The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
1444 A meeting of the Board of Governors of the Federal Reserve Shtem Was held in Washington on Monday, September 10, 1945/ at 11:00 PRESENT: Mr. Mr. Mr. Mr. Mr. Eccles, Chairman Szymczak McKee Draper Evans Mr. Hammond, Assistant Secretary Mr. Connell, General Assistant, Office of the Secretary Mr. Morrill, Special Adviser Mr. Thurston, Assistant to the Chairman The action stated with respect to each of the matters hereineNr referred to was taken by the Board: The minutes of the meeting of the Board of Governors of the Pecie 1%41 Reserve System held on September 7, 1945, were approved unani 111°1184. Letter to Mr. Weigel, Assistant Vice President of the Federal Reeery_ - ' bank of St. Louis, reading as follows: "The Board of Governors approves the changes in the 12:1"8onne1 classification plan of the Federal Reserve Bank v4 St. Louis, involving the Bank Relations Department, as elibmitted with your letter of August 16, 1945." Approved unanimously. tzle Letter to the "First National Bank in Ord," Ord, Nebraska, read- February 10 "This refers to the resolution adopted on 1 1945, by the board of directors of your bank, signifying the bank's desire to surrender its right to exercise 144_5 9110/45 -2- "fiduciary powers heretofore granted to it. "The Board, understanding that your bank has never actually accepted or undertaken the exercise of any trust, has issued a formal certificate to your bank certifying that it is no longer authorized to exercise any of the fiduciary powers covered by the provisions of section 12 .-(k) of the Federal Reserve Act, as amended. This certificate is enclosed herewith. "In this connection, your attention is called to the fact that, under the provisions of section 11(k) of the Federal Reserve Act, as amended, when such a certificate has been issued by the Board of Governors of the Federal Reserve System to a national bank, such bank (1) 11 no longer be subject to the provisions of section i1 , ' 4.00 of the Federal Reserve Act or the regulations of the Board of Governors of the Federal Reserve System made pursuant thereto, (2) shall be entitled to have returned to it any securities which it may have deposited with the State or similar authorities for the protection of private or court trusts, and (3) shall not exercise 44Y of the powers conferred by section 11(k) of the Federal Reserve Act, except with the permission of the Board Of Governors of the Federal Reserve System." V Approved unanimously. Letter to Mr. Mangels, Vice President of the Federal Reserve San Francisco, reading as follows: "This refers to your letter of August 28, 1945, with I'espect to a shortage in the account of a former teller 1 1t 4. The Utah Savings and Trust Company, Salt Lake City, It is noted that you propose writing to the memr,'ah1 ',!er bank asking for a full official report of the occurnee, together with an outline of the circumstances con! ldered by the bank in reaching its decision to take no 'illrther action, and if the information so obtained conto that already received from your examiner and the Bank Commissioner, you do not plan to report the case the United States Attorney and the Federal Bureau of 4-11vestigation. "The Board agrees with your conclusion that, in view °I the circumstances and pursuant to the discretion vested 1446 9/10/45 —3— tt • In your Bank in reporting misdemeanors, this procedure would not be improper, and the Board has no suggestions to offer as to other steps which might be taken." Approved unanimously. Letter to Mr. Fred M. Vinson, Secretary of the Treasury, read— trig as follows: "For your information you will find attached a copy 5' the draft of proposed Amendment No. 18 to Regulation " of the Board of Governors relating to consumer credit. , "This amendment has two principal objectives: (1) ' 4) remove home repairs and improvements from the scope ?..!* the regulation and (2) to raise the maturity limita1°ns on loans which are not for the purpose of purchas— consumers' durable goods from 12 months to 18 months. '"18 would represent a step in the direction of simplifying and liberalizing RegulationViwithout at the same time ' materially lessening its anti—inflationary influence. "The Board of Governors will be glad to receive from in your capacity as a member of the Consultative Coin— created by the President's Executive Order under Illoh the regulation was adopted, any advice or sugges— 1°rIe regarding these proposals which you may consider ap— P!