Full text of Minutes of the Board of Governors of the Federal Reserve System : Meeting Minutes, July 30, 1937, Volume 24, Part 3

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1066
A meeting of the Board of Governors of the Federal Reserve
6rsterfi WE
s held in Washington on Friday, July 30, 1937, at 11:15 a.m.
PRESENT:

Mr.
Mt.
Mr.
Mr.

Eccles, Chairman
Ransom, Vice Chairman
Szymczak
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. Tyatt, General Counsel
Goldenweiser, Director of the Division
of Research and Statistics
Dreibelbis, Assistant General Counsel
Chairman Eccles referred to the statement on "Objectives of
11°11stkry policy ,
" which was approved at the meeting of the Board yesf° tra
nsmission to Senator Smith as Chairman of the Committee
°11'1/41letature and
Forestry, and suggested that a change be made in the
tleXt to
the last
paragraph of the statement before it is sent to Senator
kith.

th
The matter was discussed and, by unanimous vote,
e
was amended to. read as follows:
ocon
sUtRi7F-1-11Eion. To sum up, the Board believes that economic
obl:"V rather than price stability should be the general
ti;;etive of public policy. It is convinced that this objecgoEli ernot be achieved by monetary policy alone, but that the
other ould
be Sought through coordination of monetary and
rnajor policies of the Government which influence busito =vity, including particularly policies with respect
tAlre
ta::., expenditures, lending, foreign trade, agricul„u
labor."
tteo

The
was presented for consideration by the Board a draft of
- Prepared by Counsel pursuant to the reauest made at the




1067
NO/37

-2-

Ineetitig of
the Board on July 13, 1937, and reading as follows:
'"BE IT RESOLVED that the first sentence of the third
Vgraph of section XIV of Regulation ic entitled 'Banking
.g.ql°rations *Authorized To Do Foreign Banking Business Under
L
Terms Of
Section 25(a) Of The Federal Reserve Act' is
c4nded, effective September 1, 1937, to read as follows:
'Against all demand deposits and time deposits received by the Corporation in the United
tates a reserve shall be maintained in the peres required to be maintained by member banks
Of the
Federal Reserve System located in central
reserve cities, provided that in no event shall
such reserve be
less than 10 per cent of the aggregate amount of all demand deposits and time deposits received in the United States.'"

I

Upon motion, the resolution was
adopted by unaminous vote.
In e°nnection with the above matter consideration was given
to4,
-Letter 4.
uo the Presidents of all Federal reserve banks, reading
ti.Z follows.

0
rder that all foreign banking corporations operating
the supervision of the Board pursuant to the provisions
Act t
T,
-tbiler section 25 or section 25(a) of the Federal Reserve
to
Y be placed on substantially the same basis with respect
SeD4rlie requirements, the Board has amended, effective
paragraph
Or sec
,r 1) 1937, the first sentence of the third
'Lon XIV of Regulation K to read as follows:
'Against all demand deoosits and time deP,e8its received by the Corporation in the United
ta.teE
a reserve shall be maintained in the Derrequired to be maintained bri member banks
-,, the Federal
Reserve System located in central re;
erve cities, provided that in no event shall such
serve be less than 10 per cent of the aggregate
c unt of all demand deposits and time deposits re4:I/Ted in the United States.'
i, Your information, you are advised that only one of the
tcre4nor
the p;;;_;ankino' corporations operating under the supervision of
i-IQ pursuant to the provisions of section 25 of the FedcleDojserve Act is not now reauired to maintain reserve: against
'
8 received in the United States in the percentages required

