Section 24A of the Federal Reserve
Act provides in part that no state member bank, without the board’s
approval, shall invest in bank premises, or in stock, bonds, etc.,
of any corporation holding the bank premises, if the aggregate of
all such investments will exceed the amount of the capital stock of
such bank. This language could be interpreted to mean that the aggregate
amount of all past investments in bank premises must be included each
time a state member bank proposes to make a further investment in
bank premises to determine whether the Board’s approval is required
by statute. In construing this provision of law, the Board has taken
the realistic view that only the present book value or carrying value
of past investments need be included when further investments in bank
premises are under consideration. However, the law contains no basis
for disregarding any part of proposed investments in bank premises,
and the System’s approval is required in any case in which the aggregate
investment of bank premises (the book value of past investments plus
the total proposed investment) will exceed the amount of the member
bank’s capital stock.* * * S-1317; April 30, 1951.
