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1_836 Minutes of actions taken by the Board of Governors of the Fed- "Ea Reserve System on Friday, December 20, 1946. PRESENT: Mr. Draper Mr. Evans Mr. Vardaman Mr. Mr. Mr. Mr. Carpenter, Secretary Sherman, Assistant Secretary Morrill, Special Adviser Thurston, Assistant to the Chairman Telecrams to Mr. Whittemore, President of the Federal Reserve kra, Of Boston; Mr. Treiber, Secretary of the Federal Reserve Bank of tiew . )rk; Mr. MeCreedy, Secretary of the Federal Reserve Bank of " -'elPhia; Mr. Dillard, Vice President of the Federal Reserve Bank or ilicago; Mr. Stewart, Secretary of the Federal Reserve Bank of St. 14011.1 Mr. Caldwell, Chairman of the Federal Reserve Bank of Kansas 4tY; and Mr. Volberg, Vice President of the Federal Reserve Bank of Silli ncisco, stating that the Board approves the establishment with- ch -4101ge by the Federal Reserve Bank of San Francisco on December 17, by th e Federal Reserve Bank of St. Louis on December 18, by the Federal Reser ve Banks of New York, Philadelphia, Kansas City, and San Francisco 011 I) ecernber 19; and by the Federal Reserve Banks of Boston and Chicago tod,e Y) of the rates of discount and purchase in their existing schedules. olt Approved unanimously. Memorandum dated December 13, 1946, from Mr. Thomas, Director or the Division of Research and Statistics, recommending that Harry 414111? Gillis, Ir., be appointed as a research assistant in the Divi- atoll °t Research and Statistics, on a temporary indefinite basis, with 1837 -2- 12/.4/46 basic salary at the rate of $2,770.20 per annum, effective as of the ri4te upon which he enters upon the performance of his duties after tiari ng passed the usual physical examination. The memorandum also 8tated that it was contemplated that Mr. Gillis would become a member 0f the Federal Reserve retirement system. Approved unanimously. Telegram to Mr. Harold D. Hodgkinson, Vim. Filene's Sons Company, 'tOn, Massachusetts, reading as follows: )s "Board of Governors of the Federal Reserve System has aPpointed you Class C director of the Federal Reserve Bank of Boston for three-year term beginning January 1, 1947, and will be pleased to have your acceptance by collect telegram." Approved unanimously. Telegram to Mr. L. Vinton Hershey, Hagerstown Shoe Company, Ii4gerst0wn, Maryland, reading as follows: "Board of Governors of the Federal Reserve System has appointed you director of Baltimore Branch of Federal Reserve Bank of Richmond for three-year term beginning Janu?a7 1, 1947, and will be pleased to have your acceptance IV collect telegram." Approved unanimously. Telegram to Mr. W. A. L. Sibley, Lionarch Mills, Union, South l'caina, reading as follows: "Board of Governors of the Federal Reserve System has appointed you director of Charlotte Branch of Federal Reserve Bank of Richmond for three-year term beginning January 1, 1947, and will be pleased to have your acceptance by collect telegram." Approved unanimously. 1838 12/20/46 Telegram to Mr. Ralph E. Plunkett, Plunkett-Jarrell Wholesale 4c)cer Company, Little Rock, Arkansas, reading as follows: "Board of Governors of the Federal Reserve System has aPPointed you director of Little Rock Branch of Federal Reserve Bank of St. Louis for three-year term beginning January 1, 1947, and will be pleased to have your acceptance by collect telegram." Approved unanimously. Telegram to Mr. Hugh M. Brinkley, Hughes, Arkansas, reading as "Board of Governors of the Federal Reserve System has aPpointed you director of the Memphis Branch of the Federal Reserve Bank of St. Louis for three-year term beginning January 1, 1947, and will be pleased to have your acceptance by collect telegram." Approved unanimously. Telegram to Mr. Rufus Green, Duncan, Oklahoma, reading as follows: "Board of Governors of the Federal Reserve System has 4APointed you director of Oklahoma City Branch of Federal I.eserve Bank of Kansas City for two-year term beginning 4anuary 1, 1947, and will be pleased to have your acceptance by collect telegram." Approved unanimously. Telegram to Mr. Hiram S. Corbett, J. Knox Corbett Lumber and tiftrd are Company, Tucson, Arizona, reading as follows: "Board of Governors of the Federal Reserve System has aPpointed you director of El Paso Branch of Federal Reserve Bank of Dallas for three-year term beginning January 1, 1947, and will be pleased to have your acceptance by collect telegram.n Approved unanimously. 