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X-1530
F E D E R A L R E S E R V E BOARD ANNOUNCEliENT
WEEK ENDED JULY 3, 1931
C H A N G E S IN S T A T E B A N K M E M B E R S H I P *
District
Capital
Date
Admitted to Membership*
None.
Cons olidations;
2
Fanners & Mechanics Bank, Jamestown, N. Y.,nonmember,$525,OOO
American National Bank,
300,000
500,000
Consolidated with Bank of Jamestown, member, . .
7- 1-31
7
Alpena National Bank, Alpena, Mich.,
Consolidated with Alpena Trust & Savings Bank,
Alpena, Mich., mem her
6-24-31
8
Peoples National Bank, Hillsboro, 111.,
Consolidated with Montgomery County Loan & Trust
Co., Hillsboro, 111., member
150,000
200,000
100,000
5-29-31
100,000
Closed:
7
7
Farmers State Savings Bank, Milford, Mich., . . . .
Lapham State Savings Bank, Northvilie, Mich,, . . .
25,000
50,000
6-30-31
6-30-31
P E R M I S S I O N G R A N T E D TO E X E R C I S E TRUST P O W E R S :
6
First National Bank in Decatur, Ala. (Full powers)
6-30-31
X-1530
FEDERAL RESERVE BOARD ANNOUNCEMENT
WEEK ENDED JULY 10, 1931
CHANGES IN STATE BANK MEMBERSHIP:
District
Date
Admitted to Membership:
None.
PERMISSION GRANTED TO EXERCISE TRUST POWERSt
2
6
Merchants National Bank in Plattstourg, N. Y. (Full powers)
First National Bank in Decatur, Ala. (Limited powers}
(reported last week, in error, as having full powers)
1
6-16-31
6-30-31
8
X-1530
FEDERAL 3ESERV2 BOaHD ANNOUNCE!31NT
WEEK ENDED JULY 17, 1931
CHANGES IN S M P E BANK MSiaBERSHIP:
District
Capital
Date
^100,000
7-14-31
Reclamation State Bank, Newell, S. Dak.,member, 25,000
Irrigators State Bank, Nisland,S. Dak.,
nonmern'ber,
10,000
Consolidated under charter and title of
Reclamation State Bank, member,
25,000
6-20-31
Admitted to Membership*
None.
Closedi
State Savings Bank, Pent on, M c h
Consolidation;
PERMISSION GRANTED TO EXERCISE TRUST POWERS:
6
8
First National Bank in Gulfport, lass. (Full powers)
First National Bank, Jackson, Tenn.
(Limited powers)
7-13-31
7-15-31
>
X-1530
FEDERAL RESERVE BOARD ANNOUNCEMENT
WEEK ENDED JULY 24, 1931
CHANGES IN STATE BANK MEMBERSHIP;
District
Capital
Date
Admitted, to Membership:
None.
Absorption of National Bank:
2
Manufacturers Trust Co., New York, N. Y.,member,^27,500,000
absorbed the Lebanon National Bank,
500,000
7-15-31
Voluntary Withdrawals:
7
9
Lowden Savings Bank, Lowden, Iowa,
Minnetonka State Bank, Excelsior, Minn.,. . . .
25,000
25,000
7-23-31
7-24-31
PERMISSION GBANTBD TO EXERCISE TRUST POWERS:
1
11
Iforstic River National Bank, %stic, Conn. (Pull powers)
First National Bank, Corsicana, Tex.
(Confirmatory)
5-29-31
7-23-31
X-1530
FEDERAL RESERVE BOARD ANNOUNCEMENT
l V E ENDED JULY 31, 1931
iEK
CHANGES IN STATE BANK MKBERSHIP:
District
Capital
Date
Admitted to Membership*
7
Central Republic Bank & Trust Co., Chicago, 111.
$14,000,000
(Successor to Central Trust Co. of Illinois, member)
7-25-31
Absorbed by National Bank:
4
Steubenville Bank & Trust Co., Steubenville, 0.
650,000
Absorbed by National Exchai^e Bank, Steubenville, 0.
Consolidation:
7-30-31
7
Ottumwa Savings Bank, Ottumwa, Iowa, member, . . .
Iowa National Bank,
"
"
, . . .
Ottumwa National Bank,
"
"
, . . .
Wapello County Savings Bank,"
" , nonmember,. .
Above banks consolidated under new charter and
title of Union Bank & Trust Co.,
7-11-31
PERMISSION GRANTED TO EXERCISE TRUST POWERS*
None.
100,000
200,000
100,000
50,000
300,000
X-1550
FEDERAL RESERVE BOARD ANNOUNCE,ZBNT
WEEK ENDED AUGUST 7, 1931
CHANGES IN STATE BANE MEMBERSHIP;
District
Capital
Date
Admitted, to Membership:
2
American Express Bank & Trust Co., New York, N. Y.
$10,000,000
8- 6-31
Closed;
2
2
2
4
American Union Bank, New York, N. Y.,
International-Madison Bank & Trust Co.,New York,N.Y.
Times Square Trust Co., New York, N. Y.,
Minerva Savings & Bank Co,, Minerva, Ohio, . . . .
Absorption of National Bank*
2
Labor National Bank, Jersey City,*N. J., . . . . .
absorbed by
New Jersey Title Guarantee & Trust Co., member,. .
PERMISSION GRANTED TO EXERCISE TRUST POWERS i
None.
1,000,000
1,750,000
1,000,000
125,000
8- 5-31
8- 5-31
8- 5-31
7-31-31
400,000
7-31—51
2,000,000
E
X-1530
FEDERAL RESERVE BOARD AMOUNtiEKENT
WEEK ENDED AUGUST 14, 1931
CHANGES IN STAKE B A M MflBEB3HIP:
District
Capital
Date
Admitted to Hiembership:
9
State Savings Bank,
Esoanaba, Mich.,
$100,000
8-12-31
200,000
8-14-31
Bank of Dearborn, Dearborn, llch., member,
200,000
Union State Bank, nonmember,
200,000
Bank of Commerce, nonmenber,
200,000
Consolidated under charter of Bank of Dearborn and
title of Guardian Bank of Dearborn, a member.
8- 1-31
Voluntary Withdrawal;
1
tenotomy
Trust Co.,
Arlington, llass.,
Consolidation;
7
Closed:
8
Bank of Kenning,
Henning, Tenn.,
PERLISSION GRANTED TO EXERCISE TRUST POWERS:
None.
100,000
8-13-31
b
X-1530
FEDERAL RESERVE BOAED iNNOUNCEIvENT
WEEK ENDED AUGUST 21, 1931
O R A N G E S IN STATE B A N K M E M B E R S H I P :
Distriot
Capital
Date
Admitted to Membership:
None.
Consolidation of State Members:
2
Ivlidwood Trust Co., Brooklyn, N. Y., member, . . . ^1,000,000
Manufacturers Trust Co., New York, N. Y., member,
1,000,000
Consolidated under charter and title of latter.
6-11-31
Closed:
4
4
7
7
Commerce Guardian Trust & Savings Bank, Toledo, 0.
Union Savings & Trust Co., Warren, 0.,
Citizens State Bank, Big Rapids, ilich.
Peoples State Savings Bank, Britton, Ilich.,. . . .
1,400,000
550,000
50,000
25,000
8-17-31
8-20-31
8-21-31
8-20-31
3,500,000
500,000
400,000
8-17-31
8- 5-31
20,000
50,000
7-25-31
Absorption of Nonmembers:
5
7
10
American Bank & Trust Co., Richmond, Va., member,
absorbed Richmond Trust Co., nonmember, . . . .
Alpena Trust & Savings Bank, Alpena, Mich., member,
absorbed Montmorency County Savings Bank,
Hillman, Mich., nonmember, . . . .
Fidelity State Bank, Aurora, Nebr., member,. . . .
absorbed Giltner State Bank, Giltner, Nebr.,
nonmember
25,000
P E R M I S S I O N G R A N T E D TO E X E R C I S E TRUST POVFLSRS:
4
6
Logan National Bank & Trust Co., New Kensington, Pa.
(Limited powers)
Florida National Bank & Trust Co. in Miami, Fla. (Full powers)
8-14-31
8-14-31
E
9
X-1530
FEDERAL RESERVE BOARD ANNOUNCEfclENT
WEEK ENDED AUGUST 28, 1931
CHANGES IN STATE BANK MEMBERSHIP:
District
Capital
Date
Admitted to Membership: ,
6
7
Greene County Union Bank, Greensville, Tenn.,
Union Bank & Trust Co», Otturawra, Iowa,
. . . . ^75,000
300,000
8-27-31
8-22-31
Absorption of National Bank:
2
Peoples Bank & Trust Co., Passaic* N. J., member,
absorbed the American National Bank of Passaic,
. . 850*000
. . 200,000
8-26-31
FirSt-Citizens Trust Co., Columbus, Ohio, member, . 2,500,000
absorbed by bhio National Bank of Columbus, . . . 1,500,000
8-24-31
Absorbed by National Bank*
4
Closed 8
2
2
7
7
Globe Bank & Trust Go., Brooklyn, N. Y. *
B&nk of Europe itust Co«, N e w York, Ni Y . , . . . . .
State Bank of Caledonia, Caledonia, Mldli.
Dansard State Bank, iflbnroe, Eich., . . . *
1,525,000
1,000,000
50,000
200,000
8-22-31
8-27-31
8*-22-3l
8-28-31
Consolidation of State Ifembeirs:
7
7
Liliey State Bank, TecumSeh, Mch<, meimbei', . « . .
Tedumdeh State Savings Bank, member, . .
Consolidated under chart at1 of the latter and title
of United Savings Bank, member,
40,000
50,000
8*19-31
50,000
Vo lUntary Wi thdratoalt
7
Gilbert Savings Bank# Gilbert, Iowa, . . .
25,000
8-27-31
PERMISSION GRANTED TO EXERCISE TRUST POWERS:
2
7
First National Bank in Sidney, Sidney, N. Y. (Full powers)
Second National Bank, Belvidere, 111.
(Supplemental)
8-26-31
8-26-31
X-1530
FEDERAL R . avs BOARD AlJltOUNCEMENT
WEEK ENDED SEPTE13ER 4, 1931.
CHANGES BT STATE BANK MEMBERSHIP:
District
Capital
Di.te
Admitted to membership:
None.
Absorption of National Bank:
y
Ivknufacturers Trust Co., New YOrk, N. Y., member,
Absorbed the Brooklyn National Bunk,
. $, 27#500,000
1,500,000
8-25-31
400,000
9- 2-31
Closed:
7
B . y City Bank, Bay City, Mich
i.
Absorption of Nonmember:
7
Chemical State Savings Bank, Midland, Mich., member, . . .
Absorbed Peoples State Savings Bank, nonmember, . . . .
50,000
50,000
9- 1-31
50,000
8-26-31
Absorption by National Bank:
12
Security State Bank, Odessa, Washington, member,
Absorbed, by Old Na tional Bank & Union Trust Co
Spokane, Washington,
. . . .
. . . 1,500,000
PERI I SSI ON GRATED TP SICERCISE TRUST POWERS:
I
None.
X-1530
FEDERAL RESERVE BOARD AJMOUNCEMENT
WEEK ENDED SKPTEMB3R 11, 1931.
CHANGES IN STATE B A M les^RSHIP:
Distrlct
Capital
Date
Admitted to Membership:
None „
Absorbed by State Member;
5
Union Bank & Federal Trust Co., Richmond, Va.,
member,
i750,000
Absorbed by Bank of Commerce & Trusts, Richmond, . 600,000
member
9- 8-31
Closed:
7
State Savings Bank, Caro, Mich., .
75,000
9- 8-31
PERMISSION GRANTED TO ZEROISE TRUST POWERS:
3
Harleysville Rational Bank, Harleysville, Pa. (Full Powers)
9— 8—31
12
X-1530
FEDERAL EESBRVE BOARD ANNOUNCEMENT
WEEK ENDED SEPTEMBER 18, 1931.
CHANGES IN STATE BANK MEMBERSHIP:
District
Capital
Date
Admitted to Membershipt
None.
Consolidations:
2
Continental Bank & Trust Co., New York, N. Y.,member,$6,000,000
International Trust Co., member
3,200,000
Straus National Bank & Trust Co., . . .
2,000,000
Consolidated under charter and title of
Continental Bank & Trust Co., member,
6,000,000
2
Manufacturers Trust Co., New York, N. Y., member, . .27,500,000
Midtown Bank, New York, N. Y., nonmember
769,000
Bryant Park Bank, New York, N. Y., nonmember, . . . .
500,000
Consolidated with and under the charter and title of
Manufacturers Trust Co., member,
27,500,000
7
Home State Bank for Savings, Grand Rapids, Mich.,
member,
American National Bank, Grand Rapids, Mich., . . . .
Security National Ba#k,
Consolidated under the charter of the Home State
Bank for Savings and under the title of
American Home Security Bank, member,
400,000
500,000
500,000
9-15-31
8- 4-31
8-25-31
9-15-31
400,000
Closed:
7
7
7
11
Peoples State Bank, Flushing, Mich.
State Savings Bank, Ionia, Mich.,
Fanners State Bank, Vicksburg, Mich.,
First State Bank & Trust Co., Snyder, Texas
25,000
100,000
40,000
50,000
9-12-31
9-12-31
9-16-31
9-18-31
PERMISSION GRANTED TO EXERCISE TRUST POWERS:
3
Hatboro National Bank, Hatboro, Pa. (Full powers)
9-15-31
13
X-1530
FEDERAL RESERVE BOARD ANNOUNCEMENT
WE2K 3IDED SEPTEMBER 25, 1931.
CHANGES IN STATE BANK MEMBERSHIP:
District
Capital
Date
Admitted to Membership:
7
Guardian Bank of Royal Oak, Royal Oak, Mich.
$100,000
9-18-31
Change of Title:
The Peoples Trust Co., Binghamton, N. Y., has changed its
title to Marine Midland Trust Co. of Binghamton.
9-25-31
Absorbed by National Bank:
S
American State Bank, St. Marys, Ohio, member,
absorbed by First National Bank of St. Marys
50,000
60,000
9-19-31
Dime Bank Title & Trust Co., Wilkes-Barre, Pa
500,000
Union State Savings Batik & Trust Co.,Kewanee, 111. ..150,000
Slaton State Bank, Slaton, Texas
,
25,000
Citizens Bank & Trust Co., Pocatello, Idaho
. ... 100,000
9-22-31
9-21-31
9-21-31
9-23-31
Closed:
3
7
11
12
PERMISSION GRANTED TO EX2RCISE TRUST POWERS:
None
14
X-1530
FEDERAL RESERVE BOARD iUMOUNCEMENT
Y f J EKDSD OCTOBER 2, 1931
flK
District
CHANGES IN STATE BANK MEMBERSHIP:
Capital
Date
Admitted to Membership:
None
Qlosed;
3
1
4
5
7
7
7
11
11
12
Miners Savings Bank & frust Co., Olyphant, Pa. . . $350,000
Union Savings Bank & Trust Co., Steubenville, 0. . , 350,000
Broadway Bank & Trust Co., Richmond, Va. . . . . . .
300,000
Peoples Trust & Saving# Bank, Clinton, la. . . . . .
300,000
American Savings ,&ank & Ti?ust Co., Davenport, la. . 1,600,000
Farmers & Merchants State Bank, Carson City, Mich .
25,000
First State Bank, Cross Plains, Tex
30,000
City Central Bank & Trust Co., San Antonio, Tex. . 1,300,000
Holtville Bank, Holtville, Calif
75,000
9-30-31
10- 2-31
9-26-31
9-30-31
10- 1-31
9-28-31
10-1 -31
9-28-31
9-24-31
PERMISSION GRANTED TO EXERCISE TRUST POWERS:
7
7
7
7
Albion National Bank, Albion, Ind.
,
First National Bank, Aurora, 111.
First National Bank in East Chicago," Ind.
Union National Bank of Indiana Harbor at East
(Limited)
9-30-31
(Full)
9-29-31
(Full)
10- 1-31
Chicago, Ind. (Full) 10-1-31
15
X-1550
FEDERAL RESERVE BOARD ANNOUNCEMENT
WEEK ENDED OCTOBER 9-, 1931.
CHANGES m
Dis
trict
STATE BANK MEMBERSHIP:
Capital
D;te
Admitted to Member ship:
9
Security B:.nk & Trust Co ., Madison, So* Dak
$50,000
10- 6-31
Glenside Bank & Trust Co., Glenside, Pa.
..
300,000
Dime Savings Bank, Canton, Ohio
..
500 ,000
Citizens Savings Bank, Upper Sandusky, Ohio ......... 50,000
Moville Skate Bank, Moville, Iowa
35,000
10- 3-31
10-^5-31
10- 8-31
10- 8-31
Closed";
3
4
4
7
Absorbed by National Bank:
ii'
First State Bank, Corsicana, Texas, member,
absorbed by State National Bank of Corsicana
PERMISSION GRANTED TO ZXZRCISE TRUST P0;./ERS:
None
200,000
300,000
10- 3-31
16
11530
FED2RAL RJSZRVE BOARD AMNOUNCBENT
RAE ENDED OCTOBER IE, 1931.
CHANGES IN STATE BANK MEMBERSHIP:
Pisbrief
Capital
Date
Admitted to Membership:
4
Potters Bank & Trust Co., East Liverpool, Ohio, . , #580,000
10- -31
-13.