°Priate. It will be appreciated if your comments can ;each the Board by the afternoon of September 13 as the ! i ard would like to consider the amendment on the follow— g day. 8 "A copy of this letter and the enclosure are being ent under separate cover to Under Secretary Bell." Z Approved unanimously, together with similar letters to Mr. Charles B. Henderson, Acting Administrator of the Federal Loan Agency, and Mr. Chester Bowles, Administra— tor of the Office of Price Administration. Letter to Mr. Ziemer, Vice President of the Federal Reserve Bank aPolis, reading as follows: k„. "Mr. Grant W. Anderson, Vice President of Northwestern -'1,Llonal Bank of Minneapolis, asked two questions in his 1447 9110/45 , "letter to you of August 27, 1945, regarding Regulation "In reply to his first question, as you have undoubtedly told him, subparagraph (2) of section 1, as anlended effective July 16, 1945, requires that when collateral is substituted in an undermargined loan subject to section 1 of the Regulation, the loan must be reduced by an amount equal to any excess of the current market value of the collateral withdrawn over the maximum loan value of the collateral deposited. This means, in the V-ample given by Mr. Anderson, that in order to withdraw 01,000 market value of stock of one corporation and substitute $1,000 market value of the stock of another corPoration, the loan must be reduced by $750, being the difference between the market value and the maximum loan value, which, at present, is 25 per cent of the current market value. "Mr. Anderson also asks whether the phrase 'Mille Dank maintains any such loan, whenever made,' at the uegInning of the third paragraph of section 1 refers " (3 t, to loans made after May 1, 1936. The answer to Ails question is in the negative. Originally, the Reg..1.ati0n did not apply to loans made prior to May 1, 1936, baut effective September 1, 1937, the Regulation was mended so as to provide, as it now does: 'For the pur1 °se of this Regulation, the entire indebtedness of any oorrower to any bank incurred on or after May 1, 1936, or at any previous time, for the purpose of purchasing r carrying stocks registered on a national securities exChange sha31 be considered a single loan, Approved unanimously. Letter to Mr. Joseph A. Schlecht, Secretary-Manager of the Gl'eat_ r e. St. Louis Automotive Ass'n. Inc., St. Louis, Missouri, read-s follows: "This will acknowledge your letter of August 30, 19 45, enclosing copies of three resolutions adopted at 0, special meeting of the new-car dealers who are members Your association. One of the resolutions requested th in so far as it applies rescission of Regulation '° the financing of new and used motor vehicles. 9/10/45 -5- "Regulation ill is being carefully studied in the light of the changed situation resulting from the sudden ending of the World War. Some modification may be appropriate at this time, but the indications so far are that in the automobile field it would be well to delay action. How— ever quickly production is resumed and increased, a con— siderable period will elapse before supply will be any— where near adequate to meet the strong demand. Relaxation 2f Regulation T1 could not possibly increase production, uut it would certainly add to the inflationary pressures that exist in this field. . "Yibile our position is different from that taken in the resolution, we would like to have you feel that we !elcome discussions of these problems and will be glad 0 receive reports of any further comment about the regu— ation's provisions." 1 Approved unanimously. Telegram prepared for the signature of Chairman Eccles to Mr. -amle, President of the Federal Reserve Bank of Philadelphia, read— as follows: "Members of the Board of Governors of the Federal Re— ! erve System and of its staff are grieved to learn of the ;?ath of Paul Philippe Cret, who designed the Board's of— and ask that you convey to Mr. Cret's family and 2eoc1ates in his firm the assurance of their deep appre— 'aation of Mr. Cret's distinguished services and their sin ,--cere sympathy with those most deeply affected by his 'eath.fl Approved unanimously. Thereupon the meeting adjourned. Assistant Secretary. edt Chairman.
@FedFRASER