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F EDERAL R E S E R V E BANK OF ST. LOUIS

E L E C T IO N O F D IR E C T O R S
September 17, 1936.
T O T H E M EM BER B A N K S IN D IS T R IC T No. 8:
An election will be held under the provisions of Section 4 of the Federal Reserve Act to choose
successors to the following directors of this bank whose terms expire December 31 of this y ear: Class
A director, Max B. Nahm, (Vice President, Citizens National Bank, Bowling Green, Ky.), and Class
B director, J. W . H arris (President, Harris-Polk H at Co., St. Louis).
The Class A director w as elected by banks in Group 2 and the Class B director by Group 1 banks.
Consequently, their successors will be chosen, respectively, by these groups. Group 1 consists of banks
having capital and surplus in excess of $599,000; Group 2, banks with capital and surplus of $599,000
to $100,000. inclusive, and Group 3, banks having capital and surplus less than $100,000. Lists of the
banks composing the voting groups are given on the following pages.
Each bank in Group 1 is permitted to nominate a candidate for Class B director and each bank in
Group 2 a candidate for Class A director.* The nomination must be made by resolution of the board
of directors and certified to me on or before October 24. A form and self-addressed envelope for this
purpose are enclosed. On October 30, a list of the candidates (indicating by whom nominated) and a
preferential ballot will be mailed to each bank in the two groups mentioned. The ballot must be cast
within fifteen days after receipt. T he polls will open on November 2 and close at 2 p. m. on November
17, 1936. At that time the ballot box will be opened in the board room of this bank, the votes counted
and the results announced. T he candidates are invited to be present or represented on that occasion.
In order to be counted, the ballot m ust be executed by an officer authorized to cast the vote. On
the following pages are shown the officers heretofore designated for this purpose. The authority con­
ferred on them continues until revoked. Each bank that has not designated such officers, or any bank
that desires to change its authorization, should do so by resolution of its board of directors and certify
the appointments to me before the polls close. A form is herewith furnished to each bank that has not
made such designations by title.
Section 4 of the Federal Reserve Act, as amended June 16, 1933, provides: “ Whenever any two or
more member banks within the same Federal reserve district are affiliated with the same holding com­
pany affiliatef, participation by such member banks in any such nomination or election shall be con­
fined to one of such banks, which may be designated for the purpose by such holding company affili­
ate.” Each bank affected thereby should have the holding company designate, by resolution of its board
of directors, which affiliated bank is to participate in the nomination and election, and should send me
a certified copy of the resolution.
W hile the banks in Group 3 do not elect a director this year, this circular is sent to them without
forms for their information.
Respectfully,
PA U L D IL L A R D ,
Deputy Chairman of the Board.

•S ectio n 4 of the Federal Reserve A ct provides that "C lass A shall consist of three m em bers, w ho shall be chosen by and b« representative
of the stockholding banks. N o officer or director of a m em ber bank shall be eligible to serve as a Class A director unless nom inated and elected
by banks w hich are m em bers of the same group as the m em ber bank of which he is an officer or director. Any person who is an officer o r director
of more th a n one m em ber bank shall not be eligible for nom ination as a Class A d irector except by banks in the same group as the bank
having th e largest aggregate resources of any of those of which such person is an officer o r director. Class B shall consist of three m em bers, who
a t th e tim e of their election shall be actively engaged in th eir district in com merce, agriculture o r some other industrial pursuit. N o director of
Class B shall be an officer, d irecto r or em ployee of any bank. No S enator or R epresentative in Congress shall be . . . an officer o r a director of
a Federal reserve b an k ." In a resolution adopted December 23, 1915. the Board of Governors of the Federal Reserve System expressed th e
opinion " th a t persons holding political or public office in the service of the U nited S tates, or of any State, territo ry , county, d istrict, political
subdivision, o r m unicipality thereof, or acting as m em bers of poiltical party com m ittees, cannot consistently w ith the spirit and underlying prin ci­
ples of th e Federal R eserve A ct, serve as directors or officers of Federal reserve banks." O n December 28, 1915, the Board resolved th a t
"national bank exam iners shall not hereafter be elected . . . to directorships in Federal reserve banks." U n d er date of July 2, 1925, the Board
advised it had ‘ reached the conclusion th a t a person whose sole occupation is that of officer of an insurance com pany is not eligible for election
as a Class B director of a F ederal reserve bank.”
tT h e Banking A ct of 1933 as am ended A ugust 23, 1935, defines the term “ holding company affiliate" as follows: ‘T h e term ‘holding
company affiliate’ shall include any corporation, business tru s t, association, o r other sim ilar o rg an izatio n — (1) W hich owns o r controls, directly
o r indirectly, either a m ajority of the shares of capital stock of a m em ber hank or m ore than 50 per centum of the num ber of shares voted for
th e election of directors of any one bank at the preceding election, o r controls in any m anner the election of a m ajority of the directors of any
one bank : or (2) F o r the benefit of whose shareholders or m em bers all or substantially all the capital stock of a m em ber bank is held by tru stees.”
‘‘N o tw ith standing the foregoing, the term ‘holding company affiliate' shall not include (except for the purposes of section 23A of th e
Federal R eserve Act, as am ended) any corporation all of the stock of which is owned by the U nited S tates or any organization which is determ ined
by the B oard of G overnors of th e Federal Reserve System not to be engaged, directly or indirectly, as a business in holding the stock of, or
m anaging o r controlling, banks, banking associations, savings banks, or tru st com panies."




