Full text of Minutes of the Board of Governors of the Federal Reserve System : Meeting Minutes, February 12, 1940, Volume 27, Part 1

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221
A meeting of the Board of Governors of the Federal Reserve
t

was held in Tashington on Monday, February 12, 1940, at 11:7:0

PRESENT:

Mr.
Mr.
Mr.
Mr.
Mr.

Eccles, Chairman
Ransom, Vice Chairman
Szymczak
McKee
Davis

Mr. Morrill, Secretary
Bethea, Assistant Secretary
Mr. Carpenter, Assistant Secretary
Mr. Clayton, Assistant to the Chairman
The action
stated with respect to each of the matters hereinreferred to
was taken by the Board:
The minutes of the meeting of the Board of Governors of the
Reserve System held on February 10, 1940, were approved unani-

13°11ds, each in the amount of i'10,000, executed under date of

lEtuti
A

31)

1940, by Messrs. George C. Brainard as Federal Reserve
R. Matter as Assistant Federal Reserve Agent and Elmer F.

Pric.eit

e'3 A
lternate Assistant Federal Reserve Agent, all at the Federal
e 41. 11 of
Cleveland.
Approved unanimously.
bit

ealorandum dated February 7, 1940, from Mr. Goldenweiser,

tc)/*
to% the °' the Division of Research and Statistics, recanmending that,
retiq
stated in the memorandum, Miss Melva R. Kaplan be ap,,ed
On e
temporary basis for a period of three months as a clerkE:raph
er in the Division, with salary at the rate of




12.0 per

222
2/12/40

-2-

ni°11th, effective as
of the date upon which she enters upon the pert"lielice of her duties.

The memorandum stated that in view of the

r"t that Miss KaplEn will probably be recommended for a peTmanent
8111)0irit rit
Ine--

at

the expiration of her temporary appointment, it was

l'ecillested that she now
be Permitted to become a member of the Retireof the Federal Reserve Banks.
Approved unanimously.
Ile111°I'andurn dated February 8, 1940, from Mr. Van Fossen, As1"9-tblit Chief olx the Division of Bank Operations, submitting a letter
te
l'ebirtlerY 5 from Mr. Rounds, Vice President of the Federal Reserve
"New York, which requested approval by the Board of chanpes in
the 13el's°1111e1 classification plan of the bank to provide for the creati
"t e
11 new positions of "Holdover Teller", Receiving Division,
tittd11
48si stant
Currency Sorting Teller", Sorting and Counting Divi1°11)

the Cash Department; for changes in the title and maximum

41"Y. for
the positionSorting"Senior Clerk", Sorting and Counting Di000 per annum,oto tilt Currency Teller", Sorting and Countr)11'41°11,
"rilbrt
in the
Di.7ision,
1),a,11.1e

per annum, and for a change from `.3,500 to2,220
maximum salary
al
for the position of "Senior Clerk",
all in the Cash Department; for the combining of the

1)o4tiorts of

"Senior Receiving Teller" and "Receiving Teller" into

''er110/,

peceiving Teller" and the two positions of "Assistant PeceivTqiertt
into one Position of '
,Assistant Receiving Teller", with




(-,4AWCJIP

2/1240

_3-

ZI1M1111111 salaries of :13,50.0 and

2,700 per annum, respectively; and

tc*chenees in the
description of work for a number of other positions
ilithe Cash Department.

The memorandum stated that the proposed changes

4"een 'eviewed
and recommended that they be approved.
Approved unanimously.
Chi ceo

Letter to Mr. Wood, Chairman of the Federal Reserve Bank of

) reading
as follows:
er
"At the completion of the examination of the Fed19e
3)
..a
. - 1)
'eserve Bank of Chicago, made as of November 18,
ex
bY the Board's examiners, a copy of the report of
meZrIlination was left for your information and the inford
of the directors. A copy was also furnished Presient
Schaller.
1,e "The report
does not appear to contain any matters
apriring further comment at this time. The Board will
si;reciate advice, however, that the report has been conby the Board of Directors. Any comments you may
ex e to o2
i fer
regarding discussions with respect to the
sAli'llation or as to action taken or to be taken as a re'of the examination will also be appreciated."
Approved unanimously.
ttip,
,:

Lett
voer to the "Osage Farmers National Bank", OsaFe, Iowa, read1-°110WS:

