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1442
?e
(lerea
Zt
Minutes of actions taken by the Board of Governors of the
Reserve System on Tuesday, September
7, 1948. The Board
ill the
Board Room at 10:30 a.m.
PRESENT:
McCabe, Chairman
Szymczak
Draper
Vardaman
Clayton
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Sherman, Assistant Secretary
Hammond, Assistant Secretary
Morrill, Special Adviser
Riefler, Assistant to the Chairman
Thomas, Director of the Division of
Research and Statistics
Vest, General Counsel
Nelson, Director of the Division of
Personnel Administration
Leonard, Associate Director of the
Division of Bank Operations
Young, Associate Director of the
Division of Research and Statistics
Horbett, Assistant Director of the
Division of Bank Operations
There
Igas presented a letter from Mr. Whittemore, President
Bank.
of Boston, dated August 23, 1948, stating
lkitthe
ddr‘ectors of that bank had voted to increase the salary of
kt
he-lieere.Reserve
i)'Ikt3
i.
'41rI ti.
vice President,
$16,000,
from an annual rate of $14,000 to
September 1, 1948, in recognition of additional duties
'
4411. by
mr.
gult and of the outstanding performance by him of
11
kt110,, other
accompanied by a
t
official duties. The letter was
.r1,
:1414fr0m Mr. Nelson dated August 30, 1948, recommending that
1111'°I)osed
approved but that a salary at the annual
salarY be
not
1443
17A8
-2-
rtit4
pt 4a5,000
be approved if fixed at that figure by the directors
the
13411k, and by a memorandum from Mr. Nelson dated September 2,
:
19 'stating that the Personnel Committee had requested that the
tte be co
nsidered at a meeting of the Board.
Mr. Vardaman stated that he felt the matter should be conbasis of whether the work Mr. Hult was doing justified
'rY1.11crease and also in terms of whether it was good policy to
t4cte
he salary of
a senior officer who was close to retirement
(kr
'lilt will
be 62 in November) and who was not being advanced in
t4elos "ere followed a discussion of the senior officer staff at
tot
ban
during which Mr. Clayton stated that when he was at
ttoilea
ecentlY he was informed that Mr. Hult had been given ad-
ithr
responsibilities and that he was carrying his duties very
t 40
He suggested, however, that, since Mr. Whittemore
4 t1 eelt". another position and was expected to leave the Bank
'q
'a salarY at an annual rate of $15,000 rather than $16,000
114r.°11'ecl
'14hich would afford an incoming president an opportunity
:
the
materTh
question of salary increases for senior officers who
4r retirement age
was also discussed briefly but there was
°Ileittsiori as to
adoption of a definite policy in this respect.
1444
-3Upon motion by Mr. Clayton, unanim°us approval was given to a letter to
Ivir. Whittemore in the following form:
19118:Reference
is made to your letter of August 23,
,requesting the Board's approval for the payment
Pre,1-LarY at the rate of $16,000 per annum to Vice
'
dent Ellis G. Hult.
kr, The Board has given careful consideration to
v4ichrecommendation and appreciates the circumstances
Dr°111Pted the action of your board of directors.
er) in order to afford an incoming president of
'YeiliCpt
130e.ral.1-k an opportunity to review the matter, the
cree:"'°es not feel that it should authorize anin01F4e as large as $2,000 at this time, but in view
.appr e circumstances set forth in your letter it does
o $°
114e the payment of salary to Mr. Hult at the rate
'
I °00 Per annum for the period September 1, 1948
'
()ugh
A
titrc
,,,
-Pril 30, 1949, if this rate is fixed by your
s
zokel
:1
Mr. V
ardaman stated that at the meeting yesterday the Per-
tta4 C°MZittee
considered requests from three members of the
k Tor
per
mission to accept part-time teaching assignments durN. the
hegt
school term and that he had suggested that, before
Perz
Comiaittee passed on these requests, the Board's policy
4 1,
s'ect to such outside activities be reviewed.
