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254 A meeting of the Board of Governors of the Federal Reserve SYstera was held in Washington on Saturday, February 14, 1942, at 11:30 PRESENT: Mr. Ransom, Vice Chairman Mr. Szymczak Mr. Draper 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 hereinafter referred to was taken by the Board: Memorandumn dated February 12, 1942, from Mr. Nelson, Assistant Seer eidarY, recommending that Miss Helen E. Gervais be appointed as a Ift'eton, ' b aPher in the Secretary's Office, with salary at the rate of Per annum, effective as of the date upon which she enters upon the Performance of her duties after having passed satisfactorily the Physical examination. Approved unanimously. tar* of Letter to Mr. Gidney, Vice President of the Federal Reserve New York, reading as follows: 191.0 "Reference is made to your letter of February 3, submitting the request of the Ogdensburg Trust ComOgdensburg, New York, for approval of the establish,.!t2t of a branch in Winthrop, New York, in connection the proposed purchase of assets and assumption of the 'Posit liabilities of The First National Bank of tinthrop PIllbsuant to an agreement executed December 17, 1941. "In view of your recommendation and the information ';11omitted, the Board approves the establishment and operaIi of a branch in Winthrop, New York, by the Ogdensburg 255 -2“Trust Company, Ogdensburg, New York, upon completion of ti.le transaction involving assumption of the deposit liabilities of The First National Bank of Ivinthrop substant3 .-ally in accordance with the agreement referred to, pro1.rlded (1) approval of the appropriate State authorities ls obtained, (2) provision satisfactory to the Federal r.Zeserve Bank of New York is made for the losses estimated in the report of examination of the trust company as of 23, 1941, and (3) the assets acquired from the naw.onal bank will not be carried by the trust company at .1.1 amount in excess of cost; any reserve resulting from th? differences between carrying value of the assets acquired and cost to the trust company to be treated as a valuation reserve rather than as a reserve for contingsnoies.” Approved unanimously. Letter to Mr. Day, President of the Federal Reserve Bank of San else°, prepared following the action taken at the meting of the oard February 6, 1942, and reading as follows: 20 1 "Reference is made to Mr. Vest's letter of January ) 4.942, with respect to the plans of First Trust and L'avings Bank of Pasadena, California, control of which ;as recently acquired by Transamerica Corporation, to etablish a branch at Alhambra and to acquire the assets 5 the Temple City National Bank and to establish a branch 111 Temple city. "The Board has given careful consideration to the inf ormation submitted and to other pertinent information its files and has reached the conclusion that it should t(13.1t approve the establishment of the proposed branches on p.s basis of the information now before it. Please advise jrst Trust and Savings Bank of Pasadena of the Board's vl-ey'rs before it takes any further steps to consummate its Plaz1s." Approved unanimously, together with the following letter to Mr. Day: There is enclosed a letter which the Board has addr eased to Transamerica Corporation, with respect to the 2 214/42 —3- 11 matter of further expansion of the Transamerica group, which you are requested to transmit to that Corporation." The letter to Transamerica Corpora— tion, referred to in the second letter to Mr. Day, was also approved unanimously and was in the following form: "The Board has recently received through the Federal Reserve Bank of San Francisco a copy of a letter from a member bank, control of which was recently acquired by Your Corporation, stating that the member bank has under consideration the establishment of several branch banks and that the letter is written for the purpose of secur— !;ng the necessary approval from the Federal Reserve Board. 'he member bank's letter set forth certain facts with re— spect to proposed branches at two locations and stated that the letter would be supplemented by such formal ap— Plioations as Federal Reserve regulations may require. "The Board gave careful consideration to the infor— ation submitted and to other pertinent information in files and reached the conclusion that it should not ) la10Prove the establishment of the proposed branches on the asis of the information now before it. The Federal Re— serve Bank of San Francisco was requested to advise the Member bank accordingly. "Should your Corporation have any plans for the fur— th er expansion of its interests in banks, either directly °r indirectly, through the mechanism of extending loans 0 others for the purpose of acquiring bank stock, or in tIl_Y other manner, you are requested to advise the Board ,"rough the Federal Reserve Bank of San Francisco before 'fly such plans are consummated. "The Board's position in this matter is in accord th the policy, upon which there is unanimous agreement the Board, the Comptroller of the Currency, and the bscleral Deposit Insurance Corporation, that the Federal 8 ; 11-k supervisory agencies should, under existing circum— ,'ances, decline permission for the acquisition directly ',Zr indirectly of any additional banking offices or any ; 11hstantial interest therein by Transamerica Corporation, Tank of America N. T. & S. A., or any other unit of the ' ransamerica group. "Please see that all persons