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July 9,
Board of SwRiori

ItiHn&i on H a. 7186
»

r» loloaon. Assistant Counsel
ftirsuant to the request of Mr» %afct, X attended oar in, a
this aomlng by Mai iianklag and Ourranoy Coaraittee of the House on the b i l l
H#H. 71M| which would ©rtead for tire yoar« after August 23, 1937, the authority of sasmber banks and oth«?r Insure-i banks to pay Interest oa deaaad
deposits of public £&n&u and trust funds In cases where the paymfisit of
i* r«qulmd by £tat® law*
only witness who t#atifi«4 wai Mr» Clare Boss, froasuror of the
state of Pennsylvania, who t«atlfi«d la favor of tl^ b i l l . It ma el«ar
from hit toatimosy that # wliil® h> toatifle.: for a two y^ar extension, > o
^
really faTor^d • paraaaeat #x^mptlocs In faet, quostlosing froa nws^rs
of the Cojasittee brought oat that UN Host mm no objeetlon to the payment
of Interest on e.ny deaaad deposits*
It appeared tbfct the f'^enzxeylTaiila leglelature r^oaaitly aiaeaded the
Stat© laws with the intention of relaxing the requirement of Interest on
State funds wherever that rsqulretfexit Might confliot with Federal r®striotions* However, Mr* Boss stated that there was a question whether this
SflMBdment was not Ueo)mieally insufficient to aahlev* i t s purpose* He based
a goed deal of his argiaaant for the passage of K*l« 7186 on this pceslbillty
of a teohnioal defeet in the amendment to the State law*
The questions of o©rfcaia of the Canalttee ineabere, particularly
Ghainaan Gteagall (Ala#) aixd Hon^ressnen BBBIMB (!I«C.)# seea«<i to be sorns*
what unfavorable to the b i l l , although Mr# Baaoook ^ntioaad the possibility
that he aight propose an aaen^snt t© the b i l l to extend the exemption for
one year instead of two* The questions of C©jjgr«sssaan ,'ord (Calif,) and
Patoan (Taau) were apparently a»re favorable to the bill*
After Mr* Ross had ooneludedf Chairman Sbeagall stated Informally that
Chalraan Socles had asked to be heard on the b i l l to destroy old Federal R>
*»
serve notes bearing the gold redenptieo feature $ and i t was agreed that
Cheiraen iooles would be he&rd oa Heteesdayt July 14, i f agreeable to h
It was indieated that after hearlag Cfeainaan Eoel«s the Cetoslttee probably
would go late Executive Session to dispose of the interest oa deposits b i l l
and the federal '.'Reserve not© bill*
The Cesadttee then adjourned until 1^30 A. . , Tuesdayf July 13*




Respectfully,

Frerlorie
,
Aeelstant Counsel*