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1939 UNITED STATES EXECUTIVE GOVERNMENT OFFICERS President Franklin D. Roosevelt (re-elected Ndov 1936, inaugurated hn. 20, 1937 Secretary of Treasury Henry Morgenthau, Jr. (appointed Jan. 1, 193I, served until July 23, 1943) Comptroller of Currency Preston Delano (date of appointment October 24, 19381 Cordell Hall Secretary of State Secretary of War Secretary of Navy Secretary of Interior Secretary of Agriculture Secretary of Commerce Secretary of Labor Postmaster General Attorney General kIrY H. Woodring Claude A. Swanson Harold L. Ickes Henry A. Wallace Daniel C. Roper, Harry L. Hopkins Frances Perkins James A. Farley Homer S. Cummings, Frank Murphy _ ____. _ _____ _____.___ __ __ U. S. G 0 V E RNM E N T 1939 April SENATE Banking and Currency Committee 76th Congress Bem~ .epubleas WAGNER, Robert F. GLASS, Carter BARKLEY, Alben W. BYRNES, James F. BANKHEAD, 2d, John H. ADAMS, Alva B. MALONEY, Francis T. RADCLIFFE, George L. BROWN, Prentiss M. HUGHES, James H. HERRING, Clyde L. SMATHERS, William H. MILLER, John E. CLARK, D.Worth DOWNEY, Sheridan New York Virginia Kentucky South Carolina Alabama Colorado Connecticut Maryland Michigan Delaware Iowa New Jersey Arkansas Idaho California TOWNSEND jr. John G. FRAZIER, Lynn J. TOBEY, Charles W. DANAHER, John A. TAFT, Robert A. Delaware North Dakota New Hampshire Connecticut Ohio _C_ _I__ __ 1939 April U. S. 1 GO V E RNMEN T HOUSE OF REPRESENTATIVES Banking and Currency Committee 76th Gongress ..~pIuQQ1at& STEAGALL, Henry B. GOLDSBOROUGH, T.Alan WILLIAMS, Clyde SPENCE, Brent FORD, Thomas F. BROWN, Paul PATMAN, Wright EVANS, Marcellus H. BARRY, William B. SACKS, Leon GORE, Albert MILLS, Wilbur D. MARTIN, John C. FOLGER, Alonzo D. HULL, Merlin Repu. Alabama Maryland Missouri Kentucky California Georgia Texas New York New York Pennsylvania Tennessee Arkansas Illinois North Carolina Wisconsin WOLCOTT, Jesse P. GIFFORD, Charles L. LUCE, Robert CRAWFORD, Fred L. GAMBLE, Ralph A. SIMPSON, Richard M. JOHNSON, Noble J. KEAN, Robert W. SUMNER, Jessie MILLER, William J. s Michigan Massachusetts Massachusetts Michigan New York Pennsylvania Indiana New Jersey Illinois Connecticut 1939 FEDERAL BOARD Marriner S. Eccles, ChairmanM. S. !9qscak jSam K. IcKee RESERVE SYSTEM OF GOVERNORS ea4 R eibese, Vie Chairman hestBer C. DaTa Ernest G. Draper Lawrence Clayton, kast. to the.Chairman Elliott Thurston, Special Assistant. to the Chairman Secretarya Office Divsion of Bank Operations Chester Morrill, Secretary Edvard. L. Smead,Chief Liston P. Bethea, Asst. Secretary J. R. Van Fossen, Mgat. Chief S. R. Carpenter, Asst.Secretary J. E. Horbett, Aast. Chief J. C. Noell, Asst. Secretary. Division of Security Loane Counsel' s Office Carl E. Parry, Chief Walter Watt, GeneralCounsel Philip E. Bradley, Asst. Chief J. P. Dreibelbi. Asst.. General. Counsel FicalAgent George B. Vest,Asst. General Counsel 0..E.FouJk, Agent B. Magruder.Wingfield,. Asst.. General Counsel EJo PFoulk, icE.alAgyDeputy Division of. Ensinations Leo H. Paulger, Chief R. F. Leonard, Last. Chief C. E. Cagle, Asst.. Chief DiJisioza Of Reearoh and Statistics E. A. Goldenveiser, Director Woodlief Thomas, Asat. Director Lauchlin Currie, Asst. Director Josephine. E. Lally, Deputy Fiscal Agent 1939 FEDERAL RESERVE SYSTEM FEDERAL ADVISORY COUNCIL District No. 1 (Boston) Thomas M. Steele District