19370512_minutes.pdf

688

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

'fl Was was held in Washington on Wednesday, May 12, 1937, at 12:30 p. m.

PRESENT: Mr. Eccles, ChairmanMr. BroderickMr. SzymczakMr. McKee

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

Consideration was given to each of the matters hereinafter re-

ferred to and the action stated with respect thereto was taken by the

13csard:

The minutes of the meeting of the Board of Governors of the Fed-eral

lieserve System held on May 11, 1937, were approved unanimously.

Tel egram to Mr. Young, President of the Federal Reserve Bankor

liosto-11) stating that the Board approves the establishment withoutchat

86 bY the bank today of the rates of discount and purchase in its

6146ting schedule.

Approved unanimously.

Letter to Mr. Gidney, Vice President of the Federal Reserve Bankor New

YcIrk, reading as follows:

"In accordance with the request contained in your let-ter of May 6, the Board approves the appointments on a i

per-basis of Anthony Giachetti, Frank J. Humphrey, Jr.,Robert L. Riedel, George C. Smith, and Howard D. Crosse as

alstant examiners for the Federal Reserve Bank of Newlark.

re "It has been noted that the information submitted withe,ePeot to the appointees/ indebtedness and outside business11:lasctions is as of July 1, 1936, the date such informationan! last formally reported to the Reserve bank. It is as-ti:ed, of course, that you have made sufficient investiga-

-11 in each instance to determine that there have been no

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

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"subs equent developments in these matters the results ofwhich would have an undesirable effect upon their servicesas assistant examiners for the Federal reserve bank."

Of phil

ter of May 6, the Board approves the designations of the

en1Ployees listed as assistant examiners for the Federal Re-

rrve Bank of Philadelphia. It has been noted that the des-,Plations of such employees as assistant examiners has been4-equested in order that they may be available to lend tem-!..?rarY assistance to your regular examiners, and that they7 11 not be transferred permanently to examining work withoutthe Board's approval."


Letter to Mr. Hill, Vice President of the Federal Reserve Bank

adelphia, reading as follows:

"In accordance with the request contained in your let-


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

It°11) reading as follows:

i "This refers to your letter of March 31, 1937, relat-ci R to the Board's condition of membership requiring the117?sit of securities to secure funds of trusts administeredeJ oanks and carried in their banking departments, as such

jndition applies to Connecticut State member banks andrust companies.

have A"Governor Ransom and members of the Board's staffdiscussed the Problems with which State member banks

Zn4 trust companies in Connecticut are confronted in thisth nection, and, as you know, Governor Ransom discussedhaese Problems with you recently when he was in Boston. ItenSci been suggested that, if the interested Connecticut banksre, trust companies so desire, it might be helpful if theirtIresentatives would come to Washington and discuss all! problems involved in this matter with Governor Ransom:7 other representatives of the Board. Of course, it is1-2templated that you or such other representatives of thewZaral Reserve Bank of Boston as you deem appropriate

lld also participate in any such discussion.the ."It will be appreciated if you will determine whether

interested banks and trust companies would like to have


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a conference of this kind, and, if so, advise as to a date?s ii which it would be convenient for the representatives of

banks and trust companies and your bank to be in Wash-ington.”


Memorandum dated April 20, 1937, from Mr. Baumann, Assistant

e°411sel ) with which were submitted, pursuant to the instructions of theBoard

revised drafts of letters to the Federal reserve banks and hold-comPsnY affiliates with respect to the modification of agreements

e'ecuted as a condition precedent to the issuance of general voting

1)"11118 Prior to revision of the standard form of agreement in Decem-bel„, 1936.

lOws:

The draft of letter to the Federal reserve banks read as fol-

"In its telegram of December 7, 1936, (Trans. 2433),01;e Board advised you that it had revised the standard form

agreement prescribed as a condition to the issuance ofivnel'al voting permits ana that, with respect to cases in,'10/1 holding company affiliates had executed agreements

the form theretofore required, appropriate action wouldme taken looking toward the modification of the require-ora.!.e of such agreements in accordance with the principles

the Such

described in such telegram.

