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2021 A meeting of the Board of Governors of the Federal Reserve Systetl was held in nshington or Thursday, October 15, 1942, at 11:00 a.m. PRESENT: Eccles, Chairman Mr. Ransom, Vice Chairman Mr. Szymczak :ee Mr. Moi, Mr. Draper Mr. Evans Mr. Mr. Mr. Mr. Mr. Morrill, Secretary Bethea, Assistant Secretary Carpenter, Assistant Secret Clayton, assistant to the Chairlaan The action stated with respect to each of the natters hereinr e- refe, red to was taken by the Board: The minutes of the meeting of the Board of Governors of the Ner al-Reserve System held on October 14, 1942, were approved unanimously. Tela5ram to 7,:r. 71cLarin, President of the Federal Reserve Bank eTAti anta, stating that the Board of Governors approves for the Atlanta effective October 15, 1942, the rates established by the board of (lire et°re of the Bank of 1/2 per cent on advances to member banks, under CaPhs 8 and 13 of section 13 of the Federal Reserve Act, secured bY di reet or fully guaranteed obligations of the United States which 11,1tc, Ofl yer or less to run to call date or to maturity if no call 0,ate. ) of 2 per cent on advances to individuals, partnerships, or corporatto,, "s other than banks under the last paragraph of section 13, and of 4/2 Per cent on advances to member banks under section 10(b), and the tab 4-ishment without chance of the other rates of discount and purchase the Bank's existing schedule. approved unanimously. 2022 10/15/42 Memorandum dated October 14, 1942, from Mr. Ldorrill, recommendthat Stanley M. Love be appointed as a laborer in the Secretary's °trice on a temporary basis for the rate of '1_,200 per annum indefinite period, with lary at effective as of the date upon which he enters upon the performance of his duties after having passed sat Ntoril J-Y the usual physical examination. Approved unanimously. Memorandum dated October 13, 1942, from Ir. 1,1=111, recommending that the following increases in salaries of employees in the Secre117's Office be approved, effective as of October 16, 1942: Name , 14t rY* L. Othisson "aa*V.aret Pauszek tit°111se -z4ith Douglas le Schaffner ConleY ti)• J"eanne '(Thert p,. Krieger Warner Desiomation Stenographer Stenographer Stenographer Stenographer Stenographer General Assistant Clerk Salary Increase To From $1,440 1,620 1,620 1,620 1,680 2,400 1,680 t)1,560 1,740 1,740 1,740 1,740 2,600 1,800 Approved uncnimously. Memorandum dated October 14) 1942, from Patrick J. Winkler, a hcle. Reserve Ex-miner in the Division of Examinations, temlorLrily 816--:ned to the office of the Administrator for the War Loans Committee, 4Ibm. -ltted to the Board with a r commenthtion for approval by Mr. Snead, Anti lIR Administrator for the War Loans Committee, requesting that 7:r. len be granted leave of absence without pay beginning October 17 19 E0 that he might enter active duty vith the United States Army, 202:1 o_ 101'15/42 and the that he be ;1-anted the benefits provided in the policy adopted by Bc3erct on November 14, 1940, and amended August 20, 1941, for all Naoyees entering military service. Approved unanimously. Letter to the board of directors of the "Granite Trust Company", Q'Llj4ke71 Massachusetts, stating that, subject to conditions'of membershb, tiumbered 1 to 6 contained in the Board's Regulation H and the fol11E special condition, the Board approves the bank's application tc)11 Illembership in the Federal Reserve System and for the appropriate '''ount or . 117 stock in the Federal Reserve Bank of Boston: Prior to admission to membership, such bank, if it has not already done so, shall charge off or otherwise eliminate estimated losses of U0,279.41 as shown in the report of examination of such bank as of Tuly 20, 1942, made by an examiner for the Federal Reserve Bank of Boston." Approved unanimously, together with the following additional letter to the board of directors of the "Granite Trust Company": "In connection with your application for membership in the Federal Reserve System, the Board of Governors tapProves the retention • and operation by the 'Granite Trust C°mPanyl, Quincy, Massachusetts, after admission to memberchip, of the three branches in Weymouth, Massachusetts, the establishment and maintenance of which were approved on 4ril 24, 1941, by the CoEmissioner of Banks of the CommonWealth of Massachusetts." In connection with the above matter, unanimous approval WEIS also given to a letter to Mr. Paddock, President of the Federal Reserve Bank of Boston, reading as follows: 2024 10/15/42 -4- "The Board of Governors of the Federal Reserve System approves the application of the 'Granite Trust Company', Quincy, Massachusetts, for membership in the Federal Reserve °Ystem, subject to the conditions prescribed in the enclosed letter which you are reouested to forward to the Board of Directors of the institution. TWO copies of such letter are also enclosed, one of which