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1844 A meeting of the Board of Governors of the Federal Reserve Systea was held in Washington on Saturday, September 19, 1942, at 11:00 a.m. PRESENT: Mr. Mr. Mr. Mr. Ransom, Vice Chairman Szymczak McKee Draper 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 hereinreferred to was taken by the Board: eral The minutes of the meeting of the Board of Governors of the Fedneserve System held on September 18, 1942, were approved unanimously. Memorandum dated September 16, 19420 from Mr. Morrill, recommendthat Cheater B. Dampley, a painter in the Secretary's Office, be *411'ecl, leave of absence without pay beginning September 160 19420 so might enter active duty with the United States Navy, and that he bhat he gl'anted the benefits provided in the policy adopted by the Board on °Irentber 14, 1940, and amended August 20, 1941, for all employees entermilttary service. Approved unanimously. Memorandum dated September 17, 1942, from Mr. Stark, Assistant &recto r of the Division of Research and Statistics, submitting the ma4 of Mrs. Elizabeth F. Luckadoo as an economic assistant in that 1_845 949/42 Division, 1942) and to become effective as of the close of business on October 5, recommending that the resignation be accepted as of that date. The resignation was accepted. Letter to the board of directors of the "Industrial State Bank °f Kalamazoo", Kalamazoo, Michigan, stating that, subject to conditions °f niebership numbered 1 to 3 contailed in the Board's Regulation H, the Board approves the bank's application for membership in the Federal ye System and for the appropriate amount of stock in the Federal Reser" Bank of Chicago. Approved unanimously, together with a letter to Mr. Young, President of the Federal Reserve Bank of Chicago, reading as follows: 'The Board of Governors of the Federal Reserve System apr°ves the application of the 'Industrial State Bank of aelamazoot, Kalamazoo, Michigan, for membership in the Federal : serve System, subject to the conditions prescribed in the IfIclosed letter which you are requested to forward to the Board ,Directors of the institution. Two copies of such letter are ;-;-1r enclosed, one of which is for your files and the other of You are requested to forward to the Commissioner of Bankfor the State of Michigan for his information. l!M•th respect to the interlocking relationship of Vice gesldent and Director George E. Monroe with the applicant and al st her bank in Kalamazoo, it is assumed that the bank underarands that its admission to membership in the System will not t.!'ect the eligibility of Mr. Monroe to serve the two banks untt-4 the expiratio n of one year from the date of his last elect1,°11 as an officer and director of the applicant bank. However, comments in the report of examination are not clear on that Dr New Letter to Mr. Gidney, Vice President of the Federal Reserve Bank °rk, reading as follows: 1846 9/19/42 -3-. "Reference is made to your letter of June 17, 1942, advising that the directors of Marine Midland Corporation, Jersey City, Nevi Jersey, had adopted a dividend policy for that corporation by which it is expected that the dividend recently declared, and also future dividends, will be covered by the corporation's actual net earnings. "From the description of the new dividend policy cona-lned in the letter to you dated May 13, 1942, from Mr. !!aYard F. Pope, chairman of its board of directors, and Ir°m other information, it appears that the corporation P,,larls to declare dividends in 1942 and subsequently only 4-r(3ra its actual net earnings accumulrted since December 31, 1941. Dividends from its subsidiaries included in such actual net earnings will be only such dividends as are Paid out of net earnilgs of the subsidiaries accu!mllated since December 31, 1934. Such net earnings in t_he case of banking subsidiaries are to be computed in ordance with their earnings and dividends reports. would appeEr that as long as this procedure is folc-wed, and actual net earnings of the corporation are .° m Irrectly co puted in other respects, the payment of divt ITends by the corporation will not be in violation of "e Provisions of the voting permit application agreeTTIt, required by Section 5144 of the Revised Statutes ir the United States, which restrict dividends to actual luet earnings. It is requested that you advise the corPoration accordingly. _ :From sumly-ries of net earnings and dividends of its eidiaries furnished through you by the corporation the theear's Division of Examinations has prepared a list of amounts of undistributed earnings of the subsidiaries eln?e December 31, 1934, accruing to the corporation's clgl itY in such subsidiaries at December 31, 1941. The ti;:ef of that Division is furnishing you with a list of mai.ase balances and also a few comments on other related ers. It is requested that in your reviews of the reports, and also during examinations of the holde°mPany affiliate, the payment of dividends and com'ation of actual net earnings of the corporation be -Zefully checked for conformity with the proposed pro--,lire. II r 4 Approved unanimously. 1847 9/19/42 -4Telegram to the Presidents of all the Federal Reserve Banks, reading as follows: "Referring last sentence our July 20 telegram, interest, fees, and other charges derived by Navy Department from loans and guarantees, mentioned in Section 5, page 5, of instructions all Reserve Banks, dated May 13, 1942, should be credited account of Ti. S. Treasurer for credit in regular account of A. B. CARPENTER LT COMDR SC USNR, "mbol no. 56-324, address, Property Accounting Office, Navy 6 ;'ePartment, Washington, D. C. Certificate of Deposit Form 599 should bear legend 'Interest and Fees - EO No. 9112' (Tx .1 should contain appropriate description of item credited. urlglnal of certificate of deposit should accompany tranrlpt to U. S. Treasurer; duplicate should be mailed to ace Section, Office of Procurement and Material, Navy D e?artment, Washington, D. C.; and, triplicate should be mailed to Lt. Comdr. Carpenter." disb= p Approved unanimously. Letter to the Presidents of all the Federal Reserve Banks, readtrig as follows: e "There is enclosed for your information a copy of GenOrder No. 54 Revised adopted by the Maritime Commission All5SUSt 25, 1942, and received by the Board with a letter 1-'2 transmittal from the Maritime Commission dated September u 3.1942, relating to the delegation of authority by the Narltime Commission to guarantee loans under Executive Order 13. 9112. Your particular attention is directed to paragraphs ii,and 2) of the General Order which, of course, affect the 1,,,;tructions of the United States Maritime Commission to all '''eral Reserve Banks dated May 7, 1942." Approved unanimously. Memorandum dated September 15, 1942, from Mr. Leonard, Director ttlorhiez:ivision of Personnel Administration, recommending that the au- ti°/1 drated Mr. Goldenweiser, Director of the Division of Research 41c1 `1-1stics, on September 12, 1939, to incur such transportation and diefli expenses at the rate of 0.00 per day, as might be necessary 1848 9/19/42 °ecasionally to bring to Washington for interview persons whose names had been recommended to him for consideration as possible employees in hi8 Division, be extended to all divisions of the Board, with the understanding that the authority would be used with the concurrence of the Director of the Division of Personnel Administration after having first inscie as complete an investigation as possible, that, as was the case With the original authority, such interviews would involve in no way a cl3nIldinlent as to the Board's action with respect to the employment of 'allYindividual, that, if as a result of the interview it was desired to Isse end the employment of an individual, the recommendation would be althtted in the usual way, and that the expenses incurred, supported by 841 appropriate travel order, would be paid from the budget for travel- ing exh -eenses of the division concerned. The memorandum also recommended that '1/1 addition to allowing actual necessary transportation ex,)enses 4 Pro • vlded by the Board's travel regulations, the per diem allowance 14 lieu Per of subsistence be increased from 0.00 to not to exceed $6.00 day, the rate presently allowed Board employees. Approved unanimously. Thereupon the meeting adjourned. APProved:
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