"Inc108,N1 herewith is a letter to (holding company af-

tiliat )eoPi ) , inclosing three

es of an agreement executed by the Board and to be ex-

oebelltted bY such holding company affiliate if it desires toby ain

t

the modification of the agreement previously executedfol, so as to bring the latter into conformity with thete-11 now prescribed by the Board. Please transmit the let-coill'a and the three copies of the agreement to the holdingor 1.4.311Y affiliate. A copy of the letter and a fourth copy

u"s agreement are also inclosed for your files."If the agreement be executed by the holding companyarriltate please forward to the Board one executed copy,


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"together with a certified copy of the resolution author-izing the execution of the agreement. One executed copy ofthe

agreement and one copy of the resolution are to be re-tained by you. You will note that, if the holding companyaffiliate desires to execute the agreement, it must do sowithin sixty days from the date of the inclosed letter. Ifthe holding company affiliate does not desire to executethe

agreement, please advise the Board."Similar action is being taken with respect to all hold-ine°mPany affiliates which executed agreements in the form

.1&-Dequired by the Board prior to December 7, 1936. You are2ing advised concerning any other such holding company af-ates in your district in separate letters."

The draft of letter, referred to in the letter to the Federal

reserve banks as the letter to be sent to the holding company affiliates,

l'ead as follows:

"This refers to the agreement which your organizationexecuted on , 193_, in compliance with11 condition to the granting of the general voting permitWhich was granted to it under date of , 193_.

"The Board recently reconsidered its policy with re-spect to the granting of general voting permits and revisedthe

standard form of agreement which it requires holdingc

°111PanY affiliates to execute as a condition to the grant-i115 cf such permits. The Board desires that, in so far asPOSSible holding company affiliates granted general vot-jts Permits be subject to uniform requirements of a general

Zrracter and that there be no discrimination, real or ap-eat, between such organizations.

ti "Accordingly, the Board wishes to afford your organiza-thr opportunity to enter into an agreement modifying1.11; agreement previously executed by it so as to bring the

`ter into conformity with the form now prescribed by themeerd. Inclosed herewith are three copies of such an agree-

Which have been executed by the Board. If your organi-el ion desires to enter into this agreement, please execute

J of the copies within sixty days from the date of this

Of letter and return two copies to the Federal Reserve Bank

e°1311---- , together with two certified

s of the resolution authorizing the execution of suchZI:ergent- The date on which the agreement is executed by

first line should be entered in the blanks in the

line of each copy. If your organization does not


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692

"desire to enter into the agreement, please advise the Fed-Reserve Bank of , returning ell of

the copies of the agreement."

The agreements referred to in the above letters were in the fol-

1°wing forna:

"FORM FOR HOLDING COY,PAN'Y AFFILIATESWHICH ARE NOT NATIONAL BANKS

"AGREE/INT

'THIS AGREEMENT entered into on the day of 1937, bY and between

fsiliate', and the Bo , hereinafter called 'Holding Company Af-ard of Governors of the Federal Reserve

Ystem, hereinafter called 'Board':

W1TNESSETH THAT

the "WHEREAS, pursuant to the provisions of section 5144 ofRevised Statutes of the United States, the Board has

;ereto -fore granted to the Holding Company Affiliate a general

It rig permit entitling the latter to vote the stock which

°Ims or controls of the bank or banks specified therein;

a„ ,"WH1REAS, prior to the granting of such voting permitin compliance with a condition of the granting thereof,

i,e licilding Company Affiliate, in consideration of the grant-Of- such voting permit, executed an agreement dated

, 193_, (hereinafter called 'Orig-Agreement'); and

A„ "WHEREAS, the Board has offered to modify such Original'eement by deleting paragraphs numbered 4 and 5 thereof;P:11r1 the condition that the Holding Company Affiliate ac-Pt another modification of such agreement:

