The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
481 A. meeting of the Board of Governors of the Federal Re3e1 ve System was held in Washington on Friday, December 1, 1939, at io:30 PRESENT: Mr. Mr. Mr. Mr. Mr. Ransom, Vice Chairman Szymczak McKee Davis Draper Mr. Bethea, Assistant Secretary Mr. Carpenter, Assistant Secretary Mr. Clayton, Assistant to the Chairman Mr. Thurston, Special Assistant to the Chairman Mr. Wyatt, General Counsel Mr. Smead, Chief of the Division of Bank Operations Mr. PauliLer, Chief of the Division of Examinations Mr. Dreibelbis, Assistant General Counsel Mr. Cagle, Assistant Chief of the Division of Examinations Mr. Chase, Assistant Counsel There were presented telegrarls to Messrs. Kimball and Post, eczetaries of the Federal Reserve Banks of Nev York and Philacielphia) respectively, Ur. MeLarin, First Vice President of the "al Reserve Bank of Atlanta, and Messrs. Dillard and Hale, Zecr a''. "111-es of the Federal Reserve Banks of Chicago and San Francisco, rea, -00etively, stating that the Board approves the establishment with1 ° t eh, 41Ce by the Federal Reserve Banks of Chicago and San Francisco ' 04 xo Itember 28, by the Federal Reserve Banks of New York and Atlanta Ilbvelaber 30, 1939, and by the Federal Reserve Bank of Philadelphia 1482 12/1/39 t°daY, of the rates of discount and ourchase in their existing schedules. Approved unanimously. There was further discussion of the program for the Chairlets Conference for December 5-6, 1939, and Mr. Davis stated that 48 had arranged with Mr. Peyton, President of the Federal Reserve 11°1( of Minneapolis, to send to Washington the recordings of three Of the broadcast programs which had been prepared by the Minneapolis bawl, and that it was his (Mr. Davis) suggestion that these record111ge be Presented during the late afternoon of the first day of the Clirillen's Conference. Mr. Davis' suggestion was agreed to unanimously. It was also agreed (1) that arrangements should be made for a dinner on the evening of December 5 to be attended by the Chairmen, the members of the Board, and Messrs, Morrill, Clayton, Thurston and Goldenweiser, the cost of the dinner to be paid by the Board and an ! .Ppropriate amount added to the miscellaneous account 111 the general budget for 1939 to cover such cost, (2) that the Assistant Secretary should send a telegram today to the Chairmen extending to them an invitation tO attend the dinner and stating that it seemed certain that the Chairmen's Conference will run into the second day and that the Board hoped they would be able to arl'alage their affairs to be present on the second day, !ad (3) that arrangements should be made by the SecreuarY's office for a set luncheon in the large dining room for the Chairmen, and the members of the Board on both days of the conference. Mr. McKee stated that he understood that the Temporary Naconomic Committee has scheduled hearings in the near future 14183 12/1/39 —3- 04 the question of investment funds and investment securities and he raised the question of the desirability of having representatives of the Board's staff attend the hearings. It was agreed unanimously to request Messrs. Glenn M. Goodman of the Division of Examinations, Lnd A. B. Hersey of the Division of Research and Statistics, to attend the hearings. Mr. McKee referred to a letter dated October 25, 1939, rxiom— - -zesi(ent Young of the Federal Reserve Bank of Boston with Which was enclosed a copy of a letter dated October 20, 1939, from he President of the Meriden Trust and Safe Deposit Company of den, Connecticut, in which inquiry was made whether the trust e°4411Y) in making loans in various trust capacities only and not it e own account, would be held to be engaged in making real loans within the meaning of the Board's Regulation L, Inter- 1oc1-1hg Bank Directorates under the Clayton Act. The letter said that this question may be of importance in determining whether six nle.nibel s of the board of trustees of the trust company could ' contirl to serve the trust company and The Home National Bank and The 1, 4"ide11 National Bank, both of Meriden, Connecticut. A draft Or ze Ply to the letter from President Young of the Federal Reserve Bawc °r Boston had been prepared in which the opinion was expressed that °/1 the basis of the information available, the trust company 1484 12/1/39 -4- would be considered as engaged in one of the same classes of business as a national bank which makes real estate loans in other then a fiduciary capacity. Mr. McKee stated that when the draft l'sPlY reached his desk he suggested that further investigation °t the matter be made, that Mr. Chamberlin of the Division of ExamWent to Meriden for this purpose, and that the results of his investigation were set forth in a memorandum under date of N°Irenber 17, 1939. Mr. McKee also referred to a letter which he had received 4114 "date of November 9, 1939, from the President of The Detroit 131111kt Detroit, Michigan, raising the question whether the prohibiticlls of the Clayton Act would apply to an interlocking relationelliP between the Detroit Trust Company, which has no deposit ha811d a bank which does no fiduciary business. After discussing some of the circumstances surrounding the two cases to which he had referred, Mr. McKee suggested that the Board give consideration to taking the position that as long as a tzust eanpany does not accept deposits it would be regarded as not engaged in the same class of business within the provisions or Ilsgq1ation L as a bank which does receive deposits but does not ex. '''() fiduciary Powers. .1.485 -5Mr. McKee's suggestion was discussed in the light of the legislative history of the Clayton Act and the provisions of Pegtiletion L. During the discussion Mr. Wyatt stated that Mr. McKee's sliggestion might be made effective by (1) amending the Regulation 813eeifically to permit an interlocking relationship between a trust °°111PanY which does not accept deposits and a member bank which does erercise fiduciary powers, or (2) by ruling that such a trust "rillperlY is "not engaged in a class or classes of business" in which the viewer 13 bank is engaged. He also said that the two cases pre- Sellted by Mr. McKee were borderline cases, that if the Board decided to take action he felt the best method of procedure would be by an ellie"rasnt to the regulation which would be in accordance with the statu turY authority of the Board to permit interlocking relation8/148 between a member bank and not more than one other bank, and 1414 ruling under the existing regulation that the trust company tlot engaged in the same class or classes of business might be held to be contrary to the basic philosophy of the Clayton Act. At the conclusion of the discussion, Counsel's Office was requested to draft an amendment to Regulation L alone the lines referred to by Mr. Wyatt for consideration at a meeting of the Board to be held on the morning of Monday, December 4, 1939, at 10:30 a.m. 148E 12/1/39 -6- During the consideration of this matter Mr. Thurston left the /fleeting. Mr. Davis stated that it had been ascertained that Warren Whittier, a farmer, dairyman, and cattle breeder in Douglass17111e, Pennsylvania, was willing to accept appointment as a Class C director of the kederal Reserve Bank of Philadelphia and that it the recommendation of the Personnel Committee that he be aped for the remainder of the three-year, term ending December 31, 1940. In accordance with the recommendation of the Personnel Committee, Mr. Whittier was appointed a Class C director of the Federal Reserve Bank of Philadelphia for the unexpired portion of the three-year term ending December 31, 1940. The minutes of the meeting of the Board of Governors of the 441'14. Reserve System held on November 30, 1939, were approved 1111(1111111ousiy. Thereupon the meeting adjourned. Assistant Secretary.
@FedFRASER