The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
771 A meeting of the Board of Governors of the Federal Reserve Syswas held in Washington on Thursday, Tune 3, 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 reto and the action stated with respect thereto was taken by the toard: The minutes of the meeting of the Board of Governors of the FedIlsaerve System held on June 2, 1937, were approved unanimously. Telegrans to Mr. Ziemer, Vice President of the Federal Reserve 84111tr,o 4 Minneapolis, and Mr. Sargent, Secretary of the Federal Reserve Of San " Francisco, stating that the Board approves the establishwithout change by the respective banks today of the rates of dise°411t and purchase in their existing schedules. Approved unanimously. Telegrem to Mr. Douglas Brooks, President, Union Compress and se Company, Memphis, Tennessee, reading as follows: "Board of Governors has appointed you director of MemPhis Branch of Federal Reserve Bank of St. Louis for unex! il'sd portion of term ending December 31, 1939. Please wire cmceptance collect." Approved unanimously. 772 6/3/37 -2Letter to Mr. Hamilton, President of the Federal Reserve Bank oriCansas City, reading as follows: "Reference is made to your letter of April 26, 1937, end Previous correspondence regarding the minimum amount of caPital required for the Brighton State Bank, Brighton, Colorado, to be eligible to membership in the System. "In view of the information submitted and with the understanding that your recommendation is based on a firm opinion that the number of the present inhabitants of Brighton, C.i l°redo, is less than 3,000, the Board feels that there is fication for considering the number of inhabitants of 'righton as less than that number and the Brighton State Beak, therefore, eligible for admission to membership with caPital of 425,000. However, if in any other case there should be a question as to the number of inhabitants and should be necessary to determine the population of the Place for membership purposes, it will be appreciated if the 1!rocedure for determining population as set out in the Board's etters X-7578 and X-4397 is more closely followed. "In his letter of April 21, 1937, Mr. Rhode, president 0 Ef both the Brighton State Bank and the Fort Lupton State cenk) which is also considering membership, states that the 0( :,1°111do laws compel State banks to maintain'a ratio of 0. capital and surplus to every 410 of deposits and that such fequirement would amply cover the question of sufficiency of In only one of the seven semi-annual statements of tile Fort Lupton State Bank for the period December 31, 19n, to December 31, 1936, as shown in Rand McNally Bankers DirecA llies, did the capital structure of the bank, including unv`stinded Profits and reserves, equal 10% of deposits. ,The etmaent as of June 30, 1934, showed a ratio of 10.7,0 and the 19, three latest statements as of December 31, 1935, June 30, 6.4, and December 31, 1936, showed ratios of 7.8, 8.6% and th(b) respectively. It would appear, therefore, either that d eposits of the Fort Lupton State Bank have fluctuated Wid totelY, or that the statutes to which Mr. Rhode refers have a,,Proved as effective as Mr. Rhode indicates in compelling " increase in capital or surplus. the "The previous correspondence has dealt primarily with Ba,,Illinimum amount of capital required for the Brighton State to be eligible for admission to membership, but it would er that there may be some question as to the adequacy of the e1' of the Brighton State Bank and the Fort Lupton St e Penk, and it is assumed that this will have your careco or Mensideration in connection with applications of the banks mbership in the System." Eq) e ' Approved unanimously. 973 6/3/37 -3Letter to Mr. Newton, President of the Federal Reserve Bank of Atlente, reading as follows: "This refers to the Board's letter addressed to you under date of Tilly 31, 1936, in which you were advised that You had been designated to make a determination of the fair lielue of the assets of 'The Birmingham Trust and Savings C°mPanY', Birmingham, Alabama, upon the basis of the report Of an examination of the bank made by an examiner for the Federal Reserve Bank of Atlanta as of June 2, 1936. The d esignation was made pursuant to the provisions of section 18.0f Article THIRD of the institution's charter, as amended, Which, according to the Board's files, reads in pert as follows: 'The determination of the fair value of the assets of the Corporation for the purposes of this article Third Shall, unless and except as otherwise expressly provided, be made by such person or persons as may be designated to make the same by the Board of Governors of the Federal Reserve System * * * * and be based upon the last available report of examination of the Corporation made under the direction of or approved by such Board of Governors or