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Minutes of actions taken by the Board of Governors of the
Federal Reserve System on Tuesday, November 4, 1952.
The Board met
ta the Board Room at 10:00 a.m.
PRESENT:
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Martin, Chairman
Szymczak
Evans
Vardaman
Mills
Robertson
Mr. Carpenter, Secretary
Mr. Kenyon, Assistant Secretary
Mr. Allen, Director, Division of
Personnel Administration
Referring to the actions taken by the Board at the meeting on
October 23, 1952, with respect to the designation of Federal Reserve
/kalt Chairmen and Federal Reserve Agents for the year 1953, the appointOf Deputy Chairmen for the year 1953, and the appointment of Class
°directors and Federal Reserve Bank branch directors for terms begin414 January 1, 1953, Chairman Martin suggested that the Board consider
"this time authorizing the sending of advice& to persons appointed or
48imated to
hold office in the abovementioned capacities in those cases
llere the appointments or designations raised no question in connection
'
liith the policy of rotation of Class C directors which was approved by
tile Board on October 23.
Following discussion, it was
agreed unanimously that telegrams
should be sent to the persons named
below advising them of their appointment or designation, requesting advice
1863
11/4/52
-2of their acceptance, and requesting
that any public announcement be withheld until release by the Board of a
press statement concerning the appointment of directors at all Federal Reserve
Banks and branches:
Federal Reserve Bank or Branch
Boston
Boston
Philadelphia
Philadelphia
Cleveland
Cleveland
Cincinnati
Richmond
Richmond
Minneapolis
Minneapolis
Minneapolis
Helena
Name
liarold D. Hodgkinson
Axes Stevens
141lliam J. Meinel
O. Canby Balderston
.1(111111 C. Virden
'
40 L. Rummell
C. Besuden
rie8 P. McCormick
rhla B. Woodward, Jr.
40ger B. shepard
E. Miller
A. Flodin
"
Li 11 E. Corette, Jr.
Unanimous approval also was given
to a telegram to Mr. Brainard, Chairman of the Federal Reserve Bank of
Cleveland, stating that the Board was
considering the appointment of Sidney
A. Swensrud, President, Gulf Oil Corporation, Pittsburgh, Pennsylvania, as
a Class C director of the Clevelnnd Bank,
and requesting that he ascertain and advise the Board whether Mr. Swensrud would
accept the appointment if tendered.
At this point Mr. Allen withdrew from the meeting and the followmembers of the staff entered the room:
Mr.
Mr.
Mr.
Mr.
Sherman, Assistant Secretary
Thurston, Assistant to the Board
Riefler, Assistant to the Chairman
Thomas, Economic Adviser to the Board
11/4/52
-3Mr. Leonard, Director, Division of
Bank Operations
Mr. Vest, General Counsel
Mr. Young) Director, Division of
Research and Statistics
Mr. Sloan, Director, Division of
Examinations
Mr. Solomon, Assistant General Counsel
Mr. Hackley, Assistant General Counsel
Mr. Cherry, Legislative Counsel
In accordance with the request made by the Board at the meeting
°4 July 8,
1952, the Legal Division, after consultation with other members
°f the staff, prepared and distributed to the members of the Board under
clate of July 301 1952, a memorandum setting forth a list of changes in
the law relating to the Federal Reserve System which the Board might wish
to ecflasider for possible recommendation to the Congress.
The memorandum
"altad that the list was intended to be somewhat comprehensive and, ace("ingly, included many provisions which might be of doubtful merit or
illall'isable; that, in addition to possible amendments of a substantial
Aacter there were included many so-called nontechnical or, more
ili()1)61
'
1Y, less important amendments to the law; and that there were, morecite,
') a number of obsolete provisions in the law which might be considered
1)°1‘ repeal but which, in the interest of brevity and because of their
tatea,
'
4 significance, were not included. The memorandum also stated that in
the
Pr'elparation of the list of possible changes in the law, consideration
114d1,.
given to legislative recommendations or reports made by the Board
11/4/52
-4-
14 recent years and to the recommendations made in the Patman Subcommittee
Port and the Douglas Subcommittee Report in 1950, in addition to similar
lists Prepared in the Board's organization over the last 10 or 15 years.
