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52s A meeting of the Board of Governors of the Federal Reserve System was held in Washington on Tuesday, April 4, 1944, at 11:30 a.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Eccles, Chairman Ransom, Vice Chairman Szymczak McKee Draper Evans Mr. Mr. Mr. Mr. Morrill, Secretary Bethea, Assistant Secretary Carpenter, Assistant Secretary Clayton, Assistant to the Chairman The action stated with respect to each of the matters hereinafter referred to was taken by the Board: The minutes of the meeting of the Board of Governors of the Federal Reserve System held on April 3, 1944, were approved unanimously. Letter to Mr. Williams, President of the Federal Reserve Bank of Philadelphia, reading as follows: "The Board approves the changes in the Dersonnel classification plan of the Federal Reserve Bank of Philadelphia involving the establishment of the new position of Director of Research, with maximum annual salary of t7,500, and the elimination of the position of Research Supervisor, as requested in Mr. Hilkert's letter of March 31, 19h4." Approved unanimously. Letter to Mr. Young, President of the Federal Reserve Bank of Chicago, reading as follows: "In accordance with the requests contained in your letters of March 28, 1944, the Board approves the appointments of Donald Richard Busey and Edward August 529 4/4/44 -2- "Koeller as assistant examiners for the Federal Reserve Bank of Chicago. Please advise us of the dates upon which the appointments become effective. "It has been noted that Mr. Busey is indebted to the Commercial Bank, Champaign, Illinois, an insured nonmember bank, in the amount of g2,000 secured by cash surrender value of life insurance. As you know, it is the Board's feeling, as expressed in letter X-7638 of October 14/ 1933 (F.R.L.S. #9180), that members of the examining staffs of the Federal Reserve Banks should not be indebted to banking institutions. It is understood that Mr. Busey has no program for liquidating the loan although it was indicated that it could be liquidated at any time. Accordingly, this appointment has been approved with the understanding that the loan will be liquidated, financed through sources other than banks, or placed on a regular reduction basis." Approved unanimously. Letter to the board of directors of the "People's State Bank of Mansfield", Mansfield, Illinois, stating that, subject to conditions of membership numbered 1 to 3 contained in the Board's Regulation H and the following special condition, the Board approves the bank's application for membership in the Federal Reserve System and for the appropriate amount of stock in the Federal Reserve Bank of Chicago: "4. Such bank shall increase the number of its directors to not less than five, the minimum number required in the case of all member banks under the provisions of section 31 of the Banking Act of 1931, as amended." Approved unanimously, together with a letter to Mr. Young, President of the Federal Reserve Bank of Chicago, reading as follows: "The Board of Governors of the Federal Reserve System approves the application of the 'People's State Bank of Mansfield', Mansfield, Illinois, for membership in the 4/4/44 -3- "Federal Reserve System, subject to the conditions prescribed in the enclosed letter which you are requested to forward to the Board of Directors of the institution. Two copies of such letter are also enclosed, one of which is for your files and the other of which you are requested to forward to the Auditor of Public Accounts for the State of Illinois, for his information. "In connection with condition of membership numbered 4, it has been noted that the bank has agreed to increase the number of its directors to five at the next annual meeting in January, 1945. With the understanding that the required increase will be effected as soon as practicable, and not later than the next annual meeting of the stockholders, the Board will not object to the admission of the bank to membership with only four directors." Memorandum dated April 3, 1944, from Mr. McKee, reading as follows: "Because of continued illegal and unsound practices by the Pine Lawn Bank & Trust Company, Pine Lawn, Missouri, the Board recently issued an order for a hearing to determine whether its membership in the Federal Reserve System should be forfeited. However, the Federal Reserve Bank of St. Louis advised that representatives of the member bank were coming in to discuss the matter, and accordingly the order was not sent to the member bank but to President Davis of the Reserve Bank, with instructions to send copies of the order to the bank and its directors in the event the contemplated discussions did not terminate satisfactorily. "President Davis has telephoned me to say that the representatives of the member bank have discussed the matter with him and indicated a desire to change their ways. Accordingly Mr. Davis suggests that the directors of the member bank be required to sign a letter to the Reserve Bank which would state specifically the respects in which its practices will be changed and improved and that when this has been done the proposed hearing and service of the order to show cause be postponed indefinitely pending an opportunity for the bank to correct its practices. "It is my recommendation that Mr. Davis' suggestion in this respect be approved by the Board, with the understanding that representatives of the Board have an opportunity to review the letter that is to be signed by the 531 4/4/44 "directors before it is agreed upon and that the proceedings in connection with the hearinc, and order for the hearing, as previously approved by the Board, be postponed pending further action of the Board. "If the Board approves this recommendation, I will call Mr. Davis and advise him accordingly." Approved unanimously. Telegram to Mr. Dillard, Vice President of the Federal Reserve Bank of Chicago, reading as follows: "Your wire April 3 heating stoves and space heaters are heating equipment within the meaning of section 8010 of Regulation W as amended." Approved unanimously. Thereupon the meeting adjourned. ) 1111041Adj42 Secre ary. Approved: Chairman.
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