No. 2 (New York) Leon Fraser District No. 3 (Philadelphia) Howard A. Loeb, District No. 4 (Clevelandi) T. J. Davis District No. 5 (Richmond) Robert M. Hanes District No. 6 (Atlanta) Edward Ball District No. 7 (Chicago) District No. 8 (St. Louis Edward E. Brown ) District No. 9 (Minneapol is) District No. 10 (Kansas City) Walter W. Smith, President John Crosby John Evans District No. 11 (Dallas) R. E. Harding District No. 12 (San Fran cisco) Paul S. Dick Vice President Walter Lichtenstein, Secretary _111_______1______ _ FEDERAL 1939 FEDERAL SYSTEM RESERVE OPEN MARKET COMMITTEE Marriner S. Eccles, Chairman George L. Harrison, Vice Chairman Chester C. Davis Ernest G. Draper Hugh Leach M. J. Fleming Wm. McC. Martin George H. Hamilton M. S. Szymczak John K. McKee Ronald Ransom Chester Morrill, Secretary S. R.Carpenter, Assistant Secretary Walter Wyatt, General Counsel J. P. Dreibelbis, E. A. Assistant General Counsel Goldenweiser, John H. Williams, Economist Associate Economist Allan Sproul, Manager of System Open Market Account 1 Federal Reserve Bank of Boston (Dist. 1) OFFICERS President First Vice President Vice President Federal Reserve Agent and Chairman Deputy Chairman - Roy A. Young William 'W.Paddock William Willet Frederic H. Curtiss Henry S. Denison 2 I 1939 Federal Reserve Bank of Boston (Dist. 1) DIRECTORS Class A Term Expires Dec. 31 FORBES, Allan (Boston, Mass.) REED, Lewis S. (Waterbury, Conn.) DODGE, Leon A. (Damariscotta, Me.) 1939 19ho 1941 (re-elected) Class B ALLEN, Philip R. (E. Walpole, Mass.) FRENCH, Edward S. (Springfield, Vermont) FROST, Edward J. (Boston, Mass.) 19 1 (re-elected) 1960 1939 Class C CURTISS, Frederic H. (Boston, Mass.) Chairman and FR Agent DENNISON, Henry S. (Framingham, Mass.) Deputy Chairman HARRIMAN, Henry I. (Boston, Mass.) 1941 (re-appointed) 1939 1940 1939 Federal Reserve Bank of New York (Dist. 2) OFFICERS President First Vice President - - George L. Harrison Allan Sproul Vice Presidents Bay M. Gidney L. Werner Knoke John H. Williams Chairman and Federal Reserve Agent Deputy Chaiman Walter S. Logan Leslie R. Rounds Robert G. Rouse Owen D. Young Beardsley Rual -- I-"-~- -- -----~-1 ~C Federal Reserve Bank of NEW YORK 1939 ( Dist. 2) DIRECTORS Dec, 31 Term Began Te:rm Ended PLOCH, .William F.. (Long.. eah) 1/1/37 1939 POTTER, William C. (Old I estbury) 1/1/38 1940 THOMPSON, Otis A. (Norwic h) 1/1/39 1941 (reelected) 1/1/37 1939 1/1/38 1940 1/1/39 1941 (reelected) (Ithaca) 1/19/38 1939 Owen D. (Van Home sville) 1/1/38 1940 (Chairman) 1/1/39 1941 (reappointed) CLASS A CLASS B STEVENS, Robert T. (Plairifield) WATSON, Thomas J. (Lebanc n, N. J.) TEAGLE, Walter C. (Port C,hester) CLASS C DAY, Edmund E. YOUNG, RUML, Beardsley (New Yorl ) (Deputy Chairman) 1 Federal Reserve Bank of Philadelphia (Dist. I9 ) OFFICERS - President First Vice President John S. Sinclair - Frank J. Drinnen Vice Pres:idents W. J. Ernest C. Hill Davis C. A. Mc Ihh enny Chairman and Federal Reserve Agent - Thomas B. McCabe Deputy Chairman I 1939 Federal Reserve Bank of Philadelphia (Dist. 3) 1 1 1 i i DIRECTORS Term Expires Dec. 31 Class A REILY, George W. (Harrisburg, Pa.) HENNING, J. B. (Tunkhannock, Pa.) (Philadelphia, WAYNE, Joseph (Jr.) Pa.) 1939 1940 1941 (re-elected) Class B DeLaCOUR, J. Carl (Camden, New Jersey) STOTT, C. Frederick C. (Camden, New Jersey) CANNON, Harry L. (Bridgeville, Delaware) 1939 194o 