19351207_minutes.pdf

2638

A meeting of the Executive Committee of the Board of Governors

of the Federal Reserve System was held in Washington on Saturday, De-

cember 7, 1935, at 11:50 a. in.

PRESENT: Mr. Thomas, Vice ChairmanMr. HamlinMr. James

Mr. Morrill, SecretaryMr. Carpenter, Assistant Secretary

The Committee acted upon the following matters:

Letters dated December 60 1935, approved by three members of

the Board, to Mr. Austin, Chairman of the Federal Reserve Bank of

Philadelphia, Mr. McAdams, Secretary of the Federal Reserve Bank of

Kansas City, and Mr. Walsh, Chairman of the Federal Reserve Bank of

41.11ae, and December 7, 19350 to Mr. Sproul, Secretary of the Federal

Reserve Bank of New York, and Mr. Clark, Secretary of the Federal Re-

serve Bank of Atlanta, stating that the Board approves the establish-

ment without change by the Philadelphia bank on December 4, by the New

Y°rk, Kansas City and Dallas banks on December 5, and by the Atlanta

bank on December 6, 1935, of the rates of discount and purchase in

their existing schedules.

Approved unanimously.

Letter to Mr. Thomas C. Lynch, President, Carthage National

4change Bank, Carthage, New York, reading as follows:

"This refers to your letters of October 500 1935, andNovember 26, 1935, requesting advice as to whether the CarthageNational Exchange Bank, Carthage, New York, may act as trusteeunder the will of Mr. Clifford P. McDonald, in view of thepermission granted under date of March 1, 1932, by the Boardof Governors of the Federal Reserve System to that bank

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

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"authorizing it to act as trustee and in certain otherfiduciary capacities 'only in the specific trusts in whichthe Carthage National Bank and the National Exchange Bankand Trust Company of Carthage had been appointed and wereacting on December 50, 1951.°

"Yau have advised that, on June 18, 1931, the will ofMr. McDonald was probated and that at that time the NationalExchange Bank and Trust Company qualified to act as trusteethereunder. You have also referred to the Board's letter ofFebruary 24, 1955, containing advice to the effect that theCarthage National Exchange Bank, under the Board's grant ofMarch 1, 1932, was authorized to act as trustee under a willnaming the Carthage National Bank in that capacity, and youhave stated that that case and the present case tare parallel'.In the previous case to which you have referred, the Boardunderstood that, on December 50, 1931, the Carthage NationalBank had qualified and was acting as trustee under the willinvolved. In the circumstances, the Board considers that,on December 30, 1931, the National Exchange Bank and TrustCompany was qualified and was acting as trustee under theWill of Mr. Clifford P. McDonald and that, therefore, theCarthage National Exchange Bank, under the Board's grant re-ferred to above, is authorized to act as trustee under suchWill, provided it is appointed by a court of competent juris-diction to succeed the National Exchange Bank and Trust Com-pany in that capacity."


Letter to Mr. Case, Federal Reserve Agent at the Federal Reserve

Bank of New York, reading as follows:

"Reference is made to Mr. Downs' letter of November 7,1955, recommending approval of a proposed reduction in thecommon capital stock of the 'Westwood Trust Company, ofWestwood, N. J.', Westwood, New Jersey, from $200,000 to^0100,0001 pursuant to a plan which provides that approxi-mately $60,000 of the released capital will be used for theelimination of substandard assets and the balance of ap-proximately $40,000 will be used to augment the bank's sur-plus and undivided profits accounts.

"The Board has considered the information submitted,as well as the condition of the trust company as reflectedIn the last report of examination, and, in accordance withMr. Downs' recommendation, approves the proposed reductionof $100,000 in the common capital stock of the Westwood


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'Trust Company, of Westwood, N. J., on the basis of theplan as set forth in Kr. Downs' letter, with the understand-ing that the eliminated assets will remain the property ofthe trust company; that the transaction has the approval ofthe appropriate State authorities, and that your Counsel issatisfied as to the legality of the proceedings in connec-tion therewith.

"In reviewing the condition of the trust company specialconsideration has been given to the excessive amount in-vested in bank premises, furniture and fixtures and otherreal estate, and, as the eliminations proposed by the trustcompany will leave approximately i'40,000 of the releasedcapital available for additional eliminations or to augmentthe bank's surplus and undivided profits, it is suggestedthat you consider the advisability of recommending to thetrust company that consideration be given to applying aPortion of such funds to further reduce the carrying valueof its investment in bank premises.