M E M B E R BANKS C O M P O S IN G G R O U P 1 AND O F F IC E R S D E S IG N A T E D TO V O T E
(T o elect one Class B Director)
ARKANSAS
E l D orado................ F irs t N ational Bank ..................... ......C hm ., P rea.. V. P. o r Cash.
F o rt S m ith .............. F irst N ational B an k ................... .......... Chm ., P re s., V. P. or Cash.
F o rt S m ith ............. M erchants National B ank...................... P res , V. P. or C ash.
L ittle Rock............ .LTnion N ational B ank..................... . ..Chm ., Pre* . V. P ., Cash, or
Secy.
L ittle R ock..............W . B. W orthen Co., B ankers............P resident.
P ine Bluff............... Sim m ons N ational B ank....................... P resident.
IL L IN O IS
A lto n ..................... ...F irs t N ational Bank & T ru st Co.......C hm .. P res., \ . P. or Cash.
N at. S tock Y ds......N ational Stock Y ards N ational Bk ...O . J. Sullivan, P resident.
INDIANA
E vansville............... Citizens Natk-nal B ank...............
E vansville............... National City B ank.....................
E vansville............... Old N ational Bank.......................
V incennes............... American N ational B ank..........

.C hm ..
.C hm .,
.C hm .,
.Chm .,

l’res., V.
P res,, V.
P res., V.
P res,, V t

P. o r Cash.
P. or Cash.
P. or Cash.
P. o r Cash.

KENTUCKY
Louisville................ Citizens-U nion N ational B ank—........ C hm ., P res., V. I*, o r Cash.
Louisville................First N ational B ank.............. ........... ...C hm ., P res., V'. P. or Cash.
Louisville................ K entucky T itle T ru st C o...... „ ............ C hm ,. P res.. V. P. or Cash.
Louisville.............. L iberty N ational Bank & T ru st C o..C hm ., P re*., V . P. or Cash.
Louisville................ Lincoln Bank & T ru s t Co................... P re s., V. P ., or Cash.
Louisville................ Louisville T ru st Co........................ ..........Chm ., Pre*., V. P. o r T r e a s .
Mayfield.............. - ..F ir s t N ational B ank...................... .......E. O . G ardner, P resident.

M IS S O U R I
S t. L ouis..................Boatm en's National B ank......................C hm ., V. C hm ., P res.. V. P,
or Cash.
St. L ouis..................Bremen Bank & T ru s t C o....................P resident o r Vice Pres.
S t. L ouis..................Cass Bank A T ru st C o..........................C hm ., Pres, o r V. P.
St. I.o u is................. F irst N ational B ank...............................C hm ., V. C hm ., P res., \ . P.
or Cash.
St. L ouis— ...........Jefferson-G ravois B ank............ - .......... C hm ., P res., V. P. or Cash.
St. L ouis................. M anchester Bank..................................... P re s., V P. o r Cash.
’.
St. Lottis................. M anufacturers Bank & T ru st Co.......C hm ., Pres, o r V. P.
St. L ouis................. M ercantileC om m erce Bk. & T r. Co..Chm ., I’res.. Chm. E xec.
Com. or Cash.
S t. L ouis.................Mississippi Valley T ru s t Co.................C hm ., Pres, o r V. P.
St. L ouis................. N orthw estern T ru st C o.........................Chm ., Pres.. V. P. o r Cash.
St I.’ tiis.................. Security N at. Bk., Sav. & T r. Co....Chm ., P res., V . P. or Cash.
S t L ouis.................. South Side N ational Bank.................. C hm .. P res., V. P. o r Cash.
S t. L ouis................. T elegraphers N ational Bank................. C hm ., l’res., V . P. or Cash.
S t. L ouis..................T ow er Grove Bank & T ru st C o........ Chm ., P res., V . P. or Cash.
S t. L ouis..................U nited Bank & T ru st C o........ ............ P res.. V. P. o r Secy.
Springfield.............. I ’nion N ational B ank ............................C hm ., Pres , V . P. o r Cash,
TEN N ESSEE
M em phis..................F irst N ational Bank................ ............. S. E . R agland, P resident.
M em phis..................N ational Bank of Com m erce............... P re s., V. P. o r Cash.
M em phis..................U nion P lanters N at, Bk. & T r. C o .-C hm .. I’res,, V . P. or Cash.

