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2019 A meeting of the Board of Governors of the Federal Reserve Systftwas held in Washington on Friday, December 21, 1945, at 11:00 a.mPRESENT: Mr. Mr. Mr. Mr. Ransom, Vice Chairman McKee Draper Evans Mr. Carpenter, Secretary Mr. Connell, General Assistant, Office of the Secretary Mr. Morrill, Special Adviser Mr. Thurston, Assistant to the Chairman The action stated with respect to each of the matters hereinafter referred to was taken by the Board: The minutes of the meeting of the Board of Governors of the ?ecleral Reserve System held on December 20, 1945, were approved unaniill°1181y. Telegrams to Mr. Flanders, President of the Federal Reserve tank of Boston, Messrs. Treiber and McCreedy, Secretaries of the FedReserve Banks of New York and Philadelphia, respectively, Mr. 14cLarin, President of the Federal Reserve Bank of Atlanta, Mr. Dillard, Vi ee President of the Federal Reserve Bank of Chicago, Mr. Stewart, Secretary of the Federal Reserve Bank of St. Louis, Mr. Gilbert, President f the Federal Reserve Bank of Dallas, and Mr. Earhart, Vice Presiderlt of the Federal Reserve Bank of San Francisco, stating that the approves the establishment without change by the Federal Reserve tall ks of Dallas and San Francisco on December 18, by the Federal Rere Banks of Atlanta and St. Louis on December 19, and by the Federal 2020 12/21/45 -2- Reserve Banks of New York, Philadelphia, Chicago, and San Francisco on Neember 20, 1945, and by the Federal Reserve Bank of Boston today, of the rates of discount and purchase in their existing schedules. Approved unanimously. Memorandum dated December 19, 1945, from Mr. Thomas, Director Qf the Division of Research and Statistics, recommending that Mrs. Ileea Chase Shepherd be appointed as a clerk in that Division on a telaPorary basis for an indefinite period, with salary at the rate of $2,166 per annum, effective as of the date upon which she enters upon the performance of her duties after having passed the usual physical ex.-2 --uumation. The memorandum stated that if it were found that Mrs. Shepherd had funds in the Civil Service Retirement System from former Geverimnent employment, she would continue as a member of that System; not, she would become a member of the Federal Reserve Retirement SYsteme Approved unanimously. Letter to Mr. Hilkert, Assistant Vice President of the Federal ileeerve Bank of Philadelphia, reading as follows: "The Board of Governors approves the change in the personnel classification plan of the Federal Reserve Bank of Philadelphia, involving the elimination of page 141, as submitted with your letter of December 14, 1945. " Approved unanimously. Telegram to Mr. James E. Hooper, William E. Hooper and Sons ComBaltimore, Maryland, reading as follows: 2021 12/21/45 "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 January 1, 1946, and will be pleased to have your acceptance by collect telegram." Approved unanimously. Telegram to Mr. Prentiss M. Brown, Detroit Edison Company, De' ti °1-t, Michigan, reading as follows: "The Board of Governors of the Federal Reserve System has appointed you director of the Detroit Branch of the Federal Reserve Bank of Chicago for two-year term beginning January 1, 1946, and will be pleased to have your acceptance by collect telegram." Approved unanimously. Telegram to Mr. Dorrance D. Roderick, Newspaper Printing CorpoNtion, El Paso, Texas, 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, 1946, and will be pleased to have your acceptance by collect telegram." Approved unanimously. Telegram to Mr. Ruml, Chairman of the Federal Reserve Bank of New York, authorizing him to issue a limited voting permit, under the 13110visions of Section 5144 of the Revised Statutes of the United States, to 4. he "First Securities Corporation of Syracuse," Syracuse, New York, "4tling such organization to vote the stock which it owns or controls " he First National Bank of Canastota," Canastota, New York, the ftLi verpool Bank," Liverpool, New York, and "The State Bank of Parish," ?allsh, New York, at any time prior to April 1, 1946, at the annual 2022 12/21/45 _4_. meetings of shareholders of such banks or any adjournments thereof or at any special meetings of shareholders of such banks, (1) to elect directors and act upon such matters of a routine nature as are ordillarily acted upon at the annual meetings of such banks, (2) to take arlY actions which may be necessary to effect the proposed transfers of "sets of such banks to, and the