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11_03
A, meeting of the Board of Governors of the Federal Reserve
SYstem was held in Washington on Friday, September 8, 1939, at 10:30
m.
PRESENT:
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Eccles, Chairman
Ransom, Vice Chairman
Szymczak
McKee
Davis
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:
The minutes of the meeting of the Board of Governors of the
44era1 Reserve System held on September 7, 1939, were approved unanittousiy.
Telegrams to Mr. Kimball, Secretary of the Federal Reserve
4.4k of New York, Mr. Walden, First Vice President of the Federal ReBank of Richmond, Mr. M.cLarin, Vice President of the Federal
'lleerve Bank of Atlanta, Mr. Dillard, Secretary of the Federal Reserve
441c of Chicago, Mr. Powell, First Vice President of the Federal Reeerv'e Bank of Minneapolis, Mr. Gilbert, President of the Federal Re%e Bank of Dallas, and Mr. Hale,
Secretary of the Federal Reserve
44k of San Francisco, stating that the Board approves the establishwithout change by the Federal Reserve Bank of San Francisco on
414 mber 5 and by the Federal Reserve Banks of New York, Richmond,
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Atlanta, Chicago, Minneapolis, Dallas and San Francisco on September
7) 1939, of the rates of discount and purchase in their existing
s
chedules.
Approved unanimously.
Memorandum dated September 7, 1939, from Mr. Thomas, Assistant Director of the Division of Research and Statistics, recommending that, for the reason stated in the memorandum, Mrs. Ella W. Henry
be ePPointed on a per diem basis for as many working days as may be
necessary, not exceeding 30, as a draftsman in the Division, with
selarY at the rate of 410 per day for each working day, effective
tls of the date upon which She enters upon the performance of her
kties.
Approved unanimously.
Memorandum dated September 6, 1939, from Mr. amead, Chief
°I' the Division of Bank Operations, submitting a letter dated Sept "er 2 from Mr. Worthington, First Vice President of the Federal
Ileaerve BArk of Kansas City, which requested approval by the Board
Of a change in the personnel classification plan of the Oklahoma
CitY brandh of the bank to provide for the creation of a new position
°t "Assistant Supervisor" in the Custody and R. F. C. Custody DepartIllente and an increase in the maximum salary for the position of
"Sqlpervisor" in the R. F. C. Custody Department. The memorandum
stated that the proposed changes had been reviewed and recommended
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9/8/39
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that they be approved.
Approved unanimously.
Letter to the Chairmen of all Federal Reserve banks, reading
as follows:
"In its letter of January 24, 1938, S-70, the Board
set forth reasons why it was believed to be undesirable
for a member of the board of directors of a Federal Reserve bank to serve at the same time as a director of a
branch of the bank. The amendment to the Board's regulation with respect to the appointment of directors of
branches of Federal Reserve banks, to which reference
was made in that letter, provided that no director of a
Federal Reserve bank should be appointed to serve as a
director of a branch during the period of his service as
a director of the Federal Reserve bank. It will be noted
that this provision does not cover the case where a director of a branch is appointed to serve as a director of
the Federal Reserve bank and in order to give full effect
to the policy of the Board in this matter the last sentence of the second paragraph of the regulation has been
amended to read as follows:
'No director of a Federal Reserve bank shall
serve as a director of a branch of the bank
during the period of his service as a director
of the Federal Reserve bank.'
"A copy of the amended regulation is attached to this
letter."
Approved unanimously.
Letter to Nh.. Post, Secretary of the Federal Reserve Bank of
Philadelphia, reading as follows:
"Phis refers to your letter of August 15, 1939, with
enclosures, suggesting certain changes in the procedure
for the election of directors of your bank.
"As you know, the procedure and forms for elections
Of directors of Federal Reserve banks have, with some exceptions, been generally uniform throughout the System
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4-
"for a number of years, and continued substantial uniformity
in this matter would seem desirable. The Board is interested, however, in the changes which you suggest that are
intended to encourage participation in the elections by
member banks, and it appears that in general the modifications suggested would not drastically change the election
Procedure or forms now in effect. Accordingly, if the
Chairman of your bank is willing to do so, the Board has
no objection to a trial of the revised procedure at the
forthcoming elections this Fall. If this course should
be decided upon, it is suggested that the results of your
experience with the revised Procedure at the forthcoming
elections be transmitted to the Board of Governors and,
through the Chairman of your bank, to the Chairmen of the
Other Federal Reserve banks in order that the matter may
be considered at the next ensuing conference of the Chairmen, with a view to determining whether or not a revision
Of the procedure at all of the Iederal Reserve banks should
be recommended to the Board of Governors for its consideration.
"While it is not our purpose to undertake to offer detailed suggestions as to the suggested revision of the forms
and procedure, one or two points may be mentioned for your
consideration. The second paragraph of the proposed circular dated September 11, 1939, states that six of the nine
directors of a reserve bank 'represent the member banks'
and are elected by them. You may wish to consider rewording this sentence to eliminate the statement that the
directors represent the member banks. In the same circular it is possible that you may wish to reword the statement that nominations must be made and submitted before
October 18, in order to make it clear whether it is intended that they must be actually received by the Chairman
before that date. Attention is also invited to the fact
that there may be some inconsistency in the last sentence
on the front of the 'voting envelope' and the last two
sentences of the proposed circular dated September 11,
1939."
