19470124_Minutes.pdf

106

Minutes of actions taken by the Board of Governors of the

Federal Reserve System on Friday, January 24, 1947.

PRESENT: Mr. Eccles, ChairmanMr. DraperMr. EvansMr. Vardaman

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

Minutes of actions taken by the Board of Governors of the

Federal Reserve System on January 23, 1947, were approved unani-

mously.

Telegrams to Mr. Clarke, Assistant Secretary of the Federal

Reserve Bank of New York; Mr. McCreedy, Secretary of the Federal Re-

serve Bank of Philadelphia; Mr. Blair, Secretary of the Federal Re-

serve Bank of Cleveland; Mr. Walden, First Vice President of the

Federal Reserve Bank of Richmond; Mr. McLarin, President of the Fed-

eral Reserve Bank of Atlanta; Mr. Dillard, Vice President of the

Federal Reserve Bank of Chicago; Mr. Stewart, Secretary of the Fed-

eral Reserve Bank of St. Louis; Mr. Powell, First Vice President of

the Federal Reserve Bank of Minneapolis; Mr. V,00lley, Vice President

of the Federal Reserve Bank of Kansas City; Mr. Gilbert, eresident

of the Federal Reserve Bank of Dallas; and Mr. Volberg, Vice Presi-

dent of the Federal Reserve Bank of San Francisco, stating that the

Board approves the establishment without change by the Federal Re-

serve Banks of Atlanta and St. Louis on January 22, and by the Fed-

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

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1/24/47 -2-

eral Reserve Banks of New York, Philadelphia, Cleveland, Richmond,

Chicago, Minneapolis, Kansas City, Dallas, and San Francisco on

January 23, 1947, of the rates of discount and purchase in their

existing schedules.

Approved unanimously.

Letter to Mr. Neely, Federal Reserve Agent of the Federal

Reserve Bank of Atlanta, reading as follows:

"In accordance with the request contained in yourletter of January 21, 1947, the Board of Governors ap-proves the appointment of Yr. Levings W. Laney as Al-ternate Assistant Federal Reserve Agent at his presentsalary of 3,750.

"It is noted from your letter that Lir. Laney willbe placed upon the Federal Reserve Agent's pay roll andwill be solely responsible to him or, during a vacancyin the office of the Federal Reserve Agent, to the As-sistant Federal Reserve Agent, and to the Board of Gov-ernors, for the proper performance of his duties. Uiennot engaged in the performance of his duties as AlternateAssistant Federal Reserve Agent he may, with the approvalof the Federal Reserve Agent or, during a vacancy in theoffice of the Federal Reserve Agent, of the AssistantFederal Reserve Agent, and the President, perform suchwork for the Bank as will not be inconsistent with hisduties as Alternate Assistant Federal Reserve Agent.

"It is noted from your letter also that Mr. Laneywill execute the usual oath of office which should beforwarded to the Board. Please advise the effectivedate of Mr. Laney's appointment as Alternate AssistantFederal Reserve Agent."


Letter to the board of directors of the "Citizens Bank of

Darlington", Darlington, South Carolina, stating that, subject to

conditions of membership numbered 1 to 3 contained in the Board's

1r


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Regulation H and the following special condition, the Board approves

the bank's application for membership in the Federal Reserve System

and for the appropriate amount of stock in the Federal Reserve Bank

of Richmond:

114. Prior to admission to membership, such bank,if it has not already done so, shall chargeoff or otherwise eliminate estimated lossesof 058.57, as shown in the report of exami-nation of such bank as of December 16, 1946,made by an examiner for the Federal ReserveBank of Richmond."

Approved unanimously, togetherwith a letter to 1dr. Leach, Presidentof the Federal Reserve Bank of Richmond,reading as follows:

"The Board of Governors of the Federal Reserve Systemapproves the application of the Citizens Bank of Darlington,

Darlington, South Carolina, for membership in the FederalReserve System, subject to the conditions prescribed in theenclosed letter which you are requested to forward to theboard of directors of the institution. Two copies of suchletter are also enclosed, one of which is for your filesand the other of which you are requested to forward to theChief Examiner, State Board of Bank Control for the Stateof South Carolina, for his information.

