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Minutes of actions taken by the Board of Governors of the

ral Reserve System on Wednesday, September 7, 1949.

PRESENT: Mr. McCabe, ChairmanMr. Eccles

SzymczakMr. DraperMr. EvansMr. VardamanMr. Clayton

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

Minutes of actions taken by the Board of Governors of the

al Reserve System on September 6, 1949, were approved unani-111011814r

1469

Memorandum dated September 6, 1949, from Mr. Millard, Direc-

ortor

the Division of Examinations, recommending that Harry J.

an examiner for the Federal Reserve Bank of New York, be ap-

1°14ted an examiner by the Board of Governors for the purpose of

1541"tielP8.t1ng in the forthcoming examination of The Chase Bank, New

1.°111t) New York.Approved unanimously.

Letter to Mr. Stetzelberger, Vice President of the Federal Re-serve

Be.nk of Cleveland, reading as follows:

"In accordance with the request contained in yourletter of August 31, 1949, the Board approves the ap-Peointments of Frank B. Kehres and Harry M. Pugh, at pre-Reent assistant examiners, as examiners for the Federal!erve Bsnk of Cleveland. Please advise us of the

1"ee upon which the appointments become effective and

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"also as to salary rates."

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Approved unanimously.

Letter to Mr. Edison H. Cramer, Chief, Division of Research

44c1 Statistics, Federal Deposit Insurance Corporation, Washington,b. 0

*) reading as follows:

"In reply to your letter of August 26, 1949, weshall be glad to make available to your office the re-

of condition of State member banks in the Fed-eral Reserve System as of June 30, 1949, for thetabulations described in your letter, under the sameconditions as those outlined in the Board's letter ofl',Ietrch 30, 194), to your office, enclosing a copy of the

heletter of the same date to Mr. Norman J. Wall of theDePartment of Agriculture, namely: (1) That the Bureau ofAgricultural Economics of the Department of Agriculture'41-11 not publish the figures obtained therefrom, or makethem available except for official use within the Depart-Illent, in a manner that would disclose figures for anyc01111tY or size group containing less than three insured.(3111mercial banks; (2) that the tabulation to be made forue Agricultural Department of the American Bankers Asso-iation is for the confidential use of the Association;411.1,d (3) that no figures for any county will be made avail-le to the Association if there are less than three in-

sUred commercial banks in the county."During this project you may also place on punch-the additional items you requested for your confi-

rntial use in making studies concerning the assets and'iabilities of all insured commercial banks."

Approved unanimously.

Letter to Mr. Leach, President of the Federal Reserve Bankot

_

"'QInd, reading as follows:

GO "There is enclosed a copy of a letter received bygov ernor Clayton from Mr. John D. Hospelhorn, Deputy Bank

Mnlissioner of the State of Maryland, dated August 30,1949,

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regarding the payment of interest by a member bank ona deposit of uninvested trust funds made by its trustdepartment in its own banking department, together witha copy of the Board's proposed reply. Before transmit-ting this reply, the Board will appreciate any commentsIihich you may have with respect to this matter."

Approved unanimously, togetherwith the following proposed letter toMr. Hospelhorn:

"This is in reply to your letter of August 30, 1949,addressed to Governor Clayton, who is at present absenttroM the city, regarding the practice of a trust company

Maryland, a member bank, in depositing uninvested cash(n individual trusts in an account in its banking depart-

and paying interest on such deposit, the interestueing distributed semiannually to the respective individ-ual trust accounts.

"from the facts stated in your letter it appearsthat the deposit in question does not comply with the re-Wirements of a savings deposit or of a time deposit asset forth in the Board's Regulation (4 and that therefore

deposit is a demand deposit on which interest may nottawfully be paid by the member bank under the law or un-uer the Board's Regulation.

"The Board has for some time had under considerationa Westion with respect to the circumstances under whichtiTinvosted trust funds of individual trusts deposited by;Ile trust department of a member bank in a single account111 its own banking department may properly be regarded as8 time deposit under the Board's regulations where the

time deposit agreement as to notice of withdrawalis entered into between the two departments. That ques-ion has not yet been determined but, irrespective of the!°11clusion which may be reached in this matter, the payment

interest on a demand deposit consisting of uninvested:.1:11st funds, which is apparently the case under the prac-'-ce described in your letter, would not be permitted un-der the law."

Secretary's Note: Upon receiving areply from Mr. Leach, the letter to

Mr. Hospelhorn was sent under date

of September 13.

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Letter to Mr. Black Cashier of the Federal Reserve Bank of

ago reading as follows:

"Reference is made to your letter of July 30, 1949,in which you advised that it appears expenses for 1949

at Your Bank will exceed the budget estimates for theYear as follows:

General Overhead $ 4,700Furniture and Equipment 19,000General Service 4,300Discount and Credit 3,700Provision of Space 84,000

"The Board accepts the revised figures as submitted,atel- appropriate notations are being made in the Board'srecords."

Approved unanimously.

411111° Afdoedit.d

Secta

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