He added that,
%°11s Vhich he outlined, he seriously questioned whether it
4 i''able to
permit members of the staff of the Board or of the
Ilserve Banks to participate in teaching or other outside
activities.
Clie
4rtereht
n McCabe said that he felt teaching activities were
category from most other outside business connections,
1445
9/1A8
-4-
tbat
teaci-,4
assignments were beneficial to the individuals,
a-Ling
ilitithat in
the research field it was highly desirable that the
,ataft
4 41
Iletbers have
such connections in order to develop properly.
)1'elt
that the connections were beneficial to the Federal
SYStera
because they brought the System to the attention
lpe°Ple and helped get Federal Reserve thinking into the
441N,qties.
SzYmczak said that the teaching connections represented
8178 carried on outside office hours and that he felt the
not object unless it appeared that the teaching work
itrterf.
'ttit
ering with the proper performance of the individual's
f3r the
Boa.rd.
IlaresPonse to Chairman McCabe's question as to present
13°14eY, Mr. Sherman read excerpts from the memorandum to all
111t3Y,
kN,
417)Proved by the Board on March 24, 1948 outlining the
k)lieles with respect to outside business affiliations and
t erz
4
tivities of members of the Board's staff and of the of-
ilzziol:e111Ployee5 of the Federal Reserve Banks.
During a dis-
°I' the niemorandum Chairman McCabe stated that he felt it
kt
4111eci
:41111 4 clear statement of a reasonable and workable policy,
geeted that no change be made in it.
Chairman McCabe's suggestion was
IIPProved unanimously.
1446
9/7148
-5before
this meeting there had been circulated among the mem-
r the Board the following memorandum from the Division of PerAdrairtistration,
prepared under date of August 27, 1948, reclit'ellcithg certain revisions in the Board's form of application for
4 1)0
i
hfit-C)11 (Form
FR 28) to make it conform more closely to Civil
-ntice
Form. 57,
Application for Federal Employment:
vistth"While there is some question whether it is adhe h le to ask an applicant for a position whether
rez:soefvthe
erbeen a member of a subversive group) bepolicy followed by the Board of cooperating
recoY in the loyalty program of the Goverment, it is
rnril
t encled that the first of the two questions relate. llos? loYalty in the Board's form of application for
ltion be changed to read as follows:
men}, Are you now, or have you ever been, (1) a
coZer of the Communist Party, U.S.A. or any
unist organization, (2) a member of a
or'cist organization, or (3) a member of any
cotlerlization, association, movement, group, or
illation of persons which advocates the overthrbm.T
°f our Constitutional form of Government,
groQL an organization, association, movement,
1113) or combination of persons which has adopted
:
11cY of advocating or approving the commission
or13
Te `'s of force or violence to deny other persons
-r rights under the Constitution of the United
Sta
et
:es or of seeking to alter the form of GovernkenTi
- (pf the United States by unconstitutional means?
is irif Your answer to any of the above questions
J es t state the names of all such organizations,
per;ciations, movements, groups, or combination of
tail--°113 and dates of membership. Give complete de°f your activities therein and make any exe.e-C
ini°11 You desire regarding your membership or
itIvlties therein.
.., is also recommended that there be inserted imecliEtt,,,t
'he ety:'Y following the statement in parentheses above
Pllcantts signature the following:
False statement on this application is
PtInishable by law."
ass,,
1447
917/48
-6,
Szymczak stated that in a recent informal discussion
°eUlee/Iterabers of the Legal Division and representatives of the
1)ektlillett Of
Justice with respect to the loyalty program the queslo
UP as to whether the Board's application form contained
the r
ere°1-11g questions, and that the recommendation for the changes
l'el38'red in the light of that discussion.
Upon motion by Mr. Draper,
recommendations contained in
the memorandum were approved unaniInously.
the
SzYmczak referred to the understanding at the meeting
kit
1%t 31
1948 that the Board would not submit a statement with
eet
to
•the report prepared for the Hoover Commission by Mr. G. L.
cliacel'Iling the Federal Reserve.