The possible amendments to the law discussed in the memorandum
are
summarized below, together with the views of the Board concerning each
Of them as expressed at this meeting:
14 to
Reduction of the term of appointment of Board members from
possibly 10, years, with no prohibition against reappointreduction in the membership of the Board from 7 to 5.
1.
6, or
Differing opinions were expressed,
both as to the desirability of reducing
the term of appointment, either to 6 or
10 years, and as to reducing the number
of members of the Board. In the circumstances, the item was passed over for
further consideration by the Board at a
later time.
2. Elimination of geographical and other qualifications for
4Pointmeat to membership on the Board.
While the majority of the Board was
favorably inclined toward changes in the
law to eliminate these requirements, one
member expressed apprehension that this
might result in an undue concentration
of Board membership both geographically
and from the standpoint of interests represented. Accordingly, the matter was
passed over for further consideration.
Other
3- Provision for increased salaries for the Chairman and
members of the Board.
11/4/52
Some members questioned whether
it would be appropriate for the Board
as such to advocate legislation for
this purpose but it was unanimously
agreed that it would be proper for the
Chairman to discuss the matter with appropriate persons on the basis that the
current salaries were out of line with
those paid to others in Government service.
4. Provision for the designation by the President of the Chairman
a4a the Vice Chairman of the Board for terms expiring at the end of the
month of March next following the commencement of each Presidential term.
While the majority of the Board
favored such an amendment, question was
raised by one member as to the possible
implications involved from the point of
view of the independence of the Board, particularly if the membership should be reduced. Accordingly, the matter was passed
over for further consideration.
5. Provision for a reduction in the number of Reserve Bank Preside/14
10 vs on the Federal Open Market Committee, should the membership of the
be reduced from 7 to 5, so as to maintain approximately the present
ratio of
Board-Reserve Bank membership.
In view of lack of agreement on the
question of reducing the membership of the
Board, this item was passed over along with
the question of the transfer of open market
functions from the Committee to the Board
or of some of the Board's functions in the
credit field to the Committee.
410 44.
6. Provisions that the accounts of the Board be subject to post-
by the General Accounting Office, with the authority of the CompGeneral limited to reporting to Congress expenditures which he
„(4718idered improper and to making such suggestions as he considered apvtqlriate; that annual audits of the Federal Reserve Banks be made by an
1867
11/4/52
-6-
outside auditor appointed by the Reserve Bank directors and approved by
the Board and that full reports thereof be filed with the Senate and
!!°11se Banking and Currency Committees; that the Board submit its annual
°udget and those of the Reserve Banks to the Banking and Currency Committees for such consideration and action as the Committees might conappropriate; that the Board In its annual reports to Congress
8PecifY with some particularity the financial details of its budget
amd expenditures and those of the Federal Reserve Banks.
There was unanimity of opinion
that any provision requiring a postaudit of the accounts of the Board or
the Federal Reserve Banks by the General Accounting Office would be undesirable. With regard to the Board's
accounts, Chairman Martin suggested
that, as an alternative, copies of
audit reports submitted by outside
auditing firms be transmitted to the
Senate and House Banking and Currency
Committees. The other members of the
Board indicated that they would favor
such a procedure.
As to the suggestion that audits of the Reserve Banks be made by
°Iltaide auditors, Governor Robertson referred to the possibility of subniltting the procedures for the examination of the Federal Reserve Banks
t° an outside audit firm for review and suggestions and of having such
41141tors accompany the Board's staff on one Reserve Bank examination
e4ch Year and check the examination reports of the other Federal Reserve
114
'
138
to ascertain whether the prescribed procedures were being carried
clUt.
He then stated that he was planning to confer this afternoon with
kr
Lang, Chief Federal Reserve Examiner, regarding the whole question of
1868
11/4/52
the scope
Scope of the examinations conducted by the Board's field examining
staff, and suggested that this item be held over for further consideration following his conference with Mr. Lang.
7. Authority for the Board or its designated representatives
administer oaths and subpoena witnesses and documents in connection
/41th hearings conducted by the Board.
to
It was agreed unanimously that
It would be desirable for the Board
to have this authority.
8. Authorization for the Board to require reports from banks
lad. also from other financial institutions for statistical purposes in
!
orWection with the Board's credit control and other responsibilities;
'
a provision exempting the obtaining of reports by the Board from
requirements of the Federal Reports Act.