M EM B ER BANKS C O M P O S IN G G R O U P 2 A ND O F F IC E R S D E S IG N A T E D TO V O T E
(T o elect one Class A Director)
ARK ANSAS
Berryville.......
Blytheville
C am den...........
De W itt..........
El D orado......
Fayetteville....
F o rd y ce..........
F o rrest C ity —
F o rt Sm ith.... .
H elen a............

I L L I N O I S — Continued
...... C hm .. I’res , V. P. o r Cash.

.......l ’rrs ., V. P. or Cash.
.— C hm ., P res., V . P. or Cash.

L ittle Rock.............Commercial N ational B ank................. Vice Pres, or Cash.
L ittle Rock............. Peoples N ational B ank.......................... Chm ,, P res., V. P . or Cash.
N ew p o rt.................. F irst N ational Bank................- ....... —\V. A. Billingsley, P resident.
P arag o u ld ............... N ational Bank of Com m erce............... W . W . W oosley, Cashier.
P in e Bluff............... .National Bank of C om m erce-............ C hm .. P res, o r V. P.
Russellville..............Bank of Russellville..............................Chm ., P res., V. P. or Cash.
Russellville..............Peoples E xchange Bank.............— — President.
T ex ark an a..—.........S tate N ational B ank.....................— ..P re s., V. P. o r Cash.
IL L IN O IS
B a rry .........- ............ F irst N ational Bank.............................. O. W illiam son, Cashier.
Belleville..................Belleville N ational B an k ........................Chm ., Pres., 1st V. P . or
Cash.
Belleville..................F irst N ational Bank— ........................Chm .. Pres., V. P ., Cash, or
A sst. Cash.
Belleville..................St. Clair National B ank....................... Chm ., P res., V. P. or Cash.
B enld............. .......... F irst N ational Bank........................... ...Chm., P res., V. P. or Cash.
C airo.... ....................Security National B ank......................... Pres, or Cash.
C arbondale..........—F irst N ational Bank..............................Chm., Pres., V. P. or Cash.
Carlinville................Carlinville National B ank.....................Chm ., P res., V. P. or Cash.
C arm i........................F irst N ational Bank..............................T . W . H all, P resident.
C arro llto n ................G reene C ounty N ational B ank........................................- ......................
C en tralia..................City N ational Bank...... ......................... Chin.. P res., V. P. or Cash.
C en tralia..................Old N ational Bank.................................. I’res., V. I’., o r Cash.
C h e ster............... .....First S tate Bank....................................P res., V. P. or Cash.
Collinsville.............. F irst N ational Bank.............................. W m . L . K aem per, C ashier.
E ast St. L ouis........F irst N ational Bank.............................. Chm ., P res., V. P. or Cash.
E ast St. L ouis........Southern Illinois N ational B ank— Pres., V. P. or Cash.
E ast St. L ouis— -U n io n T ru s t Co........... ...................- ...... Chm. o r Pres.
E dw ardsville——...Bank of Edw ardsville..............................Chm., P re s., V. P. or Cash.
E dw ardsville...........Edw ardsville N at. Bk. & T r. Co.— P resident.
Effingham ................Effingham S tate Bank............ ........ — Chm ., Pres., V, P ., C ash, or
A sst. Cash.
El D orado................C. P. B urnett & Sons, B ankers....... Pres, or Cash.