1941 (elected) Class C McCABE, Thomas B. (Chester, Pa.) Chairman and FR Agent WILLIAMS, Alfred H. (Philadelphia, Pa.) WHITTIER, Warren (Douglasville, Pa.) 1939 1941 (appointed Mar.2) 1940 (appointed) 1939 Federal Reserve Bank of Cleveland (Dist. 4) OFFICERS President M. J. First Vice President Fleming F. J. Zurlinden Vice Presidents W. H. Fletcher G. H. Wagner W. F.Taylor Chairman and Federal Reserve Agent Deputy Chairman G. C. Brainard R. E. Klages 1939 Federal Reserve Bank of Cleveland (Dist. 4) DIRECTORS Class A CONNER, B. R. (Ada,Ohio) McDOWELL, H. B. (Sharon, Pa.) BROOKS, F.F. (Pittsburgh, Pa.) Term Expires Dec, 31 1939 190 19L1 (re-elected) Class B GALVIN, J. E. (Lima, Ohio) WRIGHT, R. P. (Erie, Pa.) CRABBS, G. D. (Cincinnati, Ohio) 1939 190 1941 (re-elected) Class C KLAGES, R. E. (Columbua, Ohio) Deputy Chairman BRAINARD, G. C. (Youngstown, Ohio) Chairman and FRAgent STONE, J. C. (Lexington, Kent.) 1939 194o 1941 (appointed) 1939 Federal Reserve Bank of Richmond (Dist. 5) OFFICERS President - First Vice President - Hugh Leach J. S.Walden, Jr. Vice Presidents J. G. Fry Chairman and Federal Reserve Agent Deputy Chairman George H. Keesee Robert Lassiter W. G. Wysor Federal Reserve Bank of Richmond (Dist. 5) DIRECTORS Class A RIEMAN, Chas. E. (Baltimore, Md.) BRASWELL, James C. (Rocky Mount, N. Carolina.) JOHNSON, L. E. (Alderson, W. Va.) Term Expires Dec. 31 1939 1940 1941 (re-elected) Class B REED, Chas. C. (Richmond, Va.) HANNA, John H. (Washington, D.C.) MALLOY, Edwin (Cheraw, South Carolina) 1939 194 191 (re-elected) Class C VYSOR, W. G. (Richmond, Va.) Deputy Chairman 1939 LASSITER, Robert (Charlotte, N.Carolina) Chairman and FR Agt. 1940 MC CORMICK, Charles P. (Baltimore, Md.) 19L1 (appointed, 8/21) 1939 Federal Reserve Bank of Atlanta (Dist. 6) OFFICERS - President First Vice President Oscar Newton (died Feb. 13) Robert S. Parker (eff. Feb. 20) William S. McLarin, Jr. Vice Presidents Malcolm H. Brvan H. F. Conniff Chairman and Federal Reserve Agent Frank H. Neely Deputy Chairman J. F. Porter (Eff. Oct. 13) 1939 Federal Reserve Bank of Atlanta (Dist. 6) DIRECTORS Term Expires Dec. 31 Class A THITE, George J. (Yount Dora, CLAY, i. G. (Atlanta Ga.) COOK, W. D. (Meridian, Miss.) Fa.) 191 (re-elected) 1939 19L Class B McC-ARY, J. A. (Decatur, Ga.) HALT, Fitzgerald (Nashville, Tenn.) GEORGE, Ernest T. (New Orleans, La.) 1939 19h0 19L1 (re-elected) Class C PORTER, J. F. (Williamsport, Tenn.) Deputy Chairman HARRIS, Dr. Rufus C. (New Orleans, Louisiana) NEILY, Frank H. (Atlanta, Ga.) Chairman and FR Agent 1939 19h0 19h1(re-appointed) 1939 Federal Reserve Bank of Chicago (Dist. 7) OFFICERS President - First Vice President - George J. Schaller H. P. Preston Vice Presidents J. H. Dillard W. H. Snyder C.S. Young Chairman and Federal Reserve Agent Deputy Chairman Robert E. Wood Frank J. Lewis 1939 Federal Reserve Bank of Chicago (Dist. 7) DIRECTORS Term Expires Dec. 31 Class A CUMMINGS, Walter J. (Chicago, Ill.) ESTBERG, E. R. (Waukesha, Wis.) WILLIAMS, Frank D. (Iowa City, Iowa) 1939 1940 1941 (re-elected) Class B BABB, Max W. (Milwaukee, Wis.) VAN DUSEN, Charles (Detroit, Michigan) NOYES, Nicholas H. (Indianapolis, Indiana) 1939 1940 191 (re-elected) Class C Vacancy LEWIS, Frank J. WOOD, Robert E. (Chicago, (Chicago, Illinois) Deputy Chairman Illinois) Chairman and FR Agent 19h0 1941 (re-appointed) 1939 Federal Reserve Bank of St. Louis (Dist. 8) OFFICERS William Mc C. Martin President First Vice President - F.Guy Hitt Vice Presidents Olin M. Attebery Clarency M. Stewart Chairman and Federal Reserve Agent William T. Deputy Chairman Oscar G. Nardin Johnston 1939 Federal Reserve Bank of St. Louis (Dist, 8) DIRECTORS Term Expires Dec. 31 Class A NAHM, Max B. (Bowling Green, Kent.) CORLIS, G. R. (Anna, Illinois) MAESTRE, Sidney (St. Louis, Missouri) 1939 1940 1941 (elected) Class B HARRIS, J.W.