-0, THEREFORE, in consideration of the premises andInutuel covenants herein contained, the parties hereto

eree as follows:1. That the Original Agreement be and hereby is modi-fied --

(1) By deleting the word 'State' from paragraphnumbered 2 thereof; and

(2) By deleting paragraphs numbered 4 and 5 there-of and appropriately renumbering the succeed-ing numbered paragraphs;

SO that such agreement, as modified, reads as follows:


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"In consideration of the granting by the Board of Gov-ern°rs of the Federal Reserve System, under authority ofsection 5144 of the Revised Statutes of the United Statesand Pursuant to an application heretofore filed with theB°ard of Governors of the Federal Reserve System by theIlaersigned, of a general voting permit entitling the under-'lgned to vote the stock which it owns or controls of the

Tember bank or banks specified in such permit at all meet-1,11gs of shareholders of such bank or banks, the undersigneduersbY represents, undertakes and agrees as follows:

tiThat, as soon as practicable and, in any event,Within two years from the date such voting permitis granted, the undersigned will charge off orOtherwise eliminate from its assets,(a) the part of the carrying value on its books

of its investments in stocks of subsidiaryand/or affiliated organizations which is inexcess of the adjusted value of such stocks,after effect shall have been given to thededuction of all estimated losses of suchsubsidiary and/or affiliated organizations,all depreciation in stocks and defaulted se-curities, and all depreciation in all othersecurities not of the four highest grades,as classified by a recognized investmentservice organization regularly engaged inthe business of rating or grading securities,as shown by the latest available reports ofexamination of such organizations by the ap-propriate supervisory authorities and/oras shown by the latest appraisal of theirassets by other examiners, auditors or ap-praisers satisfactory to the designatedrepresentative of the Board of Governorsof the Federal Reserve System in the districtin which the undersigned is located,

(b) (i) all depreciation in its other stocks andin its defaulted securities, (ii) all depre-ciation in its securities not of the fourhighest grades as classified by a recognizedinvestment service organization regularly en-gaged in the business of rating or grading se-curities, (iii) all losses in all its other as-sets, - all as shown by the latest availablereports of examination by the appropriatesupervisory authorities and/or as shown bythe latest appraisal of assets by other ex-aminers, auditors or appraisers satisfactory


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•

•

•

-7-

"'to the designated representative of theBoard of Governors of the Federal ReserveSystem in the district in which the under-signed is located,

(c) all its other known losses;2. That the undersigned will take such action within

its power as may be necessary to cause each of itssubsidiary banking institutions to charge off orOtherwise eliminate from its assets as soon as prac-ticable and, in any event, within two years fromthe date such voting pernit is granted, (a) all es-timated losses in loans and discounts, (b) all de-preciation in stocks and defaulted securities, (c)all depreciation in securities not of the fourhighest grades, as classified by a recognized in-vestment service organization regularly engaged inthe business of rating or grading securities, (d)all other losses, all such charge-offs or elimina-tions to be based upon the latest available reportsof examination by the appropriate supervisory au-thorities and/or as shown by the latest appraisalof assets by other examiners, auditors or appraiserssatisfactory to the designated representative ofthe Board of Governors of the Federal Reserve Sys-tem in the district in which such institution islocated;

3. That the undersigned will take such action withinIts power as may be necessary to cause each of itssubsidiary banking institutions to maintain a soundfinanciel condition and to cause the net capitaland surplus funds of each such subsidiary bankinginstitution to be adequate in relation to thecharacter and condition of its assets and to thedeposit liabilities and other corporate responsi-bilities of such subsidiary banking institution;

4. That the undersigned will take all necessary actionWithin its power to prevent any of its subsidiarybanks and any other banks with which the undersignedor any of its subsidiaries is affilisted from here-after making, any loans or extensions of credit to,or purchases of securities under repurchase agree-ments from, the undersigned or any of its subsid-iaries or any other organizations with which theundersigned or any of its subsidiaries is affiliated,or any investments in, or advances against, securi-ties of the undersigned or any of its subsidiariesor any other organizations with which the undersigned


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"or any of its subsidiaries is affiliated, exceptWithin the same limitations and subject to the sameconditions end provisions as are applicable undersection 23A of the Federal Reserve Act to such trans-actions involving member banks end their affiliates;