It was the view of the Board that
any attempt to secure such authorization, particularly if it affected nonmember banks, might be misconstrued as
an effort to obtain additional powerl •
and that, in the light of statements
by the staff that no serious difficulties had been encountered in securing
voluntary cooperation, the matter was
not of sufficient importance to warrant
a request for a change in the law although the Board might support such a
proposal if it originated with outside
sources.
a4i
9. A broadening and clarification of the authority of the Board
the Federal Reserve Banks to obtain reports from member banks for
tlill'ervisory purposes.
It was the unanimous opinion of
the Board that the problem was not of
serious enough proportions to warrant
a request for an amendment to the law.
1869
11/4/52
-8-
10. Provision that any action which the Board was authorized to
might be taken by the affirmative vote of a majority of the members
Present at any meeting, provided that a quorum was present.
tap.
e
'
There was agreement that although
such a provision might be desirable, it
should only be requested when a bill containing other technical amendments was
being proposed.
11. Authorization for the Board to assign to designated members,
°r to its representatives, under rules and regulations prescribed by the
Board, the performance of certain specific duties and functions.
There was unanimous agreement with
a statement by Chairman Martin that such
a provision should be opposed.
12. Repeal of the requirement for the maintenance and submission
n ,-ongress of a record of policy actions taken by the Board and the Federal
'Pen Market Committee.
to n
While it was the consensus of the
Board that the inclusion in the annual
reports of the record of policy actions
served little purpose, it was agreed
that a request for repeal of the requirement should be made only in a bill containing other technical amendments.
13. Prohibition against a member of the Federal Advisory Council
Ber..4
"alg more than a certain number of years consecutively; elimination of
Council.
It was agreed that no recommendation for an amendment limiting the tenure
of service of the members of the Council
should be made by the Board until the proposal had been discussed with the Council.
The question of elimination of the
Council was passed over without discussion.
1870
11/4/52
-9The meeting then recessed and reconvened at 2:00 p.m. with the
same attendance as at the conclusion of the morning
session.
Chairman Martin reported that he had been informed by Mr. Vest
8°Itle time ago of a request by Mr. Grover W. Ensley, Staff Director of the
Patman Subcommittee, for the assistance of the Board's legal staff in
arafting legislation which would carry out the recommendations in the
Stlbcommittee report, that the staff had been working on the matter, but
that none of the material had been transmitted to Mr. Ensley.
The Chair-
114t4 asked for the views of the other members of the Board as to compliance
/lith the request.
Following a discussion, it was
agreed that the staff should be as helpful as possible in supplying technical
assistance in the preparation of drafts
of the legislation, provided it was made
clear that the drafts did not represent
in any sense the results of consideration by the Board; that such drafts
should be transmitted informally by Mr.
Cherry to the staff of the Patman Subcommittee without prior submission to
the members of the Board; and that where
the recommendation of the Subcommittee
involved questions of policy, Mr. Ensley
would be asked to indicate the manner in
which the draft should be prepared so that
the staff would not be in the position of
appearing to suggest what the decisions on
policy should be.
The Board then resumed its consideration of possible amendments
to
the law relating to the Federal Reserve System as outlined in the
11/4/52
-10-
zemorandum submitted by the Legal Division under date of July 30, 1952.
During the discussion it was
agreed that Chairman Martin would
be free to discuss possible banking
legislation during the forthcoming
session of the Congress with the
Chairmen of the Banking and Currency
Committees and any other members of
these committees that might be appropriate.
14. Formulation of a specific mandate to the Board and to the SecretarY of
the Treasury as to the objectives which they should endeavor to
ccomPlish in carrying out their statutory functions.
'
Governor Mills stated that he
felt that the report of the study of
the Government securities market being
conducted by a special committee of
the Federal Open Market Committee might
supply information which would be pertinent to a consideration of this proposal. Accordingly, it was decided to
defer consideration of this item until
the completion of the special study.
council of a consultative and
. 15. Establishment of an interagency
adyi
Qory type to coordinate fiscal and debt management policies with credit
Monetary policies.
The Board was unanimously opposed
to this proposal and it was agreed that
arguments against it should be prepared.
cl
16. Establishment of an interagency council to coordinate the lendactivities of various Government agencies in the lending field with the
Qit and monetary policies of the Government.
