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1050 A meeting of the Board of Governors of the Federal Reserve Sysheld in Washington on Thursday, July 29, 1937, at 10:30 a. in. PRESENT: Mr. Mr. MT. Mr. Mr. Mr. Eccles, Chairman Ransom, Vice Chairman Broderick Szymczak McKee Davis Mr. Morrill, Secretary Mr. Bethea, Assistant Secretary Mr. Carpenter, Assistant Secretary Mr. Clayton, Assistant to the Chairman Mr. Thurston, Special Assistant to the Chairman Mr. Wyatt, General Counsel Mr. Paulger, Chief of the Division of Examinations Mr. Parry, Chief of the Division of Security Loans Mr. Dreibelbis, Assistant General Counsel Mr. Leonard, Assistant Chief of the Division of Examinations Mr. Baumann, Assistant Counsel Mr. Solomon, Assistant Counsel Mr. Dembitz, Research Assistant in the Division of Security Loans There was presented a memorandum dated July 29, 1937, prepared Division of Examinations in accordance with the action taken at ett nc) of the Board on July 27, 1937, with respect to the proposed Pla of the Union Trust Company of Maryland, Baltimore, Maryland, for t hcj sollItion of the City Certificates Corporation. pEtrry, Thereupon Messrs. Bethea, Carpenter, Clayton, Thurston, Wyatt, and the kEil.„(1 1)1.eibelbis, Bauniann, Solomon and Dembiti left the room (1. r"eeded With a discussion of the proposed plan. ellaai During the °4 Chairman Eccles suggested that the Board consider action Iti°11e th e --hes set forth in the following resolution and that he 1051 7/29/37 -2wished to be recorded as favoring such a resolution: "That the Federal Reserve Bank of Richmond be requested advise the Union Trust Company of Maryland that the Board (4 Governors, without having approved the proposed transfer of stock under the revised plan submitted by the trust comP t,hY, will give consideration to a reauest for a waiver of , ne requirement as to consent to such transfer of stock conaihed in Condition of Membership No. 27, if and when "1. plan has been submitted in writing to the holders ofThe the certificates of beneficial interest issued by the City Certificates Corporation and to the stockholders the Corporation, in terms clearly and simply setting forth the details of the plan and stating specifically not only !hat the certificate holders would receive under the proPosed plan but also what they would give up; 2 . " Such plan has been approved in writing by not lese then two-thirds of the holders, who hold not less than i t fee-fourths in amount, of the certificates of beneficial 'Lerest outstanding, exclusive of the certificates upon eh Cash Payments would be made in full; and „ "3- Such plan has been approved in writing by the ete 0d owning at least two-thirds of the outstanding 8t0 '°ok of the City Certifi cates Corporation." to Z At 11:50 a. m. the Chairman left the meeting for the purpose (311 attending a conference which had been arranged Previously. The discussion continued until 1:00 p. in when the meeting re- The meeting was reconvened at 2:50 p. m. with the same atas at the opening of the morning session except that Chairman "le8 Wes not present. was presented a letter to Mr. Leach, President of the 4derea There R eserve Bank of Richmond, reading as follows: ,71hi3 refers to Mr. Wallace's letter of May 26, 1937, 0011 "Is subsequent correspondence with the Board's General Sta sel, concerning security for trust funds deposited by ?ember banks in their own banking departments. the 1,_In its letter of September 27, 1935, to Mr. Hoxton, Stateard waived compliance by State member banks in the Of Maryland with the condition of membership to the 1052 7/29/37 -3effect that if a State member bank deposits trust funds in own banking department, it must deposit securities in its trust department to secure the payment of the trust funds. 1.iever, c the Board expressly reserved the right to require ."111 campliance with such condition by the State member banks 811biact thereto if, at any time, it felt that such trust funds were not otherwise adequately protected. "As you know, the Board's action in waiving compliance with such condition was based upon the understanding that in ipa l State of Maryland all such trust funds were protected Y a preference accorded by certain provisions of the State tatutes. It now appears that, in the case of Corbett v. 1,:spelhorn, 191 Atl. 691, the Court of Appeals of Maryland recently held that the preference accorded by the Maryland :tatutes applies only to liabilities incurred by a trust ,,nenY when acting under appointment by a court as executor, : ualnietrator, guardian, trustee, receiver, committee, or