be substantially equal in amount or 'be so arranged that no instalment is substantially greater 21 amount than any preceding instalment'. Therefore answer to inquiry is negative." Approved unanimously. Telegram to the Presidents of all of the Federal Reserve Banks l'eading as follows: the "Reg. W-57. A question has been received regarding application of Regulation v: to a case in which an au'?ralkile salesman sells his demonstrator. The question by relates to the purchase of the resulting obligation the dealer -employer of the salesman. "The dealer -employer in such a case, who presumably is a eglstrant as described in section 3 and also familr 3 with the partic ular transaction, may not in any event ;1,l'ellaso the obligation unless it complies with the rectlf-rements of sectio n 4. This is true because no Regisknowingly purchase any instalment sale obligatjo vo"r,:n which fails to comply with section 4, regardless of ' Made the original extension of credit. terl ."The regulation does not apply to an isolated exbus9-°n of credit by a person who is not 'engaged in the i,Ylessi as described in section 3(a). However, it is ;g?rtant to note that, whatever the form in which the nan ement may be set up, an automobile salesman's filajlal interest in his demonstrator may represent a rethel°nshiP that is substantially different from that of automobile ownership. It may have the formal appearance Man -rnce of a purchase of the automobile by the salesert Wu "actually the demonstrator is in effect the props‘4 of the dealer -employer rather than the salesman. In case the sale of the demonstrator by the salesman like for the purposes of the regulation, be treated rttade tnY other sale made by the salesman, i.e. as a sale shoa him as agent for the dealer-employer, and hence comply with the requirements of section 4 regardless 9/12/41 —6- 01 whether the obligation is purchased by the dealeremployer." Approved unanimously. Telegram to the Presidents of all of the Federal Reserve Banks NclUng as follows: "Reg. W-58. In view of provisions of section 3(a) (2( ;')0d), bank which discounts an obligation which is subto the Regulation is not obliged to ascertain whether the °riginal lender is a duly licensed Registrant." Approved unanimously. Telegram to the Presidents of all of the Federal Reserve Banks l'eEding as follows: "The classification 'pianos and household eJectric T b-ns includes the Solovox manufactured by the Hammond 'netrlin iwrau Company, Chicago, Illinois. has much as this wire relates to a trade name °cluct it is not being given a W number and will not Published in Federal Reserve Bulletin." Approved unanimously. tatlk Tele ori_ gram to M. Swanson, Vice President of the Federal Reserve Nanneapolis, reading as follows: ori " °11r telegram September 10 re extension of credit meat nallY made with proper down payment and for repayels within 12 months, which obligor wishes to refinance dat e here for repayment within 18 months from original ' eit,' Such refinancing permissible under Regulation rie:r before or after November 1 without statement of per ”itY since the additional 6 months would have been ssible in the first instance." Approved unanimously. Tele gram to Mr. Stroud, First Vice President of the Federal 9/12/41 —7— "'e Bank of Dallas, reading as follows: , "Re your telegram inquiring as to application of aegulation 1j to loan by small loan company which is payable in thirty days but will be renewed at maturity upon Payment of interest. Assuming there is no agreement or .1:Iderstanding that renewal will be accompanied by reduc' 10n of principal, principle of Board's ruling V.-39 appears to be applicable, and loan would not violate present Itegulation See, however, V-47." Approved unanimously. counsel Telegram dated September 9, 1911, from Mr. Hodge, Assistant of the Federal Reserve Bank of San Francisco, inquiring as to "e co rrectness of the opinion that, in connection with the appli_ eation the provisions of Regulation 11„ if a registrant takes everY %°nable means, but not necessarily legal action, to effect collec%11 under baniet. section 8(a)(2), this requirement of the Regulation would 4 The Secretary was requested to advise Mr. Hodge that the Board agrees With the opinion. the bi 4 e.morandum dated September 10, 1941, from Mr. Parry, Chief of ,r. \r181°11. of Security Loans, recommending that the Board reimburse Behrens of Ludwig Bauniann, New York, New York, for expenses °4 edbY him in connection with the trip which he made to Washington 'Ptember Boardt 1941, at the s request, to discuss certain asOf Regulation L. Approved unanimously. i119 9/12/41 -8Letter to Mr. LaGuardia, United States Director of Civilian Defense of the Office of Civilian Defense, reading as follows: "Your letter of September 5 to Chairman Eccles, in which you ask that we designate some responsible person from the Board's organization as a member of a committee to meet with Brigad ier General L. D. Gasser, U. S. ArMY retired, to consider matters relating to the Protection of vital structures and formulate a feasible and acceptable plan of procedure, has had the careful con sideration of our Board. the , "It is not clear from your letter, particularly lirst paragraph thereof, that the Board of Governors Solvingsition to render any worth while assistance the problems to be explored by such a commitre. Accordingly, the Board doubts whether it would be _PPropriate for it to designate a representative to serve fl such a committee. However, the Board is desirous of ?operating with your office in every way possible and be glad to have your office contact Mr. E. L. Smead, ler of the Board's Division of Bank Operations, for further information regard ing the Federal Reserve System er ,the protection of buildi ngs housing the Board and Fed-L Serve Banks and Branches. has In this connection, I may point out that the Board are own building here in Washington and that there (Alt ;V.rtY-six Federal Reserve Banks and Branches throughhave ' e various sections of the country, most of which t._ ouildings of their own. The System is vitally inin seeing that all necessary steps are taken to exalvilide adequate protection for these buildings. As an of one of our problems, the Federal Reserve Bank 1levl ey- York gol ; holds in its vault billions of dollars of State rencY and securities for itself, for the United fore.r l'easury and other Governmental agencies, and for thatIn governments and central banks. It is important veauabi he utmost precautions be taken to protect these eXpert es and the Board hopes that through your committee the adeadvice may be had in due course with respect to quacY of our present protective measures." Approved unanimously. 1180 _9_ Thereupon the meeting adjourned. • ec Vice Chairman.
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