The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
2183 A meeting of the Board of Governors of the Federal Reserve System Wa3 held in Washington on Monday, December 7, 1936, at 11:00 a.m. PRESENT: Mr. Mr. Mr. Mr. Eccles, Chairman Ransom, Vice Chairman Szymczak McKee Mr. Mr. Mr. Mr. Morrill, Secretary Bethea, Assistant Secretary Carpenter, Assistant Secretary Clayton, Assistant to the Chairman Consideration was given to each of the matters hereinafter referred tO and the action stated with respect thereto was taken by the Board: The minutes of the meeting of the Board of Governors of the Fed- eral h —4eserve System held on December 4, 1936, were approved unanimously. Telegrams to Mr. Thomas, Chairman of the Federal Reserve Bank of 141118118 City, and Mr. McKinney, President of the Federal Reserve Bank of -482 stating that the Board approves the establishment without change the respective banks today of the rates of discount and purchase in their existing schedules. Approved unanimously. Letter dated December 5, 1936, to Mr. Rounds, Chairman, Retire4/1t. 8,,, "'sem of the Federal Reserve Banks /ork, reading as follows: Federal Reserve Bank of New "In accordance with the arrangement outlined in the -"s letter of November 25, 1936, X-9748, a copy of "1-ch is attached, all employees of the Federal Reserve eeue and Redemption Division of the office of the roller of the Currency, heretofore carried on the pay1 of the Board of Governors, have been transferred to the PaYroll of the Comptroller of the Currency, effective ecember 1, 1956. arici "Twenty-two employees of the Federal Reserve Issue , Redemption Division have been members of the retirement em of the Federal reserve banks and such membership is, BOarAt i 2184 ' 2/7/36 -2- Course, terminated by their transfer to the payroll of the Comptroller of the Currency. There are attached applications from eighteen of these members for return of their contributions with interest and applications from the four remaining members for retirement on a retirement allowance deferred to age 65. The applications of these four employ:2, Viz., Theresa Barrow, Belle Howell Bohn, Edna S. Mead, Fannie P. Meade, meet with the approval of the Board of k2overnors, with the understanding that retirement allowance Payments will not begin in any case until after the member's employment by the Government has terminated." Approved unanimously. Telegram to Mr. Clerk, First Vice President of the Federal Reserve Bk.* of San Francisco, reading as follows: "Your letter December 2 re election Class A director. following procedure is suggested for the consideration lIltlInDeputy Chairman. Prior to the time of opening and F: the ballots consideration should be given to each i ing member bank which there is reason to believe from ar , l,'°rmation at hand may be affiliated with a holding company h'!'iliate and which has not been designated to vote by such ac-Laing company affiliate. With the assistance of counsel etermination should be made by Deputy Chairman for the purPoses of this election, as to whether, on the basis of all failable information which is believed to be reliable, each au such banks is affiliated with a holding company affiliate. a eh d etermination should be made in so far as practicable _8 of the date of the certificate of the voting officer which ;rears on the face of the certificate envelope. In cases r? l it may be determined that a bank is affiliated with a company affiliate notice should be given, if possible, t , ( 43 Such bank and its holding company affiliate with the ad' lece that the holding company affiliate if it desires may eignate one of its subsidiary member banks for voting pur:e ° t by letter or telegram received by the Deputy Chairman 11,;(3re the time set for the opening of the ballots. When the -aots in the sealed certificate envelopes are removed from the ballot box the ballots of the banks determined in the aa i , r11:1er above indicated to be affiliated with holding company de'lliatea, excepting any bank which may have been validly Iliignated to vote by its holding company affiliate, should be evbharawn from and not counted in the election without, hower, removing the ballots of such banks from the sealed Certificate envelopes. While the procedure suggested above 'Y not be entirely satisfactory, it is the most practicable The 7 holc j 2185 12/7/36 raileh occurs to us in the circumstances which have developed as outlined in your letter and also appears to be not inconsistent with the law. It is realized that it may be difficult to make a determination as to whether a bank is affiliated with a holding company affiliate in