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1362 A meeting of the Board of Governors of the Federal Reserve Ssteraisas held in Washington on Saturday, September 18, 1943, at 10:30 PRESENT: Mr. Mr. Mr. Mr. Mr. Ransom, Vice Chairman Szymczak McKee Draper Evans Mr. Bethea, Assistant Secretary Mr. Carpenter, Assistant Secretary Mr. Clayton, Assistant to the Chairman Hr. Smead, Chief of the Division of Bank Operations Mr. Dreibelbis, General Attorney Mr. Vest, Assistant General Attorney ALSO PRESENT: Mr. Davis, President of the Federal Reserve Bank of St. Louis Mr. Davis stated that in his letter of September 7, 1943, 1, he ,Aad Presented reasons why it was believed desirable to provide for Space at the Louisville and Memphis Branches of the FedReserve Bank of St. Louis, and that because of the urgency of the sit uation at Memphis he would like to discuss with the Board this 41°1'414 the Proposal of the board of directors of the Branch that an "ctItional story (4,500 square feet) be added to the Branch building cost estimated by the S & W Construction Company of $66,780 (inarchitect's fees of 6 per cent). He said that the original b14iA -4irig had been constructed with the necessary foundations and supports t°Permit the addition of another floor, that therefore the construction l'equire a minimum of critical materials, and that in view of the N17clecl condition of the Branch and the fact that no satisfactory space ava ilable for rent within a reasonable distance of the Branch 1363 9118/43 -2-- bldading it was felt that the work should be authorized. He went on to saY that question had been raised whether the cost of the new floor 111311341 increase the total cost of the building proper beyond the limitati °f 1250,000 established by section 10 of the Federal Reserve Act, 4 that he " had received a letter from the Managing Director of the 8ran on under date of September 16, 1943, which indicated that even "1 the additional floor the cost of the building proper would be less tilan that that the recommendaamount. He made the further statement " of the Memphis directors had been approved by the board of directors of +1, e Federal Reserve Bank of St. Louis subject to approval by the ' of Governors. During a discussion of the proposed addition, Mr. McKee inquired vtheth er it had been ascertained that the work actually could be done for the 44.0unt stated, and Mr. Davis said that the estimated cost would be within , )per cent of the actual expenditure. At the conclusion of the discussion, Mr. Szymczak moved that the Board interpose no objection to the expenditure by the St. Louis Bank of approximately k67,000 for the proposed addition, with the understanding that in no event would the total cost of the building proper, exclusive of cost of vaults, permanent equipment, furnishings and fixtures, be in excess of the limitation of !tt250,000 imposed by section 10 of the Federal Reserve Act. !kr Davis then commented briefly on the consideration being Uven by- the Bank to steps that might be taken to meet the space problem 1364 9118/43 -3- qthe Louisville Branch and stated that a further study of that latter* was being made, including the possible availability of other Illarters for the Branch, and that he had nothing to present to the Board for consideration at this time. At this point Messrs. Smead, Dreibelbis, Vest, and Davis withdrew f rom the meeting, and the action stated with respect to each of the tatters hereinafter referred to was then taken by the Board: The minutes of the meeting of the Board of Governors of the ral Reserve System held on September 17, 1943, were approved unani11104a4r. Memorandum dated September 13, 1943, from Mr. Goldenweiser, Dia,e etor of the Division of Research and Statistics, recommending (1) that Itrs. Jane Barco, a clerk in that Division, be permitted to use her (tee unklated and accrued annual leave, including any compensatory leave to h "credit, and that she also be granted leave without pay for such may be necessary for a period of not to exceed six months in '4rder vo be with her husband while he is still in this country, and (2)•that the Board continue to make its contributions to the retirement 434tem - on Mrs. Barco's behalf during the time she is on leave without Deir vrovided she continues her own contributions for the same period. Approved unanimously. Memorandum dated September 14, 1943, from Mr. Leonard, Director the n - -tvision of Personnel Administration, to Governor Szymczak, 1365 9443 -4- slAting that in passing upon salaries of officers of the Federal