That the management of the undersigned will be, andthe undersigned will take such action within itsPower as may be necessary to cause the managementof each of its subsidiaries to be, conducted undersound policies governing its financial and otheroperations, including statements issued relatingthereto; that the undersigned will maintain a sound

financial condition; that its net capital and sur-plus funds shall be adequate in relation to the

character and condition of its assets and to its

liabilities and other corporate responsibilities;and that, except with the permission of the Boardof Governors of the Federal Reserve System, it shallnot cause or permit any change to be made in thegeneral character of its business or investments.

m 'The foregoing representations, undertakings and agree-ellt are subject to the following understandings:

ties '(A) In determining the amount of depreciation in securi-cwned by the undersigned or by any of its subsidiary or

rnY

iliated organizations, appreciation in securities owned bys slleh organization may be off-set against depreciation inaecUrities owned by the same organization, provided that suchsPePreciation shall first be off-set against depreciation intieurities of the four highest grades owned by such organize-" 88 classified by a recognized investment service organ-

On regularly engaged in the business of rating or grad-eg securities.

elm '03) Whenever, under the terms of this agreement, anyth°1.1111-ta are required to be charged off or otherwise eliminated,tb 8 agreement shell be deemed to have been complied with to

extent of any valuation reserve that may be set up for thepoeurities or other assets involved; provided that, in all re-sjtE and published statements of condition, the amount of1,0, h reserves be deducted from the respective assets against".Leh they are allocated.

'(C) Whenever the stock of any of its subsidiary or af-tillated organizations is carried on the books of the under-

at less than its adjusted value, as determined in ac-With the foregoing clause numbered 1, nothing in this

'eement shell prevent the undersigned from increasing the


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mount at which such stock is carried on its books to anaraount not exceeding such adjusted value.

'(L) In case any dispute arises with any designatedrepresentative of the Board of Governors of the Federal Re-serve System as to compliance with the terms of this agreementelm such dispute involves disagreement with respect to anyaPpraisal or valuation by any examiner, auditor or appraiser,Or any recommendation or suggestion of such designated repre-sentative the undersigned shall have the right to appeal tohe Board for review and final determination.

'This agreement is executed in duplicate.'

"II. That the execution of this agreement shall not in!_tilY wise affect the force and effect of the Original Agree-ment except to the extent stated above.

"III. That paragraph numbered 2 of the Original Agree-Ment as hereby modified shall have the same force and effect:1! though it had been so worded in the Original Agreement whenIt was executed by the Holding Company Affiliate.

"IN VvITNESS WHEREOF the Bolding Company Affiliate, byjs"" duly authorized officers, and the Board, by its AssistantSecretary have caused this agreement to be signed as of theday, End year above written and their respective seals to behereunto

affixed. This agreement is executed in triplicate."

"FORM FOR HOLDING COMPANY AFFILIATESWHICH ARE NATIONAL BANKS - EXCEPT NATIONAL

SHAWMUT BANK OF BOSTON WI= THIRD RECITAL MUSTBE OMITTED AND CERTAIN OTHER MINOR CHANGES MADE

"AGREEMINT

140, "THIS AGREEMENT entered into on the day of and between

. , hereinafter called 'Holding Company Af-s,„- e', and the Board of Governors of the Federal Reserve

m, hereinafter called 'Board':

,WITNESSETH THAT

"INHEREAS, pursuant to the provisions of section 5144 oft'4 Revised Statutes of the United States, the Board has here-in °re granted to the Holding Company Affiliate a general vot-o_g Permit entitling the latter to vote the stock which it owns

controls of the bank or banks specified therein;

hREAS, prior to the granting of such voting permit andc°111Pliance with a condition of the granting thereof, the


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"Holding Company Affiliate, in consideration of the granting°I such voting permit executed an agreement dated 193_1 (hereinafter celled 'Original Agreement');

"WHEREAS, the Board has heretofore advised the Holding Cam-PanY Affiliate that it would treat the following provision ofParagraph numbered 6 of such Original Agreement as ineffectiveand that such provision would not be binding on the HoldingComPany Affiliate:

'and that, except with the permission of the Board ofGovernors of the Federal Reserve System, it shall notcause or permit any change to be made in the generalcharacter of its business or investments.'