"It will be appreciated if you will forward copies ofany amendments to the trust company's charter which may beadopted in connection with the capital adjustment, and ad-vise the Board as to the eliminations effected as well asany corrections which may have been made in the criticizedmatters set forth in the last report of examination.

"A separate letter is being written to you inclosing aletter to be transmitted to the Hackensack Securities Com-Pany relating to the status of that company, Crum & Forsterand Crum and Forster Insurance Shares Corporation as holdingcompany affiliates of the Westwood Trust Company, of West-wood, N. J."


Telegram to Mr. Case, Federal Reserve Agent at the Federal Re-

Ser" Bank of New York, stating that, subject to the condition set forthin the telegram, the Board of Governors of the Federal Reserve System

authorizes the issuance of a general voting permit, under the pro-

'risi°n8 of section 5144 of the Revised Statutes of the United States,t „the "First National of Elmira Corporation", Elmira, New York, en-

titling such organization to vote the stock which it owns or controls

of "The Citizens National Bank of Waverly", Waverly, New York,


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"The First Uatioral Bank of Horseheads", Horseheads, New York, and

the "Watkins State Bank", Watkins Glen, New York, at all meetings of

Shareholders of such banks. The condition contained in the telegram

Upon which the permit was authorized was as follows:

"Prior to the issuance of the general voting permit

authorized herein, applicant shnll execute and deliver toYou in duplicate an agreement in the form accompanying the

Board's letter X-9385."

The telegram also stated that the period within which such a permit

IllaY be issued pursuant to this authorization is limited to thirty

daY5 from the date of the telegram unless an extension of time is

granted by the Board.


Letter to Mr. Case, Federal Reserve Agent at the Federal Re-

serve Bank of New York, reading as follows:

"In connection with its consideration of the applica-tion of 'Hackensack Securities Company', Hackensack; NewJersey, for a voting permit entitling it to vote the stockWhich it owns or controls of 'Westwood Trust Company, ofWestwood, N. J.', Westwood, New Jersey, the Board has de-termined that the applicant is not engaged, directly or in-directly, as a business in holding the stock of, or managingor controlling, banks, banking associations, savings banks,or trust companies within the meaning of section 2(c) ofthe Banking Act of 1953, as amended by section 301 of theBanking Act of 1955, and, accordingly, the applicant is nota holding company affiliate for any purposes other thanthose of section 25A of the Federal Reserve Act.

"Inclosed herewith is a letter to the applicant ad-vising it concerning the Board's action in this matter.If, for any reason, you believe that this matter should bereconsidered by the Board, please communicate with the Boardat once. Otherwise you are requested to transmit the in-closed letter to the applicant. A copy of the letter isalso inclosed for your files.


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"As you will note, the Board expressly reserves theright to make a further determination of this matter atany time on the basis of the then existing facts. In thisconnection it is requested that you advise the Board if, atany time, you believe this matter should again be consideredby it."

Approved unanimously, together with aletter to "Hackensack Securities Company",Hackensack, New Jersey, reading as follows:

"This refers to the application of your company for avoting permit entitling it to vote the stock which it owns orcontrols of 'Westwood Trust Company, of Westwood, N. J.',Westwood, New Jersey.

"The Board understands that your company owns 1,070 ofthe 2,000 outstanding shares of common stock of Westwood TrustCompany but does not own or control any other bank stock anddoes not manage or control any other bank. In view of thesefacts, the Board has determined that your company is not en-gaged, directly or indirectly, as a business in holding theStock of, or managing or controlling, banks, banking asso-ciations, savings banks, or trust companies, within the mean-ing of section 2(c) of the Banking Act of 19332 as amended bysection 601 of the Banking Act of 1955, and, therefore, itis not a holding company affiliate for any purposes otherthan those of section 25A of the Federal Reserve Act. Accord-ingly, it is not necessary for your company to obtain a votingpermit and the Board will give no further consideration toits application.

"If, however, your company should at any time own or con-trol a substantial portion of the stock of, or manage or con-trol, any other bank, this matter should again be submitted tothe Board for its determination. The Board reserves the rightto make a further determination of this matter at any timeon the basis of the then existing facts.