uzder

er,a




1068
7N/37
-3ti+„
be
maintained by member banks located in central reserve
Cities. . The
Board is taking appropriate steps to require the
same
reserves to be maintained by this corooration.,”
Approved unanimously, together with three
letters readinfr as follows:
Letter to The Chase Bank, New York, New York:
in "In order that all foreign banking corporations operatvig.under the supervision of the Board pursuant to the proRese.lcns of either section 25 or section 25(a) of the Federal
rve Act may be placed on substantially the same basis
ef," respect to reserve requirements, the Board has amended,
palrective September 1, 1937, the first sentence of the third
agraPh of section XIV of Regulation K to read as follows:
'Against all demand deposits and time deposits
received by the Corporation in the United States
a reserve shnll be maintained in the percentages
required to be maintained by member banks of the
Federal Reserve System located in central reserve
sities, Provided that in no event shall such reserve
be less
than 10 Der cent of the aggregate amount of
all demand
deposits and time deposits received in
the United
States.'
by th'The proviso
in the above-quoted amendment is made necessary
the pe,last sentence of the sixth paragraph of section 25(a) of
cleral Reserve Act.
tein Beginning September 1, 1937, your Corporation should mainas enireserves in accordance with the provisions of the regulation
are:
- ended- At present, member banks in central reserve cities
inezd-equired to maintain reserves of 26 per cent against their dedeposits and 6 per cent against their time deposits.
forei Fcr Your information, you are advised that only one of the
the en banking corporations operating under the supervision of
to the provisions of section 25 of the Federal
serve A
1108ije Act is not now reauired to maintain reserves against deto be- received in the United States in the percentages required
The Bfsmaintained by member banks located in central reserve cities.
tobe
'
ard is taking appropriate steps to require the same reserves
Ilaintained by this corporation."
Letter to
Mr. W. C. Thompson, Vice President, French American
0
Nration, New York, New York:




1069
7/30/37
-4"This refers to your letter of June 9, 1937 requesting an
ndment to the aree-rient under which your corporatton is opPursuant to the provisions of section 25 of the Fedn °LI-Reserve Act,
so as to provide that the corporation maintain
;reserve of
13 per cent a-ainst all demand deposits and time
eP°sits received in the United States.
4.L
"On March 12, 1937 the Board advised your corporation that
;
i
- .would be
willing to modify the terms of the agreement under
t:
h c the corporation is operating so as to provide that it mainthtn a reserve of 13 per cent against all deposits received in
United States. On March 16, 1937 you acknowledged receipt
Of
notTs letter and stated that at that time the corporation did
esire to request any change in the agreement.
e writing the letter of March 12, 1937, the Board of
Gove,,
olus;"°rs has reconsidered this matter and has reached the Conthat corporations operating under agreements with the
por
'
Pursuant to section 25 of the Federal Reserve Act and corActati
organized under section 25(a) of the Federal Reserve
recelhould all
be required to maintain reserves against deposits
rtiai,jed in the United States in the percentac:es required to be
Utdll A
by member banks located in central reserve cities. As
You
83w, member banks in central reserve cities are now required
to 1:
denos_is
ts
and n pe antin reserves of 26 per cent against their cemand
Board
the
cent against their time deposits. Accordingly,
Your is unwilling to change the provisions of the agreement with
COrPora
tion in regard to this matter.
trig a Pcsr Your information, you are advised that the Board is takinto
ppropriate steps to bring all outstanding agreements entered
forreirsuant to section 25 of the Federal Reserve Act into con}11 point and has also amended the provisions of its
0n K so as to require corporation-, organized under section
rese;
, to
maintain against deposits received in the United States
ves
by 44emb
in
the .
same percentages as are required to be maintained
e,banks In central reserve cities."
Lett
to the First of Boston International Corporation, Boston,

Zr

chusettes:
agre "Under date of
May 11, 1935, your corporation executed an
eral ent, pursuant to the provisions of section 25 of the FedRe
Posit
"eserve Act, which agreement provided 'that against all detain s received in
the United States the Corporation shall main', reserve of
not less than 13 per cent'.
171.Eio The other two corporations now operating under the superthe 1,11 °f the Board nursuant to the provisions of section 25 of
ederea Reserve Act are required to maintain reserves against
deru,,
-4
'
1 d eposits and time deposits received in the United States