1839 12/20/46 -4- Telegram to Mr. Merle G. Hyer, Lewiston, Utah, reading as follows: "Board of Governors of the Federal Reserve System has appointed you director of Salt Lake City Branch of Federal Reserve Bank of San Francisco for two-year term beginning January 11 19471 and will be pleased to have your acceptance by collect telegram." Approved unanimously. follows: Telegram to Mr. R. B. Taylor, Adams, Oregon, reading as "Board of Governors of the Federal Reserve System has appointed you director of Portland Branch of Federal Reserve Bank of San Francisco for two-year term beginning January 1, 19471 and will be pleased to have your acceptance by collect telegram." Approved unanimously. Letter to Mr. Creighton, Federal Reserve Agent of the Federal Re serve Bank of Boston, reading as follows: "In accordance with the request contained in Mr. Whittemore's letter of December 162 1946, the Board of Governors approves, effective January 11 1947, the payment of salaries to the following members of the Federal Reserve Agent's staff at the rates indicated: Name Jaepar A. Lane John F. Mooney Clifford E. Morrissey Lewis E. Stoyle Title Alternate Assistant Federal Reserve Agent Alternate Assistant Federal Reserve Agent Alternate Assistant Federal Reserve Agent Alternate Assistant Federal Reserve Agent Annual Salary $4,240 5,616 3,604 4,007" Approved unanimously. Reserve Letter to Ir. Whittemore, President of the Federal of Boston, reading as follows: 1840 12/20/46 -5- "Reference is made to your letter of December 16, 1946, advising of the salary adjustment program approved by the Board of Directors at its meeting held on that day. "The Board of Governors authorizes the Federal Reserve Bank of Boston, effective January 1, 1947, to exceed maximum annual salaries under its personnel classification Plan by 30 per cent of the first $3,000, provided that any increase granted under this authorization shall not cause the total annual salary of any employee to exceed the rate of $7,500 per annum. "This authorization supersedes the authorization to exceed maximum salaries contained in the Board's letter of n ovember 16, 1945, and is granted as a temporary measure for post war adjustments pending revision of your personnel classification plan." Approved unanimously. Letter to Mr. Guthrie, Vice President and Cashier of the Federa' Reserve Bank of Richmond, reading as follows: "The Board of Governors approves, effective January 1, 1947, changes in the ;personnel classification plan of the Federal Reserve Bank of Richmond and the Charlotte Branch, as submitted with your letter of December 16, 1946. With respect to your specific question, you are advised that the authorization to exceed maximum annual salaries contalned in the Board's letter of June 25, 1946, also applies to the maximum for the positions involved in the approved changes.it Approved unanimously. Letter to Mr. Leach, President of the Federal Reserve Bank of °Ild, reading as follows: "The Board of Governors approves the payment of salary to Mr. N. L. Armistead, Chief Examiner, Federal Reserve Bank Of Richmond, for the period from January 1, 1947, through 4141Y 31, 1947, at the rate of $7,500 per annum, which is the rate fixed by the Board of Directors as reported in your letter of December 13, 1946." Approved unanimously. 1841 12/20/46 -6- Letter to Mr. Leach, President of the Federal Reserve Bank of Richnt ond, reading as follows: . "The Board of Governors approves the payment of sal— aries to the following officers of the Federal Reserve Bank of Richmond for the period from January 1, 1947, through IlaY 31, 1947, at the rates shown, which are the rates fixed by your Board of Directors as reported in your letter of December 13, 1946: W. R. Milford Title Baltimore Branch Vice President R. L. Cherry S. A. Ligon Charlotte Branch Vice President Cashier Name Annual Salary $14,000 9,000 7,000" Approved unanimously. Letter to Mr. Powell, Secretary of the Board of the Federal Rea- Bank of Minneapolis, reading as follows: . "The Board of Governors approves the payment of sal— aries to the following officers of the Federal Reserve blank of Minneapolis for the period from January 1, 1947, through May 31, 1947, at the rates shown, which are the rates fixed by your Board of Directors as reported in Your letter of December 13, 1946: A. W. Mills Title Head Office Vice President and Cashier R. E. Towle C. J. Larson Helena Branch Vice President Assistant Cashier Name Approved unanimously. Annual Salary $9,000 8,500 5,500" 1842 12/20/46 -7— Letter to Mr. Leedy, President of the Federal Reserve Bank Ot Kansas City, reading as follows: "Reference is made to your letter of December 14, 1946, and telegram of December 19, with reference to the salary Program approved by your Board of Directors, providing for an increase of 10 per cent in the salaries of all employees. "The Board of Governors authorizes the Federal Reserve Bank of Kansas City, effective January 1, 1947, to exceed meztUmam annual salaries under its personnel classification Plan and that of its Branches by 30 per cent, plus such additional amount as may be necessary to permit an increase in the salary of each employee, other than an officer, in an amount equal to 10 per cent of his annual salary on De— cember 31, 1946, provided that any increase granted under this authorization shall not cause the total annual salary Of any employee to exceed the rate of $7,500 per annum. "This authorization supersedes the authorization to exceed maximum salaries contained in the Board's letter of JulY 3, 1946, and is granted as a temporary measure for Post war adjustments pending revision of your personnel Classification plan. "Please furnish the Board with a list of employees Who will receive salaries greater than 30 per cent in ex— cess of their respective maximum annual salaries under your Personnel classification plan." Approved unanimously. Letter to Mr. Parten, Federal Reserve Agent of the Federal ve Bank of Dallas, reading as follows: ' 11"el "In accordance with the request contained in your letter of December 12, 1946, the Board of Governors ap— proves the appointment of Mr. W. B. Kidd as Alternate As— slstant Federal Reserve Agent at his present salary of $21788.98. "This approval is given with the understanding that 141% Kidd will be placed upon the Federal Reserve Agent's pay roll and will be solely responsible to him or, during a vacancy in the office of the Federal Reserve Agent, to the Assistant Federal Reserve Agent, and to the Board of Governors, for the proper performance of his duties. 1843 12/20/46 "When not engaged in the performance of his duties as Alternate Assistant Federal Reserve Agent he may, with the approval of the Federal Reserve Agent or, during a vacancy in the office of the Federal Reserve Agent, of the Assistant Federal Reserve Agent, and the President, Perform such work for the Bank as will not be inconsis— tent with his duties as Alternate Assistant Federal Reserve Agent. "It is noted from your letter that Mr. Kidd will ex— ecute the usual oath of office which will be forwarded to the Board together with advice as to the date upon which he assumes his duties as Alternate Assistant Federal Reserve Agent." Approved unanimously. Letter to the board of directors of the "First State Bank of 144rner, S. Dak.", Mrner, South Dakota, stating that, subject to con— ditions of membership numbered 1 to 3 contained in the Board's Regula— ti°1111 and the following special condition, the Board approves the bankt _ application for membership in the Federal Reserve System and to the appropriate amount of stock in the Federal Reserve Bank of 4:414eap0li8: "4. At the time of admission to membership, such bank shall have a paid—up and unimpaired capital stock of not less than $30,000." 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 Federal Reserve System -droves the application of the First State Bank of tarner, 2' Oak., Warner, South Dakota, for membership in the Federal tteserve System, subject to the conditions prescribed in the ,r1closed letter which you are requested to forward to the ; )0ard of directors of the institution. Two copies of such -Letter are also enclosed, one of which is for your files 1844 12/20/46 -9.- H and the other of which you are requested to forward to the Superintendent of Banks for the State of South Dakota, for his information. "Since the amount of estimated losses shown in the report of examination for membership is relatively small, the usual condition of membership requiring elimination of losses has not been prescribed. However, it is noted that such losses are to be collected or charged off prior to the end of the current year." Letter to Mr. Hill, Vice President of the Federal Reserve Bank (4Philadelphia, reading as follows: "Reference is made to your letter of December 13, 1946, submitting the request of the Girard Trust Company, Philadelphia, Pennsylvania, for approval, under the provisions of Section 24A of the Federal Reserve Act, of an additional