The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
904 A meeting of the Board of Governors of the Federal Reserve Setem Was held in Washington on Friday, June 18, 1943, at 11:00 a.m. PRESENT: Mr. Mr. Mr. Mr. Ransom, Vice Chairman McKee Draper Evans Mr. Mr. Mr. Mr. Morrill, Secretary Bethea, Assistant Secretary Carpenter, Assistant Secretary Clayton, Assistant to the Chairman The action stated with respect to each of the matters herein— ater referred to was taken by the Board: The minutes of the meeting of the Board of Governors of the Reserve System held on June 16, 1943, were approved unanimously. The minutes of the meeting of the Board of Governors of the Neral Reserve System held on June 17, 1943, were approved and the ac— tic418 r ecorded therein were ratified unanimously. Telegrams to Mr. Brome, Assistant Secretary of the Federal Re— aerve 134r1k of New York, Messrs. VcCreedy and Hays, Secretaries of the Nler 41 Reserve Banks of Philadelphia and Cleveland, respectively, Mr. Dtilar U' Vice President of the Federal Reserve Bank of Chicago, Mr. Stewa : ealc ei t, Secretary of the Federal Reserve Bank of St. Louis, Mr. 1, Chairman of the Federal Reserve Bank of Kansas City, and Mr. Rale, v, 4-ce President of the Federal Reserve Bank of San Francisco, stat— ili e that erea R the Board approves the establishment without change by the Fed— eserve Banks of St. Louis and San Francisco on June 15 and by the 1 Reserve Banks of New York, Philadelphia, Cleveland, Chicago, 905 6118/43 —2- l'Irksas City, and San Francisco on June 17, 1943, of the rates of dis— coll/lt and purchase in their existing schedules. Approved unanimously. Uemorandum dated June 17, 1943, from Mr. Smead, Chief of the 34111 of Bank Operations, recommending, with the concurrence of Mr. Dreibe lbls, General Attorney, that Miss Margaret Muehlhaus, a stenog— relPher• In the Legal Division, be transferred to the Division of Bank °1 ati as secretary to Mr. Van Fossen, with an increase in her b4ic salary from $1,920 to $2,100 per annum, effective June 21, 1943. Approved unanimously. Memorandum dated June 17, 1943, from Mr. Morrill, recommending (10 th at the temporary appointments of Mrs. Sallie Farrow and Mrs. et FitzGerald as cafeteria helpers in the Secretary's Office be ektenci ed for additional periods of not to exceed 60 days each, with no ehllnge n their present salaries at the rate of $1,080 per annum, ef- -' a of the expiration of their present appointments at the close ot btls. ness on June 21 and 29, 1943, respectively, and (2) that the 4tiat : 1 Of John sk1200 Per s, a cafeteria helper, be increased from $1,080 to annum, effective July 1, 1943. Approved unanimously. Memorandum dated June 15, 1943, from Mr. Goldenweiser, Director °I' the 0 ot ivision of Research and Statistics, submitting the resignation 111S Margolis as a junior economist in that Division, to become "reet'v 1 -e upon the expiration of his accumulated annual leave following 906 6/18/43 discontinuance of active service, and recommending that the resignation beaccepted as of that time. It was contemplated that Mr. Margolis 11°4-14 leave the Board's employ at the close of business on June 12, 1943. The resignation was accepted. Letter to the board of directors of "The Medaryville State Bank", 4edary-crille, Indiana, stating that, subject to conditions of membership 41411cered 1 to 3 contained in the Board's Regulation H and the following 81lecia4- c ondition, the Board approves the bank's application for member11113 in the Federal Reserve System and for the appropriate amount of stock in the Federal Reserve Bank of Chicago: "4 Prior to admission to membership, such bank, if it has not already done so, shall charge off or otherwise eliminate eetiated losses of $715.051 as shown in the report of examination of such bank as of May 8, 1943, made by an examiner for the Federal Reserve Bank of Chicago." The letter also contained the following Special comment: "It has been noted that the bank has outstanding common ital stock of $25,000 which is in excess of the figure at coh, , ch the stock is shown on the books of the bank. In this ',?ction the Board feels that the bank should, as soon as pr ' aa cLicable, take such action within its power as may be neces8,!5: to cause the common stock to be shown at its par value. 1:1,7 adjustments may be effected through conservation of earne,gs of the bank, through reduction of its outstanding common ital stock, if and when such a reduction may be accomplished o er the applicable provisions of State law, or through such "er means as may be within the power of the bank. t t"It is understood that the bank wishes to discontinue its the department and that steps are to be taken shortly to have tIxt.°/le account now being handled transferred to another instibeel°n. In the circumstances, therefore, the application has bei n alTproved on the same basis as if fiduciary powers were not t1,1-ng exercised and attention is invited to the fact that if t7ipank should desire in the future to exercise such powers, : 1 11 be necessary under condition of membership numbered 1 to 7,3 -utain permission of the Board before exercising them." Z Zj 907 6/18/43 —4— Approved unanimously, together with a letter to Mr. Young, President of the Fed— eral Reserve Bank of Chicago, reading as follows: "The Board of Governors of the Federal Reserve System r proves i the application of 'The Medaryville State Bank', darYville, Indiana, for membership in the Federal Reserve seYstem, subject to the conditions prescribed in the enclosed letter which you are requested to forward to the Board of ulrectors of the institution. Two copies of such letter are also enclosed, one of which is for your files and the other °f which you are requested to forward to the Director, De— of1, Financial Institutions for the State of Indiana or his information. "The examiner calls attention to the fact that the num— ber of directors prescribed by the by—laws of the bank is ' eel.reh whereas there are eight directors serving, and it is that the by—laws will be amended at the next meeting of he ei board of directors to increase the prescribed number to ar,g"t. However, it is noted that the bank's articles of 480ciation provide that there shall be six directors and it wh.?ur understanding that the Indiana statutes provide that, sul-Le the 'exact number of directors to serve for each year a11 be determined, from time to time, in such manner as InL . 