(St. Louis, Mo.) COUCH, Harvey C. (Pine Bluff, Arkansas) STANLEY, John R.(Evansville, Indiana) 1939 19h0 19h1(elected) Class C NARDIN, Wlliam T. JOHNSTON, Oscar G. Vacancy (St. Louis, Mo.) Chairman and FR Agent (Scott, Miss.) Deputy Chairman 1939 1940 1939 Federal Reserve Bank of Minneapolis (Dist. 9) OFFICERS President First Vice President J. N. Peyton 0. S. Powell Vice Presidents H. I. E. W. Swanson Ziemer Deputy Chairman - Walter C. Coffey 1 1939 Federal Reserve Bank of Minneapolis Federal Reserve Bank of Minneapolis (Dist 9) (Dist, 9) DIRECTORS Class A HANSEN, H. C. (Churchs Ferry, N.D.) GRANGAARD, M. 0. (Minneapolis, Minnesota) McKNIGHT, J. R,(Pierre, South Dakota) Term Expires Dec. 31 1939 194o 191h (elected) Class B FUNK, Albert P. (La Crosse, Wisconsin) YWSHBURN, W. 0. (St. Paul, Minnesota) O'CONNELL, J. E. (Helena, Montana) 1939 1940 1941 (re-elected) Class C COFFEY, Walter C. (St. Paul, Minnesota) Deputy Chairman COCHRAN, W. D. (Iron Mountain, Michigan) SHEPARD, Roger B. (St. Paul, Minnesota) 1939 1940 1941 (appointed) 1939 Federal Reserve Bank of Kansas City (Dist. 10) OFFICERS George H. Hamilton President First Vice President - C. A.Worthington Vice Presidents J. i .Helm H. G. Leedy Chairman and Federal Reserve Agent Deputy Agent - R. B. Caldwell J. Thomas J. 1939 Federal Reserve Bank of Kansas City (List. 10) • DIRECTORS Class A SPONABLE, Frank W. (Paola, Kansas) MULLANEY, Hill City, Kansas) DINES, T. A. (Denver, Colorado) Term Expires Dec. 31 1940 1941 (re-elected) 1939 Class B HOSFORD, Willard D. (Omaha, Neb.) BERNARDIN, J. M, (Kansas City, Mo.) PHILLIPS, L. E. (Bartlesville, Okla.) 1939 194O 1941 (re-elected) Class C BROWN, E. P. (Davey, Nebr.) CALDWELL, R. B. (Kansas City, Mo.) Chairman and FR Agent THOMAS. J. J. (Seward, Neb.) Deputy Chairman 1939 19h0 1941 (re-appointed) Federal Reserve Bank of Dallas (Dist. 11) OFFICERS B. A. McKinney (died April 2) R. R. Gilbert (appointed April 13) President - First Vice President Ethan B. Stroud (appointed June 1l) Vice Presidents R. B. Coleman W. 0. Ford W. J. Chairman and Federal Reserve Agent Deputy Chairman Evans - J. H. Merritt - Jay Taylor 1939 Federal Reserve Bank of Dallas (Dist. 11) DIRECTORS Term Expires Class A Dec. WINTON, Ed. H.(Fort Worth, Tex.) HOOKS, Pat E. (Itasca, Tex.) SEALE, Ford (denison, Tex.) 31 1939 1940 1941 (elected) Class B MILAM, J. R. (Waco, Texas) WEST, J. M. (Houston, Tex.) MIDDLETON, John D. (Greenville, Tex.) 1939 19h0 (elected) 1941 (re-elected) Class C TAYLOR, Jay (Amarillo, Tex.) Deputy Chairman COZZO, J.B. (Dallas, Texas) MERRITT, J. H. (Mc Kinney, Tex.) Chairman and FR Agent 1939 1940 (appointed, Jun.26) 1941 (re-appointed) 1939 Federal Reserve Bank of San Francisco (Dist. 12) OFFICERS President First Vice President -- Wm. A. - Ira Clerk Day Vice Presidents W. M. Hale R. B. West Cecil E. Earhart Chairman and Federal Reserve Agent vacancy Deputy Chairman St. George Holden 1939 Federal Reserve Bank of San Francisco (Dist. 12) DIRECTORS Term Expires Class A POVELL, Keith (Salem, Oregon) McINTOSH, C. K. (San Francisco, Calif.) ODLIN, Reno (Tacoma, Wash.) 1939 1940 1941 (elected) Class B TAYLOR, Reese H. (Los Angeles, Calif.) COX, Elmer H.