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1865 Minutes of actions taken by the Board of Governors of the ?ecle Reserve System on Wednesday, December 7, 1949. PRESENT: Mr. Mr. Mr. Mr. McCabe, Chairman Szymczak Draper Vardaman Mr. Mr. Mr. Mr. Carpenter, Secretary Sherman, Assistant Secretary Morrill, Special Adviser Thurston, Assistant to the Board Minutes of actions taken by the Board of Governors of the 'la Reserve System on December 6, 1949, were approved unani- 4141°..Y. Letter to the Presidents of all Federal Reserve Banks, r1111g as follows: v. "The Board has been engaged for some time in re, 1 18ing and extending the data on the condition of all j L :1°Jis for the period, 1896-1938. In connection with 41.1is project it is necessary to have certain informaOXi for state member banks by states, and for a few YI?ars the data needed are not available at the Board. Is hoped that they may be at the Federal Reserve tatks. , "It will be appreciated if you will furnish the the following summary tabulations, by States, loans and investments of State member banks in Your district: For June call dates, 1922 to 1926, Inclusive, the amounts of loans on real estate, loans on collateral, and all other loans. For June call dates, 1925 to 1928, inclusive, the amounts of Ti. S. Government securities, securities of states and political subdivisions, and all other investments (including foreign government securities). 'f 1LY,'; '‘i 12/7/49 -2- "In lieu of summary figures, it will be satisfactory to submit work sheet tabulations. It will also be satisfactory to give whatever breakdown of loans and investments was required by the form of report used on each call, instead of the particular breakdowns indicated above. "Since the project is well along, it would be appreciated if these data could be provided at your earliest convenience." Approved unanimously. • Memorandum dated November 29, 1949, from Mr. Millard, Dire"°1 'of the Division of Examinations, recommending the promotion 4111iincrease in the basic annual salaries of the following members Qr +1, -,Ae staff in that Division, effective December 22, 1949: Itaatie Promotion 4h4 J. Bart —4 N. Itiley From Asst.Fed.Res. Examiner Jr. Asst.Fed.Res. Examiner To Fed.Res. Examiner Fed.Res. Examiner Salary Increase To From $5,450 -$4,32) 5,225 5,600 Approved unanimously. Memorandum dated November 30, 1949, from Mr. Millard, Ditecto 'of the Division of Examinations, recommending that Federal Ileae I've Examiner Willis G. Brown be transferred from the field le411.4i staff to the office staff of the Board's Division of uations, effective January 1, 1950. Approved unanimously. Memorandum dated November 6, 1949, from Chairman McCabe, Nclill€ as follows: "Pending the selection of a successor to Mr. 1.867 12/7/49 -3- "Clayton as a member of the Personnel Committee, I recommend that Mr. Draper be appointed to serve on this Committee." Approved unanimously. Letter to the Federal Deposit Insurance Corporation, la41.4g as follows: "Pursuant to the provisions of section 12B of the Federal Reserve Act, as amended, the Board of Governors of the Federal Reserve System hereby certifies that 'The Hartford-Connecticut Trust Company', Eartford, Connecticut, became a member of the Federal Reserve System on December 2, 1949, and is now a memuer of the System. The Board of Governors of the Federal Reserve System further hereby certifies that, in connection with the admission of such bank to member8114 in the Federal Reserve System, consideration was r1°en to the following factors enumerated in subsec4 (g) of section 12B of the Federal Reserve Act: 1. The financial history and condition of the bank, 2. The adequacy of its capital structure, 3. Its future earnings prospects, 4. The general character of its management, 5. The convenience and needs of the community to be served by the bank, and 6. Whether or not its corporate powers are consistent with the purposes of section 12B of the Federal Reserve Act." Approved unanimously. 8„,8 Letter to Britton & Koontz National Bank in Natchez, Natchez, siPpi, reading as follows: "The Board of Governors has given consideration to t Your fiduciary application and grants you authority 4t ) act, when not in contravention of State or local law, ; 1,8 trustee under deed of trust covering property in the vlottebello Subdivision, Natchez, Mississippi. The exercise SG8 12/7/49 Of such Such authority shall be subject to the provisions Of the Federal Reserve Act and the regulations of the Board of Governors of the Federal Reserve System. "This letter will be your authority to exercise the fiduciary power granted by the Board pending the Preparation of a formal certificate covering such aut horization, which will be forwarded to you in due course." Approved unanimously. Letter to Mr. Robert D. Tucker, Lecturer in Finance, Deerit of Business Administration, University of California, Los l'14 'eles 24, California, reading as follows: "This refers to your letter of November 15, 1949, relating to your proposed thesis on the subject of c°tmen trust funds and to the interpretation of the Provisions of Regulation F restricting the publication y information with respect to common trust funds. • fle pertinent provisions of Regulation F are contained !!). section 17(c)(3), to which you refer, and also in 'le third paragraph of section 17(a). "For your informfition we quote the following from otlx. reply of this date to a letter from a magazine itor stating that he had undertaken to compile for blication certain statistics concerning common trust (,1411ds and that some of the banks