The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
1388 A meeting of the Board of Governors of the Federal Reserve rstera iras held in Washington on Saturday, August 25, 1945, at 11:00 PRESENT: Mr. Eccles, Chairman Mr. Szymczak Mr. Draper Mr. Carpenter, Secretary Mr. Connell, General Assistant, Office of the Secretary Mr. Thurston, Assistant to the Chairman The action stated with respect to each of the matters hereinreferred to was taken by the Board: Memorandum dated August 23, 1945, from Mr. Thomas, Director °t the n. sion of Research and Statistics, submitting the resigna4011 of Winofred Racz, a clerk in that Division, and recommendthe that the resignation be accepted as of September 15, 1945, with understanding that she will make reimbursement for unliquidated , 1.eave through an appropriate deduction from her last salary check, th at - -Lump sum payment will be made for the annual leave remain- to her credit at that time. The resignation was accepted as recommended. Letter to the Presidents of all the Federal Reserve Banks read- tlIgh Lou ows: "So that you may be informed, there are enclosed si-l es of (1) a letter dated August 11, 1945, from Mr. 114'er, Director of the Office of War Mobilization and tcei °Ilversion, advising of the establishment in that ofOf a Reconversion Working Committee to advise and 1389 8125/45 —2-- /assist him on matters pertaining to reconversion, and k2) the August 20, 1945, commenting on a. numberBoard's reply of of subjects pertaining to the reconversion or transition period following V—J Day from the standpoint of the Board of Governors of the Federal Reserve System. "In accordance with the request contained in the , cond paragraph of Mr. Snyder's letter, Mr. Morrill, ecial Adviser to the Board, has been designated as the PutY to represent the Board on the Reconversion Commit— tee, to attend its meetings, and to participate in its work. ? iT • "The Board will be glad to keep you informed of any 11113ortant developments in connection with the work of the kteconversion Working Committee which may be of interest to your Bank." Approved unanimously. Letter to Mr. Gentry, First Vice President of the Federal Re— ser, Ire II, czlk of Dallas, reading as follows: "Reference is made to your letter of August 1, 1945, ransmitting copy of a letter dated July 28 from President v. p r • Neuhaus of the McAllen State Bank, McAllen, Texas, sl, e rrding the application of that institution for member-4-P in the System. that Mr. Neuhaus is correct, of course, in his supposition ex as a general policy the Board does not undertake to bs7ci5e supervision over minority stockholders of member or require financial reports from persons acquiring bal,?itY stock interests subsequent to the admission of a to membership in the System. However, in the case of to the se State Bank, the statement is made in the Re— tjve Bank's presentation memorandum that potential domina17,!111 of the institution is traceable to the Murchison and interests even though the stock ownership does not ofP}:esent control; that Mr. Neuhaus is a business associate 4-°11g standing of Messrs. Murchison and Wynne and admits 41 4ecountability to them; that Vice President and Cashier 14:1! was an active executive officer of two other banks Murchison and Wynne group; and that T. F. Murchison, ofe °f the proposed directors of the applicant, is a brother C b W. Murchison. Therefore, in view of the apparently 8/25/45 —3— evident potential influence of Messrs. Murchison and %rnne upon the active management of the bank, it seemed to the Board that the case should be viewed practically as though they were actuPlly identified with the active management. "The character of management is, as you know, one Of the most important factors to be considered in connectlon with an application for membership, and in the case of an uninsured bank joining the System, which is the 'ase in this instance, the Board is required by law to .certify to the F.D.I.C. that consideration has been given ° several factors enumerated, among them the general Character of management. Since membership in the System ajtomatically carries with it deposit insurance, applicans of uninsured banks are referred to the F.D.I.C. to ee.if the Corporation has any objection to extending de' Posit insurance to the applying bank. The McAllen case 8 further complicated by the fact that, earlier in the Year, o the new bank at Edinburg, Texas, in which the stock t141ership by the Murchison and liJynne interests is shown i° be slightly less than at McAllen, applied for deposit r181-1rance as a nonmember bank and we understand that the te.T.C. has deferred action on the application pending e rnishing of complete information regarding the financial condition and operations of the Murchison and Cull_e interests. The Board would hesitate, therefore, mu grant deposit insurance, through membership, to the e°411en bank when the F.D.I.C., under substantially the b:411 circumstances, is unwilling to approve the Edinburg ' 11K bor deposit insurance. YOU may answer to another question raised by MT. Neuhaus, of course assure him that the additional informaiisf; ' me ll regarding the financial condition and operations of qussrs- Murchison and Wynne and their interests was reme7ted solely for the purposes of the application for 111'ership of the McAllen State Bank." Approved unanimously. trlg Letter to the Presidents of all the Federal Reserve Banks readfollows. let "There is attached for your information a copy of a received from Frederick K. Trask, Jr., Deputy As'''ant Director, Office of Contract Settlement, with V25/45 -4- respect to the time required to process T-loan guaree agreements. The Office of Contract Settlement as addressed a similar letter to the Mar and Navy DePartments and to the Maritime Commission. "Now that the war is over there may be an urgent cleilland for credit to unfreeze funds tied up in war proWe all appreciate the need for prompt handling T-loan applications that will be received during the ra.onths ahead, and the Board, and its staff, will be glad to be of whatever assistance it can to the Federal Re8erve Banks in their efforts in this respect." n Approved unanimously. Telegram prepared for the signature of Chairman Eccles to Mr. Att. Bio "'ganln, President of the State Bank of U.S.S.R., Moscow, Russia, as follows: "Ve are pleased to hear that officials of your Dant, Will be prepared to meet the three representatives the Federal Reserve System now traveling abroad to ca raLl upon certain correspondent central banks. Our Aresentatives are Dr. E. A. Goldenweiser, Economic L.Irlser to the Board of Governors and Vice President Knoke and Mr. W. H. Rozell of the Federal Reserve ael'Ik of New York with which institution your Bank has °1111ts. We hope this meeting will be mutually helpful : d send you our greetings." Approved unanimously, together with a telegram to Mr. Tuomioja, Director General of the Finlands Bank, Helsinki, Finland, reading as follows: t "Three representatives of the Federal Reserve Sys13:',Dr. E. A. Goldenweiser, Economic Adviser to the 141,-r of Governors, and Vice President L. W. Knoke and arA, 4. H. Rozell of the Federal Reserve Bank of New York h,- now in Europe visiting certain central banks. We that they may soon have the privilege of calling yolln YOU and your associates and that their meeting with maY be mutually helpful."
@FedFRASER