I

F airfield....................Fairfield N ational B ank................Chm ., P res., V . P. or C ash.
F lo ra......................... F irst N ational Bank.............................. Chm ., Pres, or Cash.
G ranite C ity— .......F irst-G ranite C ity N ational B ank— C hm ., Pres, o r Cash.
G reenville............... B radford N ational B ank........................ Chm ., l ’res., V . P. or C ash.
G reenville............... S tate Bank of Hoiles & Sons........... -C hm ., I’res., V'. P. or C ash.
•
H arrisb u rg .............. City N ational B ank................................ Pres., V. P . or Cash.
H a trisb u rg .............. F irst N ational Bank....................................................................................
H arrisb u rg ............ - F irs t T ru st & Savings B ank...............Jo h n B. Lee, V ice-Pres.
H ighland..................F irst N ational Bank.............................. Chm , Pres., V . 1’. or C ash.
H illsboro..................Hillsboro N ational B ank ........................Geo. I I. Fisher, P resident.
H illsboro................. M ontgomery Co. Loan & T ru st Co......................................................
Jacksonville............. E lliott State B ank.................................. P res, o r Vice P rea.
L itchfield................. F irst N ational Bank.............................. Pres, o r Cash.
L itchfield................. Litchfield Bank & T ru s t C o ..............F ran k R. M ilnor, P resident.
M etropolis............... City N ational B ank................................ Chm ., I’res., V. P. or Cash.
M etropolis............... F irst N ational Bank.............................. Chm ., P res., V. P. or C ash.
M illstadt...................F irst N ational Bank.............................. Cashier.
M ount V ernon........First National Bank..................... ........ P res, o r Cash.
M urphysboro..........City National B ank................................ Chm., P re s., V . P. or Cash.
N ashville..................F irst National Bank............................ - P r e s ., V . P. or Cash.
O blong............... ......F irst N ational B ank................— — S. F. O dell, P resident.
O 'F a llo n ...................F irst N ational B ank— .........................Chm ., P res., V. I’. or Cash.
Pittsfield..................F irst National B ank...............................Cashier.
R aym ond..................F irst National Bank.............................. J. E. M cDavid, Vice P res.
Robinson................. Second N ational B ank........................— Chm., P re s .,V . I’. or Cash.
Salem ........................ Salem N ational Bank.............................. P res., V . P., C ash, or A sst.
Cash.
V andalia...................F irst N ational Bank...............................Chm., P res., V. P. or Cash.
V ienna......................F irst National Bank.............................. Chm., P re s., V. P. or Cash.
W hite H all.............. W hite Ila ll N ational B ank................... Cashier.
INDIANA
Bedford....................Bedford N ational Bank.......................... Chm ., P re*., V. P . o r Cash.
Bedford....................Citizens N ational Bank..........................Pres, or Cash.
Bedford.....................Stone City N ational Bank...................- ..................................................
C annelton.................First-C annelton N ational Bank........ Jos. M. H irsch, Cashier.
M adison....................F irst National B ank.............................. P res., V . P. o r Caah.
M adison....................N ational Branch Bank..........................-Jo h n W . Tevis. P re s.
N ew A lbany........... .Union National Bank.................. — Chin., P re s., V. P . o r Cash.
P etersb u rg .............. F irst N ational B ank......... .................... Jo e O 'B rien , Cashier.
Princeton.................Farm ers National Bank.......................... Pres, or Cash.
Seym our...................Seymour National Bank— —...............Chm ., P res., V. P . or Cash.
T ell C ity...................Citizens National Bank...................... .Sam A nderson, C ash.
T ell C ity ...................Tell City N ational B ank.....................Chm ., P re s., V. P . or Cash.
W ashington............ Peoples N ational Bank & T ru st Co.. Pres, o r Cash.
W ashington............ W ashington N ational B ank................. L . I. Read, C ashier.

