The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
1808 A meeting of the Board of Governors of the Federal Reserve SYstelll was held in Washington on Thursday, December 18, 1941, at 11:30 PRESENT: Mr. Mr. Mr. Mr. Mr. Eccles, Chairman Ransom, Vice Chairman Szymczak McKee Draper Mr. Morrill, Secretary Mr. Bethea, Assistant Secretary Mr. Clayton, Assistant to the Chairman The action stated with respect to each of the matters hereinreferred to was taken by the Board: Per, The minutes of the meeting of the Board of Governors of the Reserve System held on December 17, 1941, were approved unani- 1401,181 . Memorandum dated December 16, 1941, from Mr. Nelson, Assistant Seelleta17, recommending (1) that Kenneth G. Emery, an elevator operator, be 0l):1°.tecl to the position of clerk in the Secretary's Office on a Permaalent basis and that his salary be increased from $1,200 to $1,440 Der. a tralm, effective January 1, 1942, and (2) that James H. Campion, i) be appointed as an elevato r operator in the Building Operation and 414itit, enance Section of the Secretary's Office on a temporary basis for arl definite period with salary at the rate of 1,200 per annum, ef- rect. of the date upon which he enters upon the performance of d ilties .knation. after having passed satisfactorily the usual physical exam- Approved unanimously. 1809 12/18/41 -2- Memorandum dated December 16, 1941, from Mr. Nelson, Assistant Secretary, recommending (1) that Thomas G. Cook be appointed on a temPorary basis for an indefinite period as a chauffeur in the Secret417's Office, with salary at the rate of $1,200 per annum, effective 4 of the date upon which he enters upon the performance of his duties after —"lrig passed satisfactorily the usual physical examination, and (2) that the salary of C. 1%. Spargo, chauffeur in the Secretary's Office be increased from $1,380 to $1,500 per annum, effective January ' 1 1942. Approved unanimously. M emorandum dated December 11, 1941, from Mr. Goldenweiser, 41*eetc3r of the Division of Research and Statistics, recommending that Itse tether H. Larson be appointed on a permanent basis as a clerk in that 13ivieion, with no change in salary at the rate of t1,440 per aneffective at the expiration of her temporary appointment at the el°8e Of business on December 21, 1941. Approved unanimously. Letter to Mr. Meyer, Assistant Cashier of the Federal Reserve Chicago, reading as follows: per "The Board of Governors approves the changes in the Brar!i°2nel classification plan of your Bank and the Detroit 1941. ! as requested in your letters of December 12 and 13, Approved unanimously. 1810 12/18/41 -3Letter to Mr. Young, President of the Federal Reserve Bank of 1308ton, reading as follows: "This refers to your letter of November 13, 1941, and 1-ts enclosures, requesting the Board's views with respect to certain questions in connection with a proposal of Pilm Trust Company, Boston, Massachusetts, to transfer the ullding in which its banking quarters are located to a ?orporation to be organized to hold and operate the build11:1g, the bank acquiring all of the stock of such corporation• "The Board concurs in your Counsel's opinion that, in View of the provisions of section 24A of the Federal Reserve ' et relating to investments by member banks in such stock, section 9 of the Federal Reserve Act and section 5136 of the Revised Statutes should not be construed to prohibit he purchase by a State member bank of stock of a corporaion holding the bank premises of the bank. "However, the Board cannot agree that section 24A Should be treated as an implied exception to section 23A 141, the Federal Reserve Act and is of the opinion that, juere the corporation has been organized subsequent to 4une 16, 1934, the right to purchase the stock thereof is subject to the limitations of section 23A with respect se investments by member banks in stock of affiliates. tj'ion 23A, as amended by the Banking Act of 1935, conselns an exception stating that the provisions of such letli-on shall not apply to any affiliate 'engaR7ed on June ;711-1 0 -2E, in holding the bank premises of the member bank pro" which it is affiliated or in maintaining or operating daj7rt1es acquired for banking purposes prior to such ' Act • As originally enacted, as a part of the Banking goinof 1933, section 23A contained, instead of the foresecj , an exception stating that the provisions of such ill Ilion should not apply to any affiliate 'engaged solely it i°1ding the bank premises of the member bank with which the /83 affiliated'. Section 24A, also enacted as a part of scribanking Act of 1933 and not subsequently amended, pre23A) es