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Minutes of actions taken by the Board of Governors of the eral Reserve System on Tuesday, September 21, 1948. rtlet The Board the Special Library at 9:30 a.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. McCabe, Chairman Eccles Szymczak Draper Evans Vardaman Carpenter, Secretary Sherman, Assistant Secretary Riefler, Assistant to the Chairman Thomas, Director of the Division of Research and Statistics Mr. Young, Associate Director of the Division of Research and Statistics Mr. Mr. Mr. Mr. Mr. Thomas presented and Mt. Carpenter read a draft of state0 be presented at the meeting with the Federal Advisory Council 30 o'clock this morning in response to statements under items thr. °Ugh 5 which were contained in the memorandum submitted by the ell to the Board and considered at a meeting yesterday afternoon. TIle 'raft of statement, which had been prepared in accordance with the II 4clerstanding at the meeting of the Board yesterday, was disNt, e and, after a number of changes were made, was approved in the t in which it appears in the minutes of today's meeting of he °E1rd and the Federal Advisory Council. The meeting then recessed and reconvened in the Board Room 4t :3() ' P.m. with the same attendance as at the close of the morning seioxi and, in addition, Messrs. Nelson, Director of the Division 1540 9/21/48 -2- or personnel Administration, and Townsend, Associate General Counsel. There was presented a memorandum from Mr. Southard, Associate tire„'''or of the Division of Research and Statistics, dated September 10 '1948, stating that Philippine Secretary of Finance Cuaderno had et.411Y requested the services of Mr. David L. Grove, an economist t/1 the Division of Research and Statistics, as adviser in connection +1, setting up and early operation of the Philippine Central '4) that Secretary Cuaderno desired that Mr. Grove be available N "'ember 1, 1948 for a period of not less than six months, and that he would like to have an understanding that Mr. Grove's emplOyttie nt with the Philippine Government might be extended an additiotai The three to six months depending on the circumstances 411 4flaum also stated that Secretary Cuaderno proposed to provide NUat —e compensation for Mr. Grove which would enable him to take f 41.1Y to Manila and it recommended that the Board grant a leave ” Iluerice to Mr. Grove for the period specified. Nted, The memorandum further that Secretary Cuaderno had asked informally whether '111 Exter, an economist in the Division of Research and Statietie s/ might be made available after the beginning of 1949 for re lirPose of assisting the Philippine Central Bank to set up a rch division and it recommended that, for reasons stated, no 4geMent be given Secretary Cuaderno in this connection. 1541 9/21/48 -3Chairman McCabe stated that he had now received a letter °"1 Secretary Cuaderno dated September 13, 1948 making formal the reqllest previously discussed informally and outlined in Mr, Southard's raelllorandum. Mr. Vardaman said that he had asked that this matter be diselisseci at a Board meeting because he was opposed in principle to al41411-1g members of the staff to go on leave for periods of as much months to a year. 'uch leayes He stated that, aside from the fact that meant holding open positions for extended periods of ti 'he felt the Board would be handicapped without having availttble the services of members of the staff during such periods. Mr. Eccles stated that in the case of persons employed for tile D 11rPose of assisting in foreign missions, particularly in conlecti°11 with the organization of central banks, it was expected that 146, c't their work would be done away from the Board's offices, that thekard had taken a liberal view of requests for assistance by the Government in setting up its central banking organization, 1. 11tIllit he felt much of the good accomplished thus far might be lost he Operations of the new central bank during the first few months its existence could not have the benefit of the expert advice it lred. Mr. Vardaman expressed the view that, if members of the staff .N 1,1 ere expert in central banking matters were to be provided by the 1542 9/21/48 —4- 4ard to assist other governments, such men should be sent at the ikard's expense and their salaries paid by the Board during the 1)1'iods of service. Mr. Szymczak stated that earlier this year the Board loaned kes„ Grove and Exter to the Philippine Government for assisting '1'elparing central bank legislation during which time the Board reta.. ited the men on its pay roll but that in the present instance the, ' equest was for Mr. Grove as an adviser to Secretary Cuaderno Illthe operations of the Philippine