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1540 Minutes of actions taken by the Board of Governors of the Federal Reserve System on Monday, November 10, 1947. PRESENT: Mr. Mr. Mr. Mr. Mr. Eccles, Chairman Szymczak Draper Evans Clayton Mr. Carpenter, Secretary Mr. Morrill, Special Adviser Mr. Thurston, Assistant to the Chairman Minutes of actions taken by the Board of Governors of the ederal Reserve System on November 7, 1947, were approved unanimously,. Memorandum dated November 7, 1947, from Mr. Szymczak recomIllerldiag that the appointment of Miss Theodosia Kinney, a stenographer his Office, be changed from temporary indefinite to permanent ef44tive November 10, 1947• Approved unanimously. Memorandum dated November 5, 1947, from Mr. Thomas, Director "the D on of Research and Statistics, recommending that Richard ksers, ---vel a consultant to that Division, be asked to prepare a critie41 ellIalYsis of a forthcoming Committee for Economic Development policy attitemelat on "Taxes and the Budget: A Program for Prosperity in a Free cotioinr The memorandum stated that it was estimated that from 10 to 2° cilVs would be required to prepare this analysis, and recommended that 4tithorizati0n be made for a maximum of 20 working days. The memorandum 154-1 11/10/47 -2- 4180 stated that Mr. Musgrave would be on terminal leave from the 13°alscl until December 17, and recommended that the authorized coinof $30 per day as consultant be eliminated for such days as fall within the terminal leave period and that in lieu thereof the save period be extended by an equal number of days, with the 4111(4Tstanding that the Board would pay the authorized traveling exPenses and the per diem as provided for consultants. Approved unanimously. Telegram to Mr. Latham, Vice President of the Federal Reservn Bank of Boston, reading as follows: "Retel November 10, 1947, Board approves the designation of William Clifford Gittins as a Special Assistant Examiner for the Federal Reserve Bank of Boston." Approved unanimously. Letter to Mr. Peyton, President of the Federal Reserve Bank flfl eaPolis, reading as follows: "In reply to your letter of November 4) 1947, the Board -- approves the appointment of Arthur J. McNulty, at l ilsent an assistant examiner, as an examiner for the eueral Reserve Bank of Minneapolis, effective November 1°) 1947." Approved unanimously. Letter to the Presidents of all Federal Reserve Banks readan follows: "The Federal Deposit Insurance Corporation as an in surer of deposits is directly concerned with the amount 1,542 4/10/47 -3- "of fidelity coverage carried by an insured bank. As a matter of fact, the Corporation is empowered by law to require any insured bank to provide such protection and if the bank refuses to comply with the requirement to contract for the coverage and assess the cost against the bank. "In a letter dated August 25, 1947, the FDIC requested each insured bank, which had not already done so, to provide the amount of coverage recommended by the Insurance and Protective Committee of the American Bankers Association as 'Fair'. The FDIC subsequently issued instructions to its examiners to request, wherever necessary, that this level of coverage be provided. It rl.,1-80 requested the cooperation of the Comptroller of the ‘'urrency and the Federal Reserve to the end that all insured banks meet such standard. "The Schedule of Blanket Bond coverage suggested by the ABA committee lists 'Minimum' and 'Fair' amounts for p ismaller banks and a range of minimum amounts for larger ahks. In the latter case the FDIC regards the larger of the two amounts as the 'Fair' amount. "The Board is in agreement that all banks should Provide adequate amounts of coverage and that, in this connection, the schedules suggested by the bankers' own committee should be regarded as a guide. The Board requests the Reserve Banks to cooperate in this program and endeavor to see that each State member bank provides such coverage as may be appropriate and feasible in the circumstances and, in any event, at least the 'Minimum' ala°unt of coverage suggested by the ABA committee. "We have heretofore furnished the officers in charge the Bank Examination Departments of the Reserve Banks 'with copies of the schedule of Blanket Bond coverage as 7I ,1._ggested by the ABA committee. A fuller expression of policies of the FDIC and the principles and procedures which it has established for its examiners is contained enclosed memorandum dated September 15, 1947, which has p sthe b — , eell incorporated in the FDIC Manual of Ex Examination ci "Although important, the provision of fidelity and Other ,usr insurance protection is no substitute for appropria a ? internal safeguards. It is also requested that exvilners be instructed to be especially vigilant in rethe audit and control practices and procedures 1543 11/1o/47 —4— in effect in each State member bank examined and in— ?lude appropriate comments on pages 2 and 16 where the Internal safeguards are not regarded as satisfactory." Approved unanimously. PProved:
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