19420408_Minutes.pdf

658

SYste

A meeting of the Board of Governors of the Federal Reserve

as held in Washington on Wednesday, April 8, 1942, at 11:30

PRESENT: Mr. Eccles, ChairmanMr. Ransom, Vice ChairmanMr. McKeeMr. DraperMr. Evans

Mr. Morrill, SecretaryMr. Bethea, Assistant SecretaryMr. Carpenter, Assistant SecretaryMr. Clayton, Assistant to the Chairman

The action stated with respect to each of the matters herein-

rt" referred to was taken by the Board:

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

Reserve System held on April 7, 1942, were approved unani-

14emorandum dated March 30, 1942, from Chairman Eccles, recom,

'ellding that the salary of Miss Madeleine E. Benton, secretary to Mr.1111111̀ st

°43 be increased from $2,400 to $2,600 per annum, effective

1411 16 1942.

th

Approved unanimously.

Memorandum dated April 8, 1942, from Mr. Nelson, Assistant

1".3 submitting the resignation of Richard H. Westlake as a guard

Secretaryee t A

ti6ed. Pril 26 1942, and recommending that the resignation be ac-

of that date.

The resignation was accepted.

Office, to become effective as of the close of busi-

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

659

4/8/42

eta, submitting the resignation of Sidnor T. Chichester, Jr.,

-2-

ilemorandum dated April 8, 1942, from Mr. Nelson, Assistant

48 aPage in the Secretary's Office, to become effective as of the

c4se fC4 business on April 8, 1942, and recommending that the resig-

nation be accepted as of that date.

Contra

The resignation was accepted.

Letter to Mr. James McCawley, Secretary of the United Roofing

ct°rs Association, New York, New York, reading as follows:

ol,„."This will acknowledge your letter of March 21 en-ti'llag a copy of the resolution with respect to Regula-thellW that was passed at the 55th Annual Convention ofiete united Roofing Contractors Association. Your earlierno ter on this subject evidently miscarried, for we have

record of its receipt.Auto.„':As You have doubtless observed, the Board's recentth-“4Elent No. 3 of Regulation Mr, now in effect, shortensol ermissible maturity on most classes of instalment

from 18 months to 15 months and requires increased11:alPaYments on most of the articles subject to the reg-to17,:,.°r4.1. This tightening of requirements does not apply

10Lisnion.gtihowever, and in effect puts it in a preferen-

with are glad that your Association is in sympathyPori. the current efforts to avoid inflation. This sup-to eXists, we believe, wherever the measures being takensdvalat end are understood. The tendency for prices tois atice to inflationary extremes under existing conditionsreePowerf because purchasing power is increasing as athsta't of increased wage payments at the same time th?.tdrazIellAgy of articles for civilian consumption is being

lil*ItelifallY curtailed in favor of military and naval needs.

thr„ taxes and increased borrowing by the Governmentpiir-1",gh the sales of savings bonds both tend to dampenillatc,"."ing power and check civilian consumption, but r:eg-ter n of credit is also necessary. In the general in-

-8', we should not only avoid an increase of private


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4/8/42

toh

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Hind he-4 tedness for purposes of consumption but reduce what

de already outstanding; for inflation, which thrives on

abt5 would inflict severe economic losses on the great„88 of private citizens, and would impede the production-4. war materials.

•ti "That civilian indebtedness for purposes of consump-r-°n.ls of such critical importance is not so generallynealized as it should be. In consequence, sacrifices are

always accepted with understanding, especially whenthej 'Lake it necessary for people to do without thingsit belong to a normal peace time standard of living.01. iMPOrtant to mention that the more the consumption

uurable goods is subordinated to war time productionthe greater the volume of civilian business should

ue 1711n the war is over.a 'We appreciate very much your kindness in sending usyo!ORY of your Association's resolutions and regret that8,'41' previous letter failed to reach us. Please be red

as-that the Board welcomes at all times the views of

"? subject to its regulations and gives them careful'0n8lderation in framing and executing its policies."


Letter to Mr. A. B. Sapers, Boston, Massachusetts, reading as

1 "The Board is very glad to have your letter of Aprilciel which you make some suggestions with respect to thef081grlation of automobile appraisal guides by the BoardtjatPUrPoses of Regulation W. You are aware, of course,but ThRegulationYi does not attempt to set maximum prices

merely makes use of the designated guides in setting/11 um credit values for the financing of used automobiles.by . nnecti0n with the continuing study of this problemge3i,-.'e Board's staff, you may be assured that the sug-

con 3:°n8 in Your letter will receive the most carefulia slderation although you will understand that the Boardactr41°t a price-fixing agency and desires to avoid any

LLomobile

a„'")n that might appear to constitute the dictation of

prices."



4/8/42

Ne'r Y0

Kansas

661

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Telegram to the Presidents of the Federal Reserve Banks of

rk, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis,

City, and Dallas, reading as follows:

of "Please advise Board fully, by mail, regarding scopeSavings Bond and Tax Note operations performed at your

lanches, particularly whether they supply Series E Bondsa 12,ect to all qualified issuing agents in Branch territoryrnolliwhether they issue Savings Bonds for firms having pay

savings plans that have not qualified as issuingagents."

raading as follows:


Letter to Honorable Preston Delano, Comptroller of the Currency,

us. "As you know, under Executive Order No. 9112, datedthreh 26, 1942, the War Department, Navy Department andgq: U• S. Maritime Commission are authorized to make andto:rantee loans for the purpose of financing any contrac-to',°r subcontractor engaged in a business which is deemedcuje necessary, appropriate or convenient for the prose-4,3,;()n of the war. The Federal Reserve Banks are author-be' by the Executive Order to act as agents for the Warcarrtment, Navy Department and Maritime Commission in

rYing out the provisions of this Order.eco, "Vie have been advised of a situation in which a sub-to",ractor engaged in war production is in need of creditarli* the financing of such production; and a question hasbc-Seri whether such credit may be supplied through a loanp'roa.national bank which would be guaranteed under the

th 7181°ns of the Executive Order. However, it appears

th:t the legal lending limit of the national bank under

isNW

Provisions of section 5200 of the Revised Statutes

r n°t sufficient to enable the bank to supply the credit-red.

:In the circumstances, the Board will appreciate thepa;elderation by your office of the question whether that

a loan made by a national bank in these circum-cee which is guaranteed by the War Department, Navy


4/842

662

Oh_zpartment or Maritime Commission under this Executive

the is

subject to the restrictions of section 5200 of_ Revised Statutes. In connection with any such consid—

47ation of this question, representatives of the Board11-14 be glad to confer with representatives of your officeauch a conference is deemed necessary."


Thereupon the meeting adjourned.


Documents

19420408_Minutes.pdf