Full text of Records of the Federal Reserve System, Record Group 82 : Memo to the Board of Governors, Box 136

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Form F R. 131
BOARD OF GOVERNORS
OF THE

FEDERAL RESERVE SYSTEM

Office Correspondence
To

The Board of Governors

From

Mr, Morrill

Date March 19, 1938
Subject:_

At the recent Conference of Presidents it was voted to suggest to
the Board that it make recommendations with respect to legislation as
set forth below:
A.

(l) That the Board favorably consider recommending to
Congress the enactment of legislation to authorize
member banks, not located in a city in which a Federal reserve bank or branch is located, to count
all or some part of cash in vault as a part of
their required reserves.
(2) That before recommending the enactment of any such
legislation, the Board make a study to determine
the amount of vault cash to be counted as a part
of a member bank's required reserves, which amount,
in the opinion of the Conference, should not, in
any event, exceed fifty per cent of the amount of
the member bank's required reserves.

In taking this action the Conference agreed that little would be
accomplished by permitting a member bank, in determining the amount of
reserves required to be maintained against its deposits, to deduct from
the amount of its deposits the amount of cash in its vault.

The Con-

ference also was aware of the possibility that the Board of Governors
might consider the present an inopportune time to recommend the suggested legislation•
B.




That the Board of Governors should concur in the recommendation of the Comptroller of the Currency that Section
22(g) of the Federal Reserve Act should be amended to extend for one year from June 16, 1958, the period during
which loans made prior to June 16, 1933, to executive
officers of member banks might be renewed.

-2C.

That the Board should recommend that the provisions
of Section 12B(n)(4) of the Federal Reserve Act,
which provides for loans by the Federal Deposit Insurance Corporation to banks to avert losses, should
be extended for a period of some years or made permanent.

After this memorandum has been circulated among the members of
the Board, the recommendations of the Conference of Presidents will
be placed on the docket for consideration at the next meeting of the
Board.