Central Bank and that he felt it ' lIcUld not be appropriate for the Board to pay his expenses under aitch circumstances. During a discussion of the matter, Chairman McCabe suggested that Grove be granted a leave of absence for a period not to ex81X months. Upon motion by Mr. Szymczak, it was agreed that Mr. Grove be granted leave without pay for a period of six months from the date his services to the Philippine Central Bank began. On this action Mr. Vardaman asked to be recorded as "not voting". Mr. Southard's recommendation With respect to the services of Mr. Exter was approved unanimously. Reference was made to a request for proposed travel by M±. / Associate Director of the Division of Research and Statistics, the Purpose of making a tour of the meat industry from October 17 9/21/48 -5- t° °ctober 30, .1948, as a guest of Armour and Company, the tour to 8tart in Chicago and to include visits to several SoIrthwestern States. Midwestern and The request was accompanied by a memorandum Young dated September 3, 1948, stating that the trip was 4ttallged at the suggestion of Mr. Evans and that the invitation to laisticiloate was received in a letter from Armour and Company dated 4111st 24, 1948. Mr. Draper stated that he questioned the matter in view of the fact that part of Mr. Young's expenses would be paid by Armour 111(1C°InDanY. Mr. Vardaman felt the work of the Board was such that the 4bselice of Mr. Young for the period specified might cause the toar, s work to suffer. Mr. Evans stated that as the member of the Board having the assignment for the research function he recommended the trip teei4 ' .11 that it would assist Mr. Young in getting a better understand1Z1 °Ile of the country's largest industries, and that it would be 4 m -151ortant means of bettering relationships of the Federal Reserve 14 with a wide group of individuals located in various States of w the ldclle west area who in many cases seldom came in touch with FedIleserve representatives. qllestion He stated, however, that in view of whether Mr. Young's expenses should be borne by Armour ConliDany, he would recommend that the Board approve the proposed with the understanding that, in addition to paying for his 9/21/48 -6- ttlavel cost from Washington to Chicago and return, the Board also 14t3r hotel and incidental expenses which Mr. Young might incur in the course of the trip. Mr. Evans' suggestion was approved unanimously. Chairman McCabe stated that he had received a letter from nlIbur, Chairman of the Federal Reserve Bank of San Francisco, 4tc1 September 3, 1948, suggesting that Mr. Harry R. Wellman, a Ns s C director and Deputy Chairman of the San Francisco Bank 1111°se term of office will expire at the end of this year, be reap1)0111tea, even though Mr. Wellman will then have completed two cone three year terms of office. or Mr. Carpenter stated that there was no established policy the zoard which would preclude reappointment of a head office r 0- ,or more than two full terms. Following a discussion it was agreed unanimously that Chairman McCabe might inform Mr. Wilbur that the Board felt that the principle of rotation in directors of Reserve Banks and branches, including both elected and appointed directors, was sound but that it did not have a fixed policy which would call for replacement of a Class C director after he had completed two terms Of office, that the question of appointments to become effective January 1, 1949 would be considered shortly, and that, while the Board was not prepared to make a commitment with respect to Dr. Wellman until the matter could be considered along with appointments at other Federal Reserve Banks, there was no sentiment on the Board at present which would prevent the reappointment of Dr. Wellman. 4.0 9/21/48 -7Mr. Vardaman referred to a memorandum from Mr. Carpenter (I4ted August 2, 1948, concerning the procedure authorized by the . " 1 in 1940 for the handling of miscellaneous correspondence tliro Ugh the Secretary's Office. The memorandum stated that the 14Itter was being brought to the attention of the members of the llottrA and division heads because there appeared to be a tendency to lft back to the situation which the Board found objectionable 111 1 n 'Y before the procedure was adopted. Mr. Vardaman stated that 111 asked that this matter be discussed at a Board meeting behe felt the procedure outlined in the memorandum for handling ()Iltesipondence was desirable and that the work should be centralized the S ecretary's Office. Mr. Thomas suggested that the procedure be reviewed in the I1Rht of the requests that were received by members of the Research relating to statistical or economic information, stating slloh requests often times could be handled