The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
216 A meeting of the Board of Governors of the Federal Reserve 878tell was held in Nashington on Saturday, February 10, 1940, at 11:30 a. 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 The action stated with respect to each of the matters herein"ter re ferred to was taken by the Board: Ilederta The Minutes of the meeting of the Board of Governors of the Reserve System. held on February 8, 1940, were approved unani- Telegrams dated February 9, 1940, to Mr. Leach, President of the ?ederal Reserve Bank of RI chmond, Mr. McLarin, First Vice President or the reclerel Reserve Bank of Atlanta, Messrs. Dillard, Stewart and 1)(114)11 'Secretaries of the Federal Reserve Banks of Chicago, St. Louis h,L11(1 141141eaPoli qeeerve respectively, Mr. Gilbert, President of the Federal of Dallas, and Mr. Hale, Secretary of the Federal Reserve 411k or Set Francisco, stating that the Board approves the establishet Without el'ange by the Federal Reserve Bank of San Francisco on 6 d. by the Federal Reserve Banks of Richmond, Atlanta, " -ceRo the St s Louis, Minneapolis and Dallas on February 8, 1940, of l‘ates Of discount and purchase in their existing schedules. Approved unanimously. 217 2/10/40 -2Letter to Mr. Kimball, Secretary of the Federal Reserve Bank "New Ic)ric-, reading as follows: Bo tt2 eferring to your letter of February 3, 1940, the : R rd of Governors approves the reappointment of Messrs. K- Beach, Arthur G. Nelson, William H. Pouch, and 0 - --flei8 B. Reynolds as members of the Industrial Advisory t rlittee for the Second Federal Reserve District to serve r terms of one year each beginning March 1, 1940. It is understood from your letter that Mr. Edward J. le, who is at present a member of the Industrial 1d 0 Y was not Committee and also Under Secretary of Comerce, reappointed, and that pending further study of 'h.'ll_cosing a saccesFor to him his place on the Committee not been filled for the coming year." Approved unanimously. Letter to Mr. F. D. McCartney, Secretary, Marshall-McCartney Colpe ' Oakes, North Dakota, reading as follows: mie ;This refers to your request that the Board deterhold4 het Your company is not engaged as a business in g the stock of, or managing or controlling, banks. corn he Board understands that your company is a closed MeX, ' 1 ation, the stock of which is owned by members of the vari'all and McCartney families; that it is engaged in owt2,4s business enterprises, including managenent of farms ' atm bY it and others, dealing in ! r-rain, seed, livestock reel estate, negotiating real estate loans, and hold01, reel estate end securities investments; that it owns or rerontrois a majority of the outstanding shares of stock First National Bank of Oakes, Oakes, North Dakota; e vuet it does not own or control any stock of or manage O Oak es °ntrol any bank other than The First National Bank of that "In view of these facts, the Board has determined et a 2 Y 11r company is not engaged, directly or indirectly, troll rlsiness in holding the stock of, or managing or cont111 ,.banks, banking associations, savings banks, or coraPanies, within the meaning of section 2(c) of iz II-an-king Act of 1933, as amended, and, therefore, it then°t 8 holdinrr company affiliate for any purposes other th0s0 of section 23A of the Federal Reserve Act. 218 P/10/4.0 7 f. "If) however, the facts should at any time differ _ronl those set out above to an extent which would indii.eitlt .e that your company might be deemed to be so engaged, , un_ls matter should again be sulnitted to the Board. The ll'oard reserves the right to make a further determination 4t tiny time on the basis of the then existing facts." Approved unanimously for transmisSiert throuPh the Federal Reserve Bank of Minneapoli S. Letter 41,1,e B to Mr. Paddock, First Vice President of the Federal P 4111-- of Boston, reading as follows: 24 "Reference is made to 1,.1r. McPee's letter of .Tanuary 1940, and enclosures, presenting for the considerapC" of the Board the question whether The Tpunton Morris thellme°111PanY, Taunton, Massachusetts, is a 'bank' within r earlin. of section 8 of the Clayton Act, since, if th e u nY is not a 'bank', the statute is not applicable tolir-°111Pa e Harrison VI. George who is serving as Treasurer End Con of the Company and as a director of the Bristol klit3r Trust Company of Taunton. It is understood that the Company was incorporated 1„.4---1-7 under Chapter 156 of the General Laws of Massathat by its charter it is 'not to carry on the . : 308 11ess of a bank or tru.st company'; that since its moorit has continued as a Massachusetts business corto ni°11 and paid taxes as such; that having no deposits Peci:"slue) it has never applied for membership in the so-rt31 i Deposit Insurance Corporation; that, while it is ileet to the supervision of the Conuissioner of Banks witIse .t ssaohusetts, it has never become a banking company ma8"In the meaning of Chapter 172A of the General Laws of Theriitlehtlsetts, and that since February 1939 the stock of by rphi'llInton Morris Plan Company has