cliePository. Parenthetically it may be noted that it is unrstood that trust companies are the only banking institu'°fls permitted to exercise fiduciary powers in Maryland. ti "The Board does not feel that it is justified in Conto waive compliance with the above-mentioned condi110213- of membership in connection with trust funds which are Protected by the preference accorded by the Maryland tutes as interpreted by the Court of Appeals of that pi, te• Therefore, the Board withdraws its waiver of com; I Eince with such condition by State member banks in Marywhich are subject to the condition, except as to funds Which couch auch banks hold when acting under appointment by a cei ; t as executor, administrator, guardian, trustee, rest_,er, committee, or depository. Please advise each such e member bank accordingly, forwarding to the Board for records a copy of the advice you furnish each bank. co--"It is noted that while the question has never been G.eridered by the Maryland Court of Appeals, the Attorney notefEll of that State has ruled that a trust company does Ailla""e to pledge securities to secure trust you, 8 "Posited by it in its banking department and that coll'ci.counsel concurs in that opinion. As you know, the StElfition of membership in question contemplates that if a Nicive member bank subject to such condition deposits trust pled8 in its own banking department there shall be a valid Of securities to secure such funds. It is realized that the withdrawal of the Board's waive of compliance with the condition as above aescribed sclze in view of all the circumstances involved, present difficulties to the banks subject to the condition it8 j T 1053 7/29/37 -4making the necessary adjustments for the handling of :rust funds affected by the withdrawal of the waiver. It suggested, therefore, that you contact the State member nnks subject to the condition with a view to giving such !,Ssistance to them as you may in working out, within a reasone time, the problem of making such adjustments as may be nec essary." Mr. Ransom stated that he had requested that the letter be cirlated a4°ng the members of the Board before its consideration at a teetirlg for the reason that, while he felt the Position taken in the letter waa correct under present cirawmstances and that the letter 11(1111d be a pproved, he also felt that consideration would have to be '11'111411 bY the Board to some means of solving the problem confronted by Stte Member banks in Maryland and other States which are not permitted bylaw to pledge security for trust funds deposited in their banking 4ellartzents. Thereupon Mr. Ransom moved that the letter to Mr. Leach be approved. Carried unanimously. Mr 'Baumann left the meeting at this point. Th°re was presented a memorAndum from Mr. Parry, which had been Areparea bY htm under date of July 28, pursuant to the request made at tiae rtie etillg of the Board on July 27, and which submitted a draft of 1e dIllerit to Regulation U, Loans by Banks for the Purpose of PurvaEtaille NI which Or c4rrYing Stocks Registered on a National Securities Exchange, w°414 make the provisions of the regulation applicable to so1°11s, I.e., loans made prior to May 1, 1936, the date upon 1h111 the regulation became effective. 'uent The reasons for the proposed as outlined in Mr. Parry's memorandum were elaborated upon 1054 7/29/37 -5_ by hira and, in response to an inquiry whether it would be desirable to defer the amendment until the revision of Regulation T, Extension and Maintenance of Credit by Brokers, Dealers, and Members of National Seci'll'ittes Exchanges, becomes effective, or whether it should be made "tactive before that date, Mr. Parry expressed the opinion that the latter c _ aarse should be followed for the principal reason that under the Prasent regulation, in the event of appreciation in the market 13lice of the securities held as collateral raising the margin in the 71, acc°1111t above the amount of margin required by the lending bank, the 11°11r°//er would be able to withdraw the excess margin or obtain addition1 credit, tabat this privilege would be lessened if the regulation Wel'e al/Plied to old loans, and that it was believed to be desirable tilt the 4mendment be made effective before any further substantial 1.4 security prices takes place. After a discussion, Mr. Szymczak moved the adoption of the following resolution: RESOLVED, That effective September 1, 1937, the Board approve and adopt the following amendment to Regulation U: the _Regulation U, as amended, is