Closed:
3
4
4
5
5
11
Wildwood Title & Trust Co., Wildwood, N. J.,
City Trust & Savings Bank, Toungstown, Ohio,
Dollar Savings & Trust Co., Youngstown, 3hio,
Grafton Banking & Trust Co., Grafton, W. Va.,
Peoples Trust Co., Martinsburg, W. Va.,
Ballinger State Bank, Bellinger, Tex.,
.
.
.
.
.
.
.
•
.
.
.
100,000
. 1,000,000
. 2,500,000
.
100,000
.
250,000
.
40,000
10- -31
-15.
10- -31
-15.
10. -31
-1510. -31
-1010. -31
-1610-10--31
Absorbed by National Bank:
5
Hardy County Bank, Moorefield, W. Va., . . . . . .
absorbed by South Branch Valley National Bank, . .
50,000
100,000
10. -31
-13-
Change of Title:
12
. *
-Knight Trust & Savings Bank, Provo, Utah*,
title changed to First Security Bank
10. 8- -31
Voluntary Withdrawal:
12
Multnomah Commercial & Savings Bank, Multnomah, Ore.
10--13-31
6
CO
1
PERMISSION GRANTED TO EXERCISE TRUST
25,000
Calcasieu National Bank.in Lake Charles, La. (Full powers)
10-- 5-31
17
X-1530
FEDERAL RESERVE BOARD ANNOUNCEMENT
W E E K E R D E B O C T O B E R 23, 1 9 3 1 .
C H A N G E S IN S T A T E B A M
MEMBERSHIP:
District
Capital
Date
Admitted to Membership:
None
Absorption of National Bank:
4
Woodlawn Trust Co., Aliquippa, Pa., member,
absorbed the Aliquippa National Bank
^125,000
100,000
10-15-31
Absorption of Nonmember:
4
Union Trust Co., Greensburg, Pa., member,
. . . . .
absorbed the Maddas Bank & Trust Co., Greensburg, .
.
(nonmember)
Succeeded by National Bank:
400,000
150,000
9-24-31
12
Inland Empire Bank, Pendleton, Ore., member, . . . .
Succeeded by First Inland National Bank, Pendleton,
250,000
400,000
10-19-31
100,000
50,000
...
250,000
1^.000,000
.
100,000
75,000
50,000
. . .
200,000
35,000
35,000
10-23-31
10-19-31
10-22-31
10-22-31
10-19-31
10-17-31
10-20-31
10-23-31
10-23-31
10-21-31
Closed:
2
3
4
4
6
7
7
8
11
11
Amherst Bank, Williamsville, N. Y.,
Bank of Auburn, Auburn, Pa.,
City Savings Bank & Trust Co., Alliance, Ohio,
Ohio-Merchants Trust Co., Massillon.#, Ohio
Citizens Banking Company, Eastman, Ga
First State Bank, Petoskey, Mich.,
United Savings Bank, Tecumseh, Mich
Fidelity Bank & Trust Co., St. Louis, Mo., .
First State Bank, Monday, Tex.,
First State Bank, Seymour, Tex., . . . .
PERMISSION GRANTSD TO EXERCISE TRUST POWERS:
None
X-1530
FEDERAL RESERVE BOARD AI3IOUNCSCNT
1E2K ENDED OCTOBER 30, 1931.
CHANGES IN STATE BAHK MEMBERSHIP:
District
Capital
Date
Admitted to Membership:
4
Commercial Bank, Delphos, Ohio,
^75,000,
10-27-31
Absorbed by State Member;
2
500,000
Utica Trust & Deposit Co., Utica, N. Y., rember,
absorbed by First Bank & Trust Co., member, . . .1,500,000
10-26-31
Absorption of Nonmember:
3
7
Equitable Trust Co., Atlantic City, N. J., member, 200,000
absorbed Chelsea Safe Deposit & Trust Co., nonmem. 100,000
State Bank of Cuba, Cuba, 111., member, . . . . .
50,000
absorbed State Bank of I t " Darid", TIT,:,nonmem.
Si'
15,000
10-13-31
10-10-31
Absorption of National Bank:
3
Equitable Trust Co., Atlantic City, N. J., member,
absorbed Pacific Avenue National Bank,
200,000
200,000
10-13-31
Federation Bank & Trust Co., New York, N. Y. . . . 750,000
•
10-30-31
CLOSED:
2
PERMISSION GRANTED TO EXERCISE TRUST POWERS:
7
Old-First National Bank in Bluffton, Ind. (Confirmatory)
10-28-31
19
X-1530
FEDERAL RESERVE BOARD AEITOUNCMENT
' B T ENDED NOVEMBER 6, 1931.
73C
CIL-iHGSS IN STATE BANK IEMBERSHIP:
District
Capital
Admitted to Membership:
' Date
,
None
Closed:
3
4
4
8
Peoples Trust Co., Frackville, Pa.,
125,000
Union Trust Co., Dayton, Ohio
1,500,000
Farmers Savings & Trust Co., Mansfield, Ohio, . • •
225,000
Lawrence County Bank, Walnut Ridge, Ark., . . . . .
100,000
PERMISSION" GRANTED TO EXERCISE TRUST POWERS:
None
11- 4-31
10-31-31
11- 4-31
11- 5-31
X-1530
FEDERAL RESERVE BOARD ANNOUNCEMENT
WEEK ENDED NOVEMBER 13, 1931.
1
Pis
trict
CHANGES IN STATE BANK MEMBERSHIP:
Capital
Date
Admitted to Membership:
None
Consolidation of State Members:
2
2
Ridgefield Park Trust Co., Ridgefield Park, N. J., .
Overpeck Trust Co., Ridgefield Park, N. J., . . . .
Consolidated under charter of the former and title
of Ridgefield-Overpeck Trust Co., member. .
^100,000
150,000
11-2-31
11-2-31
.
100,000
11-12-31
.
50,000
11-12-31
Voluntary Withdrawal:
2
Trust Company of Wyoming County, Warsaw, N. Y., .
Closed:
11
Beevilie Bank & Trust Co., Beeville, Texas, . . .
PERMISSION GRANTED TO EXERCISE TRUST POWERS:
None
2:
X-1550
FEDERAL RESERVE BOARD ANNOUNCEIvENT
UEEK ENDED NOVEMBER 20, 1931.
CHANGES IN STATE BANK KEMBERSHIP.:. .:
Dis—
trict
Capital
Date
Admitted to Membership:
None
Consolidation of State Members;
2
2
Citizens Trust Co., Utica, N. Y., member, . .
First Bank & Trust Co., Utica, N. Y., member,
Consolidated under charter of the latter and
of First Citizens Bank $ Trust Co., member,
. . . *>1,625,000
. . . 1,500,000
title
...
11-14-31
*'
250,000
50,000
11-14-31
11-16-31
Reopened:
5
9
Peoples Trust Co. , Martinsburg, W. Va.,
State Bank of Madelia, Madelia, Minn.,
•
PERMISSION GRANTED TO EXERCISE TRUST POWERS:
2
Auburn-Cayuga National Bank & Trust Co., Auburn, N. Y.
(Confirmatory; full powers)
11-18-31
22
X-1530
F3D3RAL RL,S :RVE BOARD ANNOUITCSIENT
'"QSK "IIDED NOV325BZR 27, 1931.
District
C ANGES IN STATS BAMC I SI ©IRSHI?:
Capital
Date
Admitted to Membership:
None
Absorption of Nonmember:
10
Sundance State Bank, Sundance, Wyo
absorbed Hulett State Bank, Hulett, Wyo., nonmember,
^25,000
15,000
11-14-31
11
Commercial American Bank & Trust Co. Shreveport, La.
(member)
absorbed Continental Trust & Savings Bank, nonmem.
and changed title to Continental-American Bank
& Trust Co.
300,000
10-31-31
400,000
700,000
Absorbed by National Bank:
11
First State Bank, Wortham, Texas, member
absorbed by First National Bank, Wortham, Texas,
50,000
60,000
11-14-31
50,000
60,000
11-27-31
11-23-31
25,000
11-25-31
Closed:
5
8
Westminster Bank, Westminster, S. C.
Farmers State Bank, Conway, Ark.
. . . . . .
Voluntary Withdrawal:
9
Powder River County Bank, Broadus, Mont.
....
PERMISSION GRANTED TO 3X3RCISE TRUST POKERS:
12
First Inland National Bank, Pendleton, Ore.
(Full Powers)
11-23-31
X-1530
FEDERAL R3SER1/E BOARD ANNOUNCEMENT
WEEK ENDED DECEMBER 4, 1931.
CHANGES IN STATE BANK MEMBERSHIP:
Dig
trict
Capital
Date
Admitted to Membership:
None
Consolidations:
2
Peoples Bank & Trust Co., . fcssaic, N. J., member, . .
^ity Trust Co., Passaic, N.. J., nonmember,
Lincoln National Bank of Passaic
Consolidated under charter and title of
Peoples Bank & Trust Co,, member.
4
First City Trust & Savings Bank, Akron, Ohio, member,
Central Depositors Bank & Trust Co., Aleron, member,
Consolidated under charter of former and title of
First Central Trust Co., member.
>850,000
400,000
500,000
12- 1-31
3,750,000
2,750,000
10-18-31
Oak Park Trust & Savings Bank, Oak Park, 111., member, 1,000,000
absorbed North Oak Park State Bank, nonmember, . . .
100,000
11- 1-31
Dallas City Bank, Dallas, Ore., member, . . . . .
absorbed Bank of Falls City, Ore., nonmember
Absorption of Nonmembor:
7
12
. .
50,000
15,000
11-30-31
....
....
100,000
50,000
11-30-31
11-30-31
Closed:
8
12
Community Bank & Trust Co., Hot Springs, Ark.,
Commercial Bank, Okanogan, Wash., . . . . . .
PERMISSION GRANTED TO EXERCISE TRUST POWERS:
2
Farmers National Bank, Sussex, N. J., (Supplemental)
11J-30-31
24
X-1530
FEDERAL RESERVE BOARD ^TNOm T CBENT
WEEK ENDED DECEMBER 11, 1931.
District
Capital
Date
Admitted to Membership:
None:
Absorbed by State Member:
3
North York State Bank, York, Pa., member,
absorbed by York Trust Co. of York, a membar, . . . .
:J40,000
750,000
12-4-31
100,000
150,000
11-30-31
Succeeded by Nonmember:
3
The Qlyphant Bank, Olyphant, Pa., member,
Succeeded by Mid-Valley Trust Co., nonmember, .
. .
Absorption of Nonmember:
"2 New Jersey Title Guarantee &-Trust Co., Jersey.City,N."J# 2,000,000
absorbed the following nonmembers:
(member)
Bank of Lafayette, Jersey City, . . . . . . . . . . .
125,000
Ocean Avenue Bank, Jersey City, . . . . . . . . . . .
150,000
12-10-31
11 Citizens State Bank, Greenville, Texas, membar,
absorbed First State Bank, Campbell, nonmember,
100,000
17,500
11-30-31
100,000
12- 7-3&
200,000
25,000
12-11-31
12-11731
. . .
Voluntary Withdrawal:
4 State Bank of Bowling Green, Bowling Green, Oljio, . . .
Closed:
8
11
Bank of Jonesboro, Jonesboro, Ark.,
First State Bank, Coahoma, Tex,,
. . .
PERMISSION GRANTED TO EIGRCISE TRUST POWERS:
10
First National Bank in Larned, Kansas, (Limited powers)
12- 5-31
*
2 5
X-1530
FEDERAL RESERVE BOARD AlJNOTJNCEMBNT
WEEK ENDED DECEMBER I l , 1931.
f
CHANGES IN STATE B A M I3MB J33HIP:
District
Capital
D; te
Admitted to Membership:
2
10
Hibernia Trust Co., New York, N. Y.,
Merchants Bank of Kansas City, Mo., . . . . . . .
'>3,000,000
200,000
12-17-31
12-15-31
200,000
100,000
12-15-31
12-15-31
12-12-31
12-14-31
Closed:
1
2
7
12
Inman Trust Co., Cambridge, Mass., . . .
Community Trust Co., Middleport, N. Y.,
Michigan State Bank, Eaton Rapids, Mich.,
Fremont County Bank, Sugar City, Iv.aho,
75,000
25,000
PERMISSION GRANTED TO EXERCISE TRUST POVERS:
None
X-1530
FEDERAL RESERVE BOARD ANNOUNCBIIENT
Y/EBK ENDED DECELBEB 25, 19 31
CHANGES IN STATE BANK MFXBEBSHIP;
13'
rii
Capital
Date
Admitted to Membership;
None.
Merged with No nm ember:
2
American Express Bank & Trust Co.,New Ycrk,N.Y..member, ^10,000,000
Equitable Trust Co., New York, N. Y., nonmember,
2,000,000
Consolidated under the title of the Equitable Trust
Co., nonmember (trust business retained; banking
business immediately transferred to Chase Nat. Bank).
12-19-31
Absorption of National Banks
2
2
6
8
Linden Trust Co., Linden, N. J., member,
Absorbed Linden National Bank, Linden, N. J., . . . .
Continental Bank & Trust Co., New York, N. Y., member,
Absorbed Industrial National Bank, New York, N. Y., .
Bank of Statesboro, jStatesboro, Ga», member
Absorbed First National Bank, Statesboro, Ga., . . .
200,000
200,000
4,000,000
1,500,000
100,000
100,000
12-23-2]
Absorbed by National Bank:
Franklin-American Trust Co., St. Louis, Mo., member, .
Absorbed by First National Bank in St. Louis, Mo., .
2,600,000
12,100,000
12-22-31
625,000
40,000
50,000
750,000
100,000
500,000
12-22-3?
12-1v~T_
12-22-31
12-22-31
12-24-3'
12-19-33.
12-19-0..
12-23-51
Closed:
2
5
7
7
8
12
Seacoast Trust Co., Asbury Park, N. J.,
Franklin Bank, Franklin, W. Va., .
Albion State Bank, Albion, Mich.,
American State Savings Bank, Lansing, Mich.
Peoples Exchange Bank, Bussellvilie, Ark.,
Hibernia Com,l & Savings Bank, Portland, Oreg.,. . . .
PERMISSION GBANTED TO EXERCISE TBUST POWERS:
None.
K
2 ?
X-3962
BANKS REPORTED CLOSED - V f E ENDED JULY 5, 1931
flK
(For confidential use only - subject to correction!
Member "banks indicated by an asterisk (*).
Surplus
& profits
Total
deposits
Name of Bank
City
State
Date
closed
District No. 2
Steneck Trust Co.,
•First National Bank
Hohoken
Genoa
N. J.
N. Y .
June 27 1,000,000
it
25,000
30
District No. 4
Farmers Bank Co.
Jenera
Ohio
June 29
25,000
June 26
South Boston Va.
Kingwood
W. Va. July 1
200,000
75,000
25,000 1,186,000
97,000
479,000
100,000
66,000
11
70,000
20,000
June 27
it
27
II
29
II
27
tl
29
ft
30
tt
30
II
30
July 1
tl
2
II
2
tl
2
II
2
150,000
150,000
100,000
25,000
100,000
25,000
25,000
50,000
50,000
75,000
50,000
11,000
300,000
82,000 1,360,000
72,000 1,161,000
63,000
657,000
548,000
18,000
819,000
133,000
136,000
7,000
16,000
324,000
63,000 1,225,000
8,000
216,000
40,000
415,000
46,000
696,000
—
—
49,000
144,000 1,617,000
June 23
300,000
130,000
145,000
25,000
20,000
15,000
80,000
25,000
4,000
10,000
1,000
33,000
11,000
150,000
150,000
43,000
899,000
399,000
District No. 5
•Boston National Bank
Bank of Kingwood
District No. 6
Pulaski
Citizens Bank
Tenn.
"branches at: Prospect and M n o r Hill.
Montgomery Ala.
Citizens Bank & Trust Co.
District No. 7
•First National Bank
Berwyn State Bank
Twelfth Street State Bank
Iyons State Bank
Gary Trust & Svgs. Bank
First State Bank
•Farmers State Svgs. Bank
•Lapham State Svgs. Bank
•First National Bank
Dundee State Bank
State Savings Bank
Farmers & Merchants Bank
Immel State Bank
Lyons
Gary
Hartford
Milford
Northville
Elliott
Dundee
Flat Rock
Tipton
Chicago
District No. 8
Title Guarantee Trust Co.
Louisville Ky.
District No. 9
•Merchants National Bank
First State Bank
Union Bank
Northwestern State Bank
Farmers State Bank
Boyal Oak
Bermgm
it
Mich.
111.
it
it
Ind.
Mich.
tl
ft
Iowa
111.
Mich.
It
111.
June 29
tt
Willow City,N.Dak.June
Plevna
Mont. tt
Antler
N .Dak. it
it
Chippewa Falls Wis.
Kenyon
Minn. July
27
26
26
29
2
REOPENED:
District No. 8
6- 1-31
Miller County Bank & Tr. Co . Texarkana Ark.
Capital
912,000 19,096,00(
42,000
299,000
11,000
200,000
787,000
—
—
Date open
75,000
52,000
6-27-31
28
X-3962
B A M S REPORTS!? CLOSED - WEEK ENDED JULY 10, 1931
(For confidential use only - subject to correction)
Member tanks indicated fry an asterisk (*).
Name of Bank
Pity
State
Date
closed
Capital
Surplus
& profits
Total
deposits
District No. 5
•First National Bank
Federalsburg
M.
July 3
25,000
13,000
280,000
111.
Mich.
111.
July 6
"
1
"
10
200,000
241,000
612,000
8,000
2,670,000
445,000
109,000
District No. 7
Roseland State Savings Bank
Chicago
Guaranty Trust Co.
