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1546 A meeting of the Board of Governors of the Federal Reserve System was held in Washington on Saturday, October 23, 1943, at 11:00 a.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Eccles, Chairman Ransom, Vice Chairman McKee Draper Evans Mr. Mr. Mr. Mr. Morrill, Secretary Bethea, Assistant Secretary Carpenter, Assistant Secretary Clayton, Assistant to the Chairman The action stated with respect to each of the matters hereinafter referred to was taken by the Board: The minutes of the meeting of the Board of Governors of the Federal Reserve System held on October 22, 1943, were approved unanimously. Letter to Mr. Rice, Vice President of the Federal Reserve Bank of New York, reading as follows: "The Board of Governors approves the changes in the personnel classification plan of the Federal Reserve Bank of New York as submitted with your letter of October 13, 1943." Approved unanimously. Letter to "The Bank of Herington", Herington, Kansas, reading as follows: "The Board is glad to learn that you have completed all arrangements for the admission of your bank to the Federal Reserve System and takes pleasure in transmitting herewith a formal certificate of your membership. 1547 -2- 10/23/43 "It will be appreciated if you will acknowledge receipt of this certificate." Approved unanimously. Letter to Mr. Gidney, Vice President of the Federal Reserve Bank of New York, reading as follows: "This refers to your letter of October 6, 1943 and enclosures, with regard to the question whether, under section 32 of the Banking Act of 1933 as amended, Mr. John Agnew and Mr. F. 0. Fayerweather may lawfully serve at the same time as directors of the Paterson National Bank, Paterson, New Jersey, and as employees of the Paterson Branch of the firm of Eastman, Dillon & Co., New York City. "As you know, the Board has considered a number of cases of this kind where the question was whether the type of business described in section 32 was a sufficiently important part of the business of the firm to be regarded as one of its primary activities within the meaning of the statute. It is noted that, relying on the position taken by the Board in such cases, you have advised Messrs. Agnew and Fayerweather that the firm of Eastman, Dillon & Co. should be regarded as 'primarily engaged' in the business described in section 32 and that they may not lawfully continue both as directors of the Paterson National Bank and as employees of the firm of Eastman,. Dillon & Co. On the basis of the information submitted in your letter and enclosures, the Board agrees with you that the firm should be regarded as 'primarily engaged' in the type of business described in section 32 and that Messrs. Agnew and Fayerweather may therefore not lawfully continue as directors of the bank and as employees of the firm of Eastman, Dillon & Co. "It is assumed that you will continue your efforts to obtain a compliance with the law and keep the Board advised as to any development in the matter." Approved unanimously, together with a letter to the Comptroller of the Currency transmitting a copy of the above letter. Letter to Mr. Attebery, Vice President of the Federal Reserve 1548 10/23/43 -3- Bank of St. Louis, reading as.follows: "Enclosed is a copy of a letter dated October 6, 1943, from Mr. Harry C. Lamberton, Acting Associate Solicitor in Charge of Rural Electrification asking for an interpretation of Regulation W. There is enclosed a copy of our reply, saying that additional facts are necessary and that we have asked your Bank to get in touch with him. "Possibly the first question to be discussed with Mr. Lamberton is whether section 8(a) is applicable. This appears to be a possibility, and mould dispose of the inquiry entirely. "The point made by Mr. Lamberton in the last part of his letter is based upon the assertion that the old obligation is not extinguished. However, the question would seem to be whether or not the new obligation is a different obligation, or merely the same obligation in a revised form. If it is a new and different obligation, the principles in S-529-a would be applicable and the case would be similar to the resale of a repossessed automobile. It seems unlikely that W-72 would be applicable. "Of course, if, in discussing the matter with Mr. Lamberton, any question should arise as to which you feel that we may be of assistance, please let us know." Approved unanimously. Thereupon the meeting adjourned. Chairman.
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