19461108_Minutes.pdf

1596

Minutes of actions taken by the Board of Governors of the Fed-erea

Reserve System on Friday, November 8, 1946.

PRESENT: Mr. Eccles, ChairmanMr. Ransom, Vice ChairmanMr. DraperMr. Evans

Aa stated in

4.111t °n official business.

Minutes of actions taken by the Board of Governorsera' a

Mr. Carpenter, SecretaryMr. Sherman, Assistant SecretaryMr. Morrill, Special AdviserMr. Thurston, Assistant to the Chairman

the minutes of October 30, 1946, Mr. Vardaman was

of the Fed-

eserve 0uYstem on November 7, 1946, were approved unanimously.

Memorandum dated November 7, 1946, from Mr. Carpenter recom-

e that Mr. Bray Haamond, Assistant Secretary of the Board, be'rallted si

leave for the period from October 17, 1946, to December

1 inclusive, with the understanding that such leave will notellated to

31, 1946be

sick leave subsequently accrued.

Approved

Memorandum dated NovemberOt the Division of Research

.reqgnation of tAiss Ruth41tision, be accepted toNIest, at the closel'.4111-111g that a lump sumNtkining to her credit as of

unanimously.

7, 1946, from Mr. Thomas, Director

and Statistics, recominending that the

Toni Giese, a Research Assistant in that

become effective, in accordance with her

of business November 11, 1946, with the under-

pLyment would be made for any annual leave

that date.

Approved unanimously.

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

11/8/46

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Memorandum dated November 71 1946, from Mr. Nelson, Director

°I the n;'vision of Personnel Administration, recommending that thetemper._

'17 indefinite appointments of the following named employees

be made Permanent, with no change in their present basic salaries,to

become effective November 8, 1946:

Namelira.

Evelyn W. EdwardsEsther Mae Mercer„janles P. Hamiltonkichael L. Jamison

Telegrams to Mr.

TitleStenographerClerk-StenographerMessengerMessenger

DivisionLegalOffice of the SecretaryBoard MemberBoard Member


Valittemore, President of the FederalOf

Boston, Mr. Treiber,

IlewYork, Mr. McCreedy,

(ielPhia, Mr. Blair,141'.

Leach, President of

Vice President of the Federal

8e°retary of the FederalIliee

President of thePeclerel

Reserve Agent

Gilbelt, President of'4e

president of the

Secretary of the Federal Reserve

Secretary of the Fedeml Reserve Bank

Reserve

Bank of

of Phila-

Secretary of the Federal Reserve Bank of Cleveland,

thq

the Bead

aPPr°VeS

the Federal Reserve Bank of Richmond, Mr. Dillard,

Reserve Bank of Chicago, Mr. Stewart,

Reserve Bank of St. Louis, Mr. Powell, First

Federal Reserve Bank of Minneapolis, Mr. Caldwell,

of the Federal Reserve Bank

the Federal Reserve Bank of

York, Philadelphia,

Nellieage' St

Cleveland, Richmond,

o

l'eltibel'

" Louis,

7' 1946, and by the Federal

Federal Reserve Bank of San

of Kansas City, Mr.

Dallas, and Mr. Mangels,

Francisco, stating

change by the Fed-the establishment Tithout

Re8eI've Banks of New

end San Francisco on

Reserve Banks of Boston and


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11/8/46-3-

today, of the rates of discount and purchase in their existingschedules.

Anproved unanimously.

Lettf-r to Mr. Gentry, First Vice President of the Federal

Re8ellie Bank of Dallas, reading as follows:

in "Reference is made to your letter of November 4,*7,6) recluesting the Board's approval of a payJent of

T to the Retirement System by the Federal Reserve Bank

Leslias in order that the right of 0, former employee,le s. Brown, to elect a retirement allowance may bereinstated."The Board of Governors approves the payment to theRetir

ton,

ement System as reeuested."


Letter to the Federal Deposit Insurance Corporation, Washing-D, c

reading as follows:

pet, "Pursuant to the provisions of section 12B of theOf ,1!"al- Reserve Act, as amended, the Board of GovernorsGr Federal Reserve System hereby certifies that TheMet*: C°1111tY State Bank, Bayard, New Mexico, becme aarid of the Federal Reserve System on November 6, 1946,of t11,8 11(ni a member of the System. The Board of Governorsthat-e.Federal Reserve System further hereby certifiesnierb' in connection with the admission of such bank towa; :!'shiP in the Federal Reserve System, consideration

secOlven to the following factors enumerated in sub-011 (g) of section 12B of the Federal Reserve Act:

4- The financial history and condition ofthe bank,2. The adequacy of its capital structure,3. Its future earnings prospects,4.

5. The general character of its management,The convenience and needs of the community

6.to be served by the bank, andWhether or not its corporate powers areconsistent with the purposes of section12B of the Federal Reserve Act."



11/8/46-4-

Letter to "The First National Bank of Boston", Boston 6,

Ma.8sachusetts , reading as follows:

"This refers to the letter of October 19, 1946from Cashier R. D. Clark of your bank recuesting anr It_ ension of the time within which you may establish°ranch at Rio de Janeiro, Federal District, Unitedotates of Brazil.