"It is not apparent from the information before theBoard whether Crum & Forster and Crum and Forster InsuranceShares Corporation are holding company affiliates of West-wood Trust Company by virtue of indirect control of the stockWhich your company holds of Westwood Trust Company. If suchis the case, the stock which your company holds of WestwoodTrust Company cannot be voted unless Crum & Forster and Crumand Forster Insurance Shares Corporation obtain voting per-mits or obtain determinations by the Board that they are notengaged, directly or indirectly, as a business in holding thestock of, or managing or controlling, banks. The Board's


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"action with reference to your company does not affect theholding company affiliate status of such organizations."

Telegram dated December 6, 1935, approved by three members of the

Board, to Governor Hamilton of the Federal Reserve Bank of Kansas City,

reading as follows:

"Your telegram. Board believes that reasons underlyingits decision not to fill vacancies on branch boards whichWill occur on December 51, 1955, as the result of the appli-cation of policy set forth in letter of January 9, 1935 (X-9085),do not apply to appointments to branch directorates by Federalreserve banks and that your directors should proceed with ap-pointments in usual way in accordance with regulations attachedto letter of January 9. It appears from Board's records thatbank's appointees (other than managing directors) to boards ofYour branches whose terms expire on December 51, 1935, willhave served six or more consecutive years and, therefore,under terms of regulations are not eligible for reappointment."


Memorandum dated December 6, 1935, from Mr. Carpenter, Assistant

Secretary, stating that the recent elections at Federal reserve banks

resulted in the election of the following Class A and B directors, each

for a term of three years beginning January 1, 1936:

Name Bank

Class A Directors* A. L. Ripley Boston* E. K. Mills New York* Joseph Wayne, Jr. Philadelphia* R. A. Wardrop Cleveland* L. E. Joh Richmondnson

G. J. White AtlantaChicago

* F. D. Williams* J. G. Lonsdale St. Louis

Kibbee MinneapolisKansas City

* E. E.* Al

Mullaney Dallasf MorrisS

* T. H. Ramsay an Francisco*

Reelected.


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Name

* P. R. Allen* W. C. Teagle* Arthur W. Sewall* C. D. Crabbs* Edwin Malloy

E. T. George* N. H. Noyes* M. P. Sturdivant* J. E. O'Connell* L. E. Phillips* John D. Middleton* A. B. C. Dohrmann

* Reelected.

_7_

Class B Directors

Bank

BostonNew YorkPhiladelphiaClevelandRichmondAtlantaChicagoSt. LouisMinneapolisKansas CityDallasSan Francisco

Noted.

Letter to Mr. Leo T. Crowley, Chairman of the Federal Deposit In-

surance Corporation, reading as follows:

"Referring to your letter of October 27, according to ad-vice received by the Board from the respective Federal Reservebanks, since August 25, 1935 the Federal Reserve bank stock out-standing in the names of the banks listed below has been canceledand the banks ceased to be members of the Federal Reserve Systemon the dates shown:

Date of cessationName and location of bank of membership

The First National Bank ofThe McCloud National BankThe Claxton National BankThe First Nationpl Bank ofThe First National Bank ofThe Home National Bank ofThe First National Bank ofThe Coldwater National BankThe First National Bank ofThe First National Bank ofFarmers National Bank ofThe Wallowa National Bank ofThe First National Bank ofOntario National BankThe First National Bank ofThe Commercial National Bank ofThe South Side National Bank ofCity Deposit Bank & Trust Co.

Banning, Calif.McCloud, Calif.Claxton, Ga.Warden, Ill.Harvey, IowaLangton, Kans.

Arcadia, La.Coldwater, Mich.Belle Plaine,Minn.Pender, Nebr.Sardinia, OhioEnterprise, Ore.

Newberg, Ore.Ontario, Ore.Union, Ore.Bradford, Pa.Butler, Pa.Pittsburgh, Pa.

November 13November 15September 13September 25September 16October 2

September 14November 15September 17October 19September 16November 16

September 11October 21October 3November 16October 15October 29


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"In response to your request, we shall furnish you cur-rently hereafter the names of banks reported to the Board ashaving terminated membership through the cancelation of theirFederal Reserve bank stockholdings."


