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Circular No. 3 9

FEDERAL RESERVE BANK
OF

Series of 1920

DALLAS

November 4 , 1 9 2 0 .

ELECTION OF DIRECTORS
TO MEMBER BANKS IN GROUPS 2 AND 3:
Supplementing Circular No. 37 of October 6th, on the above subject.
In order that each member bank in groups 2 and 3, which are to elect one Director
of Class A and one Director of Class B in the coming election, may clearly understand
the provisions of the Federal Reserve Act, 1 again call attention to Section 4 as follows:
“ Each member bank by a resolution of the board or by an amendment to its by-laws
shall authorize its president, cashier, or some other officer to cast the vote of the member
bank in the elections of Class A and Class B directors.
Within fifteen days after receipt of the list of candidates the duly authorized officer
of a member bank shall certify to the chairman his first, second, and other choices for
director of Class A and Class B, respectively, upon a preferential ballot upon a form fur­
nished by the Chairman of the board of directors of the Federal Reserve Bank of the dis­
trict. Each such officer shall make a cross opposite the name of the first, second, and
other choices for a director of Class A and for a director of Class B, but shall not vote
more than one choice for any one candidate.
Any candidate having a majority of all votes cast in the column of first choice
shall be declared elected. If no candidate have a majority of all the votes in the first
column, then there shall be added together the votes cast by the electors for such can­
didates in the second column and the votes cast for the several candidates in the first
column. If any candidate then have a majority of the electors voting, by adding together
the first and second choices, he shall be declared elected. If no candidate have a majority
of electors voting when the first and second choices shall have been added, then the votes
cast in the third column for other choices shall be added together in like manner, and
the candidate then having the highest number of votes shall be declared elected. An
immediate report of election shall be declared.”
While it is optional with member banks whether or not they shall nominate candi­
dates for Class A or Class B directors, under the terms of the provisions just quoted it
is mandatory upon each member bank to authorize, by a resolution of the board of direc­
tors or by an amendment to its by-laws, some officer to cast a vote in behalf of the bank
in the elections of such directors, and upon the officer so authorized to certify to the
Chairman of the Federal Reserve Bank his first, second and third choices for such directors.
Inasmuch as each Class A or Class B director is elected by one group of member banks,
nominations may be made and ballots shall be cast only by those member banks which
belong to the group which is to participate in the particular election.
The law also makes it mandatory upon the officer casting the ballot to designate his
first, second, and other choices and provides that under some circumstances votes for
second and third choices may determine the election. The Federal Reserve Board has
heretofore ruled that when there are three or more nominees no ballot is valid unless
the first, second and third choices are designated thereon.
You will understand, therefore, that the terms of the Federal Reserve Act are man­
datory with respect to the authorization of officers to cast the votes of member banks
and to the casting by the officers so authorized of ballots designating the requisite num­
ber of choices.
Yours very truly,

Chairman of the Board.

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