.8111, "AND WHEREAS, the Board has offered to further modifyA-!4 Original Agreement by deleting paragraphs numbered 3 and;,hereof upon the condition that the Holding Company Af-filiate accept certain other modifications of such agreement:

the "NOW, THEREFORE, in consideration of the premises and

ar.elmutual covenants herein contained, the parties heretobales as follows:1.That the Original Agreement be and hereby is modi-

fied

(1) By deleting the word 'State' from paragraphnumbered 1 thereof;

(2) By deleting paragraphs numbered 3 and 4 thereofand appropriately renumbering the succeedingnumbered paragraphs;

(3) By adding a new paragraph numbered 5; and

(4) By adding a new paragraph lettered (D);SO that such agreement, as herein and heretofore modi-fied, reads as follows:

40 'In consideration of the granting by the Board of Gover-nors of the Federal Reserve System, under authority of section

to.t4 of the Revised Statutes of the United States and pursuant

Of 4.4!1 aPPlication heretofore filed with the Board of Governorsyo4ra Federal Reserve System by the undersigned, of a generallo,:ng permit entitling the undersigned to vote the stocki74ch it owns or controls of the member bank or banks speci-b4ad in such permit at all meetings of shareholders of suchank or banks, the undersigned hereby represents, undertakes

agrees as follows:'1. That the undersigned will take such action within

its power as may be necessary to cause each of itssubsidiary banking institutions to charge off orotherwise eliminate from its assets as soon as

•


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'2.

3.

14.

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"practicable and, in any event, within two yearsfrom the date such voting permit is granted, (a) allestimated losses in loans and discounts, (b) all depre-ciation in stocks and defaulted securities, (c) alldepreciation in securities not of the four highestgrades, as classified by a recognized investment ser-vice organization regularly engaged in the business ofrating Or grading securities, (d) all other losses, allsuch charge-offs or eliminations to be based upon thelatest available reports of examination by the appro-priate supervisory authorities and/or as shown by thelatest appraisal of assets by other examiners, auditorsor appraisers satisfactory to the designated repre-sentative of the Board of Governors of the FederalReserve System in the district in which such institu-tion is located;

That the undersigned will take such action within itsPower as may be necessary to cause each of its sub-sidiary banking institutions to maintain a soundfinancial condition and to cause the net capital andsurplus funds of each such subsidiary banking insti-tution to be adequate in relation to the characterand condition of its assets and to the deposit lia-bilities and other corporate responsibilities of suchsubsidiary banking institution;

That the undersigned will take all necessary actionWithin its power to prevent any of its subsidiary banksand any other banks with which the undersigned or anyof its subsidiaries is affiliated from hereafter mak-ing, any loans or extensions of credit to, or purchasesof securities under repurchase agreements from, theundersigned or any of its subsidiaries or any otherorganizations with which the undersigned or any ofits subsidiaries is affiliated, or any investments in,or advances against, securities of the undersigned oranY of its subsidiaries or any other organizationsWith which the undersigned or any of its subsidiariesis affiliated, except within the same limitations andSubject to the same conditions and provisions as areaPplicable under section 23A of the Federal ReserveAct to such transactions involving member banks andtheir affiliates;

That the management of the undersigned will be, andthe undersigned will take such action within its poweras may be necessary to cause the management of eachof its subsidiaries to be, conducted under sound policies