Detroit
Spring Grove State Bk Spring Grove
750,000
25,000
District No. 9
Faraiers State Bank
Southern State Bank
District No. 10
Gillam-Jackson Loan
& Trust Co.
•First National Bank
•First National Bank
Winsted
Southern
Minn. July
N. Dak. "
3
8
20,000
10,000
2,000
5,000
237,000
40,000
Maryville
Mo.
"
Okla.
3
6
3
120,000
75,000
35,000
24,000
4,000
320,000
627,000
199,000
11
July
"
"
25,000
Date open
REOPENED:
District No. 9
Havana State Bank
Havana
N. Dak.11-25-30
25,000
6,000
7- 1-31
BANKS REPORTED CLOSED ~ WEEK ENDED JULY 17, 1931
(For confidential use on^y - subject to correction)
"banks indicated by an asterisk (»).
" Date '
Name of Bank
City
State closed
Capital
Surplus
i profits
s
2
Total
deposits
District No. 3
Northwestern Trust Co. Philadelphia,Pa.
July 17
200 ,000
2,682 ,000
8,939 ,000
July 13
II
17
40 ,000
50 ,000
31 ,000
28 ,000
371 ,000
566 ,000
N. C.
July 13
,000
15,
1 ,000
61 ,000
Joliet
111.
New Hampton,Iowa
Fenton
Mich.
Lawler
Iowa
July 11
ft
13
ft
14
ft
15
200,
,000
100,
,000
,000
100,
50,
,000
173 ,000
29,
,000
15,
,000
3,260;,000
867,
,000
675,
,000
325,
,000
Everton
Mo.
July 13
25,
,000
6,
,000
222,
,000
Fairfax
Minn.
July 10
20,
,000
5,
,000
475,
,000
10
11
13
13
13
14
15
15
25,000
50,000
50,000
20,000
30,000
25,000
25,000
10,000
12,
,000
49, 000
8,
,000
13,
,000
3,000
10,000
18,000
2,000
261,
,000
976,
,000
219,
,000
630,
,000
293,000
353,000
400, 000
97,000
July• 13
ft
13
It
15
ft
15
14,000
10,000
25,000
50,000
1,000
2,000
19,000
1,576,000
600,000
150,000
387,000
Mt. Pleasant,Utah July 16
50,000
85,000
321,000
District No. 4
Center "burg Svgs.Bk.Co. Centerburg Ohio
•Third National Bank
New London it
District No. 5
Garner Bkg & Tr. Co.
Garner
District No. 7
•Will County Nat. Bank
•Second Nat. Bank
•State Savings Bank
State Savings Bank
.„
District No. 8
Bank of Everton
District No. 9
Citizens State Bank
Farmers & Merchants
State Bank
Bau Claire Svgq.Bank
Citizens Bank
Farmers & Merch. Bank
•First National Bank
Peoples State Bank
Kellogg State Bank
Farmers State Bank
Plentywood Mont.
Eau Claire Wis.
Minot
N.Dak.
Kindred
N.Dak.
Scobey
Mont.
Bloomer
Wis.
Kellogg
Minn.
Garden City "
ft
ft
tl
ft
ft
ft
ft
It
District No. 11
Peoples Exchange Bank
Power Banking Co.
Security State Bank
•Floyd County Nat.Bank
Archer City,Tex.
ft
?!
Lockney
Floydada
tl
If
ft
. -
District No. 12
Mt» Pleasant Com*!
& Svgs. Bank
REOPENED:
District No. 8
Bank of Caneyrille
Caneyrille
Ky.
District No. 9
State Bank of Roberts
Plum City State Bank
Roberts
Plum City
Wis.
ft
Date open
11-19-30
30,000
33,000
7-16-31
1- 6-31
7-15-30
10,000
10,000
7,000
6,000
7- 1-31
7-13-31
X-3962
BANKS REPORTED CLOSED - WEEK ENDED JULY 24, 1931
(For confidential use only - subject to correction)
Member banks indicated by an astefiWk (*)
Qi
Surplus
& profits
Total
deposits
50,000
30,000
25,000
10,000
5,000
7,000
181,000
139,000
82,000
July 20
25,000
1,000
138,000
July 21
100,000
50,000
350,000
Name of Bank
City
State
Date
closed
District No. 4
Commercial Bank
Harrod State Bank
Nova Banking Co.
Marion
Harrod
Nova
Ohio
i
t
n
July 20
21
"
"
24
Camden
on Gauley
W.Va.
District No. 6
•First National Bank
Greensboro
Ala.
District No. 7
Beaver Valley Svgs.Bk
Belmond Savings Bank
State Bank of Belmond
Bank of St. Lucas
•Greenville Nat. Bank
Wadena Savings Bank
Far.& Merch.Svgs.Bank
Parkersburg Iowa
»
Belmond
1
1
n
t
t
St. Lucas
Greenville Mich.
Iowa
Wadena
i
t
Durant
July
"
"
"
"
"
"
Barlow
Drakesboro
Ky.
"
July 24
"
24
20,000
30,000
12,000
12,000
127,000
104,000
Willow Lake
Stanley
Armour
Mekinock
Tolstoy
S.Dak. July 20
"
21
Wis.
22
S.Dak. "
22
N.Dak. "
22
S.Dak. "
25,000
50,000
35,000
10,000
15,000
28,000
26,000
5,000
6,000
9,000
345,000
523,000
435,000
46,000
82,000
Mb.
Hans.
July
"
"
"
18
20
20
23
25,000
25,000
10,000
10,000
6,000
7,000
4,000
3,000
208,000
110,000
46,000
51,000
Texas
July 20
100,000
July 20
50,000
78,000
237,000
37,000
112,000
Date open
7-14-31
7-22-31
Capital
District No. 5
Peoples Bank
20
21
21
21
20
21
24
15,000
420,000
50,000
478,000
8,000
25,000
10,000
412,000
80,000
(no figures available)
300,000
19,000
50,000
25,000
7,000
221,000
38,000
867,000
50,000
District No. 8
Bank of Barlow
Citizens Bank
District No. 9
Far. & Merch. Bank
Far. & Meroh.State Bk
Citizens State Bank
Eekinook State Bank
Farmers State Bank
District No. 10
Bank of lynch
Lynch
•Walthill National Bank, Walthill
Wentworth
Bank of Wentworth
Milton State Bank
Milton
Nebr.
i
t
District No. 11
Bank of Crowe11
District No. 12
North Sanpete Bank
Crowell
Mt.Pleasant Utah
REOPENED:
Metropolitan Bk & Tr.Co.,Norfolk
Va.(5) 1- 5-31
Citizens Bank, Monroe, ¥is.(Dist. 7)
1- 7-31
55,000
100,000
I
.
S I
X-3962
BANKS REPORTED CLOSED - WEEK ENDED JULY 31, 1951
(For confidential use only - subject to correction)
Member "banks indicated " y an asterisk (*).
b
Name of Bank
City
State
Date
closed
Capital
Surplus
& profits
Total
deposits
District No. 2
Prisco State Bank
•First National Bank
New York
Ripley
N. Y.
N. Y.
July 28
i
i 30
250,000
25,000
274,000
20,000
2,303,000
600,000
District No. 3
•First National Bank
Beaverdale
Pa.
July 28
50,000
103,000
736,000
District
Farmers
Farmers
Amherst
Martinsville, 0.
Ohio
Elida
i
f
Amherst
July 27
It
29
It
30
50,000
25,000
50,000
9,000
5,000
8,000
141,000
139,000
655,000
No. 4
Bank
Bank
Svgs.& Bkg.Co.
District No. 7
Ypsilanti Savings Bank
First Tr. & Svgs. Bank
Nashville Savings Bank
Ladora Savings Bank
Oom'l Bank of James
Livingston & Co.
State Savings Bank
Clarion Savings Bank
Lorimor State Bank
Farmers Savings Bank
Bank of Holmes
Deckerville Mich.
Lanestoro
Iowa
i
t
Clarion
i
i
Lorimor
i
i
Meservey
n
Holmes
District No. 9
Pioneer State Bank
First State Bank
•Steele County Nat. Bank
Lunds State Bank
State Bank of Waverly
First State Bank
District No. 10
Peoples Bank
Garfield County Bank
Bank of Lincoln County
Ypsilanti
Melcher
Nashville
Ladora
Mch.
Iowa
Ilich.
Iowa
July 25
n
27
it
27
it
27
232,000 2,055,000
100,000
166,000
35,000
3,000
(no figures available)
200,000
50,000
13,000
27
27
28
29
30
31
15,000
30,000
50,000
25,000
20,000
5,000
1,000
28,000
1,000
15,000
7,000
Glentana
Grace City
Finley
Vining
Waverly
Grenville
Mont. July 23
24
N. Dak • "
II
II
27
it
27
Minn.
29
S. Dak
i
i 29
II
20,000
10,000
25,000
10,000
10,000
10,000
10,000
11,000
2,000
5,000
8,000
55,000
149,000
160,000
75,000
59,000
93,000
Fairfax
Enid
Hershey
Mo.
Okla.
Netr.
July 27
It
27
It
29
15,000
50,000
25,000
2,000
24,000
9,000
90,000
1,126,000
213,000
District No. 12
Lumber mans Bk & Tr. Co. Longview
Wash.
July 30
60,000
12,000
367,000
Dis t.
Fern Creek
8. Bank of Fern Creek
9. Prinsburg State Bank Pr ins'burg
REOPENEDT
11-24-30
Ky.
-31
Minn. 6-15-
15,000
10,000
10,000
7,000
Date open
7-25-31
7-30-31
»»
tt
it
tt
it
it
."
—
-
—
93,000
150,000
500,000
113,000
345,000
128,000
X-3962
BANKS BEPOBTED CLOSED - WEEK ENDED AUGUST 7, 1951
(For confidential use diily - subject to Correction)
Ilember "banks indicated " y an asterisk (•).
b
Name of Bank
City
State
Date
closed
District No. 2
•American Union Bank New York
N. Y. Aug. 5
•International Madison
tt
5
Bank & Trust Oo.
New York
N. Y.
tt
M
5
•Times Square Trust Co. "
"
•Notional Bank of
tt
6
Union City
N. J.
North Hudson
ft
ft
»
tt
6
•Union City Nat.Bank
ft
tt
M
ft
6
Bergenline Trust Co.
M
ft
6
Jersey City
Jackson Trust Co.
8
Bk., Ft. Plain,N. Y. ft
Farmers & Mechanics !
Capital
Surplus
& profits
.
*
"
Total
deposits
1,000,000
750,000#
6,500,000
1,750,000
1,000,000
1,450,000#
1,000,000*
6,500,000
1,400,000
600,000
300,000
100,000
300,000
100,000
1,027,000
129,000
60,000
157,000
230,000
8*686,000
1,010,000
925,000
1,430,000
1,460,000
125,000
50,000
24,000
10,000
50,000
57,000
17,000
45,000
1,000
22,000
1,099,000
205,000
630,000
150,000
362,000
#Surplus only.
District No. 4
•Minerva Svgs.& Bk.Co . Minerva
Citizens Cora*l Bank WaynesfieId
Butler Deposit Bank Butler
Far .5: Merch. Bank
Leesburg
Bank of Wayland
Way land
*
t
it
Ky.
Ohio
Ky.
July 31
Aug. 1
M
1
1
1 4
n
6
District No. 7
•Oconto National Bank Oconto
Wis.
Aug. 1
60,000
19,000
it
•First National Bank Boyne City
Mich.
3
50,000
12,000
It
Peoples State Bank
Cissna Park 111.
3
25,000
3,000
Nashville State Bank Nashville
Mich. July 27
65,000
30,000
(in lieu, of Nashville Svgs. Bank , reported last week in error)
State Bank of
Oconto Falls Wis.
Aug. 4
50,000
.45,000
tt
First State Bank
Piano
111.
6
25,000
50,000
ft
Bank of Popejoy
Popejoy
6
Iowa
10,000
3,000
tt
ft
Hubbard State Bank
Hubbard
7
50,000
18,000
ft
ft
Toledo Savings Bank Toledo
7
50,000
30,000
District No. 8
Stock Growers Bank
Bank of Emma
Farmers Bank
v
Ohio
Purdin
Emma
Livonia
Mo.
Aug. 1
ft
4
ft
7
30,000
20,000
10,000
District No. 9
Wallace State Bank
Wallace
Corsica State Bank
Corsica
Far.& Merch. St ate Bk Chetek
Security State Bank Watford City
Commercial State Bank,Kennebec
S.Dak. Aug. 1
M
ft
3
ft
4
Wis.
N.Dak. ft
5
S.Dak. tf
4
15,000
25,000
36,000
15,000
30,000
District No. 10
Burrton State Bank
Farmers State Bank
Kans.
Nebr.
Burrton
Sutherland
M
tl
July 31
Aug. 3
REOPENED BANKSt
None.
35,000
25,000
29,000
8,000
10,000
817,000
612,000
55,000
1,000,000
591,000
550,000
165,000
230,000
382,000
132,000
109,000
98,000
7,000
59,000
267,000
264,000
113,000
195,000
4,000
9,000
172,000
182,000
mm
9,000
5,000
wm
mm
X-3962
BANKS REPORTED CLOSED - WEEK ENDED AUGUST 14, 1931
(For confidential use dhly - subject to correction)
Member tanks indicated " y an asterisk (*).
b
Date
closed
Capital
Surplus~
& profits
Total
deposits
District No. 2
•Lanufacturers Nat.Bank Mechanicville,N.Y.
Aug.10
100,000
193,000
3,184,000
District No. 4
Beaver Valley State Bk: Weeks "bury
Ky.
Aug. 10
25,000
11,000
135,000
District No. 5
State Bank of Trapse
Id.
Aug. 14
10,000
28,000
288,000
111.
Ind.
Iowa
Aug. 10
25,000
1,000
111,000
t
t 10 100,000
24,000
481,000
T
l 10
40,000
32,000
435,000
tt
10
50,000
17,000
600,000
tt
10
50,000
12,000
848,000
1
1
8
(no figures available)
tt
11
50,000
25,000
700,000
ft
12
25,000
9,000
96,000
5
1 13
25,000
8,000
165,000
it
13
30,000
13,000
345,000
Aug. 8
20,000
47,000
303,000
t
t 10
15,000
17,000
254,000
tt
13 100,000
—
294,000
Name of Bank
City
State
Trappe
District No. 7
Beddick State Bank
Reddick
LaGrange Co.Trust Co. LaGrange
Farmers Savings Bank
Wheatland
Ulch Bros. State Bank Solon
it
Farmers State Bank
Cloverdale State Bank Cloverdale
•First National Bank
Polo
Farmers Bank
Buckingham
McCallsburg State Bank IdcCallsburg
Sunbury
Di9W#&%yN«%v gngs Bank
Security Bank
Dutzow
Farmers & laerch. Bank Center
•Bank of Henning
Henning
District No. 9
Spooner State Bank
Spooner
•First National Bank
Parshall
•First National Bank
Plaza
•First National Bank
Ryder
•First National Bank
Van Hook
First State Bank
Watford City
Chelsea State Bank
Chelsea
Farmers State Bank
Emery
•First National Bank in Mb. Vernon
Avon State Bank
Avon
Bank of Stanley
Stanley
District No* 10
State Bank of Omaha
Farmers & Kerch. Bank
•First National Bank
South Omaha State Bank
Farmers & Kerch. Bank
Bank of Kremlin
Omaha
ti
Colony
Omaha
Hopkins
Kremlin
It
tt
111.
H
»»
Iowa
»t
Mo.
tt
Term.
Wis.
Aug.
N .Dak. ft
It
t
t
tt
1
1
5
8
8
8
8
11
12
12
12
14
13
25,000
25,000
25,000
25,000
25,000
15,000
15,000
40,000
25,000
55,000
15,000
8,000
10,000
16,000
15,000
10,000
5,000
4,000
15,000
12,000
35,000
4,000
295,000
160,000
278,000
150,000
245,000
316,000
67,000
275,000
195,000
409,000
73,000
Aug. 10
tt
10
it
13
it
14
it
14
it
14
300,000
50,000
25,000
100,000
10,000
10,000
229,000
1,000
7,000
92,000
22,000
1,000
3,358,000
701,000
176,000
1,233,000
139,000
37,000
It
tt
1
1
S.Dak.
tt
tt
ti
tt
tt
tt
it
tt
tl
N.Dak.
Nebr.
tt
Kans.
Nebr.
Mo.
Okla.
REOPENED:
None.
BANKS BEPOBTED CLOSED - WEEK ENDED AUGUST 21, 1931
(For confidential use only - subject to correction)
X-3962
*.1
><
' • O-i
s
Member "banks indicated " y an asterisk (•).
b
Name of Bank
N. Y.
Aug.21
200,000
28,000
2,010,000
Toledo
Ohio
Aug. 17
200,000
70,000
1,510,000
Toledo
Ohio
Aug. 17 1,400,000 1,766,000
26,416,000
Toledo
Ohio
Aug. 17 3,000,000
5,531,000
51,895,000
700,000
35,000
50,000
25,000
25,000
25,000
550,000
572,000
15,000
50,000
5,000
6,000
17,000
360,000
15,610,000
210,000
482,000
82,000
130,000
496,000
3,790,000
Aug. 21
it
21
50,000
50,000
11,000
28,000
418,000
1,254,000
Va.
N. C.
Va.
W.Va.
Aug. 17
ft
20
tt
21
ft
21
250,000
25,000
25,000
85,000
66,000
2,000
5,000
23,000
1,116,000
129,000
93,000
206,000
111.
Iowa
111.
