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467
Minutes of actions taken by the Board of Governors of the
Federal Reserve System on Thursday, March 27, 1947.
PRESENT:

Mr.
Mr.
Mr.
Mr.
Mr.

Eccles, Chairman
Draper
Evans
Vardaman
Clayton
Mr.
Mr.
Mr.
Mr.

Carpenter, Secretary
Sherman, Assistant Secretary
Morrill, Special Adviser
Thurston, Assistant to the Chairman

Minutes of actions taken by the Board of Governors of the
Federal Reserve System on March 25, 1947, were approved unanimously.
Letter to the board of directors of "The Corn City State
Bank", Deshler, Ohio, stating that, subject to conditions of membership numbered 1 to 3 contained in the Board's Regulation HI the
Board approves the bank's application for membership in the Federal
Reserve System and for the appropriate amount of stock in the Federal Reserve Bank of Cleveland.
Approved unanimously, for transmission through the Federal Reserve
Bank of Cleveland.
Letter to the board of directors of the "Bank of Meeker",
Meeker, Oklahoma, stating that, subject to conditions of member811113 numbered 1 to 3 contained in the Board's Regulation H, the
Board approves the bank's application for membership in the Federal Reserve System and for the appropriate amount of stock in
the Federal Reserve Bank of Kansas City.




468

3/27/47

-2Approved unanimously, together
with a letter to Mr. Leedy, President
of the Federal Reserve Bank of Kansas
City, reading as follows:

"The Board of Governors of the Federal Reserve
System approves the application of the Bank of Meeker,
Meeker, Oklahoma, for membership in the Federal Reserve
System, subject to the conditions prescribed in the enclosed letter which you are requested to forward to the
board of directors of the institution. Two copies of
such letter are also enclosed, one of which is for your
files and the other of which you are requested to forward to the Bank Commissioner for the State of Oklahoma,
for his information.
"It is noted that the management agreed that items
amounting to $2,760.91 classified IV in the report of
examination for membership would be charged off at the
close of the examination. In the circumstances, the
usual condition of membership requiring the elimination
of losses prior to admission has not been prescribed.
It is assumed, however, that the Reserve Bank will
satisfy itself that such losses have actually been
eliminated before admitting the bank to membership.
"The numerous violations of Regulation WI the
large amount of past due paper, the many collateral
exceptions and the poor credit files shown by the
report of examination for membership indicate laxity
on the part of the bank's management. The F. D. I. C.
reports that it has received promises of correction
without results. It was indicated, also, in the report of examination by the State Banking Department
submitted with the application, that the management
may have been moved to apply for membership in order
to escape criticism. However, it is noted that the
Reserve Bank feels that it can assist the management
in adopting better procedures with a view to eliminating the causes of criticism and it is assumed that a
definite and constructive program in this regard will
be vigorously pursued. The circumstances appenr to
challenge the ability of the Reserve Bank to obtain
actual and substantial improvement and the application
has been approved with the expectation that definite
results will be achieved."




469
3/27/47
Letter to the board of directors of the "Citizens State
Bank", Ysleta, Texas, stating that, subject to the conditions of
membership numbered 1 to 3 contained in the Board's Regulation H,
the Board approves the bank's application for membership in the
Federal Reserve System and for the appropriate amount of stock in
the Federal Reserve Bank of Dallas.
The letter also contained the
following special comment:
"It appears that the bank possesses the power to
issue and sell investment certificates, which power is
not necessarily required in the conduct of a banking
business. It appears also that the bank possesses
authority to exercise fiduciary powers but does not
expect to engae in fiduciary activities. Attention
is called to the fact that if the bank should desire
to exercise the power to issue and sell investment
certificates or to exercise fiduciary powers, it will
be necessary under condition of membership numbered 1
to obtain the permission of the Board of Governors before exercising them."
Approved unanimously, together
with a letter to Mr. Gilbert, President of the Federal Reserve Bank of
Dallas, reading as follows:
"The Board of Governors of the Federal Reserve
System approves the application of the Citizens State
Bank, Ysleta, Texas, for membership in the Federal
Reserve System, effective if and when the bank is
duly authorized to commence business by the appropriate
State authorities, subject to the conditions prescribed
in the enclosed letter which you are requested to forward to the board of directors of the institution. Two
copies of such letter are also enclosed, one of which
is for your files and the other of which you are requested to forward to the Bank Commissioner for the
State of Texas, for his information.




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3/27/47

—4—

"It is understood that present plans are to open
the bank about May 1, 1947, the exact date being contingent upon completion of banking auarters. In view
of the circumstances, instead of the usual 30 days,
the bank is being given three months within which membership may be accomplished."
Letter to the Honorable J. Edgar Hoover, Director, Federal
Bureau of Investigation, United States Department of Justice,
reading as follows:
"Reference is made to my letter of February 19,
in reply to your letter of February 7, 1947, regarding
the reported hazardous manner in which banks in Seattle,
Washington, were delivering currency to and from the
Federal Reserve Branch Bank in that city.
"The matter of precautions against robbery was
discussed by the Presidents at their recent conference
held in Washington and it was the consensus of the conference that all Federal Reserve Banks, working through
their Bank Relations Departments or otherwise, should
conduct an educational campain among member banks to
encourage the use of adequate safeguards in the handling
of money and securities. The conference also considered
it desirable for representatives of the Insurance Committee of the Presidents' Conference to meet with the Federal
Bureau of Investigation for the purpose of arranging, if
possible, for a survey by the Bureau of the practices of
the Federal Reserve B-nks in handling money and securities.
It is understood that a conference for this purpose was
held on Friday, March 21, in the office of your assistant,
Mr. E. A. Tamm. We are advised thLt your office has already w:de such surveys at the several offices of the
Federal Reserve Bank of San Francisco.
"In view of the conditions referred to in your letter of February 7, 1947, the Board would like to suggest
for your consideration the desirability of also discussing the question of more adequate protection for currency
movements at member and nonmember banks with the American
B9nkers Association, with the thought in mind that its
insurance department might be able to include some additional valuable suggestions in the Association's periodic
publications."




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3/27/47

-5-

Approved unanimously.

Secretary.

Approved:




Chairman.