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FEDERAL RESERVE BOARD WASHINGTON ADDRESS OFFICIAL CORRESPONDENCE TO THE FEDERAL RESERVE BOARD X-9255?; June 8, 1935. Dear Sir: At the meeting of the Governors' Conference with the. Federal Reserve Board on Sfe.y 28, 1355, reference was made bo amendments to the Clayton a.ct :..ns. to section 52 of the Banking Act of 1935 v;hioh tht Board had decided to recommend to the committees of Congress in lieu of thi. amendments contained in the proposed Bunking Act of 1955. Some of the governors ex;jressec- a desire to have copies of the proposed amendments for further study, and, in accordance wiuh their request, copies of the amendments ere attached. The letter to bhe Chairman of tho Senate Banking anc Currency Committee transmitting the propose amendments commented as follows: "These sections contain proposed revisions of section 52 of the Banking Act of 193.. and the provisions of the Clayton Antitrust Act relating to interlocking bank directorates. It was proposed in the bill as originally introduced to revise these provisions > ' Law so as to simplify them ana to sliminate the necessity 3f the Federal Reserve Board passing upon thousands of ini Lvidual cases and issuing iniiviuUcLl penaits for persons to .^erve in the capacities '<ffrrcte1 by those sections. As orii^inally Lntroducud, the bill -..cui. authorize *Y^- Board t. Issue general regulations making exceptions to thy prohibitions of thosa sections; -2- "but, after further study, the Board has concluded that it would be preferable to provide for no exceptions except those 3tated in the statute itself. The substitute suctions Inclosed herewith have been approved by the Federal Reserve Board and would incorporate in the statute all o.f< the exceptions /.hich the Board believes to be desirable," Very truly yours, Chester Morrill, Secretary. TO ALL FEDERAL W X-9232-a SUGGESTED SUBSTITUTE FOK SECTION 529 OF H.K.7617 AS PASSED BY THE HOUSE OF hEPKfciSENTATIVES Page 32 1 line 14, strike al] of section 329 anci substitute the following? "Sec.329. Effective January 1, 1936, section 25 of the Federal Reserve &ct, as aoended, ic further amended by striking out the Last paragraph of such section; the paragraph of section 'co(a) of tho Federal Reserve Act, as amended, which commences v;ith the words 'A majority of the shares of the capital stock of any such corporation' is amended by striking out all o:> said paragraph except the first sentence thereof; and the Act entitle;. 'An Act to supplement existing laws against unlawful restraints and monopolies, ana for other purposes1 (33 Stat.73C), approved Dctober 15, 1914, as amended, is further amended (a) by striking out section 8A thereof and (bj by substituting for the first three paragraphs of section 3 thereof the following: "'Section 8. No director, officer, or employee of any member bank of tho Federal Reserve System or any branch thereof shall be at the same time a private banker or a director, officer, or employee of uny other bank, banking association, savings bank, or trust company organized unaer the National Bank Act or organized under the laws of any State or of the -?.•• X-9£32-a District of Columbia, or any branch thereof, except any one or more of the following or any branch thereof: "'(1) A bank, banking association, savings bank, or trust company, more than 90 per cent of the stock of which is owned directly or indirectly by the United States or by any corporation of which the united States directly or indirectly owns more than 30 per cent of the stock. '"(2) A bank, banking association, savings bank or trust company which ha;? been placed formally in liquidation or which is in the hands of a receiver, conservator or other official exercising similar functions. H: (o) A corporation principally engaged in interna- tional or foreign banking jr banking in a dependency or insular possession oi the United States which has entered into an agreement with the Federal Reserve Board pursuant to section 25 of the Federal Reserve Act. "'(4) A bank, banking association, savings bank, ur trust company, mere than 50 per cent of the stock of which is owned directly or indirectly by persons who own directly or indirectly more than 50 per cent of the stock of such member bank. '"The Federal Reserve Board ic authorized f n directed id to enforce compliance with this section, and to prescribe such rules a * : regulations as it cieems necessary fur that purpose.'" n' X-9252-b SUGGESTED SUBSTITUTE FOR SECTION 307 OF H.n.7617 H S PASSED BY THE HOUSE OF riEPit&SENTATIVES Page 61, line 5, strike all of section £07 and substitute the following: "Sec.307. Effective February 1» 1936, section 32 of the Banking Act of 1933 is amended to read as follows: "'Soc.32. No officer, director, or employee of any corporation or unincorporated c.ssociatien, no partner or employee of cny partnership, and no individual, engaged in the issue, flotation| underwriting, public sale, or distribution, at nholesale or retail, or through syndicate participation, of stocks, bonds, or other similar securities, shall serve at the same time as an officer, director, or employee of any member bank. The Federal Reserve Board is authorized and directed to enforce compliance with this section, and to prescribe such rules and regulations as it deems necessary for that purpose.'"