(San Francisco, Calif.) VOLKMANN, William G. (San Francisco, California) 1939 1940 1941 (re-elected) Class C THORPE, Carlyle (Los Angeles, Calif.) HOLDEN, St. George (San Francisco, Calif.) Deputy Chairman Vacancy 1939 1940 1939-40 Apr. 19,20,24,27 HEARINGS U.S.Congress. Senate. Banking and currency committee. Tp repeal the Silver purchase act of 1934: HEARINGS...76th cong., 1st sess. on S.785, a bill to repeal the silver purchase act of 1934, to provide for the sale of silver, and for other purposes. April 19, 20, 24, and 27, 1939. Wash. Govt.ptb.off., 1939. HG 301 .A21 1939-40 150 p. --- Part 2 - March 19, 1940 (76th cong., 252 p. Testimony: Eccles, M.S., (ChmnBd) no other Fed. Res. F.R.Bd.L. 3d sess.) (Pat. 1) pp. 63-87 testimony, Pt. 1) 1939 May 31-June 29 HG Senate. Banking and currency U.S.Congress. committee 1595 .A2 To provide for the insurance of loans to business: HEARINGS...76th cong., 1st sess. on 1939 S.1482, a bill to provide for the insurance by the RFC of loans made by banks to business enter prises... and S.2343, a bill to provide for the insurance of loans to business...May 31,rJine 2',5, 13, 15, 20-22, 29, 1939. Wash., Govt.ptg.off., 1939 477 P. pp. 87-113 June 5 Testi- Eccles, M.S. (ChmnBd) pp. 113-115 statement mony: Draper, E.G. (Bd.mbr) June 2 pp. 78-85 pp. 117-129 Brown, E.E.(Fed.Adv.Council) 6/13 F.R.Bd.L. HEARINGS 1939 June 20 Membership in Federal Reserve System of insured banks. LEGISLATION Section 12B(y)(1) of Federal Reserve Act was repealed. The effect of this amendment was to remove the requirement that all State banks having average deposits of $1,000,000 or more during the calendar year 1941 or any succeeding calendar year must be members of the Federal Reserve System in order to have their deposits insured by the Federal Deposit Insurance Corporation. (53 Stat. _ ) Loans to executive officers. Section 22(g) of Federal Reserve Act was amended by extending for five years from June 16, 1939, the period within which loans made to executive officers of member banks prior to June 16, 1933, may be renewed or extended ) subject to the other conditions named in the law. (53 Stat. __ Source: Supplement to statement on Evolution of Banking Legislation by Walter Wyatt, October 26, 1939. Exhibit G 1939 June 30 LEGISLATION Obligations of the United States as collateral for Federal Reserve notes. Section 16 was amended so as to extend until June 30, 1941, the period during which direct obligations of the United States may be used as collateral security for Federal Reserve notes. Source: (53 Stat. ) Supplement to statement on Evolution of Banking Legislation by Walter Wyatt, October 26, 1939. Exhibit G. 1939 June 30 LEGISLATION [PuoBB-No. 162-76TH CoNs ICHATER 256--1T SESSION) ]ms) [8. 2618] AN ACT T9 extend the period during which direct obligations of the United States may be used as collateral security for Federal Reserve notes. Be it enacted by the Senate and House of Representatives qf the Uhited States of America in Congress assembled, That the Paragraph of section 16 of the Federal Reserve Act. as amen is hereby amended by striking therefrom the words "until JuiW3O, 1939" and by inserting in lieu thereof the words "until June 80, 1941". Ap U qVii" 20 9 1939 . 