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7 37 A meeting of the Board of Governors of the Federal Reserve 8:ntem was held in Washington on Monday, March 11, 1946, at 12:00 °clock noon. PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Eccles, Chairman Ransom, Vice Chairman Szymczak McKee Draper Evans Mr. Carpenter, Secretary Mr. Connell, General Assistant, Office of the Secretary Mr. Morrill, Special Adviser Mr. Thurston, Assistant to the Chairman Mr. Vest, General Counsel Mr. Townsend, Assistant General Counsel Mr. Ransom said that this meeting of the Board had been called to c . °Ilelder the course that should be followed in the case of the Peoroo Bank of Lakewood Village vs. the members of the Board of Govextol. 8, in the event the motion to dismiss the action were overruled, 411c1 that he would like to have Mr. Townsend comment on the alternatives that apeared to be available to the Board in this connection. Mr. Townsend stated that there were two different courses that klOt 404 be followed by the Board, one of which would be to take the posi- In the case that the conditions of membership imposed upon a bank 4Ppl g for membership in the Federal Reserve System were a matter for the -"e-Lusive determination of the Board of Governors and that the '" had no right to substitute their judgment for the judgment of the b 0a A -1\-1. The other alternative, Mr. Townsend said, would be for the iloard to give a detailed explanation of the reasons which prompted it 3/11/46 to -2- Prescribe the condition of membership about which the member bank Ile"omPlains. He added that the first alternative appeared to be the more satisfactory one inasmuch as it would present a clear questic° of law on which the burden of establishing a case would be on the 1)11.1tiff and which, if the decisions of the lower courts were adverse to ""e Board, could be taken to the Supreme Court in the event that 41)15eared to be the desirable thing to do. During a discussion of the circumstances which led the Board to pr eecribe the condition of membership complained of by the Peoples tark 'Aar. Ransom stated that the first alternative as presented by 11r. rn ,ownsend appeared to be the most desirable one to follow and that it w ould be his recommendation that it be approved by the Board, with the U4derstanding that if the decision in the District Court should be 4dliel'se consideration would be given to what further action should be take . 4 In connection with the case. Mr. Ransom's recommendation was approved unanimously. At this point Messrs. Vest and Townsend withdrew from the Illeetillg and the action stated with respect to each of the matters hereill4tter set forth was then taken by the Board: The minutes of the meeting of the Board of Governors of the Pecler el Reserve System held on March 8, 1946, were approved unanikolleisr. Memorandum dated March 8, 1946, from Mr. Smead, Administrator 3"i9 CI 4 3111/46 N. War -3Loans, submitting the resignation of Miss Mary Holmes, Clerk r1 the Office of the Administrator, effective as of the close of bus!flees on March 15, 1946, and recommending that the resignation be accept ed as of that date and that appropriate payment be made for the 8.cetu1iulated annual leave remaining to her credit at that time. The resignation was accepted as recommended. Memorandum dated March 11, 1946, from Mr. Bethea, Director of the -viuLon of Administrative Services, recommending that Mrs. Myrtle Grc, 'es and Miss Lauretta Brown be appointed to the position of cafeteria 4113er in that Division, each on a temporary basis for a period of not to exceed two months, with salary at the rate of $1,440 per annum, effseti -lie March 11, 1946. The memorandum stated also that neither Mrs. grolf es nor Miss Brown will become members of the Retirement System --"g their temporary appointment. Approved unanimously. Letter to Mr. Frank H. Neely, Chairman and Federal Reserve 4€erit at the Federal Reserve Bank of Atlanta, reading as follows: "This acknowledges receipt of your letter of February 14, 1946, enclosing Mr. McLarints memrandum relative to matters subject to comment in the recent report of examination of the Federal Reserve Bank of Atlanta. "The Board is pleased to note the careful con8!.deration which you, your directors and officers of , t,"e Bank have given to the several points mentioned in 4tr. McLarints memorandum." Approved unanimously. 380 3/11/46 -4Letter to the Presidents of all Federal Reserve Banks, read- ing as follows: "The Board of Governors approves the general program as recommended by the Presidents Conference under which each Federal Reserve Bank would assume two-thirds of the cost of providing hospitalization and surgical benefits through individual, husband and wife, or family membership, as the case may be, in the Blue Cross Association Or Associations (or other comparable non-profit organizations) of its District for each of its officers and emPloyees who may wish to avail himself of the privilege. "The Board is prepared, therefore, to consider such Proposals under the above program as the directors of the respective Federal Reserve Banks may approve. In submitting a proposed program, please accompany it with a schedule of the benefits and costs and an estimate of the annual expense to the Bank." Approved unanimously together with the following letter to Mr. Sproul, President of the Federal Reserve Bank of New York. "As you have been advised in anothar letter, the Board has given its general approval to the program recomMended by the Presidents Conference with regard to hospitalization and surgical benefits for employees of the Federal Reserve Banks. "In your letter of November 23, 1945, you reported t .hat the board of directors of your Bank had voted, subject to the approval of the Board of Governors, to approve he assumption by the Bank of two-thirds of the cost of providing individual, husband and wife, or family membership, as the case may be, in the plan for hospitalization and Surgical facilities provided by the local Blue Cross Associa'dion or equivalent organization for each employee and officer °f the Bank who may wish to avail himself of the plan. It ,l!las estimated then that the cost to the Bank of this program, °ased on recent employment figures and existing premium rates, would be in the neighborhood of $77,500 per annum. "The Board approves the expenditure under the program aS submitted." 381 Ma/46 Letter to "The Lubbock National Bank", Lubbock, Texas, reading as follows: "The Board of Governors of the Federal Reserve System has given consideration to your application for fiduciary Powers, and grants you authority to act, when not in contravention of State or local law, as trustee, executor, administrator, guardian of estates, or in any other fiduciary capacity in which State banks, trust companies, or other corporations which come into competition with national banks are permitted to act under the laws of the State of Texas, the exercise of all such rights to be subject to the provisions of the Federal Reserve Act and the regulations of the Board of Governors of the Federal Reserve System. . "This letter will be your authority to exercise the f cluciary powers granted by the Board pending the preparation of a formal certificate covering such authorization, Which will be forwarded to you in due course." Approved unanimously. Thereupon the meeting adjourne Secretary.
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