hereby further amended in 1. lollowing respects: S the 14°ee - tion 1 of said relation is amended by inserting gu or , I'de "or at any previous time," in the second paragraph 193?!;d section after the words "incurred on or after May 1, , and by substituting the words "While a bank mainally-- any such loan, whenever made, the" for the words "After N..cl uch loan has been made, a" in the third paragraph of reed section; so that said section 1 as thus amended will as follows: "SECTION 1. GENERAL RULE On and after May 1, 1936, no bank shall make any 1.055 7/29/37 -6"loan secured directly or indirectly by any stock for 1 E22At of purchasing or carrying any stock registhe 2,1 tered on a national securities exchange in an amount exceeding the maximum loan value of the collateral, as prescribed from time to time for stocks in the supPlement to this regulation and as determined by the good faith for any collateral other than Stocks. For the purpose of this regulation, the entire i ndebtedness of any borrower to any bank incurred on or after May 1, 1936, or at any previous time, for the Purpose of purchasing or carrying stocks registered on a national securities exchange shall be considered a single loan; and all the collateral securingsuch indebtedness shall be considered in determining whether or not the loan complies with this regulation. While a bank maintains any such loan, whenever made, the bank shall not at any time permit withdrawals Or substitutions of collateral that would cause the TEI tUatIM loan value of the collateral at such time to be less than the amount of the loan. In case such MEIximum loan value has become less than the amount of the loan, a bank shall not permit withdrawals or klbstitutions that would increase the deficiency; !olit the amount of the loan may be increased if there 1 v8 Provided additional collateral having maximum loan 2. lal e at least equal to the amount of the increase." the Section 2 of said regulation is amended by substituting portnrd "may" for the word "thereafter" in the unlettered se,""n of said section so that the unlettered portion of "section as thus amended will read as follows: "SECTION 2. EXCEPTIONS TO GENERAL RULE m_ Notwithstanding the foregoing, a bank may make and ! 6LY maintain any loan for the purpose specified above, Without regard to the limitations prescribed above, if the loan comes within any of the following descriptions:" Carried unanimously, with the understanding that the regulation would be reprinted and that the first paragraph of the foreword would be changed to read as follows: "This regulation is issued Pursuant to the provisions of section 7 of the Securities Exchange Act of 1934." 1056 7/23/37 -7Mr. nsom stated that pursuant to the plan inforiaally agreed Upon whEa the request from Senator Smith for a report on S. 1990 (Thomas bill) was received, he (Mr. Ransom) had submitted to Mr. Upham, AsFistant to the Secretary of the Treasury, for the purpose of obtaining such e(1111eats as the Treasury might care to offer, drafts of the statement Prepar ' e bY Mr. Goldenweiser Pursuant to the action taken by the Board meeting on July 26, 1937, on the subject "Objectives of Monetary Ol. ft " and that he had been advised by Mr. Upham over the telephone today. that he and Assistant Secretary Taylor had no suggestions to make. Thereupon Mr. Ransom submitted a draft of letter to Senator Smith which was approved unanimously as follows: to s 711 response to your letter of July 2, with reference 990, I am transmitting to you herewith a statement ,17111 re;eg reflects the views of the Board of Governors with ti_Pect to the important questions raised by this legisla: 1 1. The opportunity afforded the Board to express its to your committee is very much appreciated." The statement referred to in the letter read as follows: era" "From time to time the Board of Governors of the Fedill%erve System is asked for its opinion of bills pendth; 'mgress that would establish a central monetary auanc ,Y -" and direct it, as a Primary objective, to achieve biulliaintain a specified domestic price level. In these be „48_,it is generally assumed that the stated objective may epo-ained exclusively through monetary control, and repialbility for accomplishing the end sought is, therefore, cl! upon the monetary authority. stat , The Board assumes that, while price stabilization is garde`t as the objective of such proposals, the authors report stability of prices merely as a means toward a more ime,nd Znt end, namely, the lessening of booms and depressions the bh? increase in