Re4srve Banks last spring a number of proposed increases were not ap1)1‘0 11ed because it was considered that the increases would have required ication, that under the "hold-the-line" order the certification Pl'cleedure had been held in abeyance but that advice had now been re°I-Ired that it was in order to act under the certification procedure, 411c1that it was recommended that the Reserve Banks concerned be advised tie t°110Ars with respect to the pending cases: Letter to Mr. Creighton, Chairman of the Federal Reserve Bank of Boston: "When the salary recommendations for officers of the Federal Reserve Bank of Boston were considered in'°rmally last spring you were advised that, under the e lar7 stabilization regulations, the Board could not !PProve an increase in the salary of Mr. Carrick, Vice ' 1"esident and General Counsel. "The certification procedure has since become unblocked, but as a matter of policy the Board is not in lavor of increases in the higher salaries which would h4nge the pattern of the Bank and require certification ! '90 the Joint Committee. In accordance with this policy, : 1c1 in view of the fact that Mr. Carrick received a 9-L,000 increase in May 1942, the Board does not approve ,n increase in Mr. Carrick's salary. This action is not Intended in any way to minimize the long and faithful service which Mr. Carrick has rendered the Bank nor his Participation in the management. "While no action is being taken on Mr. Carrick's IetalarY, this letter is written in order that you may be ePt informed of the developments." I Letter to Mr. McCabe, Chairman of the Federal Reserve Bank of Philadelphia: "When the salary recommendations for officers of the Federal Reserve Bank of Philadelphia were considerinformally last spring you were advised that, under 1366 9/18/43 -5- "the salary stabilization regulations, the Board could not approve the proposed increase of A11000 in the salof Mr. Vim. G. McCreedy, Assistant Vice President and °ecretary, which had been recommended in your letter of April 13. "The certification procedure has since become unblocked, and upon receipt of an appropriate certificate t° be submitted to the Joint Committee to support the in,?frease, the Board will approve payment of salary to Mr. eCreedy as Assistant Vice President and Secretary of :Lhe Bank at the rate of /1410,000 per annum for the period liaT 1, 190 through April 30, 1944, provided your direc6ore formally fix his salary at that figure." Letter to Mr. Leach, President of the Federal Reserve Bank of Richmond: "In a letter dated May 25, 1943, the Board advised You that it was believed that under the existing salary abilization regulations an increase in the salary of re J. R. Cupit, Cashier of the Baltimore Branch, was not Permissible at that time. "The certification procedure has since become unblo cked, and upon receipt of an appropriate certificate r be submitted to the Joint Committee to support the ineasel the Board will approve payment of salary to Mr. p:Pit as Cashier of the Baltimore Branch at the rate of :()500 per year for the year beginning June 1, 1943, which at the rate fixed by the directors of your Bank as rePorted in your letter of May 11, 1943." r j Letter to Mr. Neely, Chairman of the Federal Reserve Bank of Atlanta: "When the salary recommendations for officers of the eral Reserve Bank of Atlanta were considered informally 13”t spring you were advised that, under the salary staollAzation regulations, the Board could not approve the °Posed increase of '',300 in the salary of Mr. T. A. anford, Cashier at the Jacksonville Branch, which had een recommended in your letter of April 14. "The certification procedure has since become un-Looked, and upon receipt of an appropriate certificate to be submitted to the Joint Committee to support the ncrease, the Board will approve payment of salary to Fed Z 1369 9/18/43 -6- Mr. Lanford as Cashier at the Jacksonville Branch at the rate of $5,300 per annum for the period June 1, 1943 through May 31, 1944, provided your directors formally fix his salary at that figure." Letter to Mr. Nardin, Chairman of the Federal Reserve Bank of St. Louis: "In a letter dated May 28, 1943, the Board advised You that, under the existing salary stabilization regu11:ations, it did not believe that the increases recommended Your directors in the salaries of Mr. L. H. Bailey, eneral Auditor, and Mr. C. E. Martin, Assistant Cashier ' Of the Memphis Branch, could be approved. "The certification procedure has since become unblocked, and upon receipt of an appropriate certificate to be submitted to the Joint Committee to support the flcrease, the Board will approve payment of salary to Y. Martin as Assistant Cashier of the Memphis Branch 'tut the rate of A5,100 per annum for the year beginning june 1, 1943. "The question of Mr. Bailey's salary has been dis2ussed with the office of the Commissioner of Internal !venue, who has advised us informally that, without condering the case as a precedent, the Commissioner's of'lee would not object to approval of the increase without certification. Accordingly, the Board approves payment °f riary to Mr. Bailey as General Auditor at the rate !