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853 A meeting of the Board of Governors of the Federal Reserve ''stera was held in Washington on Friday, June 7, 1940, at 11:30 a.m. PRESENT: Mr. Mr. Mr. Mr. Ransom, Vice Chairman Szymczak Davis Draper Mr. Morrill, Secretary Mr. Bethea, Assistant Secretary Mr. Carpenter, Assistant Secretary The action stated with respect to each of the matters herein41rter referred to was taken by the Board: The minutes of the meeting of the Board of Governors of the Nter., cu- Reserve System held on June 5, 1940, were approved unanimously. Telegrams to Mr. Young, President of the Federal Reserve Bank Of n " - tOn, Mr. Sanford, Assistant Secretary of the Federal Reserve tkik Or New York, Messrs. Post, Hays, Dillard, Stewart, and Powell, Seer etar'ies of the Federal Reserve Banks of Philadelphia, Cleveland, Nea g°1 St. Louis, and Minneapolis, respectively, Mr. Caldwell, Chairthe Federal Reserve Bank of Kansas City, Mr. Gilbert, President the Federal Reserve Bank of Dallas, and Mr. Hale, Secretary of the ?Nett al Reserve Bank of San Francisco, stating that the Board approves the t establishment without change by the Federal Reserve Banks of St. 014.8 an yors d San Francisco on June 4, by the Federal Reserve Banks of Cleveland, Chicago, Minneapolis, Kansas City, Dallas, and 'atipra_ "elsco on June 6, 1940, and by the Federal Reserve Banks of , c et,011 and Philadelphia today, of the rates of discount and purchase 854 6/7/40 in -2- their existing schedules. Approved unanimously. Memorandum dated June 5, 1940, from Mr. Morrill referring to the approval by the Board on March 13, 1940, of the appointment of j()er)h E. Kelleher to the position of Supervisor of Duplicating, Mails, Et81.113P1ies in the Secretary's Office on a probationary basis for a Period of three months without a change in salary, and recommending that), Inasmuch as Mr. Kelleher had fully measured up to expectations th 4L1E0-'Y new position, he be appointed on a permanent basis and his increased to 21100 per annum, effective as of June 16, 1940. "Illorandum also recommended, for the reason stated therein, that the a-LarY of Senior Guards E. F. Anderson, J. H. Heher, and Paul T. 11111.01 eY each be increased to n.,560 per annum, also effective as of 16, 1940 . The recommendations were approved unanimously. Memorandum dated June 5, 1940, from Mr. Goldenweiser, Director q *I. t,4 a n , etIrrence ision of Research and Statistics, recommending with the con- of Mr. Morrill that, for the reason stated in the memorandum, Ver„ R, Glaser be transferred from the Office of the Secretary the ulvision of Research and Statistics as a clerk-stenographer, kre. nO change in her present salary ettecti're as of June 16, 1940. at the rate of t1,800 per annum, Approved unanimously. 855 6/7/4o —3— Memorandum dated June 4, 1940, from Mr. Morrill recommending that for the reason stated in the memorandum, Louis W. Zidek, ele- Itator operator, be promoted to the position of stenographer in the Oftic e of the secretary, with .salary at the rate of , '31,440 per annum, etteotiv -.e as of the date upon which he enters upon the performance of chaties. Approved unanimously. 14r. Morrill recommended that, because of the increased number tele Phone calls due to the housing of offices of the Advisory Comtiasion to the Council of National Defense in the Board's building, 111'8 '14111am E. Speakman be appointed on a temporary basis as a tele1211'0 Le °Aerator in the Secretary's Office, with salary at the rate of kooper month, effective as of the date upon which she enters upon the Performance of her duties. Approved unanimously. Letter to Mr. Fry, Vice President of the Federal Reserve Bank ot tchnion 10/ q reading as follows: re "Reference is made to your letter of May 27, 1940, whIc)rfil i:lerlding that condition of membership numbered 19 or i".1vas prescribed in connection with the admission be flIon Trust Company of Maryland, Baltimore, Maryland, "allied until March 1942. The condition reads as follows: '19. Such bank shall make adequate provision for depreciation in its banking houses and furniture and fixtures, in amounts which in any one year sharl be not less than 2 per cent of the carrying value 856 6/7/4o -4- "of the banking houses after the charge off prescribed in condition numbered thirty-four and the adjustment prescribed in condition numbered thirty-two have been effected, and 10 per cent of the present carrying value of its furniture and fixtures.' "It is understood that at the expiration of the 2,1-ease in March 1942 the bank proposes to purchase the -Leased ground on which more than one-half of the main °face building is situated and that, in anticipation 5 such purchase, the management of the bank is endeavorIng to set up a program under which the purchase will not ' ) l:21t in any material increase in the book value of the banking premises. As part of the program, the bank re„' ,sr4.'?sts that from now until March 1942 it be permitted to the amount required for depreciation in establishin!g.a r t special account which will be used for that purpose. e. ls also understood that subsequent to March 1942, the „Tlic will resume its regular depreciation schedule as pro"-ded under condition of membership numbered 19. "In view of all the circumstances and in accordance With Our recommendation, the Board waives the provisions Of "Yo f condition of membership numbered 19 under the terms set TTh in your letter from this date until March 1942. mernts , temporary waiver of the provisions of condition of pr7ership numbered 19 does not, of course, constitute aprufral under condition of membership numbered 8 of the arl ' Ilre purchase of the land and it is assumed that, at wilpropriate time in the future, the proposed purchase or be submitted for consideration under such condition membership. This waiver is granted with the understand;Ii'sjlq that, if objection to the purchase should be interposed er the provisions of condition of membership numbered ei." f lf for any other reason the purchase should not be lie ! eted, the amount set aside in the special account in pl,' of will be applied toward depreciation. lease advise the bank accordingly." r Approved unanimously. Letter to Mr. Hill, Vice President of the Federal Reserve Bank e1p a, reading as follows: "Reference is made to your letter of May 31, 1940, 857 6/7/4o —5— ft regarding a request by the Paoli Bank and Trust ComPanY, Paoli, Pennsylvania, for permission, under the 111,r0v1.sions of condition of membership numbered 4 to eftect a reduction in its common capital stock from 11125,000 150,000. You state that the proposed capital reducon is desired in order to enable the bank to write twn the carrying value of its banking house, increase ! ti surplus account and provide sums for reserves and :le elimination of portions of the carrying value of tain loans and other real estate. view of all the circumstances and in accord-"ce with your recommendation, the Board approves the PI:oPosed capital adjustment as outlined in your letter, nth the understanding that no part of the funds released Y the capital adjustment will be returned to share- r Approved unanimously. Letter to Honorable Stewart McDonald, Administrator, Federal 11°118111- - . Administration, reading as follows: or "There is being sent to you with this letter a copy fi a circular issued by Amortized Mortgages, Inc., the 1,4118t paragraph of which raises a question of policy ch it is believed should have your consideration. the ,."It will be noted that the statements contained in th:,41-rst paragraph of the circular are to the effect i;:t" the recent declines in security prices have again ,; tjaired the capital accounts of thousands of banks all hZ the country, in some cases to the extent that stockin the banks have been called upon to furnish. arpl'lonal capital. Inasmuch as statements of this kind abia - not necessary in effectively pointing out the desiris 131:!T of insured mortgages as investments, the matter 'lng brought to your attention with the thought that . 1114 th0 ,1Y wish to take such action as is within your au, 401 : t""Y to discourage statements of this kind by Amortized gageS, Inc., in the future." Approved unanimously. Thereupon the meeting adjourned.
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