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"'governing its financial and other operations, includ-ing statements issued relating thereto; that the un-dersigned will maintain a sound financial condition;that its net capital and surplus funds shall be ade-quate in relation to the character and condition of itsassets and to its liabilities and other corporate re-

sponsibilities;5. That, as soon as practicable and, in any event, within

two years from the date such voting permit is granted,the undersigned will Charge off or otherwise eliminatefrom its assets,(a) the part of the carrying value on its books of

its investments in stocks of subsidiary and/or

affiliated organizations which is in excess of the

adjusted value of such stocks, after effect shallhave been given to the deduction of all esti-mated losses of such subsidiary and/or affil-iated organizations, all depreciation in stocksand defaulted securities, and all depreciationin all other securities not of the four highestgrades, as classified by a recognized investmentservice organization regularly engaged in thebusiness of rating or grading securities, asshown by the latest available reports of ex-amination of such organizations by the appro-priate supervisory authorities and/or as shownby the latest appraisal of their assets byother examiners, auditors or appraisers satis-factory to the designated representative ofthe Board of Governors of the Federal ReserveSystem in the district in which the undersignedIs located.

(b) (i) all depreciation in its other stocks and inits defaulted securities, (ii) all depreciationin its securities not of the four highest gradesas classified by a recognized investment ser-vice organization regularly engaged in the busi-ness of rating or grading securities, (iii) alllosses in all its other assets, - all as shownby the latest available reports of examinationby the appropriate supervisory authorities and/oras shown by the latest appraisal of assets byother examiners, auditors or appraisers satis-factory to the designated representative of the

Board of Governors of the Federal Reserve Sys-tem in the district in wnicb the undersigned

is located,


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"(c) all its other known losses.

'The foregoing representations, undertakings and agree-ments are subject to the following understandings:

'(A) In determining the amount of depreciation in securi-ties owned by the undersigned or by any of its subsidiary oraffiliated organizations, appreciation in securities owned byanY such organization may be off-set against depreciation inSecurities owned by the same organization, provided that suchaPPreciation shall first be off-set against depreciation in se-eill'ities of the four highest grades owned by such organization,

:8 classified by a recognized investment service organizationgUlarly

ties. engaged in the business of rating or grading securi-

'(B) Whenever, under the terms of this agreement, any

roUnts are required to be charged off or otherwise eliminated,4!ia agreement shall be deemed to have been complied with to

extent of any valuation reserve that may be set up for thesecurities or other assets involved, provided that, in all re-ports and published statements of condition, the amount of such

they are deducted from the respective assets against which

fleY are allocated.

'(C) In case any dispute arises with any designated repre-lentetive of the Board of Governors of the Federal ReserveSystem as to compliance with the terms of this aareement ands1;.ch dispute involves disaareement with respect to any ap-,

or valuation by any examiner, auditor or appraiser,or any recommendation or suggestion of such designated repre-

trt"ive, the undersigned shall have the right to appeal to"e Board for review and final determination.

ar,, 'N) Whenever the stock of any of its subsidiary orij'lliated organizations is carried on the books of the under-'elgned at less than its adjusted value, as determined in ac-

with the foregoing clause numbered 5, nothing in thisZl'eament shall Prevent the undersigned from increasing the7101-Int at which such stock is carried on its books to an amountnot

exceeding such adjusted value.

'This agreement is executed in duplicate.'

That the execution of this agreement shall not inany e_q_ wise affect the force and effect of the Original Agreement'eaPt to the extent stated above.

"III. That paragraph numbered 1 of the Original Agree-Critesas hereby modified shall have the same force and effect

it though it had been so worded in the Original Agreetient whenwas executed by the holding Company Affiliate.


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"IV. That the new paragraphs hereby added to the OriginalAgreement shall have the same force and effect as though theyhad been contained in the Original Agreement when it was ex-ecuted by the Holding Company Affiliate.

"IN WITNESS WHEREOF the Holding Company Affiliate, by itsd111Y authorized officers, and the Board, by its Assistant.Secretary, have caused this agreement to be signed as of the,_lEtY and year above written and their respective seals to behereunto

affixed. This agreement is executed in triplicate."

Mr. Baumann's memorandum suggested, for the reasons stated, that

hereEttter the Board require holding campany affiliates which are nationalbEtriks

to execute agreements containing paragraph 1 of the agreement, and

that the Board authorize its Assistant Secretaries to sign letters and

Prepared In accordance with the action taken relating to the

°rgani24tions which executed agreements prior to the revision of the

-grd form of agreement and which, according to the Board's records,were

still holding campany affiliates.

