Full text of Minutes of the Board of Governors of the Federal Reserve System : Meeting Minutes, May 19, 1944, Volume 31, Part 2

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794

A meeting
of the Board of Governors of the Federal Reserve System
was held
in
Washington on Friday, May 19, 1944, at 3:30 p.m.
PRESENT: Mr.
Mr.
Mr.
Mr.

Szymczak
McKee
Draper
Evans

Mr. Morrill, Secretary
Mr. Clayton, Assistant to the Chairman
Mr. Dreibelbis, General Attorney
Mr. McKee
referred to the letter sent to the Presidents of all the
PederalReserve Banks
under confidential cover yesterday with which were
14ttitted
copies of the draft of the
holding company bill which had been
PrePared by
the Board's
staff. Mr. McKee raised for consideration the
cillestion
whether copies of
the draft should now be sent to members of the
eteelAtive co
mmittee of the Federal Advisory Council or to
all of the mem111418 or the
council., having in
mind that the executive committee of the
C°44cil was
t0 meet
in Washington on June 7, 1944.
Stho,
He stated that the
-qeetion had
been made by
Mr. Fleming, a member of the executive committee c't the
Co
uncil, that it would be very helpful to the members
of the
Nkttee if
they could
have ample time to study the draft.
Mr.
Dreibelbis reported that Congressman Patmon had asked him to
INPare a
statement which the
Congressman might make when he introduced the
1141 in the
House and which
would go into the Congressional Record. Mr.
•
8,b1s
said
that he had prepared a draft of such a statement
tlot
but had
had an o
pportunity to discuss it with anyone. He read the draft,
4141 it w
-48
understood that he would hand it to Mr. Patman as soon
as pos44'1
ascertain from him what
his plans were with respect to the




795

5/19/44
-2introduction of the
holding company bill.
Following a discussion and upon motion

by Mr. McKee, it was voted unanimously- to authorize Ur. Morrill, upon receipt of information that the bill was about to be introduced
by Mr. Patman, to wire the Presidents of the
Federal Reserve Banks accordingly and authorize .the to bring the bill to the attention of
the members of the Federal Advisory Council
from their respective districts as well as to
the attention of their respective boards of
directors. It was understood that when the
wire was sent Mr. Morrill would also write a
letter, sending copies of the bill to the members of the Federal Advisory Council, along
the general lines of the letter which was sent
to the Presidents yesterday but stating when
the
1 was to be introduced by Congressman
Patm
At this

point Mr• Dreibelbis withdrew from the meeting, and the

4qi°14stated with
respect to each of the matters hereinafter referred to
wea then tak n
e by the
Board:
The minutes
of the meeting of the Board of Governors of the Fede41Reserve
System held on May 18,
1944, were approved unanimously.
Tel.
-grams to Messrs. Treiber, McCreedy, and Clouse, Secretaries
°I' the ped
re
eral Reserve
Banks of New York, Philadelphia, and Cleveland,
sPecti„1
kr.
Y2 Mr.
Leach, President of the Federal Reserve Bank of Richmond,
'
l gY Secretary of the Federal Reserve Bank of Chicago, Mr. Caldwell,
cf the
Federal Reserve Bank of Kansas City, and Mr. Hale, Secre4rY t the
Federal Reserve
Bank of San Francisco, stating that the Board
r°/Pect the est
ablishment without change by those Banks on May 18, 1944,
°t the
rates
cdb discount
and purchase in their existing schedules.




Approved unanimously.

796
5/19/44
-3dated May 17, 1944, from Mr. Morrill submitting the
liZnation of Mrs.
Ruth I. Bowes as a page in the Secretary's Office,
tobeconie e
ffective as of the close of business on May 31, 1944, and rec°4uneriding
that the
resignation be accepted as of that date with the undertaanding that
appropriate deduction will be made from her salary to cover
Ilnearried
leave.
The resignation was accepted as

recommended.
Letter to
Mr. Fletcher, Vice President of the Federal Reserve Bank
4-tve1and
.
, reading

as follows:

:In
May
accordance with the request contained in your letter of
Co21 1944, the Board approves the appointment of Robert
Allison
44'1'; as an assistant
examiner for the Federal Reserve Bank of
becove4
'6nd• Please advise us of the date upon
which the appointment
ales e
ffective and also as to the salary rate."
Approved unanimously.

