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A meeting of the Board of Governors of the Federal Reserve System was held in Washington on Tuesday, January 5, 1937, at 11:30 a. m. PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Eccles, Chairman Ransom, Vice Chairman Broderick Szymczak McKee Davis 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: The minutes of the meeting of the Board of Governors of the .Federal Reserve System held on January 4, 1937, were approved unanimously. Mr. Morrill reported that the Comptroller of the Currency today issued a call on all national banks for reports of condition as at the close of business on December 31, 1936, and that, in accordance with the usual practice, a call was made on behalf of the Board of Governors of the Federal Reserve System on all State member banks for reports of condition as of the same date. The call made on behalf of the Board was approved unanimously. Telegram to Mr. Thomas, Chairman of the Federal Reserve Bank of Kansas City, stating that the Board approves the establishment 1/5/57 -2- without change by the bank today of the rates of discount and purchase in its existing schedule. Approved unanimously. Telegram to Mr. McCravey, Assistant Federal Reserve Agent at the Federal Reserve Bank of Atlanta, reading as follows: "Referring telephone conversation with Mr. Newton on January 4, Board approves continuance of your appointment as Assistant Federal Reserve Agent at Federal Reserve Bank of Atlanta. Board also approves continuance for further temporary period not to exceed six months beginning January 1, 1957 of appointment of Mrs. Genevieve M. Barnett as Alternate Assistant Federal Reserve Agent. It is understood that continuance of Mrs. Barnett's appointment for a further period is desired in order that you may be free to spend some time in the Board's Division of Research and Statistics in Washington." Approved unanimously. Letter to Mr. Wood, Vice President of the Federal Reserve Bank of St. Louis, reading as follows: "The Board of Governors of the Federal Reserve System approves the application of the 'Lindell Trust Company', St. Louis, Missouri, for permission to exercise the fiduciary powers authorized under its charter and the laws of the State of Missouri, on the following conditions: 1. Such bank shall not invest funds held by it as fiduciary in obligations of or property acquired from the bank or its directors, officers, employees, members of their families, or their interests, or in obligations of or property acquired from affiliates of the bank. 2. Such bank shall not invest funds held by the bank as fiduciary in participations in pools of mortgage bonds or other securities, and the securities and investments of each trust shall be kept separate from those of all other trusts and separate also from the properties of the bank itself; provided, however, that the Board 10 1/5/57 -3- "of Governors of the Federal Reserve System will not object to the collective investment of trust funds where the cash balances to the credit of certain trust estates are too small to be invested separately to advantage, if the bank owns no participation in the securities in which such collective investments are made and has no interest in them except as trustee or other fiduciary, and if such collective investment is not prohibited by State law or the instrument creating the trust. 5. If funds held by such bank as fiduciary are deposited in its commercial or savings department or otherwise used in the conduct of its business, it shall deposit with its trust department security in the same manner and to the same extent as is required of national banks exercising fiduciary powers. "You are requested to advise the Lindell Trust Company, 6t. Louis, Missouri, of the Board's action, and to obtain an appropriate resolution of the board of directors of the bank accepting these conditions and forward a certified copy thereof to the Board." Approved unanimously. Letter to Mr. Peyton, President of the Federal Reserve Bank of Minneapolis, reading as follows: "This refers to your letter of December 11, 1956, forwarding an inquiry received from Mr. A. McC. Washburn, Vice President and General Counsel of the First National Bank and Trust Company of Minneapolis, as to how a limited guaranty from a third party should be regarded in calculating the maximum loan value of collateral to a loan made under Regulation U for the purpose of purchasing or carrying stocks registered on a national securities exchange. "It has been noted that you forwarded a copy of the opinion of Mr. Ueland, Counsel to your bank, which is to the effect that, although the term !collateral' is not defined in Regulation U, the context of the regulation indicates that the term was intended to include only property which might be pledged or mortgaged. The Board agrees with this view expressed by your Counsel and Ii 1/5/57 -A- "therefore agrees with the conclusion that such a guaranty should not be taken into consideration in determining the 'maximum loan value of the collateral' for a loan which is within the scope of Regulation U." Approved unanimously. Letter to Mr. Young, Vice President of the Federal Reserve Bank of Chicago, reading as follows: "This refers to your letter of November 25, 1936, with regard to a possible violation of section 22(a) of the Federal Reserve Act by the Bankers Trust Company, Des Moines, Iowa, and Mr. D. W. Bates, Superintendent of Banking of the State of Iowa. "This transaction occurred prior to the date of the enactment of the Banking Act of 1955, and in that Act Congress, by amending the law on this subject, recognized the doubt on the question whether the statute as it read prior thereto applied to State bank examiners. In view of these considerations and the fact that the Department of Justice several years ago accepted without appeal a decision of a United States District Court holding that section 22(a) as it then existed did not apply to State bank examiners, the Board has decided that no useful purpose would be served by reporting this case to the Attorney General, and accordingly it will not be necessary for you to make a report to the local United States Attorney. This advice should not, of course, be construed as an expression of opinion on the question whether a State Superintendent of Banks should be considered an examiner within the meaning of section 22(a) as it now exists." Approved unanimously. Memorandum dated December 30, 1956, from Mr. Noell, Assistant Secretary, recommending that the practice followed during 1956 of having the par list printed commercially be followed hereafter that, unless future experience indicates the wisdom of a change, and inasmuch as the National Capital Press, Inc., was again the low bidder, a contract for printing, binding and mailing the par list 12 1/5/37 _5_ during 1937 be executed with that firm on the basis of its bid dated December 11, 1956, with the understanding that the Board will furnish the paper stock and franked addressed envelopes for mailing as at present. Approved unanimously. rnmitKe._ Secretary. Chairman.
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