He added that Mr. Bach and
• Membr of a subcommittee of the Hoover Commission, were
et
:
111 •
1 l receiving. comments and that Mr. Bach would be in the
tle
in a few days for the purpose of discussing the report
alleci 7ex's of the staff. It was understood that when Mr. Bach
he 3• °e'rd members would be informed so that they could discuss
/.1• 1.thhim if they were available and wished to do so.
t
11l
Ugup the question of increasing reserve requirements
b.
--kbe
tk
btv,
1)8.11kS,
Chairman McCabe referred to memoranda prepared in
°f Research and Statistics under dates of August 31 and
1948 on the position of central reserve city, reserve
1448
9/7/48
-7oulltrY banks and on current monetary developments and a
44estecl increase in member bank reserve requirements, and to a
s°'74(11'13‘11411Z Prepared by Messrs. Thomas, Young, and Horbett under
4t' Qr September 3, 1948
on technical considerations governing
c)t action in reserve requirements.
Copies of these memoran-
411(113"11 sent to all members of the Board before this meeting,
:
11 1184 Et
memorandum dated August 25, 1948, informing them of Mr.
We statement
at the meeting on August 24-, 1948 that he would
4t -0„
4.LI-s meeting that reserve requirements be increased and
B.sk.
1'131
'a vote on the motion at this time.
After
reading excerpts from his testimony before the House
1144 44c1 Currency
Committee on August 2, 1948, in which he disci Vhat Could
14 re2erve
and could not be accomplished through increases
requirements and stated that such increases must be re-
14
to
t44t.
-`'ller instruments of credit policy, Chairman McCabe said
°Ililection with consideration of an increase in reserve
t 1emets
he felt it would be desirable to call a meeting of
to eellti\re committee of the Federal Open Market Committee so
hELITe the benefit of the advice of that committee in develop111 1,
011 -all Program which might include not only an increase
eIlre requirements but also further increases in rediscount
41(1
'more
°11 rtIrlient
Particularly, a lowering of the support prices
bond-.
contemplated
He added that his suggestion
1.449
9/1/48
-8t're li°11-1.(1 be a thorough discussion at this meeting of the question
°13:111cl'elleing reserve requirements but that no final action would be
taker( toclay and,
if the executive committee could meet tomorrow, it
be
understood that, following that meeting, the Board would
4et est. the Purpose of voting on the question of an increase in
Isecillirements.
iliel'ea'se reserve
He reiterated that he felt any action taken
requirements should be part of an over-all
11(3R/.41
atid
should not be an isolated action, and that it was for
the
0se f
developing such a program that he suggested a meet111'.°1' the eXecutive
conrnittee of the Federal Open Market Committee
r re '
a etiori was
taken by the Board with respect to changing rel'ecl/lirements.
He also said that he had an appointment to
N'eel'ettll'Y of the Treasury Snyder this afternoon at which time
:
:
.hit 14411ecl to
inform him of the action the Board proposed to take
esi3eet to
reserve requirements, in accordance with the understatea
in
a
letter from Chairman McCabe to Secretary Snyder
4 4411't 11, 191+8.
' Clayton stated that he felt consideration of the governNti
11PPort program was timely but that he did not feel the
11 a
011
-e uion by the Board on reserve requirements was in any
s
d upon a change in support prices or on an opinion
ecretary of the Treasury might express
1450
-9MI' Vardaman said he felt the Board should take action today
4dettly of any
view of the executive committee or the Treasury
f•terii
kit
- he would favor calling the executive committee to meet this
13°11°r tomorrow morning before the Board's action was made
that the executive committee could consider whether any
44%
°Pen market operations was desirable in the light of the
'
action..
