The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
340 A meeting of the Board of Governors of the Federal Reserve 818tenWa5 held in Washington on Tuesday, March 5, 1940, at 12:50 PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Eccles, Chairman Ransom, Vice Chairman Szymczak McKee Davis Draper Mr. Mr. Mr. Mr. Morrill, Secretary Bethea, Assistant Secretary Carpenter, Assistant Secretary Clayton, Assistant to the Chairman The action stated with respect to each of the matters hereinktte , 4: referred to was taken by the Board: The minutes of the meeting of the Board of Governors of the al Reserve System: held on March 4, 1940, were approved unani1101415r. Letter to the board of directors of "The Bank of Monroe", 11404 ' West Virginia, stating that, subject to conditions of member4/11, vtlimbered 1 to 3 contained in the Board's Regulation H and the 14111 special condition, the Board approves the bank's applica- tio4 Is°! 1 membership in the Federal Reserve System and for the approNte eziount of stock in the Federal Reserve Bank of Richmond: tt 4. Such bank shall make adequate provision for depreciation in its banking house and furniture and fixtures." Approved unanimously, together with a letter to Mr. Leach, President of the Federal Reserve Bank of Richmond, reading as follows: 341 V5/40 -2- "The Board of Governors of the Federal Reserve Sysapproves the application of 'The Bank of Monroe', Union, West Virginia, for membership in the Federal Reserve System, subject to the conditions prescribed in the n1closed letter which you are requested to forward to the 'oard 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 Commissioner of Banking for the State of West Virginia for his information. "Since the losses classified in the report are rela! ivelY nominal in amount and since the management informed 4he examiner that the amount classified would be charged "'II) the usual condition of membership regarding the eliminetion of losses has not been prescribed. "The examiner criticizes the manner in which the bank's Nindow cash is being handled and calls attention to the hazatrds associated with allowing safe deposit box keys of cqatomers to be retained in the bank. It is assumed, of c,!urse, that your office intends following the matter of zue bank's making the needed changes in its present pracicee in these respects, so that adequate safeguards will "instituted and maintained." 2 Letter to the Federal Deposit Insurance Corporation, reading 48 Naolvirs. "'Pursuant to the provisions of section 12B of the PeA _-eral Reserve Act, as amended, the Board of Governors the Federal Reserve System hereby certifies that The ; 1- 4sley Bark, Kinsley, Kansas, became a member of the ederal Reserve System on March 4, 1940 and is now a ril peraber of the System. The Board of Governors of the iederal Reserve System further hereby certifies that, 81; connection with the admission of such bank to memberIn the Federal Reserve System, consideration was given 8° the following factors enumerated in subsection (g) of ection 12B of the Federal Reserve Act: 1. The financial history and condition of the bank, 2. The adequacy of its capital structure, 3. Its future earnings prospects, 4. The general character of its management, 342 Vs/40 0 6. The convenience and needs of the community to be served by the bank, and Whether or not its corporate powers are consistent with the purposes of section 12B of the Federal Reserve Act." Approved unanimously. Letter to Mr. Fletcher, Vice President of the Federal Reserve liatoc of Cleveland, reading as follows: "Under date of January 24, 1940 you were advised !hat the condition statement published by the Commonwealth 'rast Company of Pittsburgh, Pittsburgh, Pennsylvania, as December 30, 1939, in fulfillment of the requirements cAr the State banking department and the Federal Reserve et, could be accepted under the conditions outlined in Lhat letter. "You are now advised that, while it is desirable to have the published condition statements of State bank memb ers of the Federal Reserve System conform with the ar1 11t , lagement of items in their condition reports on Form ..11 '105, the Board will interpose no objection to the rceptance of statements published in the manner followed y the Commonwealth Trust Company of Pittsburgh, provided oLshe revised grouping of the items is made for the purpose f complying with State requirements." Approved unanimously. Letter to the Presidents of all Federal Reserve banks, reading 4"41-ows: "The Board of Governors has now adopted regulations IT/verning the operations of the branches of the Federal _eserve banks in the form enclosed herewith, to became suffective April 1, 1940. "A few suggestions were received from the Federal Res erve banks with regard to these regulations pursuant the Board's letter of December 20, 1939, S-194, and, liccordingly, certain changes have been made in the reg14t1ons. In this connection, it will be observed that 343 Vs/40 -4the regulations as adopted are so worded as to permit the designation of the chairman of the board of directors of the branch from among the members appointed by the Board cf Governors to be made either by the Federal Reserve behk or the branch board, as the bank may deem advisable. This provision, of course, is not intended to affect in ellY way the service or terms of branch chairmen now in ce. "Before the effective date of the regulations or as ;Pon thereafter as Practicable, it is requested that each bedaral Reserve bank having branches review the existing Y-laws of its branches and make such modifications as IlleY be appropriate in the light of the new regulations enclosed. As indicated in S-194, it will not be neces' 8 117 for a Federal Reserve bank to obtain the approval ?ti the Board of Governors of by-laws and instructions :esued pursuant to section 5 of the regulations, but it '8 requested that copies of any such bylaws or general Iletructions regarding operation of branches, as well "copies of any future amendments thereof, be furnished 13r0111PtlY to the Board of Governors for its information." 