19470404_minutes.pdf

512

Minutes of actions taken by the Board of Governors of the

Federal Reserve System on Friday, April 4, 1947. The Board met in

the Board Room at 3:05 P.m-

PRESENT: Mr. Eccles, ChairmanMr. DraperMr. EvansMr. Clayton

Mr. Sherman, Assistant SecretaryMr. Morrill, Special AdviserMr. Nelson, Director of the Division

of Personnel Pdministration

Mr. /Avery, Chairman of the Federal ReserveBank of Chicago

Mr. Young, President of the Federal ReserveBank of Chicago

In accordance with the action taken at the meeting on March

25, 1947, Mr. Avery and Mr. Young had been invited to come to Wash-

ington to discuss the question of officers' salaries, and they had

Spent this morning with the Personnel Carmittee reviewing the pro-

posals of the Chicago Bank's board of directors, contained in Mr.

Young's letter of January 10, 1947, as to the officers' salaries

to be paid during the year beginning April 1, 1947.

At Mr. Evans' request, Mr. Nelson reported on the discussion

at the meeting of the Personnel Committee this morning with Messrs.

Avery and Young stating that they had asked that the Board give

formal consideration at this time only to the salaries proposed

for Mr. Diercks, Vice President in Charge of Examinations, Mr. Langum,

Vice President in Charge of Research, and other officers below the

rank of Vice President, that the proposals for Mr. Black, Cashier,

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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4/4/47 -2-

and Mr. Bachman, Assistant Vice President, be revised to allow for

increases of $1,000 in their annual salaries instead of t1,500 as

Proposed in Mr. Young's letter, and that consideration of the sal-

aries proposed for other officers be reserved pending further study

by the Chicago Bank.

Mr. Clayton called attention to the proposal for Mr. Endres,

Auditor, which would place his salary at $12,000 per year. There

was a discussion of the salaries of auditors at other Federal Re-

serve Banks, and it was the consensus of the Board members present

that the amount proposed was reasonable for the auditor of the

Chicago Bank.

Mr. Morrill referred to the increase originally proposed

for Vice President Dillard, who was included among the group of

dfficers whom Messrs. Avery and Young had requested not be con-

sidered by the Board today pending further review by the Chicago

Bank, Mr. Morrill stated that this proposal had attracted some

attention here at the Board, since it was understood Mr. Dillard

had not been a strong officer. Mr. Young said that he knew Mr.

Dillard had been considered "4-F" by the Board for years and that

although consideration was not being given at this meeting to a

change in his salary, he would like to say that Mr. Dillard was

carrying the responsibility for numerous activities of the Bank,

that the reduction in his salary several years ego had been made


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4/4/47 -3-

when certain duties were taken from him to permit some other weak

officers to show what they could do, that those officers had since

left the Bank, that he (Mr. Young) made a great deal of use of Mr.

Dilltrd by turning over to him any problem requiring e lot of

attention, and that during the last year Mr. Dillard probably had

made a greater contribution to the successful operation of the Bank

than ever before and probably as much as any officer.

Reference was then made to the problem connected with de-

termining the salary of Mr. Harris, Vice President assigned to the

Detroit Branch, who Mr. Avery stated was being prepared through a

long-range program to assume any office in the Bank. There was a

discussion of the relative importance of Vice Presidents in charge

of Federal Reserve -bank branches, during which Chairman Eccles out-

lined his views stating that the Board had long considered a general

improvement in the calibre of men in charge of branches to be desir-

able, that to get and hold men of this type would require that the

importance of branches be maintained and increased, that the chief

Officers at some of the larger branches might be expected to have

an importance ahead of any Vice President except the First Vice

President, that an increase in salaries for such men might be

called for, and that this was a problem which could only be con-

zidered as a System matter.

There was a further discussion of the long range program

for personnel of the Chicago Bank, of the specific salary recom-


51_5

4/4/47 -4-

mendations under consideration, and of the relationship of salaries

of officers of Federal Reserve Banks to those paid by Government and

by private industry, and it was pointed out that, for the reasons

discussed, salaries of senior officers of the Federal Reserve Banks

had been approved at levels substantially higher than those estab-

lished for Government positions, but that they could not be deter-

mined on the basis of salaries paid in private industry. Mr. Avery

stated that if the Board approved the proposed salaries for the

group of officers under consideration the salaries of other officers

at the Federal Reserve Bank of Chicago would be set for the year

be ginning April 1, 1947, at their present rates, with the under-

standing that after further review by the Chicago Bank the Board

would consider additional recommendations for the officers above

the rank of Cashier and for the /lanaer of the Detroit branch whose

salaries were not being changed at this time.