certain cases, but it is believed nevertheless that a determination of this question O1' the purposes of the election must be made before opening d counting the ballots. Wherever possible, information bearingon the determination of this question should be Obtained both from the member bank affected and its supposed holding company affiliate." Approved unanimously. Letter dated December 5, 1936, to Mr. McAdams, Secretary of the "al Reserve Bank of Kansas City, prepared in accordance with the action taken at the meeting of the Board on December 1, 1936, and reading 48 r°110vis: "Reference is made to your letter of November 13, 1936, advising that the executive committee of your bank on that date had appointed Chairman Thomas to serve as an alternate member of the Federal Advisory Council at the meeting of the 0;uncil in Washington on November 16 and 17, 1936, in place to attend theMr• Kemper, who, it is understood, was unable meeting. 84, "It would appear that because of the emergency of the -"uation the committee overlooked the Board's letter of Janu!IY 8) 1916, to the Federal reserve banks, in which it was ted that it was the sense of the Board that officers of Federal reserve banks Should not serve as members of the Federal Advisory Council. A copy of the Board's letter is attach to hereto with the thought that your directors may wish p„ aye it in mind should a similar situation arise in the Lure. "In connection with the appointment of alternate members tviLa the Council attention is called to the Board's letter of ell 23, 1925, X-4296, a copy of which is inclosed, and in which it was stated that it is not believed there is any way Ivhich a Federal reserve bank may legally appoint an alternate to serve on the Council in the absence of the regularly appointed member." Approved unanimously. 2186 12/7/36 -4-Letter to the board of directors of "The Green Island Bank", Green 4411d, New York, stating that, subject to the conditions of membership numbered 1 to 3 contained in the Board's Regulation H and the following 8Pecial condition, the Board approves the bank's application for member84iP in the Federal Reserve System and for the appropriate amount of stock the Federal Reserve Bank of New York: "4. Prior to admission to membership such bank, if it has not already done so, shall charge off or otherwise eliminate estimated losses of $3,082, as shown in the report of examination of such bank as of October 13, 1956, made by an examiner for the Federal Reserve Bank of New York." Approved unanimously, together with a letter to Mr. Harrison, President of the Federal Reserve Bank of New York, reading as follows: "The Board of Governors of the Federal Reserve System 4Por °lies the application of 'The Green Island Bank', Green T land, New York, for membership in the Federal Reserve ?yst Subject to the conditions prescribed in the inclosed d;"er which you are requested to forward to the board of allieotors of the institution. Two copies of such letter are of8°,14olosed, one of which is for your files and the other walch you are requested to forward to the Superintendent Of Banks for the State of New York for his information. is understood that the bank has eleven directors, and st :It -n the report of examination made by your examiner it is haated that there are no vacancies in its directorate. It vis4 been noted, however, that, in accordance with the pro" sta. )ns of section 127 of the Banking Law of New York, the at:kholders of the bank, at their annual meeting held in op .1;!arY, 1934, adopted a resolution providing that 'the number eiruirectors of The Green Island Bank be thirteen'. In the takcumstances, it appears that subsequent action has been anden reducing the number of the bank's director s to eleven, a it will be appreciated if you will furnish the Board with a c e'PY of the document evidencing such action, together with the°PY of any approval which may have been given thereto by __ 8tate supervisory authorities, in order that the Board's record 'cords may be complete." 