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1436 Minutes of actions taken by the Board of Governors of the Pec Reserve System on Friday, September 3, 1948. PRESENT: Mr. Szymczak, Chairman pro tem. Mr. Draper Mr. Vardaman Mr. Carpenter, Secretary Mr. Sherman, Assistant Secretary Mr. Morrill, Special Adviser q‘plit Telegrams to the Federal Reserve Banks of New York, Phila- 'At• 414,01 e t,tik 8 lanta, Chicago, and San Francisco stating that the Board t• he establishment without change by the Federal Reserve ottie,,tySe 'll Francisco on August 31 and by the Federal Reserve Banks 1948, 0 °Ilt, Philadelphia, Atlanta, and Chicago on September 2, r t• he rates of discount and purchase in their existing Approved unanimously. 41%41 Letter to mr. "Peyton, President of the Federal Reserve Bank eaPoli, -, Prepared in accordance with the action taken at the N4 t the Board on August 31, 1948, reading as follows: The telegrams which you addressed to Messrs. : Ath lalc and Evans on August 26 and your letters 27, 1948 to Messrs. Draper and Vardaman oke-e ' e a feeling on your part that the Board had 's°n, other than the reasons conveyed in our telejee e.se.-];°11e conversations last week, for not approving ' '- rY at the rate of $8000 per annum as proposed 'directors for Mr. Clarence Groth, Assistant 111 Irlee°10 : resident at the Helena Branch. The Board wishes to t21.5 lit;lire You that there are no other reasons for its in this matter than those of which you have them 1.--Ylpeen advised, and in order that you may present to Your directors they are restated below. 1437 9/3A8 -2tlx,„ The Board is in full agreement with the selec1)J-; of som',one who can be trained in the remaining 0 d of Mr. Towle's service to succeed him as the in ; cer cia charge of the Branch and the Board appreatt-2! verY much the considerable amount of time and tor-"'ion that have been given by you and your direcIlles , to finding the proper solution of this problem. Board is entirely willing to accept your judgment cSlapeof your directors that Mr. Groth is the most person available for the appointment. How/ it can not see why a salary at the rate of $8000 10( j villy 4111-1m is an essential part of the arrangement and a Ll of the objectives sought by the arrangement cka' allri ll°t be achieved with an initial salary of $7000 per ract which appears to the Board to be in line with the the , °f the situation. Without desiring to emphasize °1.11t at all, the Board feels that it has a definite t ej 1411sibility under the law to consider salaries prob the directors of a Federal Reserve Bank on the tella 8 a salary policy applicable to the entire Systhe members of the Board feel that your direccillect via readily agree that the Board could not ade:y discharge that responsibility if it approved oPird'es Proposed by a Federal Reserve Bank when in the of the Board of Governors they are out of line. to a:kJ. salary at the rate of 58000 per annum would amount $70-07 illerease of.38 per cent and a salary at the rate of lArg-rIgill give Mr. Groth an increase of 20 per cent. The thel,;,TLIlarY would be $1500 higher than was received by ' Noo leer whom Mr. Groth is succeeding and while it is tazvt nized that he will be expected to take a more imporIlltja"rt in the affairs of the Branch and its contacts 1/4:CLe te rritory with a view to succeeding Mr. Towle, it 14'e 1313 T,e some months before he will be able fully to measthe new position and be of greater immediate 1/E11.11 the Branch than was Mr. Larson. In comparing 4Z 4:es for similar positions in other branches as well Elppea- Pattern of salaries of officers at your Bank it ecl to the Board that a starting salary of $7000If *41e s b le adequate in a small branch such as Helena. 8,4-e'rY was fixed at $8000 it would give Mr. Groth 4 i,E1.1.' ' el' increase immediately than the total of all increas 8 he would have to look forward to in the future t438 913A8 -3ex, 4, 8suilling that in due course he would succeed Mr. Towle eventually receive the salary that Mr. Towle is now arc,„eiving. Furthermore, the difference between the solaria.' (31' $8000 and Mr. Towle's salary of $10,000 would be percentagewise than the difference between the Brnel7 of the first and second officer at any other of-Ilch of a Federal Reserve Bank. Finally, the approval Lae:It ! .s. larY at the rate of $7000 at this time does not at the matter can not be taken up again at the tarta, °I. the annual review of official salaries at your April of next year. your The Board appreciates very greatly and joins in desire to preserve the present completely cooperarelationship which it has with the directors of feel Bslik and if for any reason you or your directors sici,tilat Mr. Groth's salary has not had adequate conBo Tlation or has not been properly presented to the the:c, it will be glad to consider any further comments lis„Y°11 or your directors might wish to make or to at ' ...'t (88 the matter with you when you are in Washington he time of the next Presidents' Conference." Approved unanimously. 11), Let „ e.,t-- to the Honorable Preston Delano, Comptroller of the Prepared in *accordance with the action taken at the meetthe Board on August 31, 1948, reading as follows: knel.i"°11 June 30, 1948, you were informed that Bank of 1114Qica National Trust and Savings Association had filed I ra , -- ti°ns with the Board for permission to establish G(4c' es at Bremen Frankfurt-am-Main, and Hamburg, ()4 1 ZY. On July 22nd you advised the Board that your ou wld enter no objections to the establishment branches. Tice these communications were exchanged, the 13raraderstands that the subject of these proposed oece : -.'es has been further discussed with you, on one :,°11 tY Governor Szymczak on the telephone, and on , 6•Iloths1 tioal,a7r IDY Governor Clayton and Mr. Townsend of the The Board is informed that - 8 Legal Division. 