Aug. 15
tt
15
ft
17
tt
19
ft
20
ft
20
100,000
25,000
50,000
40,000
20,000
25,000
51,000
10,000
15,000
12,000
2,000
7,000
775,000
304,000
274,000
140,000
400,000
172,000
Aug. 20
M
20
It
21
100,000
25,000
50,000
55,000
7,000
90,000
855,000
244,000
1,816,000
S. Dak.Aug. 17
It
it
17
N.Dak. tt
17
tt
18
Wis.
It
19
Minn.
15,000
50,000
10,000
25,000
10,000
6,000
14,000
12,000
4,000
3,000
69,000
350,000
61,000
207,000
120,000
25,000
12,000
563,000
Toledo
Ohio
Aug. 17
Jeffersonville, 0. ft
17
ft
Metamora
Ohio
17
tt
Point Place ft
18
ft
tt
Hoytville
18
ft
tt
ISaumee
18
it
ft
20
Warren
Warren
Canton
District No. 5
Hopewell Bank & Trust Co. ,Hopewell
West Durham
Bank of West Durham
Merchants & Farmers Bank, Ivor
Blacksville
Dunkard Valley Bank
District No. 7
Arlington
Arlington Hei^its
Heights
State Bank
Lehigh
•First National Bank
Hanover
Hanover State Bank
Farmers Bank
North Henderson
demons
Bank of demons
Duncombe
Duncombe Savings Bank
Banking House of AnderIda Grove
son Lipton & Co.
•Peoples State Svgs.Bank Britton
Big Bapids
•Citizens State Bank
District No. 9
Trail City
Security State Bank
Farmers & Merchants Bank, Britton
Lefor
Lefor State Bank
Fairchild
•First National Bank
Odessa
First State Bank
Farmers & Merchants
State Bank
Silver Lake
Total
deposits
Date
closed
District No. 2
•Bockaway Beach Nat.Bank New York
District No* 4
American Bank
•Commerce Guardian Trust
& Savings Bank
Ohio Savings Bank &
Trust Co,
Commercial Savings
Bank & Trust Co.
Citizens Bank
Home Savings Bank Co.
Point Place State Bank
Hoytville Bank Co.
State Savings Bank Co.
•Union Svgs. & Trust Co.
Citizens Com*! &
Savings Bank
American Exchange Bank
Surplus
& profits
State
City
Ohio
it
ft
Iowa
tt
Iowa
Mich.
M
tt
19
Capital
i • 85
«» *
X-3962
•
- 2 •
BANKS BEP0BT3D CLOSED - WEEK 3ND3D AUGUST 21, 1931
llemfrer "banks Indicated " y an asterisk (*)
b
Name of Bank
City
State
District No. 10
Nebr.
Omaha
Union State Bank
ti
First State Bank Pleasant Dale
ft
Dwight
Dwight State Bank
ft
Brainard State Bank Brainard
It
Bruno State Bank
Bruno
Butler County
tt
David City
State Bank
tf
Leigh
Leigh State Bank
Yfyo.
Kemmerer Savings Bank,Kemmerer
Holt
Mo.
Holt Bank
District No. 11
First State Bank
Blectra
Texas
District No. 12
•First National Bank Blythe
Calif.
•First National Bank Bancroft
Idaho
•United States Nat.Bk.Los Angeles Calif,
(with 8 tranches)
Date
closed
Aug. 1 4
Capital
Surplus
& profits
1,731,000
200,000
65,000
"
17
20,000
8,000
170,000
"
17
20,000
10,000
255,000
"
17
25,000
9,000
332,000
9,000
224,000
"
17
27,000
"
17
50,000
17,000
268,000
"
17
20,000
22,000
250,000
"
20
100,000
68,000
830,000
"
20
10,000
11,000
87,000
75,000
57,000
782,000
50,000
Aug.12
25,000
" 18
i 18 1,000,000
i
9,000
493,000
1,000
247,000
150,000
13,458,000
Aug.20
BEOPENEDvt
district No. 7
Farmers & Merchants State Bank,
Hortonville, Wis.
Total
deposits
6- 9-31
Date open
20,000
6,000
8-19-31
X-3962
OtJ
BANES REPORTED CLOSED - WEEK ENDED AUGUST %8. 1931.
(For confidential use only - subject to correction)
Member banks indicated by an asterisk (*).
State
Date
closed
Capital
N. Y.
Aug. 22
1,525,000
931,000
8 ,118,000
N. Y.
Aug. 25
200,000
125,000
2 ,640,000
N. Y«
Aug. 27
1,000,000
820,000
13 ,768,000
Aug. 22
Aug. 22
Aug. 24
25,000
50,000
200,000
6,000
50,000
325,000
130,000
919,000
2 ,862,000
Aug. 25
25,000
2,000
200,000
Aug. 27
25,000
7,000
102,000
Aug. 28
10,000
8,000
230,000
Aug. 24
25,000
19,000
502,000
District No. 6
Tallapoosa County Bank
Aug. 26
Dadeville, Ala.
27
Planters & Merchants Bank, Ozark,Ala Tt
50,000
100,000
10,000
50,000
184,000
350,000
District No. 7
Aug.
Citizens Bank Elroy
Wis.
n
Glidden Savings Bank, Glidden, la.
ii
City Trust & Svgs.Bank, Paton, la.
ii
State Bank of Caledonia, Mich.
it
State Bank of Davis, Davis, 111.
n
Citizens Bank, Sheffield, Iowa
ii
Citizens State Bank, Herscher, 111.
ii
Clio State Bank, Clio, Mich.
it
Hansard State Bank, Monroe, Mich.
Monroe State Svgs. Bank, Monroe,Mich. M
ii
Erie State Bank, Erie, Mich.
it
Peoples State Bank, Ida, Mich.
40,000
25,000
20,000
50,000
25,000
15,000
25,000
25,000
200,000
200,000
20,000
30,000
17,000
3,000
9,000
24,000
13,000
3,000
48,000
18,000
72,000
.140,000
10,000
12,000
566,000
150,000
185,000
604,000
275,000
196,000
315,000
540,000
2,
,272,000
,850,000
1,
268,000
283,000
Name of Bank
City
District No. 2.
*Globe Bank & Trust Co.
Brooklyn
*Q,ueensboro Nctl. Bank
Corona,
*Barik of Europe Tr. Co.
New York,
District No. 4.
Helena Banking Co., Helena, Ohio
*First National Bank, Wauseon, Ohio
*First National Bank, Latrobe, Pa,
Ridgeville State Bank,
Ridgeville
Corners
Ohio
Orangeville Svgs. Bk. Co.
Orangeville
Ohio
Exchange Bank, Unincorporated
Bloomdale,
Ohio
District No. 5.
Citizens Bank, Richwood, W. Va.
21
22
22
22
25
27
28
28
28
28
28
28
Profits
& surplus
Total
deposits
o 7
— 2
X-3962
—
BANKS REPORTED CLOSED - - WEEK ENDED AUGUST 28, 1931
Member banks indicated by an asterisk (* ).
Date
State closed
City
Name of Bank
District No. 8
Sweet Springs,Mb. Aug.
•First National Bank
Leavenworth State Bank,Leavenworth,Ind. it
District No. 9
Bank of Oberon
•Farmers Nat. Bank
State Bank of
•Earners Nat. Bank
District No. 10
Farmers State Bank
Bank of Hound City
Holt County Bank
Oberon
Bridgewater
Mellette
Fairfax
N.Dak. Aug.
S .Dak. ii
ii
ii
»
Inland
Mound City
Nebr.
Mo.
n
tf
ii
11
ii
ii
Aug.
Capital
Surplus
& profits
Total
deposits
24
50,000
5,000
119,000
28
25,000
5,000
190,000
22
15,000
2,000
129,000
24
25,000
16,000
263,000
24
15,000
6,000
120,000
26
25,000
10,000
207,000
26
10,000
4,000
115,000
ii
27
20,000
12,000
200,000
ii
27
20,000
35,000
252,000
Date open.
REOPENED:
District No. 5
Bank of Black Ebuntain
N. C. 11-22-30
(no figures available)8- 8-51
District No. 8
Bank of Sherman
Sherman
Miss. 12-26-30
15,000
14,000
6-24-31
District No. 10
Bank of Kremlin
Kremlin
Okla.
8-14-31
10,000
1,000
8-27-31
X-3962
BANKS REPORTED CLOSED - WEEK ENDED SEPT. 4, 1951
(For confidential use only - subject to correction)
liember "banks indicated ty an asterisk (*).
Date
closed
Surplus
Total
Capital
& profits
deposits
(Bankers' Directory,Jan.1931)
Name of Bank
Pity
District No. 3
•Portland National Bank
Parkway Trust Co.
Portland
Pa.
Philadelphia "
Aug. 31
Sept. 2
50,000
250,000
76,000
234,000
1,056,000
1,884,000
District No. 4
Curtice State Bank
Curtice
Sept. 2
40,000
23,000
542,000
State
Ohio
District No. 5
Elon College N. C. Aug. 31
10,000
10,000
Elon Bkg.& Trust Co.
Bank of Sutton
Sutton
W.Va. Sept. 1
35,000
8,000
351,000
Central Trust Co.of M . Frederick
Md.
"
2 1,000,000 1,608,000 14,682,000
with branches at: Emmittsburg, Monrovia, i^ersville, Poolesville, Smithsburg,
Sykesville, Thurmont, Union Bridge, Walkersville, Ellicott City & Iliddletown.
Bank of Pax
Pax
W.Va. Sept. 4
25,000
10,000
163,000
District No. 6
•First National Bank
Vidalia
Ga.
Sept . 1
35,000
41,000
703,000
it
•First.National Bank
Lyons
Ga.
1
25,000
10,000
175,000
It
Baldwin State Bank
Baldwin
Ga*
4
15,000
11,000
106,000
District No. 7
Farmers Savings Bank
Woolstock
Iowa Aug. 2 9
15,000
7,000
266,000
It
it
State Bank of Woolstock Woolstock
29
25,000
5,000
104,000
Farmers State Bank
Kawkawlin
Mich. It
31
20,000
7,000
160,000
It
Marquette Park State Bk. Chicago
111.
31
300,000
158,000
2,375,000
it
First State Bank
Mineral
Sept, 2
.
25,000
3,000
152,000
it
First State Bank
Frankfort
Ind.
2
100,000
80,000
900,000
it
Far. & Ilerch. Svgs.Bank Tipton
Iowa
2
50,000
15,000
482,000
it
*Bay City Bank
Bay City
Mich.
2
400,000
320,000
5,750,000
it
Princeton State Bank
Princeton
Wis.
2
60,000
30,000
700,000
it
State Savings Bank
Gait
Iowa
3
12,000
5,000
130,000
Sunfield State Svgs.Bk. Sunfield
Mich. it
3
22,000
21,000
292,000
it
it
*Inkster National Bank
Inkster
4
25,000
5,000
394,000
District No* 8
Bank of Arlington
Arlington
Ky.
Aug. 2 9
24,000
27,000
145,000
it
Clark County Svgs.Bank Kahoka
Mo.
31
20,000
17,000
235,000
Hanover Deposit Bank
Hanover
Ind. Sept. 1
25,000
5,000
56,000
A. T, Hudspeth chain;
(Bankers' Directory, July,1930)
Citizens Bank & Tr. Co. Harrison
Ark. Sept. 1
100,000
28,000
(not given)
It
it
it
Peoples Savings Bank
1
25,0P0
3,000
158,000
it
ii
Citizens Bank
Yellville
1
30,#00
10,000
466,000
with branch at:
Flippin Uiarion County Bank) .
First State Bank
Karshall
Ark. Sept. 1
25,pOO
3,000
493,000
It
ii
American Exchange Bank Leslie
1
15,000
2,000
180,000
It
it
Bank of Alpena Pass
Alpena Pass
1
10,000
1,000
133,000
It
it
Bank of Lead Hill
Lead Hill
1
10,000
1,000
79,000
II
it
Bank of North Arkansas Everton
1
10,000
2,000
89,000
- 2 B A M S REPORTED CLOSED
X-3962
WEEK ENDED SEPT. 4, 1951
lumber "banks indicated by an asterisk (*).
Date "
closed
Name of Bank
City
State
District No. 9
First State Bank
Merchants Bank
•First National Bank
Peoples Bank
Merchants State Bank
State Bank of Belview
American State Bank
•Security National Bank
Stratford
Napoleon
Westbrook
Dixon
Richardton
Belview
Howard Lake
Ho bridge
S.Dak. A u g . 2 8
29
N.Dak. «•
Iilinn. Sept, 1
,
S.Dak. ft
1
1
N.Dak. •I
ft
2
Minn.
2
3
District No. 10
Peoples Bank
Citizens State Bank
Bank of Gretna
JUaitland
Mo.
Aug. 3 1
,
Belle Plaine,Kans. Sept, 3
M
Gretna
Nebr.
4
District No. 11
Abilene State Bank
•First National Bank
•First National Bank
•First National Bank
Abilene
Smithville
El Paso
Las Cruces
ft
ti
S.Dak.
Texas
»
t»
ft
Aug.
n
ti
None.
«•»
mm
56,000
10,000
6,000
67,000
30,000
15,000
453,000
5,000
9,000
96,000
25,000
15,000
412,000
30,000
20,000
214,000
15,000
6,000
198,000
50,000
13,000
371,000
20,000
42,000
190,000
25,000
6,000
105,000
50,000
11,000
309,000
1,188,000
125,000
22,000
31
50,000
29,000
4
1,000,000
293,000
4
50,000
34,000
997,000
100,000
355,000
8,372,000
50,000
9,000
154,000
67,000
13,000
338,000
District No. 12
Ogden State Bank
Ogden
Utah
Aug. 31
•Prineville National Bank,Prineville Oreg. Sept. 1
Glendora Bank
Glendora
3
Calif.
REOPENED:
30,000
29
Sept.
,
N.liex.
~
Surplus
Total
& profits deposits
Capital
(Bankers Directory,Jan.1931)
455,000
11,828,00C
BANKS REPORTED CLOSES) - W S M EMBED SEPTHOER 11> 1 9 3
.,1
(For confidential ua4 ot|Ly * subject to correction)
Member "banks indicated " y an asterisk (*).
b
Name of Bank
City
State
District No. 2
•Peoples National Bank
Salem
N.
District No. 3
Bosak State Bank
Simpson State Bank
Anthracite Trust Go.
Scranton
Simpson
Scranton
Pa.
Date
closed
122,000
680,000
11
500,000
75,000
500,000
930,000
58,000
501,000
5,490,000
570,000
3,525,000
Sept . 8
n
8
tt
9
tt
11
147,000
50,000
50,000
50,000
49,000
28,000
47,000
77,000
1,510,000
404,000
353,000
483,000
District No. 5
Earine Bank
Bank of Vass
Morehead City,N.C. Sept . 9
H
it
10
Vass
15,000
20,000
4,000
8,000
80,000
163,000
District No. 6
Bank of Collins
Collins
Sept . 9
15,000
5,000
57,000
O
-p
0
1
3
District No. 4
•National Bank of
Defiance
•First National Bank
Smithfield
First State Bk.& Tr.Co.Dry Ridge
Versailles
tt
ft
Ohio
it
Ky.
tt
Ga«
Sept .
tt
It
5
9
District No. 7
•First National Bank
Coin
Iowa Sept . 4
it
Ocheyedan
Bank of Ocheyedan
5
tt
«
Bank of Sumner
Sumner
5
tt
State Bank of Freeport Freeport
Mich.
5
tt
Reinbeck State Bank
Reinbeck
8
Iowa
tt
tt
•First National Bank
Randolph
5
it
Citizens Loan & Tr.Co. Frankfort
Ind.
0
M
Farmers Savings Bank
So.English
Iowa
8
ft
8
•State Savings Bank
Caro
Mich.
tt
Reynolds
Farmers State Bank
111.
8
?t
State Bank of
Bondurant
Iowa
8
tt
First Italian State Bk.Chicago
9
111.
Morton Grove Tr .& Svgs .
it
Morton Grove 111.
10
Bank
Helmer & Gortner
State Bank
Mechanicsville, la. tt 10
tt
9
Mich.
Baroda State Bank
Baroda
tt
Avon State Bank
11
Avon
111.
tt
•Farmers National Bank Trafalgar
11
Ind.
it
Ruthven
Farmers Savings Bank
Iowa
11
District No. 8
Browns State Bank
Browns
Perryville
The Old Bank
American Bank & Tr.Co. New Albany
111.
Ky.
Ind.
Sept.
,10
»t
11
tt
11
40,000
7,000
133,000
30,000
18,000
390,000
(no figures available)
25,000
13,000
278,000
—
m.
35,000
240,000
« —
.
45,000
125,000
75,000
73,000
763,000
16,000
4,000
103,000
75,000
29,000 1,120,000
25,000
360,000
20,000
25,000
14,000
268,000
200,000
80,000 1,536,000
50,000
25,000
405,000
40,000
20,000
25,000
25,000
20,000
41,000
3,000
20,000
12,000
11,000
875,000
107,000
130,000
122,000
344,000
10,000
20,000
350,000
«*»
12,000
162,000
106,000
215,000
2,684,000
!
40,000
Y.
Sept.10
Total
Surplus
& profits deposits
Capital
,
(Bankers'Directory, Jan.1931)
•
4 %
X-3962
- 2 BANES REPORTED CtOSED - W B K B M M ) SEPT31-3ER 11, 1931
[*).
