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278 A meeting of the Board of Governors of the Federal Reserve Systal s held in Washington on Wednesday, February 21, 1940, at 11:30 a.m. PRESENT: Mr. Mr. Mr. Mr.. Mr. Eccles, Chairman Ransom, Vice Chairman Szymczak Davis 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 hereinreferred to was taken by the Board: The minutes of the meetina of the Board of Governors of the FedIR eserve System held on February 19, 1940, were approved unanimously. The minutes of the meetinq of the Board of Governors of the Peserve System with the Federal Advisory Council held on Feb- 111/1*Y 20) 1 940, were approved unanimously. Letter dated February 20, 1940, to Mr. Youmpr, Vice President c/t the Pederal Reserve Bank of Chicago, reading as follows: "In accordance with the request contained in your oe ftter of February 13, the Board approves the designation leYne Smith, an employee of the Detroit Branch, as a 11::!cial assistant examine/-. Approval is given with the ,f,;uerstanding, of course, that Mr. Smith will not be transIlred permanently to examination work without the Board's 113Provai.. "The name of Iohn George has been removed from the enployees whose designations as special assistant elliners have been approved by the Board." ex "of Approved unanimously. Letter to the board of directors of the "Bank of Christiansburg", 1 "13burg, Virginia, stating that, subject to conditions of member- 279 2/21140 8114 numbered 1 to 6 contained in the Board's Regulation H and the toilowinF,' special condition, the Board approves the bank's application illetnbership in the Federal Reserve System and for the appropriate Pli°1/11t of stock in the Federal Reserve Bank of Richmond: 11,7 Such bank shall make adequate provision for dePreciation in its banking house and furniture and fixtures." The letter also contained the following special comments: "It appears that the bank possesses certain powers 14hich are not being exercised and which are not necessarily l'equired in the conduct of a banking and trust business, eS the power to guarantee the payment of bonds. Atfltion is invited to the fact that if the bank desires to : aIr'cise any powers not actually exercised at the time of trission to membership, it will be necessary under condi: t1 311 of membership numbered 1 to obtain the permission of c"e Board of Governors before exercising them. In this ornection, the Board understands that there has been no t allEe in the scope of the corporate powers exercised by 'e bank since the date of its application for membership." Approved unanimously, together with a letter to Mr. Leach, President of the Federal Reserve Bank of Richmond, reading as follows: , tt "The Board of Governors of the Federal Reserve System 0 -1)1".01Tas the application of the 'Bank of Christiansburg', 1.stiensburg, Virginia, for membership in the Federal tlelserva System, subject to the conditions prescribed in the enclosed letter which you are requested to forward to eue,Illoard of Directors of the institution. Two copies of ril. en letter are also enclosed, one of which is for your to . 4e8 and the other of which you are requested to forward vi he Commissioner of Banking for the Commonwealth of for his information. 10, "In view of the fact that the amount of estimated ehises classified in the report of examination for memberis small, the usual condition of membership regardthe elimination of losses has not been prescribed." 280 -3Letter to the board of directors of "The Citizens-Waynesboro teut 'nq Trust Company", Waynesboro, Virginia, stating that, subject to c °nditions of membership numbered 1 to 6 contained in the Board's a'tion H and the following special condition, the Board approves the b enk's application for membership in the Federal Reserve System arld O the appropriate amount of stock in the Federal Reserve Bank ." Richmond: ft7. Such bank shall make adequate provision for depreciation in its banking house and furniture and fixtures." The letter also contained the following special comments: wu "It appears that the bank possesses certain powers r4ich are not being exercised and which are not necessarily :Qtlired in the conduct of a banking and trust business, ' tL lell as the power to r7uarantee the payment of bonds. Attention is invited to the fact that if the bank desires 0 , ° exercise any powers not actually exercised at the time admission to membership, it will be necessary under concnti°n of membership numbered 1 to obtain the permission c the Board of Governors before exercising them. In this erneetion, the Board understands that there has been no then67e in the scope of the corporate powers exercised by e benk Since the date of its application for membership." Approved unanimously, together with a letter to Mr. Leach, President of the Federal Reserve Bank of Richmond, reading as follows: tem "The Board of Governors of the Federal Reserve SysI likaPproves the application of 'The Citizens-Waynesboro end Trust Company', Waynesboro, Virginia, for memberti P in the Federal Reserve System, subject to the condire°11s Prescribed in the enclosed letter which you are tc iTested to forward to the Board of Directors of the inTwo copies of such letter are also enclosed, 2/21/40 -4- "one of which is for your files and the other of which YOU are requested to forward to the Commissioner of Bankfor the Commonwealth of Vir,ginia for his information. "Since the amount of estimated losses classified in he report of examination for membership is snail, the Usual condition of membership regarding the elimination °f estimated losses has not been prescribed." Letter to the board of directors of "The Kinsley Bank", Kinsley, 412ts5) stating that, subject to conditions of membership numbered 1 to c°rtained in the Board's Regulation H, and the following special con(Ittion, the Board approves the bank's application for membership in the Pecier.c. Peserve System and for the appropriate amount of stock in the 'Reserve Bank of Kansas City: 114, Such bank shall make adequate provision for depreciation in its banking house." Approved unanimously, together with e letter to Mr. Hamilton, President of the Federal Reserve Bank of Kansas City, reading as follows: "The Board of Governors of the Federal Reserve SysaPproves the application of 'The Kinsley Bank', Kinsley, j nsae, for membership in the Federal Reserve System, subt to the conditions prescribed in the enclosed letter ch You ara requested to forward to the Board of Directors or ' ela the institution. Two copies of such letter are also 1,111710sed, one of which is for your files and the other of rolch You are reouested to forward to the Bank Commissioner 11 the State of Kansas for his information. ra "It has been noted that during the examination for 111bership the board of directors of the bank instructed bue officers to charge off the estimated losses classified ' 01, the examiner, and, according to Mr. 