the national output and well-being, in e'lEf that through the maintenance of a stable price 1057 7/29/37 -8"level the broader objective will be achieved. "The Board is in full agreement with the ultimate objective of the proposals to promote economic stability, which means the maintenance of as full employment of labor and of the Productive capacity of the country as can be continuously ,Tistained. The board, with the broader powers conferred l'Pon it by the Banking Act of 1935, performs essential functions necessary to the achievement of this objective. by to the adequacy and efficacy of the means provided the proposals to achieve this objective, the conclusions reached by the Board are briefly stated in the following di scussion. "Price stabilization not an adequate objective. That wide flUctuations in the price level are disastrous is beyond cillestion and determined efforts should be made to prevent Such fluctuations as would endanger economic stability. The board is convinced, however, that the broader objective of 21)11113aln aastainable utilization of the nation's resources lolinot be achieved by attempting to maintain a fixed level Prices, and that, therefore, price stability should not the sole or principal objective of monetary policy. "Stabilization of individual prices by monetary means Proposed, nor would it be feasible. Proposals for PriTee stability necessarily refer to some index or average 0,Prices. There is no general agreement on the question 131-1 what constitutes a satisfactory price index for this it1i4P°8e, although the general wholesale commodity price is often suggested. 44s "No matter what price index may be adopted as a guide, theteble economic conditions may develop, as they did in act;1920's, while the price level remains stable; business vitY can change in one direction or the other and ac441 : icrill e Considerable ofib iferEble momentum before the changes are reflected prices. There are situations in which of 4ges in the price level would work toward maintenance I._ stability; declining prices resulting from technological ' igrovements, for example, may contribute to stability by thsraasing consumption. There are other situations when meztrestoration and maintenance of relatively full employe possible only with an advance in prices. Coris P°ndence between price stability and economic stability to 11, 1ot aufficiently close, therefore, to make it desirable b* strict the objective of monetary policy to price staIt, y "The 141Y be i inadequacy of price stability as a guide to policy llustrated by a situation when the index rises owing 1058 7/29/37 -9to an advance in agricultural prices. Such a rise might result from a crop failure in the United States, or from Short world crop while the harvest in this country was bo untiful and full employment prevailed. If the maintenance a fixed price level were the sole guide to monetary policy, et. restraining policy would be indicate d in both cases, alh°ugh in the former case such a policy might result in a general business decline, while in the latter case it might °r Might not be justified depending on other circumstances. "Inasmuch as the management of the country's monetary ./rstem is not an exact science, since it involves forecast,ng and dealing with many uncertainties, it is essential in " termining an objectiv e to leave scope for judgment and di scretion. 11rIlatry contribution to economic stability. Monetary : Ut horities may contribute to economic stability by exerting at itfluence to maintain a flow of funds conducive to as full t.118e of the country's productive resources as can be contitill°uslY sustained and to keep the banking machinery of ev :°°untrY in sound condition. The Board recognizes that t,-n an adequate supply of money will not perform its func17111°ns adequately, if the banking structur e through which it best oPerate is in an unsound condition, and that a sound i2lking structure cannot be sustained if the supply of money inaufficient, and a deflation is under way. The Federal -*serve System, therefore, must work toward economic stability °11gh its influence both on the flow of money and on the limrildness of banking conditions. The Board is aware of the Eiaq' : , tations on the effectiveness of this influence which tram the multiplicity of laws and jurisdictions as well der aa from the divided responsibility for supervision unwhich the banks of this country function. 