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

8 held in Washington on Friday, 'arch 19, 1937, at 11:30 a. m.

PRESENT: Mr. Ransom, Vice ChairmanMr. Broderick

Szymczak

Ar. 4orrill, SecretaryMr. Bethea, Assistant Secretary:Jr. Carpenter, Assistant Secretary

Consideration was given to each of the matters hereinafter re-

red to and the action stated with res9ect thereto was taken by the

130.ard:

Te1egr6ms to Messrs. Kimball, Strater, and Young, secretaries oftae

Federal Reserve Banks of New York, Cleveland, and Chicago, respectively,

4tirlg that the Board approves the establishment without cnange by the

4elvyork bank on March lo, 1937, and by the Cleveland and Chicago banks

t(Ic111' Of the rates of discount and purchase in their existing schedules.

Approved unanimously.

Letter to mr. Schaller, ?resident of the Federal Reserve Bank of411.. ea

g0) reading as follows:

"It is noted from your letter of -arch 9 that, effectiveEiarch Ivir. R. J. tiargreaves was to be relieved of his duties

he 'anager of the Personnel Department, because of declining

alth. It is also noted that Mr. Hargreaves is being trans-to the non-official position of 'General Lien,' and that

wj Present salary will be continued until August 1, aftersch date it is to be reduced to 43,500 per annum, the maximum

provided in the personnel classification plan for this-°Bition.”

•

Approved unanimously.

Letter to "The National Bank of Burlington", Burlington, North

reading as follows:

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"The Board of Governors of the Federal Reserve Systemhas given consideration to your application for permissionto exercise fiduciary powers, and grants you authority toact, when not in contravention of State or local law, astrustee, executor, administrator, registrar of stocks andbonds, guardian of estates, assignee, receiver, committeeof estates of lunatics, or in any other fiduciary capacityin.which State banks, trust companies or other corporationswalch come into co,,,petition with national banks are permit-ted to act under the laws of the State of North Carolina,t?e exercise of all such rights to be subject to the provi-?,lons of the Federal Reserve Act and the regulations of thezoard of Governors of the Federal Reserve System.

"This letter will be your authority to exercise thei.cluciary powers granted by the Board pending the prepara-

'Ion of a formal certificate covering such authorization,which will be forwarded to you in due course."

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Approved unanimously.

Letter to mr. G. W. Newton, First Federal Foreign Banking Corpora-

' 14ew York, New York, reading as follows:

"Receipt is acknowledged of your letter of ,arch 13, 1937,„ a statement of condition as of December 31, 1936, of

e First Federal Foreign Banking Corporation, in liquidation."It will be appreciated if you will forward a similar

atement as of December 31, 1937, unless in the meantime a114.41 disbursement is made to stockholaers and the liquidation

the Corporation completed. In the latter event your advices41th respect thereto will be appreciated."

Approved unanimously.

Letter to ?Jr. Young, Vice President of the Federal Reserve BankOf'

4g0, reading as follows:

"This refers to your letter of .arch 12, 1957 regardingthem question whether the payment by member banks of assess-i:ents under the provisions of 'Senate Bill No. 1 of the Indianadegislature would constitute a payment of interest on demandaePosits in violation of section 19 of the Federal Reserve Act+ncl the Board's Regulation Q. It is understood from your let-"" that this bill has been enacted into law.

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"Some time ago the Board reviewed a proposed billfor a new depository act for oresentation to the EightiethGeneral Assembly of the State of Indiana and advised one oftie officers of the State that, in the Board's opinion, ifthe proposed bill should be enacted into law, the paymentby member bank depositories of the assessments provided forin the bill would not constitute the Jayment of interest ondeposits within the Gleaning of section 19 of the Federal Re-8erve Act and Regulation Q.

