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1258 A meeting of the Board of Governors of the Federal Reserve System was held in Washington on Saturday, September 28, 1940, at 10:30 a.m. PRESENT: Mr. Mr. Mr. Mr. Ransom, Vice Chairman Szymczak McKee Draper Mr. Morrill, Secretary Mr. Bethea, Assistant Secretary Mr. Wyatt, General Counsel Mr. Smead, Chief of the Division of Bank Operations ALSO PRESENT: Mr. Leach, President of the Federal Reserve Bank of Richmond Mr. Szymczak stated that while Mr. Leach was in Washington he desired to discuss briefly with the Board certain questions which had arisen with regard to the title to the property which the Federal Reserve Bank of Richmond proposed to acquire at Second and Tryon Streets, Charlotte, North Carolina, in anticipation of constructing a building thereon to house the Charlotte Branch. Mr. Leach said that counsel for the Bank had proceeded to have an examination made of the title by a firm of lawyers in Charlotte and that an abstract had been furnished showing certain minor objections to the title. He referred to the letter which he had written to the Board under date of September 19, 1940, and to the opinion dated September 11, 1940, enclosed therewith which had been prepared by counsel for the Bank, which discussed the situation in detail. He said that counsel for the Bank was of the opinion that, while there were certain objections to accepting a conveyance to the property under existing conditions, 1259 -2- 9/28/40 it did not appear at all probable that any loss would result; and that, after fully considering the views of counsel and the desirability of acquiring the property at this time, his board of directors had voted unanimously to purchase the property -- notwithstanding the slight questions as to the title -- provided the Board of Governors saw no objection to the Bank's doing so. He said that Mr. Wallace, Counsel for the Reserve Bank, had discussed the matter with Mr. Wyatt, and that he (Mr. Leach) felt that the Bank should go forward with its plans and assume the small business risk involved. Following a full discussion of the subject the Board authorized the Secretary to advise the Federal Reserve Bank of Richmond that the Board would interpose no objection to the action of the Reserve Bank's board of directors in voting to acquire the property in question. At this point Messrs. Wyatt, Smead and Leach left the meeting and the action stated with respect to each of the matters hereinafter referred to was then taken by the Board: The minutes of the meeting of the Board of Governors of the Federal Reserve System held on September 27, 1940, were approved unanimously. Letter to the board of directors of the "State Savings Bank, Frankfort, Mich.", Frankfort, Michigan, stating that, subject to conditions of membership numbered 1 to 3 contained in the Board's Regulation H and the following special condition, the Board approves the 1260 9/28/40 -3- bank's application for membership in the Federal Reserve System and for the appropriate amount of stock in the Federal Reserve Bank of Chicago: "4. Prior to admission to membership, such bank, if it has not already done so, shall charge off or otherwise eliminate estimates losses of $633.15, as shown in the report of examination of such bank as of September 3, 1940, made by an examiner for the Federal Reserve Bank of Chicago." Approved unanimously, together with a letter to Mr. Schaller, President of the Federal Reserve Bank of Chicago, reading as follows: "The Board of Governors of the Federal Reserve System approves the application of the 'State Savings Bank, Frankfort, Mich.', Frankfort, Michigan, for membership in the Federal Reserve System, subject to the conditions prescribed in the enclosed letter which you are requested to forward to the Board of Directors of the institution. Two copies of such letter are also enclosed, one of which is for your files and the other of which you are requested to forward to the Commissioner of Banking for the State of Michigan for his information. "It has been noted that the bank is authorized to act as executor, administrator and guardian, such authority having been obtained within the past few years, but that it has never undertaken any fiduciary activities. It is suggested that the bank's attention be called to the fact that the application has been approved on the same basis as if no fiduciary powers were authorized and that should the institution desire in the future to exercise fiduciary powers, permission to do so should first be obtained from the Board of Governors in accordance with the provisions of condition of membership numbered 1. "It is felt that estimated losses are of sufficient amount in relation to the size of the bank, and to the capital account, to require their elimination as a condition of membership. Therefore, the case has not been 1261 9/28/40 -4- "treated as an exception, and in accordance with the general practice of the Board the usual condition of membership regarding the elimination of losses has been prescribed. "In order that our records may conform, please advise us if you differ with our opinion that the correct legal name of the bank is 'State Savings Bank, Frankfort Mich.'" Thereupon the meeting adjourned.
@FedFRASER