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147 A meetin S'Ystem of the Board of Governors of the Federal Reserve waS held in Washington on Saturday, January 27, 1940, at 11:30 /104 PRESENT: Mr. Eccles, Chairman Mr. Szymczak Mr. Draper Mr. Mr. Ur. Mr. inarter Morrill, Secretary Bethea, Assistant Secretary Carpenter, Assistant Secretary Clayton, Assistant to the Chairman The action stated with respect to each of the matters herereferred to was taken by the Board: Teler,ra:a to Mr. Young, Vice President of the Federal Reserve or Chica o, referring to the application of the "Dansard State 1311) 14°11.1.°e; Dlicaigan, for periaission to withdraw immediately from Illeb"3111P in the Federal Reserve System, and stating that the Board 11Thies the usual requirement of six months notice of intention to withI? e'rld that, accordingly, upon surrender of the Federal Reserve bank tclek islled to the Dansard State Bank, the Federal Reserve Bank of Ohi is authorized to cancel such stock and make appropriate refund Approved unanimously. Letterto" 14r. Vi. R. McQuaid, President, The Barnett National 11 or ,00 nv111e, Jacksonville, Florida, reading as follows: : to ilf C1°.7ernor "McKee has asked me to reply to your letter aim dated Xanuary 17, 1940, regarding the income tax credit bY Barnett National Securities Corporation, 3acksont0'4F10rida, for the year 1936, and the certification by the /le t; , ' 0 the Conun1s:3io11er of Internal Revenue required in con--4 therewith. .148 v27/40 —0— or ,"As You no doubt know, the regulations of the Bureau ' nternal Revenue regarding credits claimed by holding COMbR/1 Of i .0-1 (7s affiliates under section 26(d) of the Revenue Acts and 1938 provide for certification by the Board to th,, or' uoMmissioner upon his reque2t subsequent to the filing th.the income tax return. You will note that, pursuant to fils Provision, the Bureau of Internal Revenue determines t'o-rst whether there is any need for certification by the ne * and no action by the Board is required until it res a request from the Commissioner for a certificate. li er) under the procedure which has been worked out for ti:t-inP_!. these natters, no action is taken by the Board unava.it receives advice from the Commissioner as to the seat ilabi si.4 VY of certain information for inspection by repre;'4:vas of the Board. This procedure was arranged be/lee% °f the fact thnt a great deal of the information alle : --aarY for the Board's purposes in considerirkr, the issuOr the required certificate is obtained by the Bureau Of i;"ernal Revenue in the ordinary ciurse of its handling 0/Iti'e°1118 tax returns, thus avoiding duplication of effort le Part of the Bureau and the Federal Reserve System. Contri ninasmuch as the Board had not received advice from the ii °ner that the information referred to was available Case, we conferred with the Bureau of Internal Revethe receipt of your letter to ascertain the status of tatter) and were informed that the Internal Revenue A ellil J'acksonville was advised by the Bureau on or about 15_ 1940, that he would shortly receive from the , 1111/'eal, / thet- Le-uailed instructions applicable to the handling of l'et111,, a111 ,„ett National Securities Corporation's income tax V °11 1936. be ebil; . °t1 requested to be informed as to when the Board will At0 make certification to the Commissioner regarding the 193 ,.- return of the Corporation. Please be assured that : the )13; Or will consider and act promptly upon the question rNa ,3 trI1C the required certificate when it receives advice C°r3missioner that the necessary information is %140t YOU will understand, of course, that the Board assurance that it will be able to certify that a ()TIpanY affiliate is entitled to the credit claimed , 14 all ,c34 icIAuicular case until it has had an opportunity to ' -1 'all pertinent facts and information." Approved unanimously. Letter to Mr. Walter Lichtenstein, Secretary of the Federal readinp. as follows: 149 1/27/40 -3:In response to your letter of Tanuary 12, it is ass dil illeu that the Council will have an agenda of its own for jusellssien at its next meeting ana the Board would prefer, di inaugurating the new procedure, to have the preliminary relate to such features of your agenda as may seem be t° call for any special comment. To this end it would so -elpful if you will send us nine copies when it is ready that each Board member may have an opportunity to conit in advance. the "As to the time when Dr. Goldenweiser may meet with .°1111°11, it is probable that he will be present at the pi,sie "IllinarY meeting and, consequently, his subsequent disl;z7.:Ittt: Council can be at any time that is mutua1 Approved unanimously. Letter to the Presidents of all Federal Reserve banks, read- ztehZt seems likely that you may receive inquiries as to Board will extend beyond February 1, L940, the the 0.?uring which interlocking relationships affected by ter i 4-aYt°n Act may continue; and the purpose of this letto enable you to reply to such inquiries. Of it I A2 You know, the Board, by amendments to section 3 Reeulation L, extended until February 1, 1940 the 1. 11 : 1/11; which certain interlocking relationships which thillY existing on the date of the enactment of the Baalki„cil ' melde 'LC Act of 1935 could continue. This extension was Whichsh°1'tlY before the President vetoed the bill S. 2150, th Uld have extended the date until February 1, 1943. 14,e*cl'urce of his veto message, the President said: If it was in the public interest in 1935 ti- the Con[;ress to decide t') terminate these relath°11211iPs) it is in the public interest to termillate h:n°17. Affected banks and affected directorates wo e had over 4 years to make adjustments. That uld, seem to be a liberal time. If the Congress wishes to reverse itself and allow of interlocking directorships in the future, it can, 11 ' se) do so. But I do not think that the Congress , shZ)1 iri,sT nullify its policy, declared in 1935, by extende years on another Of rlockiy directorships for th()4 years, extension which has already been 150 1/27/4o -4thi nin the circumstances, the Board does not believe at th-8 time that it should intervene to extend the period furbY regulation." Approved unanimously with the understandthat replies would be made along the same lines to the letters received by the Board on the same subject. Thereupon the meeting adjourned. 6'edd4-4.-1 . Secre(ary. 11;a21Lfig1 Chairman.
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