1070

7/6v37
—F,441 the
percentages required to be maintained by member banks
-;:c3cated in
central reserve cities. TIember banks in central
peserve cities are now required to maintain reserves of 26
417.eent against their demand deposits and 6 per cent against
time denosits.
"In order to place all foreign bankin - corporations op—
erating under
the supervision of the Board pursuant to the
re?lsions of section 25 on the same basis with respect to
of"re requirements, the Board has decided that the agreement
1001
:2 11) 1935 should be amended so as to require your cor—
bto maintain reserves in the percentages required to
intained by member banks in central reserve cities. In
to
accomplish this nurnose, the Board desires that sec—
of the agreement of May 11, 1935, be amended to read
as fop
"
4- 0, such amendment to become effective September 1, 1937:
'That against all demand deposits and time de—
posits received in the United States the Corpora—
tion shall maintain reserves in the percentages re—
quired by law to be maintained by member banks of
the
Federal Reserve System located in central re—
serve cities, which reserves may consist of cash in
vault or
balances with a Federal Reserve bank or any
member
bank;'
ernend F°1- Your information, you are advised that the Board has
ed the
provisions of Regulation K relating to foreign bank—
Rese,e°11)orations organized under section 25(a) of the Federal
all
'
dye Act so as to require such corporations to maintain against
cettaePosits received in the United States reserves in the per—
ser ges required to be maintained by member banks in central re—
es,
130ard"It will be appreciated if your corporation will advise the
to 8 °f Governors of its acceptance of this proposed amendment
the le
1 1(c) of the agreement of May 111 1935 and forrard to
a copy of a resolution of the board of directors of
corporation
authorizing such acceptance."
At this
point Messrs. Thurston, Wyatt, Goldenweiser and
1)41beibi
8 left the meeting and consideration was then given to each
°.t tht
Inatters
hereinafter referred to and the action stated with re—
Net th
ereto
17as taken by the Board:
The
minutes of the meeting of the Board of Governors of the
-4ebta

c;„r

3T,T

rye

System held on July 29, 1937, were anproved unanimously.




1071

7/50/37

-6Telegrams
to Mr. Roelse, Assistant Secretary pro ten of the

Neraa

Reserve Bank of New York and Mr. Clark, Secretary of the Fed-

eral

Reserve Bank
of Atlanta, stating that the Board approves the estbjj
hment without
change by the New York bank on July 29, 1937, and
bY the
Atlanta bank today, of the rates of discount and purchase in
tIleir
existing schedules.
Approved unanimously.
Balik of

T
elegram to Mr. Wood, Vice President of the
St.

Federal Reserve

Louis, readinu as follows:

Bo "Your letter of July 26. In view of your recommendation
ow
:
rd extends to September 20, 1937 time within which 'First11(I
Bank & Trust Company', Owensboro, Kentucky, may aceordingly.n
e'lsh membership in the System. Please advise bank ac-

Approved unanimously.
II1g as

Letter to u rhe
"Ely, Nevada, readFirst National Bank of Ely,
follows:

has The Board of Governors of the Federal Reserve Sys-?em
to erven consideration to your application for permission
act -acise fiduciary nowers, and grants you authority to
tr,! en notu in contravention of State or local law, as
sigtee e
xecutor, administrator, guardian of estates, asreceiver, and committee of estates of lunatics, the
Of all such rights to be subject to the provisions
of. - ederal
Reserve Act and the regulations of the Board
Go
IPrs of the Federal Reserve System.
ticke.'"Ls letter will be your authority to exercise the
ttqa ,
4
,rY powers granted by the Board pendinu thenrel?ara)
0"tietT 4'11 formal certificate covering such authorization,
1/4-11 be forwarded to you in due course."

°e the Of




Approved unanimously.