'also stabil l ntrol alone cannot accomplish economic An attempt to make either price stability or the ce,:uer objective of economic stability the particul ar contact of the Federal Reserve System, without recognizing the coothat the attainment of the objectiv would require e the cal. ration of other agencies of the Government is impracti- 4 the "The Federal Reserve System can regulate within limits p ,,s1IPPlY of money, but there are other factors affecting r1 8 and business activity fully as powerful as the money 141any of these factors are non-monetary and cannot rolled by monetary action. Their effect on business act Of , : 3 irltY may express itself in an increased or decreased rate se or turnover, of the existing supply of money as well pedln a change in the supply itself. The influence that the sral Reserve System can exercise over the interest rate 1059 7h9/37 -10has an important bearing on business activity, but it may be entirely offset by other factors. "It is essential to recognize the limitations on the effectiveness of monetary policy. Monetary factors are nlY one of the groups of forces affecting business activity. . "Conclusion. To sum up, the Board believes that econ°mac stability rather than price stability should be the .leheral objective of public policy. It is convinced that !lis objective cannot be attained through monetary policy ne. The policies of the Government with reference to le ! . Iking, prices, agriculture, tariffs, security markets, or, uOther relief, spending, taxation, borrowing, and in many directions, have an effect on business activity. of "It should be the declared objective of the Government 8 ,the United States to maintain economic stability, and it °111d be the recognized duty of the Board of Governors of e 2, Reserv System e to use all its powers to contribut to a concer ted effort by all agencies of the Government toward the attainment of this objective." r j Question was raised as to whether the statement should be released to the press, and it was agreed that it should not be released by the Board unless it was given to the press by Senator Smith or representatives of the press were advised by other means of its transmission, in which event Mr. Thurston would be authorized to hand copies of the statement to the press. PEttry, 't th, Therellpon Messrs. Bethea, Carpenter, Clayto n, Thurston, Wyatt, Dl'elbelbis, Solomon and Dembitz left the room and consideration P-en submitted by the Union Trust Company of Maryland, Baltimore, ' for the dissol ution of the City Certificates Corporation was At the conclusion of the discussion, the resolution suggested by Chairm an Eccles at the morning session was adopted, Mr. McKee voting "no". Reference was made to a draft of letter to the board of directors 1.060 7/29/37 -11(31' the "Commerce Union Bank", Nashville, Tennessee, stating that, subject to the conditions of membership numbered 1 to 6 contained in the 13cardia Regulation li, and the following special conditions, the Board lailk"ea the bank's application for membership in the Federal Reserve syst and for the appropriate amount of stock in the Federal Reserve 4tLlz of Atlanta: ri f. Such bank shell make adequate provision for depreciation in its banking houses and furniture and fixtures. 118. As soon as practicable such bank shall dispose of !illy shares of its own stock held as collateral to ite loans. Within 6 months from date of notice by the Board of Governors requiring such action, such bank shall disPose of the ownership of all stock held in the Broadway National Bank of Nashville, in which bank it now holds a controlling stock interest, or convert such national bank into a branch of the Commerce Union Bank tt Approved unanimously, together with a letter to Mr. Newton, President of the Federal Reserve Bank of Atlanta, reading as follows: 4 "The Board of Governors of the Federal Reserve System Nrj ;'°17es the application of the 'Commerce Union Bank', Nashle' Tennessee, for membership in the Federal Reserve Sys— leelubject to the conditions prescribed in the inclosed which you are requested to forward to the board of Eire--; °rs of the institution. Two copies of such letter ()thee's° inclosed, one of which is for your files and the ,r tenci e of which you are requested to forward to the Superinnt of Banks for the State of Tennessee for his infortatiori. (11c1 : With reference to the accounts listed on pages 21-b of the report of examination for membership as being listTrlY li carried as savings accounts, and to the loans teoll ' 011 Page 21-a of the report as not being margined as th;'1 ' ed by the provisions of Regulation U, it is assumed lf the bank completes its membership you will follow 