1\4r
SzYmczak said the Board should not give the impression
111g any other agency such as the executive committee
e8"911.117 or any other group to decide whether it should ineserve requirements since that was a matter for which the
sPonsfbility, but that he felt there could be a full
4e's1c)11
at this meeting and a consensus as to the action to be
tklt
etlI that the
:
1 4111(i re'r the
executive committee could be asked to meet tomorrow
Purpose of considering operations in the System ac-
c'(''t
i. 14 the
4-ight of the Board's action, that in the meantime Chair"A41,teee.h
ill could inform Secretary Snyder of the action that was
loN the
ccordance with the earlier understanding, and that fol-
ileeting of the executive committee the Board could meet
Dialse of
taking final action.
t1i
%•
Mczak then said that, as agreed informally among
°• I' the Board last week, Messrs. Thomas and Young went
tote.4
With Mr. Bartelt, Fiscal Assistant Secretary of the
1451
9/7/48
-10—
last Friday concerning the possible effects of an increase
trir.
requirements.
11r. Thomas said that he informed Mr. Bartelt the Board would
aide
t°day the question of increasing reserve requirements, that
COUld
n°t saY whether there would be any action, but that the
Yod
81111)srs felt that the Treasury should know what was involved.
he
tuwa. told Mr. Bartelt that the System had been called
1;kil to
buy
large amounts of government bonds over the past several
Neike
d that it would unquestionably be called upon to purchase
14ge
ltl(mal amounts during the next several weeks since there
441,
a lto
°Ilsiderable demand for loans and the initative was in the
841anonbar4king lenders as to whether to sell securities and
the fliad
S to make the loans; and that in view of the action
t)4.trea
8 in giving the Board additional authority to limit credit
11414401
it aPpeared.that it was incumbent upon the Board to take
1404
1)
°n to immobilize the reserves being created and which would
created
1.J.Y sales of bonds to the System, since the only alternative
d to
/Ai,
cotie
to buy the bonds and thus permit the volume of reserves
le°to,
wolt
Igt tt
credit to expand. Mr. Thomas said he also told Mr. Bartelt
kt_
Inatter of
absorbing additional reserves that would be cretbYSA1
imports and
et14.
4 ri of bonds to the System as well as by gold
4,111
Of currency from circulation.
With respect to timing,
°1 's said he
indicated several possibilities, including Sep-
52
917/48
1l
16
) October 1, and October 16 as effective dates, and that
111 Pc/ssible amounts of increase in reserve requirements were
4180 ci
iscussed.
Mr' Thomas said that Mr. Bartelt did not express any opin1°448 t° a.h increase in reserve requirements other than to ask
c)(pd it would do to increase the requirements if the System
(I then 1)117 securities from the banks and supply them with the
11114
t° raeet the increase.
He felt, however, that Mr. Bartelt
t°°cI the
situation.
Mr' Vardaman then asked what had been heard from Messrs.
es
Nits 8.11
vez.1-s as a result of the informal understanding last
€tr that
their views would be obtained by telephone before
t
t
Mr' Morrill stated that he talked by telephone with Mr.
e 14St
Thursday evening and at his request Mr. Sherman read
tolloWing excerpt
from a memorandum of the conversation PrekNlbY
Mr.
Morrill under date of September 3/ 1948:
vi"G°vernor Eccles said that he felt very strongly
eLeir the legislative history that the Board
making a mistake if it did not use the au'41.1z ih
t"4:\Tilich had been granted to it. It seemed to
in view of the inflationary situation it
4
1c)1,ter5-e absurd for the Board not to use all the
N11. e.vailable to it. He said that he would not
eetlt c
at
°risider using the power in terms of only 1 per
per
Nit
a time. He thought more in terms of
t-all of 1 per cent. Considering the discussions
1453
-12”that had
taken place in Congress and the allegation
D0
7
,4t the
administration and the Board had not used the
be ers already available to them, he felt that we might
ceec1.