expenditure of $500,000 for alteration and improvement of bank premises. "It is noted that the institution has expended only $40,000 of the $500,000 approved by the Board of Governors on February 7, 1946, but now feels that the entire improvement program contemplated at that time may be undertaken during the next few months. "It is understood that the proposed expenditure of apProximately $1,000,000 is not to be capitalized, and in view your recommendation, the Board approves the proposed additional investment substantially in accordance with the Plan as submitted." Approved unanimously. Letter to Mr. DeMoss, Vice President of the Federal Reserve talak of Dallas, reading as follows: "This refers to your letter of December 12, 1946, with egard to the application of the South Main State Bank, rlouston, Texas, for permission to exercise fiduciary powers. "In view of the information submitted, and of your fav2rable recommendation, the Board of Governors of the Federal ,1 Tserve System grants the applicant bank permission, under 'ne provisions of its condition of membership numbered 1, 1845 12/20/46 -10- "to exercise the fiduciary powers now or hereafter authorized under its articles of association and the laws of the State of Texas. The Board's approval is given subject to acceptance by the bank of the following standard conditions prescribed in connection with the admission to membership of State banks exercising fiduciary powers: 1. Such bank shall not invest funds held by it as fiduciary in stock or obligations of, or property acquired from, the bank or its directors, officers, or employees, or their interests, or in stock or obligations of, or property acquired from, affiliates of the bank. 2. Such bank, except as permitted in the case of national banks exercising fiduciary powers, shall not invest collectively funds held by the bank as fiduciary and shall keep the securities and investments of each trust separate from those of all other trusts and separate also from the properties of the bank itself. 3. If funds held by such bank as fiduciary are deposited in its commercial or savings department or otherwise used in the conduct of its business, it shall deposit with its trust department security in the same manner and to the same extent as is required of national banks exercising fiduciary powers. "You are requested to advise the South Main State Bank, Houston, Texas, of the Board's action, and to obtain an apPropriate resolution of the board of directors of the bank accepting the conditions listed above and forward a certified e()PY thereof to the Board." Approved unanimously. Telegram to Mr. Shepard, Federal Reserve Agent of the Federal Re%.11. e Bank of Minneapolis, stating that, subject to the conditions set forth- -n the telegram, the Board of Governors of the Federal Reserve 8Yatern authorizes the issuance of a general voting permit, under the 1111°Iiisions of Section 5144 of the Revised Statutes of the United States, to the "Northwest Bancorporation", Minneapolis, Minnesota, entitling 1846 12/20/46 -11- 811ch organization to vote the stock which it owns or controls of "The Union National Bank of Rochester", Rochester, Minnesota, at all meetings Of shareholders of such bank, and that the period within which a permit 1QAY be issued pursuant to the authorization contained in the telegram is limited to 30 days unless an extension of time is granted by the ?4)ard. The condition contained in the telegram upon which the permit 1748 authorized was as follows: "That, prior to issuance of general voting permit authorized herein, applicant shall execute and deliver to you in duplicate an agreement in same form as that which applicant executed on June 13, 1946, as a condition to issuance of permit dated June 18, 1946." Approved unanimously. Letter to Mr. J. W. Slaughter, President of the First Columbus National Bank, Columbus, Mississippi, reading as follows: "This refers to your letter of December 10, 1946, addressed to Governor Vardaman, regarding the absorption of exchange charges by your bank with respect to an account carried with you by the Mississippi State College for Women. "The Board's Regulation Q, relating to the payment of iterest on deposits by member banks, is based upon provisions of section 19 of the Federal Reserve Act. Among other th3-ngs, this section provides that no member banks of the Federal Reserve System shall 'directly or indirectly, by !.45r device whatsoever, pay any interest on any deposit which ls payable on demand'. The prohibition is ar)plicable to all ember banks and therefore, of course, applies to your bank. i'or the purposes of the law, the Board's Regulation defines the term 'interest' as 'any payment to or for the account of any depositor as compensation for the use of funds constituting a depositl; and the Board has taken the position that the absorption of exchalge charges by a member bank 4.?r the purpose of compensating a depositor for the use of 418 funds constitutes a payment of interest in violation of the law and the Regulation. 