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A meeting of the Board of Governors of the Federal Reserve

Was held in Washington on Monday, March 6, 1939, at 4:00 p.m.

PRESENT: Mr. Eccles, ChairmanMr. Ransom, Vice ChairmanMr. SzymczakMr. McKeeMr. DavisMr. Draper

Mr. Wyatt

E;e4tatives of the

zemorandum to

thatas

pointed out

to Conrz,ress

all of itsthe

fnactions of

effective unless

t1011 eZpressinE its

ned language whichto

k:11.1rici8

Mr. Bethea, Assistant SecretaryMr. Carpenter, Assistant Secretary

Mr. Clayton, Assistant to the ChairmanMr. Thurston, Special Assistant to the

ChairmanMr. Wyatt, General CounselMr. Vest, Assistant General Counsel

reviewed briefly the status in the House of Repre-

reorganization bill, (H.R. 4425), as outlined in

the Board under date of March 4, 1939.

in that memorandum, the President could

which

functions

He stated

submit

would abolish the Board entirely or transfer

to another agency or transfer to the Board

other agencies and that such a plan would

Congress within sixty days adopted a

become

joint resolu-

disapproval thereof. He also said that the bill

might be construed as making the Board subject

he BudEet and Accounting Act of 1921 but that there were several

Upon which it could be arguedbe eot.

loaz evid

the

strilad as applying to the Board,

ellead during consideration of

that this provision should not

unless a contrary intention

the bill. He added that since

b tl House committeeread ybeen reported favorably y the

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the °14117 way in which the Board could seek an amendment in the House

w°Uld be to have an amendment offered on the floor. Upon inquiry,

141s. 1WYatt stated further that, as a practical matter, he did not know

or 8thY action that the Board should take with respect to the bill

" the Present time.

At the conclusion of a discussionit was agreed unanimously that Counsel'soffice should continue to watch theProgress of the bill and keep the Boardadvised of developments.

Mr. Davis reported that, in accordance with the action takenat th

8 meeting of the Board on February 27, he and Mr. Szymczak had

disc%sseu with President Harrison the draft of the annual report of

thel,ederal Reserve Bank of New York for the year 1938 to its stock-

11014,..'8) that a number of changes in the report had been made by

?ze,"-gent Harrison prior to the discussion, that certain additional

Chlat

e8 Were made durinr, the discussion, that as finally written the

Nort ,"las agreeable to Messrs. Davis, Szynczak and Goldenweiser and

resident Harrison had been so advised.

At this point Messrs. Thurston, Wyatt and Vest left the meet-

:" the action stated with respect to each of the matters herein-*.t

l'eferred to was then taken by the Board:

The minutes of the meeting of the Board of Governors of the

611 Reserve System held on March 3, 1939, were approved unani-

k°11qY.

thttt

lte

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Letter dated March 4, 1939, to Mr. Parker, President of the

Federal Reserve Bank of Atlanta, reading as follows:

"In accordance with the recommendation containedin Your letter of February 27, the Board approves the alp-Pointment of R. P. Wilson as an assistant examiner forthe Federal Reserve Bank of Atlanta. Please advise us ofthe effective date.

"It is assumed that Mr. hilson has no indebtednessoutside business connections which would have an unde-

lrable effect upon his services as an assistant examinerror the Reserve bank, but these Points are not covered inirlir letter and definite advice in this connection wille appreciated."

Approved unanimously.

Letter to the board of directors of the "Iirst State Bank of

4a4P', Red Bud, Illinois,

113ershiP numbered 1the f„QI„

-Louing special

.t1()11 for membership

llitElte amount o f stock

115.

stating that, subject to conditions of

to 3 contained in the Board's Regulation H and

conditions, the Board approves the bank's appli-

in the Federal Reserve System and for the appro-

in the Federal Reserve Bank of St. Louis:

Such bank shall make adequate provision for de-preciation in its bankinE!, house and Purniture andfixtures.

Such bank shall not make any distribution or pay-ment on outstanding deferred certificates of de-Posit except with the permission of the FederalReserve Brink of St. Louis.

Prior to admission to membership, such bank, ifit has not already done so, shall charge off orOtherwise eliminate estimated losses of .(12,201.02,aS shown in the report of examination of suchbank as of January 18, 1939, made by en examinerfor the Federal Reserve Bank of St. Louis."

