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1533

Minutes of actions taken by the Board of Governors of the
Federal Reserve System
on Thursday, October 31, 1946.
PRESENT:

Mr.
Mr.
Mr.
Mr.

Eccles, Chairman
Ransom, Vice Chairman
Draper
Evans
Mr.
Mr.
Mr.
Mr.

AS

Carpenter, Secretary
Sherman, Assistant Secretary
Morrill, Special Adviser
Thurston, Assistant to the Chairman

stated in the minutes of October 30, 1946, Mr. Vardaman

we's absent on official business.
The minutes of actions taken by the Board of Governors of
the Federal Reserve System on October 30, 1946, were approved unani.
rnous4

Menorandum dated October 30, 1946, from Mr. Bethea, Director
of the Division of Administrative Services, recommending the appointItlent of
Miss Helen M. Anderson as a page in that Division, on a tam13°Ilar7
indefinite basis, with basic salary at the rate of 11756.00
Per arirliza,

effective as of the date upon which she enters upon the

13e"°rnlarIce of her
duties after having passed the usual physical oxThe memorandum also stated that it was contemplated that
443 AliderSOn

r'stem.

would become a member of the Federal Reserve retirement




Approved unanimously.

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10/31/46

-2-

Telegram to Mr. Fred S. Wallace, Kearney, Nebraska, reading
as follows:
"Board of Governors of Federal Reserve System has appointed
You director of Omaha Branch of Federal Reserve Bank of Kan-7a8 eitY for unexpired portion of term ending December 31,
J-946, and
telegram."will be pleased to have your acceptance by collect
Approved unanimusly.
Letter to Mr. DeMoss, Vice President of the Federal Reserve
13(Ink of

Dallas, reading as follows:

"This refers to your letter of October 10, 1946, addressed to Mr. Leonard, Director of the Board's Division
of
.
Ebcamanations,
enclosing a copy of a farm mortgage purchase
agreement
which
has been entered into between State
and
National banks in your district and the Equitable Life
2ssurance Society of the United States. Under this agreet, the bank agrees to sell, within two years and withml-srecourse, and the Society agrees to purchase farm
8`0)7,gages which have been considered and approved by the
84.cletY before the loans are actually made. It is underthat you would like advice as to whether unlimited
170,n and transfers as contemplated in this agreement
''' be prohibited under standard condition of member941. numbered
3, which prohibits any State member bank
'
m__'-'°Ject
thereto
from engaging as a business in selling
ortgages
ti
Board In prescribing this condition of membership, the
had in mind
particularly sales of mortgages to the
r
srairal public who were not in a position to evaluate
mor estate loans
and might consider the bank at least
as .11Y obligated to make good any loss sustained, whereloaLhe
Society is qualified to appraise the real estate
sl and would not expect the bank to act as guarantor
e soundness of the investment. Moreover, it may be
question
a
would
-e whether transactions under this agreement
of a violate the condition of membership as the contract
bankssignment to the Society is entered into before the
cumst etuallY makes the farm mortgage loan. In the cir-flees) however, regardless of ;tether sales under

