Minutes of actions taken by the Board of Governors of the ... · Minutes of actions taken by the...
Transcript of Minutes of actions taken by the Board of Governors of the ... · Minutes of actions taken by the...
Minutes of actions taken by the Board of Governors of the
Federal Reserve System on Friday, February 29, 1952. The Board metin the Board Room at 12:30 p.m.
PRESENT: Mr. Martin, ChairmanMr. SzymczakMr. EvansMr. VardamanMr. PowellMr. MillsMr. Robertson
Mr. Carpenter, SecretaryMr. Sherman, Assistant SecretaryMr. Kenyon, Assistant SecretaryMr. Thurston, Assistant to the BoardMr. Riefler, Assistant to the ChairmanMr. Thomas, Economic Adviser to the BoardMr. Leonard, Director, Division of Bank
OperationsMr. Bethea, Director, Division of Adminis-
trative ServicesMr. Vest, General CounselMr. Williams, Assistant Director, Division
of Research and StatisticsMr. Sprecher, Assistant Director, Division
of Personnel Administration
Telegrams to the Federal Reserve Banks of New York, Cleveland,kiehrao..
"ds St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco,etatih-
that the Board approves the establishment without change by the?ecierThl.4.
Reserve Bank of St. Louis on February 25, by the Federal Reserve
Or u+1ew y
(4‘ks Cleveland, Richmond, Minneapolis, Kansas City, and Dallasripeb
ary 28, 1952, of the rates of discount and purchase in their
tabok of
San Francisco on February 261 and by the Federal Reserve Banks
Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
2/29/52
v.ing s cheduies
-2-
Approved unanimously.
Before this meeting there had been submitted a memorandum cover-
oPios to be discussed at a joint meeting of the Board and the
Presidents of the Federal Reserve Banks to be held today at 2:15 p.m.
The Beard considered the topics listed and it was agreed that the views
°tithe Board would be stated substantially as recorded in the minutes
of the .joint meeting.
At this point all of the members of the staff with the exception
orLiessrs. Carpenter, Sherman, and Kenyon withdrew, and the action stated
with respect to each of the matters hereinafter referred to was taken
13r the Board:
Minutes of actions taken by the Board of Governors of the
Reserve System on February 28, 1952, were approved unanimously.
Memoranda recommending that the basic annual salaries of the
r011°Iling employees be increased in the amounts indicated, effective
karch 21 1952:
ate f .lemorandum Name and Title Memorandum from Mr. Young, Director,
Division of Research and Statistics
Salary IncreaseFrom To
Joan N. Yamamoto,Statistical Assistant $3,255 $3,1110
Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
337
2/29/52
Date of Memorandum
2/27/52
2/27/52
-3-Salary Increase
Name and Title From To
Memorandum from Mr. Bethea, Director,Division of Administrative Services
Raymond J. Martin,Operator, Duplicating Devices $21830 $2,910
Memorandum from Mr. Williams, Assistant Director,
Division of Research and Statistics
Harvey A. Robinson,Clerk
Approved unanimously.
4116o 4,295
Memorandum dated February 20, 19520 from Mr. Young,
Direct„, Division of Research and Statistics, recommending the
aPPointment of Jane S. Sundeen as Clerk-Typist in that Division,
:11 teMPOrary indefinite basis, with basic salary at the rate of
921950 Per annum, effective as of the date upon which she enters
41404 the performance of her duties after having passed the usual
PkYaical examination and subject to the completion of a satisfactory
etaPlorkent investigation.
Approved unanimously.
Memorandum dated February 27, 19520 from Mr. Leonard,
1°11lector r.14-vision of Bank Operations, recommending the appoint-
Of
Relen A. Bennett as Clerk-Typist in that Division, on a
1441Por417 indefinite basis, with basic salary at the rate of $2,950
44114m, effective as of the date upon which she enters upon the
Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
338
2/29/52
-4 -piano
r ance of her duties after having passed the usual physical
er.alnination and subject to the completion of a satisfactory employ-
ment investigation.