"Although Senate Bill No. 1 is somewhat different fromthe proposed bill which was submitted to the Board, it ap-pears that the provisions of the bill relating to the insur-ance of deposits are substantially similar to those contained?-r1 the proposed bill which the Board reviewed. Accordingly,lt is our view that the payment by member bank depositoriesof the assessments provided for in Senate Bill No. 1 wouldnot constitute a payment of interest on deposits within themeaning of section 19 of the Federal Reserve Act and Regula-tion us',

Approved unanimously.

Letter to Honorable Elmer Thomas, United States Senate, reading

1E3 f°11ows:

"In the absence of Chairman Eccles I am replying toYour letter of 1;.arch 11 in which you pass on to the Boardthe suggestion of a number of banks in Oklahoma that sincethey are required to cash Government checks at par the Fed-eral Reserve System should bear the expense of the trans-Portation of money from the Federal Reserve banks with whichto cash the checks.

"The Board has had this suggestion brought to its atten-tion a number of times in the past and has taken the positiontnat the question of cashing Government checks at par is amatter between the Treasury and the banks, and that the Fed-eral Reserve banks would not be justified in absorbing thee-x-Pense of currency shipments to nonmember banks to enablethem to pay such checks. The Federal Reserve banks do absorbthe cost of currency shipments to banks that are members ofthe Federal Reserve System. They also absorb the cost of,I1J-Pments of currency from nonmember banks to the Federal?serve banks in payment of checks sent to nonmember banks,°r collection and remittance to the Federal Reserve banks.'or the Federal Reserve banks to absorb the cost of shipping

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currency to nonmember banks would be to give to nonmemberbanks a service which the Board feels should be given onlyto banks that are members of the Federal Reserve System."

13()Etrd

Approved unanimously.

Letter to mr. Stuart A. Rice, Chairman, Central Statistical

' 17ashington, D. C., reading as follows:

"Reference is made to your letter of March 15 to Chairman"Ecei-,-es requesting that someone immediately responsible for thestatistical work of the Board of Governors be designated toscuss with Mr. Edward R. Gray, Review Officer of the Central

6tat13tical Board, your Regulation No. 1, 'submittal by Fed-Reserve Agencies of Questionnaires and Other Material to

).e Central Statistical Board for Review'."The Board of Governors has designated Mr. E. A. Golden-

Director of its Division of Research and Statistics,

10confer with Mr. Gray regarding the questions involved. Itsuggested, therefore, that Mr. Gray contact Mr. Golaenweiser

4,1_rect1y in order to arrange a mutually satisfactory date forwie conference."

Approved unanimously.

Letter to Mr. Peyton, President of the Federal Reserve Bank of

113, .readilg as follows:

tf "Reference is made to your letter of March 6 advisingoi;Lt Your bank plans to assume transportation expenses, cost,elbcard and room and tuition for any officers or employees

ated by the bank to attend the Graduate School of Bank-at Rutgers University, provided such procedure is satis-

'ctcrY to the Board.'In reviewing this question prior to writing the state-

ilierit •tha inclosed with its letter, X-9729, the Board recognizeder t attendance at the Graduate School should materially in-waease the value of an officer or employee to the System. It

ctiso cognizant of the fact that such attendance shouldth:erially benefit the officer or employee himself and felt

to't consequently such officer or employee shoula be willingfitillake some financial sacrifice in order to obtain the bene-see reoulting from attendance at the Graduate School. Iti,. sTed to the Board that in the circumstances an equit&ble'ribution of the costs of such course between the employer

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"and the employee would be for the employer to assume trans-Portation costs and to grant leave with pay for the periodtecessary to attend the Graduate School and for the employeeto Pay for his board and tuition.

"The Board has carefully reviewed this matter in thelight of your letter and is still of the opinion that the6Yetemys contribution toward the expenses of officers andemployees in attending the Graduate School should be limitedto transportation expenses and leave with pay for the timenecessary to take the course."

Approved unanimously.

Thereupon the meeting adjourned.

Vice Chairman.

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