19381105_minutes.pdf

1150

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

SYsten was held in Washington on Saturday, November 5, 1938, at

11:30 a.m.

PRESENT: Mr. Eccles, ChairmanMr. Ransom, Vice ChairmanMr. SzymczakMr. McKeeMr. DavisMr. Draper

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

The action stated with respect to each of the matters herein-

refer.ed to was taken by .the Board:

The minutes of the meeting of the Board of Governors of the

ederal Reserve System held on November 4, 1938, were approved unani-

M01184,

Memorandum dated November 4, 1938, from Mr. Snead, Chief of

the Division of Bank Operations, submitting a letter dated October

28 f1'°111 Mr. Hays, Assistant Vice President of the Federal Reserve

13414k of Cleveland, which requested approval by the Board of changes

14 the personnel classification plan of the bank to provide for the

°IleEltion of the new position of "Assistant Head of Department" in

the Fiscal Agency Department and for a change in the maximum salary

t°11 the position of "Manager" of the Business Statistics Department.

1116 zemorandum stated that the proposed changes had been reviewed

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

1151

11/5/38 -2-

and recaanended that they be approved.

Approved unanimously.

Letters had been received under date of October 28 and Novem-

hex' 2) 1933, from "The Chase National Bank of the City of New York",

New York, New York, requesting approval by the Board of its applica-

tion to establish and maintain in Balboa, Canal Zone, Isthmus of

Pan.„-ale) a branch which will be subsidiary to the branch of The Chase

14"1onal Bank of the City of New York now existing in Cristobal,

Cal"41 Z°12e) Isthmus of Panama, and uncle,- date of October 28, 1938,

tr()11 Mr- Gidney, Vice President of the Federal Reserve Bank of New

recommending that the application be approved. Under date of

Na"71ber 4 the Board had also been advised by the Secretary of War,

the Secretary of State, and the Office of the Comptroller of the cur-

0Yel' that these departments had no objection to the establishment of

the proposed branch.

The following order was adopted by

unanimous vote:

"WHEREAS The Chase National Bank of the City of Newc)rk has made application to the Board of Governors of

l'ha Federal Reserve System under date of October 28,1238) pursuant to the provisions of section 25 of thexederal Reserve Act for permission to establish in Balboa,Canal Zone, Isthmus of Panama, a subsidiary branch or!g°11cY of the branch now operated by the said The ChaseINational Bank of the City of New York in Cristobal, CanalZ°ne; and

"WHEREAS it appears that the said application isProperly made under the law and may properly be approved;


11/5/38-3-

"NOVi, THERI1X)RE, IT IS ORDERED that the said appli-cation be and it hereby is approved, and that the saidbank be and it hereby is authorized to establish in Balboa,Canal Zone, Isthmus of Panama, a branch which will beSubsidiary to the branch of the said The Chase NationalBank of the City of New York now existing in Cristobal,Canal Zone, Isthmus of 'Panama; upon condition, however,that unless the authority hereby granted is exercised andsuch branch actually is established and opened for busi-ness on or before May 7, 1939, all rights hereby grantedshall be deemed to have been abandoned and the authorityhereby granted Shall automatically terminate; but, if suchbranch shall be established and opened for business on orbefore said date, the said bank may operate and maintainthe same subject to the provisions of section 25 of theFederal Reserve Act."

In connection with the above

matter, the following letter to TheChase National Bank of the City ofNew York, New York, New York, was alsoapproved unanimously:

"This is to advise you that the application of yourb/ink dated October 28, 1938, for permission to establisha branch in Balboa, Canal Zone, Isthmus of Panama, hasbeen aPproved. There is inclosed herewith a certifiedeopY of an order of the Board of Governors of the FederalReserve System authorizing the establishment of this branch.

"Your attention is called to the fact that the au-th"itY granted by the Board for the establishment of

branch will terminate on May 7, 1939, unless thebranch is established and opened for business on or be-fore that date.

"Please advise the Board of the date upon which thebranch is opened for business."

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

Of New York, reading as follows:

"Reference is made to your letter of October 27,1938 regarding the proper maximum loan value under Regu-lation U for collateral other than stocks.


11/5/38 -4-

"The Board agrees with your views on the questionand also agrees that it would be advisable to publish aruling on the point. Accordingly, the ruling set forthbelow will be published in the Federal Reserve Bulletin.

Maximum Loan Value of Bonds under Regulation U

Section 1 of Regulation LI provides in partthat for the purposes of that regulation themaximum loan value of stocks shall be as speci-fied in the supplement to the regulation andthe maximum loan value of any collateral otherthan stocks shall be 'as determined by the bankin good faith'.

This means, in effect, that for such pur-poses the maximum loan value of collateral otherthan stocks should be the amount which the bankwould customarily lend on such collateral ifthat were the only collateral for the loan.Consequently, a bank may not determine that suchOther collateral, as for example a bond, has amaximum loan value equal to its current marketvalue unless the bank would customarily lendsuch amount on the collateral without any addi-tional collateral.

It is believed that the regulation is clearon this point, but since it has developed thatthere may have been some confusion regarding thematter, it has seemed desirable to publish theforegoing to remove any misunderstanding thatmay have existed in this connection."


Memorandum dated October 25, 1938, from Mr. Wyatt, General

Coa s lrecommending that, for the reason stated in the memorandum,

the 811111 of 100 be added to the 1938 budget for the Office of General

Coqnsel, to cover the purchase of books and subscriptions during the

l'etraainder of the current Year.



1_154

4/5/38 -5-

Mmorandwn dated October 31, 1938, from Mr. Goldenweiser,

Director of the Division of Research and Statistics, recommending

that, for the reason stated in the memorandum, the stun of $1,500 be

added to the item Non-Personal Services in the 1938 budget for the

Division to cover $900 for traveling expenses, $500 for telephone

and telegraph service, and $100 for the purchase of books and sub-

during the remainder of the current year.


Memorandum dated November 1, 1938, from Mr. Foulk, Fiscal

Agent, recommending that, for the reason stated in the memorandum,

the Bum of 425, be added to the item Miscellaneous contained in the

1938 budget for the Office of the Fiscal Agent.


There was submitted, with the recommendation of the Office

°f General Counsel that it be approved for publication in the De-

"aber 1881.1e of the Federal Reserve Bulletin, a ruling with respectto the

following subject:

41)Pltored:

Guarantee of Account by Special Partnerof Member Firm


Thereupon the meeting adjourned.

Chairman.


19381105_minutes.pdf

Documents

city of new york

chase141onal bank

chaseinational bank

chase national bank

subsidiary branch

board of changes14

canal zone

assistant secretarymr