IWber " a t e indicated by an asterisk I
btls
Date
closed
Name of Bank
City
State
District No. 9
Farmers Guaranty
State Bank
Farmers State Bank
Farmers State Bank
Volin
Brampton
Yale
S .Dak. Sept. 8
t
t 8
N.Dal:.
i
i 9
S .Dak.
District No. 10
Farmers State Bank
Shelly State Bank
Bank of Aline
Wynot
Shelby
Aline
Nebr.
District No. 11
Clint
•First National Bank
Cochise County State Bk Tombstone
Capital
Surplus
& profits
86,000
15,000
3,000
58,000
20,000
2,000
(no figures available)
Okla.
Sept. 8
i
i 8
i
i 8
25,000
20,000
10,000
8,000
9,000
3,000
147,000
163,000
151,000
Texas
Ariz.
Sept. 5
i
t 6
25,000
30,000
5,000
5,000
85,000
313,000
»»
Date
opened
B A M S REOPENED i
District No. 8
Louisville Trust Co.
Louisville
Ky. 11-17-30 1,750,000 1,522,000
(a member "bank when closed; reopened as a nomnember)
District No. 9
Lefor State Bank
Lefor
Total
deposits
N.Dak.8-17-51
10,000
12,000
8-24-31
9- 5-31
t
42
X-3962
BANKS REPORTED CLOSED - WEEK ENDED SEPT. 18, 1931
(For confidential use only - subject to correction)
Member "banks indicated by an asterisk (*).
Name of Bank
City
State
Date
closed
District No. 4
Vanlue Banking Co.
•First National Bank
Vanlue
Carey
Ohio
i
i
Sept .12
18
25,000
25,000
9,000
36,000
205,000
265,000
District No. 5
Bank of Beaufort
Detour Bank
Bank of Union
Beaufort
Detour
Union
N. C.
Md.
S. C.
Sept.15
M 15
i 16
i
20,000
25,000
150,000
10,000
10,000
356,000
118,000
525,000
District No. 7
•Peoples State Bank
Flushing
•State Savings Bank
Ionia
Kossuth County State Bk.Algona
Interstate Svgs. Bank
Blanchard
Peoples Savings Bank
Hardy
Kent State Bank
Kent land
Farmers State Bank
Boxholm
Farmers Savings Bank
Swea City
Lyons State Bank
Lyons
Miller & Chaney Bank
Newell
Northville State Svgs.Bk,Northville
Lee State Bank
Lee
•First National Bank
Merrill
•Farmer s State Bank
Vicksburg
Casey
Citizens Savings Bank
First State Bank
Apple fiiver
State Savings Bank
0larksvilie
Pilot Mound Svgs. Bank Pilot Mound
American, Savlngk Bank
Carroll '
Bank of Stfotts'
Sdotts
Citizens State Bank
I 5 . Vernon
vt
Edwin Nash State Bank
Clarksville
Sept .12
i 12
t
i 12
t
Iowa
f
t
i 12
i
f
t
i 12
i
i 14
i
Ind.
i 14
t
Iowa
n
i 14
i
n 14
Mich.
n 15
Iowa .
i 15
t
Mich.
n 14
111.
n 16
Iowa
i 16
i
Mich.
i 17
t
Iowa
i 16
f
111.
i 16
t
Iowa
f
t
i 16
t
f 17
t
Iowa
i 17
t
1-1 ch.
i 18
i
Iowa
i 18
t
Mich.
Mich.
i
i
District No. 8
•First National Bank
Eudora
Ark.
La Monte Bank
La Monte
Mo.
i
t
Tri-County State Bank Nelson
f
t
Eolia Bank
Eolia
Farmers State Bank
Dubois
Ind.
t
Crawford County State Bank, English f
f
t
Paoli State Bank
Paoli
Sept .12
i 14
t
i 12
i
i 16
i
i 18
t
n 18
H 18
Surplus
Total
Capital
deposit;
& profits
(Bankers' Directory,.
Jan.1931)
—
—
25,000
38,000
338,000
100,000
108,000 1,590,000
50,000
29,000
919,000
20,000
10,000
198,000
15,000
10,000
277,000
50,000
31,000
285,000
25,000
16,000
192,000
25,000
10,000
189,000
20,000
4,000
200,000
40,000
32,000
453,000
75,000
36,000
857,000
25,000
33,000
229,000
40,000
10,000
350,000
25,000
16,000
400,000
4,000
30,000
370,000
30,000
18,000
225,000
25,000
6,000
238,000
3,000
15,000
105,000
50,000
21,000 1,200,000
(no figures available)
25,000
1,000
135,000
20,000
9,000
236,000
40,000
6,000
254,000
20,000
31,000
181,000
15,000
7,000
65,000
15,000
1,000
53,000
25,000
20,000
229,000
25,000
663,000
7,000
(no figures available)
— 2
mm
X-3962
SANKS REPORTED CLOSED - WEEK ENDED JEPT. 18, 1931
lumber banks indicated BY an asterisk (•).
Name of Bank
District No. 9
First State Bank
•First National Bank in
*Labor National Bank
of Montana
•First National Bank
Peoples Savings Bank
Farmers & Merchants
State Bank
Security State Bank
Farmers State Guaranty
Bank
District No. 10
•Limon National Bank
Page State Bank
Farmers & Kerch. Bank
Wykoff
Alexandria
Minn. Sept.12
S.Dak . " 11
25,000
50,000
17,000
8,000
460,000
482,000
Three Forks
Mora
Water to v n
a
Mont.
" 12
f 14
t
Minn.
H
S.Dak *
14
25,000
25,000
100,000
8,000
5,000
14,000
177,000
465,000
556,000
New England
Waldorf
N .Dak, " 15
.
Minn.
" 16
15,000
10,000
6,000
2,000
350,000
172,000
Viborg
.
S .Dak.
16
50,000
1,000
290,000
Limon
Page
Crescent
Colo. Sept.15
Nebr.
" 14
Okla.
" 15
30,000
20,000
20,000
4,000
5,000
17,000
120,000
105,000
316,000
Texas Sept.12
M
" 15
I
I
" 18
25,000
125,000
25,000
2,000
68,000
7,000
120,000
3,290,000
75,000
18
50,000
28,000
478,000
Oreg. Sept.12
50,000
53,000
759,000
Ontario
I
I
»
"
REOPENED:
District No. 5
Bank of Chatham
Chatham
12- 1-30
Va.
(opened as a newly organized bank)
District No. 9
First State Bank
Surplus
Total
Capit al
deposit:
& profits
(Bankers* Directory, Jan. 1931)
State
District No. 11
Peoples State Bank
Bronson
•Plainview National Bank,Plainview
Delta State Bank
Edcouch
•First State Bank &
Trust Co.
Snyder
District No, 12
•First National Bank
Date
closed
City
Cleveland
Minn.
4-24-31
Date open
100,000
25,000
mm
mm
26,000
9-14-31
9-16-31
X-3962
B A M S REPORTED CLOSED - WEEK ENDED SEPT. 25. 1931.
(For confidential use only - subject to correction)
Member "banks indicated "by an asterisk (•).
Surplus
Total
Capital & profits deposits
(Bankers' Directory)
Name of Bank
City
State
Date
clo sed
District Ho. 2
Capitol Trust Co.
•First National Bank
Schenectady
Unionville
N. Y.
N. Y.
Sept.21
Sept.24
300,000
30,000
128,000 2,435,000
50,000
729,000
Wilkes-Barre
Pa.
Sept.21
325,000
907,000 3,665,000
Littlestown
Pa.
Sept.22
125,000
209,000 1,399,000
Wilkes-Barre
Wilkes-Barre
Pa.
Pa.
Sept.22
Sept.23
500,000
50,000
977,000 2,702,000
264,000 1,701,000
Pa.
Pa.
Sept.21 3,000,000 3,000,000 49,955,000
Sept.21
200,000
215,000 3,923,000
District Ho. 3
Pennsylvania Liberty
Bank & Trust Co.
Littiestown Savings
Institution
*Dime Bank Title & Trust
Co.
Heights Deposit Bank
District No. 4
•Bank of Pittsburgh, U.S. Pittsburgh
•Highland National Bank Pittsburgh
Franklin Savings & Trust
Co.
Pittsburgh
•First National Bank
Lynchburg
Merchants Savings &
Trust Co.
Pittsburgh
Peoples Bank Co.
Alliance
Pittsburgh .American
Pittsburgh
Bank & Tr. Co.
District No. 5
Loan 6 Savings Bank
York
•Alderson National Bank JLLderson
Nelson Cook & Co.
Balto.
Citizens Bank
Inman
Southern Bank & Trust
Orangeburg
Co.
District No. 6
Citizens Bank & Trust
Co.
District No. 7
Citizens State Bank
Edwin Nash State Bank
Mount Greenwood Trust
& Svgs. Bank
Pa.
Ohio
Sept. 21
Sept. 23
175,000
50,000
245,000 2,774,000
18,000
215,000
Pa.
Ohio
Sept. 24
Sept.25
125,000
100,000
89,000 1,003,000
27,000
781,000
Pa.
Sept,25
225,000
285,000 2,960,000
S. C.
W.Va.
Md.
S. C.
Sept.19
Sept.24
Sept. 21
Sept.25
857,000
100,000
140,000
25,000
26,000
520,000
-(Figures not given)
18,000
187,000
25,000
S. C.
Sep t. 25
100,000
Sept.21
80,000
58,000
573,000
Athens
60,000 1,103,000
Mt. Vernon
Clarksville
Iowa
Mich.
Sept.18
Sept.18
25,000
20,000
1,000
9,000
135,000
236,000
Chicago
111.
Sept.19
25,000
5,000
71,000
I
4 5
X-3962
u&r
BANKS REPORTED CLOSED - WEEK EMBED SEPT. 25. 1931.
Member "banks indicated by an asterisk (*).
Name of Bank
City
State
District Ho. 7 (Cont'd)
Iowa
Colfax
Citizens State Bank
Iowa
Hinton
Bank of Hinton
Mitchellville Iowa
Citizens State Bank
Iowa
State Bank of Stratford Strafford
Mich.
Climax
Climax State Bank
Romulus
Mich.
Romulus State Bank
Tomah
Wis.
Warrens Bank
•Union State Savings
Kewanee,
Bank & Trust Co.
111.
Luverne
Iowa
Bank of Luverne
Iowa
Fenton
Fenton State Bank
Muscatine
Iowa
American Savings Bank
Whiting
Iowa
Whiting State Bank
Door County State Bank Sturgeon Bay Wis.
Livermore
Iowa
Farmers Savings Bank
Rudd
Farmers State Bank
Iowa
St. Benedict Iowa
Peoples Savings Bank
•Rogers Park national
Chicago
111.
Bank
111.
Commercial Savings Bank Moline
St. Anne
111.
Farmers State Bank
logansport Loan & Trust
Logansport
Ind.
Co.
Iowa
Altoona
Altoona Savings Bank
Montrose
Mich.
Montrose State Bank
Iowa
Bode
•First National Bank
•Commercial National Bank
Mich.
St. Joseph
& Trust Co.
Manufacturers State Bank East Moline 111.
Winnebago
111.
Peoples State Bank
Salix
Iowa
Farmers Bank
District No. 8
Farmers State Bank
Crawford County State
Bank
Paoli State Bank
Liberty State Bank
Bank of Brunswick
Date
closed
Sept.19
Sept.19
Sept.19
Sept.19
Sept.19
Sept.19
Sept.19
Surplus
Total
Capital & profits de-posits
(Bankers' Directory)
50,000
15,000
30,000
35,000
20,000
20,000
25,000
10,000
1,000
15,000
15,000
9,000
57,000
10,000
358,000
187,000
413,000
386*000
176,000
747,000
610,000
Sept. 21
Sept. 21
Sept. 21
Sep t. 21
Sept. 21
Sept. 21
Sept.22
Sept. 22
Sept. 22
38,000 1,174,000
150,000
(no figures given) 539,000
25,000
206,000
25,000
72,000 2,075,000
200,000
139,000
— —
100,000
576,000
13,000
50,000
7,000
150,000
10,000
216,000
4,000
25,000
215,000
10,000
10,000
Sept.22
Sept. 23
Sept. 23
100,000
100,000
50,000
93,000 1,448,000
70,000 1,660,000
252,000
29,000
Sept. 24
Sept.24
Sept. 24
Sept. 24
150,000
25,000
20,000
25,000
139,000 1,601,000
4,000
202,000
283,000
17,000
6,000
147,000
Sept. 34
Sept.25
Sept. 25
Sept.25
200,000
100,000
25,000
15,000
217,000 3,529,000
18,000 1,103,000
90,000
9,000
120,000
6,000
20,000
229,000
Dubois
Ind.
Sept.18
25,000
English
Paoli
New Albany
Brunswick
Ind.
Ind.
Ind.
Mo.
Sept.18
Sept.18
Sept. 21
Sept,23
7,000
663,000
25,000
(no figures available)
248,000
50,000
2,000
26,000
296,000
20,000
46
-*3«
X-3962
BANKS REPORTED CLOSED - WEEK ENDED SSPT. 25. 1931.
Member "banks indicated by an asterisk (*).
Hame of Bank
District Ho. 9
Eau Claire State Bank
Union Savings Bank
Clarkfield State Bank
Ashton State Bank
Bank of Monroe
Farmers & Merchants
State Bank
First State Bank
Farmers & Merchants
State Bank
Farmers State Bank
First State Bank
Farmers State Bank
Cottonwood State Bank
First State Bank
Maynard State Bank
Bank of Wakonda
State Bank
Turner County Bank
Hazelrun State Bank
*First National Bank
City
State
Date
closed
Eau Claire
Eau Claire
Clarkfield
Ashton
Monroe
Wis.
Wis.
Minn.
S.Dak.
S.Dak.
Sept.19
Sept.19
Sept. 21
Sept.21
Sept.21
200,000
50,000
50,000
15,000
25,000
Wessington
Mercer
S.Dak. Sept.21
H.Dalt. Sept.21
22,000
10,000
7,000
3,000
138,000
30,000
Spencer
S. Dak. Sept.21
Echo
Minn. Sept.22
Reeder
• IT. D. Sept.22
Hurley Falls Minn. Sept.23
Cottonwood
Minn. Sept.23
Clearwater
Minn. Sept. 23
Maynard
Minn. Sept.23
Wakonda
S. D. Sept.23
Foster
Wise. Sept.23
Hurley
S. D. Sept. 23
Hazelrun
Minn. Sept. 24
Yiborg
S. D. Sept.22
25,000
15,000
25,000
25,000
20,000
10,000
20,000
50,000
15,000
30,000
10,000
40,000
10,000
4,000
35,000
7,000
11,000
2,000
19,000
11,000
15,000
6,000
13,000
7,000
275,000
187,000
476,000
218,000
562,000
114,000
476,000
320,000
330,000
158,000
150,000
344,000
Surplus
Total
Capital St profits deposits
(Bankers' Directory)
45,000 3,916,000
14,000
688,000
18,000
757,000
16,000
90,000
5,000
176,000
District Ho. 10
Bank of Ragan
Ragan
First Bank of Roosevelt Roosevelt
Manhattan State Bank
Manhattan
Nebr.
Okla.
Kans.
Sept.21
Sept.19
Sept.22
20,000
25,000
50,000
4,000
26,000
14,000
121,000
290,000
263,000
District Ho. 11
*Slaton State Bank
First State Bank
Texas
Texas
Sept.21
Sept. 22
25,000
50,000
2,000
2,000
236,000
40,000
Ariz.
Wash.
Sept. 21
Sept. 21
50,000
60,000
54,000
23,000
726,000
724,000
Wash.
Wash.
Sept. 21
Sept. 21
15,000
15,000
7,000
4,000
105,000
50,000
Hev.
Sept. 21
50,000
11,000
175,000
Slaton
Cajnp Wood
District Ho. 12
Security Trust & Savings
Bank
Yuma
•First National Bank
Colville
Hunters Exchange State
Bank
Hunters
Addy State Bank
Addy
Douglas County Farmers
Bank
Gardnerville
47
-4-
X-3962
B A M S REPORTED CLOSED - WEEK ENDED SEPT. 35, 1931.
Member banks indicated "by an asterisk (*) .
^ir
Uame of B r l
City
District No. 12 (Cont'd)
•Citizens Bank & Trust Co. Pocatello
State
Date
closed
Idaho
Sept.23
Surplus
Total
Capital A profits deposits
(Bankers' Directory)
100,000
34,000 1,000,000
REOPENED:
District Ho. 10
Bank of Aline
Aline
Okla.
Closed 9-8-31
10,000
Date open
4,000
9-24-31
X-3562
B . 1 j E1,0..,T1D 3L033D . '
' : j D OCTC3^1
2uJ
1J31..
( . or confident! 1 use onljr - subject bo correction)
kember tanks indicated by an asterisk (*).
__
Name of Bank
City
State
Date
closed
District Ho. 1.
Chesire Bank & Trust
Co.
Cheshire
Conn.
Sept .28
25,000
Binghamton
N. Yi
Pulaski
N. Y.
j?leisclx..anns x . Y.
i
Sept .29
Seps .29
Sept .30
250,000
£0,000
25,000
165,000 2,208,000
593,000
35,000
382,000
27,000
; .ohawk
N. Y.
Sept .30
100,000
32,000 1,148,000
Glassboro
N. J.
Sept .26
100,000
48,000
Philadelphia
Pa.
Sept .28
967,000 1,066,000 3,839,000
Olyphant
Orbisonia
,<ayne
Pa.
Pa.
Pa.
Sept .30
Sept .30
Oct. 1
550,000
50,000
50,000
510,000 3,594,000
510,000
81,000
936,000
29,000
Philadelphia
Philadelphia
Bangor
Pa.
