PederaiIlinutes of actions taken by the Board of Governors of the

Reserve System on Friday, April 30, 1948.

PRESENT: Mr. DraperMr. EvansMr. VardamanMr. Clayton

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

6b2

MiMites of actions taken by the Board of Governors or the Fed -

se eSYstem on April 29, 1948, were approved unanimously.

'Telegrams to the Federal Reserve Banks of Atlanta, Chicago,8t. Louis)

Kansas City, and San Francisco stating that the Board ap-PliNe the

establishment without change by the Federal Reserve Banks

°I* Cille4gc)/ Kansas City, and San Francisco on April 27, by the Fed-

of S. Louis on April 28, and by the Federal Re-

Of Atlanta on April 29, 1948, of the rates of discount

1.1'11:1/11'ehase In their existing schedules.

Approved unanimously.

raorandilim dated April 29, 1948, d," the t from Mr. Leonar Director

°tgeoree 1°11 of E inations, recommending that the resignationWill 4

411 -4-ams, an Assistant Federal Reserve Examiner in that.44404

4 t4 "cepted to be effective, in accordance with his request,4,0se

E lk1:413of

business June 25, 1948, with the understanding that

Nit4 /34Yeat would be made for annual leave remaining to his

8 or thatdate.

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693

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Approved unanimously.

Memorandum dated April 30, 1948, from Mr. Bethea, Director°t theD

of Administrative Services, recommending an increasethe

basic salary of Mrs. Mildred Tydings, Supervisor of the Cafe-teria iz

that Division, from 4;)3,898.80 to $4,024.20 per annum, effec-tivel'aY 2) 1948.

Approved unanimously.

441, or tileelitter to Mr. TialtSep Vice President of the Federal Reserve

York, reading as follows:

elattli:Ileference is made to your letter of April 27, 1948, Jeff,:iding the proposal of The Bank of Port Jefferson,

Port

Port-.Tra°r13 New York, to absorb The First National Bank ofa br"-et.fferson, Port Jefferson, New York, and to

establish

--1;eu in Port Jefferson Station, New York.

Provethe noted that State banking authorities have ap-ta„

.‹ is of proposed merger agreement and that the Reserve4ot r„ the opinion that the proposed transaction will11141t in a change in the general character of the the (,-es of The Bank of Port Jefferson or in the scope ofcohdir°rate powers exercised by it within the meaning

of

of membership numbered 1 to which it is subject.Iihelat;-,seumed that the Board will be advised in due courset2,!ef 1.-1 ame of the continuing institution is changed withvl 1\4:4-17' aPproval of the State authorities to 'The Bank

-0'"ern Brookhaven.'41°1's eIl.„11, view of your recommendation, the Board of &over ;.11 P0 ;,.oves the establishment and operation of a branch'Jerre:" 'Jefferson Station, New York, by The Bank of PortProp° a(c)In, Port Jefferson, New York, before or after the

change in its corporate title, provided the absorp-teeter* The First National Bank of Port Jefferson is ef-ktt;ted

BuosOf tantially in accordance with the plan as sub-bank paid bank has paid up and unimpaired capital stock

n:°Pri tAl, than $500,000, and prior approval of the ap--ellt 4-1-iotate authorities is obtained for the establish-'41's branch; and with the understanding that

, self f°1" the Reserve Bank is to review and satisfyQat, as Aro to the le alit of all steps ken to effect.,

13°s-% absorption 2nr

takend establish the branch."

Approved unanimously.

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ing Tele

gram to the Presidents of all Federal Reserve Banks read-as Naows:

res "Referring Board's letter April 13 and previous cor-

to P°ridellee,,orauthorize

regarding proposed amendment to Regulation Jconditionalpayment of checks, American Bankertriiirrhursday2 April 29, on page 1, indicates that Board

isn had hearing on May 17 regarding this matter. Thisit ict e 0..,.re.- - c,I t. In publishing notice of proposed action

X0 el'eral Register, Board has invited comments in writing.i1114141;:e has suggested or requested a hearing and the Board

-0 present plans for any such hearing."

Approved unanimously.Letter to

tiS 0, the Presidents of all Federal Reserve Banks reading.1.011-Love:

keetm•nin accordance with the understanding reached at theOf .671-g„of the Conference of Presidents with the membersVith 400ard on February 27, 1948, there is enclosed herei-capit;,new draft of the proposed bill to modify member bank11-1-

requirements.Etdrais ..411t11 respect to the capital stock required for the(1114-6,:°4 of State banks to membership, the bill would re-°rear! -2-„,T-Ilimum of$50

l 000, with the exception that banks

Inittedi—: Prior to the enactment of the bill could be ad-I1T/I;th a minimum of $25,000.

1)1144 e bill contains a provision requiring State membere4itai" obtain the Board's consent before reducing their40iike sT.00k. As you know, national banks and insured%tIlher banks are now required by law to obtain the con-Depoer r the

T Comptroller of the Currency and the Federal

the'alsurance Corporation, respectively, and a majoritykertibe r'Aste member banks are subject to a condition ofticalsi,,ship requiring the Board's consent prior to reduc-1,174 capital stock.the '11 lieu

Gstabl• of the existing requirements with respect tolshment of domestic branches by State member13141111 'Ile bill would provide that no State member bank

tShtateseGtablish and operate any new branch within the United;;;G PtiZietiler an in-town or out-of-town branch, without-Ls eetZ,consent of the Board. The provisions governing

completely from those governing

s li,:;;ishment of domestic branches by State memberbe divorced

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4/30/48

litheis establishment of branches by national banks. This

suggested in view of the fact that the Comptroller ofi:Currency has advised the Board, in effect, that hetiacIPPosed to any change in the capital requirements for1,esi establishment of out-of-town branches by nationalET7s other than the elimination of the requirement that(01,41°11e1 bank must have a minimum capital of $500,000411„Leeser amount in a few States) in order to establish

su_ch branch.ze "Anothraber er hank possible approach would be to leave State

S subject to the same requirements as national8 with respect to the establishment of out-of-town

q te,1.1.ee and to amend the requirements governing branchestrconal banks to the extent acceptable to the Comp-bark er. If this were done, however, both State memberthe: and national banks would continue to be subject toIttwtimc.luireanent that a bank with out-of-town branchescapit;';ve capital at least equal to the minimum aggregate

-31- required for the organization of unit nationalhillA4.11 the places in which its head office and its

are situated; and, thus, the discrimination be-• °zate member banks and State nonmember banks withq b,n to the capital required for the establishment

-Zehee would be only partially eliminated.tions we will be glad to receive any comments or sugges-

114hich You may wish to make concerning any of theVewohle,esPects of the proposed bill; and, specifically,bra/107; like to have your views as to which type oftion :LLegislation you favor in the light of the situa-441 Juur District."

4Pptoved z

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Approved unanimously.

Member.

695

Sec etary.

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