KENTUCKY
Rowling G reen.......Am erican N ational R ank..................... P resident.
Rowling G reen.......Citizens N ational B ank..........................Chm ., P re s., V. P. or Cash.
Cam pbellsville........T ay lo r N ational Bank..................... -....P resid en t.
C arrollton................ F irst N ational Bank...................................................................... ................
C entral C ity ............F irst N ational Bank.............................. Cashier.
D anville................... Boyle Hank & T rust C o................................................................ ...............
D anville....................Citizens N ational Bank......................... Chm ., P re s., V. P. or Cash.
Danville................... F arm ers N ational Bank.................. ....... Vice President.
E lizabethtow n........F irst-H ardin National B ank..................Chm .. P res., V. P. or Cash.
F ran k fo rt................ N ational Branch Bank of K en tu ck y ..!!. F . L indsey, Cashier.
F ran k fo rt................ S ta te N ational Bank............................ .. P resident.
F u lto n .....................-C ity N ational Bank................................ N. G. Cooke, Cashier.
Glasgow....................Citizens N ational B ank.......- ................J. H . M ann, J r ., Cash.
G lasgow ................... New Farm ers National B ank............ Chm ., P res., V. P. or Cash.
Greenville................ F irst N ational Bank............................. Chm ., P res., V. P. or Cash.
lla rro d s b u rg ...........M ercer C ounty N ational Bank............................................... ................... .
H en d erso n ..............F irst N ational Bank............................... Chm ., P res., V'. P. or Cash.
H enderson..............O h io Valley National B ank .................Clim., P res., V. P. or Cash.
Hopkinsville............P lanters Bank & T ru st Co.................Chm ., P res., V. P. or Cash.
L aw rcnccburg....... Anderson N ational B ank..................... J. \V. Gaines, P resident.
L nw rcnceburg....... L aw renccburg N ational B ank...... „ ...J. M. Johnson, Cashier.
L ebanon................ -C itizen s N ational Bank.................- ...... Pres, or Cash.
L ebanon..................^Farm ers N ational B ank.........................Pres, or Cash.
L ebanon.................. M arion N ational Bank..... - .................... Pres., V. P. o r Cash.
M adisrmville............F arm ers N ational Bank...... ........... .......P res, or Cash.
O w ensboro.............. N ational D eposit Bank................... ......................................................—
Paducah.................. Peoples N ational Bank...........................P res, or Cash.
P rin ceto n .........— F irst N ational Bank.............................. Pres., V. P. or Cash.
M I S S IS S I P P I
A berdeen................. F irst N ational Bank....™......™......... ..Chm ., I’res., V . P . or Cash.
Colum bus................ First-C olum bus National B ank.......... C hm ., P re s., V . P. or Cash.
Columbus...—..........N ational Bank of Com m erce...............Cashier.
.™......-.C h m ., P res,, V'. P. o r Cash.
G reenville.....-...-....Com mercial N ational B ank.—
G reenville................F irst N ational Bank...................- ......- P r e s ., V. P. o r Cash.
W est P oint............. F irst N ational Bank.......- .......... .......... Chm ., P re s., V . P. o r Cash.
M IS S O U R I
California................ M oniteau N ational B ank................. - ............................................- ..............
Cape G irardeau...... F irst N ational Bank........ ..................-.C h in ., P res., V. P. or Cash.
C arrollton................ F irst N ational Bank.......................................................................................
Chillicothe............... C itizens N ational Bank..........................Chm., I’res., V. I’, or Cash.
C layton—................ C layton N ational Bank..................... — P resident o r Cashier.