Approved unanimously.
Letter to Mr. Parker, President of the Federal Reserve Bank of
4t1Egita, reading as follows:
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9/8/39
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"This is in response to your letter of August 8,
1939, regarding the proposed payment of a fee of $2,000
to Mr. Edward X. anith, of Nashville, Tennessee, for his
legal services in connection with the case of University
Of the South v. Nashville Branch, Federal Reserve Bank
of Atlanta.
"With the understanding that this case has been finally disposed of favorably to the Federal Reserve Bank,
that the proposed fee covers all of Mr. Smith's services
in connection with the case, and that, upon your recommendation, the payment of the fee has been authorized by
the executive committee of the Federal Reserve Bank of
Atlanta, subject to the approval of the Board of Governors,
the Board of Governors has approved the payment of cach
fee."
Approved unanimously.
Letter to Mr. Clerk, First Vice President of the Federal Reserve Bank of San Francisco, reading as follows:
"This refers to your letter of August 26, 1939, relating to the relationship between Utah Hotel Company and
Utah Savings & Trust Company, both of Salt Lnke City,
Utah.
'Tnderstanding that Corporation of the President of
the Church of Jesus Christ of Latter-Day Saints owns a
majority of the stock of Utah Savings& Trust Company and
Utah Hotel Company, the Board concurs in your opinion
that the latter is an affiliate of the bank, and this,
Of course, is likewise true of the other corporations
Of which Corporation of the President of the Church of
Jesus Christ of Latter-Day Saints owns a majority of the
stock. If indebtedness of Utah Hotel Company is carried
as an asset on the bank's books at a value in excess of
05,000 or 1 per cent of the bank's capital and surplus,
Whichever is analler, on any report date or for more than
six months in the twelve months preceding the report date,
the bank will be required to submit and publish a report
for such affiliate. The existence of affiliate relationships and the application of the Board's waiver of the
requirement for reports of affiliates are not affected
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9/8/39
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"by the fact that Corporation of the President of the
Church of Jesus Christ of Latter-Day Saints is not a
holding company affiliate for any purposes other than
section 23A of the Federal Reserve Act.
"It is assumed that you have in mind the possibility that the bank's participation in the real estate
mortgage loan to Utah Hotel Company may constitute a violation of the provisions of the second paragraph of section 23A of the Federal Reserve Act prescribing requirements
With respect to security for loans to affiliates.
"In view of your comments with respect to affiliates
of Utah State National Bank of Salt Lake City, Salt Lake
City, Utah, your letter and this reply are being brought
to the attention of the Comptroller of the Currency."
Approved unanimously.
Letter to the Comptroller of the Currency reading as follows:
"It is respectfully requested that you place a special
order with the Bureau of Engraving and Printing, supplementing the order requested Tune 14, 1939, for the printing of
Federal reserve notes of the 1934 Series in the amounts
and denominations stated for the Federal Reserve Bank of
New York:
DenomiNumber of
sheets
nation
Amount
50
60,000
06,000,000
100
30,000
36,000,000
6,000
500
36,000,000
1000
4,000
48,000,000
5000
200
12,000,000
6,000,000"
10000
50
Approved unanimously.
Letter to Mr. A. N. Wall, President of the Farmers National
4,10,
Of Sparta, Sparta, Wisconsin, reading as follows:
"A copy of your letter of August 9, 1939, addressed
to the Chief National Bank Examiner of your district,
regarding the question whether certificates of deposit
maturing on Sunday may be renewed or paid on the previous
day, has been referred to the Board of Governors of the
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"Federal Reserve System by the office of the Comptroller
Of the Currency.
"The Board of Governors, in a ruling published at
page 609 of the 1934 Federal Reserve Bulletin, declared
that there is no provision of law which would preclude
the renewal of a time certificate of deposit prior to the
date of its maturity, dating the new certificate as of
the date of maturity of the original certificate.
"hen the maturity of a certificate of deposit falls
on a Sunday, the date on which it is due and payable is to
be determined by State law. It is our understanding that,
under the statutes of Wisconsin, negotiable paper maturing on a Sunday or on a holiday becomes due on the succeeding secular or business day and, accordingly, if this
is correct, under section 4 of the Board's Regulation
a copy of which is enclosed, a member bank of the Federal
Reserve System located in Wisconsin may not pay a time
certificate of deposit having such a maturity until the
next succeeding secular or business day, except in the
circumstances specified in the regulation.
"If you have any further questions regarding this
matter, or any similar matter, it is suggested that you
communicate with the Federal Reserve Bank of Chicago."
Approved unanimously.
Thereupon the meeting adjourned.
'4Et-)C
Chairman.
Secrete .
@FedFRASER