Pa.
Pa.
Oct. 2
Oct. 2
Oct. 2
200,000
300,000
128,000
161,000 1,322,000
847,000 5,816,000
839,000
93,000
Pittsburgh
Pittsburgh
Pa.
Pa.
Sept .26
Sept .26
200,000
50,000
60,000 1,894,000
455,000
18,000
Pittsburgh
Pa.
Sept .26
125,000
81,000
Pittsburgh
Pit ssburgh
Ashland
Niles
Slickville
f it; s burr.ii
ra.
xJa •
K„y.
Ohio
Pa.
i;a.
Sept .26
Sept .26
Sept .28
oept .28
ueyt
Sept .29
300,000
75,000
800,000
150,000
19,000
100,000
327,000 3,456,000
304,000
7,000
328,000 4,638,000
170,000 2,337,000
—
—
142,000
651,000
37,000
Steubenville
Ohio
Oct. 2
350,000
394,000 3,317,000
Richmond
Ealeigh
Pamplin
yiemington
Va.
N. C.
Va.
Va.
Sept .26
Sept .26
Sept .26
Sept .26
300,000
15,000
25,000
25,000
45,000 1,659,000
480,000
74,000
240,000
16,000
382,000
65,000
District No. 2.
Citizens Trust Co.
*j?loples National Bank
"First National 3. uk
"National ilohawk Valley
Bank
District No. 3_^
* Glass"boro Title 6 Tr.
Co.
Northern Central Tr.
Co.
*1 Liners Savings Bank &
Trust Co.
*?irst National Bank
* in Line National 3k
1
Jefferson Title & j?r.
Co.
Olney Bank « Trust do
Bangor Trust Co
District No. 4.
Bloomfield Trust Co.
Garfield Bank
I cGillick Savings &
Trust Co.
Pennsylvania Bank &
Trust Co.
Hamilton State Bank
•iishland National Bank
Hiles Trust Co
Slickville first Bank
Perry State Bank
*Union Savings 3 ink &
Trust Co.
Diatrict No. 5.
•Broadway Bank i Tr.
Co.
Mechanics Savings Bk.
State Bank of Pamplin
Banlc of Piecing ton
Surplus
Capital & profits
(Bankers' Directory)
15,000
Total
deposits
208,000
512,000
362,000
X-5962
c l ^ j j - .usi; .i^ w oopoB^i 2, issi.
Lember "banks indicated tr; an asterisk {'•).
Nane of Bank
City
District Ho. 5 (Cont'd)
Bank of .eston
Oeston
Lechanics Loan & Savings Bank
Hagerstown
Co; K:ercial Bank of l d •Frederick
\
(Branches at adamstown, Jefferson
•First National Bank
Fort 1 ill
Bank of i.organtovn
i'organtown
Hancock Bank
Hancock
Townsend Scott & Sons
(irivate Bankers)
Baltimore
"•First iiitional Bank
Hagerstown
Bichwood Banking «
Prust Co.
Hichivood
Ocean City
Bank of Ocean City
"First Rational Bank
Bichwood
District Mo. 6.
Alabama Trust & Savings Bank
,est Blocton Savings
Bank
•First National Bsnk
Farmers u Merchants
Bank
Farmers & ierchants
Bank
Vienna State Bank
District No. 7.
First >->tate Bank
Farmers Savings Bank
•Ogden National Bank
Berrien County Bank
Bank of New «indsor
LBwden Savings Bank
Farmers State Bank
•Farmers & i erchant s
State Bank
Stevens ille State
Ban;::
iontrose Savings Bank
is toria State Bank
Union S . . be Bank
t:
Ottawa Banking &
Prust Co.
*Farmers National Bank
•National City Bank
Central Prust & Savings Bank
Date
closed
state
. Va.
Surplus
Capital & profits
(Bankers' Directory)
Sept .26
60,000
Potal
deposits
63,000
1,150,000
378,000
204,000
5,546,000
2,674,000
id.
i d.
and l.t.
S. C.
V. Va.
id.
Sept.26 100,000
Sept.26 200,000
Airy, Id.)
Sept.28 40,000
Sept*23 100,000
Sept.29 35,000
Id.
id.
Sept.30
(No figures given)
Sept.30 150,000
423,000
3,064,000
N. Va.
Id.
-. Va.
Oct. 2
Oct. 1
Oct. 2
50,000
15,000
40,000
32,000
18,000
17,000
505,000
260,000
503,000
Jacksonville Ala.
Sept .30
25,000
5,000
150,000
/est Blocton Ala.
i idland City Ala
Sept .30
Sept .28
25,000
35,000
55,000
17,000
176,000
104,000
Garfield
Oct. 1
15,000
15,000
46,000
West i orel-.nd lean. Oct. 2
Vienna
Ga.
Oct. 2
20,000
75,000
3,000
8,000
87,000
50,000
Ga.
8,000
270,000
241,000
364,000
2,111,000
1,048,000
xrinceville 111.
J ans on, la . Iowa
Chicago
111.
Benton Hc-rvor I ich.
New Windsor 111.
Lowden
Iowa
New Carlisle Ind.
Sept .26 50,000
:J«pt .26 50,000
Sept .26 200,000
Sept .26 50,000
Sept .28 50,000
Sept .28 25,000
Se.pt .28 25,000
12,000
40,000
51,000
56,000
v , 000
.
22,000
13,000
331,000
509,000
680,000
840,000
300,000
357,000
120,000
Carson City
, ich.
Sept .28
25,000
1J,000
203,000
Stevensville
i ontrose
Astoria
Sc.Chicago
. ich.
Iowa
111
111
Sept .28 2:,000
Sept .28 20,000
Sept .28 50,000
jepfc .29 250,000
15,000
1^,000
22,000
132,000
292,000
231,000
368,000
2,364,000
Ot fcawa
New Bedford
Ota\;a
111
111
111
Sept .29 100,000
oept .30 25,000
Sept .30 200,000
106,000
6,000
46,000
919,000
119,000
1,145,000
Bock Island
111
Sept .30 500,000
520,000
6,720,000
.
:-5962
3 BaNl.S li:3»0321D CLO^HD -
50
iiGHj 00203 S 2, 1951.
Member 'banks indicated by an asterisk (*)»
Name of Bank
District No. 7 (Cont'd)
Serena State Bank
Polish-American Bank
LSura State Bank
*American Savings Bank
& Trust Go.
Peoples Trust & Savings Bank
Peoples Trust 6 Savings Bank
He ..itt Savings Bank
Union Savings Banlc
a it
. 7.
State
Total
Surplus
_
Capital
6 profits _ depos its
(B.inkers' Directory)
Serena
111.
Grand Capitis I ich.
Laura
Ill
oept .30
Sept .30
Oct. 1
Davenport
Iowa
Oct. 1
Ottawa
111.
Sept .30
100,000
43,000
1,274,000
Iowa.
Iowa
Sept .30
Sept .30
300,000
25,000
249,000
25,000
4,18^,000
455,000
Iowa
111
I ich
111
111.
Sept .30
Oct. 1
Oct. 1
Oct. 2
Oct.;
2
50,000
400,000
100,000
200,000
100,000
29,000
255,000
119,000
47,000
36,000
473,000
5,337,000
1,351,000
585,000
1,005,000
111.
111.
Oct . 2
Oct. 2
200,000
100,000
94,000
140,000
703,000
669,000
111.
111.
Iowa
I ova
Iowa
Iowa
: ich
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
2
2
2
2
2
2
2
100,000
25,000
40,000
20,000
30,000
100,000
12,000
1 ich.
Oct. 2
300,000
150,000
2,669,000
Sept,
,19
Sept.
,19
Sept.
,19
10,000
85,000
25,000
4,000
15,000
16,000
60,000
531,000
410,000
Sept.
,26
Sept. 28
75,000
10,000
25,000
16,000
646,000
SO,000
,28
Sept.
Sept.29
10,000
10,000
6,000
6,000
£0,000
35,000
Sept.25
Sept. 30
25,000
30,000
11,000
75,000
166,000
457,000
Sept.24
~>ept.24
Sep t.25
Sept.28
Sept.26
oept.26
Sept.26
25,000
75,000
30,000
25,000
20,000
15,000
15,000
36,000
29,000
15,000
19,000
5,000
3,000
2,000
386,000
343,000
162,000
201,000
120,000
20,000
150,000
Clinton
De Witt
Wilton Junction
"Calumet national Bank Chicago
*First National Bank
Heed City
Brighton Park State 3k Chicago
Hegewisch State Bank
Chicago
I.arshall Square State
Bank
Chicago
•First National Bank
Kewanee
LaSalle Savings Bank &
Prust Go.
LaSalle
Utica State Banlc
Utica
Citizens Savings Bank " j s Liberty
.et
Pruro Savings Banlc
Truro
Thor oavin^s Bank
Thor
American Savings Bank i a-uoketa
Banlc of Swartz Greek
Swartz Greek
Peoples state Banlc for
Savings,
iuskegon
District No. 8.
Fremont State Bank
Fremont
Mo.
Martin Bank
- rtin
Tenn.
Jefferson County Bank Jeffersontov.rn I>y.
Exchange Bank & Trust
Co.
Dermocb
Ark
F rmers Bank
Chilhowee
l:o.
Bank of Portage Des
Portage Des
Sioux
j 0.
Sioux
Jacksonville Savings Bk Jacksonville Mo.
Somerville Bank & Trust
Co.
Somerville
Tenn
reo. les Banlc
Searcy
i.k
ir
District No. 9.
Adams County State Bk Hettinger
N.Dak.
'First National Bank
Sisseton
S. Dak.
"First National 3 nk
Hankinson
N. Dak.
First State Banlc
Regent
N. Dak.
Missionhill State Bank Lissionhill S. Dak«
Farmers State Banlc
Bat oleview
N. Dak.
Elgin State Bank
Elgin
N. Dak.
Date
closed
25,000
16,000
(No figures given)
25,000
5,000
290,000
140,000
,600,000 1,534,000 33,000,000
1;
32,000
501,000
30,000
338,000
13,000
167,000
39,000
162,000
27,000
318,000
75,000 , 954,000
29,000
390,000
,1-3962
banfs
4
r
cufjD JLoy:D - ^nir iiwij ocpobib 2, m i .
-janber banks indicated by an asterisk (»).
Name of
Bank
District ko. 9 (Cont'd)
Sheyenne V lley Bank
Nassau otate Bank
Tirst State Bank
Volin ota^e Bank
jt 08 B , l
,nc
farmers & merchants
utate 3ank
First State Bank
First State Bank
Olmsted County Bank L
Trust Co.
First State B . n
,.k
*F: rmers & m erchants
National Bank
First ot:ite Bank
security State Bank
District No. 10.
,'armers u 1'erchants
.
State Bank
Cedar Oounby State Bk.
:igate State Bank
Farmers state Bank
Citizens Bsnk of
Acchinson County
Citizens ^tate Bank
Fortiyce State Bank
State Bf.nl: of B v^nna
feo.les State Ban..
Stock Grovers State Bk
j?otal
deposits
25,000
' 15,000
30,000
30,000
15,000
8,000
9,000
27,000
13,000
5,000
197,000
95,000
781,000
200,000
84,000
15,000
20,000
IS,000
6,000
11,000
7,000
111,000
268,000
90,000
75,000
10,000
56,000
7,000
649,000
139,000
50,000
10,000
10,000
23,000
30,000
5,000
692,000
261,000
171,000
Sept.25
Sept.25
Sept»28
Sept.28
25,000
35,000
10,000
15,000
7,000
11,000
2,000
4,000
560,000
250,000
30,000
101,000
Sept.28
Sept.29
ijept. 30
*jept. < 0
^
Oct. 1
Oct. 2
20,00015,000
20,000
25,000
50,000
25,000
100,000
10,000
25,000
16,000
8,000
50,000
513,000
48,000
446,000
248,000
336,000
501,000
State
Eathryn
Nassau
Elgin
Volin
Holi-quist
N. Dak. Sept .26
Sept.28
: inn.
Sept.26
-.inn.
k •J) i «
3 S-. C oept.28
oept . i
.6
xtoslyn
Strum
Benner
a.jvak. oepc.29
s e pt. 6
,isc.
S. Dak. uept.30
Rochester
Glenville
I inn.
.
linn.
'-ebster
Pierpont
Hallid.y
S. Dak. oe./t. 2 8
j. Dak. Oct. 2
N.Dak. Oct. 1
Ben.keli.an
Hartington
Aaate
Najer
Nebr.
Nebr.
Colo.
Nebr.
Bock,ort,
; 0.
Okla.
Carmen
Nebr.
Fordyee
Nebr.
Itaverma
Grand Island Nebr.
-vj 1 * - v C- - Colo
D'k
District No. 11.
* City National Bank Ci
San antonio
P C o .
Stoclcdale
First State Bank
s>
3.,zvxi,'zj- national 3... Bowie
Cisco
Cisco Banking Co.
Bunge
B m u e utate Bank
3-.stland
fezas otate Bank
l.oulton
First State B nk
Cross plains
"'First State Bank
Surplus
L profits
Date
closed
City
Oct. 1
Oct. 1
Capital
•
fezas
fe::as
J-as
s.Pexas
Da-as
j — -V
]
Jea.as
Peaas
3 a ,5.48
3ep u.28
sept.29
3a.,,;.22
Oct. 2
Ov t. Oct. 2
Oct. 1
1,300,000
40,000
50,000
100,000
50,000
100,000
50,000
50,000
591,000 14,570,000
115,000
15,000
418,000
58,000
376,000
27,000
204,000
11,000
•w .
y w
n
602,000
275,000
18,000
144,000
19,000
'
y
N »
rz (
i-3962
-5,NF3 ; i . 02J2J OLO . j l - • ::2'I
-:
j i
Ic
:Jv :i) C O M B S .
lx,'51.
• . "banks indicated "by an asterisk (»).
r
Name of B^ik
District No.12.
•Holtville Bank
Lore State Bank
Joseph State Bank
Bank of Oroville
City
Holtville
i oro
,
Joseph
Oroville
D le
i
3 ;ate , dlosed
Cal.
Ore.
Ore.
iash.
Sept.24
Sept.£6
Sept.25
Oct. 1
Surplus
fotal
Capital £ profits deposits
(Bankers' Sir .ofcory)
75,000
50,000
25,000
15,000
K50r'-jNBD:
District No. 8.
Banlc of Barlow
Barlow
Ky»
10,000
12,000
5,000
5,000
244,000
228,000
142,000
105,000
Date open
Closed 7-24-31
207*000
127000
9-17-31
X*3962
BANKS RgPQHTED, CIOitifeL* WEEK ENDED OCTOBER 9, 1931
(For confidential use only - subject to correction)
Member tanks indicated " y an asterisk (•).
b
Name of Bank
City
Date
State closed
Capital
Surplus
& profits
Total
deposits
District No, 1
Eedford Trust Co.
Medford
Nau^tuck Bank & Tr. Co., Naugatuck
Mass* Oct* 7
Conn. tt
7
600,000
50,000
690,000
30,000
5,500,000
586,000
District No. 2
Ontario County Tr.Co.
•Peoples National Bank
•First National Bank
Warren County Tr. Co.
N.
N.
N.
N.
Oct, 6
tt
6
it
7
tt
8
300,000
50,000
150,000
100,000
398,000
46,000
69,000
91,000
4,263,000
429,000
2,364,000
836,000
Canandaigua
Blairstown
Newark
Belvidere
Y.
J.
Y.
J.
District No* 3
Glens id e Trust Co,
Glenside
Oct# 3
Pa.
ft
It
it
•Grlenside Bk & Tr. Co.
3
ft
tt
llanheim Trust Co.
Philadelphia
3
f»
It
tt
Weniger & Co.
3
tt
tt
"
United Security Tr.Co
5
It
it
tt
Richmond Trust Co.
5
tt
tt
•Central National Bank lib. Union
5
tt
it
Willow Grove Trust Co . Willow Grove
5
It
tt
Franklin Trust Co.
Philadelphia
6
It
tt
Jordan State Bank
Allentown
6
Shrewsbury Svgs.Insti'
It
tt
tution
Shrewsbury
6
It
tt
Central Tr•& Svgs.ffo. Philadelphia
6
ft
ft
it
Wharton Title & Tr .Co
7
ft
ft
Haddington Title & Tr.Co.
"
7
ft
it
n
Hamilton Trust Co.
7
•First National Bank
Ocean City
8
N. J. it
Girard Ave.Title & Tr .Co.,Philadelphia,Pa. $t
8
tt
•Moshannon National Bank,Philadelphia Pa,
9
tt
it
it
County Trust Co.
9
t
District No. 4
•Farmers National Bank Leechburg
Pa.
Oct.
It
Monroe Bank
Woodsfield
Ohio
ft
tt
•Dime Savings Bank Co. Canton
1
1
•Farmers & Miners Nat. Benbleyville Pa.
ft
ft
Alexander & Co.
Monongahela
ft
ft
Washington Trust Co.
Washington
tt
ft
Monongahela City Tr.Co.Monongahola
If
If
Union Trust Co.
Washington
It
It
•Peoples Nat. Bank
Point Marion
It
It
Vandergrift
•Citizens Nat. Bank
If
Citizens Banking Co.