n

of Zi




1535
10/31/46

-3-

"this agreement would be technically inconsistent with
the
condition of membership, the Board will not object
to member
State banks making sales of farm mortgage
1-cans to the Equitable Life Assurance Society under this
tgreement, as
such transactions would not violate the
purpose of the condition."
Approved unanimously.
Letter to Mr. Fulton, Vice President of the Federal Reserve
o C
leveland, reading as follows:
"This refers to your letter of October 10, 1946,
Lt
Tot: the application of The Peoples Bank,
C;:nZorri:
for permission to exercise fiduciary
Powers.
your :/
1 -1 view of the information submitted, and of
rd- le recommendation, the Board of Governors
!
7
13 the
Federal Reserve System grant:,
, the applicant
Ilk Permission, under the provisions of its condition
130w
.membership numbered 1, to exercise the fiduciary
of .7.r8 now or hereafter authorized under its Articles
The
'
ncorporation and the laws of the State of Ohio.
LP°ard's approval is given subject to acceptance
bank 01.
- the following standard conditions pre!! .13)ed in connection with the admission to membership
21e banks
exercising fiduciary powers:
i.
Such bank shall not invest funds held
by it as fiduciary in stock or obligations of, or property acquired from,
the bank or its directors, officers,
or employees, or their interests, or
in stock or obligations of, or property
acquired from, affiliates of the bank.
2. Such
bank, except as permitted in the
case of national banks exercising fiduciary powers, shall not invest collectively funds held by the bank as fiduciary
and shall keep the securities and investments of each trust separate from
those of all other trusts and separate
3. from the properties of the bank itself.
If funds held by such bank as fiduciary
are deposited in its commercial or savings department or otherwise used in the




153“
1O/31/46

-4—

"conduct of its business, it shall deposit with its trust department security
in the same manner and to the same extent
as is required of national banks exercising fiduciary powers.
"Since it is understood that in the State of Ohio,
trust
funds deposited in the banking department of a bank
are preferred claims in event of liquidation of the bank,
5?1,1.are authorized, in accordan
;ce
with the general authorion previously granted by the Board, to waive compliance
"
1 condition of membership numbered 3 herein until further
notice
oh. "You are requested to advise The Peoples Bank, Canton,
of the Board's action, and to obtain an appropriate
rjsolution of the board of directors of the bank accepting
conditions listed above and forward a certified copy
whereof to
the Board."

Z

Approved unanimously.
to

Letter to "The First-American Bank & Trust Company", MiddleOhi0,
reading as follows:
ha "The Board of Governors of the Federal Reserve System
f. considered the application for permission to exercise
tia;tclary powers made by you on behalf of the First National
wg"1,°f Middletown, Middletown, Ohio, the national bank into
oh;cu The First
-American Bank & Trust Company, Middletown,
au3
j
, is to be converted, and grants such national bank
co "°ritY, effective if and when it is authorized by the
whraPtroller of the Currency to commence business, to act,
eg;I:Ful.t1,2 in contravention of State or local law, as trustee,
administrator, registrar of stocks and bonds,
tiara?an of estates, assignee, receiver, or in any other
or uclary capacity in which State banks, trust companies
nat?ther corporations which come into competition with
%a.
:
lt. 11a1 banks are permitted to act under the laws of the
;Let tol*
o Ohio, the exercise of all such rights to be subthe provisions of the Federal Reserve Act and the
s gulati°118 of the Board of Governors of the Federal Reerve SYstem,
Tru "After the conversion of The First-American Bank &
Banistt Company, Middletown, Ohio, into the First National
M
effective and the Comptroller
Of the
uue iddletown becomes
Currency authorizes the national bank to commence




1537
1O/31/46

—5—

"business, you are requested to have the board of directors of the
national bank adopt a resolution ratifying
application for permission to exercise fiduciary
er 3 and a certified copy of the resolution so adopted
. /leuld be
forwarded to the Federal Reserve Bank of Clevefor transmittal to the Board for its records. When
of such resolution has been received by the Board,
eopy
p
.14°rmal certificate covering the national bank's authorivy to exercise trust polhers will be forwarded."

gr

Approved unanimously.
Letter to Mr. DeMoss, Vice President of the Federal Reserve
Of Dallas,
reading as follows:
"In
of the recommendation contained in your
letter of October
16, 1946, the Board of Governors will
tx?tenTe no
objection, under the provisions of condiitc'n 0- membership numbered 8 to which the member bank
_
,-subject,
to the investment of $1,500 by the Farmers
mjcerchants State Bank, Ladonia, Texas, in property adits bank premises, for the purpose of expanding
quarters, and the contemplated expenditure of apProxi 4-m-at'eJ-Y
" $2,000 for the purpose of improving such
t-roperty.




Approved unanimously.

Secretary.

Chairman.