It was stated that when the establishment of such a council was
gested in former Chairman McCabe's reply to the questionnaire of the
1872
11/4/52
-11-
Douglas Subcommittee in 1949, it was with the thought that this might constitute a mechanism through which the various Government agencies could be
encouraged to conform their lending policies to the credit and monetary
P°11cies advocated by the Board.
It was also stated that coordination of
lending policies had been achieved to some extent through a committee arIle-ngement established by the Bureau of the Budget and that, in the circumstances,
the reasons which motivated the original suggestion were no longer
80
important.
It was the unanimous view of the
Board that the proposal should not be
supported.
17. Revision or extension of the present statutory provisions relat14 to reserve requirements of member banks.
It was agreed that, preliminary
to further discussion of this matter
by the Board, Mr. Young should discuss
with Governors Mills and Robertson the
various reserve proposals considered in
recent years.
18.
Authority for standby powers over consumer and real estate credit.
19.
Standby authority to sponsor voluntary credit restraint programs.
These items were passed over for
later consideration.
20. Legislation making permanent the authority for Federal Reserve
to purchase Government securities directly from the United States up
ell aggregate outstanding amount of $5 billion.
13,eht.
1873
11/4/52
-12The majority of the Board felt
that the initiative on continuation
of the authority should be with the
Treasury and that, when proposed by
the Treasury, the Board should reaffirm its previously stated position
that the authority should be made
permanent.
21.
Broadening the industrial loan powers of the Federal Reserve
ks
22. Elimination of the penalty rate in connection with loans made
ederal
Reserve Banks under section 10(b) upon any collateral satisfactory
to +
the Reserve Bank.
by p
It was agreed that these amendments should not be proposed by the
Board at this time.
23. Elimination of the statutory requirement that Reserve Bank
dim
--count rates be established every 14 days.
Following discussion of the reasons which had prompted the institution
of this requirement, it was agreed unanimously that a decision on this amendment
should be considered in connection with
any changes to be proposed in the instruments of general credit policy.
given.
24. Provision that all banks, whether members or nonmembers, be
access to the credit facilities of the Federal Reserve Banks.
It was agreed unanimously not
this change.
propose
to
25. Amendment to the Securities Exchange Act to provide that
karr,4
eep.m'-r1 requirements on loans for the purpose of purchasing or carrying
Ilrities would be fixed at a specific percentage in the law.
'
It was agreed unanimously that no
change in the law with respect to margin
requirements should be proposed without
first discussing the matter with the
Securities and Exchange Commission.
74
11/4/52
t
-13-
26. Authorization for the Board to apply margin requirements
bank loans to purchase securities not registered on an exchange.
After discussion of the purposes
of such a change in the law, it was
agreed that the item be dropped since
the problem was not serious from a
credit standpoint.
27. Legislation clarifying the authority of the Federal Reserve
to extend currency stabilization credits to foreign central banks
nhout following technical requirements of establishing accounts with
°11ch banks or purchasing commercial paper through such banks.
alike
There was agreement with Governor
Szymczak i s suggestion that no change be
recommended by the Board at this time.
28. Elimination of the statutory limitations on the aggregate
olnoth,
—At which Federal Reserve Banks may expend for branch bank buildings;
or
°4 tacrease of the aggregate limit of the present law by a stated
ct41°1111t
It was agreed that upon receipt
of information which had been requested
from the Federal Reserve Banks by the
first of December, an estimate should
be made of the amount that would be required to meet the System's reasonable
needs for branch buildings and that the
matter would be considered again in the
light of this information.
29. Repeal of the prohibition upon the paying out by one Federal
rye Bank of Federal Reserve notes issued by another Reserve Bank.
The Board favored such legislation,
and it was suggested that the matter be
placed on the agenda for discussion with
the Reserve Bank Presidents at the time
of their next Conference.
1875
11/4/52
-1430.
Legislation requiring the Federal Reserve Banks to pay
90
,per cent of their net earnings after expenses and dividends to the
!
'
1'easury as a franchise tax.
It was agreed that a draft bill
should be prepared for use in the event
the matter should be brought up by other
parties but that the Board should not
urge a change in the law at this time.