1939 LEDISIATION July 20 [PUBLIC-NO. 201-76TH CONGRESIB [CHAPTER 336-1ST SESSION] [H. R. 5748] AN ACT Toa.amend the Second Liberty Bond Act, as amended. of the Be it enacted by the Senate and Houe of Representatives That section 21 of United States of America in Congress assembled, U. S. C., the Second Liberty Bond Act (49 Stat. 21, as amended; follow the out striking by amended is 757b), Supp. IV, title 31, sec. issued bonds of amount ing proviso: "Provided, That the face aggregate the in exceed not shall Act this of under the authority $30,000,000,000 outstanding at any one time. Approved, July 20, 1939. 1939 September 1939 FEDERAL RESERVE SYSTEM POLICY ACTION Apparent Intent - For other purposes Open Market Operations - Bought $470 million of Treasury bonds and notes but allowed $90 million bills to mature without replacement. Discount Rate - Reduced from 11/2 to 1 oercent at Boston*. - Outbreak of war; Government bond prices declined sharply; action taken to prevent development of disorderly conditions or unreasonably abrupt decline in prices of Government securities. System announced that Reserve Banks would lend to member and nonmember banks on Government securities at System Treasury bill holdings par at the discount rate. allowed to run off in view of heavy demand for short-term securities. Reserve Fequirements Selective Regulations Surrounding Circumstances Source: Joint Committee on the Economic Report Monetary Policy ano the Management of the Public Debt (Patman Peport) 1952, Page 221. Digitized for*During FRASER Seotember the discount rate http://fraser.stlouisfed.org/ securities was reduced from 11/2 to Federal Reserve Bank of St. St. Louis Louis, Kansas Citvy and Chicago. on advances to member banks on U.S. Government 1 percent at the Federal Reserve Banks of Atlanta, Dallas. 1939 October 1939 to January 1940 FEDERAL RESERVE SYSTEM POLICY ACTION Apoarent Intent - Restrictive Open Market Operations - Sold $84 million of Treasury bonds and notes (November January), and allowed $240 million Treasury bills to run off. - Strong market demand, which resulted in rapid advances in Government security prices late in 1939, partly met by System sales; gold inflow, business active, prices rising, money easy, credit expanding. Discount Rate FPcerve Requirements Selective Regulations Surrounding Circumstances Source: Joint Committee on the Economic Report Monetary Policy and the Management of the Public Debt (Patman Report) 1952, Page 221. LITIGATION State Taxation of Salary of Officer of Federal Reserve Bank.-The Governor of 7.206. the Federal Reserve Bank sought to recover State income tax paid under protest fn his The Supreme Court of Minnesota held that the question depended on whether or not salary. the functions and purposes served by the Federal Reserve Bank are of such a character that the Governor of the Bank might be said to be employed as a necessary and proper means The court reviewed at length the of executing the sovereign power of the United States. It alluded to the exemp purposes for which the Federal Reserve Banks were established. tion from taxation given by the Federal Reserve Act, and said that this was a declaration that the functions of the bank are regarded by Congress as an exercise of sovereign power. After an extensive review of the legal questions, the court concluded that the salary was not subject to the State income tax. Geery v. Minnesota Tax Commission, 202 Minn. 366; 278 N. W. 594 (1938). The Tax Commission appealed again, and the Supreme Court of Minnesota reaffirmed its decision. 