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1181
A meeting of the Board of Governors of the Federal Reserve
SYstem was held
in Viashington on Saturday, September 13, 1941, at
11:30
PRESENT:

Mr. Ransom, Vice Chairman
Mr. Szymczak
Mr. Draper
Mr. Morrill, Secretary
Mr. Bethea, Assistant Secretary
Mr. Carpenter, Assistant Secretary

The action stated
with respect to each of the matters hereinetter
referred to was taken by the Board:
Letter to Mr. Young, President of the Federal Reserve Bank
Of Chicago, reading
as follows:
"In accordance with
the request contained in your
letter
f
of September 10, the Board approves the designation
Vice
of the President Mulroney as the officer to have charge
Bank Examination Department, and his appointment
s an examiner for
the Reserve Bank."
Approved unanimously.
Letter to Mr. Chase, Presid
ent of the Maine Securities Company,
Portiand,
Maine, reading as follows:
"This refers to your letter of August 21, 1941, re:
ning the rirht of a
bank which is a member of the FedReserve System to lend securities owned by it. In
th_717 °I the reference in your letter to the fact that
. matter had
been taken up with the Federal Reserve
th„of Boston by a
member bank, we have made inquiry of
to
e Bank concerning the matter before replying
0 Yo
you.
Ipres "The
Federal Reserve Bank advises that an inquiry,
phonullablY the one in question,
was recently made by teleof
by a State member bank but that the exact detail
s
Thethe
R arrangenent had not been worked out at the time.
es rve Bank's comment was of a general character and

r




1182
9/13/41
II

not intended either as approval of the
proposed transor as advice that the loan of stock would in itself be
contrary to any provisions of law or regulations.
Doubt was expressed, however, as to the
desirability of
ispuch a
transaction from the point of view of the member
ank, and in this connection the possibility was mentioned
?f the
member bank's finding later that the transaction
had been in
effect a sale of the stock. Of course, if
transaction
should be such as to constitute a sale,
the member
bank could not thereafter reacquire the stock
In view of the
provisions of section 9 of the Federal Re'V Act
and section 5136, United States Revised Statutes,
,!Ilch prevent the purchase of stock by
member banks of
',Ile Federal
Reserve System.
,
i "1:e trust that
this explanation of the matter will
Iblje you the
information which you desire, but if it is
ma
'clear to you or to the member bank in question, you
BaY wish to contaunicate further
with the Federal Reserve
ilk of Boston
on the subject."
Approved unanimously.
Tels'a
6FCLM

to the Presidents of all of the Federal Reserve Banks

g as follows:
."Reg.
The classification 'plumbing fixtures
-bued for household
use' does not include water meters."
Approved unanimously.
r'e ct
isn,

g

Tel
egran to the Presidents of all of the Federal Reserve
Banks
8

follows:

(1110„:1Reg. T-60. The Board has received the following
-t,Lon relatim
-, to Regulation W:
"A Purchaser
Paymen
buying a listed article makes a dortion t in excess of
the amount required by the regu a
MaY he be permitted later,
in purchasing a second
the
article, to
apply any part of the down-payment on
chaaell
'
st article as the required down-payment on the
ourof the
second article?
'Re is not permitted
to do so."




Approved unanimously.

1_183
9/13/41
Telegram to the Presidents of all of the Federal Reserve Banks
---ug as follows:
"Reg. V:-61. An inquiry which may be stated as follows has been received under Regulation lc:
The X Electric Company purchases substantial numbers of automobiles for cash and sells
them to its salesmen on a monthly payment plan,
with payments spread over 12 to 18 months. The
X Electric Company does not make such sales to
anyone except its salesmen. Is the X Electric
Company- 'engaged in the business' as described
in section 3(a)? Must these extensions of credit
comply with the down-payment and other requirements of the regulation?
"Both parts of the question should be answered in the
aff
irmative."
Approved unanimously.
Telegram
to Mr. Hodge, Assistant Counsel of the Federal Reserve
441t of c
hicago, regarding suggested amendment to Regulation W to apply
ti5 the f.
Inanoing of used cars, and reading as follows:
our wire September 10 re Vv-16-24-37. Board agrees
with
'Your opinion that practic under
e
(1) your wire is not
in°1ation in circumstances described in your wire. Assum14
that practice
under (2) your wire involves arrangements
eta': Particular
finance companies or banks which your wire
y.o 'es are not present in (1). Board also agrees with
0,'
1
nion that such practice under (2) is violation.
clideration is
being given to possible amendments to
v1-1- wlth
such situations."
Approved unanimously.
Thereupon the meeting adjourned.

Secr tary.

V

edirrie 4.4114AW




Vice Chairman.