(,)7,200 per annum for the year beginning June 1, 1943, Be rate as fixed by your board of directors." Z Letter to Mr. Caldwell, Chairman of the Federal Reserve Bank of Kansas City: "In a letter dated June 5, 1943, the Board advised Yju that, under the existing salary stabilization regu1a141°ns, increases in the salaries of President Leedy and 4 1% John Phillips, Jr., Assistant Vice President, and an . Increase in the salary of Mr. Koppang, First Vice Presienty beyond A15,000, were not permissible at that time. "The certification procedure has since become unbl ocked, and upon receipt of an appropriate certificate be submitted to the Joint Committee to support the increase, the Board will approve payment of salary to 1368 9/18/43 -7- "Mr. Phillips as Assistant Vice President of the Bank Bt the rate of 8,500 per annum for the period June 1, 1943 through May 31, 1944, which is at the rate as reported in your letter of May 22, 1943. "The present salaries of Ir. Leedy and Mr. Koppang are at the maximums established for the positions by the Board in July 1941, and the Board does not believe ?hat at this time any change should be made in those maxlmura salaries for any one particular Bank." Letter to Mr. Day, President of the Federal Reserve Bank of San Francisco: "In a letter dated May 7, 1943, the Board advised You that it was believed that, under the existing salary stabilization regulations, increases in the salaries of i, 'essrs. Holman, Wheeler, Ambrose, Davis, and Shaw were not permissible at that time. "The certification procedure has since become unblocked, and upon receipt of an appropriate certificate to be submitted to the Joint Committee to support the increases, the Board will approve payment of salaries to the f°11o1ring officers at the rates indicated, for the period MaY 1, 1943 through April 301 1944: Salary Title Name Head Off' 8,500 F. H. Holman General Auditor Director of 0. P. Wheeler 8,000 Research LQ4-Aaaelt4 11,000 W. N. Ambrose Managing Director 00 s9,5 D. L. Davi Director Managing 9,500 C. R. Shaw Managing Director "The salaries as approved for Messrs. Holman and heeler are at the rates fixed by your directors, as rePorted in your letter of April 3, 1943. "The Board did not believe it appropriate to increase the salary of Mr. Ambrose in the amount of!t,2,000 and the eaaaries of Messrs. Davis and Shaw in the amount of t1,500, a8 recommended, but approves an increase of 1,1,000 in the 8alary of each." Approved unanimously. 1369 9/18/43 -8— Letter to Mr. Hitt, First Vice President of the Federal Re- "re Bank of St. Louis, reading as follows: "In accordance with the request contained in your letter of September 14, 1943, the Board approves the aPPointment of James F. Hunt as an examiner for the Federal Reserve Bank of St. Louis. Please advise us of the date upon which the appointment becomes effective." Approved unanimously. Memorandum dated September 14, 1943, from the Personnel Comr ttt submitting the name of John Davidson Clark, Professor of Rec410mics and Dean of the College of Business Administration at the 41, 1 / ersitY of Nebraska, as a director of the Omaha Branch of the Fed' Reserve Bank of Kansas City for the unexpired portion of the term ending December 31, 1943, and recommending (1) that the Chairman °r ti e Federal Reserve Bank of Kansas City be requested to ascertain itif"raally whether Mr. Clark would accept appointment and (2) that the 84)13°intment be tendered if he would accept. Approved unanimously. Letter to Mr. McCabe, Chairman of the Federal Reserve Bank of Phi 4de1phia, reading as follows: "I have shown to the members of the Board of Governors who are in Washington the draft of circular which kr°u Proposed to send to the member banks in your district len connection with the election of directors of the Fedjral Reserve Bank of Philadelphia for terms beginning tnuary 1, 1944, and they have asked me to say to you at they are in accord with your thought as to the delrability of calling the attention of the member banks ! to the importance of their responsibility in the election °f Federal Reserve Bank directors. 