Letter to Mr. William F. Hofmann, Cashier, The First National

Bank of La Grange, La Grange, Texas, reading as follows:

"This refers to your letter of November 25, 1935, inquir-ing whether your bank may make a loan to a depositor upon thesecurity of his time certificate of deposit.

"The Board has recently approved a revision of its Regu-lation Q which deals with this subject, and subsections (d)and (e) of section 4 of this revised regulation provide asfollows:

/(d) Payment in emergencies. - In an emergencywhere it is necessary to prevent great hardship to thedepositor, a member bank may pay before maturity atime deposit or the portion thereof necessary to meetsuch emergency, provided that before making such pay-ment the depositor shall sign an application describ-ing fully the circumstances constituting the emergencywhich is deemed to justify the payment of the depositbefore maturity, which application shall be approvedby an officer of the bank who shall certify that, tothe best of his knowledge and belief, the statementsin the application are true. Such application shallbe retained in the bank's files and made available tothe examiners authorized to examine the bank. Wherea time deposit is paid before maturity the depositorShall forfeit accrued and unpaid interest for a periodof not less than three months on the amount withdrawnif an amount equal to the amount withdrawn has beenon deposit three months or longer, and shall forfeitall accrued and unpaid interest on the amount with-drawn if an amount equal to the amount withdrawn hasbeen on deposit less than three months. When aPortion of a time certificate of deposit is paidbefore maturity, the certificate shall be canceledand a new certificate shall be issued for the unpaidPortion of the deposit with the same terms, rate, dateand maturity as the original deposit.

1(e) Loans upon security of time deposits. - Amember bank may make a loan to the depositor upon the


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"'security of his time deposit provided that the rateof interest on such loan shall be not less than 2 percent per annum in excess of the rate of interest on thetime deposit.'"This revised regulation does not become effective until

January 1, 1936, but the Board will not object to your bank ac-ting in accordance with these provisions prior to that date."

Approved unanimously, together with aletter to the Federal reserve agents at allFederal reserve banks inclosing a copy of theabove letter for their information and gui-dance.

Letter to Mr. Harry Schwartz, Vice President, Zell Products

Corporation, New York, New York, reading as follows:

"This refers to your letter dated October 22, 1935,regarding the question whether the distribution, by loan,gift, or otherwise, of savings devices for coin and currencyaccumulation, commonly known as coin banks, constitutes thePayment of interest on deposits within the meaning of theterm 'interest' as used in section 19 of the Federal ReserveAct and as defined in section l(f) of the recent revision ofthe Board's Regulation Q.

"You suggested the inclusion in Regulation Q of a clausedesigned to make it clear that the distribution of coin banksdoes not constitute the payment of interest on deposits.However, the Board decided that the determination of this ques-tion should be in the form of a ruling rather than a specificprovision on the point in the regulation.

"Prior to the date of your letter, Mr. Waugh, a repre-sentative of your corporation, had called at the Board'sOffices regarding this matter and had left with a member ofthe Board's staff a coin bank manufactured by your corporationbearing the name 1CaleMeter'. This coin bank is a small boxWith a slot for the insertion of coins in the top and can beumlocked only with a key. It also has a device for changingthe date when a coin is deposited therein. However, thedevice is not an accurate calendar since it indicates thirtydays for every month.

"It is understood that in your letter you refer to coinbanks, such as the ICaleMeterl, which are used for the accu-ulation of coin or currency, or both; that such banks areaistributed, by loan, gift, or otherwise, to savings deposi-tors or prospective savings depositors; that the coin banks


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"are constructed so that money placed in them can not be re-moved without unlocking the banks; that the distributingbank retains the key or combination to the coin banks; andthat the coin banks have no value except as devices to aidin the accumulation of savings and are not useful for anyother purposes

'After considering the matter the Board has reached theOpinion that the distribution in the manner described aboveof coin banks of the type described above does not constitutethe payment of interest on deposits within the meaning ofsection 19 of the Federal Reserve Act or section l(f) of Regu-lation Q."

Approved unanimously, together with aletter to the Federal reserve agents at allFederal reserve banks inclosing a copy of theabove letter for the information of theirbanks and others who may be interested in thematter.

Letter to the National Capital Press, Washington, D. C., reading

as follows:

"This will confirm the telephone conversation with yourMr. Collins today to the effect that upon receipt from youof the proof on Regulation "V, it was decided to print thesupplement to the regulation with a title page, necessitatingthe printing of the supplement as a four-page pamphlet, withthe text of the supplement printed on the second and thirdPages.

