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2097 A meeting of the Executive Committee of the Board of Governors of the Federal Reserve System was held in Washington on Wednesday, October le, 1935, at 11:30 a. m. PRESENT: Mr. Mr. Mr. Mr. Eccles, Chairman Hamlin Miller James Mr. Morrill, Secretary Mr. Bethea, Assistant Secretary Mr. Carpenter, Assistant Secretary The Committee acted upon the following matters: Telegrams dated October 16, 1935, from Messrs. Curtiss, Austin "Y411(3d, Chairmen of the Federal Reserve Banks of Boston, Philadelphia kid St. Louis, respectively, all advising of the establishment without Chang e by their banks today of the rates of discount and purchase in " ct at the banks. Noted with unanimous approval. Letter to Mr. Curtiss, Federal Reserve Agent at the Federal Reserve ealk of Boston, reading as follows: "Receipt is acknowledged of your letters of October 8 4.2and October 11, 1935, from which it has been noted that connection with a reorganization of the Department of ' 41a1rinat1ons of your bank you have appointed a chief ex aminer. "This is to advise you- that the Board approves, efree+4 'C7e. October 7, 1935, the appointment of Mr. James D. u eponald as chief examiner in the Federal Reserve Agent's enpartment of your bank. Approval by the Board of the tg-a17 of $6,000 is not necessary, inasmuch as this amount does ,-' exceed the maximum salary allowed for this position in "ur Personnel Classification Plan." r Approved unanimously. Letter to the board of directors of the "Farmers & Merchants State kilo 'verlington, Indiana, stoting that, subject to the conditions pre 2098 10/16/35 8cri.bed in the letter, the Board approves the bank's application for Membership in the Federal Reserve System and for the appropriate amount °I* stock in the Federal Reserve Bank of Chicago. Approved unanimously, together with a letter to the Federal Reserve Agent at Chicago, reading as follows: "The Board of Governors of the Federal Reserve System approves the application of the /Farmers & Merchants State Bank, Darlington, Indiana, for membership in the Federal Reserve System, subject to the conditions prescribed in the !!_lelosed letter which you are requested to forward to the ard of directors of the institution. Two copies of such riletter are also inclosed, one of which is for your files and the other of which you are requested to forward to the Bank (3"Imissioner for the State of Indiana for his information. "It has been noted from the report of examination as August 14, 19350 that the institution was carrying a ;lance balance in excess of 10 per cent of its capital with the ; 48ton Bank and Trust Company, Crawfordsville, Indiana, a rnmember bank. It is suggested, therefore, that you call he specific attention of the bank to condition numbered 11. t , "It will be noted that the Board has not prescribed „-ue portion of membership condition numbered 1 recommended the Reserve Bank Committee that the bank shall eliminate 1 ' 1 Place in a condition acceptable to you prior to February 2 1956, the assets classified as doubtful in the report of -3t ..,.elnination of the bank as of August 14, 1935. It is 7"gested, however, that you point out to the bank the advisability of transferring such assets to the trustees or to the expiration of the right of substitution period 411 the event an improvement in the condition of such assets ' 46 not evident by that time. ci "In connection with condition numbered 19 in the intl„ letter to the subject bank, please advise not later tr December 31, 1956, what progress has been made toward b 6 removal of the building and loan association from the , 111:1ng quarters of the bank if sach removal is not effected ,! vglor to that time." n thliver Letter to Mr. M. L. Barringer, Assistant Treasurer, Denison sitY, Granville, Ohio, reading as follows: 2099 10116/35 -3- "This refers to your letter dated September 27, 1935, adnssed to the Secretary of the Treasury, which has been re'erred to the Board of Governors of the Federal Reserve System far reply. "You state that Denison University had planned to deposit some current operating cash, which it will not need for from f°11r to six months, in savings accounts at several banks in :mounts of $5,000 at each bank, intending, thereby, to earn °Me much needed additional income to help operate the college. "You also state that you were informed by one of your lo cal banks that it was not permitted to pay interest on such !_leposit since it would be classified as a corporation deposit n.not as a thrift account. Accordingly, you requested a lflg that the proposed deposit be classified as a thrift .eposit. "Section 19 of the Federal Reserve Act, as amended, authorand directs the Board of Governors of the Federal Reserve 8y 1,Y!3tem to limit by regulation the rate of interest which may be a t41441 by member banks of the Federal Reserve System and in .c ;o0rdance with this provision the Board has issued its Regulaf °11 Q defining 'savings deposits' as deposits consisting of m, ilds accumulated for 'bona fide thrift purposes' and which ,7et certain other requirements regarding presentation of the rss book, notice of withdrawal, and form of contract with the "Poeitor. ea . If the local bank in which you attempted to make a it/rings deposit is a member bank of the Federal Reserve System, le maY be that such bank declined to receive the deposit of 1.111"1"ent operating cash' from the university on the ground that th believed that such funds were not accumulated for 'bona fide Ilft purposes'. be The Board feels that questions as to whether deposits may ah l'egarded as funds accumulated for bona fide thrift purposes be considered by member banks in the exercise of their best tb:t judgment and in the light of the provisions of the law and nitti -Segulation and that in each case the question must be deter' the in the light of the particular facts and circumstances of ro,, The Board believes that it would not be practicable it .1t to um:Ica-take to determine such questions as they may arise to In cases with member banks when deposits are offered thdividual em. 4 v(to "The definition of savings deposits is contained in section yon Of Regulation Q, a copy of which is inclosed herewith for 130venience. It should be observed, however, that the now has under consideration a revision of Regulation Q to Bezil°1'in to the changes made in the law by the recently enacted kad ing Act of 1935 and it is possible that some change may be ' e in the definition of savings deposits. 2100 "A6A5 -4- "It may be that the needs of the university will be met by depositi ng the funds in question in a time deposit Which must, under the provisions of the Board's regulation, be Payable not less than 30 days after the date of deposit 2r uPon written notice of not less than 30 days. Member uallka are permitted to pay the same maximum rate of interest on time deposits as on savings deposits and the requirement IIPPlicable to savings deposits that funds in such deposits shall be accumulated for bona fide thrift purposes is not aPPlicable to time deposits." Approved unanimously. Letter to the Hechinger Engineering Corporation, Washington, D. C., r"ing as follows. 1.9 "'Receipt is acknowledged of your letter of October 5, ' 3 5, with reference to your bid filed under date of September e,19351 for demolishing and removing Temporary Building No. located between 20th and 21st Streets, C Street and Consti,`'tion Avenue, Northwest, Washington, D. C., and of your treitter of October 14, 1955, transmitting an agreement of the p tirited States Guarantee Company to extend the bond which it had eviously executed as surety so that it will cover your bid Until January 1, 1936. vi, "You are advised that the Board approves the understanding 'ill regard to the modification of the bid and of the form of contract as fully set forth in the Board's letter of September c.•°) 1935, and as confirmed by your letter of October 3, 1935." Approved unanimously. Thereupon the meeting adjourned. CrILA,LJ2„2 SecrAary.
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