meeting minutes, november 20, 1950, volume 37, part 4 · 11/20/50-3-''111)8 of bankers at...

1805

:anutes of actions taken b,y the Board of Governors of the

Federal Reserve System on Monday, November 20, 1950. The Board met

in the Soeci el Library at 2:30 p.m.

PRESENT: :Ir. McCabe, Chairman1:.r. EcclesMr. EvansMr. VardamanMr. PaJell

Carpenter, SecretaryT:r. Sherman, Assistant Secretar3,

RieCler, Assistant to the Chairman

Mr. Leonard, Director, Division of Bank

Operations:37. Vest, General Counsel

1:r. Young, Director, Division of Research

and StatisticsMr. Noyes, Assistant Administrator, Office

of Kcal Estate Credit

Arthur Phelan, Vice President of the Federal Reserve

8ank of New York, ,tho is temporarily assistin:, the Board in the

°rCanizati" of ibs work on Regulation Consumer Credit, and Reg—

Aeal _state Credit, as also present.

2er°re this meeting the Federal Advisor,/ Council submitted

araernorandum coverin,7; topics discussed at a separate meeting- of the

C°1111cil °fl llavember 19, 1950, ::hich Jere to be revieed Jith the

at a

%ard considered the topics listed and it Jas agreed that Chairman

40uld state the views of the Board substantially as recorded

d-11 the minutes of the joint meeting.

* 35YrIlozak joined the meeting during the discussion.

Chairraan McCabe stated that in accordance with the under—

joint meeting to be held at 10:30 tomorro:; morning. The

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

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stalldinC at the meeting on October 15, 1550, he talked aith

Al*I'lleY General 1:cGrath and Deputy Attorney General

OilFr'iday, November 17, concerning steps that might be taken to

devel°P voluntary agreements between financing institutions to re-

strict extensions of cred

?roduction Act of 1950, a

General that the position

such as to influence the

bankta participation

raents in the

fields

tO see

Peyton Ford

it pursuant to Section 708 of the Defense

t Jhich time it was stated to the Attorney

set forth in his letter of October 19 ia.s

counsel of any bank to advise against the

in any such agreements, that voluntary agree-

finance field 'ere different from the problems in other

covered by the Defense Production Act, that it was difficult

11(3 in tho highly competitive field of finance banks andiris,urance

field to

Of credit.

alld 11.r. Ford

'r1(1 that Llr.

e°1111ectiori.

that rai,:;ht

objectives of

their features Jould be objectionable to the Department of

and that the

companies could get together in an effort to create a

and that there was a possibility or effective action in

achieve the objectives of the Act to curtail the use

Chairman McCabe also said that both the Attorney General

indicated their agreement Ath the approach he outlined

L:cGrath stated he could not conceive of any monopolistic

The Attorney General suggested, Chairi,A,an HcCabe stated,

'be desirable to prepare a mel%orandun covering the

such agreements so that it could be determined 'ahether

Board might arrange a meeting of one of the


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''111)8 of bankers at which a representative of the Department of

Justice would be present who could assure the bankers that thereaas

not to be feared by them insofar as the Department was

concerfled. Chairman McCabe added that it was understood in their

discussion that the Attorney General -gould send the Board a letterO

tneraoranchma indir.atinc, that the Department of Justice would have

lic°bjection to arranging for a meeting of bankers to discuss a

P°ssible agreement and that it was suggested by Mr. Ford that Ur.

liestPrePare a draft of such a letter.

r. Vest stated that he had prepared such a draft and atCha

irtlaal TT-cCabe's request he described its content.

Following a discussion,Mr. Vest was authorized to submita draft of the proposed letter toDeputy Attorney General Ford forsuch use as he might wish to makeof it.