from which he had reested information had asked that he first clear the tatter with us: 'The publication of statistics covering the composition, yields, and unit values of common trust funds raises a number of questions concerning the value, if any, of such statistics and the possible harmful results of their publication which warrant careful consideration. Without undertaking a detailed discussion of the problem at this time, we must say that we have serious reservations with respect to the publication of statistics such as you have in mind, even though the banks operating the particular funds would not be identified and the statistics, in the main would be in composite form. r 1869 12/7/49 "'In the light of inquiries received from time to time concerning the publication of common trust fund statistics and the interpretation of the pertinent provisions of Regulation F, we are making a further study of this problem. In this connection, we are inviting the Common Trust Fund Committee of the Trust Division of the American Bankers Association to consider the matter and give us the benefit of its views. Thereafter, some further statement of the Board's views may be in order, but, in the meantime, we do not feel that we can give you the clearance which you desire.' "As you will note from the foregoing, we question the advisability of publication of common trust fund statistics °f the kind which you have in mind, even though the banks °Perating the particular funds would not be identified; ! fld, while we are making a further study of the problem, we do not feel that we should approve the publication 7 1 such statistics at this time. There would appear to t no objection, however, to a private study of common ust funds if it could be arranged that the study would "be published or made available for quotation." j Approved unanimously, together with the following letter to Mr. A. W. Whittlesey, Chairman, Committee on Common Trust Funds, Trust Division, American Bankers Association, do The Pennsylvania Company for Banking and Trusts, Philadelphia 1, Pennsylvania: "This refers to the questions concerning the publiesti-on of )q common trust fund statistics which Mr. John C. ; 11tIlMann, Assistant General Counsel to the Board, discussed 11 You briefly on the telephone a few days ago. 0 , "There have been various proposals for the publication : r common trust fund statistics, including statistics with s7sPect to the composition, yields, and unit values of ' c ch funds. The statistics might be in composite form r; ) ,:el'Ing a number of funds or they might cover individual 01748 with comparisons being made between them. The banks 't-ers.ting particular funds might or might not be identified. 187() 12/7/49 -6- "In connection with these proposals, we have received inquiries concerning the propriety of banks furnishing information for this purpose, and the interpretation of the pertinent provisions of sections 17(a) and 17(c)(3) of Regulation F. We have serious reservations with respect to the publication of such statistics, even in cases where the banks operating Particular funds would not be identified. However, in the light of the inquiries we have received, we believe that it is desirable to make a further study of the matter, with the view of possibly publishing some statement or ruling concerning it. "In a study of this problem, there are a number cn factors which appear to warrant careful consideration. On the one hand, there are questions with respect to Purposes, if any, which would be served by the publication of common trust fund statistics. On the other hand, there are possible objections to the publication (Dr. such statistics, including those involving misinte rPretation and misuse of the statistics, 111-informed !hd unfair comparisons of particular funds with other 4:lands or with composite figures, encouragement of less conservative management of common trust funds, and en?°Uragement of the use of common trust funds for general fIvestment purposes, rather than strictly as a mechanism 4or the collective investment of funds of bona fide trusts. "We know that your Committee from time to time has given considerable thought to questions relating 0 the publication of common trust fund statistics and it will be appreciated if the Committee will take this 8ubject up again and let us have the benefit of its cUrrent views. In this connection, we believe that it 141aY be desirable for you and members of the Board's "aff to discuss this matter informally prior to any :.”ion by the Committee. If you agree, we would be : 4-84 to have you get in touch with Mr. Baumann to make ;f1sangements for such a conference either here or elset"?ra, at your convenience. As you requested in the e-LePhone conversation mentioned above, we are enclosing , 1 everal copies of this letter in order that you may furh them to the members of your Committee." Letter to Mr. Mills, Vice President and Cashier of the 171 Iral Reserve Bank of 1i4 nneapolis, reading as follows: "Reference is made to your Bank's letter of November 23, 1949, in which you advise that it appears expenses for certain functions at your head °ffiee and Helena Branch will exceed the 1949 estinlItes as follows: Helena Minneapolis Function 44,663 Generel Overhead Provision of Space 36,168 Provision of Personnel $824 96 Discount and Credit 9')34 Securities 80 Currency and Coln 6,944 Check Collection 4,498 Planning 21645 "The Board accepts the revised figures as suband appropriate notations are being made in the Board's records." Chairman.
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