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238 A meeting of the Board of Governors of the Federal Reserve Systern was held in Washington on Saturday, February 6, 1937, at 11:45 a.m. PRESENT: Mr. Eccles, Chairman Mr. Szymczak Mr. Mr. Mr. Mr. Morrill, Secretary Bethea, Assistant Secretary Carpenter, Assistant Secretary Clayton, Assistant to the Chairman Consideration was given to each of the matters hereinafter referred to and the action stated with respect thereto was taken by the Board: Letter to Mr. Curtiss, Federal Reserve Agent at the Federal Reserve Bank of Boston, reading as follows: "In accordance with the request contained in your teleam of February 1, the Board approves the appointment of Mr. Walter L. Eddy as Assistant Federal Reserve Agent at Your bank at e salary of 44,000 per annum, effective March 13 1937, with the understanding that Mr. Eddy will be placed Upon the Agent's payroll and will be solely responsible to You for the proper performance of his duties. When not engaged in the performance of his duties as Assistant Federal Reserve Agent he may, with the approval of the Federal Reserve Agent and the President, perform such work for the bank as in your opinion is not inconsistent with his duties as Assletant Federal Reserve Agent. "Mr. Eddy should execute the usual oath of office and surety bond in the amount of 00,000 and he should not enter 1 11 the performance of his duties as Assistant Federal Rean serve Agent until the bond has been examined by your counsel to determine whether its execution complies fully with the rules printed on the reverse side of form of bond 1820 following which the bond should be forwarded to the Board Promptly for approval." r Approved unanimously. Letter to Mr. Rounds, Vice President of the Federal Reserve Bank °t* New York, reading as follows: 239 2/6/37 "In accordance with the request contained in your letter of January 26, the Board approves the continuation of the temporary assignment of Mr. Joseph A. Tully to the position of Senior Clerk, Coupon Collection Divi,ion, at his present salary of $3,000 per annum, which ! la NO° in excess of the maximum provided for this position, for a period not to exceed six months from January 27, 1937." Approved unanimously. Letter to Mr. Drinnen, First Vice President of the Federal Reserve Dank of Philadelphia, reading as follows: "Reference is made to your letter of January 26, 1937, advising that, subject to the approval of the Board, changes from 'temporary' to 'permanent' had been made in the designations of T. A. Durkin, Jr., an examiner, and Charles W. SnYder and Leonard Markford, assistant examiners, their temPorary appointments as such having been previously approved by the Board. The Board approves such appointments on a permanent basis." Approved unanimously. Letter to Mr. Worthington, First Vice President of the Federal Reserve Bank of Kansas City, reading as follows: "Reference is made to your letter of January 25 in regard to the proposed retention in service to January 1, 1938 of four employees who are more than 65 years of age, and to March 1, 1956, of J. 0. Ellis, Information Clerk, and W. R. Graham, Registered Mail Clerk. "In view of the circumstances as stated in your letter, and as the action extending their period of service was taken prior to the date of the Board's letter X-9796 °f January 21, 1937, the Board will interpose no objection to the retention of these employees to the dates specified." Approved unanimously. Letter to Mr. Sargent, Secretary of the Federal Reserve Bank of 240 2/6/37 -3- San Francisco, reading as follows: "In accordance with the request contained in your letter of January 12, the Board of Governors of the Federal Reserve System approves the fees and allowances fixed by your board for the directors of the Federal Reserve Bank of San Francisco and its branches for the year 1937, which it is understood are the same as the fees and allowances paid by the bank in 1936. "As you were advised in the Board's letter of January 16, no action by the Board appears to be necessary at this time with regard to the allowance fixed by your board of directors for the member of the Federal Advisory Council from your district." Approved unanimously. Telegram to Mr. Stewart, Chairman of the Federal Reserve Bank of San Francisco, reading as follows: . "Referring your telegrams February 3 and 4 regarding validity of ballot on which first choice only is indicated in pending election of Class B director in which there are Only two nominees. Opinion of your counsel outlined in ?our wire of February 4 holding such ballot to be invalid I? in accord with views of Board's counsel on this quest1On. Board has taken same position in past years when question has arisen. It is assumed that you have in mind ossirability of including a statement on printed form of ?allot to effect that both first and second choices must b? indicated and that failure to observe the instructions will invalidate the ballot." Approved unanimously. Letter to Mr. Young, Vice President of the Federal Reserve Bank Of chieago, reading as follows: "Reference is made to your letter of January 15, 1937, : Idvising that you had informed the cashier of the 'Farmers °! Merchants State Bank' of Darlington, Indiana, that condition of membership numbered 19, which reads as follows, should be complied with by June 1, 1937. 