19380119_minutes.pdf

82

A meeting of the Board of Governors of the Federal Reserve

SYstem was held in Washington on Wednesday, January 19, 1938, at 3:00

P. Tn.

PRESENT: Mr. Ransom, Vice ChairmanMr. SzymczakMr. McKeeMr. Davis

Mr. Bethea, Assistant Secretary

Mr. Thurston, Special Assistant to the

ChairmanMr. Wyatt, General Counsel

Mr. Goldenweiser, Director of the Division

of Research and Statistics

Consideration was given to recommenda-

tions of the Personnel Committee with re-

spect to the designation of a Chairmanand Federal Reserve Agent, the appointment

Of a Deputy Chairman and the appointmentof a Class C director, of the Federal Re-

serve Bank of New York and the following

actions were taken by unanimous vote:

Owen D. Young, Class C director whose term expires on De-cember 31, 1940, and who had been appointed as Deputy Chair-

for the year 1938, was designated as Chairman andPede ral Reserve Agent at the bank on an honorarium basisfO r the remainder of the current year and his compensationaS Chairman and Federal Reserve Agent was fixed on theuniform basis for the same position at other Federal re-serve banks, i. e., at the same amount as the aggregate ofthe fees payable during the same period to any other direc-tor for attendance corresponding to his at meetings of theboard of directors, executive committee and other committeesof the board of directors.

Beardsley Ruml, Class C director whose term expires on De-leDember 31, 1938, was appointed as Deputy Chairman of the

1,e'llk for the remainder of the current year to succeed Owen• Young,

Eciraund E. Day was appointed a Class C director of the bank

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

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83

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for the unexpired portion of the three-year term ending De-

cember 31, 1939.

In connection with the above appoint-

ments, it was agreed that Assistant Secretary

Bethea should advise Mr. Young of his desig-

nation as Chairman and Federal Reserve Agent,

and of the appointments of Mr. Ruml as Deputy

Chairman, and Mr. Day as a Class C director,

of the Federal Reserve Bank of New York, and

request Mr. Young to advise Messrs. Ruml and

Day of their appointments and indicate to

them that the Board would be pleased to have

their acceptances of the appointments by tele-

gram.It was also agreed that Mr. Young should

be requested to inform President Harrison of

the action taken by the Board with respect to

the above appointments and of the Board's in-

tention to make no announcement to the press

regarding the appointments until advice of

their acceptance had been received.

Mr. Ransom stated that Chairman Eccles

had advised him that he wished to be recorded

in the minutes as favoring the above appoint-

ments.

At this point Mr. Smead, Chief of the Division of Bank Operations

Joi/led the meeting.

There was presented a recommendation of the Personnel Committee

the Mrs- H. W. Kitzmiller be appointed on a temporary basis, for a

Period Of not

a clerk in

to exceed one year from the date she assumes her duties,

the Board's Division of Research and Statistics, with

8441'417 at a rate of not to exceed 00 per month, effective as of the

(1"e upon which she enters upon the performance of her duties.

Approved unanimously, with the under-

standing that the Personnel Committee would


1/19/38-3-

discuss the matter with Mrs. Kitzmiller, de-

termine the rate of compensation which she is

to receive, and notify the Secretary's Office

of the action taken.

fl()(*t-

At this point Mr. Thurston withdrew from the meeting.

There were presented drafts of letters to Mr. Young, President

Of the Federal Reserve Bank of Boston, Mr. Leach, President of the Fed-

eral Reserve Bank of Richmond, Mr. Parker, First Vice President of the

Federal Reserve Bank of Atlanta, and Mr. Peyton, President of the Federal

Reserve Bank of Minneapolis, with regard to salaries of officers fixed

bY the boards of directors of the respective banks for the year 1938,

and reading as follows:

Federal Reserve Bank of Boston

"The salaries fixedofficers of the bank forletter of January 5/ are

Name

Roy A. YoungWilliam W. PaddockWilliam WillettKrickel K. CarrickEllis G. alitErnest M. LeavittCarl B. PitmanL. Wallace SweetserJohn J. FoggA- C. Kennel, Jr.

Phillips Ketchum

by your Board of Directors for the

the year 1938, as submitted in your

approved by the Board as follows:

Title

PresidentFirst Vice PresidentCashierSecretary and General Counsel

Assistant CashierAssistant CashierAssistant CashierAssistant CashierAuditorAssistant Counsel

Associate Counsel (retainer)

Annualsalary

00,00020,00014,00013,0008,2507,2507,5007,5005,0004,500

2,400

"It is noted that the salary, $7,500 per annum, fixed by

Yc)ur Board of Directors for Mr. William D. McRae as Chief Ex-.ejAner is within the maximum provided for this position in110 Personnel classification plan.

