Full text of Minutes of the Board of Governors of the Federal Reserve System : Meeting Minutes, September 25, 1942, Volume 29, Part 5

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1881

A meeting of the Board of Governors of the Federal Reserve System

was held
in 'Washington on Friday, September 25, 1942, at 9:45 a.m.
PRESENT:

Mr.
Mr.
Mr.
Mr.
Mr.

Ransom, Vice Chairman
Szymczak
McKee
Draper
Evans

Mr. Morrill, Secretary
Mr. Carpenter, Assistant Secretary
Mr. Clayton, Assistant to the Chairman
The

action stated with respect to each of the matters hereinafter

l'eterlsed to was
taken by the Board:
The

minutes of the meeting of the Board of Governors of the Fed-

eral Reserve
System held on September 24, 1942, were approved unanimously.
Telegrams
New

toMr. Treiber, Secretary of the Federal Reserve Bank of

yo.

Mr. Taylor, Vice President of the Federal Reserve Bank of
4evel
and, Ur. Walden, First Vice President of the Federal Reserve Bank
Ot 15J
41011110 A
nc,, Messrs. Dillard and Stewart, Secretaries of the Federal Re4rve t
anks of Chicago and St. Louis, respectively, Mr. Ziemer, Vice
Of the Federal Reserve Bank of Minneapolis, Mr. Caldwell, ChairFederal Reserve Bank of Kansas City, Mr. Stroud, First Vice
ent'of the Federal Reserve Bank of Dallas, and Mr. Hale, Secretary
c't the
ederal Reserve Bank of San Francisco, stating that the Board apNee
4111,1_ the establishment without change by the Federal Reserve Bank of
eco on September 22, by the Federal Reserve Bank of Kansas City
4 SePt

nth

er 23, and by the Federal Reserve Banks of New York, Cleveland,




188:4

91%/42

-2-

kiel/31°11cly Chicago, St. Louis, Minneapolis, and Dallas on September 24,
1942 of the rates
of discount and purchase in their existing schedules.
Approved unanimously.
Uemorandum dated September 24, 1942, from Mr. Goldenweiser, Diof the
Division of Research and Statistics, submitting the resignation
(I Mrs. Alice Randall as a clerk in that Division, to become effective as of the close of business on September 30, 1942, and
recommending
that the res
ignation be accepted as of that date.
The resignation was accepted.
Nur
tie%

emorandum dated September 24, 1942, from Mr. Goldenweiser, Di°f the Division of
Research and Statistics, submitting the resigna-

Of Ilies Bonnie Beth Blake as a clerk-stenographer in that Division,
to be
erile effective as of the close of business on October 6, 1942, and
recomin
ending that the resignation be accepted as of that date.
The resignation was accepted.
Memorandum dated September
25, 1942, from Mr. Morrill, Secretary,
81/411itti
JN? the resignation of Miss Laura S. Talbott as a junior file clerk
111 t6,
-.Jecretaryl s Office, to become effective as of the close of business
November 4, 1942,
and recommending that the resignation be accepted as
cl that date.

The resignation was accepted.
Lett er to
Captain Maxwell E. Becker, Assistant Personnel Officer,
141Atar„
-4' -Intelligence Service, War Department, reading as follows:




18
9/25/42

-3"We are advised that Mr. Ellery W. Baker, presently em—
i Ployed by the
Board of Governors of the Federal Reserve Sys—
tiTm, has offered his services to the War Department for Mil—
"
417 Intelligence duties.
th ,"This is to advise that Mr. Baker has the consent of
e board of Governors to accept appointment in the Army of
he
United States should he receive such appointment."
Approved unanimously, with the under—
standing that in the future the Secretary
or an Assistant Secretary would be author—
ized to sign similar authorizations.
Of

Nevi

Letter to Mr. Rice, Vice President of the Federal Reserve Bank
Ic)rk, reading as follows:

a
"In accordance with your request the Board of Governors
ttl)Proves the changes in the personnel classification plan of
Head Office and the
Branch, as submitted with
our letter of SeptemberBuffalo
22, 1942."
Approved unanimously.
Letter to Mr. Hays,
Vice President of the Federal Reserve Bank of

Cl eland

reading as follows:

"In accordance with your request the Board of Governors
thYes the changes in the personnel classification plan of
B-Aelncinnati and Pittsburgh Branches of the
Federal Reserve
°f Cleveland, as submitted with your letter of September
1942.o
Approved unanimously.
Letter to Mr. Davis, Vice President of the Federal Reserve Bank of
e14311-La, reading as follows:
815Ettwrhis is in reply to your letter of September 17 with re—
cello t° a request made by Mr. William L. Dambach, who was re—
Den,jr emPloyed in a temporary capacity in the Fiscal Agency
pre
'tdaent of your Bank to assist primarily in the sales and
113°t4.on of Series E War Savings Bonds.