"It is assumed that you will follow the matter of thebank's bringing into conformity with the provisions of lawand the Board's regulations its practice with respect towithdrawal of savings deposits."

Letter to the board of directors of the'First State Bank of

Froid", Froid, Montana, stating that, subject to conditions of mem-

bership numbered 1 to 3 contained in the Board's Regulation H and

the following special condition, the Board approves the bank's ap-

Plication for membership in the Federal Reserve System and for the

appropriate amount of stock in the Federal Reserve Bank of Minneapolis:


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"4. Such bank shall increase the number ofits directors to not less than five,the minimum number required in the caseof all member banks under the provisionsof Section 31 of the Banking Act of 1933as amended."

Approved unanimously, togetherwith a letter to Mr. Peyton, Presi-dent of the Federal Reserve Bank ofMinneapolis, reading as follows:

"The Board of Governors of the Federal Reserve Systemapproves the application of the First State Bank of Froid,Froid, Montana, for membership in the Federal Reserve Sys-tem, subject to the conditions prescribed in the enclosedletter which you are requested to forward to the board ofdirectors of the institution. Two copies of such letterare also enclosed, one of which is for your files and theother of which you are requested to forward to the Super-intendent of Banks for the State of Montana, for his in-formation.

"A letter to the Schnitzler Corporation of Froid,Montana, relating to its status as a holding companyaffiliate upon the admission of the First State Bank ofFroid, Froid, Montana, to membership is enclosed and isto be transmitted to the Corporation. Two copies of theletter are also enclosed, one of which is for your filesand the other is for transmittal to the First State Bankof Froid."

In connection with the above matterunanimous approval was also given tothe following letter to the SchnitzlerCorporation of Froid, Montana:

"This refers to the Board's approval on this date ofthe application of the First State Bank of Froid, Froid,Montana, for stock in the Federal Reserve Bank of Minne-apolis, subject to certain conditions, and to the statusof the Schnitzler Corporation as a holding company affil-iate upon the admission of the bank to membership in theFederal Reserve System.

"The Board understands that the Schnitzler Corpora-tion owns over 50 per cent of the outstanding shares ofstock of the First State Bank of Froid, and, accordingly,it appears that upon the latter's admission to membershipthe Schnitzler Corporation will become a holding companyaffiliate within the meaning of the following provisionsof section 2(c) of the Banking Act of 1933:


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'The term "holding company affiliate"shall include any corporation, business trust,association, or other similar organization--

1(1) Ahich owns or controls, directly orindirectly, either a majority of the shares of

capital stock of a member bank * * *.1"However, the Board also understands that the Schnitz-

ler Corporation was organized and is operated for the purposeof engaging primarily in the operation and management of farm

lands and in dealing in farm implements, and although it ownsa substantial portion of the outstanding shares of stock ofthe Culbertson State Bank, Culbertson, Montana, the Schnitz-ler Corporation was not organized and is not operated for the

Purpose of managing or controlling these banks and it doesnot own or control any significant portion of the stock ofor manage or control any other banks.

"In view of these facts, the Board has determined thatthe Schnitzler Corporation 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 the following fur-ther provision of section 2(c) of the Banking Act of 1933:

'Notwithstanding the foregoing, the term"holding company affiliate" shall not include(except for the purposes of section 23A of theFederal Reserve Act, as amended) * * * any or-ganization which is determined by the Board ofGovernors of the Federal Reserve System not tobe engaged, directly or indirectly, as a business

in holding the stock of, or managing or control-ling, banks, banking associations, savings banks,

or trust companies.'"By reason of such determination, the Schnitzler Cor-

poration is not a holding company affiliate for any purposesother than those of section 23A of the Federal Reserve Act.However, if the facts should at any time differ from thoseset out above to an extent which would indicate that suchCorporation might be deemed to be engaged as a business inholding the stock of, or managing or controlling, banks,this matter should be submitted to the Board for its fur-ther determination. The Board reserves the right to makea further determination of this matter at any time on thebasis of the then existing facts."