more satisfactorily 4 th4, Research Division than in some other office of the Board. Following a brief discussion, it was agreed unanimously to refer the matter to the staff for consideration and recommendation. Reference was made to a memorandum from the Personnel Comttte,, dated August 11, 1948 recommending that the Board authorize ellase of an additional automobile and the employment of two ill ' _aLt6 9hv -8- klditional chauffeurs. In this connection •there were also presented zlenl°1"anda from Messrs. Eccles and Clayton dated August 23 and August 30, 190' ---, stating that they did not feel the expense of buying an ad(141 °nal car and employing additional chauffeurs was justified but ths.t Ut they would have no objection to replacement of the older Chrysler MObile owned by the Board if such replacement seemed desirable. There was a discussion of the memorandum from the Personnel ittee and of the extent to which members of the Board had found t114 'ree passenger automobiles now owned by the Board inadequate 1' official travel needs, at the end of which Mr. Eccles suggested th4t the Board now replace the older Chrysler car in service and that it consider at some time after the first of the year whether an tonal car or additional chauffQrs might be necessary. Thereupon, upon motion by Mr. Vardaman, it was voted unanimously (1) to dispose of the older Chrysler automobile owned by the Board and to replace it with a new car, the selection of the new car to be determined by Mr. Draper and, (2) to increase the appropriate classification in the budget of the Division of Administrative Services by the amount necessary to cover the cost of purchasing the new automobile. Reference was also made to the understanding at the Presi411ts'I , k-onference on May 20, 1948 that the question of the Board's tt 1-11. with respect to Federal Reserve Retirement System investas presented to the Presidents at the meeting with the 1547 9/21/48 -9- 4 On December ' 9, 1947 would be postponed until not later than the next joint meeting of the Board and the Presidents. Mr. Eccles said that the Board's position as presented at the Meeting with the Presidents on December htz 9, 1947 still seemed to to be the correct position, and that so long as the Retirement SYste m operated on a basis whereby the Board might be expected (even 14101,-, tam, not legally liable) to approve contributions by the Reserve for the purpose of making up deficits in earnings of the Re- 'Merit System, it would be appropriate and desirable to require that i• nvestments of retirement funds be limited to Government se- -es, mortgages insured by the Federal Housing Administration, securities of the International Bank for Reconstruction and bevel "L°Pment which would be in line with the policy for investment or t he funds of various retirement funds or systems established by the , 'overnment. He also stated that he felt the management of re- 'Merit funds should not be in the hands of a private concern as 1e, °14 the case under the arrangement whereby the Northern Trust ' '"EillY of Chicago acts as investment adviser to the Board of Trustee Of the Retirement System. During a discussion of the matter, Chairman McCabe stated thEtt , Ile understood the Committee appointed by the Chairmen's Conmice in may of this year to study the retirement system would 4meeting in Washington next Tuesday and he suggested that it would 1548 9/21/48 -10- be helpful to obtain any views the members of that committee might 114 "with respect to management and investment policies that should lerollowed in handling retirement funds. It was agreed unanimously that when the Chairmen's Committee on the Retirement System was in Washington next Tuesday, September 28, 1948, Mr. Draper would discuss the matter with them with a view to obtaining whatever views the Committee might wish to express. Mr. Vardaman stated that three of the Federal Reserve Banks (13osto-n, Cleveland, and Minneapolis) had adopted the practice of ht (:)„,-.-aphing cash items included in their outgoing cash letters rola " Ting the discontinuance in May 1948 of requirements by the 41 Reserve Banks that depositing banks agree to furnish deztri 'tions of cash items upon request, that the other nine Banks "-°n.cluded it was not necessary to photograph such items, and that the costs incurred by the three Banks which had adopted the 1)2.Ete,t4 'Lee of making photographic records were substantial items in t1 13 Ildgets which would be considered by the Board during the course next few weeks. He raised the question whether, in view of the conclusions by all Federal Reserve Banks other than Boston, Ql.ev elezd, and Minneapolis, that the expense of making photographic was not justified, and in