1439 9/3/48 -44011 eer each of these occasions you raised questions conini2ing certain factual aspects of the matter which well be considered by the Board in arriving at ells decision on these applications, including refer: al s to the capital structure of the bank, its loan or dividend policies, as well as to the basic problem potential over-expansion of the Bank of America is erally, A further reference to this latter subject c°11 It tained in your letter of August 30th. Inasmuch as the discussions just referred to have 1e,-1, , Place since your letter of July 22nd was received tr,6 fill ue Board, the Board feels that, before it takes ofT-,:rtion approving or disapproving the applications °f America for additional foreign branches, it 1?ota. °e helpful to the Board to obtain from you in detail such comments as you think are pertinent ica4ting. to the capital structure of the Bank of Amerloan and dividend policies, and such other cts as may be relevant to this issue." Approved unanimously, together Igith a letter to the Honorable Maple T. Hari, Chairman, Federal Deposit InsUrance Corporation, reading as follows: a n°/1 June 24,..1948, the Bank of America N. T. & S. A. s applications with the Board for permission to " sh 6, 44( certain branches in Bremen, Frankfurt-am-Main, 1)ror:EtiliblIrg, Germany. These applications are now being -e sed by the Board's staff. he The Board understands that, on two recent occasions and Mr. OSY°11 and Mr. Cook met with Governor Clayton theseell °f the Board's Legal Division, the fact that IIPPlications had been filed with the Board was l' ssed and you expressed the feeling that your Corpoall, because of its position as insurer of the domestic 41te;ePosits of Bank of America, had a very substantial Dezhie , st in any questions touching upon the further exof that bank. ' 11 the light of these discussions, the Board is th1'clls of obtaining from you such comments as you 84"e pertinent to these applications, especially 1440 9/3A8 -5 vJ tionwed from the standpoint of the Corporation's posias gEtilernsurer of the bank's domestic deposits, toWith such recommendations as you may care to e in the premises." 14 Letter to the Presidents of all Federal Reserve Banks readl'°110ws: -q0„ :14 connection with the administration of Regula- (8..7 w, about which the Board wrote you in its letter e/Ir' 01-°37) of September 2, 1948, it is planned that the cement program will be discussed with the Presicletlj °f all Reserve Banks when the Presidents' ConNT1ce meets in Washington the week of October 4• ?n that, on October 13 and 14, the Board hopes to or D-7e a conference in Washington of those in charge 'egUlation W at the Reserve Banks. Stat °rk is going forward on the new Registration be d-ment which will be simpler in form but which must arid, signed carefully to get the appropriate information it bal4;6?, make it suitable for punchcard operation. It eZpe be with the Bureau of the Budget. It is wilPsed that photo-offset negatives or printer's proofs .e Prepared to send to the Reserve Banks so that the tf','fiting can be done locally. Unless you notify 1q11-.L'be contrary, we will assume that this procedure ue satisfactory. The negatives or proofs probably 11, °n be available before the middle of September. "Ine erlt Board is also giving thought to the develope. uniform Registration Certificate for use by ror : uLeral Reserve Banks and to uniform credentials fillaie h use of all Regulation W investigators. If cliAct.1Y adopted, samples will be furnished for repro1011 by each Bank. IR/L4J°11.1" investigations so far indicate that the des2248 of automobile appraisal guides will be about as under the old regulation, but there are i,several problems to be cleared up. It is hoped the h designations can be published sometime during the : w! -4 Of September 6. h "With- respect to the monthly report, resumption of was requested in the Board's letter (S-1037) of 1441 -6110_ erntember 2, 1948, it is planned to revise Form F.R. 639 til well as the System summary prepared by the Board from The, information submitted by the Federal Reserve Banks. illoard would be glad to receive any suggestions you 1,' 4 aye which would increase the value of the monthly -°rt and summary. t oilt The question has been raised as to whether a new Vas }lue of Loan Provisions of Regulation W', such as lar selled in 1946 for use by bank examiners and simi.versons for ready reference, should be prepared and 0117111buted. The Board would like to have your views its ls question and any suggestions you may have as to content." Approved unanimously. Telegram to Mr Knoke, Vice President of the Federal Re- 44k of New York, reading as follows: rl?,r1e., "Your wire September 2. Board approves three months NP1 by your Bank of $15,000,000 of the $20,000,000 the' °8-11 to the Bank Polski maturing September 9, on s -111e terms and conditions as now apply, which were set 2 1947“31"th in your letter to the Board of December 12, %Is sh"The Board notes that you are of the opinion that tabl; . °11a Proceed with the program of repayment esthat'slied at the time of the June 9 renewal, namely, volliaellY further extension of this or any other loan ceacl, if granted, be contingent upon a repayment : ated on the basis of at least 25 per cent of the '-ulounIt now outstanding. be : f It is understood that the usual participation will °' ered to the other Federal Reserve Banks." Approved unanimous Secretary.
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