Full text of Minutes of the Board of Governors of the Federal Reserve System : Meeting Minutes, January 23, 1940, Volume 27, Part 1

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114
A meeting of the Board of Governors of the Federal Reserve
SYst

was held in Washington on Tuesday, January 23, 1940, at 1130

m.

PRESENT:

Mr.
Mr.
Mr.
Mr.

Eccles, Chairman
Ransom, Vice Chairman
Szymczak
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 hereinEIrte,
'referred
to was taken by the Board:
The minutes of the meeting of the Board of Governors of the
Nteral
kou.siy.

Reserve S
ystem held on January 19, 1940, were approved unani-

The minutes of the meeting of
the Board of Governors of the
the

tfle

Reserve System held on January 22, 1940, were approved and
acti
°Ils recorded
therein were ratified unanimously.
Memorandum
dated January 19, 1940, from Mr. amead, Chief of

lsi°n of Bank Operations, submitting a letter dated January
O1
11 Mr
' Worthington, First Vice President of the Federal Reserve
14tIllt or v.
''ensas City, which requested approval by the Board of changes
Itl The
Psl*sonnel Classification plans of the head office and the

lz

'
)
/clahoma City Branches of the bank to provide for the
°11 of the new position of "Personnel and Expenditures Clerk"
nnel and Accounting Department, for the discontinuance




115
-2Oft" Positions of
"General Clerk" in the Administration Department
alid"ExPenditures Clerk" in the Accounting Department, and for an ineltse in the maximum salary for the position of "Statistician" in the
Research and
Statistical Department, all at the head office; for an
increase in
the maxim

salary for the position of "Supervisor" in

the nPC e.ad PWA Custody Department at the Denver Branch; and for an
iterease in
the maximum salary for the Position of "Federal Reserve
A€eritt8 Representative (Audit Manager)" at the Oklahoma City Branch.
l'41fle°1"endu1 stated that the proposed changes had been reviewed and
l'ec°11311/endeci that they be approved, effective as of January 1, 1940.
Approved unanimously, the letter to
Mr. Torthington advising him of the Board's
action reading as follows:

;

Jaz "The Board of Governors approves, effective as of
tiorrY 1) 1940, the changes in the personnel classificare
Plan of the Federal Reserve Bank of Kansas City,
"Tleeted
i n your letter of January 12, 1940.
provi14ith respect to the increase in the maximum salary
pos;:
”
. cl in the personnel classification plan for the
the-"on of Federal Reserve Agent's Representative at
the tlahoma City Branch, your attention is directed to
rd's letter X-9856, of April 2, 1937, in which it
Ree-"eted that in view of the provisions of the Federal
a ,onve Act, no change should be made in the salary of
4.1-'son designated as Assistant Federal Reserve Agent,
l,ernate Assistant
Federal Reserve Agent, or Federal Reprioe
sev
Agent's Representative, tithout obtaining the Board's
ruaPProval thereof.
sh0.41,°ther changes in the personnel classification plan
bee()
°f course, be approved by the Board before they
niezt, effective, as provided in Paragraph No. 3 of State15, 'Instructions Relating to the Operation of
the
ajç 71..sonnel Classification Plans of Federal Reserve
8 ) as revised March 1936.




116
1/23/
40

-3-

0 . "It is noted that in canceling page 8 of the Head
:
rice plan, you apparently overlooked submitting a page
Preserve the numerical sequence of the pages, as reqallested inlAr. Smead's letter of May 5, 1939.
Accordingly,
Page 8 has been prepared which will Oe placed in
the
'
ta e Board's copy of your personnel classification plan,
nci a duplicate
copy thereof is enclosed for your use."
Letter to Mr. Hitt, First Vice President of the Federal Reserve
Bank. °