Sebring
Ohio
It
•Citizens Savings Bank Upper Sandusky "
Central Union Tr« Co. Wheeling
W. Va* ft
3
3
5
5
5
5
5
5
6
6
8
8
9
250,000
100,000
907,000
300,000
260,000 2,759,000
250,000
40,000
657,000
(No figures available)
750,000
789,000 8,112,000
255,000
106,000 1,837,000
60,000
98,000
556,000
125,000
90,000
857,000
3,000,000 7,574,000 26,325,000
50,000
21,000
353,000
50,000
1,000,000
200,000
150,000
250,000
300,000
200,000
150,000
812,000
215,000
1,980,000
23,000
239,000
375,000
304,000
567,000
228,000
986,000
1,376,000
5,322,000
466,000
2,618,000
2,030,000
2,852,000
2,909,000
1,600,000
6,807,000
50,000
50,000
500,000
100,000
450,000
500,000
150,000
250,000
50,000
125,000
25,000
50,000
500,000
57,000
102,000
274,000
49,000
709,000
986,000
8,961,000
824,000
2,600,000
6,427,000
1,402,000
626,000
405,000
1,383,000
812,000
456,000
1,522,000
«•»
—
1,862,000
-351,000
136,000
69,000
101,000
50,000
58,000
242,000
- 2 WEEK ENDED OCTOBER 9, 1931 (Continued)
Member "banks indicated " y an asterisk .(*)» „
b
^ate
Nafoe of Bank
City
State closed
District No. 5
Bank of Morgan County
•First National Bank
•Nat. Exchange Bank
•Planters & Merchants
First Nat. Bank
•First National Bank
Merchants & Fars. Bank
Savings Bank of
Queens town Bank of M .
•First National Bank
•first National Bank
Bank of Scottshurg
Goldsboro Bank
Far. & torch. Bank
Middletown Svgs. Bank
Bank of Riverheads
Bank of Wadestown
Bank of Clover
Peoples Dime Svgs. Bank
& Trust Assn., Inc.
Bank of Farmington
Provident State Bank
•First National Bank
Berkeley
Spr ings
Belington
Weston
W.
it
Staunton
Farmington
Preston
New Windsor
it
it
n
it
tt
it
it
it
it
it
it
it
it
It
Va.
W. Va.
M.
Md.
it
It
It
6,000
12,000
57,000
240,000
429,000
1,443,000
5
5
5
6
6
6
6
7
7
6
8
125,000
25,000
100,000
25,000
10,000
30,000
30,000
10,000
12,000
50,000
25,000
10,000
25,000
10,000
57,000
6,000
96,000
23,000
14,000
25,000
46,000
8,000
23,000
70,000
152,000
12,000
34,000
3,000
1,702,000
110,000
815,000
285,000
212,000
345,000
566,000
105,000
480,000
534,000
854,000
102,000
159,000
91,000
8
9
9
9
7,000
50,000
25,000
77,000
1,000
20,000
20,000
57,000
45,000
406,000
272,000
523,000
5
5
5
District No. 6
Sept* 8
Bank of Hermitage Springs, Term.
Kingston Springs,
Harpeth Valley Bank
Term. Sept.14
Oct. 3
Tallapoosa Ga.
Home Bank
tt
6
Ala.
Elba
•First National Bank
it
it
6
Do than
•Houston Nat. Bank
District No. 7
L. 11. Yoflum & Co.,Bkrs.
Farmers & Drovers State
Bank
LaFayett e State Bank
Citizens Svgs.& Tr.Co.
Johnson County Svgs.Bk.
Oxford Junction Svgs.Bk
Exchange State Bank
Lockridge State Bank
New Va. Savings Bank
Roscommon State Bank
Sayings Bank of
Nichols Savings Bank
Com'l Svgs. Bank
Washington Loan & Tr.Co
•First National Bank
GaJva
111.
Lakota
LaFayette
Iowa City
Ia.
111.
Ia*
tf
It
it
Oxford June tt
111.
Brimfield
Ia.
Lockridge
New Virginia,la.
Moh.
Roscommon
Ia.
Brighton
tt
Nichols
it
Washington
ii
Newton
Oct.
»»
if
it
tt
it
t«
tt
it
it
it
tt
it
it
tt
tt
it
^ „
0 4
Surplus
Total
Capital & profits
deposits
(Banker s ^Directory,July 1931)
25,000
40,000
150,000
Va. Oct. 3
it
3
it
It
3
»
So. Boston Va.
W. Va.
Cowen
Spartanburg S. C.
Williams port, M .
Queenstown m .
W. Va.
Fairview
Va.
Luray
tt
Scottsburg
to.
Goldshoro
W. Va.
Fairview
Middle town m .
Greenville Va.
W. Va.
Wadestown
Va.
Clover
X-3962
12,000
—
-
-
—
17,000
10,000
25,000
75,000
150,000
2,000
83,000
150,000
25,000
91,000
313,000
745,000
2
100,000
59,000
730,000
3
3
3
3
3
30,000
25,000
50,000
125,000
50,000
50,000
25,000
20,000
20,000
20,000
25,000
100,000
25,000
100,000
5
5
5
5
5
5
5
6
6
186,000
6,000
133,000
11,000
700,000
8,000
155,000 3,450,000
436,000
4,000
262,000
15,000
169,000
6,000
84,000
32,000
251,000
25,000
285,000
14,000
192,000
18,000
1,813,000
59,000
24,000 1,082,000
70,000 1,709,000
- 3 ' \
•
WEEK ENDED OCTOBER 9, 1931 (Continued)
Member "banks indicated, by an asterisk (•).
Date
Surplus
i
N&ne of Bank
City Si%tb closed
Capital & profits
(Bankers'Directory,
District No. 7 (continued)
luatherville State Bank Matherville 111. Oct* .
6
15,000
2,000
tt
it
•First National Bank
Erie
40,000
6
35,000
ft
Ainsworth Savings Bank Ainsworth
6
la.
35,000
21,000
ft
v
Far.& Kerch.S vgs.Bank
Haskins
6
13,000
8,000
tf
ft
Wayland Savings Bank
Wayland
6
40,000
31,000
First State Bank
Hohart
6
Ind. i t
60,000
27,000
•West Side Atlas Nat.Bk. Chicago
8
111. it
200,000
131,000
ft
it
Bank of Altona
Altona
9
50,000
79,000
it
it
Southwest Tr.& Svgs.Bk. Chicago
9
400,000
234,000
it
ft
Troy Grove State Bank
Troy Grove
9
50,000
16,000
it
•First National Bank
Blockton
9
la.
25,000
5,000
»
tt
Beasnor Savings Bank
Beasnor
9
20,000
5,000
•First National Bank
Fennimore
Wis. it
9
50,000
20,000
Agency Savings Bank
Agency
7
Iowa it
15,000
18,000
Fidelity Bk & Tr. Co.
Detroit
Mich. tt
7 1,000,000
565,000
Citizens State Bank Franklin Grove 111. it
8
50,000
19,000
Atalissa Savings Bank
Atalissa
8
Iowa it
12,000
8,000
it
ft
Lawton Savings Bank
Lawton
8
25,000
19,000
tf
u
•Moville State Bank
Koville
8
35,000
35,000
it
n
Toronto Savings Bank
Toronto
8
15,000
2,000
First State Bank
Endeavor
Wis. ft
8
10,000
5,000
District No. 8
Lincoln Bank
Citizens Tr. & Svgs.Bk
Vandalia Trust Co.
•First National Bank
Evansvilie
Princeton
Vandalia
Lake Village
111. Oct. 5
3
Ind. tt
tt
3
Il.
vo
Ark. it
2
District No. 9
Farmers Security Bank
Seneca
S.Dak .Oct,
it
it
ifenno State Bank
Menno
it
Grand laeadow
Exchange State Bank
Minn.
Bank of Wyndmere
Wyndmere
N.Dak . "
Mayer
State Bank of Mayer
Minn. ft
tt
n
Racine State Bank
Racine
It
t
t
State Bank of
Watertown
t
t
•First National Bank
Mondovi.
Wis.
tt
•First National Bank
Stewartville ,Mnn.
ft
it
First State Bank
1'yrtle
t
t
it
Far. & Kerch.State Bank Sedan
American State Bank
Java
S.Dak * ••
it
it
Harding County Bank
Buffalo
District No. 10
•First National Bank
Venango State Bank
•First National Bank
Covington State Bank
Citizens State Bank
Harrison State Bank
Bank of I - y
'a
Auburn
Venango
Hastings
Covington
Orchard
Harrison
iky
125,000
50,000
60,000
50,000
2
1
3
3
5
5
5
3
7
8
8
8
8
15,000
25,000
40,000
15,000
10,000
15,000
20,000
50,000
50,000
10,000
15,000
15,000
10,000
Nebr. Oct, 5
ft
ft
5
ft
ft
5
Okla. ft
5
t 5
Nehr. t
ft
t
t 5
ft
Okla.
5
50,000
25,000
200,000
20,000
30,000
20,000
15,000
11,000
24,000
19,000
33,000
«•»
*»
18,000
25,000
8,000
4,000
6,000
6,000
57,000
18,000
5,000
3,000
17,000
27,000
26,000
—
W.
124,000
3,000
22,000
17,000
3,000
X-3962
,
Total
deposits
July 1931)
100,000
664,000
181,000
125,000
380,000
874,000
2,340,000
349,000
3,389,000
117,000
185,000
125,000
623,000
350,000
8,038,000
192,000
157,000
157,000
194,000
75,000
162,000
515,000
378,000
420,000
550,000
70,000
320,000
435,000
140,000
104,000
100,000
401,000
906,000
506,000
86,000
70,000
. 174,000
191,000
344,000
153,000
2,234,000
100,000
225,000
93,000
29,000
- 4 -
X-3962
WEEK. ENDED OCTOBER 9, 1931 (Continued)
Member "banks indicated " y an asterisk (•).
b
Date
Surplus
Total
Name of Bank
City
State closed
Capital
& profits
deposits
(Bankers'Directory,July 1931)
District No.10 (continued)
Biverton State Bank
Biverton
Nebr. Oct e 6
13,000
1,000
121,000
tt
tt
7
25,000
4,000
85,000
Commercial Bank
Grant
First State Bank
6
Calhan
Colo. tt
25,000
16,000
214,000
8
Farmers State Bank
Glenvil
25,000
Ne"br. it
15,000
264,000
tt
tt
- Security State Bank
8
Bavenna
30,000
121,000
tt
tt
First State Bank
8
Holstein
25,000
5,000
105,000
tt
8
Boseland
25,000
4,000
Boseland State Bank
117,000
Melvern State Bank
8
Melvern
15,000
100,000
Kans. it
10,000
20,000
9
7,000
187,000
Okla. tt
First State Bank
J" et
it
it
Cimmarron Valley Bank Coyle
9
1,000
111,000
10,000
District No. 11
•San Angelo Nat. Bank
San Angelo Tex. Oct.
tt
*i
Sinton State Bank
Sinton
tt
Odem
Odem State Bank
tr
•First National Bank
Ft. Stockton "
tt
tt
•Citizens National Bank Brownwood
tt
Commonwealth Bk & Tr.Co.,San Antonio,Tex
M
Big Lake
Tex.
First State Bank
tt
tt
Bishop
•First National Bank
it
tt
•Coleman National Bank Coleman
it
tt
Coleman
•First National Bank
tt
tt
Coleman
Central State Bank
tt
tt
Mat his
•First National Bank
3
300,000
328,000
2,691,000
3
63,000
63,000
909,000
3
25,000
5,000
96,000
6
50,000
14,000
539,000
6
100,000
134,000
1,257,000
6
300,000
151,000
2,955,000
7
30,000
38,000
210,000
7
25,000
2,000
246,000
9
200,000
51,000
515,000
9
100,000
65,000
734,000
9
75,000
10,000
273,000
8
25,000
13,000
113,000
*
Date
opened
REOPENED *
District No. 8
Somerville Bk & Tr. Co .,Somervilie ,Tenn.
Drake s"boro Ky.
Citizens Bank
District Ho. 10
Far. & Kerch. Bank
Holt County Bank
Crescent
Okla.
Hound City Mo«
9-25-31
25,000
11,000
10-
5-31
7-24-31
30,000
21,000
10-
8-31
9-15-31
20,000
17,000
10-
5-31
8 - 2 7 - -31
20,000
37,000
10-
7-31
:
- b -
bl
X-3962
SUpplementai List
BANKS BEP0BT3D CLOSED - WEEK ENDED OCTOBER 9, 1931
(For confidential use only - subject to correction)
Member "banks indicated "by.an asterisk (*)•
Name of Bank
City
State
Date
closed
Capital
(Bsniksrs
Total
Surplus
& profits deposits
ct ory > July 1931
District No. 7
Saybrook
Say "brook Bank,
Churubusco
Churubusco State Bank
Farmers & Meroh.State Bk, Marion
Eingsted
Farmers Savings Bank
111.
Ind.
Iowa
M
Oct.
t
l
«
t
i
6
7
7
7
30,000
25,000
50,000
15,000
2,000
7,000
22,000
1,000
270,000
208,000
270,000
177,000
District No, 8
Bank of Augusta & Tr.Co . Augusta
Frankford Exchange Bank Frankford
Ark.
Mo.
Oct. 8
i
t 8
50,000
25,000
40,000
18,000
225,000
202,000
District No. 9
State Bank of Winthrop
Utifta State Bank
Winthrop
Utica
Minn. Oct. 6
7
S .Dak. "
,
25,000
20,000
28,000
13,000
318,000
90,000
District No,* 10
Clay Center State Bank
Clay Center
Nebr. Oct. 8
25,000
7,000
162,000
District No. 11
Bank of Tynan
Tynan
Tex.
Oct. 7
15,000
-
—
44,000
X-3962
BANKS REPORTED CLOSED - WEEK ENDED OCTOBER 16, 1931
p
(For confidential use only - subject to correction)
lumber "banks indicated " y an asterisk (•)•
b
Surplus
Total
Date
City
Name of Bank
deposits
State closed Capital & profits
(Bankers 'Directory July 1931)
District No. 1
Revere Trust Co.
Revere
200,000
Mass. Oct .13
121,000 1,576,000
It
it
Highland Trust Co.
Somerville
13
150,000
305,000 5,738,000
District No. 2
Springwater State Bank
*Belvidere National Bank
Springmter
Belvidere
He Y.
N. J*
District No. 3
•First Nat. Bank & Tr. Co. Ilerchantville N. J.
ft
Merchantville Trust Co.
i
t
•Ifiapleshade Nat. Bank
iilaple shade
ft
Collingswood Trust Co.
Collingswood
tl
•Westmont National Bank
Westmont
Coatesville Trust Co.
Coatesville
Pa.
$t
Manayunk Trust Co.
Philadelphia
ft
tt
Roxhorough Trust Co.
Toms River Trust Co.
Toms River
N, J.
tt
•Wildwood Title & Tr. Co. Wildwood
Hart isturg
Commonwealth Trust Co.
Pa*
Sea Isle City N . J .
•First National Bank
District No. 4
Farmers Bank
Highland
Ohio
•First Nat. Bank & Tr, Co. lioness en
Pa.
f
t
•Nat. Bank of Fayette Co. Uniontown
i
>
Brockway
•First National Bank in
•City Trust & Svgs. Bank
Youngstown • Ohio
ii
n
•Dollar Svgs. & Trust Co.
it
tt
•First National Bank
tt
Trumbull Banking Co.
Girard
Farmers & Merchants Bank West Newton
Pa.
tt
Tarentum Svgs. & Trust Cc,
.Tarentum
Peoples Com*l & Svgs.Bank London
Ohio
•First National Bank
Somerfield
Pa.
District No. 5
Farmers Bank of SomeriSar ion
set County
Station
m.
Roane County Bank
Spencer
W. Va.
Bank of Prosperity
Prosperity
s. c.
•First National Bank
Roxboro
N. C.
•First National Bank
Chase City
Va.
Merchants & Mfrs. Bank
Andrews
N. C.
Bank of Halifax
Halifax
Va.
State Bank of Charlotte Co.,Drakes Branch,Va.
with "branch at: Charlotte Court House, Va.
,
it
Keysville
Planters Bank
tt
with "branch at*
Keherrin
•Grafton Bkg. & Trust Co. Grafton
W. Va.
II
*Second National Bank
Morgantown
II
•First National Bank
Anawalt
ti
•Gary National Bank
Gary
ii
Citizens Bank
Weston
Brunswick Bk. & Trust Co. Lawrencevilla Va.
it
Bank of Union Level
Union Level
Peoples Bk. & Trust Co.