1847 12/20/46 -12- 11There is no exception to this prohibition which would be applicable in the case described in your letter. The Board's letter to n11 member banks of June 221 1945, to Which you make reference, stated that the absorption of exchange charges in amounts aggregating not more than $2 for aAT one depositor in any calendar month would be considered as trivial and would be disregarded. If such charges are absorbed by a member bank in greater amounts as a device for compensating depositors for the use of their funds, the practice would not be in accordance with the law and the Board's Regulation. "In connection with this matter, it may be noted that a bill known as the Brown-Maybank Bill was introduced in Congress in 1944 which would have amended the law so as to provide expressly that the absorption of exchange charges by member banks should not be deemed to be a payment of interest. 1PIlle that bill was passed by the House of Representatives, it was defeated in the Senate. Thus, while Congress had an oPportunity to review and modify the Board's interpretation of the law, it did not see fit to do so. . "In answer to your question with respect to the apPlacable penalty, there is no penalty specifically provided for violations of the provision of law in question; but, as You know, violations of the Federal banking laws by a national bank render its directors and officers subject to removal under section 30 of the Banking Act of 1933, and render the bank subject to forfeiture of its franchise under section ,,239 of the United States Revised Statutes or under section 4 of the Federal Reserve Act. "It would seem that the situation involved in this case is somewhat similar to that with respect to the collection of checks payable to the United States. It is a practice of "Ile United States Treasury to require that any check payable tO the Government shall be stamped by the depositing Government agency with a legend to the effect that the check is in payment of an obligation to the United States and must be Paid at par; and if the bank on which such check is drawn for TlY reason does not pay it at par, it will be returned to the positor in the same manner as any check which is not paid. mention this fact with the thought that, since funds of Mississippi State College for Women are State funds and since the College states that it may not lawfully pay exchange charges, you may wish to give consideration to the question whether a similar practice might be feasible with respect to checks deposited by the College. 1848 12/20/46 -13- "You of course will understand that what has been said here applies only to demand deposits and does not apply to time funds upon which the payment of interest is not prohibited but only limited." Approved unanimously. Letter to Mr. Dillard, Vice President of the Federal Reserve Bank of Chicago, reading as follows: "Question No. 2 of your letter of November 301 19461 requests advice regarding the preservation of records under section 8(a) of Regulation b. SpecificaJly, you asked Whether the 'Statement of the Borrower' required under section 4(d) of the Regulation need be preserved after a credit has been revised in accordance with the Regulation. "Briefly, section 8(a) requires a registrant to preserve relevant documents for the 'life of the obligation '!.0 which they relate'. This, of course, includes the 'Statement of the Borrower'. "The Board's view is that 'the obligation', as that term is used in section 8(a), means the original obligation with respect to which the Statement was procured, therefore, does not require the preservation of the tatement executed in connection with any such original obligation after a new obligation has arisen by virtue of a revision of the old credit. "The enforcement problems that may arise under the foregoing and which you mention are recognized and have been considered. Should such problems prove to be substantial, future