'Woolley's telegram yo l abruary 19 to the Board's Division of Examinations, office is satisfied that the instructions of the diOrs have been carried out, although definite advice that effect has not been received. In view of the tern Z 4 282 2/21/40 "circumstances, the usual condition of membership regard14E; the elimination of losses has not been prescribed; Tiowever, it will be expected of course that, as stated by :4r. Woolley would be done, you will obtain a statement from the bank prior to completion of its membership that the losses have been eliminated." In connection with the above matter the following letter to the Federal Deposit Insurance Corporation was also approved unanimously: "The Board of Governors of the Federal Reserve Systell today approved the application of 'The Kinsley Bank', If si lay, Kansas, for membership in the Federal 13eserve Istem, subject to compliance with certain conditions. : 7,c°rdinP: to the Board's information, the deposits of " 4 Kinsley Bank, Kinsley, Kansas, are not at this time ' llsu'red by the Federal Deposit Insurance Corporation." Letter to the board of directors of "The Farmers and Traders 114k of C alifornia, Mo.", California, Missouri, stating that, subject to C 1 ons of membership numbered 1 to 3 contained in the Board's laation H and the following, special conditions, the Board approves the b 441°B application ror membership in the Federal Reserve System r (3r the appropriate amount of stock in the Federal Reserve Bank ot 4. Such bank shall make adecuate provision for dePreciation in its banking house and furniture and fixtures. tt5. Prior to admission to membership, such bank, if lt has not already done so, shall charge off or otherwise eliminate estimated losses of $345.00, as shown in the report of examination of such bank as of January 13, 1940, made by an examiner for the Federal Reserve Bank of St. Louis." Approved unanimously for transmission through the Federal Reserve Bank of St. Louis. 283 2/21/40 -6-Letter to Mr. Hill, Vice President of the Federal Reserve 441c or - Philadelphia, reading as follows: "Reference is made to your letter of February 13, g submitting for the consideration of the Board the Pl'oposed Plan for the purchase of assets and assumption -11 the deposit liabilities of the Swedesboro National nenk, Swedesboro, New Jersey, by the Swedesboro Trust ' amPany, Swedesboro, New Jersey. "In view of your recommendation and the information tA s'lbmitted, the Board will interpose no objection to the 2"81asaction as proposed with the understanding that in 1,he transaction no assets unacceptable to an examiner for 6he Federal Reserve Bank of Philadelphia will be acquired, Provided farther that the transaction is approved by T ile State banking authorities and that counsel for the serve Bank is satisfied as to the legal aspects involved." 19 Z Approved unanimously. Memorandum dated February 21, 1940, from Mr. Ransom with ret° the "Banking Studies" prepared by members of the Board's staff 11 411 the direction of Mr. Ransom, in connection with the contemplated 11€"8 Under the Wagner Resolution, reading as follows: to "The Board having decided to distribute these studies , the members of the Federal Advisory Council and to the :!esidents of the Federal Reserve banks for comments and ; r7estion5, I recommend that a cannittee consisting of Goldenreiser, as chairman, Mr. Thurston, and Mr. "11°nd be named to rr, "(1) consider all suggestions that may be received se"Jra members of the Board, presidents of the Federal Rethee banks, members of the Council, or others, and where th Y deal with form, not substance, in collaboration rith see authors of these studies, make such changes as may em advisable; (zive '( 2) in cooperation with the authors of these studies, co_ the studies careful editorial revision, making such ections as rill improve the studies in language and -vqnc tuation; 1_1, "(3) make recommendations to the Board regarding:, the ct these studies and their further distribution under ' 7134 2/21/40 -7- "confidential cover to those who they think might be of assistance in making the studies more useful; "(4) make such recommendations as they deem necessarv. regarding the inclusion of other studies in the series °r the omission of any of those now appearing in the series; "(5) consider the exclusion of any charts that now apPear in the studies or the inclusion of any charts that they think would improve the studies. "I recommend that the committee also consider how fl,ese stadies may be used to the best advantage, end, if ! 1”aseary, as an incident to any of their recommendations, I/lat they have an introduction prepared for the studies and have them completely indexed, and also decide on the advisability of including a dossery of the terms used. "I farther recommend that the authors of these studies be asked to submit to this committee their suggestions for the revision of their own and other studies in the series Itind that the committee be authorized, whenever it wishes s° 111ake a substantial change in substance in any of the m °1dies or the series as a whole, to report their recom; andation to the Board for Board decision, and make recomtndations as to what, if anything, should be done about 118 material that has been prepared for the appendices." The recommendations were approved unanimously. Mr. 'Morrill suggested that the Board authorize the payment of the c °8t of the luncheon served to Mr. Donald Gordon, Deguty Governor °D tIl IC> -ank of Canada, in the Board's dining room today. Approved unanimously. Thereupon the meeting adjourned. Chairman.
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