view of the experience which in- ted that any losses which the Banks might be called upon to qao 113 because of inability to furnish descriptions of cash items 1_549 9/21/48 -11- 1°8t or destroyed after leaving the Reserve Banks would be comparatively small, it would be desirable to request the elimination of 4r1a(pl1nts budgeted for filming at the three Banks specified. Mr. Smead stated that he felt the retention of photographic ec(3rcls probably was not justified. He commented that the matter orIlhat records should be maintained after requirements as to dewere eliminated for depositing banks in May 1948 had been left to the individual Federal Reserve Banks with the thought that erent methods of protecting against loss might be tried over an "Iperi-plental period, that the managements of the Boston, Cleveland, 44c1 111nneapolis Banks were the only ones which had concluded they OlQ Provide photographic records of outgoing items, and that the 1114tter might be discussed with these three Banks while their budgets tor 4. he year 1949 were under consideration with a view to finding (kit whether in the light of their experience since May 1948 and in the 1. lght of the conclusions and experience at the other nine Banks the, 4 still felt the costs of maintaining the photographic records It was agreed unanimously that Mr. Smead's suggestion should be followed and it was understood that letters would be sent to the Boston, Cleveland, and Minneapolis Banks accordingly. Mr. Vardaman said that, as he had stated at the meeting of 48.rd on September 14, 1948, he felt it was inappropriate for It 560 9/21/48 any -12- one or more members of the Board to pass on travel authorizations other Board members, that the Personnel Committee to which the matwas referred at the September 14 meeting had not been able to tlgrse upon a recommendation for a change in the present procedure, 6141 that he again suggested adoption of a procedure under which no rtleillber of the Board would submit a request for travel authorization 'a trip but would inform the Board through the Secretary's Office tc)1 e'srar in advance as Possible of the contemplated travel. There was a discussion of Mr. Vardaman's suggestion and it was agreed unanimously that it again be referred to the Personnel Committee for study and recommendation. Mr. Townsend referred to the demand filed on September 10, 1948 by Transamerica Corporation for additional details in connection th the complaint issued by the Board against that Corporation under 4cti °xi 7 of the Clayton Act reading as follows: "UNITED STA1ES OF AMERICA BEFORE THE OF THE .FEDERAL RESEEVE SYSTEM GOVERNORS OF BOARD IN THE MATTER OF 111ANSAMERICA CORPORATION DEMAND FOR MORE DE_bINITE STATEMENT OF MATTERS OF FACT AND LAW ASSERTED. Sirs: "The respondent, by its undersigned attorneys, here127 demands that the Board of Governors of the Federal Reserve System (hereinafter called the Board') serve upon the undersigned a reasonable time in advance of any hearherein, pursuant to Section 5 of the Administrative 15b1 9/21/ -13- g 100)-i-) and the Rules of the "Procedure Act (5 U.S.C. Board adopted pursuant thereto, a definite and specific statement of the particulars of the Board's contentions Upon the following matters of fact and law asserted in the Board's complaint herein, to wit: "I. The legal authority and jurisdiction under which the hearing is to be held and a statement of the name or names of the person or persons before whom the hearing is to be held. "II. With respect to the allegation of paragraph ONE of the complaint that respondent is 'engaged, in interstate commerce, in the commercial banking business' state: (a) the addresses at which respondent engages in the commercial banking business; (b) the names of the officers and employes of respondent who engage in the commercial banking business; (c) a description of the commercial banking transactions conducted by or on behalf of the respondent as a bank, the times when and places where such transactions have taken place, and the names and addresses of the persons participating therein; (d) the identity of each writing, letter, Paper or document by date, name of person preparing, name of person receiving, character and contents, Which the Board will offer in evidence in support of its said allegation that respondent is now engaged in the commercial banking business. "III. With respect to each and every paragraph of the complaint, state in what sense the Board uses the following words and phrases (which appear repeatedly throughout the complaint) and the legal authority, if 41137, upon which it relies for each such use as applied tc) the banking business, and if any of such words or Phrases is used in a different sense in different paragl'aPhs of the complaint indicate such differences and the legal authority therefor: (a) 'controls', 'control' and 'controlled'; (b) 'controlling stock interest' and 'controlling stock interests'; (c) 'general direction'; (d) 'nominees' (particularly as used in paragraph SEVEN) and as to each such nominee state: 5‘..) 