1370 9/18/43 -9- "For reasons which I mentioned to you when we disCussed the matter yesterday afternoon, you may wish to substitute for the words 'their representatives on' in the fourth from the last line of the letter of transmitSome such words as 'the election of members of'." Approved unanimously. Telegram to Mr. Stroud, First Vice President of the Federal 11"erve Bank of Dallas, reading as follows: "Re your telegram September 16, 1943, regarding new VT loans. Where Borrower has obtained adjustment under section 6 of guarantee agreement upon cancellation r all his war production contracts, Financing Institu,i°n is required to waive interest on entire amount of toan including unguaranteed portion, but Guarantor pays nterest to Financing Institution on entire loan pursuant to provisions of that section. Regarding your second T.lestion, it is our understanding that the fact that a Financing Institution has given a commitment in connec14°n With a VT loan does not in any way affect its right to extend unguaranteed credit to Borrower for working eaPital to be used in performance of war production contraote on basis of which VT commitment was issued." Z Approved unanimously, together with letters to Colonel Paul Cleveland of the War Department, Mr. Coolidge of the Navy Department, and Lieutenant Griffith of the Maritime Commission transmitting copies of the incoming telegram and the above reply. Letter to the Presidents of all the Federal Reserve Banks, readfollows: "With reference to the Board's letter of May 29, 3 943) and your reply, regarding charges made by banks ; 'their services in cashing and collecting checks, the '°ard has reached the conclusion that the limitations ontained in the first paragraph of section 13 of the ; fecieral Reserve Act do not apply to charges made by banks Or cashing or collecting checks drawn on other banks. 1371 9/18/43 -10- "For your information in this connection, there is enclosed a copy of a letter which the Board has written t° Mr. Millard W. Rice, National Service Director, Dis?.bled American Veterans, under date of September 16, J:943, in reply to an inquiry as to whether it is possible ror the Board to issue a directive prohibiting charges by Member banks for the cashing of certain Government checks." Approved unanimously. Letter prepared for the signature of Mr. Ransom to Honorable raric. . ls Biddle, The Attorney General, reading as follows: "In the absence of Chairman Eccles, I wish to thank You for your letter of August 24, 1943, inviting the Board to submit for the consideration of your Department .?.nd the Council of State Governments proposals for legis4.ation to be submitted to the State legislatures which 'fleet next year. "After canvassing the situation, the Board does not know any State legislation which it desires to propose „:of this time. However, it is hoped that the proposed amendment exempting Federally guaranteed war production loans the loan limitations of the State banking laws, which Was placed on the program of the Council of State Govern"as ments last year at the Board's suggestion and which has Passed 40 of the State legislatures, will be enacted next Year in Kentucky, Louisiana, Mississippi and Virginia, 7alch had no legislative sessions this year, and possibly South Carolina, where the proposal was not submitted o the legislature this year because the State Banking Board preferred to handle the matter by administrative ction in each individual case. , "In response to the inquiry contained in the next to t ur last paragraph of your letter, you are advised that Walter Wyatt, the Board's General Counsel, will continue to serve as the individual to whom communications and inquiries regarding State legislation may be directed snd upon whom you may rely for clearance with regard to Ilch matters originating in other Federal departments and , ,geneies." ' Approved unanimously. Letter to the Comptroller of the Currency, reading as follows: 1372 9/18/43 -11- • "It is respectfully requested that you place an order with the Bureau of Engraving and Printing, suppleTenting the order of June 15, 1943, for printing of 47)700,000 of Federal Reserve notes of the 1934 Series for the Federal Reserve Bank of St. Louis in the 5 den omination." Approved unanimously. Thereupon the meeting adjourned. Assistant Secretary. 1)PrOved: Vice Chairman.
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