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386 A meeting of the Board of Governors of the Federal Reserve System was held in Washington on Thursday, March 11, 1957, at 11:30 a. in. Mr. Eccles, Chairman Mr. Szymczak PRESENT: Mr. Bethea, Assistant Secretary Mr. Carpenter, Assistant Secretary Mr. 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 Board: Telegram to Mr. Leach, President of the Federal Reserve Bank of °d stating that the Board approves the establishment without change bith e bank today of the rates of discount and purchase in its existing etheduie. Approved unanimously. Letter to Mr. Clark, Vice President of the Federal Reserve Bank (4 Atlanta, reading as follows: "Receipt is acknowledged of your letter of March 8, 1957, 11smitting the request of the president of the 'American Bank Trust Company', Miami, Florida, that the bank's application to- membership in the Federal Reserve System be held in abeyance 04„1* a period of at least six months from March 6, 1937, the date 4 his letter. co„."In accordance with the bank's request, the application will moa lnue to be held in abeyance. It is requested that, if the t_ bter is not previously raised by the bank, you report further v the Board on October 1, 1937, as to the situation." tr Approved unanimously. Letter to Mr. Fry, Vice President of the Federal Reserve Bank of °Ild, reading as follows: 389 3/11/37 -2- "ThiE, refers to your letter of February 26, 1937, inClosing a copy of a letter from The Kanawha Valley Bank, Criarleston, West Virginia, requesting your comments and suggestions regarding certain provisions of a summary of regulations and rulings governing the purchase of investment securities which was issued by the Comptroller of the Currency under date of October 27, 1936. "It appears that points 2, 3 and 5 in the letter from Kanawha Valley Bank refer to rulings which are based 'iron application of the 'Interpretative Rulings With Respect To Section 5136 U. S. R. S.' issued by the Comptroller under date of February 15, 1936; and, as you know, the Board in its letter of April 25, 1956 (X-0565) called attention to the fact that these 'Internretative Rulings' were addressed only to national banks and stated that it was understood that they were not intended to apply to State member banks. 8 "Points 1 and 4 in the letter from The Kanawha Valley are not covered by these 'Interpretative Rulings', but aPParently are based upon a construction of certain provi! i°ns of section 5136. The Board has not had occasion to Press an opinion on the question whether a like.construc1°n of the statute with respect to these points is to be !,4)Plied to State member banks and does not feel that it should cxcept upon the basis of the facts of actual cases ariaflg in the operation of State member banks. A State member Which desires to obtain consideration of such a question _12ould furnish full information regarding the circumstances r the case to the Federal Reserve bank in order that the lattel ' , if it deems it necessary to do so, may submit the matter the Board with a request for an expression of the Board's va.ews, 'J Z Approved unanimously. Letter to Mr. Hill, Vice President of the Federal Reserve Bank Or phia adelchia, reading as follows: Reference is made to your letter of March 1, 1937, with :rd to the request of the York Trust Company, York, Penni>, varlia, that it be not required to publish the rerort as of veember Si, 1936 of its affiliate, the York-Hoover Body Corpol'ations D, "It appears that Charles H. Moore, a Vice President and 'rector of the York Trust Company, was elected a director of 388 6/11137 -3- "the York-Hoover Body Corporation on December 31, 1936, for the purpose of acting as a representative of the Trust Company in the management of the Corporation, to which the Trust ComDanY had extended crtdit in various forms, and that as a con.2equen0e of this election a majority of the directors of the Ork .Hoover Body Corporation were also directors of the Trust cimpanY, thus creating an affiliation between the Corporation "Id the bank under the terms of Section 2(b)(3) of the BankAct of 1933. It also arrears that the bank did not realize 1118 affiliation existed until the matter was called to its . - Ltention in the course of an examination as of January 23, , ji-937; that, although the director in question was elected on ;!eeember 31, 1936, the date of the call retort, he did not °.,e,eome active until some time in the early part of January 1,47; and that the affiliation has now been terminated by the ,!2ignation from the directorship of the member bank of one of Trie directors .who is on the directorship of the York-Hoover lootCorporation. "In the circumstances, the Board waives the requirement for the publication of the report as of December 31, 1936 of the York-Foover Body Corporation, York, Pennsylvania." Approved unanimously. Letter to Mr. George R. Darrow, Philadelphia, Pennsylvania, te4t11-11e as follows: "In reply to your letter of February 6, addressed to the Seo . urities and Exchange Commission, in which you request inforti°n regarding the rules governing a purchase of securities an2largin, we are inclosing a copy of Regulation T - Extension lia .Maintenance of Credit by Brokers, Dealers, and Members of „610nal Securities Exchanges. In connection with your inquiry, 3u (1-1r particular attention is called to sections 4(c), 4(d), 4(e), °Y and 12 of the regulation. to "In the absence of more complete information with respect L'Ile transaction in question, the Board is unable to determine oj ther the action of your broker was in compliance with the re1- 4 -rements of the Board's Regulation T, but it is thought that ,/ . (." h the aid of the regulation and the suggestions made herein 4 will be able to determine whether such is the case. p_ "However, if you are unable to do so, or if you have any Weirther inquiry regarding the application of the provisions of 1114tion T to the subject transaction or to any future trans4 E . yo 10ne, we suggest that as a matter of convenience to yourself u communicate with the Federal Reserve Bank of Philadelphia." Z Approved unanimously. 389 ,11/37 -4Letter to Mr. Stewart, Secretary of the Federal Reserve Bank of St. Louis, reading as follows: "This refers to your letter of February 24, 1937, inclosing a copy of the by-laws of the Louisville Branch as -mended at a meeting of your board of directors on February 17. 1937. You state that at this meeting your board of directors also amended the by-laws of the Little Rock and Memphis Branches to read the same as the incioaed copy of the by-laws of the Louisville Branch and that in all three of the sets of by-laws the name 'Federal Reserve Board' was changed to 'Board of Governors of the Federal Reserve System.' You also state that gPon advice of the Board's approval these by-laws will be rePrinted and copies furnished to the Board. "It is understood that the provisions of section 1 of article III of the by-laws relating to the tenure of officers :nd a the provisions of section 8 of article III relating to compensation of an associate counsel are, of course, subject to the provisions of the Federal Reserve Act which authorize the Board to remove officers and directors of Federal Ret serve banks and which make any compensation of officers, direcc)rs, and employees of Federal Reserve banks subject to the aPProval of the Board. "You are advised that on the basis of the understandings stated above, the Board of Governors approves the by-laws of '!le Louisville, Little Rock, and Memphis Branches of your bank Tfil the form contained in your letter of February 24, 1937. will be appreciated if you will forward to the Board four CO Pies of the by-laws of each of the Branches as soon as they 4re printed. "You are also advised that several questions which have recently arisen regarding by-laws of branches of all Federal Res t, erve banks have suggested the advisability of a review of ' e le entire subject of by-laws of branches and that the Board tPects to make such a review in order to bring about such Ilanges as may seem desirable." l j Approved unanimously. Memorandum dated March 10, 1957, from Mr. Vest, Assistant General ()11/1se, 1, submitting a letter dated February 24 from Mr. Sargent, Secretary the Of 'ederal Reserve Bank of San Francisco, advising that the by-laws the h -ank have been amended so as to authorize the executive committee -5to "Etd.blish rates of discount in conformity with the provisions of aection 14(d) of the Federal Reserve Act, and suggesting, for the reasons atatedin the memorandum, that the letter from the San Francisco bank IllerelY acknowledged in the suggested form of acknowledgment submitted th 44. vue memorandum. Approved unanimously. Thereupon the meeting adjourned. Assistant Secretary.
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