19480413_Minutes.pdf

572

Minutes of actions taken by the Board of Governors of the

Federal Reserve System on Tuesday, April 13, 1948.

PRESENT: Mr. Eccles, Chairman pro tem.

Mr. SzymczakMr. DraperMr. EvansMr. Vardaman

Mr. Carpenter, Secretary

Mr. Sherman, Assistant Secretary

Mr. Morrill, Special Adviser

Mr. Thurston, Assistant to the Board

Minutes of actions taken by the Board of Governors of the

Federal Reserve System on April 12, 1948, were approved unanimously.

Memorandum dated April 7, 1948, from Mr. Sherman recommend-

ilog that the temporary appointments of Miss Martha H. Searcy and

14iss Mary W. Sullivan, file clerks in the Office of the Secretary,

be Inade permanent effective immediately. Their temporary appoint-

lents expire on April 12 and April 16, 1948, respectively.

Approved unanimously.

Memorandum dated April 9, 1948, from Mr. Bethea, Director

er the Division of Administrative Services, recommending the ap-

Pc3intment of Joseph Marteletto as a laborer in that Division, on

4 temporary basis for a period of two months, with basic salary

4t the rate of $1,822 per annum, effective as of the date upon

he enters upon the performsnce of his duties after having

passed the usual physical examination. The memorandum also stated

that it was not contemplated that Mr. Marteletto would become a

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

573

4/13/48-2-

member of the Federal Reserve retirement system during his employ-

ment on a temporary basis.

Approved unsnimously.

Letter to the Presidents of all the Federal Reserve Banks

reading as follows:

"This refers to previous correspondence relatingto the proposed amendments to the Board's Regulation Jfor the purpose of authorizing a procedure for the con-

ditional payment of checks and delayed return of unpaid

items."AB indicated in the Board's letter of April 7,

1948, notice of the proposed amendments will be publishedIn the Federal Register on or about April 15, 1948. How-ever, in order to be certain that the matter comes to the

attention of member banks, there is enclosed a brief state-ment with respect to the proposed amendments which we be-lieve it would be desirable for you to furnish to the mem-ber banks in your District."

Approved unanimously, together withthe statement referred to which read as

follows:

"PROPOSED PROCEDURE FOR CONDITIONAL PAYMENT OF CHECKS

AND DELAYED RETURN OF UNPAID ITEMS

"Within the last few years, many banks have adopted

the practice of 'delayed posting' of checks or of makingconditional payment for checks subject to the right to

return dishonored items on the business day next follow-ing the receipt of such checks. These practices havebeen recognized by the enactment of statutes in a numberOf States and by rules adopted by numerous clearing houseassociations.

"Recently, the American Bankers Association recom-mended to the Federal Reserve System that amendments bemade to Regulation J of the Board of Governors of the

Federal Reserve System and to the circulars or operating

letters of the Federal Reserve Banks governing check


574

4/13/48 -3-

"collections in order to authorize a procedure for theconditional payment of cash items presented by FederalReserve Banks subject to the right to return and re-claim payment for unpaid items on the next succeedingbusiness day after their receipt by drawee banks.

"Accordingly, after discussion of this matter withthe Presidents of the Federal Reserve Banks, the Boardis publishing in the Federal Register on or about April15, 1948, notice of a proposal to adopt certain amend-ments to its Regulation J, relating to the clearing and

collection of checks by the Federal Reserve Banks. Ineffect, the proposed amendments would permit a draweebank to which a Federal Reserve Bank sends a check for

collection, if remittance is made on the day of receipt,to return the check for credit or refund at any time upto midnight of the drawee's next business day followingreceipt of the check. A copy of the notice to be pub-lished in the Federal Register, including the proposed

amendments, is attached. As stated in that notice, in-

terested persons may submit written comments with re-spect to the proposed amendments not later than May 17,1948.

"It is to be noted that the amendments which arenow proposed will become effective only upon their formal

adoption by the Board of Governors at a later date andafter due notice to persons concerned through subsequent

pliblication in the Federal Register."In connection with this matter, it is understood

that the American Bnrkers Association at the appropriatetime will communicate with all banks relative to their

contracts with their depositors, as represented by leg-ends on deposit slips or otherwise, in order that such

contracts may afford barks adequate protection with re-

sPect to such conditional payment procedure. It is also

understood that the Association will encourage State leg-

islation authorizing a procedure for the conditional pay-ment of checks nrd the return of unpaid items on the next

succeeding business day and will draft a model statute

Providing for such procedure."

Memorandum dated April 8, 1948, from Mr. Smead, Director

(It the Division of Bank Operations, recommending that changes


V13/l8 -4-

575

tentatively agreed upon between that Division and representatives

Of the Office of the Comptroller of the Currency and the Federal

Deposit Insurance Corporation in the provisions for reporting re-

serves for bad debts on loans on State member bank report of con-

on (form F. R 105) and report of earnings and dividends (form

F' R. 107) be approved, and that the Division of Bank Operations

be authorized to discuss the proposed revisions with the Executive

Committee of the Association of State Bank Supervisors and to agree

to minor changes in those revisions. The memorandum also stated

that the principal objective of the Division of Bank Operations

1184 been to see that the reserve for bad debts was deducted from

loans and capital accounts.

Approved unanimously.

APPrOVed:

Chairman pro tem.


19480413_Minutes.pdf

Documents

Transcript of 19480413_Minutes.pdf