1310r—laws may prescribe', the number shall not exceed the -mum number fixed in the articles of incorporation.' 8: : t 4-8 matter is mentioned with the view that, if our under— toall ing is correct, the bank's attention should be called be ris situation so that appropriate corrective action may taken when practicable. "With respect to the class B debentures issued by the the 2 it is noted that paragraph 9 of the form accompanying mentaPPlication provides, among other things, that no pay— rtin,°f interest shall be made unless the bank's surplus ' the shall amount to 20 per cent of its capital stock. As th bank has no surplus, the payment of 000 interest on e.„7,8e debentures as of August, 1942 was apparently improper "t it co-" le suggested that this matter be considered by your "sel and brought to the bank's attention." tailk 0 Letter to Mr. Mulroney, Vice President of the Federal Reserve t Chicago, reading as follows: 1943 "Reference is made to Mr. Diercks' letter of June 7, feet 'and enclosures relative to the consolidation, ef— ed 'June 1, 1943, of The Citizens State Bank of South 908 6/18/43 -5"Haven and The First State Bank of South Haven, both of South Haven, Michigan, under the charter of the first named bank and under the title Bank of South Haven. "On the basis of the information submitted, the Board Foneurs in the opinion of counsel for the Reserve Bank that the consolidation has not resulted in any change in the gen!ral character of the business of The Citizens State Bank of outh Haven or the scope of its corporate powers within the l r e_aning of condition of membership numbered 4 to which that nflk is subject. The Board, therefore, interposes no objec' 10n to the transaction under the condition of membership." Approved unanimously. Letter to "The National Park Rank in Livingston", Livingston, a, reading as follows: 190 "This refers to the resolution adopted on April 20, --, by the board of directors of your bank, signifying the bank's desire to surrender its right to exercise fidu-.arY powers heretofore granted to it. "The Board, understanding that your bank has never actually accented or undertaken the exercise of any trust, has 4 th 4-ssued a formal certificate to your bank certifying dual, it is no longer authorized to exercise any of the fiorc.1-arY powers covered by the provisions of section 11(k) Ole Federal Reserve Act, as amended. This certificate ' enclosed herewith. In this connection, your fa attention is called to the pee d that, under the provisions of section 11(k) of the Reserve Act, as amended, when such a certificate has been issued by the Board of Governors of the Federal Re :teen ' 10 erve System to a national bank, such bank (1) shall no th:g, e,r be subject to the provisions of section 11(k) of Gov rederal Reserve Act or the regulations of the Board of to ernors of the Federal Reserve System made pursuant there1.1. ,(2) shall be entitled to have returned to it any secules which it may have deposited with the State or similar auj and °11-ties for the protection of private or court trusts, ec03) shall not exercise any of the powers conferred by permrn 11(k) of the Federal Reserve Act, except with the ssion of the Board of Governors of the Federal Reserve vw,em." Approved unanimously. ot Letter ver prepared for the signature of Mr. Ransom to the Presidents the Federal Reserve Banks, reading as follows: 909 6118/43 -6- "Enclosed is a copy of a recent document prepared by the Office of War Information, entitled 'Information Program on . c°110nlic Stabilization to Keep Down the Cost of Living'. As Lhe preface indicates, it is intended as a basic information ?utline and guide in furtherance of the Government's program to combat inflation. It is not meant for general public cir— clation, but rather as a source book for educational work w_ith the public. It was prepared with a view to making it as ractual as possible and to avoid criticisms that were directed Ilainst the previous booklet, entitled 'Battle Stations for 11, which was sent to you and subsequently to all member banks. "The Information asked us whether we thou;zht 1AT.ould Office of War be advisable to distribute this new document to all mber banks, as was done with the 'Battle Stations for All'. ! t replied that it seemed preferable to ask the Presidents of Federal Reserve Banks to what extent they might wish to ks use of the pamphlet in their respective districts, and to 11rnish the Reserve Banks with copies to be distributed by t1, 4 L,rm as they deemed best. Accordingly, it would be appreciated You would advise us as promptly as possible, preferably by tire, of the number which you would care to have for distribu— „°11, not only within the Bank but to others in your District ;r have been or can be enlisted in the educational work that u.rgently needs to be done. I understand that the Office of tir Information is revising this document so that the statis— wi.?_7 Used in it will be as current as possible, and that they (144--. furnish us with such copies as are requested by the Presi— 's of the Federal Reserve Bans." r r q Approved unanimously. Thereupon the meeting adjourned. 13) Secretary. Aprit.ove Vice C airman.
@FedFRASER