4 -tue Board of Governors of the Federal Reserve Sysgiver consideration to your application for fidu'
e.; Powers, and grants you authority to act, when not
crtitn°11travention of State or local law, as trustee, exe?Ile;:il administrator, registrar of stocks and bonds,
eatn
'
i_kitlh of estates, assignee, receiver, committee of
of lunatics, or in any other fiduciary capacity
tioll'"'ch State banks, trust companies or other corporawhich come into competition with national banks
the '
&4111nitted to act under the laws of the State of Iowa,
visicel ercise of all such rights to be subject to the proor ti-1118 Of the Federal Reserve Act and the regulations
-e n"rd of Governors of the Federal Reserve System.

tem,




224
2/12/40
-4"This letter will be your authority to exercise the
fiduei
f4
powers granted by the Board pending the prepare?fl of a formal certificate covering such authorization,
ul eh will be forwarded to you in due course."
Approved unanimously.
Letter to IMIT

McRae, Chief Examiner for the Federal Reserve Bank

Or )
208

to
-

reading as follows:

e

"This refers to your letter of January 25, 1940, ree.”111e: a ruling as to whether loans secured by shares
e1 savings and loan associations are subject to
the
A:Provisions of section 11(m) of the Federal Reserve
11,2" You state that a State member bank in your district
w:s inade a loan secured exclusively by such shares which
111d be excessive if
the provisions of section 11(m)
re
p11 chic.
Tb„"AlalonF other things, section 11(m) authorizes the
to fix for each Federal Reserve district the percent
belltege of individual bank capital and surplus which may
letrePresented by 'loans secured by stock or bond cole
made by member banks within such district, and
-'•ovides that:
no such loan shall be made by any such
bank to any person in an amount in excess of
10 Per centum of the unimpaired capital and
Plus of such bank.'
Altb
do "
°qgh shares of a Federal savings and loan association
01,411°t have all of the attributes of shares of stock of an
as8illarY corporation, it would seem that shares of such an
el °elation, particularly if such shares are paid up, so
tl,c),"13/- resemble the stock of an ordinary corporation that
ir should
be regarded as stock for the purposes of sec"
this connection, the Comptroller of the Currency
orLt ken the position, for the Purposes of section 5136
toRevised Statutes, that a national bank has no power
tio;'!1:10sit' funds with a Federal savings and loan assoclaroll
;'or the reason that such 'deposit' must be made in the
hEla ,,°1 a purchase of matured stock, and a national bank
%Iell'° Power to purchase stock of any kind, except where
lioc02
11rehese is expressly authorized by statute. The
6 i easo has taken the position, in its letter of June
—38 (S-100), that the provisions of section 5136 of

:

tr




225
2/12/40
"the 'Revised

Statutes forbid the purchase by member banks

sheres of stock of Federal savings and loan associations,
n
s1
-the exemptions stated in such section do not cover

A"
ea of stock of Federal savings and loan associations.
1;.,c()rdingly, it is the view of the Board that loans made
'
1 Et member bank secured by shares of Federal savings and
1.1 On;TI associations are subject to the provisions of section
) of the Federal Reserve /ct.
, "In the circumstances, it is assumed that you will
to take steps to have
the member bank referred to
s_ Y°11r letter bring its loan within the limitations of
ection 11(m) when it is practicable for it to do so."
Approved unanimously.
Memorandum dated February 9, 1940, from Mr. Bethea, Assistant
ceel'etary,
submitting for consideration by the Board a request from
the

4cret

Service Division of the Treasury that the Board print for

the

kvision

to be

1,000,000 copies of a circular (ratified "Know Your Money"

ai,tribut

d by the Division as a pert of a current educational
41.14lign
"en

aid to crime prevention end the suppression of counter-

The reason for the request vas that the Division did not
the
eketcse

•

necessary funds to have the circulars printed at its own
Mr. D

the

thea's memorandum recommended that the Board author-

L'weretary's Office to comply with the request as, if, and
111 the
Board,s
Printing facilities and daplicatinc force may be
that purpose without detriment to the Board's work and

the
Und

erstandin




set forth in the memorandum.
Approved unanimously.




226
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Thereupon the meeting adjourned.

ereseitr-

Chairman.

PI

P)allt
Secretary.