The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
A meeting of the Board of Governors of the Federal Reserve
SYsten was held in Washington on Thursday, February 16, 1939, at
11:45 a.m.
PRESENT:
Mr.
Mr.
Mr.
Mr.
Eccles, Chairman
Ransom, Vice Chairman
Szymczak
Draper
Mr. Bethea, Assistant Secretary
Mr. Clayton, Assistant to the Chairman
The action stated with respect to each of the matters herein41ftar referred
to was taken by the Board:
The minutes of the meeting of the Board of Governors of the
/leder.,
Reserve System held on February 15, 1939, were approved unani-
Letter to Mr. McCravey, Secretary of the Federal Reserve Bank
or
Atlanta, reading as follows:
"Referring to your letter of February 11, 1939, the
B"rd approves the reappointment of Messrs. W. W. French,
A: M. Lockett, I. C. Milner, John E. Sanford, and George
14nsh1p as members of the Industrial Advisory Committee
for the Sixth Federal Reserve District to serve for terms
of one year each beginning March 1, 1939."
Approved unanimously.
Letter to Mr. Gidney, Vice President of the Federal Reserve
New York, reading as follows:
"Reference is made to your letter of February 11,
9391 advising that The Southampton Bank, Southampton,
New York, has completed arrangements for the readjustment
Of its
present capital structure and the introduction
ir".70r)(3
t{.„,k )Airs
2/16139
-2--
'of 40,000 new capital. You advise that the program includes the following features:
(1) Sale of .$49,500 par value 'A' preferred
stock, retirable at 09,000 to the Reconstruction Finance Corporation, concurrent
with the retirement of 499,000 principal
amount of 'A' debentures presently held
by the Reconstruction Finance Corporation;
(2) Sale of 4.:;25,000 par value
preferred
stock to local interests, such stock to
be sold for 4e
:50,000 and retirable at that
amount;
(3) Reduction of the present aggregate par
value of common stock from a00,000 to
$50,000.
"You further advise that inasmuch as the bank's capital position will be improved by the addition of 4;50,000
in new funds, and since the program will make possible the
elimination of a substantial portion of questionable assets,
lt is your recommendation that the Board of Governors approve a reduction of the common stock of The Southampton
Sank from 0.00,000 to 4f50,000.
"In view of all the circumstances, the Board of Gov!
'
I ll-ors of the Federal Reserve System approves a reduction
'rom 400,000 to 450,000 in the common stock of The SoutharaPton Bank, Southampton, New York, provided that none of
the funds released by the reduction in common capital is
returned to shareholders and your counsel is satisfied as
to the
legal aspects of the plan."
Approved unanimously.
Letter to Honorable Robert F. Wagner, Chairman, Committee on
tiatoo
and Currency, United States Senate, prepared in accordance
With th
e action taken at the meeting of the Board on February 13,
1939
, for the
signature of Chairman Eccles, and reading as follows:
"There is inclosed herewith for the consideration
`"- Your Committee a draft of certain proposed amend't5 to Senate Bill 477 which the Board of Governors
the Federal Reserve System believes should be incorporated in the bill before it is reported on by your
Committee.
232,
2/16/39
-.3-
"In its Annual Report to the Congress which was made
at the end of January, the Board called attention to the
already confused situation in the field of Federal bank
examination and supervision. It would feel remiss if, in
the light of this report, it should fail to call attention
to the possibility, however remote, that this pending legislation might unintentionally add further to this state
Of confusion in the course of time, if not now clarified
by a positive statement in the bill.
"The Comptroller of the Currency, the Federal Reserve
System and the Federal Deposit Insurance Corporation, which
are the three principal Federal bank supervisory agencies,
regularly examine banks and require the publication of rePorts of their condition. With the inclosed amendment, the
bill would not only authorize but require these bank supervisory agencies to furnish to the Securities and Exchange
Commission such information respecting banks and trust comPanics as the Commission may need to enable it to discharge
its responsibilities under the bill.
"In the drafting of the bill the Commission has been
most considerate of the Board's point of view on questions
involving bank examination and supervision and has from time
to time invited the Board's suggestions, and the Board has
tried to be helpful in drawing on its past experience in
the field of bank regulation. From the beginning of the
discussions between the Commission and the Board, we have
been assured that the Commission did not wish the bill to
be the means of placing on the Commission responsibility
or authority for bank examinations.
"The inclosed amendments are designed to make it clear
that the Commission shall not duplicate or supplement any
of the work done by the bank supervisory agencies but shall
rely on information which such agencies would be directed
furnish under the provisions of section 318(b), page 47,
1-ihes 6 to 22, as amended by the proposed amendment inclosed herewith.
"Without expressing any opinion as to the merits of
the bill as a whole, the Board respectfully requests the
Committee's favorable consideration of these amendments.
"P:8-: After the above letter had been prepared, I received your letter of February 15, 1939, requesting the
.0ard's opinion as to the merits of this proposed legis"
ion) which will receive the Board's consideration
234
246/39
"as soon as practicable."
Approved unanimously.
Letter to Honorable William 0. Douglas, ChairmEn, Securities
"
4 Exchange Commission, reading as follows:
"There is inclosed, for your information, s copy
Of the Board's
letter of this date to Honorable Robert
F. Wagner, Chairman, Committee on Banking and Currency,
United States Senate, submitting, for the consideration
of the Committee, a draft of certain proposed amendments
to Senate Bill 477 which the Board believes should be
incorporated in the bill before it is reported out by
the Committee.
"The proposed amendments submitted to the Committee are identical with those forwarded to you with Vice
Chairman Ransom's letter of February 8."
Approved unanimously, together with
similar letters to Messrs. Preston Delano,
Comptroller of the Currency, and Leo T.
Crowley, Chairmen of the Federal Deposit
Insurance Corporation.
Letter to The President of the United States, prepared for the
131 Mat'
-re
of Chairman Eccles and reading as follows:
"In response to your note of February 4, 1939, there
attached a proposed reply to Senator Thomas' letter
(3f Xanuary 31, 1939, to you."
18
Approved unanimously, the proposed
reply to Senator Thomas reading as fol-
lows:
"I have read with interest your letter of January
31
'1939, dealing with monetary problems and the stabil-2tet"n of prices.
"As you know, these questions have continued to be
'flatters of vital concern to me, and in February of last
235
2/16/39
year I issued a statent to the press, a copy of which
is attached, relating to the effect of prices on our national economy, which still represents my views on this
"Portent subject. I trust that these views and the questions raised by your proposal will be given consideration
by the cammittees of Congress primarily concerned with
legislation in this field."
Thereupon the meeting adjourned.
Asei stant
Chairman.
Secretary.
@FedFRASER