is for your files and the other Of Which you are requested to forward to the Commissioner Of Banks for the Commonwealth of Massachusetts for his information. "You will note that in the letter to the applicant bank attention is called to the fact that the bank as a member be TIL will be expected to comply with the terms of the conditions prescribed by the Federal Deposit Insurance Corporation in connection with the approval of the continuation of the branches acquired in the absorption of the Weymouth Trust C°mPany. "It is assumed that you will follow the matter of the bank's bringing into conformity with the provisions of law and the Board's regulations the savings accounts listed on Page 2 of the report of examination for membership. "Enclosed is a letter approvinr, the retention and operation of branches at Weymouth, Massachusetts, -which you are requested to forward to the board of directors of the aPPlicant bank. Enclosed also is a copy of the letter for Your files." Letter to Yr. Yulroney, Vice President of the Federal Reserve 13a* Of Chicago, reading as follows: "With your letter of September 1, 1942, you transmitted to us a copy of a letter of August 31, 1942 from Mr. W. I. Barth, Vice President, First Wisconsin Trust Company, Mil-eaukee, Wisconsin, relating to the execution by 425 West TisconSin Avenue, Inc., Milwaukee, Wisconsin of an agreement on Agreement to Permit Examinations) in Pc)rm P-3 (Exhibit L connection with the application by Wisconsin Bankshares Corporation for a supplementary voting permit covering The Baraboo National Bank. "Since such an agreement had not been filed and it appeared that 425 West Wisconsin Avenue, Inc. was a subsidiary Of First Wisconsin Trust Company (and, indirectly, of WisconSin Eankshares Corporation), the Board, in its telegram of : 3line 8, 1942, authorizing the issuance of a voting permit '° risconsin Bankshares Corporation, prescribed a condition relating to the filing of the agreement. Apparently a request by the Wisconsin Bankshares Corporation that First 2025 10/15/42 "lasconsin Trust Company furnish the agreement prompted 11r. Barth's letter to you in which he expresses reluctance to execute it unless it is required by law. "As you know, the form of applici,tion to be filed by holding company affiliate desiring a voting permit vias Prescribed by the Board pursuant to the authority, and in d ischarge of the responsibilities, vested in it b:r section 5144 of the Revised Statutes of the United States. As a Part of such an apthcation, the holding company affiliate 18 required to file agreements on Form P-3 executed by all °rCanizaticns (other than member banks) with which the apPlicant or any of its subsidiaries Is affiliated (see Board's Regulation P and printed forms referred to therein). In the cese of applications for supplemental voting permits, reeuirement ordinarily is waived in so far as it relates to organizations whose agreements have been filed in connection with previous aliplications; but this is immaterial in this instance because 425 West Wisconsin Avenue, Inc. was °rCanized subsequent to the issuance of the voting permit now held by Wisconsin Bankshares Corporation. "It is understood that 425 West Wisconsin Avenue, Inc., organized in 1937 to hold title to and operate real asate at the address contained in its corporate title. Mr. BELT"th's letter confirms our information that a majority of .i The corporation's outstanding voting shares are held by First viisconsin Trust Company in various fiduciary capacities and states that First Wisconsin Trust Company is 'administering the corporation 425 West Wisconsin Avenue, Inc. on behalf Of the stock so held by it in trusts as well as on behalf of EL aubstantial minority of the stock held outside.' 'Cisconsin Bankshares Corporation owns substantially all of the stock of First Wisconsin Trust Company and, it is understood, s relatively small minority of the stock of 425 West Wisconein Avenue, Inc. "On this basis, Wisconsin Bankshares Corporation and irst Wisconsin Trust Company clearly are affiliated with 425 Vest Wisconsin Avenue, Inc., within the meaning of the term 'affiliated' as defined in Regulation P. Accordingly, e0111P1iance with the requirements with respect to voting Permit applications cells for the filing of the agreement 011 Porn P-3 executed by 425 West Wisconsin Avenue, Inc.; 'fld the Board does not feel that it should make an exception to such uniform requirements in this case. The responsbility 17,0r obtaining and filing the agreement, of course, rests with "ieconsin Bankshares Corporation, the holding company affili7te, and it is surTested that you discuss this matter with -It8 representatives in the light of this letter. 