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Approved unanimously, together witha letter to Mr. Martin, President of theFederal Reserve Bank of St. Louis, read-ing as follows:

"The Board of Governors of the Federal Reserve Sys-approves the application of the 'First State Bank of

ed aid', Red Bud, Illinois, for membership in the FederalReserve System, subject to the conditions prescribed inthe enclosed letter which you are requested to forward tothe Board of Directors of the institution. TWO copies of

7,t1ch letter are also enclosed, one of which is for yourriles and the other of which you are requested to forward, the Auditor of Public Accounts for the State of Illinois

°r his information."It will be noted that the Board has not prescribedthe special condition recommended by the Reserve Bank with

respect to showing the deferred certificates of deposits

Tilz Published statements of condition. The revised form+i-105e provides for the showinR of subordinated liabili-;1-es under item 33(h) and, therefore, it is not deemedfece83arY to prescribe a special condition with respect"3 this matter.

"It has been noted that the bank has the authorityto exercise trust powers but that such powers are not now

,7111S' exercised. Therefore, the application has been ap-'707ed on the same basis as if the bank did not have trust°11ers, and should it desire in the future to do a trustbmll!ihess, application for permission to do so should be

to the Board in accordance with the provisions of°Ildition of membership numbered 1."

Letter to the Federal Deposit Insurance Corporation, reading

Ped "Pursuant to the provisions of section 12B of the .,of, -'11a1 Reserve Act, as amended, the Board of Governors

the Federal Reserve System hereby certifies that theore17''Ida Bank of Commerce', Elko, Nevada, became a member4 the Federal Reserve System on March 3, 1939, and is now,ierlIber of the System. The Board of Governors of the

eral Reserve System further hereby certifies that, in

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connection with the admission of such bank to membershipin the Federal Reserve System, consideration was given toth s following factors enumerated in subsection (g) of sec-tion 12B of the Federal Reserve Act:

1. The financial history and condition of thebank,

2. The adequacy of its capital structure,3. Its future earnings prospects,4. The general character of its management,5. The convenience and needs of the community

to be served by the bank, and6. Whether or not its corporate powers are con-

sistent with the purposes of section 12Bof the Federal Reserve Act."

Approved unanimously.

Letter to Mr. Fletcher, Vice President of the Federal Reserveiktac of

Cleveland, reading as follows:

"We have received a report as of December 31, 193824 to F.R. 105b for the Oak Harbor State Bank Company,r

°

k Harbor, Ohio, which lists the Oak Harbor Mortgage,an Company as an affiliate of the member bank, but we

'.rtsve not received a report and published statement (forms;dif 220 and 220a) of the affiliate. The report on form131.11. 105b shows that the affiliate was indebted to the

the bank in the amount of $7,000, which amount exceeds

r 6 liMitations given in the terms of waiver of affiliate1,1,!1"8 printed on form F.R. 220b. It would appear, there-

that the affiliate should have rendered a reportIT form F.R. 220 as of December 31, 1938 and published

'ir'e statement in accordance with form F.R. 220a. Since,aorwever, no useful purpose would be served in having the31filiate now render and publish a report as of December31, 1938, the Board waives a report as of that date. The

bank should be advised that, if the affiliation ex-2:!s at the time of the next call, a report on form F.R.' should be rendered and published unless waived underthe terns of waiver printed on form F.R. 220b."

Approved unanimously.

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Letter to the Presidents of all Federal Reserve banks, reading

as follows:

"The Board's letter of October 20, 1932 (X-7276),requested that funds contributed by the Reserve bank tothe Federal Reserve club or society be accounted forseparately from funds contributed to the club by employeesand that a statement be sent to the Board at the end of!ach year showing the purposes for which the funds con-

- ributed by the Reserve bank were expended."Phis matter has recently been reviewed, and you

are advised that the annual reports heretofore submittedin accordance with the Board's letter of October 20, 1932,

TaY be discontinued. The Board's examiners will, however,;6 expected to review expenditures of funds contributed toedaral Reserve clubs by the Reserve banks."

Approved unanimously.

Thereupon the meting adjourned.

si st ant Secretary.

Chairman.

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