19480130_Minutes.pdf

131

the

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

Reserve System on Friday, January

Board Room at 10:40 a.m.

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

Mr.Mr.Mr.Mr.Mr.

Mr.

Mr.

Mr.Mr.

30, 1948. The Board met

Carpenter, SecretarySherman, Assistant SecretaryMorrill, Special AdviserThurston, Assistant to the BoardThomas, Director of the Division ofResearch and StatisticsLeonard, Director of the Division ofExaminationsNelson, Director of the Division ofPersonnel AdministrationTownsend, Associate General CounselBaumann, Assistant Counsel

in

There were presented telegrams to the Federal Reserve Banks of8(38toxi

New York, Chicago, St. Louis, and San Francisco stating that the1304r4 .

643Proves the establishmenttarat of

San Francisco on January

ellieag0 and St. Louis on JanuaryYork on January 29, 1948, and bytodi,iy. of

41,04).

4t

e reqUeSt of

the

Reference

) President

without change by the Federal Reserve

27, by the Federal Reserve Banks of

28, by the Federal Reserve Bank of New

the Federal Reserve Bank of Boston

rates of discount and purchase in their

Approved unanimously.

was made to a letter dated January 23, 1948, from Mr.

of the Federal Reserve Bank of New York, stating that,

the board of directors of that Bank) the Committee

existing schedules.

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

1.32

1/30/48

°I Directors on Welfare of Staff, consisting of Messrs. Calkins (Chair-

1n), Adams, Aldrich, and Myers,

the Board of Governors to discuss salary policy at the Federal Reserve

Bank of New York and the salaries of the individual officers of the

Bellk, and suggesting that either Wednesday, March 3, or Friday, March5' be fixed as the date for the meeting.

There was a discussion of the letter

gested that the customary procedure followed

sel'Ire Banks of taking up

changes contemplated inthat the

New York Bank

41% the members10:30

Netaent would be

e()ninlittep, and such

the Purpose of discussing

of the

would like to have a conference with

informally

official

be

with

salaries

informed that

during which it was sug-

generally by Federal Re-

the Personnel Committee any

be

the

followed in this case, and

Board would be pleased to

committee come to Washington on March 5 at

at which time, in accordance with the usual procedure, ar-

made for them to meet with the Board's Personnel

other members of the Board as might be available for

informally the matters which the directors of

t414ew York Bank might wish to have presented.

date of

44'1"Y 26, 1948, in which it was stated that, in response to the

letter of December 5, 1947, requesting the views of the Comp-

of the Currency concerning proposed legislation designed

Upon motion by Mr. Evans, it wasagreed unanimously that the Secre-tary should reply to the letter fromthe New York Bank along the linessuggested.

Before this meeting the attention of the members of the Board had

drawn to a memorandum pre pared in the Legal Division under


133

113CA8

t° repeal the capital requirements for the establishment of out-of-

t01411 branches by national and State member banks and to permit such

banks to establish branches on the same terms and conditions

1E31ther State banks, the Comptroller had stated that his Office was op-

Posed to any material change in the requirements for the establishment

of

aggregat,ethe places

taeraoratictum

lel' Robertson

114der

1:111ts

Ifenacted,

the Board, s

bet, tanks.

ban"e cL_s

by national banks except the repeal of the provision re-

cilliring 4 minimum capital of $500,000 (or lesser amounts in a few8tats,. .

wlth small population), and that he favored retention of therew,_

'rement that a national bank with branches have capital equal tothe

capital required for the establishment of unit banks in

where its head office and its branches were situated. The

also said that, in an informal discussion, Deputy Comptrol-

had suggested that the Board might seek legislation

Ilhich requirements for the establishment of branches by national

14°111d not be applicable to State member banks, which legislation,

'would permit State member banks to establish branches, with

lqth the

Board, sn4tional

l'ed for the establishment of unit national banksits h

approval, on the same terms and conditions as State nonmem-

-3-

Clayt on said that inasmuch as the Comptroller did not agree

proposal for elimination of the requirement that a

bank with

as non-

branches have capital equal to the aggregate capital

in the places where

ead °ffice and its branches were situated, it would be necessary,or t4

e 13°ard to consider whether it would (1) recommend legislation


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1/30/48

relating only

sate basis as

rneraber banks on

81)81rd approval) and

4144 in conformity

the Currency which would

ralAirauni capital of $500,000

Postpone indefinitely

ileelso expressed the

the current session ofbe

Preferable to defer

session of Congress.

