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14118 Minutes of actions taken by the Board of Governors of the Federal Reserve System on Tuesday, September 281 1954. The Board met in the Board Room at 10:00 a.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Mr. Martin, Chairman Szymczak Vardaman Mills Robertson Miller Balderston Carpenter, Secretary Sherman, Assistant Secretary Kenyon, Assistant Secretary Vest, General Counsel Johnson, Controller Sprecher, Assistant Director, Division of Personnel Administration Mr. Shay, Assistant Counsel Mr. Mr. Mr. Mr. Mr. Mr. Governor Robertson referred to the program arranged in November 1953 for the Advisory Board to the Instalment Credit Commission of the American Bankers Association on the occasion of that group's visit to the Board's offices during its meeting in Washington and raised the question whether the Board would wish to invite the grolip again this Year for a similar program, including luncheon with available members Of the Board and appropriate members of the staff. The matter had been mentioned to Governor Robertson "hy the local office of the American Bankers Association. Following a discussion, Governor Robertson was authorized to extend an invitation to the Advisory Board to visit the Board's offices on November 5, 1954, for luncheon and a program similar to the one which was worked out for the Advisory Board in 1953. 119 9/28/54 -2Prior to this meeting there had been circulated to the members Of the Board a draft of regulations relating to the safeguarding of defense information, together with a staff memorandum of August 20, 1954, commenting thereon. Following a discussion, the regulations were adopted by unanimous vote, effective immediately, in the form submitted. In this connection, unanimous approval also was given to a letter from Chairman Martin to Mr. Thurston, Assistant to the Board, reading as follows: This is to advise that you have been designated by the Board as its Security Officer for the purposes of the Board's "Regulations Relating to the Safeguarding of Defense Information" which were adopted today. Unanimous approval also was given to a letter to the Presidents of all Federal Reserve Banks reading as follows: This refers to the Board's letter of July 2, 1954, with which was enclosed a draft of "Regulations Relating to the Safeguarding of Defense Information." That letter invited comments on the draft, particularly section 7 thereof which concerned the sending of classified defense information to the Reserve Banks. While it appeared that the only Federal Reserve Bank Which received classified defense information from the Board at that time was the Federal Reserve Bank of New York, it was recognized that such information might be sent to other Reserve Banks depending, of course, upon the circumstances. However, in view of the fact that the arrangements for the Sending of classified defense information to the New York 12eserve Bunk have been discontinued at the suggestion of that .pank, the regulations, in the form adopted today by the Board, contain no reference to the Federal Reserve Banks. 9/28/54 -3- The regulations do not deal with any information that may come to a Reserve Bank in connection with the V-loan program, since arrangements for safeguarding information in such cases is believed to be primarily the responsibility of the respective guaranteeing agencies. The comments and suggestions received from the Reserve Banks were appreciated, and a copy of the regulations is enclosed for your information even though, as indicated above, in the form as adopted the regulations apply only to the Board of Governors. Mr. Shay then withdrew from the meeting. Reference was made to a memorandum from Mr. Sprecher dated September 16, 1954, copies of which had been sent to the members of the Board, discussing the so-called Fringe Benefits Act which was signed by the President on September 1, 1954. The memorandum pointed out that in the absence of action by the Board certain provisions in the Act would Provide monetary benefits to employees of other Government departments and agencies that members of the Board's staff would not have. There- fore, in line with the policy followed by the Board in the past of providing for its employees the principal benefits granted to employees of Other Government agencies and in view of the fact that the new benefits aPpeared to be desirable additions to the personnel program, the memorandum recommended that the Board take the following actions: 1. With respect to longevity increases: policy (a) Amend the Board's present longevity increase to provide longevity salary increases for employees in Groups U through Y. These longevity steps would be in the same except amount as the present within-grade promotion steps steps of promotion -grade within that for Group Y, which has three years Only $200. be $250 each, each longevity step will 1421 9/28/54 -4- of service at the top of Groups U through Y immediately Preceding the effective date of the adoption of this Policy would count toward a longevity increase. (b) Amend the Board's present longevity increase policy to provide that if an employee who has earned credit toward the three-year longevity period at the maximum rate or longevity rate of his grade is transferred to the maximum rate or longevity rate of a lower grade, the credit earned by such employee in the higher grade shall apply toward a longevity step increase in the lower grade. 2. With res ect to compensation for overtime work: (a) Set the Board's rate of compensation for overtime work in accordance with the new rates provided for Government employees, as follows: (1) For each employee whose basic compensation is at a rate which does not exceed the minimum scheduled rate of Group S (presently $5,060), the overtime hourly rate of compensation shall be an amount equal to one and one-half times the hourly rate of basic compensation of such employee. (2) For each employee whose basic compensation is at a rate in excess of the minimum of Group S (presently $5,060), the overtime hourly rate of compensation shall be an amount equal to one and one-half times the hourly rate of the minimum scheduled rate of basic compensation of Group S. (b) Provide a minimum of two hours of pay at the overtime rate for any employee who is called back to perform unscheduled overtime work either on a regular workday after he has completed his regular schedule of work and left his place of emPloyment or on a day when he is off duty. (c) Provide that compensatory time off in lieu of over Pay may be granted by a Division Head at the request of any employee, but that in the case of employees whose salaries are above the maximum of Group S (presently $5,810), a Division ead may require such employees to take compensatory time off in lieu of overtime pay. 9/28/54 -5- 3. With respect to compensation for night work: Revise the Board's present policy regarding compensation for night work to provide that an employee whose regular tour of duty includes night work be paid night differential: (a) For his regular night work hours when he does not work because of a holiday, and (b) For his periods of leave with pay during any Pay period in which such leave totals less than eight hours. 