241 2/6/37 -4'Such bank shall effect as soon as practicable in the opinion of the Federal Reserve Agent at the Federal Reserve Bank of Chicago the removal from its banking quarters of the building and loan association now located therein.' "The condition was prescribed in accordance with the recommendation of the Special Committee of the Federal Reserve Bank on Admissions, and in its letter of October 16, 1935, to Mr. Stevens, the Board requested that it be advlsed not later than December 31, 1936, of the progress which had been made toward the removal of the building and loan association from the banking quarters of the bank, if such removal had not been effected prior to that time. It IS understood that your request that the present relationship be terminated by June 1, 1937, was based upon your understanding of what was expected under the condition of membership and was not prompted by any new developments in the situation or the discovery of any unsatisfactory or unsound practices on the part of the bank or the building and loan association. "According to the information submitted with the bank's application for membership, the building and loan association occupying quarters with the bank was a small association with total resources of only $450000 (since reduced to $32,500), With an excellent standing in the community, and the management felt that the association was not large enough to be able to afford the increased expense involved in renting and operating other quarters. "Since the time of admission of the Farmers & Merchants State Bank of Darlington to membership, the Board, in a few cases, has granted an indefinite extension of the effective date for compliance with the provisions of a condition of membership requiring the removal within a certain time from the banking quarters of a building and loan association. Such extension has been granted, however, with the distinct understanding that the Board reserved the right to require the bank to accomplish compliance with the condition at any time within six months after notice to such effect shall have b?en given to the bank. Accordingly, while the Board conto feel that, as a general matter, the location of a ulldin; and loan association in the banking quarters of a member bank is undesirable and should be terminated as soon as practicable without working an undue hardship on either 242 2/6/37 -5- "the bank or the building and loan association, it feels that your bank may be guided in its requirements under the provisions of condition of membership numbered 19 by the extensions granted by the Board in the other cases referred to in this paragraph. If you have reason to believe, however, that the circumstances in this particular case are such that the arrangement is or will likely prove harmful to the bank, the termination of the arrangement should be effected by June 1, 1937, if not before.“ Approved unanimously. Letter to Mr. Fleming, President of the Federal Reserve Bank of Cleveland, reading as follows: "Reference is made to Mr. Fletcher's letter of January 11, 1937, advising that 'The First-Central Trust ComPanYt, Akron, Ohio, proposed to amend its articles of incorporation in order that it might engage in the small loan business. It is understood that the statutes of Ohio Permit a commercial bank, upon suitable amendments to its articles of incorporation, to establish a department for the conduct of a small loan business, and that your bank is of the opinion that such business will be properly handled by The First-Central Trust Company and that such P"ers, if granted, will better enable the bank to serve the community. "The Board, therefore, in accordance with the recommendation of your bank, grants permission under the provisions of condition of membership numbered 1 for The FirstCentral Trust Company, Akron, Ohio, to extend the scope of its corporate powers and to engage in the small loan business. It is assumed, of course, that any necessary approval of the State authorities will be obtained and that such business will be conducted in accordance with the applicable State laws." Approved unanimously. Thereupon the meeting adjourned. Secrdtary. APPr°ved: Chairman.
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