The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
,330 X-8057 October 6, 1934 Mr 4 F r e d e r i c II • Curt i s s , Federal Reserve Agent, Federal Reserve Bank of Boston, Boston, Massachusetts• Dear Mr. C u r t i s s : This r e f e r s t o your l e t t e r of J u l y 19, 1934 r e s p e c t i n g t h e s t a t u s of mutual savings banks i n view of c e r t a i n p r o v i s i o n s of s e c t i o n 8 of t h e S e c u r i t i e s Exchange Act of 1934. Section 8 prohibits members of n a t i o n a l s e c u r i t i e s exchanges and c e r t a i n b r o k e r s and d e a l e r s t o borrow from non-member banks u n l e s s such banks have f i l e d with t h e F e d e r a l Reserve Board an agreement to comply with those p r o v i s i o n s of t h e S e c u r i t i e s Exchange Act of 1934, t h e Federal Reserve Act, as amended, and t h e Banking Act of 1933 which are a p p l i c a b l e t o member banks and which r e l a t e t o t h e use of c r e d i t t o f i n a n c e t r a n s a c t i o n s i n s e c u r i t i e s • As c e r t a i n of t h e s e p r o v i s i o n s r e l a t e t o t h e c a p i t a l and s u r p l u s of banking i n s t i t u t i o n s you i n d i c a t e t h a t t h e r e i s a q u e s t i o n as t o t h e i r app l i c a b i l i t y t o mutual savings banks which have no c a p i t a l and o r d i n a r i l y do n o t have what i s c a l l e d a s u r p l u s , although you s t a t e t h a t t h e y may have a guaranty fund s i m i l a r t o s u r p l u s . As suggested i n t h e concluding sentence of your l e t t e r , t h e Board has borne t h e s e f a c t s i n mind during t h e p r e p a r a t i o n of i t s r e g u l a t i o n s under t h e S e c u r i t i e s Exchange Act of 1934, but t h e q u e s t i o n which you r a i s e i s one which i t i s impossible t o answer e i t h e r i n t h e r e g u l a t i o n s or by a l e t t e r a t t h i s t i m e . As t h e answer t o t h e i n q u i r y - 2' X-8057 w i l l depend i n each case upon the i n t e r p r e t a t i o n of a p r o v i s i o n of law i n view of t h e a p p l i c a b l e f a c t s of a s p e c i f i c case, i t i s suggested t h a t any i n t e r e s t e d mutual savings bank d e l i v e r t o you f o r submission t o t h e Board a f u l l statement of f a c t s and s p e c i f i c r e f e r e n c e t o the p r o v i s i o n s of law w i t h r e s p e c t t o which t h e q u e s t i o n i s r a i s e d . The p r o p r i e t y of t r e a t i n g a guaranty fund as s u r p l u s w i t h i n t h e meaning of the Federal s t a t u t e s w i l l depend i n p a r t upon the law of t h e s t a t e under which t h e mutual savings bank i s i n c o r p o r a t e d and i t would be h e l p f u l t o t h e Board i f t h e p r e s e n t a t i o n of f a c t s could be accompanied by an opinion of your counsel or of counsel f o r t h e i n q u i r i n g bank, which would d e a l p a r t i c u l a r l y with t h i s a s p e c t of t h e q u e s t i o n . Very t r u l y yours, (Signed) L. P. Bethea L. P. Bethea, Assistant Secretary.
@FedFRASER