1.072
7/30/37
-7Letter to Mr. Fry, Vice President of the Federal Reserve Bank
Of

ItLe6o
A
-4-/
Prepared in accordance with the action taken at the meettrig

f

the Board
on July 20, 1937, and reading as follows:
, "This refers to
the application Of The First National
13atik of xi
Perraissi-orgsMountnin Kings Mountain, North Carolina, for
to act as trustee under deeds of trust to secure
debts
It is understood
that the applicant bank has been rebyone of its customers to act as trustee under a
Li.gage securin7 an issue of bonds and that it is not the
wention of the bank to act as trustee under mortgages to
stc̀:Ure debts
except in this one instance. It is also undere:
d4 that the officers of the bank have not had any fiduciary
depj,:ence/ that the bank does not desire to establish a trust
cf;:ts.
and does not intend to apply for additional fidulatin 418 You know, under the Provisions of the Board's Reguficit
;
41 F a national ban': which obtains permission to exercise
whic;'arY porers is reouired to establish a trust department
Of th shall be separate and apart from every other department
tnedia#
?ank and shall be placed under the management and imeonip"
et supervision of an executive officer oualified and
that ent to administer trusts. The regulation also provides
peratisin
si Passing upon an application of a national bank for
spisclal on to exercise fiduciary powers, the Board will give
tions
consideration, among other things, to the qualificathe and experience of the proposed executive officer of
vrust department.
orph_
rleetin;7 circumstances in this case were discussed at a
it se t=• of the Board. In view of the facts referred to above,
with Tne clear that the bank does not contemplate complying
4ot
requirements of the remilation and, in fact, it would
ex
eem that it
would be justified in incurring the necessary
trs, in order to do so merely for the purpose of handling
lioard-;fu. In view of all the circumstances, therefore, the
The pi
:
°es not feel that it should approve the application of
cillest'st National Bank of Kings Mountain, and you are reed to advise that bank accordingly."
Approved unanimously.

Letter to
Mr. Leech, President of the Federal Reserve Bank of




1073

7/30/37

-8reading as follows:

"The Board has given careful consideration to your letter
3.111Y 27, 1937, and to the views which you have expressed
to the
Board with respect to the proposed plan for liquidation
ur the City
Certificates Corporation of Baltimore, Maryland.
The plan
provides
that the stock of the 'Union Trust Company
of
MarYland', Baltimore, Maryland, held by the City Certificates
ut?I'Poration, be distributed to holders of certificates of bene,
Icial interest issued by the City Certificates Corporation and
4_0
0 stockholders
of that corporation. Under the provisions of
ondition of
membership numbered 27, to which the Union Trust
stillPanY of Maryland is subject, however, none of the shares of
"k Of such bank acquired by the City Certificates Corporation
shall be sold or transferred by the City Certificates Corilati;cn except with the written consent of the Board of Governors.
hi view of all of the circumstances the Board of Governors,
at
4 meeting, decided to request the Federal Reserve Bank of
ehin.ond to advise the Union Trust Company of Maryland that the
uards without having approved the proposed transfer of stock
0
,8F the revised plan submitted by the trust company, will give
ns
to lderation to a request for a waiver of the requirement as
raelab
e°nsent to such transfer of stock contained in condition of
ershiP numbered 27, if and when
1. The plan has been submitted in writing to the holders
of the certificates of beneficial interest issued by
the City Certificates Corporation and to the stockholders of the Corporation, in terms clearly and
simply setting forth the details of the plan and
stating specifically not only what 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 less
than two-thirds of the holders, who hold not less
than three-fourths in amount, of the certificates of
beneficial interest outstanding, exclusive of the
certificates upon which cash payments would be made
3 in full; and
• Such plan has been approved in writing by the stockholders owning at least two-thirds of the outstanding
stock of the City Certificates Corporation.
"Please advise the trust company accordingly."