limitations (more liberal than those of section b4nk uPcIn the amount which a member bank may invest in Pr premises and certain other assets representing bank Prezi-es, including stock 'of any corporation holding the zak of such bank'. Pointing out that, when sections and 'fld 24A were originally enacted, the exception in r 1811 /2118/41 -4- section 23A exempted only affiliates engaged solely in holding bank premises but the purchase of stock permitted by section 24A (with its more liberal limitations as to amount) was not restricted to stock of corporations solely so engaged, your Counsel argues that, since both sections were adopted as a part of the same Act, it may be logically contended that Congress saw no conflict between them and that section 24A formed an implied exception to the restrictions of section 23A, an exception not affected by t.ihe amendment to section 23A in 1935 referred to above. c3wever, the Board is of the opinion that, since Congress dealt expressly with the application of section 23A to orpnizations engaged in holding bank premises by incorporat44C an exception in that section, it is not warranted in concluding that by enacting section 24A, Congress intended scit the same time to create by implication another exception with the same subject matter, particularly as it appears to the Board that the two sections can be otherreconciled. t, "Possibly an argument might be made that the transactrn contemplated by Pilgrim Trust Company does not involve cr investment of 'funds' of the bank in stock of the new Ar'Poration and, therefore, is not governed by section 23A. dos°, conceivably, it might be argued that the transaction tl,e8 not involve an investment in stock of an affiliate on grounds that there would be no affiliate relationship to the investment. However, the Board can not accept cle!e,highly technical arguments which appear to be so 'rtY contrary to the intent and purposes of section 23A. an e_ AS Your Counsel mentions, section 23A also contains -Aception to the effect that the provisions of such sec'not ballZtJa balances apply to indebtedness of any affiliate for due a bank on assets purchased from such oplalt4' In view of this exception, the Board is of the a c4on that a member bank can sell its bank premises to receiP°ration organized to hold and operate such premises, a italv-Ing therefor all of the stock of the corporation at 23A aue not exceeding the limitations prescribed by section r a note of the corporation for the balance of the purehlase price. tra,_ It has been assumed of course, that if the proposed be 'raction • 18 consummated the true nature of the asset will gene Y disclosed in all statements of condition issued for allbm.11 i as well as in call reports o condition -"tednformation to the supervisory authorities." i Approved unanimously. 1812 12/18/41 -5Letter to Mr. George W. Fitch, Managing Director of the Retail ure Association of California, San Francisco, California, reading 48 follows: "This will acknowledge your letter of December 1 raaking a suggestion on behalf of the Retail Furniture Association of California that Regulation W be amended to P?ohibit misleading advertising concerning credit terms. The Board is always glad to learn the opinions of merchants ,id trade associations concerning RegulationW and is par41cular1y grateful for your constructive suggestions and cooperative spirit shown by your letter. t. "One of several problems that will arise in connec1°n with this subject is the difficulty of prohibiting Tisleading advertising and at the same time avoiding interoe with advertising of a legitimate nature. The Board e hoPed that the trade itself would bring to an end this type 1_of advertising, and in many localities sellers and ';', nders have : accomplished much in this regard. You may be eured that the Board is not unmindful of the problem. Re "As You are doubtless aware, the administration of W is decentralized among the twelve Federal Reserve fur Banks and you may find it more convenient to address ser_ner suggestions on this regulation to the Federal Reve Bank tiv of San Francisco. Thank you for your informae letter." aj h:ren Approved unanimously. Letter to the Comptroller of the Currency, reading as follows: with 417t is respectfully requested that you place an order the the Bureau of Engraving and Printing, supplementing pe,order requested June 14, 1941, for the printing of de'r17,1 reserve notes of the 1934 Series in the amount and lanctral.nation stated for the Federal Reserve Bank of CleveDenomination 85 Number of sheets 167,000 Amount ,110,020,000" Approved unanimously. 1813 Thereupon the meeting adjourned.
@FedFRASER