Full text of Minutes of the Board of Governors of the Federal Reserve System : Meeting Minutes, June 8, 1942, Volume 29, Part 3

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1155

A meeting of the Board of Governors of the Federal Reserve

ant", was

held in Washington on Monday, June 8, 1942, at 11:30 a.m.
PRESENT:

Mr.
Mr.
Mr.
Mr.
Mr.

Eccles, Chairman
Ransom, Vice Chairman
McKee
Draper
Evans

Mr.
Mr.
Ir.
Mr.

Morrill, Secretary
Bethea, Assistant Secretary
Carpenter, Assistant Secretary
Clayton, Assistant to the Chairnan

The action stated with respect to each of the matters herein4fter r
eferred to was taken by the Board:
The minutes of the meeting of the Board of Governors of
the
441
'
'
81 Reserve System held
on June 5, 1942, were approved unanimously.
The minutes of the meeting of the Board of Governors of the
4.41'41 Reserve
System held on June 6, 1942, were approved and the ac—
ti°4
recorded therein were ratified unanimously.
Letter to Mr. Hill, Vice President of the Federal Reserve Bank
c)t 1543-adelphia,

reading as follows:

let,. "In accordance with the request contained in your
ch.X of June 5, the Board approves the appointment of
Re;""e8 W. Adams as an assistant examiner for the Federal
daierve Bank of Philadelphia. Please advise us of the
e the
appointment becomes effective."
Approved unanimously.
Letter

to Mr. Fleming, President of the Federal Reserve Bank of

C4Irelancl, reading as follows:
lett:In accordance with the request contained in your
of June 3, 1942, the Board approves the designation




1156

6/8/42

0

Of Donald
D. Hentze as a special assistant examiner,
with the understanding, of course, that he will not be
'
)31lansferred permanently to examination work without the
°ard's prior approval."
Approved unanimously.

tank

Letter to Mr. Hitt, First Vice President of the Federal Reserve
of St. Louis, reading as follows:
"In accordance with the request contained in your
letter of June 1, the Board approves the appointments of
H. Klose, Melvyn Paul CanEe and Samuel B. Hodges
,1'.assistant examiners for the Federal Reserve Bank of
n Louis.
Please advise us of the dates upon which the
'PPointments become
effective.
110 "Alsc approved is the designation of Harold Norris
asOrs as a special examiner and that of Robert F. Schalk
of a special assistant examiner, with the understanding
to course that they will not be transferred permanently
examination work without the Board's approval."
Approved unanimously.
Letter to the board of directors of the "Marion State Bank",

n/ Texas
stating that, subject to conditions of membership num,
erect
to 3 contained in the Board's Regulation H, the Board approves
the b
application for membership in the Federal Reserve System and
the a_
PPropriate amount of stock in the Federal Reserve Bank of
-.4.

tot,

.
Approved unanimously, for transmisslon through the Federal Reserve Bank of
Dallas.
the

Telegram to Mr. Schelling, Assistant Federal Reserve Agent at
'e
eral Reserve
Bank of Chicago, stating that, subject to the con8et

forth in the telegram, the Board of Governors of the Federal




6/8/42
-311141erve System authorizes the issuance of a general voting permit,
1111d" the provisions of Section 5144 of the Revised Statutes of the
Unl:ted States,
to the "Wisconsin Bankshares Corporation", Milwaukee,
'1181-11, entitling such organization to vote the stock which it mns
or
controls of "The Baraboo National Bank", Baraboo, Wisconsin, at all
Illeetings of shareholders of such bank, and that the period within which
Permit may
be issued pursuant to the authorization contained in the
teleglmilis limited to 30 days from the date of the telegram unless an
eXtension of time
is granted by the Board. The conditions contained in
the
telegre/11 upon which the permitwas authorized were as follows:
Prior to the issuance of general voting permit authorized herein, applicant shall execute and deliver
to you in
duplicate, an agreement in form accompanying Board's letter X-9385, except that (a) paragraphs
numbered 1, 2, 4 and 5 shall be omitted and remaining
numbered paragraphs appropriately renumbered, and
(b) all lettered paragraphs and introductory sentence
immediately
preceding them shall be omitted.
"2,

Prior to issuance of general voting permit authorized
applicant shall deliver to you in duplicate,
14xhibit L
Exhibit
(Form P-3) executed by 425 West Wisconsin
Avenue Inc., Milwaukee, Yisconsin, and Exhibit N
F°11°1 P-4) executed by applicant and consented to by
!uch corporation, or furnish assurances satisfactory
to you
that it will deliver such exhibits to you
t?-thln thirty days after issuance of such permit or
urnish evidence in vxiting satisfactory to counsel
for_
Federal Reserve Bank of Chicago that such exhibits
n'e not required by Board's Regulation P and directlons on printed forms referred to.
03.
Prior to issuance of general voting permit authorlzed
herein, the President and Executive Committee
?f the
Federal Reserve Bank of Chicago shall approve
issuance of such permit."




