The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
1095 A meeting of the Board of Governors of the Federal Reserve 85r8tem.was held in Washington on Wednesday, September 3, 1941, at 11:30 a.m. 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 hereinafter r eferred to was taken by the Board: Memorandum dated September 3, 1941, from Mr. Parry, Chief of s_on f 1 o Security Loans, recommending that, effective immediately, the "eeleY be appointed on a temporary basis for a period of not to ticeeeci sixtY days as a Specialist in that Division, with salary at the rate of 6,, 9411740 per annum, to assist in the solution of problems conCernirl g Personal finance companies arising in connection with Regulation W* The 01 , 700 memorandum stated that the proposed salary at the rate of Per annum included an allowance to cover one-half of the es- t4lated cost, to be paid by Mr. Wesley, of his travel from, Washington to Insaia ilaPais each week and return. Approved unanimously, with the understanding that Mr. Wesley would pay Ills own living expenses while in Washington. Letter ,o la the board of directors of "The Munsey Trust Company", et3r11 D. C., stating that, subject to conditions of membership ll'berecl 1 to 6 contained in the Board's Regulation H, the Board approves 1_096 9/3/41 -2the b„, anK s application for membership in the Federal Reserve System "for the appropriate amount of stock in the Federal Reserve Bank fRichmand. The letter also contained the following special com. zent: . "It appears that the bank possesses certain powers 17111ch are not being exercised and which are not necesis_ar?-1Y required in the conduct of a banking and trust business such as the power to conduct a commercial storM and warehousing business as described in paragraph ‘ 4.:/) of article 'Second' of its certificate of incorpora;1°/?.. Attention is invited to the fact that if the bank deslres to exercise any powers not actually exercised at the time of admission to membership, it will be necessary under condition of membership numbered 1 to obtain the of the Board of Governors before exercising Per11-ssion them In this connection the Board understands that there rels been no change in the scope of the corporate powers f erclsed by the bank since the date of its application or membership." Approved unanimously, together with a letter to Mr. Leach, President of the Federal Reserve Bank of Richmond, reading as follows: te "The Board of Governors of the Federal Reserve Syswam,"Proves the application of 'The Munsey Trust Company', 1-ngton, D. c., for S 8" membership in the Federal Reserve eIneT, subject to the conditions prescribed in the en130.7eu letter which you are requested to forward to the Qrd of Directors of the institution. "Itbeen noted that, with respect to the questd t10 upon the bank's admission to membership, 1.1. cm'H. Corporation and The Frank A. Munsey Company come affiliates of the bank under the provisions on se cti cion 2(b)(2) of the Banking Act of 1933, no opin1941.77as expressed in Mr. Mercer's letter of August 16, intoLt° Ur. Paulger because of a question concerning the zenc- Pretation of the law which was discussed in Mr. Vyallace's is fandum recently submitted in another connection. It holc:Iderstood that The Frank A. Munsey Company is a shareof the bank; that a majority of the stock of The Frank ma "4ansey company is owned by C.W.H. Corporation; that a j0r1tY of the stock of C.W.H. Corporation is owned by 1097 9/3/41 -3certain individuals who are shareholders of the bank; and that the shares of the bank's stock owned by such Individuals and by The Frank A. Munsey Company together constitute more than 50 per cent of the number of shares voted for the election of directors of the bank at the receding On the basis of these facts, the fl,oard Board is of the opinion that such individuals should be ideemed to control C.W.H. Corpor ation and The Frank A. unseY Company and, through them, to control the stock Of the bank owned by The Frank A. Munsey Company and that, accordingly upon the admission of the bank to membership, Such corpor ations will be affiliates of the bank within tche meaning of section 2(b)(2). Further, attention is alled to the fact that such information as has been subitt?d suggests the possibility that certain other organ,ntl°fle, reported as ones which will become affiliates Lu"ler section 2(b)(3) by reason of interlocking directorates, may also become affiliates under section 2(b)(2)." T In connec tion with the above matter, reference was also made toe. memorandum dated August 29, 1941) from Mr. Paulger, Chief of the 41r1sion of EXaminations, in which it was stated that an assistant exEttlliner' in the Division was indebted to The Munsey Trust Company, and that the 1°an made in 1928 in the original amount of $15,000 had been l'ecilleed to t8,470 on January 27, 1941, and was secured by marketable , valuedtis at $4,850 and other collateral consisting of second tNet notes. The memorandum referred to the opinion expressed in a rtiert*ancium dated August 27, 1941,from Mr. Baumann, Assistant Counsel, that renewals on extensions of loan would not be violation of Section the Federa l Reserve Act after admission of the trust company t° Membership, and sugges ted that the Board should take no action on the att„. It was agreed unanimously that no action by the Board was ca3led for. t_098 9/3/41 -4Letter to Mr. Gidney, Vice President of the Federal Reserve Bank of New York, reading as follows: "Reference is made to your letter of July 25, 1941, and accompanying memorandum with reference to The Plainfield Trust Company, Plainfield, New Jersey, and to your me morandum to files dated July 17, 1941, regarding your inerview with the officers of the bank. The detailed '-ormation that you have furnished with respect to the ,ank's condition and the steps being taken to meet matof criticism is very much appreciated. "It is noted that you feel that the management has . been doing a good job and that the bank is making and Should continue to make reasonable progress in meeting lts problems although it continues to be faced with imPortant and difficult situations to be worked out in con1/1ection with its mortgage and other real estate accounts. ic*Iever, the Board cannot escape the feeling that there a real question whether the management is fully aware -1- line seriousness of, and is taking a realistic attitude toward the bank's problems, also whether the management be able to place the institution in a satisfactory Co t;ndition within a reasonable time without the introduc4.°n ,Oif new capital funds. requested, therefore, that you take every opPortLn t Is to impress upon the management and the directorate t& ar of the bank the gravity with which the institusv ! n a problems are regarded and the necessity for taking advantage of the present volume of business activity u press for the improvement of the institution's condition.n V Approved unanimously. Tel egram to the Presidents of all of the Federal Reserve Banks g as follows: pret hen presenting any question requiring Board interdie n of Regulation 'V, it is suggested that you inyou 'e, either with or without statement of reasons, what ofnk answer should be. This request is being made estab .the Federal Reserve Banks and is in accord with iShed orocedure on Board's other regulations. Approved unanimously. t009 9/3/41 —5— Telegram to the Presidents of all of the Federal Reserve Banks reading as follows: "Reg. W-20. The classification 'mechanical refrig!ators' does not include coin operated machines for 'lePensing beverages or coolers designed for the purrtTse of holding bottled beverages offered for sale even "ough they are of less than twelve cubic feet rated caPaoity." Approved unanimously. Telegram to the Presidents of all of the Federal Reserve Banks earl',.ng as follows: f "Reg. W-21. The classification ?water pumps designed , hOusehold use' includes water system pumps which are i.-"rler shallow-well or reciprocating deep-well pumps haycil:f a rated capacity of 300 gallons per hour or less, or CT-well jet type or centrifugal pumps operated by MO)r8 having a rating of 1/3 horsepower or less. The ac:;a1 use to which the pumps are nut does not affect the -1-ass ification." X 4 Approved unanimously. Telegram to the Presidents of all of the Federal Reserve Banks readi. g aS f011OWS: I meol Re . W-22. Re ruling number six the classification cabv ianical refrigerators' does not include frozen food forinets designed for the display of frozen foods offered for Zale but does include frozen food cabinets designed of p he home freezing of foods or for the home storage Lrozen foods." Approved unanimously. 1100 913/41 -6-- Thereupon the meeting adjourned. Secretary.
@FedFRASER