Mr. Evans stated that the Personnel Committee would recom-

mend that the salaries discussed be approved with the understanding

that additional proposals for the other officers would be considered

by the Board when submitted by the Federal Reserve Bank of Chicago.

Upon motion by Mr. Evans thesalaries of the Officers of the Fed-eral Reserve Bank of Chicago for theyear beginning April 1, 1947, wereapproved as follows:


4/4/47 -5-

At the rates fixed by the board of directors as reported in a letter from the Federal Reserve Bank

of Chicago dated January 10, 1947

NameWilford R. DiercksJohn K. LangumPaul C. HodzeMark A. LiesLouis G. MeyerF. L. PurringtonWilliam W. TurnerLaurence H. JonesPrank A. LindstenJohn J. EndresJohn V. GarvyOrville C. BartonEdward D. BristowPhil C. CarrollEdward A. Heath

Walter A. HopkinsClarence T. LaiblyHarold J. NewmanIngolf J. PetersenCarl M. Saltnes

Harold L. DiehlRichard W. BloomfieldWilliam T. CameronArthur J. WiegandtKenneth E. Heefele

Title Vice PresidentVice PresidentGeneral CounselAssistant Vice Presidentl'ssistant Vice PresidentAssistant Vice PresidentAssistant Vice PresidentPssistant Vice PresidentAssistant Vice PresidentAuditorAssistant General CounselAssistant CounselAssistant CashierAssistant CashierAssistant Cashier andAssistant Secretary

PssistPnt CashierAssistant CashierAssistant CashierAssistant CashierAssistant Cashier

Detroit Branch CashierAssistant CashierAssistant CashierAssistant CashierAssistant Counsel andAssistant Cashier

Proposed Salary$12,00010,00011,50010,00010,00010,00011,0008,50010,00012,0009,0007/4506,0007,000

At the following rates if fixed at those levels by the Chicago board

NameC. S. YoungCharles B. DunnNeil B. DawesJ. H. DillardOtto J. NetterstromArthur L. OlsonAlfred T. SihlerAllan M. BlackWilliam C. Bachman

Title PresidentFirst Vice PresidentVice PresidentVice PresidentVice PresidentVice PresidentVice PresidentCashierAssistant Vice President

7,5009,5008,0009,0007,5008,000

8,5008,5008,5007,500

7,500

Proposed Salary :F135200020,00013,00015,00015,50015,00016,50011,50011,500

51.6


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Detroit Branch Name Title Proposed Salary

Ernest C. Harris 1./ Vice President t16,500Harlan J. Chalfont Manager 12,000

1/ Vice President Head Office assigned to Detroit Branch.

This action was taken with theunderstanding that the Board wouldconsider further recommendationswhenever they were submitted by theChicago Bank concerning officershaving a rank above that of Cashier,including the Manager of the Detroitbranch.

Mr. Young left the meeting at this point and there was a

further discussion of the salaries of senior officers of Federal

Reserve Banks.

There were presented telegrams to Mr. Clarke, Assistant

Secretary of the Federal Reserve Bank of New York; Mr. McCreedy,

Secretary of the Federal Reserve Bank of Philadelphia; Mr. Clark,

First Vice President of the Federal Reserve Bank of Atlanta; Mr.

Dillard, Vice President of the Federal Reserve Bank of Chicago;

Mr. Stewart, Secretary of the Federal Reserve Bank of St. Louis;

and Mr. Volberg, Vice President of the Federal Reserve Bank of

San Francisco, stating thnt the Board approves the establishment

without change by the Federal Reserve Banks of St. Louis and San

Francisco on April 20 and by the Federal Reserve Banks of New York,

Philadelphia, Atlanta, and Chicago on April 3, 1947) of the rates

of discount and purchase in their existing schedules.

Approved unanimously.


4/4/47

At this point Messrs.

action stated with respect to

forth was taken by the Board:

The minutes of actions taken by the Board of Governors of

the Federal Reserve System on April 3, 1947, were approved unani-

mously.