been entirely owned Mol'ris Plan Comnany of 'Rhode Island, Providence, tione I sland, with the result that in general the operathe Company is similar in all respects to the cyr in which the branches of The Morris Plan Company 41u-ode Island are operated in that State. Paid :11:t is further understood that the Company sells Italy fIrt vestment certificates but only in denominations of QeeciY4i,(1011ars or multiples thereof in an amount not to extot i 1000 to any one Person, firm or corporation, the erriount of such certificates outstanding as of November 219 2/10/40 -4"25) being approximately Lt'53,000; that, although it maY redeem such certificates on demand, it requires e l 'eFistered owner thereof to sign a receipt therefor en the back of the certificate with the practical result that -ere there is no effective method of negotiating such cert. except by presenting it at the office of issue, eh holds the -stub originally attached to such certifi' e e and vthich stub bears the owner's signature, the Co:m.13 4"Y also reserving the right to require thirty days' _?ti ce in writing and to limit the aggregate amount of v'elthdrawals on its investment certificates in any one ()ea', month to an amount not exceeding its net receipts the Previous calendar month; that, although the Corn13 1.,,11 ,,, Y has authority to do so, o, it does not issue so-called 0"'L'allment investment certificates representing accounts ePe.,,, enecl for the purpose of purchasing fully paid investment co ' -Th ulficates on aninstallment basis; that, although the tiTelp ., t111Y Pays interest on its fully paid investment cer' ch'leatesi such interest is payable to the customer by Tneric °t1 Sanuary and July first of each year; that the t' ' ia s°11 Portion of the Company's transactions consists of the discountinr of its various types of installment notes, ) etc., and the handling of the repayments on loans, lse the c°11IPanY averaging about one hundred of such transacti0n or t-i, s Per day; that the daily cash on hand to take care ve, ille Company's transactions in loans and fully paid inCertificates averages not over •t2,500, of which :500 is set aside for payments on fully paid investded-i 'certificates; that only a mall mount of one teller's inen;Y time is used in connection with the receipt and pay°f funds with respect to investment certificates inv.,er eh e's only approximately :.'53,000 of such certificates ro e out standing. as of November 25, 1939, representing only certificate holders; that there is very little turno :, in the amount of fully paid investment certificates With, utt anding: there being en average of only one or two a14al5 per month; that the Company does not issue ert checks or drafts, such checks as it issues being Mae.,111 on banks where it has deposit accounts in Taunton, ehlisetts, or in Providence, Rhode Island; that the co:L does not accept deposits or maintain any form of corlrie-tled checking account service but receives funds in tiQn with the issue of its fully paid investment certi r.::, -be2; that the company is nrolA bit ed by law from trq1 1; -"tine and does not transact a trust business; that it d, ' es not offer safety deposit facilities to the public; ,(20 2/10/40 -5"that it transacts no escrow or agency business for the Pr/11°11 c; that the company does not buy or sell securities tel 'customers except in rare cases when it is necessary to meice an occasional sale of securities held as collateral °r a loan vthich is in default; that it is not a member °fY clearing house association; that its business hours , ere not rg in identical rith those of banking institutions operatthe community, its hour of closing extending one 113 'beYond the closing hour of such banking institutions; exat, althoufzh it is subject to the supervision of and ,ottaination by the Commissioner of Banks of Massachusetts, ri also are cooperative banks, credit unions and small rerl'Ince companies in the State; and that, although it is Orciiiired to suhnit reports of condition to the Commissioner me, I3anke and to publish reports at such times and in such i:ner as the Commissioner shall direct, apparently it not always required to Publish such reports as frequently banks and trust companies in the State are required to it having been required but once to publish its statenet puti c3f condition. It is understood also that the general regards the Company as a lending corporation or lealee Company operating primarily in the installment ede, -I-11g field and does not, to the best of existing knowle' regard the Company as a bank of deposit. ticti "From the foregoing, it appears that the powers and i_ ties of The Taunton Morris Plan Company, Taunton, setts, are essentially the same as those described corje poard's letter of October 19, 1939 (3-189-a). Acts .0 ;r1 1 . 3r, on the basis of the facts set forth above, it corri e °Pinion of the Board that The Taunton Morris Plan : 1 Tau the'''ellYnton, Massachusetts, is not now a 'bank' within meaning of section 8 of the Clayton Act." 4 Ipproved unanimously. Thereupon the meeting adjourned. Secretary. Chaiman.
@FedFRASER