Letter to the
board of directors of "The Ottoville Bank Company",

°tto iie,

O

3

stating that, subject to conditions of membership numbered

contained
the Board's Regulation H, the Board approves the bank's
4
4licetion for
mienmbteh
in the Federal Reserve System and for the appro151'44 6410tInt of
stock in the Federal Reserve Bank of Cleveland.
Approved unanimously, together with a
letter to Mr.
Fleming, President of the Federve Bank of Cleveland, reading as
;:114:7

"The „
ard of
vijae ,
Governors of the Federal Reserve System ap1 L,
he a
pplication of 'The Ottoville Bank Company'', Ottoject t o l°, for
membership in the Federal Reserve System, !1
:
Yo4 a,
- 6he
conditions prescribed in the enclosed letter which
requested to
forward to the Board of Directors of the
whil l°11. Two
copies of such letter are also enclosed, one
(1ete -tOa is fc'r Your files
f
and the other of which you are re-Orlt4,rd to the
Superintendent of Banks for the State
Proves 4




797
5/19/44

—4—

Itor 01,4
ku-o, for his information.
1"
b,
bank,3It is assumed that you will follow the matter of the
bringing into conformity with the provisions of law
and the Board's regulations the savings account mentioned on
Page 16
of the report of examination for membership and also
;i1(13,e.matter of the bank's providing for the right to require
1.ce in connection with savings deposit withdrawals."
ot

Letter to Mr. Gidney, Vice President of the Federal Reserve Bank
vo
" rk,
reading as follows:
mit ."Reference
is made to your letter of April 27, 1944, subtl-ng the request of Central Trust Company Rochester, N.Y.,
wa
uche
.ster,
New York, for permission to establish a branch in
llani
oii .s°n, New York, in connection with a proposed transaction
v
New-vvirl
merger with The State Bank of Williamson, Ailliarrison,
4.°1114:/ and the sale of $100,000, par value, additional common
etock for
$150,000.
ki.o. "In view
of your recommendation and the information sub'ecl,.the Board approves establishment and operation of a
Rocin Williamson, New York, by the Central Trust Company
can,i4
e
4`hchster
,,N• Y., Provided the proposed merger and increase in
as'tia effected substantially in conformity with the plan
thosu.bra. tted,
the prior approval of the appropriate State aube rxtlea is obtained,
and counsel for the Reserve Bank is to
8ati
fi
-sed
as to the legal aspects of the transaction."
Approved unanimously.
Lette_
4- to

Mr. Leedy, President of the Federal Reserve Bank of

84a City
v 3 reading
as follows:
"Ther •
froin kt,„ ,la
e
enclosed a copy of a letter received by the Board
W. Hogan, President of the Oklahoma City clearing
HolLse
Association, Oklahoma City, Oklahoma, regarding the que
.t
stov2 whether
the practice of certain banks of offeringcorrespond_
to print
s.r.of
'bank money orders' and supply them to their
t,
'Lion oifreReemiof
charge Constitutesa payment of interest in viola-

entll

thiIhe
,
,Board has not undertaken to determine whether a practice
acetic,
— "-Lnd involves a
payment of interest within the meaning of
II 19 of the Federal Reserve Act. In order to constitute
1.1ell:
tieto.- Payment
of interest, it must appear from the facts of a parthe paar ease, first, that
there is a payment, and, second, that
14 a-rent is made as compensation for the use of funds constitut-P
"
it• The informEtion contained in the enclosed letter




798
5/19/44

-5-

ttrom the
not sufficient to Oklahoma City Clearing House Association is
enable the Board to pass upon these questions and it
.e not appear
that the Board has been specifically asked to do
of A
ccordingly, the Board would expect to adhere to its policy
80 ex,Pressing its
opinion only in a specific case in which the
toarl is presented with all the facts and in which there appears
be
for a ruling.
itrxstances, it will be appreciated if you will
zigf:
Mr.
s letter in such manner as you may deem approte in the light of what has been said above; and we will be
irrnito
receive a copy of any letter which you may decide to write
an in this connection. For your information, the practice
°g
rere
oe !red to
Is one which has come to our attention on one or two
cirions recently.
The President of the Federal Reserve Bank of
go a short
while ago wrote the Board after receiving a letter
in a member bank in
his District on this subject, and the Board's
l'ePly to •
him was substantially along the lines of this letter."

r

Approved unanimously.
844

Letter to Mr.
Clerk

Vice President of the Federal Reserve Bank of

Pr-Ait'cisco, reading
as follows:
?qv
to .1 e appreciate very much the fact that you have undertaken
°rt.,'" us the benefit of
your analysis of the technical aspects
eitutte
Illas Bill, S. 1_892, with special reference to the legal
agai;cl
iot
se
lTarrl:! in various States in connection with claims
will 7here is
at present no substantial indication that action
the e taken on the
Thomas Bill at this session and very likely
stdXe
tstion what action
may be taken will turn upon broad conrepo,: i°118 of public policy. If we should find it necessary to
uPon the
Conlgeration.it bill the points raised by you will be taken into
Approved unanimously.

Thereupon the meeting adjourned.

413Akved:




Secretary.