"The Board of Governors of the Federal Reserve5r8telli granted its permission on July 17, 1945 for theesta

blishment of such branch provided it was established,

oPened for business on or before August 1, 1946, and

Febr letter of July 9, 1946 extended such tithe tonary 1, 1947.The Board of Governors of the Federal Reserve

The em extends to La ay 31, 1947 the time within which

013 irst National Bank of Boston may establish and.t,en for business a branch at Rio de Janeiro, FederalZiLlstriet, United States of Brazil, in accordance withe Pf'ovisions of its order of July 17, 1945.

Port. 'In connection with the matter of allocating ayou 1°n of the capital of your bank to such branch,

Se tare advised that by Act of Congress approvedAcPt tuber 7, 1916, section 25 of the Federal Reservetha,was amended so as to eliminate the requirementbe 6 a certain part of the capital of a national bankAccsoet aside for the conduct of its foreign business.quiXinglY, there is no present provision of law re-for g a specific declaration or separation of capitalhe

operation of a foreign branch."

1599


Letter to"The Birmingham Trust and Savings Company", Birming-441, Al

°parr's', reading as follows:

has eon Board of Governors of the Federal Reserve System

fiduc1sidered the application for permission to exerciseTru8t t7 Powers made by you on behalf of the BirminghamLite ,'-Lc°nal Bank, Birmingham, Alabama, the national bankham ;.,h The Birmingham Trust and Savings Company, Birming-;4a.12alna, is to be converted, and grants such national

thec-0-;iftl°1'01IY, effective if and when it is authorized byer of the Currency to cormience business, to


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11/8/465-

"act, Then not in contravention of State or local law,as trustee, executor, administrator, registrar of stocksab°11c18, guardian of estates, assignee, receiver, com--ee of estates of lunatics, or in any other fiduciary!aPacity in which State banks, trust coolpenies or otherIrrPorations which come into competition vdth nationalodiri are permitted to act under the laws of the state

tl-Labama, the exercise of all such rights to be sub-ject to the provisions of the Federal Reserve Act Lndthe regulations of the Boel:d of Governors of the FederalReserve System.

sa "After the conversion of The Birmingham Trust andTt:31.Y,s C°'-aP any, Birmingham, 1.1abama, into the Birminghamof

- the s'' National Bank becomes effective and the Comptroller

Currency authorizes the national bank to commenceottrsiness' you are requested to have the board of directorsa_

national bank adopt a resolution ratifying youraTlcation for permission to exercise fiduciary powers,be fa certific d copy of the resolution so adopted shouldt, -°rwarded to the Federal Reserve Bank of Atlanta for0;'nslaittal to the Board for its records. then a copyforeuch resolution has been received by the Board, eto 111.,1 certificate covering the national bank's authoritye4ercise

trust poiners will be forwarded."

Illino.


Let ter to the "First National Bank of Skokie", Skokie,

3.—*Luing as follows:

syst "The Board of Governors of the Federal Reservefiducel has given consideration to your application fornot ;:arY 130v,ers, and grants you authority to act, whenexe -" contravention of State or local law, as trustee,gua rcut. or,

administrator, registrar of stocks and bonds,esta ell of

" estates, assignee, receiver, committee of

in 1.11:e of lunatics, or in any other fiduciary capacity'Lion -Leh State banks, trust companies or other corpora-

Collie into competition with national banksto act under the laws of the State of

to th°1-8, the exercise of all such rights to be subjectreelli r(wisions of the Federal Reserve Act and the

Reserlre --''L°ns of the Board of Governors of the Federal

S tYs am.


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t. "This letter will be your authority to exercise the

jduciarY powers granted by the Board pending the prepara-ot?n °f a formal certificate covering such authorization,glIch will be fomarded to you in due course."


Letter to Mr. Fletcher, First Vice President of the FederalReserve Ba

nk of Cleveland, reading as follows:

s refers to your letter of October 9, 1946, in-Ziring as to the status of the voting permit issued to'sue Union Trust Company of Pittsburgh, Pittsburgh, Penn-bnnnia, in view of the recent consolidation of that

Mellon National Bank to form Mellon Nationalank and Trust Company.sit "In reviewing this case, it appears to us that theas

Ibeople lati°n is now somewhat similar to other cases, such

V-LVan• .-Pittsburgh Trust Comr'any, Pittsburgh, Penn-

that'h1lInligch the Board has in the past determined„the

‘4,Lrec+iStock'14-Y (3-

cozipany affiliates were not engaged,, indirectly, as a business in holding the

ass °I, or managing or controlling, banks, bankingthe°ciati°ns, savings banks, or trust companies, withinas Meaning of section 2(c) of the Banking Act of 1933,fornI,Ided• ladle we do not have adequate current in-po,":l'_;°n upon which to base a definite opinion, it isres-- ue that such a determination should be made withthiPsect to Mellon National Bank and Trust Corapany. Ifneed determination were made, the bank would have noto rle'r a voting permit and it would be unnecessarythe :;rsider the questions which you raise concerningCozo:'atue of the permit issued to The Union Trust'1Y of Pittsburgh.

sholOnless you have reason to believe that such actionmatt not be taken, it is suggested that you bring thisTNsZr to the attention of the Mellon National Bank and2 of +2c6aPanY, referring it to the provisions of sectionsuch ;14e Board's Regulation P relating to roqueAs for

Tther_'eterminations and the information to be submittedth„:11-th. -t should be made clear, of course, thatBoard 110 commitment that, if a request is filed, the

make a favorable determination."