Z

Approved unanimously.
EtE3

Let
ter to the Presidents of the Federal reserve banks, reading
'L0110148

"In its letter of August 28, 1935 (X-9301), the Board of




1074
7/30/37

_9-

"Governors
aabmitted to the Federal Reserve banks for comments
A
'
!
fl suggestions a draft of a revision of Regulation A relating
to
discounts for member banks by Federal Reserve banks, and
with its letter of October 21, 1935 (X-9346), inclosed copies
Of
memoranda covering the recommendations made by the Board's
,!,3tiff with respect to the principal suggestions of the Federal
Reserve banks in connection with the proposed regulation.
"There are inclosed herewith six copies of a revised draft
Of the
proposed Regulation A and of a proposed letter regarding
iarginal collateral to be transmitted to the Federal Reserve
,
41aks in connection with the issuance of Regulation A. The i
inClosed draft of
contains
regulation
changes,
a number of
the
aad Your attention is invited particularly to the provisions
1(3ct subsection
(d) of section 1 of the regulation regarding the
,
11,48
of collateral which may be used as security for advances
,
itawir section 10(b) of the Federal Reserve Act; to the omission
14111 subsection (a) of section 2 of the provisions under which
/113ele is ineligible for discount if its proceeds are advanced
:
0 811Me other borrower; to the provisions of subsection (e)
section 3 of the regulation regarding the amount of credit
extendedt
on the security of obligations of the United States;
the
omission of the words 'or between foreign countries'
biL
!
l eragraph (1) of subsection (b) of section 6 regarding
'
elZ
3 sTs' acceptances; to the omission in paragraph (3) of said
we
,
srtion (b) of the words 'or issued by a grain elevator or
8 eu°usia company duly bonded and licensed and regularly intrcted by
State or Federal authorities with wham all receipts
slIch staples and all transfers thereof are registered and
A
to ,4.1.0ut whose
consent no staples may be withdrawn'; to the new
t 471°te 9 regarding bankers' acceptances; to the recommendare-48 in the appendix relating to real estate loans; and to the
Itaccftlendations in the appendix relating to loans upon installPer; as well as to the General Principles included as
ereieLeoe to the regulation and the proposed letter to the Fed1ase
rva banks regarding marginal collateral.
,1,
4 11 aUbsection
(d) of section 1 of the regulation contains
it "
of specified classes of collateral security upon which
m
to -;,tI be expected that member banks will more readily be able
vie7"ain credit from the Federal Reserve banks under the proothlons of
section 10(b) of the Federal Reserve Act than upon
bee
"classes of security not specifically mentioned. It has
CO' suggested that the inclusion of this list of classes of
the neral security and of the recommendations contained in
be e.,PPendix to the regulation as to the standards which should
104;userved by member banks in making installment loans and
pree
:
411Pon real estate may serve to foster and encourage sound
bY member banks in making loans and investments.
kark,,'"e You know, with the exception of paper of cooperative
ceea'
ing associations and of certain factors, paper the proellehs or Which are advanced or loaned to some other borrower,
as paper made by finance companies, has heretofore been

l

j




7/30/37

g

1075
-10-

li
tIle for discount at Federal Reserve banks. You will
subsection (a) of section 2 of the inclosed draft
Of the
regulation that this restriction on paper whose proceeds are loaned to others has been eliminated, so that notes,
dr
P4
-a-us
or bills of exchange the proceeds of which have been or
are to be
advanced or loaned to some other borrower for a com!ercial, agricultural or industrial purpose would be eligible
lor discount.
Like any paper offered for discount, however,
84ch a note, draft or bill would have to comply with the other
requ
irements of the regulation as to eligibility for discount,
including the
maturity limitations of 90 days in the case of
n
e°1211ercial paper and nine months in the case of agricultural
in)r. If paper is ineligible for discount because its maturity
t° In excess of these limitations, it may nevertheless be
aced by a Federal Reserve bank as security for a member bank's
ilriseorY note under the provisions of section 10(b) of the
"eral Reserve Act, as provided in subsection (d) of section 1
of the
regulation.
"It will be observed that under
the provisions of pars!
raPh (1) of subsection (b) of section 6 it would no longer be
v2asible to discoun bankers acceptances
t
drawn to finance the
'
:!ipment of goods between foreign countries. This change
is
antained in the revised
draft of the regulation in view of the
;"iselosures regarding acceptances of this kind in the report
the Federal Reserve Committee on Acceptance Practice. In
View
z of the fact that Regulation B provides that,
with certain
incePti°ns, a banker's acceptance must be eligible for discount
4c.
3fder to be eligible for purchase by Federal Reserve banks
or Itaille open market, this change would also prevent the purchas
e
bet-ankers' acceptances drawn to finance the shipment of goods
veri;ean foreign countries. However
, the change would not pre44d rine financing through bankers' acceptances of the sale
porj
l etribution into the channels of trade abroad
of goods ex1181:1 from this country, in _accordance with the ruling pubPoot:%at Page 860 of the Federal Reserve Bulletin for 1927.
Mend:2:e 9 is intended to conform substantially to the recomzu,'"Ion contained in the report of the Federal Reserve
Comue: on Acceptance Practic
e.
dot__ It will be
appreciated if you will review the inclosed
ti:olents and furnish
to the Board your comments and suggesorle thereon
before September 1, 1937. While the Board will,
regui
°11rae, be glad to have your views on any provision of the
cont,:rion to which you wish to call attention, the provisions
toa„—
,,lied in the draft of the regulation inclosed with the
jeW s letter of
August 28, 1935, have already been the subit i °f careful consideration by the Federal
Reserve banks, and
the 8 hoped that in making suggestions to the Board regarding
visirevised draft you will give particu
lar attention to the pro°128 which are
mentioned in the second paragraph of this letter.
ter :It i
"requested that the regulation and the proposed letbut °
4 ' considered by the appropr
iate officers of your bank,
that they
be not submitted to or discussed with anyone outof the bank.
Please have it clearly understood that the

