Full text of Minutes of the Board of Governors of the Federal Reserve System : Meeting Minutes, February 18, 1947, Volume 34, Part 1

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219
Minutes of actions taken by the Board of Governors of the
Federal Reserve System on Tuesday, February 18, 1947.

PRESENT:

Mr.
Mr.
Mr.
Mr.

Eccles, Chairman
Draper
Evans
Clayton
Mr.
Mr.
Mr.
Mr.

Carpenter, Secretary
Sherman, Assistant Secretary
Morrill, Special Adviser
Thurston, Assistant to the Chairman

Minutes of actions taken by the Board of Governors of the
Federal Reserve System on February 17, 1947, were approved unani—
mously.
Memorandum dated February 14, 1947, from Mr. Vest, General
C°11neel, recommending the loan of the services of Mr. Solomon,
Assistant Counsel in the Legal Division, to the Bureau of the Budget
f°r a period of one month, beginning on or about February 17, 1947,
f°1.1 Purposes stated in the memorandum.

The memorandum also recom—

illended that Mr. Solomon's salary be paid by the Board during the
Peri°d of the loan, and stated that Mr. Solomon would be able to
devote at least some time on occasions to Board work when it was

1111P0rtzuat from the Board's standpoint that he do so.
Approved unanimously.
Letter to Mrs. Valerie R. Frank, Secretary of the Retire-.

41erit Committee, Retirement System of the Federal Reserve Banks,
Feeral Reserve Bank of New York, reading as follows:
"Charles T. Malone, a member of the Division of

Examinations of the Board's staff, went on military
leave on May 20, 1942, under the policy then in effect




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2/18/47

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"with respect to employees called into military service.
In February 1943, he withdrew his contributions to the
Retirement System and pursuant to the rules and regulations ceased to be a member of the Retirement System.
"Upon Mr. Malone's return to the Board in February
1946, he was automatically included under the Board Plan
of the Retirement System and it appears that technically
he may be charged interest for service prior to January
1, 1944, the date on which the Board of Governors Plan
became effective.
"After reviewing all of the circumstances, the
Board has concluded that an exception is warranted in
this case and that Mr. Malone should not be charged
interest under the Board Plan for service prior to
January 1, 1944, and that the interest withheld at
the time he withdrew his funds should be restored
to his account provided he deposits his own contributions."
Approved unanimously.
Letter to Mr. Fletcher, First Vice ?resident of the Federal
4serve Bank of Cleveland, reading as follows:
"The Board of Governors approves the reappointments
of Aessrs. Szm 1J. Emerson, C. F. Hood, H. P. Ladds, Herman
R. Neff, and W. laithington as meJbers of the Industrial
Advisory Committee for the Fourth Federal Reserve District
to serve for terms of one year each, beginning March 1,
1947, in accordance with the action taken by the Board
of Directors as reported in your letter of February 14,

1947."
Approved unanimously.
Letter to Mr. Strathy, Secretary of the Federal Reserve Bank
of Richmond, reading as follows:
"The Board of Governors approves the reappointments
of Messrs. J. G. Holtzclaw, Talker D. Stuart, Overton D.
Dennis, William L. Manning, and John L. Whitehurst as
members of the Industrial Advisory Committee for the
Fifth Federal Reserve District to serve for terms of
one year each, beginning March 1, 1947, in accordance
With the action taken by the Board of Directors of the
Federal Reserve Bank of Richmond, as reported in your
letter of February 14, 1947."




2./18/47

-3—
Approved unanimously.
Letter to Mr. Stewart, Secretary of the Federal Reserve Bank

of St. Louis, reading as follows:
"The Board of Governors approves the reappointments
of Messrs. ';111. K. Norris, Jacob VanDyke, M. E. Finch,
and G. A. Heuser as members of the Industrial Advisory
Uommittee for the Eighth Federal Reserve District to
serve for terms of one year each, beginning March 1,
1947, in accordance with the action taken by the Board
of Directors of the Federal Reserve Bank of St. Louis,
as reported in your letter of February 13, 1947.
"It is noted from your letter that, after the
Conlaittee has elected its officers for the ensuing
year, the Board will be advised."
Approved unanimously.
Letter to Mr. Gilbert, President of the Federal Reserve Bank
Of Dallas, reading as follows:
"The Board of Governors approves the reappointments
of Messrs. Charles R. Moore, E. P. Simmons, Lawrence S.
Pollock, Ira T. Moore, and Jake L. Hamon as members of
the Industrial Advisory Committee for the Eleventh Federal Reserve District to serve for terms of one year
each, beginning March 1, 1947, in accordance with the
action taken by the Board of Directors of the Federal
Reserve Bank of Dallas, as reported in your letter of
February 14, 1947."
Approved unanimously.
Letter to the Federal Deposit Insurance Corporation reading
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
lilipton Oaks State Bank, Houston, Texas, became a member
Of the Federal Reserve System on February 14, 1947, and
Is now a member of the System. The Board of Governors




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"of the Federal Reserve System further hereby certifies
that, in connection with the admission of such bank to
membership in the Federal Reserve System, consideration
was given to the following factors enumerated in sub—
section (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.
Letter to the Norway National Bank, Norway, Maine, reading
SS

f011OWS:

"The Board of Governors of the Federal Reserve
System has given consideration to your supplemental
application for fiduciary powers, and, in addition to
the authority heretofore granted to act as trustee,
executor, and administrator, grants you authority to
L-ct, when rot in contravention of State or local law,
as registrar of stocks and bonds, guardian of estates,
assignee, receiver, committee of estates of lunatics,
or in any other fiduciary capacity in which State banks,
trust companies or other corporations which come into
comapetition with national banks are permitted to act
under the laws of the State of Maine, the exercise of
all such rights to 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 powers granted by the Board pending the
Preparation of a formal certificate covering such
authorization, which will be forwarded to you in due
course."




Approved unanimously.

Zes::;L3
2/18/47

-5Letter to Mr. Peyton, President of the Federal Reserve Bank

of Minneapolis, reading as follows:
"This refers to your letter of January 8, 1947,
With its enclosure, regarding the procedure followed
by your Bank in handling penalties for deficiencies
in reserves of member banks.
"It is understood that, since receipt of the
Board's letter of March 5, 1946, enclosing rules for
uniform application in waiving penalties for deficiencies in reserves, you have followed the practice of
nandling such penalties on a current instead of a
monthly basis, that is, at the end of a reserve computation period. The memorandum enclosed with your
letter indicates that, since those rules authorize
the waiver of a penalty of not more than J:2.00 incurred in any reserve computation period, it was
felt that there was no reason for withholding the
assessment of penalties until the following month
and also that there were certain advantages in assessing them currently since automatically member
banks would be promptly placed on notice as to
tneir reserve positions.
"While hegulation D contemplates monthly assessment of penalties, the Board will offer no
objection, for the reasons above indicated, to the
continuance of the procedure followed by your Bank
With respect to the handling of penalties for deficiencies in reserves."




Approved unanimous4

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Chairman