811biect to severe criticism in case we did not proor
vigorously. He would favor taking the first step
:
El
least 2 per cent effective September 16, and in
tile event not later than September 23, coupled with
lettfUll 1-1/2
per cent on time deposits. That would
Octi
!
ol 2 Per cent as the next step to be applied on
l e'er 16 and the remaining 2 per cent for central
thatrn cities to be effective in November. He added
Der he would not hesitate to make the first step 4
Oetobeent °n demand deposits in September followed in
eitieer,ibY the final 2 per cent on central reserve
44*
Mr, u
viorrill said that he also talked with Mr. Evans who
a
' -egram under date of September 6, 1948 giving his views
rese:I believe the effect of the small increases in
:
f
Ii e requirements which we can still make will be
3-8./.R
tcjIPsYchological, therefore', maximum attention
'
ereas etionary dangers would result from four inone per cent each on demand deposits followe'd-e.
tileY two per Cent at central reserve cities and
crea;,Eucilallanl on savings but if Board favors two inetible --s of two per cent on demand I am entirely agreeQ011.6
thought pressure should start in October and
hbrii
-Tale through holiday season and completed early
e s:57.. However, any timing Board decides on is
Nesl
tioxi;
i e• Bankers everywhere are happy over reguladon't like control but if
One banker said
klElt eci callnot exercise judgement themselves someone
Wba.ekluit for them and I am glad Federal Reserve has
N3C
rrfl
qfbie
to
McCabe raised the question whether it would be
have a conference with some of the insurance company
et the time an increase in reserve requirements was
1454
917A8
-13N3ted
an effort to have them stop their heavy selling of govet
securities
for the purpose of making loans in competition
ks
Re said that, aside from the inflationary character
he loans
which insurance companies were making, there was a
4le co
mplaint by member banks that they were being asked to re41'let
credit while insurance companies were making loans which the
-slight have
made, and that if an increase in reserve requirelettlIktsloade
b,)4
The
effective it would accentuate the problem of member
e was an extended discussion of this matter, during
111118(3rQe of the members of the Board indicated that there was
41'1°11
objection to the current activities of the insurance corn14
selling securities for the jourpose of making loans in
letitiola with
banks
The consensus, however, was that there
()Iderable doubt as to whether it would be either desirable
erretIlIe for
the Board to approach the insurance companies
ecillest or suggestion that they discontinue such activities
Tlarting
again to a discussion of the proposed increase in
NI'sqUi
rements, Chairman McCabe said the only question seemed
"Ile eff
ective date of the increase and the amount.
. Thereupon, Mr. Draper moved that
all increase of 2 percentage points
Ectgainst demand deposits and 1-1/2 perentage points against time deposits,
4- lective October 1, 1948, be ordered.
-14t6
Mr. Vardaman suggested that Mr. Draper's motion be changed
141"lcie that the increase become effective, in the case of banks
ilorkte
serve cities, on September 16, 1948, and for other banks on
4A,„b„,„
24) 1948,
and Mr. Draper asked that his motion be restated
Mr. Draper moved that reserve requirements of member banks be increesed
as follows, effective September 16, 1948
as to member banks in nonreserve cities
and September 24, 1948 as to member
banks in reserve and central reserve
cities:
°111/let
demand de osits
Nonreserve city banks
Reserve city banks
Central reserve city banks
ttze de
osits
11°Iareserve city banks
Central reserve and reserve city banks
From 14 to 16 per cent
" 20 to 22 " "
24 to 26 " "
From 6 to 7-1/2 per cent
From 6 to 7-1/2 per cent
Mere vas a discussion of Mr. Draper's motion and of various
4
qelllEttives _ s
(1
to effective dates and amounts of increase, among
an increase of 1 percentage point on demand deposits
:44"
percentage points on time deposits, effective Septem-
4'14
'1948, to
be followed by a further increase of 1 percentage
:
rlderaand deposits effective October 1, 1948, and perhaps a
41n,
-4.ea,..
e of
e4e '
Of
1 percentage point in mid October; (2) an in-
2
Percentage points on demand deposits and of 1-1/2 per-
Poir
-s on time deposits, effective October 1, 1948; (3) an
1456
9/7/48
-15-
-43e or 4 percentage points on demand deposits and of 1-1/2 per4Iltage
points on time deposits effective October 1, 1948.
141% Vest stated that, while there was nothing in the Admint \re Pr
ocedure Act to preclude making the proposed action efktiye
as
early as September 16, such date would result in an
ItrellielY
1)4148.
short period for giving official notice to all member
It was the view of the members of the Board that, by use
rtsi
elphQne and
telegraph wherever necessary, proper notification
11)e given and that this consideration should not prevent taking
A
‘,e
n'er'rective at
the times proposed.