fr,


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Letter to the board of directors of the "Culbertson State

Bank of Culbertson, Montana", Culbertson, Montana, stating that,

subject to conditions of membership numbered 1 to 3 contained in

the Board's Regulation H and the following special condition, the

Board approves the bank's application for membership in the Federal

Reserve System and for the appropriate amount of stock in the Fed-

erai

Bank

Reserve Bank of Minneapolis:

114. Such bank shall increase the number of itsdirectors to not less than five, the minimumnumber required in the case of all memberbanks under the provisions of Section 31 ofthe Banking Act of 1933 as amended."

Approved unanimously, fortransmission through the FederalReserve Bank of i4inneapolis.

Letter to Mr. Wiltse, Vice President of the Federal Reserve

of New York, reading as follows:

"Reference is made to your letter of January 17,1947, addressed to The Amalgamated Bank of New York,approving a reduction of t250,000 in common capitalstock as a part of a program providing for an increaseof $500,000 in total capital funds. In order that therecord may be clear, the Board of Governors hereby rat-ifies the action taken by the Reserve Bank in approvingthe reduction in common capital stock."


Telegram to Mr. Volberg, Vice President of the Federal Re-

serve Bank of San Francisco, reading as follows:

"Reference your letter January 10 enclosing copy ofletter from Transamerica Corporation dated January 6, re-


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"questing permission to continue arrangement which was in

effect with respect to its annual report to Board for years

1943, 1944, and 1945. Under that arrangement, instead of

filing annual report to Board on Form F. R. 437 by February1, Transamerica furnished Board with copies of its annual

report to shareholders as soon as completed and filed its

annual report to Board after it had received audited state-

ments."Prior to period during which special arrangement was

in effect, Transamerica filed annual reports on Form F. R.

437 on or about February 1. Special arrangement was agreed

to because of personnel situation brought on by war, and

was in accord with general arrangement whereby time for

filing annual reports of holding company affiliates to

Board was extended wherever necessary. Such general ar-

rangement was discontinued with reports for 1945. In view

of possible early consideration of bank holding company

legislation by Congress, it is especially desirable thatall reports for 1946 be submitted to Board as soon as

practicable."Transamerica stated it is not possible for it to

file report based on audited figures by February 1, 1947,and that some of audited material necessary for completion

of its report to Board will not be furnished to Trans-

america until latter part of May. In view of fact that

audited statements have not been requested, it is not

necessary for Transamerica to await completion of its

annual audit before filing its report to Board."Transamerica would, of course, have privilege of

amending its report or submitting final report after

completion of audit, but it is deemed necessary that atleast a preliminary report be available to Board at

earliest practicable date.wike realize Transamerica and other organizations

in group must have reasonable amount of time to compile

information requested. Accordingly, Board extends toMarch 1, 1947, time for Transamerica to file with your

bank its report for 1946."


Letter to Mr. Willett, First Vice President of the Federal

Reserve Bank of Boston, reading as follows:


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"Acknowledgment is made with thanks of your let-ter of January 17 enclosing a memorandum submitted inresponse to the Board's letter of December 19, 1946,regarding visits made by representatives of variousGovernment Agencies.

"Referring to the second paragraph of your letter,your assumption is correct that it will not be necessaryto report visit3 of frequent and routine nature such asthose made by the Secret Service. With respect to non-routine visits, it will be appreciated if reports arefurnished currently within a reasonable time after theyoccur."


4 41 id" iSecretary.

4 Ah

Approved:

Chairman.


19470124_Minutes.pdf

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