"It is also noted that Mr. Thames M. Steele, President of


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"The First National Bank and Trust Company of New Haven,Connecticut, has been reappointed as a member of the FederalAdvisory Council representing the First Federal ReserveDistrict for the year ending December 31, 1938.

"In the Board's telegram of November 29, 1937 it was

suggested that your bank follow for this and subsequent years

the procedure set forth in the Board's letter X-9746 of Novem-ber 23, 1936 in submitting to the Board of Governors the sal-aries of officers of your bank. Since the suggested procedureappears not to have been followed by your bank in submitting

salaries of officers, a copy of the Board's letter X-9746 ofNovember 23, 1936 and of its telegram of November 29, 193?are inclosed for your information."

Federal Reserve Bank of Richmond

. "The salaries fixed by your Board of Directors for theofficers of the bank for the year 1938, as submitted with yourletters of January 14, are approved by the Board as follows:

Annualsalary

44:21,00014,00012,0009,0007,5006,5006,0004,8005,0008,000

12,0005,7005,0003,600*

7,5005,0003,600

Name

Hugh LeachJ. S. Walden, Jr.X. G. FryGeorge H. KeeseeEdward Waller, Jr.W. W. DillardAlbert S. JohnstoneClaude L. GuthrieTravis F. EpesMaxwell G. Wallace

W. R. MilfordJohn R. CupitJohn A. JohnstonDonald F. Hagner

W. T. ClementsRobert L. CherryL°uis D. Brooks

*Effective January

Title

PresidentFirst Vice PresidentVice PresidentCashier and SecretaryAssistant CashierAssistant CashierAssistant CashierAssistant CashierAuditorCounsel

Baltimore Branch

Managing DirectorCashierAssistant CashierAssistant Cashier

Charlotte Branch

Managing DirectorCashierAssistant Cashier

13, 1938."

17)'(3Z3


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Federal Reserve

-5-

Bank of Atlanta

"The salaries fixed by your Board of Directors for theofficers of the bank for the year 1938, as submitted with yourletter of January 15, are approved by the Board as follows:

AnnualName

Oscar NewtonRobert S. Parker

H. F. ConniffW. S. McLarin, Jr.V. K. bowmanC. R. CampS. P. SchuesslerE. P. Paris

P. L. T. BeaversH. S. Urquhart

G. S. Vardaman, Jr.T. A. Lanford

Joel B. Fort, Jr.E. R. Harrison

L. M. ClarkW. H. BlackF. C. Vasterling

H. C. Frazer

BowdenA. Goethe

*Approved by

Title

PresidentFirst Vice President and

General CounselVice PresidentVice President andAssistant CashierAssistant CashierAssistant CashierGeneral Auditor

salary

25,000

15,00010,500

Cashier 9,5006,5004,8004,8006,500

Birmingham Branch

Managing DirectorCashier

Jacksonville Branch


Nashville Branch


New Orleans Branch

Managing DirectorCashierAssistant Cashier

Havana Agency

Manager

Savannah Agency

ManagerAssistant Manager

Board of Governors November 27, 1937."

6,0004,200

6,5004,800

6,5005,000

10,000*6,2003,720

7,500

4,0002,400

Federal Reserve Bank of Minneapolis

"The salaries fixed by your Board of Directors for the


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"officers of the bank for the yearletter of January 14, are approved

Name

John N. PeytonOliver S. Powell

Harry I. ZiemerErnest W. Swanson

Harold C. CoreArthur R. LarsonOtis R. PrestonWilliam E. PetersonThomas H. HodgsonFrank C. Dunlop

Sia'urd ljelandRolf Ueland

Robert E. TowleAlbert A. HoerrClinton J. Larson

Title

PresidentFirst Vice President & Secretary

of the Board of Directors

Vice President & CashierVice President & Secretary of

the bankAssistant CashierAssistant CashierAssistant CashierAssistant CashierAssistant CounselAuditor

CounselAssistant Counsel )

Helena Branch

Managing Director

CashierAssistant Cashier

1938, as submitted in your

by the Board as follows:

Annualselau

05,000

Retainer

*Approved by Board of Governors December 4, 1937.

"It is noted from your letter that Mr. John Crosby

elected to the Federal Advisory Council for the year 1938."

P°int.

Approved unanimously, upon the roc-

oramendation of the Personnel Committee.

12,0009,000

9,0006,0005,5005,0005,0005,000*6,000

9,000

7,5004,5003,600

was re-

Mr. Clayton, Assistant to the Chairman, entered the room at this

Consideration was then given to a recommendation of the Personnel

C°T11111tt-ee that Mr. Rufus C. Branch be appointed a director of the Memphis

branch the Federal Reserve Bank of St. Louis for the unexpired

portion

theOf

three-year term ending December 31, 1940.