assumption of liabilities of such banks by, First Trust and Deposit Company, substantially as proposed 14 agreements, copies of which were submitted to the Federal Reserve Balmk of New York by First Trust and Deposit Company with its letters dated November 13, 1945, and November 21, 1945, and (3) to take any actions which may be necessary to effect the liquidation or dissoluti°n of such banks. Approved unanimously, together with a letter to Mr. Rouse, Vice President of the Federal Reserve Bank of New York, reading as follows: "Reference is made to your letter of December 3, 1945, submitting the request of the First Trust and Deposit Company, Syracuse, New York, for approval of the proposed purchase of assets and assumption of deposit liabilities of The First National Bank of Canastota, Canastota, New York, the Liverpool Bank, Liverpool, New York, and The State Bank of Parish, Parish, New York, and the establishment of branches in Canastota, Liverpool and Parish. "The Board concurs in your opinion that the proposed transaction will not result in a change in the general character of the assets of nor broadening in the functions exercised by the trust company within the meaning of condition of membership numbered 4 to which it is subject. "In view of your recommendation, the Board approves the establishment and operation of branches by the First Trust and Deposit Company, Syracuse, New York, in Canastota, Liverpool and Parish, all in the State of New York, provided the Proposed purchase of assets and assumption of deposit 2023 12/21/45 -5- "liabilities of The First National Bank of Canastota, the Liverpool Bank, and The State Bank of Parish is effected substantially as proposed, the prior approval of the appropriate State authorities is obtained, and Counsel for the Reserve Bank will review and satisfy himself as to the legality of all steps taken to effect the proposed absorptions and establishment of branches." Telegram to Mr. Fletcher, Vice President of the Federal Reserve 13ank of Cleveland, reading as follows: "Retel December 19, if loan is to finance purchase of stock, loan would be subject to Regulation U." Approved unanimously. Letter to Mr. Lassiter, Chairman of the Federal Reserve Bank of Ric hmond, reading as follows: "At the completion of examination of the Federal Reserve Bank of Richmond made as of October 8, 1945, by the Board's examiners, a copy of the report of examination was left for Your information and that of the directors. A copy was also furnished President Leach. "The Board will appreciate advice that the report has been considered by your Board of Directors. Any comments You may care to offer regarding discussions with respect to the examination, or as to action taken or to be taken as a result of the examination, will also be appreciated." Approved unanimously. Telegram to Mr. Sihler, Vice President of the Federal Reserve lank of Chicago, reading as follows: ' "Retel December 18, for purposes of section 4(c)(8) the date of sale of unissued securities is the date when contract is entered into, not date of settlement. Therefore, any contract to sell made prior to July 16 when section became effective would not disqualify customer from use of cash account. Also any contract to sell which offsets a contract to buy made more than 90 days prior to the contract to sell would not disqualify customer. Real question is whether when-issued contracts in these securities were eligible for cash account in 2024 12/21/45 -6- "view of agreement specified in section 4(c)(1). In most cases customer could not maintain that it was a bona fide cash transaction and that he did not contemplate selling, when the period before settlement was to be so long and indefinite. Furthermore, if he engaged in several buy and sell transactions, good faith would be seriously in question. In general we believe a further cash transaction, without cash in advance, for any customer who has sold unissued securities in a cash account is subject to question, and the broker has the responsibility of examining the circumstances in each case to determine whether or not there is good faith." Approved unanimously. Memorandum dated December 201 1945, from Mr. Foulk, Fiscal Agent, ' l scommending that an assessment of one hundred and sixty-one thousandths Of one per cent (.00161) of the total paid-in capital and surplus (sections 7 and 13b) of the Federal Reserve Banks as of the close of business December 311 1945, be levied to cover the general expenses of the (3s•rid for the six months' period