9/21/48 "(1) such nominee's name and address; (2) the date or dates on which such nominee acted as such; (3) the nature of the relationship between the respondent and such nominee and a description of each transaction relied upon by the Board as evidence of such relationship stating the time, place, and participants in each such transaction; (4) the identity of each writing, letter, paper, or document by date, name of person preparing, name of person receiving, character and contents, which the Board will offer in evidence in support of its said allegation that the persons so identified have acted or are acting as nominees of respondent. "IV. With respect to the allegation of paragraph THREE of the complaint that various acquired banks were 'in competition with one or more of the banks already controlled by respondent' state what factors, as to geographic location, Character of service offered, character of customers served, or otherwise, the Board considers determinative of the question whether one bank is in competition with another and the legal authority, if any for such determination. 'V. With respect to the allegations of paragraphs FOUR, PIvE, SIX, SEVEN and NINE that the effect of the acquisition by respondent of the capital stocks of the banks listed in Paragraphs FOUR, FIVE, SIX and SEVEN 'may be, has been, and is * * * to substantially lessen competition * * * between some or all of such banks' state specifically as to each slIch bank respecting which the Board contends there may be, has been, or is a substantial lessening of competition: (a) the identity, by name, city or town, state and street address, of the banks, or branches, between Which competition may be, has been, or is lessened; (b) the date or dates on or during which competition may be, has been, or is lessened; (c) the nature and amount of the competition Which may be, has been, or is lessened; (d) the names and addresses of the person or Persons who may participate, have participated or are Participating in such lessening of competition. 'VI. With respect to the allegations of paragraphs PouR , FIVE, SIX, SEVEN an NINE that the effect of the i.5L3 9/21/48 tt -15- acquisition by respondent of the capital stocks of the banks listed in paragraphs FOUR, FIVE, SIX and SEVEN 'may be, has been, and is * * * to restrain commerce' state: (a) the identity, by name, city or town, state, and street address, of each bank or branch, referred to in paragraphs FOUR, FIVE, SIX or SEVEN of the complaint, with respect to, by or through Which commerce may be, has been, or is restrained; (b) as to each bank, or branch, set forth in answer to Item VI (a) hereof: (1) describe and give the boundaries of the community or area wherein commerce may be, has been or is restrained; (2) specify the date or dates on which commerce may be, has been, or is restrained; (3) describe each occasion upon which commerce may be, has been, or is restrained; (4) set forth the character and amount of commerce which may be, has been, or is restrained; (5) describe the manner in which commerce may be, has been, or is restrained; (6) set forth the name and address of each individual who participated in each occasion when commerce may be, has been, or is restrained; (7) state the identity of each writing, letter, paper or document, by date, name of person preparing, name of person receiving, character and contents which the Board will offer in evidence in support of the charges of paragraph NINE of its complaint that commerce may be, has been, and is restrained by respondent's acquisition of the capital stocks of banks. "VII. With respect to the allegations of paragraphs OUR, FIVE, SIX, SEVEN and NINE that the effect of the acTtlisition by respondent of the capital stocks of the banks listed in paragraphs FOUR, FIVE, SIX and SEVEN 'may be, has 1?een, and is * * * to tend to create a monopoly of commerce 1.11 respondent in the commercial banking business particularly 1/1 banking offices' in various unspecified sections or com111114ities in the states of California, Oregon, Nevada, Arizona, Ilrld Washington: state: I 9/21/48 -16- "(a) the name and boundaries of each section or community in which there may be, has been, or is such tendency to monopoly in banking offices; (b) the name and address of each banking office which creates such tendency to monopoly in banking offices in each such section and community; (c) the specific activities of each such banking office which may be, have been, or are responsible for such tendency to monopoly in banking offices in each such section and community; (d) the date and place of occurrence of each such activity and the name and address of each individual who participated in each such activity; (e) the identity of each writing, letter, paper or document by date, name of person preparing, name of Person receiving, character and contents, which the Board will offer in evidence in support of its said allegation that respondent's acquisition of the capital stocks of banks has tended to create a monopoly; (f) the name and address of each banking office referred to in paragraphs FOUR, FIVE, SIX and SEVEN of the complaint which operates without competition from any other banking office and the facts which the Board contends establish the absence of competition in each such case. "-VIII. With respect to the allegations of paragraphs FMR, FIVE, SIX, SEVEN and NINE that the effect of the acquisition by respondent of the capital stocks of the banks lasted in paragraphs FOUR, FIVE, SIX and SEVEN 'may be, has been, and is * * * to tend to create a monopoly of commerce in respondent in the commercial banking business, Particularly in * * * bank deposits' in various unspecified sections or communities in the states of California, Oregon, Nevada, Arizona, and Washington, state; (a) the name and boundaries of each section or community in which there may be, has been, or is such tendency to monopoly in bank deposits; (b) the name and address of each banking office Which creates such tendency to monopoly in bank deposits In each such section and community; (c) the specific activities of each such banking office which may be, have been, or are responsible for such tendency to monopoly in bank deposits in each such section and community; 1565 9/21/48 -17"(d) the date and place of occurrence of each such activity and the name and address of each individual who participated in each such activity; (e) the identity of each writing, letter, paper or document by date, name of person preparing, name of person receiving, character and contents, which the Board will offer in evidence in support of its said allegation that respondent's acquisition of the capital stocks of banks has tended to create a monopoly; (f) the name and address of each banking office referred to in paragraphs FOUR, FIVE, SIX and SEVEN of the complaint which operates without competition for bank deposits and the facts which the Board contends establish the absence of competition in each such case. "IX. With respect to the allegations of paragraphs FOUR, FIVE, SIX, SEVEN and NINE that the effect of the acquison by respondent of the capital stocks of the lianks listed in paragraphs FOUR, FIVE, SIX, and SEVEN may be, has been, and is * * * to tend to create a monopoly of commerce in respondent in the commercial banking business particularly in * * * bank credit' in various Unspecified sections or communities in the states of California, Oregon, Nevada, Arizona, and Washington, state: (a) the name and boundaries of each section or community in which there may be, has been, or is such tendency to monopoly in bank credit; (b) the name and address of each banking office which creates such tendency to monopoly in bank credit in each such section and community; (c) the specific activities of each such banking office which may be, have been, or are responsible for such tendency to monopoly in bank credit in each such section and community; (d) the date and place of occurrence of each such activity and the name and address of each individual who participated in each such activity; (e) the identity of each writing, letter, Paper or document by date, name of person preparing, name of person receiving, character and contents, Which the Board will offer in evidence in support of its said allegation that respondent's acquisition of the capital stocks of banks has tended to create a monopoly; 9/21/118 -18- "(f) the name and address of each banking office referred to in paragraphs FOUR, FIVE, SIX and SEVEN of the complaint which operates without competition in the offering of bank credit and the facts which the Board contends establish the absence of competition in each such case. "X. With respect to each section and community iden. tified by the Board in its answer to paragraphs VII (a), VIII (a) and IX (a) hereof, state: (a) the specific aspect or part of the commercial banking business in which the alleged tendency to monopoly exists; (b) the date on which the Board contends the tendency to monopoly commenced; (c) the names and addresses of all banking offices which operate in each such section and community. "Dated: September 10, 1948. Yours, etc., (signed) Samuel B. Stewart, Jr. Samuel B. Stewart, Jr. (signed) Hugo A. Steinmeyer Hugo A. Steinmeyer "To: The Board of Governors of the Federal Reserve System, Washington, D. C. Attorneys for Respondent, Transamerica Corporation 300 Montgomery Street San Francisco 4, California Mr. Townsend stated that a draft of response to be made to the l eqUest from Transamerica had been prepared, which he then read ' r "UNITED STATES OF AMERICA BEFORE THE BOARD OF GOVERNORS OF THE FEDERAL RESEEVE SYSTEM IN THE MATTER OF TRANSAMERICA CORPORATION 1_567 9/21/48 -19STATEMENT "On June 24, 1948, the Board issued its Complaint against the Respondent, Transamerica Corporation, in the above entitled proceeding, charging Respondent with having violated Section 7 of an Act of Congress approved October 15, 1914, familiarly known as the Clayton Act. On September 10, 1948, Respondent served upon the Board a document denominated 'Demand for More Definite Statement of Matters of Fact and Law Asserted.' This document consists of five legal-sized typewritten pages, calling for disclosure of a wide variety of additional information, both legal and factual, to supplement the allegations of the Complaint. "The Board has treated Respondent's 'Demand' as a Motion for a Bill of Particulars and, in so doing, has reconsidered the allegations of the Complaint to determine in what respects, if any, they fail adequately and fairly to apprise Respondent of the nature of the charges which it is called upon to meet in the forthcoming hearings. Viewed in the light of that inquiry, the Board is satisfied that the Complaint is sufficient as drawn. "Section 5(a) of the Administrative Procedure Act Provides that Respondent shall be informed of '(1) the time, place, and nature /of the hearing7; (2) the legal authority and jurisdiction under which the hearing is to be held; and (3) the matters of fact and law asserted.' The Complaint specifically advises Respondent of 'the time, place, and nature' of the proposed hearing. (The Complaint does not inform Respondent of the name of the Person before whom the proceedings will be conducted, the Board intending to make such announcement at the °Pening of the hearing. However, for Respondent's further information, the Board has tentatively concluded to request one of its Members, Honorable Rudolph M. Evans, to preside throughout the proceedings.) The Complaint likewise adequately discloses the 'legal authority and Jurisdiction under which the hearing is to be held'. It certainly meets the test stated in the Attorney General's Manual on the Administrative Procedure Act that The riotice should contain reference to the agency's authority s.Ufficient to inform the parties of the legal powers and Jurisdiction which the agency is invoking in the particular and thus enable the parties to raise any legal issues they consider relevant.' 1538 9/21/48 -20- "In the main Respondent's motion seeks additional factual information of a highly detailed and evidentiary Character. Here again, however, the Board is satisfied that the more than extensive factual allegations of the Complaint meet the requirements of Section 7(a)(3) set out above. In that connection it is appropriate to point out another excerpt from the Attorney General's Manual, Which, in connection with these requirements, states that 'It is not required /that the Complaint should7 set forth evidentiary facts or legal argument. All that is necessary is to advise the parties of the legal and factual issues involved'. "It should be noted that, if at the hearing Respondent is taken by surprise respecting any of the issues raised by the allegations of the Complaint, the Board will of course entertain a motion for an appropriate continuance or such other relief as the exigencies of the situation might then seem to require. "ORDER out in the Statement hereinabove set "For the reasons for a Bill of Particulars Motion 's 'IDIDearing, Respondent is denied. "By the Board." There was a discussion of the proposed response during which the °Pinion was expressed that the information furnished to Translea Corporation in the complaint fully complied with the requireUnder the Administrative Procedure Act as well as requirements °Marily required by the courts and that it would neither be practi ab le nor desirable to attempt to furnish the Corporation with the lled evidentiary material requested in their communication of 41)teMber 10, 1948. Upon motion by Mr. Evans, the response to Transamerica Corporation as set forth above was approved unanimously. 