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A meeting of the Board of Governors of the Federal Reserve

System was held in Washington on Wednesday, October 23, 1940, at

3:00 p.m.

PRESENT: Hr. Eccles, ChairmanMr. DavisMr. Draper

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

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

after referred to was taken by the Board:

Telegram to Mr. Sinclair, President of the Federal Reserve

Bank of Philadelphia, stating that the Board of Governors approves

for the Philadelphia Bank, effective as of October 24, 1940, the fol-

1"ing rates on industrial advances under section 13b of the Federal

Reserve Act:

"Advances direct to industrial or commercialorganizations: 3% to 6%

"Advances to financing institutions:On portion for which institution is obligated:same rate as borrower is charged but not toexceed 1% above the prevailing discount rate.On remaining portion: same rate as borroweris charged.

"Commitments to make advances: A% to 2%."

The telegram also stated that the Board approves the establishment by

the Bank without change of the other rates of discount and purchase

111 the Bank's existing schedule, advice of which was contained in a

telegram from Mr. Post, Secretary of the Philadelphia Bank, dated Oc-

tober 18, 1940.

Approved unanimously.

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Telegram to Mr. Leach, President of the Federal Reserve

Bank of Richmond, stating that the Board of Governors approves for

the Richmond Bank, effective as of October 24, 1940, the following

rates on industrial advances under section 13b of the Federal Reserve

Act, it being understood that the revised schedule will enable the

Bank to charge the same rate on its participation in loan made with

financing institution as is charged by such institution on its par-

"Advances direct to industrial or commercialorganizations: 4% to 6%.

"Advances to financing institutions:On portion for which institution is obligated:

1% less than rate being charged by institutionbut in no case less than 3% except that where

institution charges less than 3% the rate may

be the same as that charged by institution.

On remaining portion: A% less than rate be-

ing charged by institution but in no case less

than 4% except that where institution charges

less than 4% the rate may be same as that

charged by institution."Commitments to make advances: 1% to 2%."

Approved unanimously.

Letter to Mr. Leedy, Secretary of the Federal Reserve Bank

Of Kansas City, reading as follows:

"Referring to your letter of October 17, 1940, the

Board of Governors approves payment of salary to Mr.

William Phillips, Assistant Cashier, Head Office, forthe period December 1, 1940 to December 31, 1940, atthe rate of $5,000 per annum. The Board also approves

Payment of salary to Mr. Phillips at the above-mentioned

rate for the period January 1, 1941 to May 31, 1941, if

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"fixed by your Board of Directors at such rate."

Approved unanimously.

Letter to the board of directors of the "Matinecock Bank of

Locust Valley", Locust Valley, New York, stating that, subject to

conditions of membership numbered 1 to 3 contained in the Board's

Regulation H and the following special condition, the Board approves

the bank's application for membership in the Federal Reserve System

land for the appropriate amount of stock in the Federal Reserve Bank

Of New York:

"4. Prior to admission to membership, such bank, ifit has not already done so, shall charge off orotherwise eliminate estimated losses aggregatingA1,971.00 as shown in the report of examinationof such bank as of September 12, 1940, made byan examiner for the Federal Reserve Bank of NewYork."

Approved unanimously, together witha letter to Mr. Harrison, President ofthe Federal Reserve Bank of New York, read-ing as follows:

"The Board of Governors of the Federal Reserve Sys-tem approves the application of the 'Matinecock Bank ofLocust Valley', Locust Valley, New York, for membershipin the Federal Reserve System, subject to the conditionsprescribed in the enclosed letter which you are requestedto forward to the Board of Directors of the institution.Two copies of such letter are also enclosed, one of whichis for your files and the other of which you are requestedto forward to the Superintendent of Banks for the Stateof New York for his information.

"It is assumed that your office will follow the mat-ter of the bank's bringing into conformity with the provi-sions of law and the Board's regulations the savings

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"accounts listed on page 16(a) of the report of examina-tion for membership.

"It has been noted that one of the directors of thebank is a partner in a firm of security dealers but thathe has indicated a willingness to resign if the firm isdetermined to be engaged in the business described inSection 32 of the Banking Act of 1933. Please advise the

Board of the developments in this connection."

Letter to the board of directors of the "Union Bank and Trust

Company", Delphi, Indiana, stating that, subject to conditions of

membership numbered 1 to 3 contained in the Board's Regulation H,

the Board approves the bank's application for membership in the Fed-

eral Reserve System and for the appropriate amount of stock in the

Federal Reserve Bank of Chicago.

Approved unanimously, together witha letter to Mr. Schaller, President ofthe Federal Reserve Bank of Chicago, read-ing as follows:

"The Board of Governors of the Federal Reserve Sys-tem approves the application of the 'Union Bank and TrustCompany', Delphi, Indiana, for membership in the FederalReserve System, subject to the conditions prescribed inthe enclosed letter which you are requested to forward tothe Board of Directors of the institution. Two copies ofsuch letter are also enclosed, one of which is for yourfiles and the other of which you are requested to forwardto the Director, Department of Financial Institutions,for the State of Indiana, for his information.

"In accordance with the recommendation of the Fed-eral Reserve Bank, the application has been approvedsubject only to the standard conditions of membership.It has been noted, however, that the bank has reached anunderstanding with the Supervising Examiner for the Fed-eral Deposit Insurance Corporation as to further increasein capital account. It is assumed, of course, that youWill keep the Board advised as to further developmentsin this connection."

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Telegram to Mr. Evans, Vice President of the Federal Reserve

Bank of Dallas, reading as follows:

"Re your letter October 21 regarding Guardian Trust

Company, Houston, Texas. Board will not prescribe condi-tion of membership requiring elimination of endorsement

Upon bank's stock certificates prior to admission to mem-

bership if your bank is satisfied with assurances obtainedfrom trust company that upon approval of its applicationit will immediately take all practicable steps within itspower to eliminate such endorsement. Since it appearsthat Travis Securities Company is not a securities com-pany within meaning of section 20 of Banking Act of 1933,there does not appear from information submitted to be

any necessity for its dissolution in connection with ad-mission of trust company to membership."

Approved unanimously.

Thereupon the meeting adjourned.

Chairman.

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