consideration of the matter, of course, would be desirable." Approved unanimously. Letter to the Presidents of all the Federal Na.A4 ' -u-ng as follows: eserve Banks, "The consensus of replies received from the Federal Reserve Banks to the Board's letter of August 12, 19461 was "efinitely in favor of the proposal to collect monthly figures of loans, United States Government securities, and Other securities from member banks. However, a number of the Reserve Banks indicated a preference for a separate 1849 12/2 0/46 IT form for reporting the three items instead of the addition of the items to the reports of deposits submitted for reserve computation purposes as was outlined in the Board's letter. "After further consideration the Board has approved a new form, F. R. 'Loans and Securities of Member Banks', a copy of which is enclosed and a supply of which will be sent you under separate cover. Reports on this form should be obtained by your Bank from all member banks in your district, other than those that submit weekly condition reports, as of the last Wednesday in each month beginning with January 1947. "Although the report form calls for only three items readily available on the books of all banks, it will provide, together with the weekly reporting member bank series, monthly figures showing changes in loans and securities of all member banks, which will be a very useful current supPlement to the more detailed call report figures. It will also provide, in conunction with the deposit figures already available, statistics of all of the principal assets and liabilities of member banks. It is planned to publish the results in the Federal Reserve Bulletin. "The Board's form F. R. 635, on which the Federal Reserve Banks now report end-of-month summary figures of deposits, reserves, and borrowings, has been revised to include the items to be reported by member banks on the new form F. R. . Provision has also been made for showing estimates of non-reported assets, liabilities, and capital accounts; the summary report form, in other words, is in condensed balance-sheet form. A copy of the revised form F. R. 635 is enclosed and a supply thereof will be sent to YOU under separate cover. It will be appreciated if you will furnish the Board with reports on the revised form F. R. 635 beginning with the last Wednesday of January 1947. If the underlying reports of some of the smaller member banks d-re unduly delayed, estimates should be made by your Bank so that your summary report may be forwarded to the Board as soon as practicable. It is hoped that after the first month o y,r two these summaries can be completed in time to reach the u'oard within three weeks after the date to which they relate." Approved unanimously. Letter to the Presidents of all the Federal Reserve Banks readas follows: 1850 12/20/46 -15- "It is desired that the regular annual reports of holding company affiliates on Form F. R. 437 be obtained for the year ending December 31, 1946, or for the holding company affiliate's latest fiscal year if it differs from the calendar year. Accordingly, please request each holding comany affiliate which has its principal executive Office in your district, and which holds a general voting permit, to file such a report in duplicate with your Bank not later than February 1, 1947. "Please inform us as to the number of copies of Form F R -• 437 which your Bank will need, in excess of its nresent stock, in obtaining the reports of holding company affiliates in your district. The form has not been revised. "It is requested that the annual reports of the holding company affiliates for 1946 be obtained and processed 110,7 your Bank in the same manner as that set forth in the Board's letter of December 19, 1945, regarding the annual reports for 1945. "The possibility of consideration of bank holding company legislation by the Congress at an early date emPhasizes the desirability of having the information contained in the reports available in the Board's files as Promptly as practicable after the end of the year. Accordingly, it is important that one copy of each report be !,orwarded to the Board immediately upon receipt by your bank. There should follow, of course, as soon as practicable, the processing of the reports by your Bank in the manner described in the Board's letter of December 19, 1945." Approved unanimously. Telegram to Ur. Knoke, Vice President of the Federal Reserve -. vl New York, reading as follows: "Your telegram December 19. Board approves extension Of loan by your Bank to Banque de Grece not to exceed 0-0,800,000 outstanding at any one time, such loan to be secured by gold earmarked in your vaults. It is understood that the loan is to be made on the following terms and condltions: (a) Such loan to be made up to 98 per cent of the 17alue of the refinaigold bars held in your vaults as collateral; (b) Such loan to run for three months; and (c) interest to be at one per cent per annum (discount ' l a'e of your Bank) on the amount actually advanced. 