LT




1076
v30/37

-11etre
gulation and proposed letter are not for publication and that
the entire
matter is to be dealt with in strict confidence."
Approved unanimously.
Letter to Honorable James M. Landis, Chairman, Securities and Ex-

elletblge C
ommission, reading as follows:
"Enclosed are six copies of a tentative draft of a proPosed general
revision of Regulation T, Extension and Mainten!nee of
Credit by Brokers, Dealers, and Members of National
oecurities Exchanges, which has been prepared at the direction
the Board but
which has not yet been acted upon by the
°311rd. Additional copies may be had on request.
it "YOU will note that this is a preliminary draft and that
Is not for publication.
. "Copies of this draft have been submitted confidentially
;,0_1* comments
and criticisms to all Federal Reserve banks and
4?1'ough them to all national securities exchanges. It is aneiPated that some of the exchanges and some of the Federal
wes"ve banks will submit their comments within two or three
be
eeks, but that others will desire additional time. It has
tl,en suggested, however, that in any event all comments from
Reserve banks and the exchanges should reach the Board not
than September 15, 1937.
th
"It will be appreciated if the Commission will consider
e
b,,.draft
in confidence, with every precaution against notice
1e Press, and submit to the Board in writing any comments,
pres
:
IT:a and suggestions that the Commission may care to

W

44

Approved unanimously.
Te
legran to Mr. McKinney, President of the Federal Reserve Bank
or Dalia
8,

reading as follows:

Boa :Referring your July 29 wire and telephone conversation
Bei
waives republication of June 30 condition report of
Y Bank and Trust Company, Bay City, Texas."
Approved unanimously.
Mamorandimn
dated July 16, 1937, from Mr. Bethea, Assistant
-J, stating
that at its meeting on June 7, 1937, the Presidents'
Collrere
4

approved the recoimnendations of its subcommittee contained

1'615°11 on the subject of "Developing a Method of Indexing and




1077

No/37

-12-

Otherwise Making
Readily Available the Rulin-s, Interpretations, In8tructions 3

etc., of the Board of Governors of the Federal Reserve

SYEAem",
and that it was the committee's recommendation that there
be

established and maintained by the Board a loose-leaf service em-

braciag the following material:
The
2. The Board's regulations,
Board's published Digest of Rulings
3.
Board communications containing such of its rulings and
interpretations of law or regulations as are still effective and are not contained in the new Digest of
Rulings, and
4. One
consolidated detailed index of the foregoing material
and of those instructions of the Board which are still
effective and are contained in the communications which
were distributed to all Federal reserve banks.
The
the