Approved unanimously.
Letter to ,jr. Neely, Federal Reserve Agent, Federal Reserve
klak of Atlanta, reading as follows:
, "In accordance with the request contained in your4etter of February 25, 1952, the Board of GovernorsaPPr°ves the payment of salary to Mr. Nicholas Bandi,Federal Reserve Agent's Representative at the Newleans Branch, at the rate of $41080.00 per annumo"
ile
Approved unanimously.
Letter to Mr. Wiltse, Vice President, Federal Reserve Bank of
-4, reading as follows:
"In view of the recommendation contained in youreetter of February 27, 1952, the Board of Governorswends until September 14, 1952, the time withinm:4-ch the Liberty Bank of Buffalo, Buffalo, New York,
establish a branch in Niagara Falls, New York, asPProved by the Board on September 14, 1951."
Approved unanimously.
Letter to Mr. Wiltse, Vice President, Federal Reserve Bank of
reading as follows:
let, "In view of the recommendation contained in yourev4ver of February 271 1952, the Board of Governors-"erlds until September 14, 1952, the time within which
Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
odt 31
2/29/52-5-
"The Marine Trust Company of Western New York, Buffalo,New York, may establish an additional branch in NorthTonawanda, New York, as approved by the Board onSeptember 14, 1951."
Approved unanimously.
Letter to Mr. Bloomfield, Assistant Vice President, Detroit
4 'ar the Federal Reserve Bank of Chicago, reading as follows:
1 "Reference is made to your letter of January 23)w923 in which you advised the Board of the reasons4Y the expenses for certain items of expenditure atYour office exceeded the 1951 budget estimates.
'Appropriate notations are being made in theBoard's records concerning these overexpenditures."
& pre
Approved unanimously.
Letter to Mr. Orville L. Freeman) Larson, Loevinger, Lindquist
ertlan, Midland Bank Building, Minneapolis, Minnesota, reading asfollows
105
, "Receipt is acknowledged of your letter of February 20,1,13 addressed to Chairman Martin regarding River Lake'Actor Company, Minneapolis, Minnesota.
As you pointed out in your letter, this case has,adY been referred by the Board to the Department of
C!s decide
The Board, therefore, is no longer in a positiont how it is to be handled. However, the fact that
Board referred the case to the Department of Justiceloates that it viewed the case in a different lightthat indicated in your letter."
Approved unanimously.
Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
2/29/52
310
-6-
Letter to Mr. J. Saxton Lloyd, President, National Automobile
Lealt3rs Association, 354-60 North Beach Street, Daytona Beach, Florida,
reading as follows:
"This will acknowledge your letter of February 26requesting a meeting on Friday afternoon, March 7, inconnection with Regulation W--Consumer Credit--todiscuss the automobile situation.
"March 7, the suggested date, is satisfactory andthe meeting has been scheduled for 3 o'clock that after-noon. Mr. Deo of your Washington office has indicatedthat that time would be convenient. We shall advise Mr.ueo later as to the room to be used for the meeting."
St. L .°las, relative to the matter of Robert L. McManemY, doing business
as Standard Auto Sales, 4212 State Street, East St. Louis, Illinois,
a
Approved unanimously.
Letter to Mr. Lewis, Vice President, Federal Reserve Bank of
l'egiStrant under Regulation W, Consumer Credit, reading as follows:
"Reference is made to your letters of February 11,and February 15/ 1952, regarding the above matter.
"In view of the circumstances described in yourlet ters and enclosures, and the telephonic advice which
;e have received from you, the Board concurs in your
Robert L. that an injunction be sought restraining
ert L. McManemy from further violations of Regulation
"SinceProceeding
Zatter.give you
your Bank has already handled one injunction
it is presumed that it will handle thiscourse, the Board's staff will stand readyany assistance possible."
Approved unanimously.
Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
2/29/52
:341
-7-
Letter to Mr. Scheffer, Manager, Real Estate and Consumer
Credit Department, Federal Reserve Bank of New York, reading as follows:
"This refers to your letter of February 201 19522regarding the inquiry from Mr. Arthur S. Lesser, con-cerning the application of RegulationlY to two trans-actions each involving the extension of instalment2redit in the amount of $3,780 by Nash Kelvinator Salescrporation in connection with the sale of a total of41 refrigerators for delivery to three apartment houses!ach owned by a different corporation. In the first'raneaction, one individual owns all the outstandingst"k of each of the three corporations and executes4 single conditional sales contract covering all 21!?frigerators. In the second transaction, where alle outstanding stock of the corporations is owned by
v4O individuals, both individuals would execute the
single conditional sales contract and be liable jointly,not
severally, thereon.0. The transaction would not comply with the termst the regulation if there were deemed to be an exten-
of credit to each corporation with respect to the7svan refrigerators delivered to it, and the exemptiontn section 7(a) would not be available since the instal-
to credit with respect to the refrigerators delivered0. i_each corporation would be less than $21500. On the,wler hand, if each transaction involving 21 refrigera-14rs is deemed to be a single extension of credit, itweCuld be exempt under section 7(a) as a non-automotiveedit in excess of $2,500.. "There appear to be two especially significant
.Leatures of the transactions."1. In each case there would be a single contract,
;L?ne case with a single individual, and in the other11 two individuals. However, in the latter case the
h:pwculd be liable jointly on the contract, and they
Was a pre-existing community of business interest which
"a created for purposes unrelated to the regulation.
t "2. Although the refrigerators would not be delivered0 the obligors on the contracts, they would be delivered
Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
2/29/52
-8-
"to apartment houses that are the property of the corpora-tion whose stock is owned entirely by the respective obli-gors on the contracts.
"The Board agrees with your view that, if there isa single obligation, and both the conditions outlined inParagraphs 1 and 2 exist, each sale of 21 refrigerators?011.1d properly be treated as a single extension of credit
an amount exceeding $2,500."As you indicate, there is some possibility thatthis conclusion might lead to attempts to evade the regu-
]t-,ation by using transactions superficially similar toes°. Such an instance is reflected in the interpre-til
ration at 1950 Federal Reserve Bulletin 1613, Regulation!Service #855.1. Accordingly, in advising Mr. Lesser
would seem advisable to emphasize that the conclusionere is based on and limited to the particular factspresented."
Approved unanimously.
Memorandum dated February 27, 1952, from Mr. Chase, Assistant
8°1icit", recommending that in accordance with the recommendation of
tIleFederal Reserve Bank of San Francisco, an Order be issued direct-
14 investigation and designating officers to take testimony in the
rnatter of S. E. Turner, Inc., Arcadia, California, a registrant under
R9g1"tion X, Real Estate Credit, as follows:
"UNITED STATES OF AMERICAAt a BEFORE THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
meeting of the Board of Governors of the Federal Reserve Systemheld at its offices in the City of Washington, D. C.,
on the 2 th da of February, A. D., 1952.111r:the Matter of ORDER DIRECTING INVESTIGATION
E. TURNER, INC" AND DESIGNATING OFFICERS-readia California. TO TAKE TESTIMONY.
Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
3Vz
2/29/52
MembersSan Franciscotonat ,
Bank hasthat
-9-
"Iof the staff of the Federal Reserve Bank ofhave reported information to that Bank, whichtransmitted to the Board, which tends to show
eiu,,J B. E. Turner, Inc., of Arcadia, California, isin the business of extending real estate credit sub-
,2!et to at
Rego ion X, Real Estate Credit, issued by the Board
ul Governors of the Federal Reserve System.mit „2) B. E. Turner, Inc., has failed and refused to per-a,,„"ls Federal Reserve Bank of San Francisco, by its dulyyZ;410rized representatives, to inspect the books and records
riCompany is required to keep pursuant to the said
IIdee The Board, having considered the aforesaid report,madills it necessary and appropriate that an investigation be
f°r the purpose of determining whether or not Bo E.est-!rs Inc., is engaged in the business of extending real
credit subject to Regulation X and, if so, whether"as violated the provisions of Section 602(b) of the
il'e'enseg Production Act of 1950 and of Section 6(d) of
b,, 111, atito permit inspection of its
hul"s a°d"r LloT,drse. fusing III
prod It is ordered pursuant to Section 705 of the Defense .