4. With res 0 - t to com ensation for holida work: Revise the Board's present policy regarding holiday Pay to provide a minimum of two hours of pay at the holiday rate for any employee who is required to work on a holiday, occurring within his basic work week. 5. With respect to annual leave: (a) Revise the Board's present annual leave policy to Provide that lump-sum payments to the survivors of deceased employees shall include payment both for the annual leave the deceased employees had accumulated and for the amount that had currently accrued to them at the time of death. (b) Revise the Board's present annual leave policy to Permit employees who have accumulated leave in ex" se of 30 days to carry this balance forward into subsequent years, and to use such balance entirely at their own volition. The memorandum further recommended that the provisions covering lonnee,,44. increases and annual leave, if approved, be made effective at the beginning of the first payroll period following approval by the lloard/ and that the provisions concerning overtime work, night work, and holiday work, if approved, be made effective at the beginning of the It 23 k. 9/28/54 -6- first payroll period in November, the earliest effective date provided for in the Fringe Benefit s Act. An attachment to the memorandum discussed two provisions of the Act, as follows , on which it was stated that recommendations would be presented to the Board at a later date followi ng clarification of the effect of the provisions by the Civil Service Commission: 1. Conversion of positions now classified according to the Civil Service CPC schedule. (Crafts, Protective, and Custodial) 2, Removal of certain restrictions on appointments, Promotions, and transfers. A second attachment discussed as a matter of information seven Other provisions of the Fringe Benefits Act on which no recommendation for action by the Board was made because they were not applicable, because no action was required at this time, or because similar provisions were already incorporated in the Board's personnel program. At the request of the Board, Mr. Sprecher reviewed the memorandum Of Septembe r 16 in some detail. A discussion ensued during which it was suggested, with respect to recommendation 7(b), relating to carrying forward annual leave in excess of 30 days, that the staff check the pertinent Provisions of the Fringe Benefit s Act and also check with other Govelllinlent agencies to make sure that the establishment of such a policy by the oard would be in line with the Act and the actions of other agencies taken Pursuant thereto. 1424 9/28/54 -7Governor Balderston then made a statement addressed to the second item covered in the first attachment to Mr. Sprecher's memorandum. While he agreed that the Board should keep in line with the Government on fringe benefit matters, it was his opinion that when it came to matters of employment, the Board should maintain an independent status. For the Board to keep people in a temporary-indefinite status for a long Period beyond that in which they would normally be kept on probation merely to conform to procedures followed elsewhere in the Government seemed to him to give up a part of that independence which should not be reli --nquished. In the circumstances, he raised the question whether the Board should await Civil Service action before taking appropriate steps With respect to its affected employees. Governor Balderston added that he would be willing to vote for such action as soon as the details could be worked out by the staff. Other members of the Board expressed agreement with the views stated — DY Governor Balderston, and it was understood that the Division f Personnel Administration would make appropriate recommendations to the Board at the earliest possible time. Thereupon, the recommendations contained in Mr. Sprecher's memorandum were approved unanimously, effective as of the dates suggested. In taking this action, it was understood that before the change proposed by item 5(b) became effective, the staff would check the provisions of the Fringe Benefits Act and the 1425 9/28/54 -8contemplated procedures of other Government agencies in this respect, and that if the action proposed for the Board differed from that which would be followed by other Government agencies, the matter would be brought back to the Board for further consideration. Messrs. Johnson and Sprecher then withdrew from the meeting. Chairman Martin referred to a letter which he had received under date of September 20, 1954, from Mr. Burgess, Under Secretary for Monetary Affairs in the Department of the Treasury, in which Mr. Burgess stated that the Savings Bonds Division of the Treasury had called its annual conference of State chairmen, State directors, and top volunteer workers for November 8 and 9, 1954, in Washington, that the group would number over 100, and that he undcrstood Chairman Martin and the Board had consented to be hosts at a luncheon for the group on November 8. Chair- ' Ilan Martin said that he had been unable to find a record of the request, and none of the other members of the Board indicated that they had any kn owledge of it. Accordingly, it was understood that Chairman Martin 11°111d discuss the matter with appropriate persons at the Treasury. The meeting then adjourned. During the day the following addi- tl°nal actions were taken by the Board with all of the members present: Minutes of actions taken by the Board of Governors of the Federal Reserve System on September 27, 1954, were approved unanimously. Letter to Mr. Armistead, Vice President, Federal Reserve Bank Or Richmond, reading as follows: 1426 9/28/54 -9- In accordance with the request contained in your letter of September 21: 1954, the Board approves the designation of Freeman L. Moore, Jr. and Gary M. Heathcote as special assistant examiners for the Federal Reserve Bank of Richmond for the purpose of Participating in the examination of State member banks only. Approved unanimously.
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