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1583 A meeting of the Board of Governors of the Federal Reserve System was held in Washington on Saturday, December 16, 1939, at 10:30 a.m. PRESENT: Mr. Mr. Mr. Mr. Szymczak McKee Davis Draper 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 herereferred to was taken by the Board: The minutes of the meeting of the Board of Governors of thePederal Reserve System held on December 15, 1939, were approved 114(1Mously. Letter to the board of directors of the "East Side Trust & 411111gs Bank", Chicago, Illinois, stating that, subject to con441°118 of membership numbered 1 to 3 contained in the Board's H and the following special condition, the Board ap151*(4.ea the bank's application for membership in the Federal Reserve te and for the appropriate amount of stock in the Federal Reserve 11 c of Chicago: n4. Such bank shall make adequate provision for depreciation in its banking house." 1584 12/16/39 -2Approved unanimously, together with a letter to Mr. Schaller, 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 'East Side Trust & bavings Bank', Chicago, Illinois, for membership in the 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 °tiler of which you are requested to forward to the uditor of Public Accounts for the State of Illinois lor his information. "It is assumed that the matter of reducing the excess balance carried with a nonmember bank to withia statutory limits will be followed by your office." Letter to the board of directors of the "Powder River C:4ty Bank", Broadus, Montana, statinL,! that, subject to conditiolas of membership numbered 1 to 3 contained in the Board's Reglo H and the following special conditions, the Board approves te 1331kt s application for membership in the leederal Reserve Systell4" cl for the appropriate amount of stock in the P'ederal Re- serve Ballk of Minneapolis: "4. Such bank shall make adequate provision for depreciation in its banking house and furniture and fixtures. n5. Such bank shall increase the number of its directors to not less than 5, the minimum number required in the case of all member banks under the provisions of Section 31 of the Banking Act of 1933, as amended." 1_585 12/16/39 Approved unanimously, together with a letter to Mr. Peyton, President of the Federal Reserve Bank of Minneapolis, reading as follows: "The Board of Governors of the Yederal Reserve SYstem approves the application of the ?Powder River County Bank', Broadus, Montana, for membership in the 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 or such letter are also enclosed, one of 'which is for your files and the other of which you are requested to forward to the Superintendent of Banks for the State of Montana for his information. "If practicable, the increase in the number of directors required by condition of membership numbered 5 Ilc)uld be effected prior to admission of the bank to mempership. However, the Board will not object to the adIllission of the bank with only four directors provided 8tsPs will be taken promptly to increase the number to 5." Letter to the board of directors of the "Schertz State Schertz, Texas, stating that, subject to conditions of membel.shiP numbered 1 to 3 contained in the Board's Regulation i and the r011°wing special condition, the Board approves the bank's 41Qication for membership in the Irederal Reserve System and for the ap propriate amount of stock in the Federal Reserve Bank of "4. Such bank shall make adequate provision for depreciation in its banking house and furniture and fixtures." Approved unanimously, together with a letter to Mr. Gilbert, President of the Federal Reserve Bank of Dallas, reading as follows: 12/16/39 -4- "The Board of Governors of the Eederal Reserve System approves the application of the 'Schertz State Bank', Schertz, Texas, for membership in the 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 Commissioner of Banking for the State of Texas for his information. "On the date of examination for membership the bank 17618 carrying a balance in excess of 10 per cent of its capital and surplus with a nonmember bank. It is assurned that the management's attention has been or will be .?.8.11ed to the fact that under the provisions of section t9 of the Federal Reserve Act the amount which a member lank may keep on deposit with a nonmember bank is limlted to 10 per cent of its own capital and surplus. "The papers submitted with the application did not include a copy of the form of capital debentures which !he bank has outstanding to the Reconstruction Finance uorporation, and it will be appreciated if you i1l forward such a copy to the Board for its records." Letter to Mr. N. C. Lenfestey, Cashier, The National City 41,11).t °r New York, New York, New York, reading as follows: "This refers to your letter of December 6, 1939, tra namitting an application of The National City Bank New York for an extension until January 1, 1941 of "°.e time within which the national bank may invest an - dditional amount up to 0.,000,000 in the stock of 'liternational Banking Corporation, a corporation which :as entered into an agreement with the Board of GovPursuant to the provisions of 6ection 25 of the li!rral Reserve Act. It appears that the national bank, er the permission originally granted December 31, „35 by the Board of Governors to invest additional iltclults up to ,p5,000,000 in the aggregate in stock of Corporation, has so far invested .4,000,000, and the ofli ission for the investment of the remaining ,1,000,000 ' he original authorization expires January 1, 1940. 15E37 12/16/39 -5- "Pursuant to such application, the Board of Governors of the Federal Reserve System hereby extends until January 1, 1941 the time within which The National City Bank of New York may invest, under the authorization originally granted December 31, 1935, additional amounts not exceeding 1.,000,000 in the aggregate in the stock of International Banking CorPoration, provided, however, that the total investment of The National City Bank of New York in the stock of banks or banking corporations under the provons of Section 25 of the iederal Reserve Act (insuch c1,0n0,000 or the portion thereof proPosed to be invested) does not exceed 10 per centum Or its paid-in capital stock and surplus at the time slich additional investments of not exceeding ::1,000,000 are made. "It wil] be appreciated if you will advise the /30ard of Governors through the Pederal Reserve Bank Of New York, of any investments made under the auabove mentioned." Approved unanimously, for transmission through the Eederal Reserve Bank of New. York. Letter to Mr. Young, Vice President of the Federal Re0 ank of Chicago, reading as follows: "Reference is made to your letter of December 11, 1239, submitting for consideration the investment by ' 'he Earmers State Bank of Waupacat, Waupaca, Wisconsin, o er 429,000 in a bank building, which through inadvertnce was not submitted to the Board in advance in ac, e°I ' dance with the provisions of condition of membership -UMbered 8. "It has been noted that in /ebruary 1938 the bank ren -JAlested permission to invest 00,000 in the purchase 11111(1 alteration of the property which it was occupying yleidel' a lease and that you advised the bank that while Were unwilling to recommend such investment, conj , . el'ation would be given to an investment not exceedthe bank's common capital of 430,000. It appears IV the bank proceeded with the purchase of the pro'ItY and on October 2, 1939 completed the transaction 1588 12/16/39 -6- "Which resulted in an investment of Q,29,000 in a banking house. In this connection, it has been noted in the report of examination of the bank, as of June 19, 1939, that 5,002.91 was also expended to remodel the banking room which amount was charged to furniture and fixtures account. "In view of all the circumstances and in accordance . With your recommendation, the Board interposes no objection to the investment by The iarniers State Bank of aupaca of the amount indicated in a banking house and it is requested that you advise the bank accordingly. It is suggested, also, that you acquaint the bank with the Board's views, with which you are familiar, with respect to making adequate provision for depreciation in banking quarters owned." Approved unanimously. Letter to Mr. Guy T. Belvering, Commissioner of Internal 1/eve , "lie) reading as follows: "This refers to your letter of December 4, 1939, relating to the procedure to be followed in connection with the issuance of certificates by the Board as required by section 26(d) of the Reveliue Acts of 1936 and 1938 and the Internal Eevenue `'eds with respect to the credit allowed holding company affiliates for income tax purposes. "The procedure outlined in your letter is sattar actory to the Board and, upon receipt of advice that of tax-payers claiming the credit are available ret1111ns li Jr inspection in Viashington, the Board will apply to re " Secretary of the Treasury for permission for its ePresentatives to make such inspection. "Your cooperation in this matter is appreciated." Approved unanimously. Thereupon the meeting adjourned.
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