10 1141.?ti°11 Act of 1950 and Section 902(a) of Executive Orderselfu lorththat an investigation be made to determine the matters
in Paragraph II hereof.E. A is further ordered,pursuant to Section 902 of the
xecutive Order, that for the purpose of such investi-thgation
ell ? 'John A. OlKane and Walter F. Scott, and each of3 is hereby designated an officer of the Board and em-
13°'rered tIttitrie 0 administer oaths and affirmations, subpoenarewisses, compel their attendance, take evidence and
he the production of such books, papers, correspondence,mater?-11-da or other records as may be deemed relevant orco,riljelal to the inquiry, and to perform all other duties in
ction therewith as authorized by law.By the Board.
(signed) S. R. Carpenter,Secretary."
Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
2/29/52-10-
Approved unanimously, with the under-
standing that in the event of failure ofthe registrant to comply with the command
contained in the subpoena, the General
Counsel of the Federal Reserve Bank of San
Francisco would be authorized to file suitin the United States District Court askinga mandatory injunction requiring the re-
spondent to permit inspection of his books
and records as required by the regulation.
Letter to the Presidents of all Federal Reserve Banks, reading
a.8 follows:
ur "In the Board's letter of January 18, 1952, (S-1430,
n179)4 reference was made under item (6) to the desir-
ability of attempting to work out uniform standards0.-Lch could be followed by all Reserve Banks. In dis-irsions at the regional conferences on the regulation,
132as appeared that it would be helpful to the Reservetcuuts to have advice of the disposition of cases referred; the Board for action, including a brief statement0
the background of the case and the facts disclosed. by the investigation.
7Nith the thought that this procedure would be help-
it is contemplated that in the future there will be
oi"Z to the presidents of all Reserve Banks a statement
ri .4118 kind illustrating various types of cases. A suf-
the44te rylurzr of copies of the statement will be sent so
be furnished to individuals handling investi-f:;:lve work either at the head office or branches of the5ziyidual Reserve Banks. These statements will come to
ln the form of a separate series of bulletins to beirrn as Enforcement Bulletins -- (W-ENF 1) etc. The
cojat of these bulletins, which you will note is for use
Reserve Bank Personnel only, is enclosed.ear "We should be glad to receive any comments you may
8 to make concerning the usefulness of these reports
e(Innection with the compliance and enforcement programor either Regulation W or Regulation X."
Approved unanimously.
Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
r?1,5
2/29/52
-11-
Letter to Mr. Scheffer, Manager, Real Estate and Consumer
Credit Department, Federal Reserve Bank of New York, reading as follows:
'We understand from informal discussions with repro-!entatives of the Reconstruction Finance Corporation andthe Defense Production Administration that applicationhas been made to you for an exemption under section 5(m)of /egulation X for proposed construction of laboratoryf011ities by Ledoux and Company, Inc., in Teaneck, NewJersey, for the weighing, analysis, and testing of strate-p-e materials. We understand further that the Reconstruc-on Finance Corporation and a stockholder of the corpora-.,ion.Nho is or would be a Registrant under Regulation X are'0 finance the construction.d,„."Mr. Manly Fleischmann, Administrator, Defense Pro-0-"10n Administration, has certified that the proposed
accordingly is essential to the national defense and,
Zr?rdingly, we believe it will be proper for your Bankr(mrsolite
Regulation of exemption therefor under section
X. Copies of the certification made byPleis chmann and our reply are enclosed."
Approved unanimously.
Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis