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144 BOARD OF GOVERNORS OF THE S-439 Reg. P-19 FEDERAL RESERVE SYSTEM WASHINGTON ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD February 19, ·1942 Dear Sir: The Board recently ha.s had occasion to review carefully its interpretation of the provisions of section 2(c) of the Banking Act of 1933 which provide that a corporation, business trust, association, or other simila:P organization is a "holding company affiliate" if it owns or controls, directly or indirectly, "more tha.."l 50 per centum of tne number of shares voted for tha election of directors of any one bank at the preceding election". Concluding that the position heretofore taken on the facts in certain particular casc:s was incorrect, the Board has ruled that an organization is a holding company affiliate of a member bank if the number of shares owned or controlled by the organization is equal to more than 50 per centum of the number voted at the preceding election of directors of the b~~k, regaraless of whether the shares so ovmed or controlled were or were not voted. This rllling will be published in the March issue of the Federal Reserve Bulletin. However, :if there are organizations in your district which you believe may be affected, it would be desirable for you to bring it to their attention. In an.y such case, it is suggested that consideration be given to the ~uestion whether it might be in order for the Board to determine that the organization is not engaged, dirsctly or indirectly, as a bu.sinese in holding the stock of, or managing or controlling, banks, banking associations, savings banks, or trust companies, within the meaning .of section 2(c), with the result that upon sucl1 determination it would not be a holding company affiliate for any purposes other than those of section 23A of the Federal Reserve Act. ---···. L. P. Bethea, Assistant Secretary. TO THE PRESIDENTS 01" ALL FEDE...~AL RESEi.1.VE BANKS
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