The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
1805 A meeting of the Board of Governors of the Federal Reserve SYstem was held in Washington on Friday, December 3, 1943, at 10:30 a41. PRESENT: Mr. Ransom, Vice Chairman Mr. Draper Mr. Evans Mr. Morrill, Secretary Mr. Carpenter, Assistant Secretary Mr. Clayton, Assistant to the Chairman The action stated with respect to each of the matters hereinafter referred to was taken by the Board: Telegrams to Messrs. Treiber, McCreedy, and Clouse, Secretaries of the Federal Reserve Banks of New York, Philadelphia, and Cleveland, resPectivelY, Mr. Dillard, Vice President of the Federal Reserve Bank Of Chicago, Mr. Stewart, Secretary of the Federal Reserve Bank of St. Loui_, a Mr. Caldwell, Chairman of the Federal Reserve Bank of Kan8" citY, and Mr. Hale, Secretary of the Federal Reserve Bank of San .‘l'anoisco, stating that the Board approves the establishment without Chan ge by the Federal Reserve Banks of St. Louis and San Francisco on 4°17"lber 30 and the Federal Reserve Banks of New York, Philadelphia, Cleveland, Chicago,Kansas City, and San Francisco on December 2, 1943, of the rates of discount and purchase in their existing sched- Approved unanimously. Letter to Mr. Neil G. Greensides, Acting Chief of the Division 1806 12/3/43 -2- °r Examination, Federal Deposit Insurance Corporation, Washington, D. C*, reading as follows: "In accordance with the request contained in your letter of November 29, 1943, the Board of Governors of the Federal Reserve System hereby grants written consent, pursuant to the provisions of subsection (k)(2) of Section 12B of the Federal Reserve Act, for examiners for idle Federal Deposit Insurance Corporation to make an examination of the Bank of Millen, Millen, Georgia, in connection with its application for continuation of insurance after withdrawal from membership in the Federal Reserve System. "There are no unfulfilled conditions nor incomplete corrective programs with respect to the member bank in Connection with which the Board would suggest incorporation of conditions for continuing its status as an insured bank." Approved unanimously. Letter to Mr. D. J. Needham, General Counsel for the American 13ankerS Association, Washington, D. C., reading as follows: "I have read with interest the letter from Mr. Hugh McLean of the Colorado National Bank, Denver, Colorado, dated November 1, 1943, to Mr. Selecman, which was enclosed with your letter of November 9, 1943. We have recently had under consideration a number of questions (3wing out of the Board's ruling regarding the absorption exchange charges which was published in the Sep1943 issue of the Federal Reserve Bulletin; and swur letter has been delayed because of its ont %1:143r to these questions. "It is my understanding that in the case mentioned by Mr. McLean, the bank in question, in analyzing its earnings and expenses, credits its trust department with a share of the net earnings of the bank in the same ratio as the net available balance carried by the trust department in the commercial department bears to the total f 18O 12/3/43 -3earning assets of the bank. I assume that this credit given the trust department only as a part of the bank's internal plan of analysis, and that no part of the credit is given to any beneficiary of funds in the trust department or to any other person outside the bank. "As you know, the Board based its ruling with respect to the absorption of exchange charges on the ground that such absorption involved a 'payment' by the particular member bank to its depositors as compensation for the use c)1 funds. It is my opinion that the allocation of a por-?ion of the earnings of a bank to its trust department in the manner described in Mr. McLean's letter, merely as a part of the bank's internal analysis of its earnings and expenses, cannot be considered a 'payment' of interest for the reason that no outside party receives any benefit from this allocation. "In accordance with your request, I am returning to You the copy of kir. McLean's letter." Approved unanimously. Letter to Mr. Ernst, The Dealers Building Products Company, Pittsburgh, Pennsylvania, reading as follows: "This is in reply to your letter of November 10, 1943, suggesting that section 8(m) of Regulation V:which exempts certain fuel conservation credits, and which was ,added to the regulation by Amendment No. 6 dated July 1942 he amended to include the installation of Plain o; granule surfaced rigid insulation'. You mention a recent change in Conservation Order L-41 of the War .ion Board which exempted this material from t l=t "The Board has no present intention of changing Regulation V: to parallel Conservation Order L-41. That Order limits construction in order to conserve materials, construction equipment, labor and transportation. As we understand it, the War Production Board has concluded that restrictions can be relaxed on 'plain or granule surfaced rigid insulation' because the supply of that material is not seriously inadequate. "Regulation V:, on the other hand, is designed to control consumer credit, to place some restraint on the addition of credit dollars to the already greatly swollen 1808 12/3/43 -41! purchasing power of the public and thus to help in some measure to keep prices from getting entirely out of hand. The Board has felt that it was justified in providing exemptions from this control only in those cases where there were very strong reasons for doing so. In considering the Problem of fuel conservation, the Board concluded that it could not go so far as to exempt all activities that in some degree would save fuel, but could exempt only those of relatively low cost and with high fuel conservation value in proportion to cost. It was suggested to us at tLie time Amendment No. 6 was adopted, and subsequently, that the materials you refer to, as well as a number of ?thers, should be included in the exempt category, but it was decided that they fail to meet the requirements." Approved unanimously, together with a similar letter to Mr. A. F. Goodman, Assistant Manager of the Finance Department, The Cleveland Trust Company, Cleveland, Ohio. Thereupon the meeting adjourned. 1100'10j.)2e Secretary. Approved: Vice Chairman.
@FedFRASER