204 Minn. 107; 282 N. W. 673. The Commission petitioned the Supreme Court of Thereafter, the petition was dismissed on the United States for a writ of certiorari. the motion of the Commission, 307 U. S. 648, and the Supreme Court of Minnesota vacated its prior judgment on the basis of a stipulation of the parties that Geery should recover one-half of the taxes paid, the reason being that, since the decision of the Supreme decisions Court of Minnesota, the Supreme Court of the United States had overruled its 204 Minn. 622; 285 N. W. relied on by the Minnesota courts in their earlier decisions. (The reason for stipulating that Geery should recover one-half of the taxes 614 (1939). paid by him was that the decisions of the United States Supreme Court should not be given Geery v. a retroactive effect, but that his salary should be taxable thereafter.) Minnesota Tax Commission, 204 Minn. 107; 282 N. W. 673. LITIGATION 7.208. State Tax on Mortgages Held by Reserve bank.-The Federal Reserve Bank made an industrial loan (under section 13b of the Federal Reserve Act) secured by a mortgage. The Register of Deeds refused to record the mortgage without payment of the State tax on mortgages. The statute provided that no tax was imposed upon "any mortgage made and running to the reconstruction finance corporation or to any other United States governmental corporation or agency or trustee for the benefit of such governmental corporation or agency, to secure a loan from such governmental corporation or agency." The Supreme Court of Michigan held "The Federal Reserve bank is an Its creation was to supply a operating agency of the Federal government. Consequently, the court held the tax was need of the national government." Federal not imposed on a mortgage securing a loan made by the Reserve Bank. Reserve Bank of Minneapolis v. Register of Deeds, 288 Mich. 120; 284 N. W. 667 (1939). LITIGATION 1939 Right to Possess Gold.--The corporation sued the Reserve Bank for 11.1202. damages for conversion of gold bullion. The court held that the refusal of the bank to turn the bullion over to the plaintiff could not be a conversion because if the defendant had turned the bullion.over, the plaintiff would have been bound to hand it back at once (in view of the statute authorizing the President to prohibit the etporting, hoarding, etc. of gold, and the executive order and tie british-American Tobacco regulations of the Treasury issued pursuant thereto). Co. Ltd. v. Federal Reserve Bank of New York, 105 F. 2d 935, affirming and cor recting, 104 F. 2d 652, cert. den. 308 U. S. 600 (1939). 11.1203. Reserve Bank Not Liable for Conversion of Gold Certificate. Plaintiff found a $10,000 gold certificate, which had previously been redeemed by the Treasury, canceled, and subsequently stolen from the General Accounting He presented it to the Reserve Bank for collection, but the latter Office. Plaintiff sued the Reserve Bank returned it to the General Accounting Office. for conversion of the certificate, but the court decided against him, saying the Reserve Bank could not be liable for conversion, since it had returned the cer Gross v. Federal Reserve oank of Cleveland, tificate to its actual owner. 