M IS S O U R I — Continued
C layton.....................F irst N ational B ank..............................Chm ., P res., V. P. or C ash.
Colum bia........- ....... Boone County N ational Bank....— Pres, o r Cash.
Colum bia................. Exchange National B ank..................... Chm ., P res., V . P. o r Cash.
F arm in g to n .............United Bank.............................................P res., V. P. o r Cash.
Glasgow....................Glasgow Savings B ank......................._.............................. ......— ..........
H annibal.................. F arm ers & M erchants Bk. & T r. Co..Chm., P res., V. P. or C ash.
H annibal..—........... H annibal N ational B ank...........- ......— W . L . W eaver, Cashier.
Jefferson C ity......... E xchange N ational B ank..................... Chm., P res., V. P. or C ash.
K irksville.................Citizens National B ank...............—
Chm ., P res., V . P. or C ash.
Chm ., P res., V. P. or C ash.
L-. tem b u rg ............. Lem ay F erry Bank...........— ....—
M aplewood............. Citizens N ational B an k ..........................................................—
— .
M aplewood............ -Peoples S tate Bank..................... — ..................... ..................—
M arshall...................W ood & H uston B ank_____ ___ - .....P res., V. P., o r Cash.
M exico...................... F irst N ational B ank.............. ........ — Chm ., P res., V. P. or C ash.
M oberly....................M echanics Bank & T ru s t Co.........— Chm ., P res., V . P. or Cash.
P a ris—
...................... Paris N ational Bank...............................Cum ., P res., V . P. or Cash.
S t. C harles—— .....F irst N ational Bank................ —.— President.
St. L ouis..................A m erican E xchange N ational Bank..Chm ., P res., V . P . or Cash.
S t. L ouis-------- — .B aden B ank........... ........... — .— — — P res., V. P. o r Cash.
S t. L ouis............ — .Chippew a T ru st Co...... „ —— — .Chm ., P res., V . P. or Cash.
S t. L ouis....... .......... Easton-T aylor T ru st C o—— — ........ President or Secretary.
S t. L ouis..................Jefferson Bank & T ru s t Co.—
___ . — P res., V. P. o r Cash.
S t. L ouis............ —.L indell T ru s t Co............................. — Chm., P res., V . P ., o r Cash.
S t. L ouis..................M ercantile-Com m erce N ational B k— res., V. P. o r Cash.
.P
S t. L ouis..................Mound City T ru st Co.................. ........ .Chm ., Pres, o r V . P.
S t. L ouis—
— ..North St. Louis T ru st Co.........—
___— — ...... — —
.
S t. L ouis............ — ..Plaza B ank........................................ — Pres, o r Cash.
S t. L ouis............ —.S outhern Commercial Savings B an k -P resid en t.
S t. Louis..................Southw est Bank............................—
Pres., V. P. o r Cash.
Scdalia...................... Sedalia Bank & T ru st C o.............. — Chm ., P res., V. P. or Cash.
Sedalia...................... T hird N ational Bank....................— Chm. or Pres.
T re n to n ......— ----- T renton N ational B ank................... — W . II. Shanklin, Cashier.
W arren sb u rg — .... Peoples N ational B ank_____ —
Chm ., P res., V. P. o r Cash.
W ashington............. Franklin County Bank.....——............ Chm., Pre*., V. P. or Cash.
W ebster G roves.....W ebster Groves T ru st C o ..... — ........ -C h m ., P res., V. P. or Secy.
W ellston.................. F irst N ational Bank—
..........— —
Chm., P res., V. P. or Cash.
W est P lains.........—F irst N ational Bank.................— — Chm ., P res., V. P. o r Cash.
TEN N ESSEE
D yersburg............... First-C itizens National B ank.............. Chm., P res., V. P. or Cash.
Jackson .....................First N ational Bank................ —......... Chm., P res., V. P. or Cash.
Jackson.......... - ........ National Bank of Com m erce.............. Chm., P res., V. P. o r Cash.
Jackson.................—Second N ational Bank.....................— Cashier.
U nion C ity——
T hird N ational Bank.......... ...............- P r e s id e n t

C A P IT A L STO CK O F F E D E R A L R E S E R V E BANK
Member banks should hold capital stock of the Federal Reserve bank equal to six per cent
of their own capital and surplus. T he Reserve bank shares have a par value of $100 each. Only
one-half of the par value is paid, the other half remaining subject to call when deemed necessary
by the Board of Governors of the Federal Reserve System.
W hen a member bank increases or decreases the aggregate amount of its paid-up capital
and surplus, it should file with the Federal Reserve Bank of St. Louis an application, on Form 56,
for adjustment in the amount of Reserve bank stock held by it.
Member banks should advise the Federal Reserve Bank of St. Louis promptly whenever
they go into liquidation, consolidate, convert, or change their titles, in order that the capital stock
which they hold in the Reserve bank may be adjusted.
Detailed instructions are contained in Regulation I issued by the Board of Governors. Forms
for stock adjustments will be furnished by the Federal Reserve Bank on request.
Exemption from Taxation of Federal Reserve Bank Stock and Dividends
Section 7 of the Federal Reserve Act provides that “ Federal reserve banks, including the
capital and surplus therein, and the income derived therefrom, shall be exempt from Federal,
State and local taxation, except taxes upon real estate.” As published on page 13 of the 1915
Federal Reserve Bulletin, the Counsel of the Board of Governors is of the opinion that under
this provision of the law, capital stock of Federal reserve banks held by member banks and the
dividends thereon are exempt from local taxation.
Under a ruling of the Commissioner of Internal Revenue, published on page 153 of the
1916 Federal Reserve Bulletin, income derived from or dividends received on the capital stock
of the Federal reserve banks is exempt from the income tax imposed by section 2 of the Act
of October 3, 1913. Consequently, for the purpose of the income tax, the Commissioner per­
mits member banks to exclude from their gross income the dividends received on such stock.
From page 315 of the 1915 Federal Reserve Bulletin and page 955 of the 1917 Bulletin,
it will be noted that where the State imposes a tax on the shares of a bank, whether State or
national, as the property of the shareholder, and such tax is not assessed against the corporation
as such, the right to deduct nontaxable securities, in making the return of the value of the shares
for taxation, has not been recognized by the courts. Hence, capital stock held by a member bank
in its Federal reserve bank cannot be deducted from the tax assessments against its shareholders.

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Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102