The letters, inclosures, and Mr.Baumann's suggestions were approved unan-tmously.

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

4"k, reading as follows:

Copy "Thank you for your letter of May 7 transmitting a

the a letter from Mr. B. A. Tompkins who representsti' ziscal Agents in this country for the Polish Stabilize-01°,11 Loan of 1927, together with a copy of a letter in-

therein, dated April 8, to the Polish Ambassadorthe French Ministry of Foreign Affairs.The State Department has advised the Board informal-

ti71,t1,1," it has already received a copy of the letter from4renoh Ministry of Foreign Affairs to the Polish Ambas-

,vtse :g°r describing the arrangement by which the French pro-; to collect payment in full on their share of the Polishtli4bilization Loan of 1927. The Department also indicatedat it was working very closely with Mr. Reuben Clark


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"of the Foreign Bondholders' Protective Council in New YorkCity, It seems unnecessary, therefore, to furnish the Sec-etarY of State with copies of the correspondence inclosedr

with.Your letter. However, it is being brought to the at-tention of the members of the Board."


Memoranda dated May 6, 1937, from Mr. Smead, Chief of the Divi-

eion of Bank Operations, stating that at the meeting of the Board of

Trustees of the Retirement System held in Chicago on April 20, 1937,

the R4168 and Regulations of the Retirement System of the Federal Re-

8"e Batks, in addition to being amended to substitute the words "Board

GI3vern°re of the Federal Reserve System" for "Federal Reserve Board",

El" the word "President" for "Governor" wherever these terms appear in

the Rules and

Regulations, were amended in the following particulars,ellbjeet

ePproval by the Board of Governors of the Federal ReserveSYsten:

SeTon 1. A definition of the terms "beneficiary" or-pcneficiaries" was added as subsection 19.

Section 3, subsection 2. The minimum age for retire-

Mant under this provision was reduced from 55 to 50Years and the 5/0 reduction in the pension for eachYear the member lacks of having attained age 60 waseliminated.

Seetinsubsection 3(b). This provision was amended

kfo make clear the fact that disability retirement isPayable only during the period of disability ratherthan throughout the life of the person retired be-ause of disability.

ecticM 3, subsection 4(a). This subsection was amendedto Clarify the subsection and to provide for the defi-nite termination of all retirement allowance paymentswhen recovery is complete, i.e., where payment of thePension has been suspended because of apparent recovery


5/12/37-16-

703

and there has been no recurrence of disability withinthe succeeding 5 years.

Section 3, subsection 5(b). A provision was added to thissubsection limiting, for a period of one year afterretirement, the death benefit payable in the case of adisability pensioner to the same benefit to which hewould have been entitled in the event of death in ac-tive service.

Secti°n 3, subsection 6. The subsection was amended toeffect a clarification of certain optional benefits.

Section 3, subsection 7. This subsection was emended togive an employee the same optional choices as to theform of the annuity, provided under the subsection ex-clusively from the employees own contributions withinterest accumulations, as would be available if hewere 65 years of age, and to Permit him to receive antmmediate annuity at any time after age 50 instead ofan annuity beginning at age 65.

Section 11. This section, which had to do with the organ-ization committee under which the Retirement System was°rganized and which has no present applicability, waseliminated.

The rneraoranda recommended that the Proposed amendments be approved by

the 8°ard, and that the Secretary of the Retirement Connittee be advisedthat the,

Board does not approve the change in subsection 17 of Section

1 cr the Rules and Regulations adopted by the Board of Trustees of the

Retil'ergent System at its meetind5, in Chicago on April 21, 1936, which

11°111d substitute the reouirement that the maximum creditable salary to

be liecd in calculating benefits and payments of contribution shall be

fIXed by the Board of Trustees, subject to the approval of the Board ofQ.c

e/,hors, for the present requirement that such maximum salary shall

11 . 12,000 per annum.



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Thereupon the meeting adjourned.

Chairman.


19370512_minutes.pdf

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