in the Transamerica t n 7 257 2/14/42 II group who may be concerned with this policy are advised a ccordingly." In connection with the above matter, unanimous approval was also given to the following letter to Mr. Day: "Reference is made to the application of the Peoples 13ank of Lakewood Village, California, which has not yet ' leen authorized to commence business, for membership in he Federal Reserve System. The Board has carefully coneldered the information accompanying this application, together with such other information as it has been able to develop with regard to the application, and has requested rae.to advise you that it is unwilling to approve the apacation on the basis of the information now before it. lease advise the applicant accordingly." r Action on the four letters referred to above was taken with the understanding that copies of the letters to Mr. Day with respect to branches of the First Trust and Savings Bank of Pasadena and the application for membership by the Peoples Bank of Lakewood Village and of the letter to the Transamerica Corporation would be sent to the Comptroller of the Currency and the Chairman of the Federal Deposit Insurance Corporation. Letter to Mr. Fletcher, Vice President of the Federal Reserve 41-1k of Cleveland, reading as follows: t. "Enclosed herewith is a copy of the report of Nalonal Bank Examiner I. F. Gaffney, dated January 23, 1942, cooncerning his investigation of the trust department reci rcls of The Second National Bank of Ravenna, Ravenna, Ohio, f connection with the desire of the bank to surrender its 4'lght to exercise fiduciary powers. Gaff. "In view of the pending litigation mentioned in Mr. „-neY's report, no action with respect to this matter : 41 be taken by the Board at this time. As you will note 'Ir(3m the enclosed copy of our letter of this date to the 258 2114/42 -5- "Comptroller of the Currency, we have requested a further eport as to the status of the litigation when the bank ls next examined. Please advise the bank accordingly." Approved unanimously, together with a letter to Honorable Preston Delano, Comptroller of the Currency, in the following form: "This refers to Mr. Upham's letter, dated January 29, 1942, transmitting a copy of the report by National Bank Examiner I. F. Gaffney, dated January 23, 1942, concerning his investigation of the trust department records of The Second National Bank of Ravenna, Ravenna, Ohio, in connection with the desire of the bank to surrender its right to exercise trust powers. "In view of the pending litigation mentioned in Mr. Gaffney?s report, no action with respect to this matter ill be taken by the Board at this time. It is assumed , 1 hat inquiry concerning the status of the litigation will ue made by your examiner upon the occasion of the next :egular examination of the bank and advice as to the in'°rmation developed will be appreciated." Z Letter to Mr. Wallace, Counsel of the Federal Reserve Bank of Rich, , LutOnd, reading as follows: "Receipt is acknowledged of your letter of January 24 1942 asking three questions regarding Regulation W. 'Your first question relates to Interpretation W-102. .fle transaction considered in that Interpretation was an tension of instalment loan credit, because, as you point the credit was constructively an extension of installoan credit the proceeds of which were used to disduarge the pre-existing indebtedness. For this reason no "°17n payment was required. en "Your third question relates to a person who is not ,I gdged in the business described in section 3 of the Regatbon and is therefore not required to register. This i'llerson sells an automobile without receiving a down payent, and takes an instalment note which does not comply with the Regulation. This is permissible because the !IA, 259 2/14/42 -6seller is not subject to the Regulation. However, as You conclude, the note may not be purchased or discounted bY a Registrant. This conclusion is stated in the second paragraph of Interpretation W-57. The reasoning is as outlined by you. "Your second question is receiving consideration, and you will be advised with respect to the matter as soon as Possible." Approved unanimously. Letter to Mr. F. P. Kearney of the Collection Department of the A 4ssociates Discount Corporation, Washington, D. C., reading as fol4178: "Receipt is acknowledged of your letter of February 1942 inquiring as to the effect of Regulation 7; upon a.contract of sale of an automobile made to a husband and : 171fe at a time when the husband had been released from the ktrmY and put in the Reserves because he was over 28 years °f age. He has since been recalled to active duty. "Section 8(a) of the Regulation, a copy of which is enclosed, provides that the company to which the payments .aire due may take 'any action that it shall deem necessary -Ln good faith, (1) with respect to any obligation of any Member of the armed forces of the United States incurred prior to his induction into such service,' and this would ,,PPlY to a member of the Reserves who was called to active ' 11-tY after making the contract. "The administration of the Regulation has been dentralized and therefore it is suggested that any further tinquiries which you may have should be addressed to the 's(feral Reserve Bank of Richmond, Richmond, Virginia." r Approved unanimously. Thereupon the meeting adjourned. t (103Q-A, el-)010,a_lor Secretary. Vice Chairman.
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