There was a general discussion

thcl light of the legislative situationt114t

action be deferred by the Board

rilattell would be studied

C4Irtort, and that after

cirqt Of a proposedtosrl

together with other

-4-

to branches of State member banks to place them on the

nonmember banks, (2) recommend legislation placing State

the

t0tillle in the past as desirable

same basis as State nonmember banks (except for

amending the law governing branches of national

with the recommendation made by the Comptroller of

repeal

for

the existing provision requiring a

national banks having branches, or (3)

any request for legislation in this connection.

opinion that, in view of the consideration at

Congress of more pressing legislation, it might

a recommendation on this matter until the next

of the proposed legislation

and the suggestion was made

with the

in

understanding that the

further by the staff in consultation with Mr.

the present session of Congress adjourned, a

amendment would be prepared and submitted to the

amendments that had been suggested from time

changes in the

c:11.:e questions of major policy and which

Aext year.

act which would not in-

could be submitted in a single

It was agreed unanimously thatthe staff should proceed in accord-ance with this suggestion.


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In connection with the above action there was agreement that

the matter was taken up again by the Board it should considerthe

desirability of proposing, as a means of discouraging the charter-

of banks with less than $50,000 capital, that the law be amendedto

Provide that existing banks with capital of 25,000

discretion of the Board,

bIlt that banks subsequently chartered would be eligible

(3412Y if they had a capital of $50,000 or more.

Mr. Carpenter referred to a letter addressed to Mr. Morrill

15"11.1 PeYton, President of the Federal Reserve Bank ofdated

January 27, 1948, stating

illdePendent Bankers Association planned to be in Washington on Febru-

11''r24 and 25, and that it would be convenient

11111che°11 with the Board on February 25 in accordance with the informal

ill\rit4-tion that had been extended to Mr.

a°ciliti°11, pursuant to the action taken by the Board on January 23,N8.

or more, in the

could be admitted to membership in the System,

for membership

Minneapolis,

that the executive council of the

for

DuBois,

the council

Secretary

to have

of the As-

It was agreed unanimously thatthe Secretary should write Mr. Du-bois, extending a formal invitationto the council to have luncheonwith the Board on Wednesday, Febru-ary 25, 1948.

111%* Szymczak stated that at times in the past the individual

rflet(lbers of the Board had taken two or more guests into the brown dining

l'°°41 /11-th the result that on occasion there were not an adequate number


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of Places to accommodate everyone which caused some embarrassment. Ina dis,b

it was agreed that the members of the Board would avoid

4"lch as possible taking more than one guest at a time into the1)1%ft

room, and that if a member had two or more guests, he would re-

the blue room or a table in the staff dining room.

Mr. Vardaman stated that he had been looking at some of the

recentl Y published statements of banks which disclosed a declining ra-

capital to deposits and loan accounts, that in his opinion there

%lere substantial inherent dangers in the existing situation, and that

he Proposed to

tio of

inCluded

discuss the matter with Mr. Clayton, whose assignment

adjustments in the

th°11ght that the question of what, if any, action should be taken bythe Board would be discussed at a later meeting.

capital accounts of member banks, with the

At this point all membersl'terit into

executive session'

Following the 'neeth4t

durtng the executivebY the Pr

esident thather

of the Board for the31)

19561. with the

Illetabers of the Boardto

select whomsoever

814ce 14r. Thurston had in

ting

of the staff withdrew and the Board

Mr. Szymczak reported to the Secretary

session reference was made to the statement

had nominated Mr. Thomas B. McCabe as a mem-

unexpired portion of the term ending January

intention of designating him as Chairman. The

were in agreement that Mr. McCabe

he

he

might wish

should be free

to serve as his assistant, and that

fact been serving for a number of years as


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alalissistant to the Board rather than as

his title should be changed accordingly.

Assistant to Chairman Eccles,

Thereupon, by unanimous vote,Mr. Thurston's title was changed,effective immediately, to Assist-ant to the Board of Governors,with the understanding that hewould continue to perform substan-tially the duties that he had beenperforming for the Board.

The action stated with respect to each of the matters herein-

terset forth was then taken by the Board:

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

lleeerve System on January 291 1948, were approved unanimously.

Memorandum dated January 30, 1948, recommending that the em-

bent of Mrs. Katie Gill, a cafeteria helper in that Division, bete natea as

of the close of business January 30, 1948, with the

141clel'stand1ng that a lump sum payment would be rade for annual leave

iflg to her credit as of that date. The memorandum also recom-

Daericleci that a special payment in an amount equivalent to four weeks'

rbe

Illade to Mrs. Gill with the understanding that such action would

14testablish a precedent.

Approved unanimously.

44'°yed:Secretary.

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Documents

19480130_Minutes.pdf