View original document

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

2-28-40

/ONFIDi&TIAL

2.

I m m e d i a t e l y upon o b t a i n i n g t h e new c a p i t a l t h e Bank

shall

s e t up a n u n a l l o c a t e d r e s e r v e o f ยง 6 , 9 0 0 , 0 0 0 . 0 0 a g a i n s t t h e c a r r y i n g
of i n d i v i d u a l

occupied banking premises c r i t i c i z e d

i n the report

value

of

e x a m i n a t i o n o f A u g u s t 5 1 , 1 9 3 9 , i n c l u d i n g t h o s e shown on t h e B a n k ' s books
and i n i t s

investment

one y e a r a f t e r t h i s
c a r r y i n g values of
Bank's

investment

i n Merchants N a t i o n a l R e a l t y C o r p o r a t i o n .

reserve

is

set up, i t

Within

s h a l l be used t o r e d u c e

the

such b a n k i n g p r e m i s e s o r t h e c a r r y i n g v a l u e o f

the

i n M e r c h a n t s N a t i o n a l R e a l t y C o r p o r a t i o n , as t h e case may

b e , u n l e s s i n t h e meantime t h e Bank s h a l l have f u r n i s h e d t o t h e

Comptroller

of t h e Currency complete i n f o r m a t i o n s a t i s f a c t o r y t o him w i t h r e s p e c t

to

( 1 ) t h e a c t u a l c o s t o f each s u c h b a n k i n g p r e m i s e t o t h e Bank o r any o f
affiliated,

a s s o c i a t e d or r e l a t e d companies when such p r e m i s e was

a c q u i r e d "whether b y t h e Bank o r b y any o f i t s
r e l a t e d companies,

affiliated,

( 2 ) any c a p i t a l e x p e n d i t u r e s

any p r e m i s e a c q u i r e d as t h e r e s u l t
allowed to the s e l l e r ,

first

associated

s i n c e made, and ( 3 )

d e p r e c i a t i o n w h i c h has been t a k e n upon e a c h such p r e m i s e .

its

or
the

With respect

of purchasing another bank, the

price

e x c l u s i v e o f any i n c r e a s e t h e r e o f f o r any r e a s o n

o t h e r t h a n t h e a c t u a l value o f the p r e m i s e , s h a l l , f o r t h e purposes of
p a r a g r a p h , be deemed t o be i t s
w i t h i n the

one y e a r ,

to

cost.

Upon f u r n i s h i n g

such

this

information

t h e r e s e r v e s h a l l be u s e d t o r e d u c e t h e c a r r y i n g

value

o f e a c h s u c h b a n k i n g p r e m i s e by t h e amount o f . a d e q u a t e d e p r e c i a t i o n

during

t h e o w n e r s h i p o f t h e b u i l d i n g by t h e Bank o r any o f i t s

asso-

affiliated,

c i a t e d o r r e l a t e d c o m p a n i e s , n o t p r e v i o u s l y t a k e n , w h i c h s h o u l d have b e e n
t a k e n i n a c c o r d a n c e w i t h sound b a n k i n g p r a c t i c e s , a n d by t h e amount o f
"write-ups"o

The r e m a i n d e r o f s u c h r e s e r v e ,

undivided p r o f i t s

accounto

All

if

a n y , may be r e t u r n e d t o

purposes*




the

d e p r e c i a t i o n s h a l l be c a l c u l a t e d on t h e

b a s i s o f d e p r e c i a t i o n a l l o w e d banks b y t h e T r e a s u r y D e p a r t m e n t f o r
tax

any

income