-7-

Nelson and Avery withdrew and the

each of the matters hereinafter set

Memorandum dated March 27, 1947, from Mr. Thomas, Director

of the Division of Research and Statistics, recommending that the

basic annual salaries of the following employees in that Division

be increased, effective April 6, 1947:

Salary IncreaseName Designation From To

Robert W. Bean Economist 1 4,400.40 41651.20Katharine P. Reil Economist 4,400.40 4,651.20Philip T. Allen Economist 4,149.60 4,525.80



of the Division of Research and Statistics, recommending increases

in the basic annual salaries of the following employees in that

Division, effective April 6, 1947:

NameHelen R. GrunwellHelen A. Lupton

Grace R. SahmCecil MelansonMary P. McCormick

DesignationChief DraftsmanAssistant ChiefDraftsman

DraftsmanDraftsmanDraftsman


CP lary IncreaseFrom

!4'31773.40To

1'4,024.20

3,397.20 3,643.003,271.80 3,397.202,469.24 2,619.722,318.76 2,544.48

518


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of the Division of Research and Statistics, recommending that the

resignation of Miss Mary S. Painter, an economist in that Division,

be accepted to be effective, in eccordnnce with her request, at

the close of business March 30, 1947, with the understanding that a

lump sum payment would be made for annual leave remaining to her

credit as of that date.


Letter to Mr. Hill, Vice President of the Federal Reserve

Bank of Philadelphia, reading as follows:

"In accordance with the request contained inYour letter of April 1, 1947, the Board approvesthe designation of the following as special assist-ant examiners for the Federal Reserve Bank ofPhiladelphia:

John J. 01 -GradyQuintin G. KerlinRollin S. TouhillEdward G. BeckGeorge W. DeckertRobert F. StaatsJ. Richard TealAlbert J. Van Sant

"Appropriate notations have been made in ourrecords of the names reported as deletions."


Telegram to Mr. Volberg, Vice President of the Federal

Reserve Bank of San Francisco, reading as follows:

"Relet March 29. In view your recommendationBoard approves establishment and operation of branchin San Bruno, California, by American Trust Company)

•


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"San Francisco, California, provided such branch is

established within six months from March 15, 1947,as required by State authorities, and with under-

standing that Counsel for Reserve Bank will reviewand satisfy himself as to the legality of all stepstaken to establish branch."


Letter prepared for Chairman Eccles' signature to the

Honorable Harold C. Hagen, United States House of Representatives,

reading as follows:

"This is to acknowledge your letter of March 20to the Board in which you inquire as to whether it isthe intention of the Board to lift all consumer credit

restrictions by July 1 and enclose a copy of your bill,

H.R. 2542, which in effect would invalidate the Execu-

tive Order on which the present Regulation W rests."The newspaper article to which you refer is based

eAtirely on speculation and not on anything that theBoard or any of the members have said. In discussingthe matter, however, with Chairman Wolcott of the House

Banking and Currency Committee, I have indicated thatthe 'Board feels that unless Congress enacts, beforethe end of the present session, legislation to continue

this type of regulation, the Board would request thatthe Executive Order be vacated. This would avoid the

necessity of having Congress formally pass a. resolution

invalidating the regulation."The Board has recognized that there is a great

deal of controversy regarding this type of governmental

regulation. Some groups subject to it favor its con-

tinuance in legislative form, while others strenuously

Oppose it. The Board felt that both sides should havea chance to be heard ln the subject before the appro-

priate committees of Congress and that Congress should

decide one way or the other whether some such regulation

should continue or be discontinued altogether. Pending

8 decision by the Congress, we have felt that we should

maintain the regulation in its present form."The Board has not changed its own view that, for

the sake of the public interest in economic stability,

the regulation should be given a specific st-tutory

basis."


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Letter to Mr. C. H. Arnold, Production Credit Commissioner,

United States Department of Agriculture, Farm Credit Administration,

reading as follows:

ACT

"This is in reply to your letter of March 26,1947, in which you point out that in the last twoyears very few violations of Regulation W have beenfound in production credit associations. In thecircumstances you suggest r=,. modification of theprocedure now in effect for checking compliancewith the Regulation.

"Specifically, you suggest that instead ofreviewing the outstanding loans in all associationsat the time of credit examinations, there would bea formal review only in those associations wherethe production credit corporation had some questionas to the degree of compliance. In other associa-tions a periodic check would be made by the corpora-tion fieldmen on their regular visits by reviewinga sample of recently made loans. Once each yearthese corporation fieldmen would report to thecorporation on the degree of compliPnce with theRegulation in those associations not chee:ed inthe course of the annual credit examination.

"The Board of Governors feels that this modi-fied procedure would provide an adequate checkUpon compliance and sees no objection to itsadoption. I take this opportunity of expressingour appreciation for the cooperation which wehave received from the Farm Credit Administrationin this connection."


Chairman.

Assis ant Secretary.


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