At the conclusion of a discussion,


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the recommendation of the Personnel Committee

was approved unanimously.

At this point Messrs. Wyatt, Goldenweiser and Smead left the

/fleeting and consideration was then given to each of the matters herein-

referred to and the action stated with respect thereto was taken

by the Board:

The minutes of the meeting of the Board of Governors of the

Federal Reserve System held on January 18, 1938, were approved unani-

1110Ua1y.

Letter to Mr. Young, President of the Federal Reserve Bank of

Boston) reading as follows:

"Referring to your letter of January 5, the Board ap-Proves the reappointment by the board of directors of theFederal Reserve Bank of Boston of Messrs. Winthrop L. Carter,Albert M. Creighton, Carl P. Dennett, Paul A. Draper andEdward M. Graham as members of the Industrial Advisory Com-Mittee for the First Federal Reserve District, to serve forterms of one year each, beginning on March 1, 1938."

Approved unanimously.

Letter to Mr. Peyton, President of the Federal Reserve Bank of

polis, reading as follows:

"Referring to your letter of January 14, the Board

"Proves the reappointment by the board of directors ofe .Federal Reserve Bank of Minneapolis of Messrs. Sheldon

s/1-.. Viood, John M. Bush, Clarence 0. Follett and Albert L.

Valer as members of the Industrial Advisory Committee forhe Ninth Federal Reserve District, to serve for terms ofane year each beginning on March 1, 1938."



89

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Letter to the Presidents of all Federal reserve banks, read-

ing as follows:

"There is attached a copy of a ruling which will bePxub lished in the Federal Reserve Bulletin regarding 'SpecialLiscellaneous Account Under Revised Regulation T.' If youdeem it advisable you may send copies of this ruling to anynatienal securities exchanges in your district and advisethem of the fact that it will appear in the Bulletin."


The ruling referred to above read as

follows:

"Section 4(f)(4) of revised Regulation T provides fora special miscellaneous account in which, subject to certainconditions, money or securities may be received from or foranY customer and paid out or delivered to or for the customerwithout regard to his general account. Section 4(a) of theFaEulation provides that if a customer has with a creditor

Cr ooth a general account and one or more special accounts, the

tor shall treat each special account as if the customerad with the creditor no general account.ber :The Board recently considered a case in which a mem-

o-L a national securities exchange demanded additional

Tergin of a customer, the additional margin being demandedbe

ofof declines in the market value of the securities

_-11 the custamer's general account and not because of any/ransaction in the account. In other words, the margin was'eplended merely for the broker's own protection and not be-cause of any requirement of the regulation. The questionPltesented was whether cash deposited by the customer in re-

to such a demand for margin may, without violation°f the regulation, be placed in a special miscellaneous ac-

The Board expressed the view that such a deposit of

;ash in the special miscellaneous account would not consti-ute a violation of Regulation T."

Letter to the Presidents of all Federal reserve banks, readingEiS

101Iows:

"There is attached a copy of a ruling which will be


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Published in the Federal Reserve Bulletin regarding 'Debit-ing of Transfer Tax Incident to Reborrowing of Securitiesoold Short Under Regulation T'. If you deem it advisableYOU , may send copies of this ruling to any national securi-61es exchanges in your district and advise them of the factthat it will appear in the Bulletin."


The ruling referred to above read asfollows:

"The first paragraph of section 6(g) of Regulation T, asrevised effective January 1, 1938, provides:

'Interest on credit maintained in a generalaccount, communication charges with respect totransactions in the account, shipping charges, pre-miums on securities borrowed ir connection withShort sales or to effect delivery, dividends orOther distributions due on borrowed securities,and any service charges (other than commissions)Which the creditor may impose, may be debited tothe account in accordance with the usual practiceand without regard to the other provisions of this

, regulation, but such items so debited shall be takeninto consideration in calculating the net credit ornet debit balance of the account.'"The Board recently considered a case in which it was

tecer,p„'-arY for a broker to reborrow securities which had been

the short in a customer's account, and to pay the amount ofpe b

d eral stock transfer tax which is incident to such

2rr"ing. The adjusted debit balance of the customer's ac-

runt exceeded the maximum loan value of the securities in the,fec)unt, and the question presented was whether in such circum-al'ances the amount of this tax could be debited to the customer's

mee°unt pursuant to section 6(g) without obtaining additional_arEin in the amount of the tax. The Board expressed theuPinion that this would be permissible."

Thereupon the meeting adj7ed.

Assistant Secretary.


19380119_minutes.pdf

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