1884
9125/42
-4b
"It appears that Mr. Dambach has been employed by a mem:
r
of
.
111uatus the New York Stock Exchange and desires to retain his
as a registered employee of that firm in order that he
may
certain brokerage accounts. It is our further uni7standing that if this arrangement is permitted, he will be
:
1 4,a position to receive some income from
the accounts and to
°-Lci them as a
nucleus should he reenter the securities busiI6Vs following the termination of his temporary appointment
1 ,
11 the Reserve Bank. It is understood from Mr. Dambach's
i;er,
.:"
however, that if the arrangement is permitted, so
1_114i' as he is in the employ of the Reserve Bank he will not
active in the securities business, either by soliciting
accounts or soliciting additional activity in his pres-A'' accounts.
oi this kindBoard will offer no objection to an arrangement
.
b
"Although Mr. Dambach has requested a letter from your
to 'Any Member
of the New York Stock Exchange', it is
lrood that you propose to address the letter to the
icular firm with which he was connected, possibly sendl
acopy
to the New York Stock Exchange.
of„tEnclosed as a matter of possible interest is a copy
tx,re interpretation of the rules of the New York Stock
'"ange governing registered employees which was pub1/1 the Exchange's Educational Circular No. 11, dated
- 10, 1942.”

4

pr:

Z

Approved unanimously.
Letter to
Mr. Swanson, Vice President of the Federal Reserve Bank
.tfle
4P°11s, reading as follows:
his is in reply to your letter of September 18, 1942,
102;" raises a Question concerning Amendment No. 6 to ReguP„4 4*°okers
11 W in its application to
the installation of coal
that:
T he Principle which S-546 was intended to express was
tati he stoker qualifies only when the „physical character
oht-?8 of the coal are such that proper combustion cannot be
wh4:1ned except by the use of the stoker. In many cases some4t,better results might be obtained
with mechanical stoking
than hand-firing and there would be greater convenience,
tion. ese reasons would not be sufficient to justify an exemp-




1885
9/25/42

—5-

D
"The coal available in various areas of the country differ widely
and is known by different names; consequently,it
!ould not be possible to say definitely that the 'screening
.1uulel' sold in your area is or is not such as would necessitate
ti...721se•of a stoker. In general, however, it might be said
""verY fine coal does require a stoker in order to burn
Properly.
,
"We hope that this information will be of some assistance
you. We have recognized that this rule is not as precise
as w! would like it, but it appears to be the only distinction
Possible in view of the terms of section 8(m) as it now stands."
Approved unanimously.
Letter to Mr. Ira A. Weller, Orlando, Florida, reading as follows:
"The President has asked us to reply to your letter of
Au
g4st 271 1942, since it relates to the Board's Regulation V:
dealing with consumer credit.
'Ile are enclosing a copy of a press release dated May 5,
, ±942 which
will give you an idea of the reasons for this reg11_4ation. You
will note that the President, in a special mesage to Congress on April 27, urged the paying off of debts,
4rtgages and other obligations. Regulation Vi is in conformY with the President's program which has as its principal
Purpose the imposition of restraints on rises in the cost of
talring. We know that you will recognize the very great imporn4ce of restraining price rises, particularly to those who do
snioY very high incomes.
1 „, "It is highly desirable that people make every effort
172in to retire their obligations and to purchase War Savings
118 to the utmost. It is not, however, necessary that, after
ii:lng all possible sacrifices with respect to their current
obitng expenditures, people should reduce payments on their
cli lgations or even increase their obligations in order to pur4._''” the War Savings Bonds. Such a program would actually
to help the war effort very little and would put the invIdual in a worse position than otherwise because of the inter
becest charges he wolild be paying, perhaps at a high rate and
ause his debts might bring about severe hardship in the
uture.

;

7

"It Would
would appear to us and we believe you will agree with
have had your attention called to the aspects of
ree_;egulation discussed above, that the restrictions of the
tar-ation are in no way opposed to your interests and, in fact,
.
w 11ng a broad view of the picture, very definitely for your

When




Approved unanimously.

1_886
9/25/42

-6Letter to the Comptroller of the Currency, reading as follows:

"It is respectfully requested that you place an order
with the Bureau of Engraving and Printing, supplementing the
crdsr of June 17, 1942, for printing of Federal Reserve
notes of the
1934 series in the stated denominations and
amounts for the following Federal Reserve Banks:
Bank
Amount
m. ---..
Denomination Number of sheets
$25,020,000
417,000
pl eaPolis
$5
'Jan Francisco
2P000,000
33,333-1/3
5
12200,000
1010,000
16,000,000
66,666-2/3
20
The above request for Federal Reserve notes of the Federal Reserve Bank of San Francisco is to cover notes to be
!
v?rPrinted for use in Hawaii in accordance with request refrom the Treasury Department dated September 23, 1942."
Approved unanimously.
Letter. to Mr. Evans, Vice President of the Federal Reserve Bank
4114s, reading as follows:
"This refers to your letters of August 25, August 31,
Ind September 10, 1942, and to the letter dated August 2
4,
942 from Mr. John Q. McAdams, Commissioner of Banking of
the
State of Texas, concerning the proposed standard caption
!PPear at the top of form F. R. 105e when that form is
,reu for joint publication of condition reports rendered by
te member banks to State banking departments and Federal
sserve Banks, respectively.
'The revised caption, as approved by the bank supervisory
authoritesp„
in 37 States, is as follows:
L'24-ORT OF CONDITION
OF'
Of

r

he close of business
, a State
in lng institution organized and operating under the banksZlaws of this State and a member of the Federal Reserve
'em. Published in accordance with a call made by the
e6e Banking Authorities and by the Federal Reserve Bank
Th this District.
v e revision on the back of the form provides that the certif?-cate of publication shall be signed and sworn to by an of., of the newspaper, thus replacing the present requirement
i:41, the certificate be signed (but not sworn to) by an ofeither of the bank or of the newspaper.
Wecordinr to our records, there are now 39 States with
Which arrangements have been made for joint publication of

n




188'7
9/25/42

—7—
Condition reforts. This does not mean, as you doubtless
liCnoW, that all of these States use the Board's form F. R.
:
1105e and a standard caption pertaininc to joint publication.
6ome States use their own forms for nonmember banks but accePt from State member banks statements published in accordance with the Board's form F. R. 105e, while a few use a
special form that meets their own as well as the Board's requirements. It is noted that Mr. McAdams lists Massachusetts
and Connecticut as approving the standard caption. Arrangements have not previously been made in these States for joint
blication because of the departmental banking forms used.
the remaining seven States, Illinois, California, and
the
bcnisiana may be unable to adopt the proposed standard form
vecause
of certain State laws; Maine, New Hampshire, and
errIlmt (which has no State member banks) do not require the
pu
blication of condition reports; and North Dakota has no
State member banks.
"A review of our files also indicates that the certifite of publication is signed by an officer of the newspaper
i" 32 States now cooperating and by an officer of the bank
,tfour States. In the three other States in which joint
''
.
"31ication is made there seems to be no uniformity on this
o
Pint.
"In the above circumstances it has been decided to print
two •
F. Rdlfferent editions of the publisher's copy, one (form
„„ • 105e) for use in States where joint publication is made
the other (form F. R. 105e-1) for use where reports made
k..0
Reserve Banks are published separately from those
d'Uhinitted to State banking authorities. Two copies of the
ilon of each form are enclosed. On the first form (F. R.
,3e) jurats are provided on the face and reverse sides, and
ir.l the
reverse side provision has been made for the execun °11 of the certificate of publication by an officer of the
jeWsPaper. On the second form (F. R. 105e-1) no notary's
slilrat appears on either the face or reverse side. No provich°n has been made on either form for showing the State
f arter number in the upper right-hand corner, and in the
tl,w States where the charter number is required to be shown
"e forms may be appropriately stamped.
It will be appreciated if you will advise the Board as
soo,„
p. as practicable how many copies of forms F. R. 105e and
c0
105e-1 will be needed for the next call and how many
'
P ee if any, of form F. R. 105e should be sent direct to
ea'
ch State banking department in your district.
0, "A copy of this letter is being sent to the Presidents
'all other Federal Reserve Banks."

2

Z

Approved unanimously, together with the
following letter to the Presidents of all the
Federal Reserve Banks:



1888
9/25/42
-8, "There is enclosed a copy of the Board's letter of this
te to Mr. W. J. Evans, Vice President of the Federal Reserve Bank of Dallas, referring to a proposed standard cap.1.10/1 to appear at the top of form F. R. 105e when that form
ts used for joint publication of condition reports rendered
by State
member banks to State banking departments and Federal Reserve Banks, respectively.
i
"For some time Mr. John Q. McAdams, Commissioner of Bankfl the State of Texas, at the request of the President of
4,
'21e National Association of Supervisors of State Banks and in
,,_?!leultation with officers of the Federal Reserve Bank of
1,11as, has been endeavoring to formulate a standard caption
which would be acceptable both to the State banking authorities
Of the
various States and to the Board of Governors. The Board
r,8 now informed that supervisors in 37 States have approved the
roposed caption, which had previously been approved by the
ard• A list of these States appears in the enclosed copy of
• McAdams' letter of August
24.
fo "The Board has decided to print two different editions of
1s11111 F. R. 105e, one for use in States where joint publication
made and the other for use where reports made to Federal ReServe
Banks are published separately from those submitted to
(pate banking authorities. Copies of the draft of each form
R. 105e and F. R. 105e-1) are enclosed.
"It will be appreciated if you will advise the Board as
soon
,as practicable how many copies of forms F. R. 105e and
• 'I. 105e-1 will be needed for the next call and how many
co
e Pies, if any, of form F. R. 105e should be sent direct to
ach State banking department in your district."

r

t

O

Thereupon the meeting adjourned.

Secrctry.

PPrOVCd




Vice

hal man.