"Mr. Collins advised that the additional cost for print-ing the supplement in this form would be VIO, representingthe cost of composition of the title page, press work, andextra paper required. This letter will be your authority toPrint 15,000 copies of the supplement in the form above de-scribed, at an additional cost of $40."


Letter to Mr. Stevens, Federal Reserve Agent at the Federal Re-

serve Bank of Chicago, reading as follows:

"This refers to Mr. Young's letters dated October 17,and November 7, 1935, requesting a determination by the Boardthat W. J. Young & Company, Clinton, Iowa, is not engaged,


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"directly or indirectly, as a business in holding the stockof, or managing or controlling, banks, banking associations,savings banks, or trust companies, within the meaning ofsection 2(c) of the Banking Act of 1955, as amended by sec-tion 501 of the Banking Act of 1935.

"The Board understands that W. J. Young & Company OWDBor controls 265 of the 600 outstanding shares of stock of theClinton National Bank, Clinton, Iowa; that at the last elec-tion of directors of such bank 301 shares were voted; andthat W. J. Young & Company did not vote the stock which itowns or controls at such election.

"On the basis of the above facts, the Board is of theOpinion that W. J. Young & Company is not now a holding corn-Puny affiliate of the Clinton National Bank and, accordingly,it is unnecessary for the Board to determine whether or notthe company is engaged, directly or indirectly, as a businessin holding the stock of, or managing or controlling, banks.However, if it should later become necessary, the Board will,at that time, upon request, be glad to determine whether ornot the company is so engaged.

"In the absence of any further facts which you feel shouldbe considered by the Board with regard to the question ofWhether or not W. J. Young & Company is now a holding companyaffiliate, you may advise the company of the Board's views inthe matter."


Telegram dated December 6, 1955, approved by four members of the

Board) to Mr. West, Managing Director of the Portland Branch of the Fed-

Reserve Bank of San Francisco, reading as follows:

"Please convey following message immediately to CharlesJ: McPherson, Secretary Stockholders Protective Committee,First National Corporation of Portland: 'This refers to yourtelegram of November 29, 1955 which apparently referred toaPPlications of Transamerica Corporation and Inter-AmericaCorpo ration for permits to vote stock of First National BankOf Portland. Your telegram and information which has beenObtained through Portland Branch indicate that the mattersabout which you are concerned involve only your desire to ob-tuln access to books of First National Corporation in orderto obtain information concerning value of its stock andIthat they are not pertinent to the financial condition of theTransamerica Corporation or the Inter-America Corporation,


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0.

f

"the general character of their management, or the probableeffect of the granting of such permits upon the affairs ofthe First National Bank of Portland, which are the matterswhich the law requires the Board to consider in acting uponsuch applications. The granting of the applications by theBoard would not involve the issuance of any permit to FirstNational Corporation nor affect the voting of any stock ofFirst National Corporation, which has no application now pend-ing before the Board. Your telegram was received after Boardhad completed lengthy consideration of applications namedabove and Board feels that issuance of permits should not bedelayed unless it is furnished promptly additional informationPertinent to the issuance of permits to Transamerica Corpora-tion and Inter-America Corporation to vote stock of the FirstNational Bank of Portland. The authority of the Board togrant permits evidently was not intended by Congress to makethe Board the forum for the settlement of private contro-versies or to permit its withholding the issuance of votingpermits as a means of enforcing private rights. However, ifthere is any matter which you desire to present to the Boardwhich should be considered by it as pertinent to the financialcondition of the Transamerica Corporation or the Inter-AmericaCorporation, the general character of their management, or theprobable effect of the granting of such permits upon the affairsof the First National Bank of Portland which are the matterswhich the law requires the Board to consider in acting uponsuch applications, Board will consider such matters if receivedIn writing not later than Wednesday morning, December U.Please acknowledge receipt by aire and advise whether you ex-pect to file such information."


