Minutes of actions taken by the Board of Governors of the

Federal Reserve System on Thursday, February 27, 1947. The Board

fliet in the Board Room at 3:25 p.m.

PRESENT: Mr. Eccles, ChairmanMr. DraperMr. EvansMr. VardamanMr. Clayton

Mr. Carpenter, SecretaryMr. Sherman, Assistant SecretaryMr. Morrill, Special AdviserMr. Thurston, Assistant to the ChairmanMr. Parry, Director of the Division

of Security LoansMr. Thomas, Director of the Division

of Research and StatisticsMr. Vest, General CounselMr. Leonard, Director of the Division

of ExaminationsMr. Nelson, Director of the Division

of Personnel AdministrationMr. Horbett, Assistant Director of the

Division of Bank OperationsMr. Brown, Assistant Director of the

Division of Security LoansMr. Young, Assistant Director of the

Division of Research and Statistics

Before this meeting there had been furnished to the members

of the Board and appropriate members of the staff copies of a memo-

I*211dUM of topics which the Presidents of the Federal Reserve Banks

had considered at their separate meeting in Washington on February

25 and 26 and which they wished to discuss at a joint meeting with

the Board which had been set for 2:00 p.m., Friday, February 28,

1947. The individual matters referred to in the memorandum, as

lIsted below, were discussed by the Board and it was agreed that

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the Presidents would be advised of the Board's position on each

of the items substantially as stated by Chairman Eccles at the

joint meeting with the President-,1 and as recorded in the minutes

for that meeting:

1. Functional expense accounting.2. Maximum deferment of credit for cash items.3. Job evaluation and classification.4. Frequency of pay days.5. Credit control proposals.6. Legislation

(a) Possible legislation regardingindustrial loans by the Re-serve Banks.

(b) Possible legislation regarding capitalrequirements of member banks.

(c) The possible restoration of the franchisetax or other means of channeling excessearnings of the Reserve Banks to theTreasury.

(d) Absorption of exchange charges by memberbanks.

(e) Wagner Questionnaire matters.7. Fortnightly establishment of rates.8. Consumer Credit--Regulation W.9. Collateral to secure uninvested trust funds.10. Interlocking relationships with security concerns.11. Examination policy re member bank loans.12. Ldministration and enforcement of Regulations

T and U.13. Relations with Board.14. Expenditures of Reserve Banks.15. Directors fees.16. Precautions against robbery.17. Periodic reports on banking conditions.

At this point Messrs. Parry, Thomas, Vest, Leonard, Nelson,

liorbett, Brown, and Young withdrew from the meeting and the action

stated with respect to each of the matters hereinafter set forth

'w -s then taken by the Board:

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Minutes of actions taken by the Board of Governors of the

Federal Reserve System on February 26, 1947, were approved unanimously.

Letter to Mr. Fletcher, First Vice President of the Fed-

eral Reserve Bank of Cleveland, reading as follows:

"This refers to your letter of February 14, 1947,With regard to the application of The First SavingsBank and Trust Company, Ravenna, Ohio, for permissionto exercise fiduciary powers.

"In view of the information submitted, and of your

favorable recommendation, the Board of Governors of the

Federal Reserve System grants the applicant bank permis-ston y under the provisions of its condition of member-ship numbered 1, to exercise the fiduciary powers nowor hereafter authorized under its articles of incor-

poration and the laws of the State of Ohio. The Board's

approval is given subject to acceptance by the bank ofthe following standard conditions prescribed in con-nection with the admission to membership of State banks

exercising fiduciary powers:4. Such bank shall not invest funds held by

it as fiduciary in stock or obligations of,

or property acquired from, the brnk or itsdirectors, officers, or employees, or otherinterests, or in stock or obligations of,

or property acquired from, affiliates of

the bank.5. Such bank, except as permitted in the case

of national banks exercising fiduciary powers,

shall not invest collectively funds held by

the bank as fiduciary and shall keep the

securities and investments of each trustseparate from those of all other trustsand separate also from the properties of

the bank itself.6. If funds held by such bank as fiduciary

are deposited in its commercial or savings

department or otherwise used in the conduct

of its business, it shall deposit with its

trust department security in the same man-

ner and to the same extent as is required

of national banks exercising fiduciary

powers.

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"Since it is understood that in the State of Ohio,trust funds deposited in the banking department of abank are preferred claims in event of liquidation ofthe bank, you are authorized, in accordance with thegeneral authorization previously granted by the Board,to waive compliance with condition of membership num-bered 6 herein until further notice.

"You are requested to advise The First SavingsBank and Trust Company, Ravenna, Ohio, of the Board'saction, and to obtain an appropriate resolution ofthe board of directors of the bank accepting theconditions listed above and forward a certified copythereof to the Board."

Approved unanimously.

Letter to "The First-Central Trust Company", Akron, Ohio,

readin as follows:

"The Board of Governors of the Federal ReserveSystem has considered the application for permissionto exercise fiduciary powers made by you on behalf ofthe First National Bank of Akron, Akron, Ohio, thenational bank into which The First-Central TrustCompany, Akron, Ohio, is to be converted, and grantssuch national bank authority, effective if and whenit is authorized by the Comptroller of the Currencyto commence business, to act, when not in contraven-tion of State or local law, as trustee, executor,

administrator, registrar of stocks and bonds, guard-).an of estates, assifnee, receiver, or in any otherfiduciary capacity in which State banks, trust com-Panies or other corporations which come into compe-tition with national banks are permitted to actunder the laws of the State of Ohio, the exerciseof all such rights to be subject to the provisionsof the Federal Reserve Act and the regulations ofthe Board of Governors of the Federal Reserve System.

"After the conversion of The First-Central TrustCompany, Akron, Ohio, into the First National Bank ofAkron becomes effective and the Comptroller of theCurrency authorizes the national bank to commencebusiness, you are requested to have the board of

directors of the national bank adopt a resolution

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"ratifying your application for permission to exercisefiduciary powers, and a certified copy of the resolutionso adopted should be forwarded to the Federal ReserveBank of Cleveland for transmittal to the Board for itsrecords. When a copy of such resolution has been re-ceived by the Board, a formal certificate covering thenational bank's authority to exercise trust powers willbe forwarded."

Approved unanimously.

Memorandum dated February 18, 1947, from Mr. Hooff, Assist-

ant Counsel, recommending that there be published in the March issue

of the Federal Reserve Bulletin statements in the form attached to

thememorandum with respect to the following subjects:

4PPro

Consumer CreditAutomobile License Taxes and FeesKitchen CabinetsSets and Groups of ArticlesStatus of Rulings under Regulation WMade Prior to Revision of December 1, 1946

Foreign Funds ControlTreasury Department Releases

Approved unanimously.

Thereupon the meeting adjourned.)

ed:

Chairman.

Secretary.

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