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726 A meeting of the Board of Governors of the Federal Reserve &Prtem was held in Washington on Monday, May 8, 1944, at 11:00 a.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Eccles, Chairman Szymczak McKee Draper Evans 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 hereinafter referred to was taken by the Board: The minutes of the meeting of the Board of Governors of the Pecie— ."Ju- Reserve System held on May 6, 1944, were approved unanimously. Letter to Mr. Gidney, Vice President of the Federal Reserve of New York, reading as follows: "This refers to the inquiry contained in your letof February 26, 1944, as to the effect of standard ridition of membership numbered 4 upon the Bridgeport , JAY Trust Company, Bridgeport, Connecticut, should it ncome a member of the Federal Reserve System. We regret that it vas not possible to make an earlier reply to your t cluirY, but you will recall that the status of this mater WaS discussed with your bank by telephone on several oc casions. "In accordance with the information you have presented, it appears that the trust company deposits trust fund S in its savings department as a form of investment a ond the State banking authorities are of the linion that such deposits are a form of investment au.2rized by State law. As you know, condition of memberT..,1-13 numbered 4 prohibits the investment of trust funds ;;Inct )bligations of the trust company unless such invest8 are expressly required by the instrument creating ter j , 72 5/8/44 -2"the trust or are specifically authorized by court order. Therefore, in the absence of such express requirement or specific authorization, the trust company would be preeluded by the terms of the condition from depositing trust ' 1.111ds in its savings department as an investment even ' o though such an investment is authorized by State law. course, the trust company would not be prohibited .1Lrom temporarily depositing in its savings department trust funds awaiting investment or distribution provided securities are pledged with the trust department as is required by standard condition of membership numbered 6. It ls City understood from your letter that the Bridgeport Trust Company has authority under its special charter which would enable it to comply with this requirement of standard condition 6. The Board concurs in your assumption D that condition of membership numbered 4 would not ,e applicable to investments of trust funds in the savJ-ngs department made prior to becoming a member of the SYstem. , L "It is hoped that the above may not adversely affect rs question of the Bridgeport City Trust Company's apply441g for membership in the Federal Reserve System." Approved unanimously. Letter to Honorable Preston Delano, Comptroller of the Cur'Y, reading as follows: "'The First National Bank of Pleasantville', Pleasantville, New York has received permission to exercise trust p powers under the provisions of section 11(k) of the ?deral Reserve Act; and it appears that the bank now de11'e8 to surrender its right to exercise such powers. It : iS understood that such bank was placed in voluntary liquic:Li..°n on July 171 1943, and was absorbed by County Trust 'PanY of White Plains, White Plains, New a State Zember bank. . "Where a national bank desires to surrender its 'Xiat to exercise trust powers, it is the customary proamTlre for us to request that you have one of your exme .141.. srs make a special investigation of the trust depart11‘, records of the bank in order to determine whether 72S 5/8/44 -3"it appears that the bank has ever undertaken to act in any fiduciary capacity and, if so, whether in the case of each trust accepted or undertaken it appears from the bank's records: (1) That all assets and papers belonging to the trust estate have been delivered by the bank to the person or persons entitled to receive them; and (2) That the duties of the bank as fiduciary have been completely performed and that the bank has been discharged or otherwise Properly relieved of all of its duties as fiduciary. "In this instance, however, it appears that, since .!.4.1e national bank was absorbed by a State member bank, !,-t would be more convenient and less expensive for the ! livestigation to be made by an examiner for the Federal 1;:?serve Bank of New York in connection with the examinalOfl of such State member bank. In the circumstances, it "4.11 be appreciated if you will advise us whether you have ,n,Y objection to the matter being handled in this manner Instead of following the customary procedure." Approved unanimously, together with a letter to Mr. Gidney, Vice President of the Federal Reserve Bank of New enclosing a copy of the above letter for his Information, Letter to the Presidents of all the Federal Reserve Banks, read48 follows: For your information and guidance there are enclosed d e°Pies of memoranda received from the War Department under . ate of May LY 1944 and from the Navy Department and Marie Commission under date of May 3, 1944, respectively, 4 4 garding the extension of maturity of Regulation V loans cases where the 1942 form of guarantee agreement is in effect a., "There is also enclosed the original attachment, if etc;Y, relating to your Bank included among those which acmpanied the Navy Department memorandum." Approved unanimously. 729 5/8/44 -4Letter to Honorable Harold D. Smith, Director of the Bureau of the Budget, reading as follows: "Reference is made to your circular letter of April 24, 19, , 44 (Bulletin No. 1943-44:6) relating to legislation providing for discontinuance of reports to Congress and ”king advice as to what reports to Congress not included the draft of bill attached to your letter may, in the Board's opinion, be discontinued without detriment to the public service. "The Board does not feel at this time that it should suggest that any reports which it is required by law to make to Congress should be discontinued." Approved unanimously. Thereupon the meeting adjourned. (6110q4,,i2„ 1313rOve Chairman. Secret ry.
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