Letter to Mr. Charles W. Collins, Attorney at Law, Washington,

C., reading as follows:

"For your information and that of Mr. Giannini, youare advised that a telegram dated November 29 has been re-ceived from Chas. J. McPherson, Secretary, StockholdersProtective Committee of First National Corporation of Port-land, Oregon, reading as follows:

'Newspapers here indicate that Mr. Giannini boardchairman Trans-America has applied to your Board forauthority to vote the holdings of Trans-America Bankstocks. As representing the minority stockholders ofthe First National Corporation of Portland which holds


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"'large block stock in First National Bank of Portlandand in view of the absence of our attorney we wouldask reasonable delay in granting such authority untilwe can ascertain our position and obtain completeaudit.'"Upon consideration of the information contained in

this telegram and other information which has been obtainedin connection therewith the Board has advised Mr. McPhersonthat if there is any matter which he desires to present to theBoard which should be considered by it as pertinent to thefinancial condition of the Transamerica Corporation or theInter-America Corporation, the general character of theirmanagement, or the probable effect of the granting of suchpermits upon the affairs of the First National Bank of Port-land which are the matters which the law requires the Boardto consider in acting upon such applications, the Board willconsider such matters if received in writing by the Board,in Washington, not later than Wednesday morning, December 11."


Memorandum dated November 27, 1955, from Mr. Miller, reading as

f011ows:

"In accordance with the Board's request, I have consideredthe amendment contained in the Banking Act of 1935, with re-spect to certain records of actions on questions of policywhich are required to be kept by the Board, together with thememorandum from the Board's Secretary on this subject, andsubmit the following report and recommendations for the con-sideration of the Board.. "It is believed that the actions which Congress had inmind were those of an important nature which affect the generalpublic interest, and not matters of a merely routine natureor the details of daily administration of numerous provisionsof the law. Under this view proceedings which merely carryout or conform to policies previously adopted, the allowancesln,particular instances of exceptions to such general policies,anct, rulings merely interpreting the law or the Board's regu-lations in accordance with the opinion of counsel would notordinarily be regarded as actions on questions of policy withinthe intent of the amendment. In fact, the inclusion of matters?f the latter type would tend to clutter up the record andImpair its value. It was understood that the other members01. the Board, in the discussion at the meeting at which thismatter was considered, were in full accord with this view, and


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"it is recommended that it be followed in the preparation ofthe required records.

"It may be well to consider one class of cases specifi-cally. The law now requires a procedure with respect to theestablishment of discount rates which results in their sub-mission to the Board every two weeks, and with the exceptionof the establishment of new rates for the purposes of section10(b) of the Federal Reserve Act, as amended by the BankingAct of 1935, there has been no change in existing rates sincedates prior to the enactment of the Banking Act of 1935. Itwould seem sufficient to record the first actions which weretaken by the Board after August 23, 1935, in which it notedWithout objection the establishment of the same rates thatwere in existence previously, with an accompanying statementto the effect that, as there had been no developments inbusiness conditions which in the opinion of the Board wouldwarrant a reconsideration at that time of the question of dis-count rates, the Board felt that there was no occasion for achange in existing policy. This, together with an appropriatestatement, such as that contained in the sample record attachedhereto with respect to the new rates for section 10(b) loans,would seem to be sufficient until changed rates are submittedfor consideration or the Board takes up the question of the ad-visability of a change in discount rates, and therefore therewould be omitted from the record any reference to the inter-vening periodic actions.

"It may be observed that, as the new records will be keptin addition to the regular minutes of the Board which will notbe affected by the new procedure and which set forth in con-siderable detail all matters passed upon by the Board, if itShould be found at a subsequent date that the completion of aProper record would require the addition of matters which pre-viously had not been regarded of sufficient importance to in-clude therein, such additions may be made readily from the in-formation contained in the Board's minutes. It is apparentthat no hard and fast rule or fixed yardstick can be laid downin advance for the purpose of determining exactly which mattersShould be included in the record and which need not be, butthat the consideration of particular cases as they arise willcreate precedents and thereby the number of doubtful cases re-quiring special consideration will gradually be reduced verymaterially.

"It is recommended, therefore, that when the officialminutes of the Board are circulated for the review or initialsof the Board members there be included in the covering circu-lation sheet accompanying each set of minutes a brief refer-ence to each of the items of a nature deemed sufficiently


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"important to include in the formal record of actions on ques-tions of policy. A sample of such a circulation sheet is at-tached. The initials of the Board members on this circulationsheet would constitute approval not only of the minutes butalso of the inclusion in the formal record of the items listedon the circulation sheet and of the exclusion of the recordsnot so listed. Items not so listed, of course, would remainin the official minutes. This procedure would afford anOpportunity for each member of the Board to indicate eitherthat particular items, in his opinion, should be omitted orthat items not listed should be added and the matter couldthen be decided by the Board if there were any differences ofOpinion.

