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a2G A meeting of the Board of Governors of the Federal Reserve SYstem was held in Washington on Friday, March 24, 1939, at 11:30 a. me PRESENT: Mr. Mr. Mr. Mr. Mr. Eccles, Chairman Ransom, Vice Chairman Szymczak Davis Draper Mr. Bethea, Assistant Secretary Mr. Carpenter, Assistant Secretary Mr. Clayton, Assistant to the Chairman The action stated with respect to each of the matters hereinart er referred to was taken by the Board: The minutes of the meeting of the Board of Governors of the Federal Reserve System held on March 23, 1939, were approved unani' IlcvUsly. Telegrams to Mr. Kimball, Secretary of the Federal Reserve Bank of New York, Mr. Leach, President of the Federal Reserve Bank of Ri chmond, Mr. McLarin, Vice President of the Federal Reserve Bank of Atlanta, Messrs. Dillard, Stewart and Powell, Secretaries of the Fed"s1 Reserve Banks of Chicago, St. Louis and Minneapolis, respectively, 141'. MCKinney, President of the Federal Reserve Bank of Dallas, and 41% Hale, Secretary of the Federal Reserve Bank of San Francisco, Stating that the Board approves the establishment without change by the Federal Reserve Bank of San Francisco on March 21, by the Federal Reserve Banks of New York, Richmond, Chicago, St. Louis, Minneapolis 427 3/24/39 -2- end Dallas on February 23, 1939, and by the Federal Reserve Bank of Atlanta today, of the rates of discount and purchase in their existing Schedules. Approved unanimously. Memorandum dated March 17, 1939, from Mr. Horbett, Assistant Chief of the Division of Bank Operations, transmitting the annual re71ewe submitted by the Federal Reserve banks as of December 31, 1938, it compliance with the Board's letters of December 4, 1926 (X-4739), etd October 5, 1933 (X,-7629), covering the seventy-one member banks located in outlying sections of central reserve or reserve cities, eXcept New York City, which had been authorized individually by the 18°Eird to carry reduced reserves on demand deposits. The memorandum recommended (1) that the Federal Reserve banks be advised that the B°ard approves their recommendations that all member banks in their respective districts which on December 31, 1938 had authority to carry red4ced reserves on net demand deposits may continue to maintain such 1°Wer reserves, and (2) in order to avoid a possible future misundercling, that the Federal Reserve Bsnk of Boston be advised that all 8t " rtle4ber banks in the city of Boston should maintain the reserves reto be maintained by banks in reserve cities, except where the 11°4rd gives specific permission to a member bank in an outlying district of Boston to carry reduced reserves. In connection with the "oond recommendation the memorandum stated that this action would <!-28 -3- V24/39 have no practical effect at this time, as there has been no member bank it Boston since 1925 with permission to carry reduced reserves, but would merely discontinue the general permission granted in 1918 and 411Parently never revoked, under which any member bank in certain outdistricts of Boston may maintain the sane reserves as "country" 11611ks, and would place member banks located in outlying districts of Boston, if there should be any so located in the future, in the same P°sition as banks in other reserve cities, insofar as applications rclr permission to carry reduced reserves are concerned. The recommendations were approved unanimously. Letter to General J. C. Persons, President, The First National Beilk of Birmingham, Birmingham, Alabama, prepared pursuant to the action taken at the meeting of the Board on March 17, 1939, and reading S follows: "This refers to the suggestion you and Mr. Forney Johnston recently made informally to Governor Ransom that the Reserve Board might file a brief as uniaus curiae in the case of Basham vs. The First National Bank of Birmingham Which is now pending in the Supreme Court of Alabama. "Governor Ransom has brought the matter to the attention of the Board and the information you and Mr. Johnston have submitted has been fully discussed by the members of the Board. Their attention was called to the fact that there is no question but that your bank has acted in the Utmost good faith and also to the possible losses which may be Incurred by your bank and other banks in Alabama if the decision in this case is adverse to The first National Bank. The Board, of course, feels that it is highly desirable that the issues involved shall be presented to el:29 3/24/39 -4- "the court so that your bank may not incur any unjustified surcharge. The Board feels sure that your attorneys will adequately and fully present the matter to the court; and the Board has requested me to advise you that, for the reasons which have been fully discussed with you and Mr. Johnston and which I am sure you understand, it does not feel that it may appropriately file a brief as amicus curiae. I may also add that it is the consistent practice of the Board not to intervene in any case involving the respective rights of a member bank and its customers for the purpose of arguing either in favor of the rights of the member bank or of the customers." Approved unanimously. Memorandum dated March 24, 1938, from Mr. Dreibelbis, Assistant 4eneral Counsel, stating that Robert C. Patterson of the Bureau of the 13(Iget had called him on the telephone on March 24 with reference to the report submitted by the Board to the Bureau of the Budget on March 17) 1939, on the Proposed legislation of the Federal Home Loan Bank 8Ystem to amend the Federal Home Loan Bank Act, the Home Owners Loan Act of 1933, Title IV of the National Housing Act, and for other gurPoses) and advised that there was to be a conference with officers of the Federal home Loan Bank System on March 27 and that for purposes °I. the conference the Federal Home Loan Bank Board desired copies of the reports made to the Bureau of the Budget by the various agencies. The memorandum also stated that Mr. Patterson had advised that the Other agencies which had submitted reports had given such permission "4 requested permission to take similar action with respect to the S report. The permission requested by Mr. Patterson granted by unanimous vote. was 430 3124 9 Letter to Mr. Hamilton, President of the Federal Reserve Bank °I 'Kansas City, reading as follows: "Acknowledgment is made of your letter of March 17, 1939, with respect to the proposed installation of a Power plant somewhat larger than the one originally contemplated. "In view of the circumstances outlined in your letter and the enclosure thereto, the Board of Governors will interpose no objection to the expenditure of approximately 090,000 for the installation of a power plant in your building at Kansas City, which amount is $25,800 in excess of the expenditure approved by the Board in its letter of September 26, 1938." Approved unanimously. Thereupon the meeting adjourned. Assistant Secretary. ed: Chairman.
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