1061 7/29/37 -12etto a conclusion the correction of these matters. It is aleo assumed that you will follow to a conclusion the matter er the bank taking the necessary steps to provide adequate suPervision of the operating details and accounting systems (If the main office and branches. The report, both in the °1?en section and in the confidential section, contains con?lderable cumment in this connection and it has been noted of the examiner the management has laigteeadttto employ ploy an auditor as soon as the services of a suitable and competent person can be obtained. tjaat :In view of the fact that the examiner has reported the estimated losses shown in the report of examinewere charged off during the examination, the usual conl_ ti°11 of membership regarding the elimination of estimated 4Jusses has not been prescribed." At this point Messrs. Paulger and Leonard left the meeting and consid to ellition was then given to each of the matters hereinafter referred the action stated with respect thereto was taken by the Board: The minutes of the meeting of the Board of Governors of the Peder 41 Peserve System held on July 28, 1937, were approved unani- 111011.01 . y IUMorandum dated July 24, 1937, from Mr. Goldenweiser, Direct°11(4 the L ivision of Research and Statistics, recommending the ap: 1) 111tIllexit On a temporary basis for a period of three months of Miss vertcie El izabeth Ford as a clerk in the Division, with salary at the 1141e °11 435 per month, effective as of the date upon which she enters 14304 the performanCe Of her duties. Approved unanimously. t4 Memorandum dated July 27, 1937, from Mr. Morrill recommending tq ct1,a1)13°111tment of Mr. Herbert W. Young as first engineer at the slIew buildinr!, with salary at the rate of 2,400 per annum, 1062 7/29/3? -13ffective as soon as his services may be reauired after he has passed satiSf actorily the usual physical examination. Approved unanimously. Memorandum dated July 28, 1937, from Mr. Morrill, recommending the °(PPointme nt of Mr. Clair M. Aldrich as a guard at the Board's new buildi 116, with salary at the rate of ,1.,500 per annum, effective as of the date his services may be reauired, after having passed satisfactorily the Physical examination. Approved unanimously. ot Letter to Mr. Hamilton, President of the federal Reserve Bank 6es CitY, prepared in accordance with the action taken at the tn. eetin. 5. 01 the Board on July 20, 1937, and reading as follows: "The letter 01 members of the Board have read with interest your July 13, 1937, to Mr. Ransom with respect to the n„ a7f4:13°81t10n and functions of the executive committee and je7inistrative committee at your bank. Your letter was rech'''.red 4 after the Board had sent its letter of July 14 to !""Illan Thomas on this subject, a copy of which is attached hereto f -or Your information. mew."The Board has given careful consideration to the statetor 'in Your letter of the reasons which prompted your direcbute, t° Provide for the two committees as now constituted rort'c'es not feel they justify a change in the views set h in the Board's letter to Chairman Thomas. or "The Board concurs in the position that the directors diaZ Federal reserve bank should be representative of the ree rict served by the bank and is of the opinion that by , s f °14 able expenses incurred in connection with attendance tor-611-of-tolAn directors at meetings of the board of direcjustior necessary meetings of the executive committee are or thried and should be continued. However, a large part bEtnk aEgregate fees and expenses of directors at your ine,,' 44ring the year 1936 consisted of fees and expenses eizo 'rred in connection with attendance of directors at St daily meetings of the executive committee and, for 1063 7/29/37 -14"the reasons stated in the letter to Chairman Thomas, the Board is unable to see the necessity for such frequent meetof the executive committee or of the recently created aarlinistrative committ ee, either from the standpoint of remi.liarity of the directors with the bank's affairs or the Proper conduct of its busines s. "The third paragraph on page 2 of your letter refers to certain 'almost daily transactions' taken over by the operating departments of the bank in connection with the transfer of the non-statutory duties of the Federal Reserve ; 4sgant's department 'such as the issuing of Federal reserve l'ank stock, issuing of Federal reserve notes, etc., concernI cing which there is some question as to whether or not our directors could delegate the authority except to the Executive