1851 -16- 12/20/46 "It is further understood that it is not the present intention of your Bank to consider favorably any request for a further extension beyond March 1947. It is also understood that the usual participation will be offered to the other Federal Reserve Banks." Approved unanimously. Letter to Mr. Peterson, Assistant Cashier of the Federal Re"'e Bank of Minneapolis, reading as follows: "This refers to your letter of November 20 regarding the provisions of the 'Rules for Uniform Application by !ederal Reserve Banks in Waiving Penalties for Deficiencies In Reserves for Member Banks', enclosed with the Board's letter S-902 of i.larch 5, 1946. . "Under the provisions of leragraph D penalties for deflciencies in reserves which do not exceed 2 per cent of the required reserves may be waived once in any two-year period regardless of any penalties the Federal Reserve Bank may have waived under paragraphs A, B, or C of the Board's letter. The authority granted in any one of the 13,.ragraph8 A to E may be exercised by the Reserve Bank without reference to any penalties that may have been 'aived under any of the other paragra-ths. There seem to be no reason, therefore, for a deficiency in reserves of the kind described in paragraph C, with respect to which no penalty is assessed, to be handled as an adjustment of required reserves rather than as a waiver of penalties." Approved unanimously. Uemorandum dated December 18, 1946, from Mr. Smead, Director c't the D ivision of Bank Operations, submitting requests from the FedeN/Reserve Banks for authority to pay the regular semiannual dividerld at the end of 1946, and to make charge-offs or other year-end 643u3tments. The memorandum stated that current earnings for 1946 would be 4144.0%.4__ -4-mately $150,400,000 and current expenses would amount to about 1_852 12/20/46 -17leaving current net earnings of $93,300,000; that addi- tiete to current net earnings, including $1,800,000 profits on sales of Ge'vernment securities, would amount to about $2,000,000; that deduct:1°4s from current net earnings would approximate about $2,700,000, in114ing $2,100,000 covering special payments to the Retirement System 414 $400,000 for additions to the reserve for registered mail losses. The Payments to the Retirement System were made to cover the accrued liability created by the amendments to the rules and regulations apProved by the Board on June 26, 1946, and are due primarily to the challge in the method of computing average annual salaries for purposes (If re tirement allowances. 492)600,000. Net earnings for the year were estimated at Payments to the Treasury under the provision of Section 13b 0f the Federal Reserve Act were expected to be about $69,000 and Metter bank dividends $10,975,0001 leaving net earnings available for tl'allsfer to surplus (Section 7) of about $81,610,000, and transfer to 8111.4,1 , - v-1-118 kSection 13b) of about $10,000. The memorandum further stated that additions to the reserve for l'egietered mail losses under the Loss Sharing Agreement of the Federal "ve Banks will amount to about $375,000 which, under the Board's Illetructions Governing the Preparation of Earnings and Expense Reports and b 'roflt and Loss Statements, are to be charged to profit and loss. Recommendations contained in the memorandum with respect to the requests of the Federal Reserve Banks were approved unanimously as follows: 1853 12/20/46 -181. Each Federal Reserve Bank was authorized to pay the regular semiannual dividend on December 31, 1946, estimated to amount to a total, for the twelve Banks of 1'6,549,000. 2. The Federal Reserve Bank of Cleveland was authorized to make charge-offs of $122,901,32 on its bank premises and the carrying value of the building site recently acquired in Pittsburgh. 3. The Federal Reserve Bank of Minneapolis was authorized to write down the carrying value of the addition to the Helena Branch building by $27,314.40. APPrOved:
@FedFRASER