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p.4 Minutes of actions taken by the Board of Governors of the Federal Reserve System on Wedhe day, October 10, 19)1. PRESENT: ,Mr. Nartin,Chairman Mr. Szymczak Mr. Sherman, Assistant Secretary Mr. Kenyon, Assistant Secretary Memorandum dated October 81 1951, from Mr 4 Young, Director, Divisthn of Research and Stat5.stic 1 recommending that the resignation 1"s8 Mary G. Offutt, Clerk in that Division, be ,accepted to be effective, in accordance with her request, at the close of business October 10, 1951. Approved unanimously. Memorandum dated October B, 1951, from Mr. Young, Director, Divis. lon,of Researth-and.Statistics, recommending , theappointment of Mrs. 1)0rothlr Z. Grahaxa as a Clerk-typist in that Division on a temporary nite , basis, with basic salary ,at the rate of $24650 Der annum, errective her autles • s of the citite upon veil tch she ,enters upon the performance of after having passed the usual physical examination and sub- ject to the completl on Of a satisfactory employment investigation. Approved 'unanimously. Memorandum dated October 1, 1951, from Mr. Bethea, Director, vision. of Admiuistrative Services thereiA recommending for the reasons stated operation of certain of the Board's machine tabulation equipment '4f1ht Shift, (4:00 p. . 1 :30 a.m.) in addition to the regular 47, 10/10/51 -2- daytime operation, at an additional rental cost of not more than $300 Per month, and employment of an experienced Senior Tabulation Equipment Operator (contemplated classification in Group P: $4,200 per an4uM) and an experienced Key-Punch Operator (contemplated classification in Group 1: $2,6i)o - $3,130 per annum) to work during the night shift. Approved unanimously. Letter to The First National Bonk of Palestine, Palestine, riexas, readine 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, executor, administrator, registrar of stocks end bonds, guardian of estates, assignee, recelver, committee 'of estates of lunatics, or in any other fiduciary capacity in which State banks, trust companies or other corporaions which come into compettion with national banks are permitted to act under the laws of the State of Texas, the exercise of all such rights to be subject to the provisions of the Federal Reserve 4ct and the reeulations of the Board of Governors of the Federal leserve 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 authorizatien, Which will be forwarded to you in eue course." Approved unanimously, for transmittal through the Federal Reserve Bank of Dallas. Letter to Mr. Walter F. Ryan, Clearance Officer, Division of Statistical Standards, Bureau of the Budget, Washington, D. C., reading as follows: 10/10/51 -3- ire enclosing two copies of your form 83 and Of a erart of our form F. R. in) that we expect to have State member banks use in submitting reports of condition , t the end-of-year cell. e understand that the Comptroller of the Currency and the Federal Deposit Insurance Corporation expect to use similar forms, except that the former will again include a memorandum on total guaranteed loans in Schedule A. 'Form Y. R. 10) is the same as that used on recent calls except for additional breakdown of item ((b) Schedule A to read as follows: (h) Real estate loans--secured by residential properties (other than farm): (1) Insured by Federal Housing Administration (2) Insured or Guaranteed by Veterans' Administration (3) Not Insured or guaranteed by FHA or VA The Executive Committee of the National Associntion of SuDervisors of State Banks has agreed to recommend the sane Change In call report forms prescribed by State banking departments, if the Federal agencies make the change. "The data are desirable for the effective and flexible administration of Federal real estate credit regulations. Trends need to be watched and questions answered such as: Ilave Regulation X and companion FBA end regulations had a Ereater effect on the government-aided mortgage market thbal on the conventional market? Have lenders reduced the Proportion of FHA and VA loans held in portfolio? Have the Portfolio changes of some lenders or in some regions of the ecnintrY been greater than in others under the impact of regulations? Most banks now segregate YEA and VA loans of their banks; consequently, the proposed segregation in the call report loan schedule should impose little, if any, aaditional reporting burden on the banks." Approved unanimously. Letter to Mr. Osborne A. Pearson, Assistant Postmaster General, :Post Office Department, Washington, D. C., reading as follows: "Further reference is made to your letter of June 8 MM), regarding the handling and Insurance of Post rice funds which might be deposited with certain Federal 10/10/51 -4- "Reserve Banks and branches through the use of registered maii "As indicated in our letter of June 27, this matter 1,ts referred to the Conference of Presidents for consideration, and, as you know, it has been discussed inforMally with representatives of your Department and the Treasury D epartment. "As a result of these discussions, you asked the Treasury Department, in a letter dated ilugust 2, 191}1, for a ruling with respect to the applicability of the Government Losses in Shipment Act to the proposed shipments. The