Committee or to a committee a majority of which was de T! 11P of directors.' Inasmuch as Article VI of your byauthorizes certain officers of the bank to sign certificates of stock issued by the bank, and the Board's ;egulation I, Increase or Decrease of Capital Stock of ederal Reserve Banks and Cancelation of Old and Issue of New Stock Certificates, states the circumstances under which Federal B reserve bank stock shall be issued and retired, the arc 'is unable to understand how questions could arise freT•lentlY which would require the attention of your directors. Innesmuch as the issuance and retirement of Federal reserve : a tn is a statutory function of the Federal Reserve Agent re the local represe ntative of the Board and was not transerred to the bank, questio ns arising in that connection hiollld be dispose d of by the Federal Reserve Agent, or in S theyabsence by an Assistant Federal Reserve Agent, unless ! re of such a nature that they should be referred to Of Governors for action. mad ava also state that if the Chairman of the board were gat :chaiman of the executive committee he could not delewo,; allY other director to serve in his stead and there ex cl be times when, there would be only two members of the cha?Utive committee available. As stated in the letter to intirnlen Thomas, the Board is of the opinion that in the direrest of sound procedure the Chairman of the board of dis=°rs of a Federal reserve bank, and, in his absence or ebii7aitY the Deputy Chairman, and, in the absence or diselleti ' tY of both, the third Class C director should serve as "of the executive committee of the bank. Such an arrtifm yo 'gement should obviate the difficulty referred to in 4r letter. fact :In this connection, reference is made again to the Eind 401at the executive committee of the bank meets on call ' het infrequent meetings are held, whereas the adminis- 1064 7/29/37 -15"trative committee meets almost daily. As stated in its letto Chairman Thomas, the Board feels that this arrangement le not consonant with the principles which should be ob.: P ,rved in distinguishing between the responsibilities of Qouirectors and officers, respectively, and that the creation all administrative committee to exercise between meetings the executive committee powers conferred upon the latter not consistent with the Purposes for which an executive te,oinmittee is provided. In this connection, it is assumed _124t Your directors are familiar with the discount committees Other Federal reserve banks, such as St. Louis and Dallas, which are composed entirely of officers of the respective banks. Th "It will be noted that the Board requested Chairman t rilas to bring to the attention of the other directors of i'e bank the views of the Board of Governors as expressed the letter to him, and the Board will also appreciate it fleYou will present this letter to your directors at their :xt m eeting. A copy of this letter is being sent to Chairn Th°111as with the request that he advise the Board of the action taken." 4 Approved unanimously. Letter to Mr. Rolf Nugent, Director, Department of Remedial ' Russell Sage Foundation, New York, New York, reading as follows: 1937 Receipt is acknowledged of your letter of July 22, de 71 commenting further with respect to personal loan an of national banks, and we are glad to have t 5 As further expression of your views on this subject. mi,lndicated in our previous letter, the matter is one tr:T1 falls Primarily withiL the jurisdiction of the Compr of the Currency." Approved unanimously. Let ter to Mr. Preston, First Vice President of the Federal Re411.e taxik of Chicago, reading as follows: 1937 "Receipt is acknowledged of your letter of July 24, or requesting approval of the employment of the firm as llYeri, Meyer, Austrian & Platt and Mr. Adelbert Brown, legjecial counsel for the purpose of contesting the iiart of the assessment on the building of the Federal 1065 7/29/37 -16- d eserve Bank of Chicago for the year 1936. The Board has ready approved their employment for the some purpose in connection with the assessment upon your building for the Y"r8 1934 and 1935 and approves their employment in conflee i oith the taxes for the year 1936, upon a contingent tee basis of not less than 5% nor more than 10% of the sayOn the taxes, exclusive of court costs, with the undernding that the total fee udll depend upon the work Inand the number of parties who are joined in the ac- Approved unanimously. Thereupon the meeting adjourned. Chairman.
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