Secretary's Note: Mr. Vest reportedto the Secretary that on NoveMber 21he handed Mr. Ford a draft of letterwhich the Attorney General might sendto Chairman McCabe reading as follows:

re "I. ish to confirm our conversation of %

last Fridaying•arda - meetings and discussions which might be heldDefearrYing out the objectives of section 708 of the

a„ense Production Act of 1950 with respect to voluntarye:geements betaeen financing institutions to restrict

ensi°ns of credit.Ge, °Under date of October 19, 1950, Deputy Attorneypaun'al Ford addressed a letter to you regarding the

Indofr!'lolpation by members of industry in the activities

Pose advisory committees. It was not e pur-.,of ustry ththat letter, however, to affect, or to prescribe


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0arW requirements concerning, meetings or consul-tations vdlich might be held among representatives

banks, insurance companies, or other financinginstitutions with a vier to the .!rorking out of vol-,1„1,11tarY agreements under section 708 of the Defense1-roduction Act.

agree with you that it is desirable under_"e inflationary conditions now existing to assistdnd encourage in every way possible the making of vol-

agree s among financing institutions which would:lu in checking any expansion of credit that is not:ssential in connection Jith the defense effort. The-,,1,/,,Ictions conferred upon the President by sectionu61(a) and 708(b) of the Act were delegated by theGr,esidentis Executive Order No. 10161 to the Board ofCovernors of the Federal Reserve System Jith respectcar ancing, and I understand that you feel that, in

have meetings from time to time and in

eoltict) the purposes of section 708, it would be

inl:sfer ent localities among representatives of banks,stilrance companies, or possibly other financing in-mentuti°ns, to consider what types of voluntary agree-the and programs might be worked out pursuant tomsnt;:w and to prepare initial drafts of such agree-

.°I agree with you as to the desirability of suchroeta-ngs and I understand from our conversation thatre1,1 'all take steps to arrange for such a meeting amonginvr,esentatives of financing institutions, to be heldwel e-4 York or other appropriate place. It might be

Of 1.-1,at such a meeting to draw up a genei'al statementreCi!? objectives of the proposed voluntary agreementsou :ulng to financing, in order that your office andwh%'7 be informed of the nature of the agreementswo-'" would be later submitted for approval. If youofuld like, je will be glad to have a representativeordthe Department of Justice attend the meeting in

Pleas er LO be of any assistance he can in this connection.ij let us know the time and place of the meetingA aould like to have our representative present.ajlmilar arrangement might be followed with respect toQsequent meetings, if desired.

assj,:Please be assured that we wish to be of maximum

til,:-'ance in cooperating in accomplishing the objec-Of the law


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At this point all of the members of the staff Ath the ex-

cePtion of Messrs. Carpenter and Sherman withdrevr, and the action

stated'cith respect to each of the matters hereinafter referred to

'4as tal':en by the Board:

Idinutes of actions taken by the Board of Governors of the

Fderal ReserveSystem on November 17, 1950, dere approved unanimously.

Terlerandum dated November 7, 1950, from Lir. Yount-, Director

ision of Research and Stntistics, recorimandin the apoint-raert of Doris

Plass .arncr as an economist in that Division,aitli basic

salary at the rate of 05,400 per annum, effective as ofthe date

Of the

the usual physical examination.

Approved unanimously.

,r.emorandum dated November 17, 1950, from Mr.tor Bethea, Dime-

°1-' the Divisionof Administrative Services, recommendinE; the

aPPointrzentof Alliam Russell Smith as a laburer in that Division

tempo ra-u;J basis for a period of tNo months, Nith basic salary

at the ra.e

t 01 %2,120 per annum, effective as of the date upon :fhich

upon Which she enters upon the performance of her dutiester

havina Passed

he ento,s

the 11.P°n the performance of his duties after havinE,, passedUS] physic ,

raelfe:::::::tion, and subject to a satisfactory in-


j'ellorandura dated November 16, 1950, from Lr. 3ethea, Arco,-

Of t'1-3,visi0n of Administrative Services, recommending that


I 8 0

the resignation of rs. Mary

be accepted to be effective,the

E.

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Maloney, a page in that Division,

in accordance with her request, at

Close of business December 1, 1950.


i,Lemorandum dated November 16, 1950, from Yr.

of the Division of Research and Statistics,

t411)()rarY indefinite appointment of ass Reba Driver,

that Division,

2°, 1950, rith no change in her present basic salary at the rate

c)f ;$2,730 per annum.

Young, Director

recommending that the

a clerI in

be extended on a permanent basis, effective November

Approved 'in

rlemorandum dated November

Collrisel, recommending a change in

Assistant General Counsel, and an

49,400 to

animously.