memorandum
set forth the principal operations to be undertaken by

13°4trd in connection with the establishment and maintenance of the
service, and
recommended, for the reasons stated in the memorandum,
that
the B°ard approve the recommendations of the subcommittee of the
?req.
Conference and authorize Counsel's Office to undertake the
1°11k
involved in connection with the establishment and maintenance of
the
proposed
service, with the understanding that the Secretary's Oftice
will
die the administrative aspects of the task, and that the
°ther
divisions of the Board's organization will cooperate with respect
to
illstructions which they originate. The memorandum also recommended
that
the
Board authorize the Secretary's Office to incur such out-of15°c4tet
expense, not to exceed !3,000, as may be necessary for the
Pl/Nse of
es
tablishing the proposed service, and such additional out".14)eket

expense as may
be necessary from time to time to maintain




1078
7/30/37
-13the service

Approved unanimously.
Letter to Mr. Schaller, President of the Federal Reserve Bank
Of chic

ago, reading as follows:
"Reference is
letters of July 6 and July
in !ith respect to made to your
the handling of currency for member banks

-11s cities of Chicago and Detroit.
"The Board is
pleased to note from your letters that
:
11 1 have been
successful in eliminating almost entirely the
ho,ressarY sorting of currency at the Detroit Branch and
at allthat similar' results may be obtained in the near future
F
rederal Reserve banks and branches.
the.4 "In the light of existing circumstances the Board feels
re," it would be helpful to ascertain at this time what prog'
aees the
Federal Reserve banks are makinr, in this respect and,
th
inglY, has written a letter to Mr. Fleming, Chairman of
geetesidents' Conference Committee on Free Services, sugthis-ulF that, if agreeable to his Committee, he ascertain at
the-2rne what progress has been made to date in eliminating
v7necessary sorting of currency for local member banks
1.".„L
' hat further
results they expect to accomplish in this
Peet.
A
•
copy
of the Board's letter to Mr. Fleming is inelos

Approved unanimously, together with a letter
President Fleming as Chairman of the Presidents'
C°
fo
o7fejzce Committee on Free Services, reading as

with "Under date of July 6 Mr. Schaller wrote to the Board
elirtZieT)
ect to the accomplishments of the Detroit Branch in
and ,74
- :41 ing unnecessary sorting of currency for Detroit banks,
chat- Late,a
his letter that a copy had been sent to you as
Servr
'
i-e n of the Presidents' Conference Committee on Free
"
' On July 9 Mr. Schaller again wrote to the Board
°4 th;
the B-s subject, and a cony of his letter of July 9 and of
d's reply are inclosed.
ter
the Board has given careful consideration to this metepeerd believes
it to be of sufficient importance to warrant
ei
,on at this time. Accordingly, if agreeable to
trelt
r
veue.4134Ite
it is suggested that you ask each Federal Re—
de,te ibank for information as to the Progress it has made to
cltrr
reducing the exnense connected with the handling of
thatencY. for local member banks. The Board is of the opinion
it would also be helpful if you would ascertain from

Z




1079
No/37
-14"each

Federal Reserve bank whether it expects to accomplish
l_r°ximately the same results in this respect as has the
t Branch, and, if so, when it expects changes to that
end to become
fully effective."

n

Letter to Mr. Stewart, Secretary of the Federal Reserve Bank
()f St. Louis,
reading as follows:
"Reference is made to your letter of July 21 in regard
proposed
change in the contributory group life insurance
eY of your bank, increasing somewhat the maximum insurance a
vailable to emPloyees in various salary groups.
It is noted that the gross cost to the bank under the
seat policy
is about 3,000, and that the actual cost durVecge Year ending July 311 1936, was slightly in excess of
Jul `'u, but that it is anticipated that for the year ending
'1- 37, the bank will have an income of approximately
$767
3 31
Of theer the policv. It is also noted that the gross cost
that proposed amended policy should not exceed ;54,500, and
thi the net cost is expected to be substantially less than

to

C

-8 aMOUnt.

inF, "The Board
will interpose no objection to your continuYeu
r.
contributor- crroun life insurance contract amended
queP
sr?Dosed with the understanding that you will bring the
10
t 11 cf continuance of the policy to the Board's attention
for ,
the 4urther consideration in case you find at any time that
exe net annual cost to the bank is likely to be materially in
ess of




Approved unanimously.

Thereupon the meeting adjourned.