19370305_Minutes.pdf

370

tem was

A. meeting of the Board of Governors of the Federal Reserve Sys-

held in Washington on Friday, March 5, 1937, at 11:30 a. m.

PRESENT: Mr. Eccles, ChairmanMr. Szymczak

Mr. Morrill, SecretaryMr. Carpenter, Assistant SecretaryMr. Clayton, Assistant to the Chairman

Consideration was given to each of the matters hereinafter re-

l*erl̀ ed to and the action stated with respect thereto was taken by thetoarci:

Tele grams to Mr. Kimball, Secretary of the Federal Reserve Bankort„

York, Mr. Flaming, President of the Federal Reserve Bank of Cleve-

and Kr. /bung, Secretary of the Federal Reserve Bank of Chicago,

1311. E that the Board approves the establishment without change by

the Ilaw York bank on March 4, 1937, and by the Cleveland and Chicago

4114 today, of the rates of discount and purchase in their existingsahekies.

11.1334b

trig

Approved unanimously.

Letter to the board of directors of the "Belt Valley Bank",

Montane, stating that, subject to the conditions of membership

"sd 1 to 3 contained in the Board's Regulation H and the follow-

Ilseial condition, the Board approves the bank's application for—vex.

orSt ok 4

-,11 the Federal Reserve Bank of Minneapolis:

Such bank shall make adequate provision for deprecia-tion in its banking house."

shiP in the Federal Reserve System and for the appropriate amount

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

371

3/5/37

NeyCitY, Tennessee, reading as follows:

-2-

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

"The Board of Governors of the Federal Reserve System ap-proves the application of the 'Belt Valley Bank', Belt, Mon-tana, for membership in the Federal Reserve System, subjectto the conditions prescribed in the inclosed letter which youare requested to forward to the board of directors of the in-stitution. Two copies of such letter are also inclosed, oneOf which is for your files and the other of which you are re-quested to forward to the Superintendent of Banks of the Stateof Montana for his information.

"It is noted that your office has discussed with them"sement of the bank the possible effect of the ten percent limitation of section 5136 of the Revised Statutes ofthe United States on certain issues of investment securities!/f separate obligors or makers which the bank is now holdingIn excess of this limitation. The Board has given careful?onsideration to this matter and has reached the conclusionnat it is not necessary for the bank to dispose of any poi._6ion of any of these issues of securities which it may law-11Y be holding at the time of its admission to membership."

Letter to Mr. A. L. Henderson, Cashier, First National Bank,

"This refers to your letter of February 8, 1937, regard-4.uhe competition between member banks and nonmember banks

°I the Federal Reserve System in the acceptance of their checkset Par.

or "You suggest that through concerted action by the Boardb Governors and the Federal Deposit Insurance Corporation alliallks be required to accept their own checks at par. This sub-eect is not one with respect to which the Board or the Fed-,sr al Deposit Insurance Corporation is vested with a discretion

there appears to be no authority under existing law for

thethe requirement which you suggest. The question whether

toe law should be amended so as to require all insured banks

mattremit at par for checks drawn on them is, of course, a

ti er of legislative Policy. You may be assured that ques-141°118 with respect to competitive disadvantages of member

1118 as compared with nonmember banks are having and will


372

3/5/37-3-

continue to have the careful thought of the BoErd in the hopethat some satisfactory solution of such problems may be found.

"As you doubtless know, since the date of your letter theBoard has amended its Regulation Q relating to the payment ofinterest on deposits by eliminating therefrom the definitionof interest which had been contained in section l(f) of theregulation and by inserting in the regulation the provisionthat 'Within this regulation, any payment to or for the accountc)f any depositor as compensation for the use of funds con-stituting a deposit shall be considered interest.' A copy ofa Press statement issued jointly by the Board of Governorsand the Federal Deposit Insurance Corporation in this connec-tion is inclosed herewith for your information.

"The Board always welcomes the views of its member bankswith respect to matters of this kind, and we appreciate yourrifting us in this connection. May we express the earnest:013e that your bank will give up any thought of leaving the.uederal Reserve System."


Letter to Honorable John J. Cochran, House of Representatives,eadi

rIZ ss follows:

, "This refers to your letter of February 3, 1937, ad-to Chairman Eccles, in which you request a statement

rding the operation of section 213 of the Economy Act ap-'?°ved Tune 30, 1932.

lth "This section, which relates to married persons livinghusband or wife who is also in the service of the United

-0!ataa or the District of Columbia, is applicable in the case

4. reductions of personnel and in the case of appointmentsor Persons to the classified civil service. The employeesvi the Board of Governors are not in the classified civil ser-e ea) and in view of the Provisions of section 10 of the Fed-

Reserve Act, section 213 of the Economy Act does not legal-affect the personnel of the Board.. "However, pursuant to your request, the following inlor-

• tl°n is given:be "Since the effective date of the Economy Act there havewhen- no reductions in any class of employees of the BoardIri:Tie any of the employees had husbands or wives in the ser-th'e of the United States or the District of Columbia so that

Preferences contemplated by section 213 could be applied.ever, four married women voluntarily resigned their posi-

-na with the Board in order that their husbands might be


373

/5/37-4-

"reinstated in the classified civil service or retain theirPositions in such service.

women whose husbands were on the Federal or DistrictOf Columbia payroll were added to the Board's staff since theeffective date of the Economy Act. Two of these appointmentswere temporary and have since expired. The six appointmentswere made because of the employees' special training for par-ticular work which the Board desired to have done and for whichthey were the best equipped of the persons known to the BoardtO be available for the positions. Of the four permanent em-

IT)Yees three came to the Board directly from positions withOther Government organizations. The fourth was unemployed at.11e time of the commencement of her service with the Board. It

V3 believed, therefore, that none of the married persons appointed40 the Board's staff were employed contrary to the spirit of see-• 213 of the Economy Act. It is the Board's policy not to:1111310Y married persons whose husbands or wives are in Government

ervice if other Persons with satisfactory qualifications areQ'▪ veilable for the particular position."There are on the Board's staff at the present time sevenenDo

• t-,0Yees who were in the employ of the Board and whose hus-uarotr4'8 or wives were in the service of the United States or Dis-TI, ct of Columbia prior to the enactment of the Economy Act.IpIere are also nine employees who married subsequent to em-

by the Board and since the enactment of the Economyata end whose husbands or wives at the time of marriage were,tItl.d still are, on the Federal or District of Columbia payroll,em,,there are four employees with husbands or wives who were

the,74-0Yed by other Government agencies since the effective date

Economy Act and who just prior to such employment wereon the Federal or District of Columbia payroll.

et,.. "Therefore, the total number of employees on the Board'sst:tf whose husbands or wives are in the service of the United'Les or the District of Columbia is twenty-four.

801aq "In the event that you should feel it necessary to havera nne from this organi7ation give testimony before your com-itbee) the undersigned will be prepared to appear."


connection with the above matter, reference was made to a memo-4 ,

ted March 3, 1937, from Mr. Morrill pointing out that the Secre-tEosqte of .

flee has not kept currently available all of the information con-1/1n the letter to Representative Cochran, end raising the question


3/5/37-5-

141E4" the Board would desire that each division head be requested totake .

special inquiry in the case of each employee in his division whose

-- or wife is employed elsewhere in the Government service and to

to the Board all of the circumstances involved, together with the

Ile" of the division head as to whether any action should be taken.

It was agreed that such an inquiryshould be made.

374

Thereupon the meeting adjourned.

02646-A eta.

Chairman..


19370305_Minutes.pdf

Documents

Transcript of 19370305_Minutes.pdf