31. Provision that dividends on Federal Reserve Bank stock,
gardless of when issued, should be subject to Federal income taxation
the same manner as other income.
re
There was agreement with Governor
Robertson's suggestion that the Board
take no position on this point, leaving
the matter for discussion with Congress
by the member banks.
32. Elimination of the requirement for segregation of collateral
4a148t Federal Reserve notes.
It was agreed that the Board should
not suggest such legislation at this time.
33. Permission for banks which are actually making exchange
charges at this time to continue to do so but forbidding other banks to
te the practice under appropriate civil penalties.
It was the view of the Board that
the progress gradually being made toward
the elimination of exchange charges would
continue and that no legislation should be
proposed. It was also the opinion of the
Board that an alternate proposal which
would allow the Board to permit Federal
Reserve Banks to receive nonpar items for
collection and to charge back or to allocate
to the depositing banks the approximate amount
of exchange charged by drawer banks against
the Reserve Banks would encourage the charging of exchange and should not be favored.
1876
11/4/52
34. Authorization for the issuance of Federal Reserve notes
in one
dollar denomination or, in the alternative, restoration of the
ions for Federal Reserve Bank notes under which a one-dollar
de
nomination is permissible.
The members of the Board expressed a generally favorable attitude toward an authorization for the
issuance of Federal Reserve notes of
one dollar denomination but felt that
no recommendation should be made for
a change in the law unless the question was raised by the Secretary of
the Treasury.
35. Elimination of the capital stock of the Federal Reserve
by paying to the member banks the amounts paid in for such stock,
to
wovuher with accrued dividends thereon; elimination of the election
loY the
member banks of some or all of the six directors they now elect.
Bettk.
It was agreed that the existing
law should not be changed.
36. Requirement that at least one of the Class C directors, or
PO8
b, Bible Class B directors, of each Federal Reserve Bank be associated
"4-tia some labor organization.
It was agreed unanimously that a
requirement should not be written into
the law.
the, 37. Prohibition against directors of Federal Reserve Banks (with
te 14)Beible exception of the Chairman) serving more than two consecutive
Of three years each.
It was agreed that the Board would
favor such a provision.
Rese_
38.
Authorization for the appointment by the Board of a Federal
the 417e Agent who would not be the Chairman of the board of directors of
Pederal Reserve Bank and who need not be a director of the Bank.
tort
39. Authorization for an Assistant Federal Reserve Agent to perthe duties of the Agent in the latter's absence; elimination of the
187`i
11/4/52
-16-
that an Assistant Agent be a person of "tested banking
exPerience".
It was agreed that no change in
these provisions of the law should be
proposed.
Ito,
Reduction of the term of appointment of Federal Reserve Bank
Presidents and First Vice Presidents.
The members of the Board agreed
with the suggestion that, as an alternative to shortening the term of
office, the law be amended to authorize
removal of the President and First Vice
President at the pleasure of the Board.
41. Elimination of the office of First Vice President at the
Pea
-er.,
Reserve Banks.
This item was passed over pending submission of the study being made
by the special committee (Messrs. Szymczak,
Mills, and Robertson) requested by the
Board to study salaries of officers of
the Federal Reserve Banks.
42. Legislation giving the Board specific regulatory authority
Vith re
spect to the operations of the Federal Reserve Banks as fiscal
t8 of the United States and of various Government agencies.
It was agreed that no legislation
should be proposed at this time.
43. Specific requirement for approval by the Board of expenses of
t
4Wederal
Reserve Banks other than compensation paid to directors,
eel's, and employees.
It was agreed that no requirement of
this nature should be proposed by the Board
at this time.
1878
11/4/52
Chairman Martin then suggested that the remaining possible changes
In lav
outlined in the memorandum from the Legal Division be considered at
a subsequent meeting of the Board, at which time attention could also be
cl
oted to the legislative program as a whole.
This suggestion was approved
unanimously.
At this point all of the members of the staff except Messrs.
earPenter, Sherman, and Kenyon withdrew from the meeting and the following
4c1d4tional actions were taken by the Board:
Minutes of actions taken by the Board of Governors of the Federal
Refila
-rve System on November
3, 1952, were approved unanimously.
Memorandum dated November
3, 1952, from Mr. Chase, Assistant
Solicitor, recommending that the resignation of Wilma R. Diane, ClerkSI4lographer in the Office of the Solicitor, be accepted to be effective,
Illaccordance with her request, at the close of business November 14,
1952.