2026 10/15/42 -6- "The time within which the voting permit could be isSued to Wisconsin Bankshares Corporaticn under the authorization contained in the Board's telegram of Tune 8, 1942, has e Pired. Consideration of the question whether such authorization should be renewed is being deferred pending receipt of advice as to whether the conditions then prescribed will be met.fl Approved unanimously. Letter to Kr. Tallace, Counsel of the Federal Reserve Bank of N.chirn --°nd, reading as follows: "Tour letter of September 15 raises a nuestion under ReMlation W which has recently been considered by the oard in connection with credit cards issued by gasoline companies and others. The question relates to the status (1)11 a charge account where the buyer has given the seller a note for the amount due and the seller has transferred the note to another Registrant. "The previous inquiries arose out of a regular course Of dealing based on contracts between the various independent dealers and the issuer of the credit cards under which the issuer agrees to purchase all accounts receivable arising out of sales made by the dealers to the holders of the p'edit cards. The accounts are purchased without recourse ‘except in the csse of fraud, etc.) and in the normal course Of events the dealer receives his money immediately and iteRrs nothing further regarding the account. "The Board took the position that the dealer was the seller, and that consequently he was the 'Registrant' within the meaning of section 5(b). Consequently, if a customer not pay his bill for articles purchased through a dealer, ne could nevertheless purchase listed articles with his credit card from another dealer, and furthermore the issuer 2f the credit card would not be prevented by the Regulation Il'om purchasing the account arising from the latter sale. "On the other hand, if the dealer contemplated making further sales of listed articles on credit to the holder of credit card, he -would not be safe in so doing unless he r°und out from the issuer of the card whether the holder "Is in default on account of previous purchases from him. "In these cases there was no promissory note, but the l'esults would be the same if there were a promissory note, In view of the definitions of 'charge sale' and 'charge 6Ccount' in sections 2(f) and 2(g). Consequently, if the note 2027 10/15/42 -7— "Were not paid (whether because it hod been renewed or for any other reason) within the time prescribed in section 5(c), the account would be in default, unless the note had been renewed under such conditions as to constitute a 'cure' under section 5(d). "With respect to your second ouestion, the seller could take a renewal note without limitation as to maturity, since he would in effect be merely extending the time of payment Of the account. The account would remain in default pending payment. On the other hand, if the bank accepted a renewal note payable to itself, it would in effect be making a loan the proceeds of which it knew would be used to retire a to the recharge account, and the renewal would be subject strictions applicable to such loans." Approved unanimously, with the understanding that copies of the above letter would be sent to the Presidents of all the Federal Reserve Banks. Secretary of the Letter to Honorable Daniel W. Bell, Under Trea— 'urY, reading as follows: "This refers to your letter of October 12, 1942, enclosing a copy of a proposed Treasury order setting forth a procedure for destruction of currency in Puerto rico. You are advised that the proposed procedure, in 80 far as it affects Federal Reserve notes and Federal Board reserve Bank notes, meets with the approval of the Of Governors of the Federal Reserve System." Approved unanimously. the Merchants Letter to Mr. E. P. Tucker, Vice President of °nal Bank, Port Arthur, Texas, reading as follows: 1942, "This refers to your letter of September 22, Treasury, the of to Hon. Henry Morgenthau, Tr., Secretary With respect to the protection afforded United States Government securities held in custody for your Bank by was the Federal Reserve Bank of Dallas, a copy of which Secretary Under referred to the Board by. 14r. D. W. Bell, °f the Treasury. Federal "Since your bank is located in the Eleventh letter your of copy reserve District we are ferwardirk7 a 2028 10/15/42 -8- "to Mr.. R. R. Gilbert, President of the Federal Reserve Bank of Dallas, with the request that he write you with respect to the protection afforded by the Bank to securities held in custody for member banks. "While our records do not indicate the types of insurance carried by your bank, it is our understanding that some banks have blanket bonds which 1-,rovide for insurance of securities held in their own vaults and in the vaults of their correspondents. It is also understood that certain insurance companies have agreed to write Policies for member banks insuring them against loss on securities held in custody for their account by a Federal Deserve Bank." Approved unanimously. Thereupon the meeting adjourned. &geA,tot, 41 1''`oved: ' Chairman. Secre ery.
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