Treasury Department replied on August 8, 19)1, and stated that a final ruling as to coverage under the Government Losses in Shipment Act was withheld pending a dotemination by the Post Office Department as to the arPlicability of the Act of March 17, 1882, as amended, 'which is cited in the third proviso in Section 3 of the Government Losses in Shipment Act. The Treasury also stated that, if the shipments are found not to be covered bY the 1882 Act, it is believed necessarily to follow that theY 8re eligible for coverage under the Government Losses Shipment Act. It is understood that you have asked the l'°st Office Department Solicitor for an opinion as to the ' APplicabaity of the 1882 Act. "The Conference of Presidents has submitted a report, iu which the Board concurs, stating that those Federal , 1 !"erve Banks and Brunches in which local postmasters now iteposit their funds and which pick up registered mail at - /Ie Post offices would be willing to accept funds of local I'ostmasters at the post offices as registered mail shipplents and to transport them to the offices of the Federal Reserve Banks, provided: 1. That such post office funds will be accepted as registered mall at post offices only at the same places and at the same times as other registers are accepted. 2. That funds of local post offices, accepted at post offices as registered mail by l'ederal Reserve Banks and branches, shall continue to be the property of and at the risk of the Post Office Department until they reach the premises of the Federal Reserve Banks. 3. That the currency and coin comprising such shipments shall be prepared and packaged in the manner prescribed by the applicable circulars of the Federal Reserve Banks relating 10/10/51 -5- 4. "tc shipments of money by member banks and shall be subject to the necessary adjustments upon verification. That the Secretary of the Treasury request the Federal Reserve Banks to accept such deposits, or that he approve acceptance of such deposits by the Federal Reserve Banks, as Fiscal Agents of the United States." Approved unanimously. Letter to Mr. Johns, President of the Federal Reserve Bank of St. Louis, reading as follows: "This refers to your letter of September 11, 1.91, requesting the Board's views as to whether section 8 of the Clayton Act permits a person who is a member of the Advisory Board of Mercantile Trust Company, St. Louis, Missouri, to serve at the same time as a director of Manufacturers Bank and Trust Company, also in St. Louis. This Presents the question of whether or not a member of-the Advisory Board of Mercantile Trust Company should be considered a 'director, officer or employee' of that company Within the meaning of section 8 of the Clayton Act. "As you know, the answer to this question necessarily depends upon all the circumstances of the particular case -upon the actual facts of the situation and not merely upon the name or title that may be applied. Accordingly, the Board has given careful consideration to all the relevant facts submitted with regard to this Advisory Board, including the facts set out in your letter, the by-laws of Mercantile Trust Company, and the Consolidation Agreement under Which Mercantile Trust Company resulted from the consolidation of Mercantile-Commerce Bank and Trust Company and Mississippi Valley Trust Company. "Upon such consideration, it appears that the title of 'Advisory Board' can not be regarded as conveying an accurate Picture of the status or functions of those who are members of the board. Without attempting to repeat in detail all features of their activities, some of the more salient aspects may be indicated. Members of the Advisory Board are elected by the stockholders in the same manner and at the same time as the directors are elected. They meet 'at the 10/10/51 '? -6- time and place of and in connection with the meetings of the Board of Directors'. They are 'compensated to the same extent as the members of the Board of Directors for attendance at meetings'. All provisions of the by-laws relating to notice of meetings of the Board of Directors apply to meetings of the Advisory Board. "You point out, among other things, that three members of the Advisory Board are officers of Mercantile Trust Company in other capacities, and that among the three are the two executive vice presidents of Mercantile Trust ComPany. "In addition to providing that the Advisory Board shall meet 'at the time and place of and in connection with the meetings of the Board of Directors', the by-laws provide that the Advisory Board 'shall participate in the discussions' of the Board of Directors. "When considered together, the relevant facts make it clear that members of the Advisory Board in fact, even though perhaps not in name, act as 'directors, officers or employees' of the Trust Company within the meaning and spirit of section 8 of the Clayton Act. Accordingly, on the basis of the information presented, the Board of Governors is of the opinion that section 8 of the Clayton Act does not permit a person to serve as a director of Manufacturers Bank and Trust Company while he is serving as a member of the Advisory Board of Mercantile Trust Company." Approved unanimously. -4‘.ssitant Secretary.
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