St. Louis,
reading as follows:
"This refers to your letters of January 11, 1940,
f:lating to the holding company affiliate status of Delk
-vestment Corporation and to the waiver of the require1101rt.that Easton-Taylor Trust Company, St. Louis, Missouri
A,T !ln reports of
that corporation and Laclede Bond and
i
e Company as of December 30, 1939, in connection
its report
of condition as of that date.
thir, "There is enclosed, for transmittal, a letter of
vi .date
addressed to Delk Investment Corporation adit that the
Board has determined that it is not enas a
business
in holding the stock of, or managing
or
controlling, banks, banking associations, savings banks,
camPanies, within the meaning of section 2(c)
Or
zott;-1,41.anking Act of 1933 and that, accordingly, it is
ng
thA,
col7 those of company affiliate for any purposes other
section 23A of the Federal Reserve Act. A
- Y °f the
letter is enclosed for your files.
zee 'BY reason of
such determination, it will not be
bel:sarY for Easton-Taylor Trust Company to obtain from
that -L.vestment Corporation an agreement, on Form P-5,.
t
811ch corporation will be subject to the same condihol- and limitations as are
applicable in the case of
c°mPany affiliates of national banks under sec;),-1414 of
the Revised Statutes.
Ree While
the provisions of section 21 of the Federal
:
ve Act, relating to the waiver of the requirement
t ePorts of
affiliates are not considered applicable
case of reports
of holding company affiliates,
will-;!fd, in view of the above-mentioned determination,
114„ '
etinsist upon Easton-Taylor Trust Company obtainepo
cembe
:
Zrt
19of.Delk Investment Corporation as of Deis"
Hit appears that Laclede Bond and Mortgage Company
Eiffiliate of Easton-Taylor Trust Company by reason




119
1/23/40
-4--

"of the fact that Delk Investment Corporation owns or conr°18 a majority of the stock of each organization; that on
bacember 30, 1939, the mortgage company was indebted to the
tnc in the amount of .,30,000 so that the requirement that
bank obtain a report of such affiliate was not waived
Under the Board's blanket waiver; that the bank had not
uenderstood that the mortgage company was an affiliate and,
s°°11 as that fact was brought to its attention, called
j- s loan; and that the mortgage company paid the loan on
visuarY 5, 1940, and is not now indebted to the bank. In
Boew of these circumstances, and your recommendation, the
"d waives the requirement that the bank obtain a rePort of the
mortgage company as of December 30, 1939."

t

Approved unanimously, together with
a letter to the Delk Investment Corporation, St. Louis, Missouri, reading as follows:
th
"This refers to your request that the Board determine
ill
"Your corporation is not engaged as a business in holdthe stock of, or managing or controlling, banks.
The Board understands
f
that your corporation is a
ZIPY investment corporation organized by William C.
raa..,,ride) since deceased, for the purpose of holding and
th- glng his Property as part of a plan to provide for
th:f seellrity end maintenance of himself and his family;
it owns
or controls 1,095 of the 2,000 outstanding
• es of stock of Easton-Taylor Trust Company, St. Louis,
bf1,1°Uri; that it owns or controls stock of four other
st4I''
'
s but in no instance as much as 3 percent of the outbZdilig shares; that it does not manage or control any
bs,
-1 °tiler than Easton-Taylor Trust Company; and that the
stocks
owned by it constitute less than 10 percent
• its total
assets.
that "In view of these facts, the Board has determined
corporation is not engaged, directly or inour•
Ctly
as a business in holding the stock of, or manor controllin, banks, banking associations, savse4i bElnks, or trust companies, within the meaning of
thsl,'?,n 2(c) of the Banking Act of 1933, as emended, end
IDII
°re it is not a holding company affiliate for any
pe08080ther than those of section 23A of the Federal
Act.

Y




118
-5-"If) however, the facts at any time differ from those
set,
t out above to an extent which would indicate that your
'
laPanY mi.-,ht be deemed to be so engaged, this matter
41d again be submitted to the Board. The Board rej
8 rves the right to make a further determination at any
on the basis of the then existing facts."
Letter to Mr. Hale, Vice President of the Federal Reserve Bank
SEta

Francisco, reading as follows:

15
"Receipt is acknowledged of your letter of January
6,L, 1940, enclosing a copy of a letter addressed to your
by Mr. F.
L. Moore requesting certain information
industrial loans, together with your proposed
;
P.L.Y. This is to advise you that after reviewing the
1111°Posed reply we have forwarded
the original thereof to
ivloore in accordance with your request."
Approved unanimously.
Melnorandum dated January 14, 1940, from Mr. Vvingfield, Assist44t "Ileral
Counsel, recommending that there be published in the
413111111'y
issUe of the Federal Reserve Bulletin in the form attached
to tile
Memorandum a statement with respect to the following subject:
Amendment to Regulation L, interlocking
13ank Directorates Under the Clayton Act
Approved unanimously.
°r the
tEitclie

1111° r'riorrill suggested that the Board authorize the payment
cc)st of the luncheon served to Mr. Donald R. Heath, an at-

toN °D
r,

the 4Inerican '•Inbassv in Jierlin, in the Board's dining room




Approved unanimously.