15b9 9/21/ 8 -21In this connection Chairman McCabe stated that subsequent to the meeting on September 10, 1948, Mr. Coleman of his office telephoned Mr. L. M. Giannini at a local hospital while he (Chair1111Q McCabe) was out of town and left information that Chairman the would be glad to have Mr. Giannini call to see him, and that vb, hotel Coleman was informed that Mr. Giannini would be at his over the weekend and that he would be very glad to have rman McCabe come over to see him. ' Chairman McCabe added that he aS leaving for Louisville, Kentucky, to attend the meeting or the National Association of Supervisors of State Banks early to rac)rrow morning and would have no opportunity to talk with Mr. ci but that he would have Mr. Coleman telephone Mr. Giannini Ettla saY to him that if he was still in Washington next week after , 0414 'man McCabe had returned he would be very glad to have him Come over to the Chairman's office if he still wished to see him. At this point Messrs. Riefler, Thomas, Nelson, Townsend, 4114 "°I.Ing withdrew and the action stated with respect to each of the Matters hereinafter set forth was taken by the Board: Minutes of actions taken by the Board of Governors of the elsal Reserve System on September 20, 1948, were approved unani111.Crils y Letter to the Honorable Christian A. Herter, House of lig -Are sentatives, Washington, D. C., reading as follows: 1560 9/21/ 8 -22- "This refers to your letter of September 13, 1948, With which you enclosed a letter dated September 10, 1948, from the Consolidated Construction Company of Brookline, Massachusetts, expressing the opinion of that concern with regard to a proposed amendment to Regulation W to include so-called repair and modernization credits under the regulation. "As you know, the Board is considering such an amendment to the regulation and has invited and received both directly and indirectly, through the several Federal Reserve Banks, the comments of interested persons to assist it in determining whether, In fact, such an amendment would be advisable. "The points raised by your constituent are worthy Of consideration and since they are points which have been made by a number of individuals from whom we have received letters we are fully conversant with them and You may be certain that we will give them full consideration in our decision. We note from the letter which you forwarded us and from others in a similar vein that the extent to which unduly liberal credit may push upward on repair and modernization costs is completely overlooked. Many of our correspondents, while opposing severely restrictive provisions, indicate that they would look with favor upon a control which sought to Provide for urgent needs but which at the same time Prevented uneconomic excesses and continued upward Pressure on prices. It may be that your constituent would share that point-of-view. In any event he may be assured that whatever decision is ultimately reached With regard to the proposed amendment will be reached °IllY after due and careful consideration of all the factors involved. At your request, we are returning Mr. Patterson's letter." Approved unanimously. Letter to Mr, Gidney, President of the Federal Reserve Bank ot c, 4-eveland, reading as follows: "This refers to telephone conversations which Mr. Rorbett recently had with Mr. Findeisen with regard to the request of the Cleveland Trust Company that Your Bank from time to time hold in safekeeping for 1561 9/21/48 -23- "Bankers Trust Company, New York, blocks of Treasury bills sold by the Cleveland Trust Company to Bankers Trust Company under repurchase agreement or with an understanding to that effect. It is understood that the Cleveland Trust Company wants to be in a position to make quick adjustments in its reserve position as late as possible in the day, and that such sales by way of CPD transactions would not serve the desired Purpose because CPD transactions must be consummated not later than 1:30 p.m. ordinarily and cannot be made at all on the last day of the month. As Mr. Findeisen was advised the Board feels that your Bank should decide whether or not it would be proper to accede temporarily to the request of the Cleveland Trust Company and that if it does accede it should make it clear to the member bank that such action is not a precedent and is subject to discontinuance after further consideration of the matter. The Board believes that it would be well to have this matter discussed at a Presidents' Conference, since regular comPliance with the request would set a precedent which would affect not only member banks in the Cleveland District but also those in other districts. Accordingly, it is suggested that you ask the Chairman of the Conference of Presidents to place the subject on the agenda for the forthcoming Conference." Approved unanimously. 44'oved: LLt (13,fze-c-- airman.
@FedFRASER