beginning January 1, 1946, and that the l'ederal Reserve Banks be instructed to pay in the assessment in two ecillal instalments on January 21 1946, and March 1, 1946. The following resolution levying an assessment in accordance with the Fiscal Agent's recommendation was adopted by unanimous vote: "WHEREAS, Section 10 of the Federal Reserve Act, as amended, provides among other things, that the Board of Governors of the Federal Reserve System shall have power to levy semiannually upon the Federal Reserve Banks, in proPortion to their capital stock and surplus, an assessment ?ufficient to pay its estimated expenses and the salaries of Its members and employees for the half year succeeding the levying of such assessment, together with any deficit carried forward from the preceding half year, and "WHEREAS, it appears from a consideration of the estimated expenses of the Board of Governors of the Federal Reserve System that for the six months' period beginning 2025 12/21/45 -7- "January 1, 1946, it is necessary that a fund equal to one hundred and sixty-one thousandths of one per cent (.00161) of the total paid-in capital stock and surplus (Section 7 and Section 13b) of the Federal Reserve Banks be created for such Purposes, exclusive of the cost of printing, issuing and redeeming Federal Reserve notes; "NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, THAT: "(1) There is hereby levied upon the several Federal Reserve Banks an assessment in an amount equal to one hundred and sixty-one thousandths of one per cent (.00161) of the total paid-in capital and surplus (Section 7 and Section 13b) of each such Bank at the close of business December 31, 1945. "(2) Such assessment shall be paid by each Federal Reserve Bank in two equal instalments on January 2, 1946, and March 1, 1946, respectively. "(3) Every Federal Reserve Bank except the Federal Reserve Bank of Richmond shall pay such assessment by transferring the amount thereof on the dates as above provided through the Interdistrict Settlement Fund to the Federal Reserve Bank of Richmond for credit to the account of the Board of Governors of the Federal Reserve System on the Books of that Bank, with telegraphic advice to Richmond of the Purpose and amount of the credit, and the Federal Reserve Bank of Richmond shall pay its assessment by crediting the amount thereof on its books to the Board of Governors of the Federal Reserve System on the dates as above provided." Memorandum dated December 21, 1945, from Mr. Smead, Director of the Division of Bank Operations, submitting requests from the Federal Reserve Banks for authority to pay the regular semiannual dividend at the end of 1945, and to make charge-offs or other year-end adjustments. The memorandum stated that current earnings for 1945 would be 4PProxi1ate1y $141,600,000 and current expenses would amount to about 448, 000, leaving current net earnings of $92,900,000; that addi- ti °Ils to current net earnings, including $2,500,000 profits on sales of G°17erament securities, would amount to about $3,200,000; that deducti°11s from current net earnings would approximate $1,100,000, and that 2026 12/21/45 -8- net earnings for the year were estimated at $95,000,000. Payments to the Treasury under the provisions of Section 13(b) of the Federal Reserve Act were expected to be about $183,000 and member bank dividends $10,200,000, leaving net earnings available for transfer to surplus (Section 7) of about $84,400,0001 and transfer to surplus (Section 13(b)) of about $255,000. The memorandum stated further that the Federal Reserve Banks Of Boston and Cleveland had requested the Board's approval to make transfers from surplus to reserves for contingencies but that it was assumed, in view of the action of the Board on contingency reserves of the Federal Reserve Banks at its meeting on December 7, these requests tleed not be considered. Recommendations contained in the memorandum with respect to the requests of the Federal Reserve Banks were approved unanimously as follows: 1. Each Federal Reserve Bank was authorized to pay the regular semiannual dividend on December 31, estimated to amount to a total, for the twelve Banks, of $5,158,000. 2. The Federal Reserve Bank of Chicago was authorized to set aside a special reserve of $400,000 for air conditioning and $100,000 for installation of a new vault door in its head office building. Thereupon the meeting adjou osarza021014.-.L-tIteiLa Secretary. APProvedl------ ice hairman.
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