"The record of the actions taken by the Board would beentitled 'Record of actions by the Board of Governors of theFederal Reserve System on questions of policy, required bythe last paragraph of section 10 of the Federal Reserve Act,as amended by the Banking Act of 1935, to be kept by the Board'.A proposed title page and flyleaf of the new record are attached.

"Following the approval of the minutes and the list of ac-tions to be included in the formal record, there would be pre-pared and circulated among the members of the Board a draft of therecord, covering a period of a week at a time, containing the re-quired statements of such actions, the votes thereon and theunderlying reasons therefor, with a circulation sheet upon whichthe initials of the Board members would be placed if they ap-proved the record as thus prepared. A sample of the sheet tobe used in circulating the record for approval and a tentativerecord covering the period from August 25 to August 26, 1935,Inclusive, are attached hereto.

"The actions entered in the record under this procedurewill appear in chronological order and an index should be ap-pended to the record at the end of the year. The record asthus prepared will be published as an appendix to the annualreport. The law also requires that there be included in theannual report a full account of all actions on questions ofpolicy and it is contemplated that this requirement will bemet by incorporating in the text of the annual report a reviewWhich will cover related actions under appropriate headings.

"If the foregoing procedure be approved by the Board, itwill be expected that the Board's Secretary will begin immedi-ately the compilation of the Board's records of its actionsin accordance with these recommendations for the period fromAugust 25 to date, and in the future the procedure will befolloged currently.

"It should be emphasized that the requirements of the lawmake it essential that the underlying reasons for any action of


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"the Board entered in the record be fully developed and care-fully stated. This should be borne in mind in taking actionupon matters which come before the Board for consideration,and it may be necessary in particular instances for the Boardto devote special attention to the question of how the under-lying reasons shall be ascertained and stated.

"In the memorandum of the Board's Secretary the questionis raised whether, in view of the requirement in the amendmentin relation to the Board's annual report, a full account ofactions taken with respect to open market policies and opera-tions and with respect to policies determined by the Boardshould be prepared for the entire calendar year 1935 or onlyfor the period subsequent to August 25, 1955. It is recom-mended that when the annual report is drafted for the con-sideration of the Board the entire year be covered, without re-gard to the technical question whether the law might be con-strued to require such account only for the period subsequentto August 25.

"In view of the fact that the Board has already authorized,With respect to the meetings of the Federal Open Market Com-mittee during this calendar year, the acceptance from the Com-mittee of a record to be submitted by it, no recommendation issubmitted in this report with respect to that procedure andit is assumed that if there should be a meeting of the FederalOpen Market Committee in 1956 prior to March 1 a similar pro-cedure will be acceptable. It is contemplated that this recordwill be kept in a volume and bound separately from the Board'srecord of its own actions.

"As to the procedure which should be followed with respectto the actions of the new Federal Open Market Committee, to beestablished March 1, 1936, it is believed that the matter shouldbe left open for the present.

"It is recommended that no action be taken at this timeon the question of keeping a stenographic verbatim record ofactions either of the Board or of the Federal Open Market Com-mittee."


Telegram dated December 6, 1955, approved by two members of the

8°e'rdy to Governor Calkins of the Federal Reserve Bank of San Francisco,

l'eading as follows:

. "Your wire Fourth to Chairman Eccles. Board has noobjection to reconsideration by Governors Conference of


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"question regarding charging off cost of Board's new build-ing."


Letter to the Federal reserve agents at all Federal reserve banks,

reading as follows:

"In the Board's letter B-999 of July 19, 1954 you wererequested, among other things, to obtain monthly reports onForm 234 from selected member banks, commencing with September19:54 and continuing thereafter until otherwise advised, inorder to provide data for a study in connection with thechanges in member bank reserve requirements recommended in1951 by the Federal Reserve System Committee on Member BankReserves.

"You are now advised that the collection of these reportsmay be discontinued as of the end of the year."

Approved:


Thereupon the meeting adjourned.

42§(27 "t

Vice Chairman.


19351207_minutes.pdf

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