such other body or agency. Each such determination shall be in writing and filed with the Corporation and be effective until another such determination is so filed. * * *' "In view of the provision of the section quoted that each slIch determination shall be effective until another such de! ermination is filed with the bank and the fact that since Vae d etermination made by you on August 4, 1936, the bank has ./,een examined as of January 25, 1937, by examiners for the federal Reserve Bank of Atlanta in participation with examIdners for the Alabama State Banking Department, the Board _eelma it advisable to request that, until further notice, you ke determinations of the fair value of the assets of The ralingham Trust and Savings Company, in accordance with the 'Z'37isions of section 18 of Article THIRD of the institution's t,rter, upon the completion of examinations of that instiC"-on made from time to time by examiners for the Federal deserve Bank of Atlanta. It is suggested that in the future terminstions of the fair value of the bank's assets, as in 4"e first one, due consideration be given to any Pertinent tnformation, including that disclosed by reports of examinaqon made by examiners for the Alabama State Banking Depart%: which you may have with respect to the condition of the q j -774 6/3/37 "As such determinations are made from time to time, you requested to file a written report of your findings with The Birmingham Trust and Savings Company, the Reconstruction Finence Corporation, and the Board. It is suggested, also, that in filing the written report of your findings with The Birminghem Trust and Savings Company you advise the bank that the determination previously made by you has been superseded bY the findings embraced in the current report being filed." are Approved unanimously. Letter to Mr. Peyton, President of the Federal Reserve Bank of IiiiiinesPolis, reading as follows: "This refers to your letter of April 7, 1937, with reference to the request of the Montana National Bank, Billings, Montana, that it be permitt ed to hold Federal Reserve bank cashier's checks as collateral for funds of trusts administered the bank and carried in its bsnking department. It has as been noted that you have discussed this matter with a representative of the nationa l bank and that you believe that the bank is now completely satisfied. Howeve r, you suggested that the Board consid er the advisability of amending Regulation F so as to permit national banks to pledge Federal Reserve bank cashier's checks with their trust departments as collatera l security for trust funds held in their banking dePartr-ents. tio 7Under the present provisions of section 9 of Regula,_ n F, obligations of the United States, obligations fully aranteed by the United States, readily marketable securities of the classes in which State institutions exercising ! m Ilst powers are permitted to invest trust funds, and readily 1'ketable securities of the classes defined as 'inves tment m:curities' pursuant to section 5136 of the Revised Statutes eaY be Pledged by a national bank as collate ral for trust funds t, Illed in its banking department. It would seem improbable 1.t there are any national banks which would not have availe for deposit, as collateral, securities of one of the .:2ad classes now specified in the Board's regulations in an in the sufficient to secure trust funds ordinarily carried banking department. It is also suggested that if at orY time a member bank should have an unusua lly large amount temllninvested trust funds such funds could be carried for a cea ! ) ,°rarY period with the Federal Reserve bank under the pro(97!r a outlined in the Board's letter - 53. X-9709 or its letter Z 7 4 84 .a.4 It is understood that your suggestion was prompted by olated inquiry, and after careful conside ration of your _ 775 6/3/37 -5- "suggestion the Board, in view of all the circumstances involved, does not feel that it is desirable to make such an almendment to the regulation." Approved unanimously. Memorandum dated May 18, 1937, from Mr. Wyatt, General Counsel, l'ec°11talend1ng, for the reasons stated in the memorandum, that the Board "11°Ilze the expenditure of a sum not to exceed $13,500 for the pure1"1 "of certain law books listed in the memorandum. Approved unanimously. Mr. Morrill submitted a recommendation, which had been approved by 'Personnel Committee, that the Board authorize the purchase of the t°110w1ng equipment, at the prices shown, for use in the Board's new 2!aling machine, model AV Pitney Bowes Special. ; . ,...tney-Bowes Ideal Mail Table No. 900. eger Rotary Gathering Table, model A. Oaallenge Automatic Single Spindle Paper Drill. Njodel Iti" Cleveland Folding Machine with motor. 6axmayer tyer, model No. 6. Approved unanimously. Thereupon the meeting adjourned. 0.,492.50 264.00 343.00 258.72 1,300.00 254.80
@FedFRASER