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Letter to Mr. Champe C. Voultel, 6C Ardsley Apartment,

4rfolk_"lrginia, reading as follows:

. "Thisaddr refers to your letter of September 24, 1946,h essed to the Securities and Exchange Commission whichasma referred it to us for reply since it deals with thergin requirements of this Board relative to securityPurchases•."You raise the Luestion of whether or not the presentmargin

requirements have an unfair impact on the small in-t's:%17 in that they prevent him front buying into the marketal-Tnrile extent which he would be able were credit more freelyto

Protect The Board feels that the present provisions tend

priprsrotect investors of all classes against unstable securitycr-71.7 ribes, which in times such as these would feed onscet, and subsequent precipitous price declines and large-„a-Le reductions in equities. There is enough buying power

large-

the liquid assets held by investors, both large and small,si r°vide the market with funds if those investors con-d-ab4ed that general conditions favored investment. The

to borrow would make it possible for certain peoplescZ do not hold much in the way of liquid assets to obtainst auldditional buying power by trading on margin, but ourteh j-es of this type of activity suggest that such tradinghcl'T. to

this

the market during periods of unsettlementahd r aggravate its movement rather than to resist a trendling about reasonable stability.

what It occurs to us that you may be interested in a some-tasht 111°re detailed discussion of the present margin require-closs

eq,,contained in a recent address, a copy of which is en-vo, , delivered by Chairman Eccles in Boston. We refer

Cularly ” "

to pages 6 to 8.the Vje have been glad to have your comments and appreciate

8Plrit in which you write."

Approved unanimously.Let

1044, ter to Mr. A. Rittenbaum, Alabama Novelty House, 2201 2nd

-4e mo' " rth,

Birmingham 3, Alabama reading as follows:

"Thiswhich refers to your letter of October 31, 1946, inereditY011 urge the retention of the fundamental consumer

ellggestcontrol principles embodied in Regulation I. but Of coal a rel axation of its present provisions in respect

Paratively inexpensive consumer items.


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"The thoughts which you express are of particular in-ter eat to us since they are both moderate and realistic.ple ,,oard has been aware of the desirability of some modi-

reation and relaxation possibly along the lines which you

jcommend and is presently engaged in a detailed considera-

jlon of the matter. In this connection it occurs to us,l t You may be interested in the enclosed copy of a recent

address delivered in Boston by Chairman Eccles in which theneed

for Preserving a flexible control is stressed.men#,"You may be certain that the considerations which youha-"°n are being given attention. We have been glad toa,:'0/.? Your constructive comments and we appreciate your-va interest in the problem."


Telegrum to Mr. Knoke, Vice President of the Federal Reserve

Qt Rew York, reading as follows:

Ba,,, "Your telegram November 7 Board approves loan by yourto Banco Nacional de Nicaragua in an amount not to

MZed, v500,000.00, such loan to be secured by gold ear-is e' in your vaults. As indicated in your telegram itterUhderstood that the loan is to be made on the following(4D1s and conditions:

Such loan to be made up to 98 per cent of the valueof the refined gold bars held by you in yourvaults as collateral;

(0) Such loan to run for three months; andInterest to be at the discount rate of your Bank(at present 1 per cent per annum) on the amount" actually advanced.

be of,It is understood that the usual participation will'ered to the other Federal Reserve Banks."

'11e Bank of New York, reading as follows:

Octob"In compliance with the request in your letter ofOf er 29, the Board approves the opening and maintenanceOeri't'rp ecount on your books for and in the name of the

Corporation of Banking Companies, Budapest, Hungary,


Letter to Mr. Sanford, Assistant Vice President of the Federal


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11/8/46

'.:subject to the terms outlined in your letter. In par-it is understood that the account would be

operated only until it is considered appropriate to_reactivate the account on your books in the name of theNational

Bank of Hungary, and under an abbreviated formof the standard letter of terms and conditions which

Tri-111, omit the usual sections relating to investmentsua kn ers1 acceptances, to earmarking of gold, and

;sfiblY the sections relating to investments in Govern-'14 securities and the custody of securities. e fur-ther

understand that you will in due course offer par-tci i .n 'Dation in this account to the other Federal Reserve


14emorandum dated November 7, 1946, from 1r. Leonard, DirectorOf

theD-IT'sion of Examinations, recommending, for the reasons stated

Lithe m_

—4u°rarldurn, tirw't V15.00 be added to the item of Repairs and11414. ten,

-"ee (Furniture and Equipment) in the 1946 non-personal budget

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that Division.

Approved unanio

Chairman.

Secretary.


19461108_Minutes.pdf

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