Approved unanimously.
Letter to Mr. Melvin Purvis, Chief Counsel, Subcommittee on Federal
4014er Policies, Committee on Post Office and Civil Service, United States
'
148
S118:te, Washington, D. C., reading as follows:
"Reference is made to your letter of September 29,
1952, earlier correspondence of August 8, 18, and 23, and
1879
11/4/52
"Mr. Hertz' conversation with Mr. A. K. Cherry of the Board
of Governors' staff concerning the subjects of Supervisory
Selection, Appeals and Grievances, and Incentive Awards in
the Federal Government.
"As the Federal Reserve System does not come within the
Purview of the Civil Service Act, we feel it best to give
You information concerning our present procedures in relation to the three categories under consideration by your
conmaittee.
"As you are aware, our organization is a relatively
small one consisting of about 590 employees who, for the
most part, are engaged in work of a highly specialized nature. This specialized type of work lends itself to independent judgment and action and does not involve areas of
detailed supervision to any great extent. Being small and
specialized, we are able to maintain a personal relationship
with our employees enabling us to gain a firsthand knowledge
of their capabilities and also to make well based selections
for filling these few supervisory positions.
"The Board of Governors follows the promotion-from:
17ithin policy contained in the attached pamphlet entitled,
The Story of Your Salary,' which is distributed to all emPloyees and which includes supervisory positions. In filling supervisory positions, the widest practicable area of
competition is provided without regard to divisional lines
and the person having the best qualifications both from a
supervisory and technical standpoint will be selected. Only
after a thorough review by Division Heads of those eligible
does the Board look outside the staff to secure the services of qualified individuals.
"With reference to Incentive Awards, the performance of
every employee at the Board is carefully reviewed by his
Division Head semi-annually for the purpose of rewarding
exceptional work which has been performed over a sustained
Period of time. The nature of the Board's operation is such
that it does not lend itself as well to incentive awards in
the fields of suggestions and inventions as do operations involving large operating costs.
"In regard to Appeals and Grievances, we have carried
out the provisions of the executive orders in setting up
Procedures covering Fair Employment Practices and the
1_880
11/4/52
-19-
"Loyalty Review Programs. A copy of 'Procedures Regarding
Fair Employment Practices' is attached.
"A grievance of any other nature may be brought to the
attention of the immediate supervisor or Division Head by the
employee, if he so chooses, or he may come directly to the
Division of Personnel Administration. His complaint in
either case will receive full consideration. If a satisfactory settlement can not be reached, the employee has
the opportunity to Present his complaint directly to members
Of the Board of Governors where it will also receive a full
hearing. Our experience has shown that most grievances may
be resolved at the supervisory level but ready access may be
had to the Board of Governors, if necessary.
"We shall be very glad to submit any other information
You desire concerning these three subjects."
Approved unanimously.
Letter to the Presidents
8.6
of all Federal Reserve Banks, reading
f011oWS:
"The recent changes in the statutory requirements with
respect to the establishment and operation of branches by
State member banks may result in an increased volume of apPlications for branches and, in order to facilitate consideration of such applications by the Board of Governors,
it is requested that a memorandum covering the following information be submitted in each case:
1. The general condition, the adequacy of capital,
and the quality of management of the applicant
bank. If some time has elapsed since the bank
was examined a current statement of condition
should be furnished.
2. Name and location of existing branches, grouped
by city, town, or village, giving the date of
establishment of each branch, population of community in which located, and capital required by
Federal law for operation of a branch in each such
location.
3. Reasons for establishment of the branch, such as
expansion of business, better service for bank's
customers, or to relieve crowded conditions in
present quarters.
1881.
-20-
"4. Location of proposed branch, estimated population of the community or area to be served,
distance from head office and nearest branches
of applicant bank, and distance from other
financial institutions.
5. Opinion supported by reasons as to economic
character of community, need for banking facilities, the competitive situation, and whether establishment of branch will tend to
create a monopoly or an undesirable competitive advantage in relation to other banks,
including unit banks, in the area.
6. Scope of the functions and the character of
business which will be performed by the branch
and the policy to be followed with reference
to supervision by the head office.
7. Prospects for profitable operations of proposed
branch.