2187 12/7/36 -5Telegram to the Presidents of all Federal reserve banks, prepared accordance with the action taken at the meeting of the Board on tieeember 4, 1936, and reading as follows: "Trans. No. 2433. This refers to Board's letter of eoembeF 3, 1935, addressed to all Federal Reserve agents X9385)A and standard form of agreement attached thereto. know, Board at that time adopted policy of requiring that, as condition to issuance of any general voting permit, holding company affiliate execute an agreement in such form, Withrlsuch modifications or added provisions as might be deemed appropriate in particular case. "After careful reconsideration of its policy, Board has :mended standard form of agreement by deleting paragraphs umbered 4 and 5 thereof and by deleting word 'State' in !aragraph numbered 2 thereof, thus making such paragraph to subsidiary national banks as well as subsidiary nate State banks. Hereafter, with such special conditions as Y be prescribed in light of facts of particular case, Board will require that, as a condition to issuance of any sral voting permit, holding company affiliate execute resed form of agreement. "It has been Board's practice not to prescribe paragraph numbered 1 in the standard agreement when the holding company illate is a national bank, but consideration will be "i',Yen t later to question whether such paragraph should herebe prescribed in such cases. at "With respect to cases in which holding company affili1,2s have executed agreements in standard form heretofore .:4uired, appropriate action will be taken looking toward ;;ierment of such agreements in accordance with the , 4 ciPlos of the revision set forth above and you will be ad 'sed in detail at an early date. 01,,:AF suggested in Board's letter of November 14, 1956 at-''.07), it may be important to some holding company affilitn "to obtain general voting permits before end of this year 19,new of the provisions of section 26(d) of Revenue Act of A "5/ and regulations of Conmissioner of Internal Revenue. . ah_vrulngly, advice concerning revision of required agreement inuuld be furnished at once to each holding company affiliate Of Mir district to which Board heretofore authorized issuance ro,!eneral voting permit subject to execution of standard ef agreement but which did not execute required agreement com reeelve general permit. Please also advise such holding A,,,12,117 affiliates that if they now desire Board to give n-40 wier consideration to issuance of voting permits they must maj dvise you and furnish to you promptly such current inforcasgn as you may deem necessary for consideration of such r Z T 21SS 12/7/36 -6"It is also essential to ascertain at once whether any other holding company affiliates desire to have consideration en to granting of general voting permits before end of ( Pis year and to obtain such current information as you may ''selri necessary. If during this month any new application for a voting permit is filed or any holding company affiliate which has an application pending, regardless of whether Board s previously authorized issuance of general voting permit Pursuant to such application, requests action with respect to anting of general voting permit, please advise Board by 1egram immediately and forward to Board immediately copy such application or request, with accompanying data, shing as soon thereafter as possible your recommendations 7fu recommendations of executive committee of your bank. In 742Y such case, please determine, if possible and without delayrg consideration of matter, whether general voting permit is '42slred for purpose of obtaining tax credit under section ' b(d) of Revenue Act of 1936 and advise Board. In connection with consideration of issuance of general t°t11g permits, certain information will be desired in order Iacilitate handling of cases by Board's staff for presenta-on to Board. Board's Division of Examinations will furnish 1°I°u promptly a statement as to general types of current -41Lormation which will be desired. It may be desirable in particular cases to advise holding COMT1., affiliates concerning Board's interpretations of 311,,ndard agreement set out in attachments to Board's letters aci 473 and X-9591. It would seem desirable, in any case, to whvise When se holding company affiliate definitely in writing that, complied with, paragraphs numbered 1 and 2 will be longer effective." P r7 V Approved unanimously. Letter to Mr. Dillistin, Assistant Vice President of the Federal 11 2eriire _ 8ank of New York, reading as follows: el "This refers to your letter of December 1, 1936, inofcTing copies of a news item regarding an apparent violation provisions of section 5208 of the Revised Statutes of 0? United States by Mr. Clifford W. Ludlow, formerly manager the Park Row Branch of the Manufacturers Trust Company, .Ivf York, New York. 1,11,11 "Since, as stated in your letter, it appears that Mr. tii"Ow has already been indicted by a Federal Grand Jury for e alleged violation and since you have no official informa- 2189 12 7/z6 "tion - Tegarding the case in your files, it will not be necesviry for you to report the matter to the local United States . Ittorney." Approved unanimously. Thereupon the meeting adjourned. Chairman.
@FedFRASER