115S
6iM2

—4—

The telegram also stated that,in advising the applicant of the Board's
Ileti°n, it should be advised as follows:
'As you know, consideration of the issuance of a
general voting permit to your corporation covering The
13arab00 National Bank was deferred last year because of
the action
taken by First Wisconsin National Bank of
.14-. lwaukee in retiring all of its outstanding preferred
g'ock over the expressed objection of the Office of the
irmptroller of
the Currency. Subsequently, at a meeting
0;tween representatives of the Board and representatives
di Your corporation held in Washington for the purpose of
r_seussing the responsibilities of your corporation with
"Pect to its subsidiaries, representatives of your corj
P ration felt that they could eliminate the differences
at then existed between the Office of the Comptroller
the
Based Currency and the First Wisconsin National Bank.
er,
uPon the agreement reached betv.een the First lasoineln National Bank and the Office of the Comptroller
the Currency, providing for the restriction of dividends to a
ba
specified amount for the strengthening of the
senk i e capital and nroviding for the maintenance of contorvative Operating policies, the Board is now willing
, ,authorize
the issuance of a general voting permit cover.4% The
Baraboo National Bank."

4

Approved unanimously.
Tel
egraM to Mr.

AParley at

Longmire, Director of the War Production Loan

the Federal Reserve Bank of St. Louis, reading as follows:
tr

"Retel June 5- Have informally contacted Mr. Mark
n regarding statement in question quoted in American
parper Ilay 28. Mr. Brown advises that statement is ap5 ointlY misquoted and should have referred to 'section
kit the agreement' instead of to 'the guarantee.' Guarby ceie,,°f loan under section 1 of agreement is not affected
and e.Lault of contractor. However, benefits of section 5
are er,!etion 6 do not apply unless war production contracts
"ncelled without fault of contractor."

Q




Approved unanimously.

1 159
6/8/42

—5—
Letter to mr. Kennel, Assistant Counsel of the Federal Reserve
BaIlk of
Boston, reading as follows:
w
"This refers to your letter of June 1, 1942, in
1„hich you request the Board's advice as to whether a
'lank or other financial institution may at the time of
?king a single-payment loan have an agreement with the
.14.?mer regarding periodic renewals and reductions and
l'1-1,1 regard the transaction as a 'single-payment loan'
as
defined in section 2(i).
.
In this connection you refer to 7
W-47, and
IL107 and
ask whether the principles stated therein are
,1
8,.1111
Llon controlling in view of the revision of the Regulaeffective May 6, 1942.
"W
-39 is obsolete, but the principles stated in
the other
two interpretations are still controlling,
of trTugh possibly of less practical importance in view
4 ue Provisions of section 7, section 80), and sec+on
Approved unanimously.

Letter
Ileserv_

to Mr. Hays, Vice President and Secretary of the Federal

Bank of
Cleveland, reading as follows:
batt,,," n Your letter of May 29, 1942, you asked whether
ars:
rles and accessories designed for trucks and busses
11.1cluded in section 13(a), Group A, Item 5.
4re . The
Board's view is that the articles mentioned
in included in Item 5, and that a dealer extending credit
to c)Ilneotion with the sales of such articles is required
isj
e licensed under
section 3. However, as noted in your
irial
'
e!ry the coverage
under
the regulation of tires and
b.„
tubes is
for passenger automobiles
limited
to
those
4 Item 6.
"
Approved unanimously.
of Letter to
441k

Mr. Swanson, Vice President of the Federal Reserve

Mln
neapolis, reading as follows:
iqg
:
This refers to your letter of May 28, 1942, enclos- COPY of your letter of May 28 to Mr. J. A. Burger,




t I60
6/8/42

-6-

,iorthern School Supply Company, Fargo, North Dakota,
and
a copy of Mr. Burger's letter to you of May 25, all
relatin_
w.
„G to the exemption in section 8(1) of Regulation
A, "The Board agrees with your view that a High School
'hletic Association or High School Activities Funds as
nneribed in Mr. Burger's letter to you are not exempt
;"er section 8(1). It appears that the extension of
cl.;r-t would not be to a 'school' but to a separate fa—
'
4-1tY of an extra—curricular nature.
"However, as you know, there are many schools or
educational institutions that would be entitled
to
b!eXemption under section 8(1) but which are sustained
J funds
obtained by means other than taxation."

Z




Approved unanimously.

Thereupon the meeting adjourned.

foa.ox,„