29 F. Supp. 1005 (1939). LITIGATION insurance company Indorsement.--The life Liability of Reserve Bank on Its 13.710. policy holders. to company the by issued agent forged the name of the payees on checks Bank and pre Reserve Federal of the Branch Cincinnati the The checks were cleared through the Federal against brought was suit This drawn. were sented to the banks upon which they of the failure the that held court The Reserve Bank upon its endorsement of the checks. in signatures genuine the with checks the on insurance company to compare the signatures two of one where because loss the for its possession made it solely and wholly responsible loss, the bear must oversight first innocent persons must suffer, the one who commits the and further because the delay of over two years in notifying the defendant of the for Royal Indemnity v. Federal Reserve Bank of Cleveland, geries discharges the defendant. 38 F. Supp. 621 (1939); aff'd. without opinion 119 F. 2d 778. Same-- The plaintiff, the drawer-drawee of checks presented to it by the 13.711. Federal Reserve Bank of N. Y. for payment, commenced suit against the F. R. Bank more than six years after payment, on the ground that prior endorsements, necessary to the to the checks, had been forged, that a iew York statute (Sec. 350-c of transfer of title on the part of the F. R. Bank to in the Negotiable Instruments Law) created a liability had occurred within 6 years of the loss the that demnify the plaintiff against loss, and on the ground that the loss complAint the The court dismissed commencement of the action. settled a claim made plaintiff the when not had occurred when the checks were paid, and statute of six-year the that and checks; by persons entitled to the proceeds of the that Regu fact the that obiter, instance said, The court of first limitations had run. guaranty of prior in the circumstances, to its lation J limits the F. R. Bank's liability, endorsements, does not prevent the Bank, under a State statute, from having responsi Mount endorsement is in such form as to constitute an indemnity agreement. bility if its Trust Co, v. Federal Reserve Bank of New York, 182 Misc. 7, 45 N. Y. S. 2d 316 Vernon http://fraser.stlouisfed.org/ (OBER) Federal Reserve Bank of St. Louis (Sup. Ct., Westchester Col), aff'd. without opinion 293 N. Y. 654 (1944). II__ITI__II1--_ I~ I- ---- ~-~- LITIGATION Failed Payee Bank as Agent of Reserve bank for Collection. 13.2743. The Atlantic City National Bank made a loan and discounted the resulting The maker paid the note to the national note with the Federal Reserve Bank. The Federal Reserve Bank, which The bank failed. bank before maturity. court submitted the case to The trial still held the note, sued the maker. The Court of Appeals the jury, and the jury decided for the defendant. affirmed on the basis of the evidence introduced by the defendant that the plaintiff had constituted the national bank its agent to receive payment, and on that ground distinguished Federal Reserve Bank of Richmond v. Kalin (see par. 13.2741). Federal Reserve Bank of Philadelphia v. Algar, 100 F. 2d 941; cert. den. 307 U. S. 631 (1939).
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