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1296 Minutes of actions taken by the Board of Governors of the l'ecieral Reserve System on Wednesday, July 27, 1949. PRESENT: Mr. McCabe, Chairman Mr. Szymczak Mr. Carpenter, Secretary Mr. Hammond, Assistant Secretary Mr. Morrill, Special Adviser Telegram to the Presidents of all Federal Reserve Banks, read"follows: "The Board of Governors of the Federal Reserve System Ilnuer authority of the fourth paragraph of Section 16 of Lhe Federal Reserve Act hereby establishes for the three rTrnths' period ending June 30, 1949, the rate of (1) Per r cent interest per annum on that amount of the Federal 4eserve notes of your Bank which equals the average daily 1„. 11.1°unt of its outstanding Federal Reserve notes during such less the average daily amount of gold certificates held ced during such -period by the Federal Reserve Agent as Coil security for such notes. Interest in an amount 841culated in the manner and at the rate specified above heal be paid to the United States on July 29, 1949. 4m "According to daily balance sheets, the average daily °11nt of outstanding notes of your Bank during the second pl, el rter of 1949 not covered by gold certificates with the 0,4eral Reserve Agent At rates specified was $ (2) . (Y7 (e Payment to Treasury for second quarter will be Payment should be credited to Treasurer's Genrtount as Miscellaneous Receipts, Symbol 1841i Collected, Section 16 Federal Reserve Act as cl lecl- Your Bank's pro rata share of $30,000,000 deEllic uc''On for first and second quarters of year in accordof t 14ith understanding at December 1, 1948 joint meeting giv ' residents and Board is $ (4) . No statement being en Press with respect to this action. l'h1;111'°rk -64elPhia (1) 1.34 7.24 1.21 (2) $993,897,414 860,369,000 1,108,33,987 (3) $3,320,434.26 11,239,954.90 3,343,230.84 (4) $2,017,000 7,249,000 2,097,000 12%":' 7/27/49 -2- Cleveland 'ichmond Atlanta Chicago LoUis x,riteapoils ilatsas CitY ..,eaLsts kap. rancisco (1) (2) 1.36 $1,328,356,402 980,832,098 1.25 762,502,110 1.37 1,8871027,283 1.51 808,016,395 1.27 1.48 418,053,215 659,253,868 1.39 439,069,101 1.90 414,954,409 4.o6 (3) $4,504,038.04 3,056,702.77 2,064,414.74 7,104,011.48 2,558,1423.42 1,542,559.10 2,284,630.73 2,079,864.32 4,200,248.11 (4) 2,813,000 1,887,000 1,598,000 4,406,000 1,577,000 9)2,000 1,421,000 1,298,000 2,687,000" Approved unanimously. Letter to Mr. Samuel B. Stewart, Jr., Transamerica Corpora300 Montgomery Street, San Francisco 4, California, reading , "Pursuant to the Board's order dated February 18, 1,949, in the matter of gi-ansamerica Corporation and the °ard's letter of July 15, 1949, we have sent to you °day, under separate cover by registered mail, data in .'xhibit form corresponding to the Board's Exhibits Nos. to 20, inclusive, and No. 257 covering The Anglo , alifornia National Bank of San Francisco, San Francisco, ' alifornia, and its predecessors. "This completes the exhibits covering the eight banks listed in your 'Demand for Production of Information' riled with the Board on February 15, 1949." Z Approved unanimously. Letter to Mr. Thomas H. Daniel, Committee on Banking and Olzrz, elleY, United States Senate, reading as follows: tio "This will refer to your recent telephone conversa, 4 with Mr. Ralph A. Young, Associate Director of the Qi-on of Research and Statistics, with regard to the ,;gulations issued by the Home Loan Bank Board which aprxegisterh: eased in the July 16, 1949, edition of the Federal ,. the "As you are no doubt aware, the Board, in letters to Rome Loan Bank Board and at an informal conference ';'-ween representatives of the Home Loan Bank Board and 7/27/49 -3- "this Board, indicated its objections to the use of the term 'Federal savings association' and the term 'sayaccount' which appeared in the proposed Regulations Published in the March 11, 1949 edition of the Federal Register. The basis of the Board's objection was, briefly, that the use of these terms would serve to mislead the Public as to the character of the obligation created by the purchase of savings and loan shares and would result in further confusion and misunderstanding as to the distinction between a share account in a savings and loan association and a savings account in a commercial or savings bank. "The Regulations as finally issued and which appear in. the July 16 edition of the Federal Register do not contain the words 'Federal savings association', the term Federal association' having been substituted therefor. aowever, the term 'savings account' still appears in the Regulations as finally issued and in our opinion is objectionable for the reasons indicated above." Approved unanimously. Letter to Mr. Sproul, President of the Federal Reserve tatit °I* Nev York, reading as follows: "In connection with section 32 of the Banking Act of 1933 there have been discussions between members of the staff of your Bank and of the Board as to whether the irction applies to interlocking directorates between two and on December 21, 1948, Mr. Brome of the staff Your Bank addressed an informal memorandum on the sl'hiect to Mr. Cherry of the Board's staff. "The Board has given consideration to the matter, inc .,,..luding the fact that (1) the question has not been raised, s4ccept internally by the staff of the Federal Reserve Bank : c, Is New York, (2) the question of interpretation of the law a doubtful one and possibly might go either way if pre64Inted to a court as an original proposition, (3) since 4 e law was enacted sixteen years ago the Board has made c° effort to apply it to relationships between banks, thus eating an administrative interpretation that the law is 1.°t aPplicable to such cases, (4) the Clayton Act regu; ttes interlocking directorates between banks and may be egarded as the exclusive regulation of such relationships, j TI 7/27/49 -4- "and (5) the Board has the power to permit such relationships by regulation. In the circumstances and unless and Until the Board should take different action, it is suggested that your Bank follow the informal administrative Policy of treating interlocking relationships between uanks as not being covered by the provisions of section 32 Of the Banking Act of 1933." Approved unanimously. t Ii Chairman.
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