1 Approved unanimously, the regulation reading as follows: "REGULATIONS RELATING TO BRANCHES OF FEDERAL RESERVE BANKS (Effective April 1, 1940) b "These regulations, governing the operations of all jetches of Federal Reserve banks, are prescribed by the of Governors of the Federal Reserve System (herein'referred to as the Board of Governors) under authority the provisions of section 3 of the Federal Reserve Act. "Section 1. Names of Branches and Territory Served "(a) Names of branches. - Each branch shall include 4. '- 48 title the name of the city in which it is situated 1_ the name of the Federal Reserve bank of which it is or°rench, as 'Detroit Branch of the Federal Reserve Bank Chicago'. "(b) Branch territory. - No change shall be made i; ellY Federal Reserve bank in the territory included withthe district served by any of its branches, except with 344 -5"the approval or upon the direction of the Board of Governors. "Section 2. Authority and Functions "No substantial change shall be made by any Federal Reserve bank in the authority of or functions performed bY any of its branches, except with the approval or upon the direction of the Board of Governors. "Section 3. Directors "(a) Number of directors. - The board of directors of each branch of a Federal Reserve bank shall consist either of seven members or of five members, as may be determined by the Federal Reserve bank, subject to the ap. P,r0val of the Board of Governors. Where the board of directors of the branch consists of seven members, four , s_ball be appointed by the Federal Reserve bank and three 01r the Board of Governors, and, where the board consists "five members, three shall be appointed by the Federal Reserve bank and two by the Board of Governors. "(b) Qualifications of directors. - All directors hall be persons of high character and standing who have established reputations and ability to meet their financial obligations. They shall be persons whose business ' fld financial interests are primarily within and repre8entative of the branch territory rather than of in!?rests controlled or owned outside the territory. The . 'll'ectors appointed by the Federal Reserve banks shall Persons who are either well qualified and experienced rl banking or actively engaged in agriculture, industry 7 commerce. The directors appointed by the Board of 71rernor5 shall be persons who are actively engaged in ggriculture, industry or cammerce and who are not primarily ngaged in banking (although they may be stockholders or , lirectors of banks). No director of a Federal Reserve Zhk shall serve as a director of a branch of the bank l'ing the period of his service as a director of the Aaderal Reserve bank. All directors shall be citizens the United States and shall reside within the ternr Served by the branch, but at least one of the direc,!ra appointed by the Federal Reserve bank shall reside -`'taide of the city in which the branch is located. "(c) Managing Director. - One of the directors ap13°1-nted by the Federal Reserve bank shell be designated alb : I, as the active manager of the branch. He shall have *u e title 'Managing Director' and shall perform such duties t8 IllaY be prescribed by the Federal Reserve bank. The ttc1131 of office of the Managing Director shall be one year lid he may be reappointed from year to year. 2 345 3/s/40 -6- "(0 Terms of other directors. - The term of office Of directors, other than the Managing Director, shall be three years where the branch board consists of seven members and two years where the branch board consists of five Members. In order to make practicable an orderly rotation Of branch directorships, the terms of directors, other than the Managing Director, shall be so arranged that the tern of a director appointed by the Board of Governors and the term of a director appointed by the Federal Reserve bank shall expire at the end of each year. "(e) Directors with six or more years of continuous service. - No director, other than the Managing Director, 811811 be reappointed as a director if each reappointment is to become effective within a period of two years tmMediately following six or more years of continuous serce at any branch having five directors or within a Period of three years immediately following such service at anY branch having seven directors. "(f) Chairman. - The Federal Reserve bank shall prode for the annual designation, in such manner as it may Prescribe, of one of the members of the board of directors c't each branch appointed by the Board of Governors as the ehairman of the board. Ng) Vacancies. - In the event of a vacancy occurring tn the board of directors of a branch of a Federal Reserve , 3411k) the appointment to fill such vacancy shall be made uY the body making the original appointment and such apPointment shall be for the unexpired term. 3 ^, "(h) Removal of directors. - As provided in section Federal Reserve Act, directors of branches of zed 4 ,arel Reserve banks hold office during the pleasure of "4e Board of Governors. "(i) Meetings. - The board of directors of each branch c—Lia meet once a. month daring at least ten months in each i!lendar year. A special meeting may be called at any time : b accordance with such procedure as the Federal Reserve may prescribe. "(j) Quorum. - A majority of the board of directors t oi the branch shall constitute a quorum for the transacof business, but less than a majority may adjourn 'una time to time until a cuorum is in attendance. to b "(k) Fees and allowances. - The fees and allowances Paid to directors of the branch for attendance at `inge of the board of directors of the branch or any 11":11:rlittee5 of the branch Shall be fixed by the Federal Barve bank subject to the approval of the Board of Govvrtiors. 1 346 Vs/40 -7- "(1) Powers. - The board of directors of the branch shall supervise the operations of the branch subject to the direction and control of the Federal Reserve bank of the district and the regulations of the Board of Governors. "Section 4. Officers "The Federal Reserve bank shall appoint such officers for each branch, in addition to the Managing Director, as the bank from time to time deems necessary. Such officers shall perfom such duties as may be prescribed by the Fed"al Reserve bank or by the Managing Director. In accordeace with the provisions of the Federal Reserve Act, all ?,fficers of a branch shall be subject to removal by the Adoard of Governors and any compensation provided for officers or employees of any branch shall be subject to the ePProval of the Board of Governors. "Section 5. Supplemental Instructions "Each Federal Reserve bank may issue instructions or adopt by-laws, not inconsistent with the law or these regulations, containing such further provisions with regard to the operation of its branches as it may deem advisable." Thereupon the meeting adjourned. Chairman.
@FedFRASER