8. Investment in banking quarters.
9. Whether appropriate State authorities have approved establishment of the branch.
10. A copy of opinion of Counsel for the Federal Reserve Bank as to whether the branch would be
established in conformity with the requirements
of the Federal Reserve Act.
11. Recommendation of Reserve Bank.
"It is expected that any other information regarded as
Pertinent will be incorporated in the memorandum.
"It is realized that the Reserve Bank may have occasion
to discuss with applicants proposals received for the establishMent of branches and in some instances, will wish to discourage
the proposal as presented or to advise the applicant that it
veuld not recommend approval and suggest withdrawal of the
application. In every case, however, it should be made clear
to the applicant that the views of the Reserve Bank are advisory and the decision on the case rests with the Board of
Governors. In cases where it can be avoided it is felt that
110 information as to the nature of the Reserve Bank's recommendation should be given the applicant.
"This letter supersedes the Board's letter of February 9,
1934, F.R.L.S. #3573, (X-7786)."
Approved unanimously.
1882
-21Letter to the Presidents of all Federal Reserve Banks, reading as
"It has been brought to the attention of the Board
of Governors that the transmittal to the Board of copies
of reports of examination of State member banks may be
delayed, if the Vice President in Charge of Examinations
is absent for any reason, because of the requirement contained in the Board's letter of August 11, 1952 (S-1465)
that he shall initial the ratings entered on page E of
the report.
"In the circumstances, the Board will consider the
initials of the Chief Examiner, the Manager of the Bank
Examinations Department, or another officer of the Reserve
Bank acceptable opposite the ratings as shown in reports
of examination provided the Vice President in Charge of
Examinations will review all such reports within a reasonable time and will report promptly to the Board any
adjustment in the rating as originally reported which
he may consider desirable as a result of his review."
Approved unanimously.
Letter to the Board of Directors, The Hanover Bank, New York,
ilev York, reading as follows:
"As requested in your letter of October 29, 1952, subnutted through the Federal Reserve Bank of New York, the
Board of Governors extends to October 24, 1953, the time
vithin which The Hanover Bank may establish a branch at
1460 Broadway, New York, New York."
Approved unanimously, for
transmittal through the Federal
Reserve Bank of New York.
Letter to the Board of
Directors, Rochelle Park Bank, of Rochelle
N. J., Rochelle Park, New Jersey, reading as follows:
"Pursuant to your request submitted through the
Federal Reserve Bank of New York, the Board of Governors
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11/4/52
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11
approves the establishment and operation by your bank of
a branch office in the principal business section of Maywood, New Jersey, at some point between Maywood Avenue and
Spring Valley Road on Pleasant Avenue. The Board's apProval is conditioned upon (a) the branch being established within six months from the date of this letter, and
(b) approval being obtained from the appropriate State authorities."
Approved unanimously, for
transmittal through the Federal
Reserve Bank of New York.
Letter to the First National Bank in Indiana, Indiana, Pennsylvania,
reacthig as follows:
"The Board of Governors of the Federal Reserve System has given consideration to your application for fiduciary powers, and grants you authority to act, when not
in contravention of State or local law, as trustee for
bond issues and registrar of stocks and bonds, the exercise of such powers to be subject to the provisions of
the Federal Reserve Act and the regulations of the Board
Of Governors of the Federal Reserve System.
"This letter will be your authority to exercise the
fiduciary powers granted by the Board pending the preparation of a formal certificate covering such authorization,
which will be forwarded to you in due course."
Approved unanimously, for
transmittal through the Federal
Reserve Bank of Cleveland.
Letter to Mr. Diercks, Vice President, Federal Reserve Bank of
Chicago, reading as follows:
"Reference is made to your letter of October 14, 1952,
submitting the application of The State Bank of Hammond,
Liammond, Illinois, for permission to exercise fiduciary
Powers.
11/4/52
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"In view of the Reserve Bank's recommendation and
the information submitted, the Board of Governors of the
Federal Reserve System grants the applicant permission,
under the provisions of its condition of membership numbered 1, to exercise the fiduciary powers now or hereafter authorized under the terms of its charter and the
laws of the State of Illinois.
"You are requested to advise The State Bank of Hammond,
Hammond, Illinois, of the Board's action."
Approved unanimously.
@FedFRASER