04
ng the discussion of alternatives Mr. Thomas was ques-
cerning the desirability of making a series of small inez
a. short period of time which would promote uncertainty,
,
e13
'111,_
Y he
said that uncertainty would be desirable in order to
the greatest effect, and that he did not feel that an increase
qA
liel'eelitage points in requirements against net demand deposits
c)1'
ttte
2
percentage points against time deposits, taken at one
kql: 11°11-14 13e as effective as a series of increases of one per cent
Riefler stated that he felt early action should be taken,
he
4koz-t
la
Etnioutit
of the increase was not of principal importance, that
errective action would be to combine a lowering of support
o4
g°vernment bonds with some increase in reserve requirements,
1457
9/7/48
-16Etki,
th4t such action might make it unnecessary to make further in'a reserve requirements for some months to come.
Chairman McCabe suggested that if there was to be a meeting
the eze _
cUtive committee of the Federal Open Market Committee to41°111111g) Mr. Draper's motion not be voted on until after that
le-14` There was a further discussion of such a meeting at the
°f which it was understood that Chairman McCabe would call
leetix).g of
the executive committee to convene at 10:30 tomorrow
kl'1114) Wedrlesday, September 8, 1948, and that he would invite all
,:lbersOf the
Federal Open Market Committee to attend so that those
"o vel,..e
11
t on the executive committee could have the benefit of the
a further discussion of the proposed action, there was
.1‘
1)r
'-1411 a
greement among the members of the Board that a vote on Mr.
zot
collim:::e:ould not be taken at this meeting, but that the ex-
h
14tIlra
of the Federal Open Market Committee should be in-
2 1 tlit
t/Icre
t
it was
the consensus of the members of the Board that
ase Of 2 percentage points in reserve requirements against
dePosits, and of 1-1/2 percentage points in reserve ret /4b 'Ilts against time deposits should be made effective on Sep16
'1948
r
1,948,
1Nz,
for banks in non-reserve cities, and on September
°r banks in reserve and central reserve cities.
It was
1°°c1. that
this information also would be telephoned to Messrs.
1458
917/48
-17des
cill Evans by Mr. Morrill, and that at the meeting of the Board
tkorrov
he would report any comments they might wish to make.
44r.
Vurdaman stated that in view of the understanding arrived
this meeting,
he waived the notice that he had given at the
„teettia€ (3114
0 algust 24, 1948, that he would ask for a vote at this
4 a motion to increase reserve requirements of all member
bk4.
At this point Messrs. Riefler, Thomas, Vest, Nelson, Leonard,
4.e.). 1 "111d8orbett
or
withdrew and the action stated with respect to
the matters hereinafter set forth was taken by the Board:
ktutes of actions taken by the Board of Governors of the
lieserve
System on August 31, 1948, were approved unanimously.
?
14
4.erea itutes Of actions taken by the Board of Governors of the
SerVe
'
41
the
actioris
System on September 1, 2, and 3, 1948, were approved
recorded therein were ratified unanimously.
Lett.
--r to Mr. Stevens, Acting Chairman of the Federal Re,
Of Boston, reading as follows:
Reference is made to your letter of August 31,
l'Yyoll egarding the informal arrangement agreed to
ti/IIZ board of directors with respect to the con(
10)11 of Mr. Whittemore's services as President
°Itlie.-1,
'
Etnk after September 1, 1948, the date of his
lise of the Presidency of the New York, New
-!
44Veli
te Rartford Railroad Company.
