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A meeting of the Board of Governors of the Federal Reserve sYst Was held in Washington on Monday, March 6, 1939, at 4:00 p.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Eccles, Chairman Ransom, Vice Chairman Szymczak McKee Davis Draper Mr. Bethea, Assistant Secretary Mr. Carpenter, Assistant Secretary Mr. Clayton, Assistant to the Chairman Mr. Thurston, Special Assistant to the Chairman Mr. Wyatt, General Counsel Mr. Vest, Assistant General Counsel Mr. Wyatt reviewed briefly the status in the House of RepreE;e4tatives of the reorganization bill, (H.R. 4425), as outlined in ze morandum to the Board under date of March 4, 1939. He stated that as pointed out in that memorandum, the President could submit to Conrz,ress which would abolish the Board entirely or transfer all of its functions to another agency or transfer to the Board the fn actions of other agencies and that such a plan would become effective unless Congress within sixty days adopted a joint resolu- t1011 eZpressinE its disapproval thereof. ned language to he which He also said that the bill might be construed as making the Board subject BudEet and Accounting Act of 1921 but that there were several k:11 . 1rici8 be eot. Upon which it could be argued that this provision should not strilad as applying to the Board, unless a contrary intention loaz evid the ellead during consideration of the bill. He added that since tl House committee read ybeen reported favorably b y the 307 3/6/39 -2the °14117 way in which the Board could seek an amendment in the House w°Uld be to have an amendment offered on the floor. Upon inquiry, 141s. 1WYatt stated further that, as a practical matter, he did not know or 8thY action that the Board should take with respect to the bill "the Present time. At the conclusion of a discussion it was agreed unanimously that Counsel's office should continue to watch the Progress of the bill and keep the Board advised of developments. Mr. Davis reported that, in accordance with the action taken at th 8 meeting of the Board on February 27, he and Mr. Szymczak had disc% sseu with President Harrison the draft of the annual report of thel, ederal Reserve Bank of New York for the year 1938 to its stock11014,.. ' 8) that a number of changes in the report had been made by ?ze, "-gent Harrison prior to the discussion, that certain additional Chlat Were made durinr, the discussion, that as finally written the Nort , "las agreeable to Messrs. Davis, Szynczak and Goldenweiser and e8 thttt resident Harrison had been so advised. At this point Messrs. Thurston, Wyatt and Vest left the meet- lte .*t :" the action stated with respect to each of the matters hereinl'eferred to was then taken by the Board: The minutes of the meeting of the Board of Governors of the 611 R eserve System held on March 3, 1939, were approved unani- k°11qY. 3C8 3/6/39 Letter dated March 4, 1939, to Mr. Parker, President of the Federal Reserve Bank of Atlanta, reading as follows: "In accordance with the recommendation contained in Your letter of February 27, the Board approves the alpPointment of R. P. Wilson as an assistant examiner for the Federal Reserve Bank of Atlanta. Please advise us of the effective date. "It is assumed that Mr. hilson has no indebtedness outside business connections which would have an undelrable effect upon his services as an assistant examiner ror the Reserve bank, but these Points are not covered in irlir letter and definite advice in this connection will e appreciated." Approved unanimously. Letter to the board of directors of the "Iirst State Bank of 4a4P', Red Bud, Illinois, stating that, subject to conditions of 113ershiP numbered 1 to 3 contained in the Board's Regulation H and the f„QI„ -Louing special conditions, the Board approves the bank's appli.t1()11 for membership in the Federal Reserve System and for the approllitElte amount of stock in the Federal Reserve Bank of St. Louis: Such bank shall make adequate provision for depreciation in its bankinE!, house and Purniture and fixtures. 115. Such bank shall not make any distribution or payment on outstanding deferred certificates of dePosit except with the permission of the Federal Reserve Brink of St. Louis. Prior to admission to membership, such bank, if it has not already done so, shall charge off or Otherwise eliminate estimated losses of .(12,201.02, aS shown in the report of examination of such bank as of January 18, 1939, made by en examiner for the Federal Reserve Bank of St. Louis." 3/6/39 -4Approved unanimously, together with a letter to Mr. Martin, President of the Federal Reserve Bank of St. Louis, reading as follows: "The Board of Governors of the Federal Reserve Sysapproves the application of the 'First State Bank of ed aid', Red Bud, Illinois, 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 ,t1ch letter are also enclosed, one of which is for your riles and , the other of which you are requested to forward the Auditor of Public Accounts for the State of Illinois °r his information. "It will be noted that the Board has not prescribed the special condition recommended by the Reserve Bank with respect to showing the deferred certificates of deposits ilz Published statements of condition. The revised form +i -105e provides for the showinR of subordinated liabili; 1-es under item 33(h) and, therefore, it is not deemed fece83arY to prescribe a special condition with respect " 3 this matter. "It has been noted that the bank has the authority to exercise trust powers but that such powers are not now ,7111S' exercised. Therefore, the application has been ap'707ed on the same basis as if the bank did not have trust b°11ers, and should it desire in the future to do a trust ! ihess, application for permission to do so should be mll to the Board in accordance with the provisions of °Ildition of membership numbered 1." 7 T Letter to the Federal Deposit Insurance Corporation, reading Ped., "Pursuant to the provisions of section 12B of the of, ' -11a1 Reserve Act, as amended, the Board of Governors the Federal Reserve System hereby certifies that the ore17''Ida Bank of Commerce', Elko, Nevada, became a member 4 the Federal Reserve System on March 3, 1939, and is now , ierlIber of the System. The Board of Governors of the eral Reserve System further hereby certifies that, in 310 3/6/39 -5connection with the admission of such bank to membership in the Federal Reserve System, consideration was given to ths following factors enumerated in subsection (g) of section 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, 5. The convenience and needs of the community to be served by the bank, and 6. 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 iktac of Cleveland, reading as follows: "We have received a report as of December 31, 1938 4 to F.R. 105b for the Oak Harbor State Bank Company, rk Harbor, Ohio, which lists the Oak Harbor Mortgage ,an ° Company as an affiliate of the member bank, but we '.rtsve not received a report and published statement (forms ;dif 220 and 220a) of the affiliate. The report on form 131.11. 105b shows that the affiliate was indebted to the bank in the amount of $7,000, which amount exceeds the r 6 liMitations given in the terms of waiver of affiliate " 8 printed on form F.R. 220b. It would appear, there1,,! 11 that the affiliate should have rendered a report IT form F.R. 220 as of December 31, 1938 and published 'ir'e statement in accordance with form F.R. 220a. Since, ao rwever, no useful purpose would be served in having the 31filiate now render and publish a report as of December 31, 19 38, the Board waives a report as of that date. The bank should be advised that, if the affiliation ex2:!s at the time of the next call, a report on form F.R. ' should the terns be rendered and published unless waived under of waiver printed on form F.R. 220b." 2 Approved unanimously. ' 11 3/6/39 -6Letter to the Presidents of all Federal Reserve banks, reading as follows: "The Board's letter of October 20, 1932 (X-7276), requested that funds contributed by the Reserve bank to the Federal Reserve club or society be accounted for separately from funds contributed to the club by employees and that a statement be sent to the Board at the end of ! ach year showing the purposes for which the funds con- ributed by the Reserve bank were expended. "Phis matter has recently been reviewed, and you are advised that the annual reports heretofore submitted in accordance with the Board's letter of October 20, 1932, aY be discontinued. The Board's examiners will, however, ; 6 expected to review expenditures of funds contributed to edaral Reserve clubs by the Reserve banks." T Approved unanimously. Thereupon the meting adjourned. si stant Secretary. Chairman.
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