10, 1950, from 1.:r. Vest, General

title from Assistant Counsel to

increase

10,500 per annum, for Hoxard H.?e1)1"Ilary 1, 1951.

3 reCOMZendin7th

° roll .

in basic salary from

Hackley, effective


Illemorandum dated November 10, 1950,„eel

263 1950:

e''rNaj

ecleriC'Solomon4/'01Tie 1.V.

Shay

increases in the basic

from 1.:r. Vest, General

annual salaries of

employees in the Legal Division, effective November

Salary Increase

Title From To

Assistant GeneralCounsel *11,000 $11,500

Assistant Counsel 7,800 8,400


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Memorandum dated November 10, 1950, from 1:r. Vest, General

C°114sell recommending a change in title from Law Clerk to Assist-

ant Counsel, and an increase in basic salary from al600 to 14;5,000

Per annaml for gilliam H. Tinsley, effective November 26, 1950.


Memorandum dated November 10, 1950, from Mr. Vest, General

C°11113e1) recommending the appointment of gaiter H. Young, as

hsistant Counsel in the Legal Division, with basic salary at therate

o8,80Q per ann 1 effective as of the date upon which he

"Iers upon the performance of his duties after having passed the

%al physical examination.


Memorandum dated November 15, 1950, from Mr. Vest, Generaleollnzei

recommending an increase in the basic salary of Alfred K.Cherrv .

Pissistant Counsel in the Legal Division, from 49,400 to

9,8o° Per annum,effective November 26, 1950.


Memorandum dated November 10, 1950, from Mr. Vest, GeneralOK)Iltsel,

recommending that the following appointments be authorized:

(1) That the appointment of an additional stenographerin the Legal Division be made as soon as a properly

cluallfied one can be found, to be placed in Group/ with a salary range of 42,650-0,130.

(2) 111.at the appointment of a Clerk in the Legal Divi-sion to assist in the work on our legal files be


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made as soon as a properly qualified person canbe obtained, and to be placed in Group I, with asalary range of !;2,650-$3,130.


Memorandum dated November 16, 1_950, from Mr. Evans, rec-

clilillendirlg that in connection with Mr. Gregory O'Keefe's trip tothe paci_ c

1-1 Coast in connection with resumption of the hearings inthe

Board Is Clayton Act proceeding against Transamerica Corporation,the

Present per diem in lieu of subsistence of 4l4 which Mr. O'Keefe

been rece iving while on assignment in Washington be continued

le he is away from ':iashington on official business of the Board,

arid that he be allowed reimbursement for other travel costs on thebasis of

arra-ugements authorized by the Board's official travel

Ofl Plus reimbursement for the rental of a small, modest,

Alrnished apartment or suitable hotel-room accommodations as shown

bY n.4bills) while on the West Coast.

Approved unanimously. '

Letter to Dr. E. A. Goldenaeiser, 30 North Stanworthrrleeto

n3 New Jersey, reading as follows:

"This letter is in confirmation of Leonardaes sndts conversation with you regarding your

.,s-uance in connection with the Board's proceed-'4g against Transamerica.it i Xhen the hearing reconvenes in San Francisco,80142 "Pected that you will take the stand to pm

rebuttal testimony, and that you will spend someall: with Mr. Townsend preparing for such testimony,Q1,0 P°ssibly also advising him in connection with thethes8-examination of any additional economists which

respondent may call.

Drive,


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"Accordingly, the Board has approved anarran gement similar to that which was in effect inc°nnection with your previous appearance on the

rate stand, under which you will be compensated at the

050.00 per day of your employment for thePurPoses of the Clayton Act proceeding, as outlinedab"e, and you will be allowed your necessary trans-p?rtatio n expenses and a per diem in lieu of sub-sistence

of 91.00 in accordance with the Board's/jficial travel regulations applicable to heads of

able other

fl i°ns, together with such supplemental alloaance

expenses as may be approved by the avail-embersmble of the Personnel Committee.

tio "Again, we wish to express to you our apprecia-n for your willingness to continue to help in thism

atter."



meeting minutes, november 20, 1950, volume 37, part 4 · 11/20/50-3-''111)8 of bankers at...

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