IN[e't is understood that Mr. Whittemore will con'4111z '
? s152,Porar11y in the office of President of the
1,°r a reasonable length of time until his sucebss0- is appointed, and devote such time to the
91
:1459
9/7/48
-18Of the Bank as he can consistent with his asste—a
,'ion
l
with the railroad company. It is also underrir°c1 that he will serve without salary except for the
194s
8t r°ur weeks of that period which represents the
the vacation with pay to which he is entitled under
sue Bank's vacation policy, but that in the event a
fireessor is appointed prior to the expiration of the
,pezin_f°ur weeks of that period he will receive comtak,,-11`ji°11 only to the date on which the new President
°ffice.
e Board approves the temporary arrangement as
oilti„
ill"- in your letter.
Approved unanimously.
letter to Mr. Volberg, Vice President of the Federal Reserve
44 Francisco, reading as follows:
25, i ceiPt is acknowledged of your letter of August
by Tr."0/ transmitting a letter addressed to the Board
whethaZsamerica Corporation relating to the question
Atiorel
' certain assets which have been the subject of
correspondence are readily marketable assets withthe
",Illeaning of section 5144 of the Revised Statutes.
to Tr ""e are enclosing a letter of this date addressed
1samerica Corporation with respect to this matter
,
a4a 1,11.11
tio/1.14-1 aPpreciate your forwarding it to that Corpora- ,
A copy of the letter is enclosed for your files.'
Approved unanimously, together
with the following letter to Trans'Illerica Corporation, San Francisco,
Cal
ifornia:
a3, lap
eCeiPt is acknowledged of your letter of August
:!
c
transmitted through the Federal Reserve Bank
rancisco, relating to the question whether cer'4114 '
Nt01-1,1ssets which have been the subject of prior cor7erice are readily marketable assets within the
Illee.liii
;1 Of section 5144 of the Revised Statutes.
)1'
11- letter restating your position with respect
to t“
s matter does not contain any new facts or argukerite
'
th which in the Board's opinion warrant any change
e views previously expressed by it concerning the
e'e-ts
in question.
1460
viA8
-19lei
,"We understand from the closing paragraph of your
clo
' that at all times since December 31, 1947, your
P°rEttion
,
has ,;)cvsessed other assets in the required
etrol,
1111(Clt which would qualify as readily marketable assets
r anY interpretation of the statute."
Letter to
,
4/lett()
M.
William A. Roberts, Roberts & McInnis, Trans-
"Ililding, Washington
6, D. C., reading as follows:
NIc0 b"I°1-zr letter of August 20, addressed to Chairman
' regarding the regulation of instalment credit
ter
;e
es on television receivers has been read with inter-:
t1L01;st * We note your concern that the credit restric; IllaY limit production and sales of this new and
larc
'
sing industry.
tele "It has seemed to us that the terms provided for
(10141111ision receivers by Regulation W---20 per cent
1,41,1 c1 15 or 18 months to pay---are liberal enough
they will not unduly interfere with sales of
these
Nille sets over coming months. We have had comments
14trti e°111e People in the trade that the provisions,
libe'elaarly the 20 per cent down payment, are too
'
1thefor 41 to provide security for the seller or equity
buyer in the case of some of the receivers
tIlat IllaY show rapid obsolescence. It is likely
NrillenlanY instalment sellers have been obtaining down
ts at least as large as 20 per cent. Where a
,,
stalirl
the
Payment has been advertised, it appears that
esE:eller often
has obtained the installation charge
11 additional cash down payment.
qlort:4's we understand it, in any event, there is no
(Illatele Of demand for these sets in areas where adecoallrl uelevision programs are available. The aggregate
a.PPears to exceed the number that can be propresent conditions. With production limited
factors,
a further encouragement of demand by
'ler
keel),
Ntel °I' excessively easy credit terms would be in:
larY, as it would tend to support relatively high
13rice°
tight—. Over the longer-range future, easy credit terms
cilIctir,cielaY the price reductions to be expected as proN ec.-t,4 costs are reduced which are perhaps the most
television
l ei„. ve means of broadening the market for
"urs.
1461
917A8
-20'We
appreciate your interest in writing to us on
1,41:' subject. You may be sure that the points you
or!
e will be considered fully in our continuing study
'Ile provisions of the regulation."
Approved unanimously.
Ass stant Secretwor.
44tovecl:
Chairman.
@FedFRASER