Bonlee
K. C.
Union Bagk
Jane Lew
W. Va.
it
Farmers Bank
Shinnston
Oct .10
it 10
25,000
100,000
Oct.10
n 10
t* 10
tt
10
tt
13
ti 13
tt
13
it 13
tt
15
it
15
ti 15
n 16
100,000
79,000
150,000
69,000
50,000
15,000
100,000
114,000
25,000
45,000
125,000
192,000
250,000
760,000
300,000
544,000
100,000
62,000
100,000
183,000
937,000 2,215,000
50,000
32,000
199,000
14,000
164,000 1,916,000
1,460,000
633,000
234,000
946,000
460,000
1,146,000
3,162,000
1,783,000
169,000
783,000
8,120,000
351,000
Oct .13
16j000
9,000
135,000
tt
13
160,000
215,000 3,310,000
it
500,000
13
566,000 9,247,000
tl
13
65,000
35,000 1,170,000
ft
15 1,000,000 1,344,000 16,627,000
tl
15 2,500,000 1,593,000 21,735,000
it
15 2,500,000 1,908,000 17,002,000
tt
50,000
15
16,000
498,000
tl
15
85,000
240,000 1,202,000
ft
15
125,000
314,000 2,555,000
tl 16
50,000
6,000
225,000
tt
16
25,000
90,000
242,000
Oct,
.10
i 10
t
ti
10
tt 12
tt
12
tt
10
n 12
ti
12
15,000
150,000
50,000
150,000
100,000
20,000
50,000
44,000
23,000
57,000
20,000
38,000
120,000
26,000
29,000
13,000
217,000
542,000
343,000
406,000
551,000
282,000
377,000
204,000
13
25,000
11,000
186,000
10
13
tt 13
tt 13
tt
13
ti
14
tt
14
58p.20
Oct.14
tt
15
100,000
100,000
50,000
100,000
50,000
75,000
10,000
25,000
60,000
40,000
ti
it
tt
43,000
863,000
254,000 2,497,000
12,000
204,000
42,000
781,000
259,000 3,154,000
34,000
383,000
12,000
61,000
53,000
1,000
32,000
377,000
697,000
33,000
X-3962
— 2 —
Week ended October 16, 1931
Member banks indicated " y an asterisk (*).
b
Total
Date
Surplus
deposits
State closed Capital & profits
CityName of Bank
(Bankers'Directory July 1931)
District No. 5 (continued)
56,000
1,000
15,000
N. C. Sep.14
Bank of Wagram
Wagram
504,000
25,000
57,000
Bruceton Bank
Bruce ton M i l s W.Va. Oct.15
1,000 200,000
28,000
" 15
Farmers & Merchants Bk. Lawrenceville Va,
289,000
255,000 3,036,000
" 15
s. c.
Bank of Western Carolina,Aiken
with branches at: Barnwell, Batesburg, Blackville, Johnston,
Lexington, North Augusta, Salley and Wagener, S. C.
272,000
28,000
50,000
Williston
5. C. Oct . 1 5
Bank of Williston
ft
it
161,000
10,000
15
25,000
Graniteville
Bank of Graniteville
it
160,000
25,000
50,000
15
Brodnax
Va.
Bank of Brodnax
it
it
82,000
323,000
50,000
15
LaCrosse
Bank of LaCrosse
n
152,000 2 ,138,000
250,000
16
Martinsburg
W.Va*
•Peoples Trust Co.
it
tt
980,000
110,000
16
50,000
Buckhannon
•Traders National Bank
it
it
ft
,015,000
72,000 1
16
100,000
Buckhannon Bank
tt
318,000
50,000
50,000
16
South Hill
Va.
Citizens Bank
tt
317,000
27,000
25,000
16
Saluda
S. C.
Farmers Bank
• -
District No. 6
Chipley
Bank of Chipley
District No. 7
Albert City
Security Savings Bank
Mecca
Mecca Bank
Cotter
Cotter Savings Bank
Richland
First Savings Bank
Farmers & Merchants Bk. Hanna
Lake City
•First National Bank
•National Bank of Sidney Sidney
Wapello
Commercial Bank
State Bank of Victoria Victoria
Waucoma
Bank of Waucoma
Cedar Rapids
Kenwood Savings Bank
Fowler
Bank of Benton County
Sully
Sully State Bank
Peoples State Bank
Wayne
District No. 8
Bald Knob
Bald Knob State Bank
tt
ft
Citizens Bank
•First National Bank
Carterville
Farmers & Merchants Bk Wheeling
Farmers & L^er chants Bk Chillicothe
Weakley County Bank
Dresden
Mendon Bank
Mendon
Triplett Bank
Triplett
Strawberry
Bank of Strawberry
Bank of Baldwyn
Baldwyn
Farmers Bank
Fulton
Eos cow llills Svgs. Bank Moscow llills
Bank of Dalton
Dal ton
Gilliam Exchange Bank
Gilliam
District No, 9
First State Bank
Ferney
Nunda State Bank
Nunda
Corson State Bank
Corson
Dunseith
Security State Bank
Montpelier
Montpelier State Bank
.Zimmerman
Farmers & Merch. St* Bk,
Pollock
•First National Bank
Fla.
Oct . 1 5
37,000
Iowa
Ind.
Iowa
Oct . 1 0
it
12
it
46,000
406,000
30,000
7,000
212,000
10,000
12,000
47,000
»
12
32,000
9,000
150,000
12
25,000
10,000
235,000
n
13
10,000
10,000
187,000
it
50,000
15,000
445,000
tt
13
,t
tt
it
277,000
60,000
12,000
13
13(indiv. responsibility 300,000)
35,000
210,000
13
41,000
13(indiv.responsibility 1 5 0 , 0 0 0 )
8,000
14
25,000
170,000
tt
Ind.
Iowa
111.
Iowa
ft
Ind.
Iowa
Hich.
Ark.
tt
111.
Mo.
lio.
Tenn.
Mo.
it
Ark.
Miss.
Ky.
it
it
it
it
it
15
25,000
23,000
485,000
16
25,000
6,000
175,000
16
30,000
48,000
1,173,000
Oct . 1 2
15,000
20,000
140,000
it
12
15,000
4,000
112,000
it
50,000
550,000
15,000
30,000
33,000
10,000
23,000
372,000
it
10
10
12
13
40,000
16,000
237,000
it
13
13
16,000
6,000
15,000
5,000
it
it
it
it
it
it
90,000
150,000
128,000
14
10,000
3,000
14
47,000
9,000
740,000
21,000
it
15
50,000
42,000
375,000
ii
16
16
16
20,000
16,000
220,000
10,000
30,000
12,000
82,000
23,000
101,000
95,000
1,10 .
tt
it
ft
it
,
S. Dak.Oct,
tt
it
2,000
66,000
it
it
15,000
11,000
13,000
12
12
15,000
2,000
80,000
9
20,000
5,000
199,000
13
13
13
15,000
5,000
105,000
20,000
2,000
147,000
25,000
5,000
193,000
N. Dak.
it
Minn.
S. Dak.
tt
tt
it
it
9
4
*
— 3 —
X—3962
Week onddfd October 16, 1931
Member tanks indicated by an asterisk (•)«
Date
Surplus
Total
Name of Bank
City
State closod Capital & profits
deposits
(Bankers'Directory July 1931)
District No. 9 (continued)
Walnut Grove State Bank,Walnut Grove
25,000
Minn. Oct .15
10,000
297,000
Bank of Scranton
Scranton
25,000
N.Dak n 14
15,000
335,000
District No. 10
State Bank of Huntley
Naponee State Bank
American State Bank
•First National Bank
•First National Bank
State Bank of Orleans
American State Bank
Citizens State Bank
Fanners State Bank
Bank of Otoe
Bison State Bank
Weston Bank
Citizens State Bank
Franklin Exchange Bank
North Loup State Bank
First State Bank
Citizens State Bank
Huntley
Naponee
Geary
Deer Trail
Yuma
Orleans
Springfield
Morrill
Hemingford
Otoe
Bison
Weston
Netawaka
Franklin
North Loup
Wiggins
Pratt
Nebr. Oct .10
tt
ft
10
Okla. It 12
Colo. tt 12
tt
it
12
Nebr. ft 13
It
tt
13
Kans. tt 14
Nebr. tt 13
tt
tt
13
Okla. tt 13
Nebr. ft 15
Kans. tt 15
Nebr. tt 15
ft
it
16
Colo. ft 16
Kans. ft 16
District No. 11
*Ballinger State Bank
Ballinger
Texas Oct,
,10
tt
it
First State Bank
Kingsvilie
14
it
ft
Texas State Bk & Tr. Co .Corpus Christi
14
ft
it
First State Bank
Etollin
15
District No. 12
Clarke County Bank
Washougal
Wash. Oct,
.15
H
San Fernando Valley Bk. No.Los Angeles Cal.
16
10,000
13,000
25,000
25,000
40,000
25,000
33,000
15,000
30,000
25,000
10,000
18,000
10,000
20,000
20,000
15,000
50,000
3,000
7,000
4,000
2,000
3,000
7,000
4,000
23,000
9,000
2,000
5,000
14,000
20,000
7,000
7,000 •
2,000
17,000
84,000
270,000
150,000
59,000
190,000
219,000
265,000
150,000
300,000
170,000
136,000
297,000
75,000
205,000
225,000
116,000
325,000
40,000
35,000
150,000
15,000
13,000
32,000
36,000
212,000
500,000
567,000
37,000
15,000
25,000
11,000
2,000
—
•»
Date
open
REOPENED:
District No. 3
•Maple shade National Bank, Ma pie shade,
N. J. 10-10-31
250,000
134,000
50,000
15,000
10-14-31
61
X-3962
BANKS REPORTED CLOSED - WEEK ENDED OCTOBER 23, 1951
(For confidential use only - subject to correction)
Lember banks indicated by an asterisk (*)«
Total
Surplus
Capital & profits deposits
(Bankers'Directory July 1931)
Name of Bank
City
Date
State closed
District No. 1
Fort Kent Trust Co.
Fort Kent
ilaine Oct .19
50,000
District No. 2
•Arherst Bank
Williamsville
N. Y. Oct .23
100,000
137,000 1,975,000
District No. 3
Farmers & Merchants Bank
*Wi lc ox Nat i ona1 Bank
•Bank of Auburn
Valley View Bank
Columbus Title & Tr. Co.
Ickesburg State Bank
Mechanics Trust Co.
KcKean County Trust Co.
Dillsburg
Wilcox
Auburn
Valley View
Philadelphia
Ickesburg
Harrisburg
Bradford
Pa.
Oct .17
tt
17
?t
19
ft
19
ft
17
tt
22
tt
23
ft
23
25,000
25,000
50,000
25,000
125,000
25,000
300,000
200,000
21,000
14,000
65,000
282,000
148,000
12,000
127,000
361,000
tt
Tt
It
tt
ft
ft
ft
60,000
651,000
300,000
262,000
612,000
1,412,000
1,495,000
125,000
2,974,000
3,308,000
District No. 4
Pittsburgh
•Exchange National B a nk
Littleton
Bank of Littleton
Middle bourne
United Bank of
Delaware
Deposit Banking Co.
T/adsworth Svgs. & Tr.Co. Wadsworth
Pittsburgh
•Monongahela Nat. Bank
tt
Homewood Peoples Bank
Jamestown
Jamestown Banking Co.
Cameron
Bank of Cameron
Brewster
Brewster Banking Co.
*City Svgs. Bank & Tr.Co. Alliance
Canton
Geo. D. Barter Bank
•Ohio Merchants Trust Co. Lias sill on
Farmers & Citizens Bkg.Co.,Monroeville
Valley Deposit & Tr. Co. Belle Vernon
750,000 1,020,000 7,973,000
Oct .19
Pa.
ft
232,000
16,000
25,000
19
W.Va.
ft
ft
ft
20,000
711,000
50,000
19
ft
579,000
85,000
20
50,000
Ohio
tt
ft
20
200,000
91,000 1,590,000
ft
21 1,000,000 1,302,000 18,489,000
Pa.
ft
tt
218,000 3,970,000
100,000
21
ft
tt
50,000
25,000
500,000
21
29,000
635,000
100,000
W.Va. ft 21
ft
250,000
25,000
20,000
22
Ohio
tt
tt
116,000 3,199,000
22
250,000
tt
n
366,000 8,081,000
22 1,000,000
tt
it
265,000 3,602,000
22 1,000,000
tt
• H
427,000
50,000
19,000
22
tt
179,000 1,468,000
23
129,000
Pa.
District No. 5
Com'l Bank & Trust Co.
Bank of Chapin
•First National Bank
Terra Alta Bank
Winnsboro Bank
•First National Bank
•Citizens National Bank
Farmers Bank
•Citizens National Bank
Winnsboro
Newburg
Prosperity
Boydton
Philippt
Oct .17
Va.
S. C. tt 17
W.Va. tt 19
tt
it
it
19
tt
19
S. c.
W.Va. tt 20
tt
20
s. c.
tt
17
Va.
W.Va. tt 22
150,000
10,000
25,000
30,000
150,000
25,000
50,000
25,000
50,000
Miami
Eastman
Elizabethton
Bufaula
Pavo
Fla. Sep . 7
Ga#
Oct .19
Tenn. tt 17
tt
22
Ala*
tt
Ga.
22
100,000
100,000
75,000
150,000
15,000
Hancock
Buchanan
Iowa Oct .17
Mich. it 17
tt
H 17
it
n
17
it
17
Wise.
«t
17
111.
t
t
n 19
15,000
40,000
50,000
75,000
15,000
50,000
35,000
District No. 6
Southern Bank & Tr. Co.
•Citizens Banking Co.
•First National Bank
•Commercial Nat. Bank
Planters Bank
District No. 7
Hancock Savings Bank
Buchanan State Bank
•First National Bank
•First State Biuak Farmers Security Bank
State Bank of Loda
State Bank of Adrian
Danville
Chapin
Terra Alta
it
it
ft
Petoskey
Wilton
Loda
Adrian
173,000 1,116,000
6,000
80,000
609,000
52,000
556,000
52,000
179,000 1,026,000
351,000
24,000
10,000
266,000
25,000
238,000
74,000
822,000
—
—
5,000
75,000
50,000
3,000
-
-
180,000
848,000
227,000
35,000
38,000
200,000
500,000
30,000
556,000
42,000
30,000 1,485,000
140,000
4,000
110,000
1,000
83,000
4,000
62
- 2 -
X-3962
Week ended October 23, 1931
Member "banks indicated " y an asterisk (•).
b
Name of Bank
~
State
~
~
City
District Ho. 7 (continued)
Ida Grove
First Tr. & Svgs. Bank
Pella
Security State Bank
Rock Rapids
•Lyon County Nat. Bank
Scottville
Peoples State Bank
Do on
•First National Bank
No. Washington
Farmers Savings Bank
Tecumseh
*United Savings Bank
Newtiurg
Newburg Savings Bank
New Sharon
Citizens State Bank
DeWit t
State Bank of DeWitfc
Kokomo
•Citizens National Bank
Cadillac
Peoples Savings Bank
Neva Farmers Bank
Neva
Iowa
if
tt
Mch.
Iowa
it
Mch.
Iowa
tt
111.
Ind.
Mich.
Wise.
Date
closed
Oct. 19
tt
19
it
19
tt
19
it
19
tt
20
tt
20
it
21
tt
20
it
22
tt
23
tt
23
tt
23
60,000
75,000
75,000
30,000
50,000
25,000
80,000
25,000
30,000
25,000
350,000
100,000
25,000
38,000
34,000
46,000
35,000
13,000
9,000
40,000
2,000
29,000
2,000
145,000
75,000
29,000
725,000
770,000
1,341,000
477,000
189,000
194,000
1 ,203,000
100,000
386,000
36,00C
4 ,043,000
1 ,060,000
259,00C
Oct. 19
tt
19
tt
16
tt
15
tt
19
tt
19
tt
19
tt
21
tt
22
tt
21
it
22
tt
22
tt
22
o
23
tt
23
tt
23
it
23
15,000
250,000
50,000
30,000
40,000
15,000
10,000
100,000
100,000
50,000
25,000
20,000
25,000
25,000
50,000
200,000
75,000
2,000
217,000
15,000
6,000
10,000
11,000
3,000
76,000
75,000
60,000
31,000
2,000
27,000
3,000
27,000
60,000
8,000
96,00C
3 ,003,000
340,000
312,000
306,000
25,000
15,000
15,000
20,000
15,000
20,000
50,000
20,000
20,000
20,000
15,000
15,000
25,000
15,000
50,000
15,000
10,000
9,000
10,000
25,000
7,000
8,000
15,000
10,000
30,000
4,000
2,000
1,000
2,000
8,000
2,000
69,000
4,000
13,000
277,000
307,006
223,00f
257,001
58,00(
400,00C
170,00C
430,000
36,000
150,000
102,OOt
122,00C
300,00C
72,00C
640,000
85,000
141,000
District No. 8
Citizens Bank
American Tr, & Svgs.Bank
•First National Bank
•First National Bank in
Exchange Bank
Lomax & Standly Bank
Farmer s & Merchants Bank
lamasco Bank
North Side Bank
•City National Bank
Peoples Bank
Farmers & lierchants Bank
Newlin State Bank
Farmers Bank
Farmers State Bank
•Fidelity Bank & Tr. Co.
Com'l Amer. Bk. & Tr.Co.
Hardy
Rogers
St. Louis
Warrens burg
Ark.
District No. 9
•First National Bank
First State Bank
Farmers & Ivierchants Bank
State Bank of Bethel
Gw inner State Bank
Farmers State Bank
Tabor State Bank
Zeeland State Bank
Bank of Doyon
Fedora State Bank
Farmers State Bank
Peoples State Bank
; Fanners State Bank
Frontenac State Bank
Citizens Bank
Farmers State Bank
State Bank of Heimdal
Isanti
Ashley
Lehr
Bethel
Gwinner
Pukwana
Tabor
Zeeland
Doyon
Fedora
Cathay
Velva
Easton
Frontenac
Lake City
Watauga
Heimdal
Minn. Oct. 16
15
H.Dak. tt
tt
tt
it
15
Minn. ti
11
17
NVDak. tt
19
.Dak. it
it
tt
it
19
19
N.Dak. tt
it
Tt
it
19
19
S .Dak • t»
20
N#Dak. tt
ft
tt
it
20
21
Minn. n
tt
it
22
tt
it
22
22
8.Dak. it
N.Dak# it
22
Mammoth Spring Ark.
Evansville
Ind.
Brunswick
Mo.
11
Versailles
ft
Vandalia
tt
Laclede
tt
Prairie Hill
Evansville
Ind.
tt
tt
Herrin
Salisbury
Hutsonville
tt
111.
Ho.
111.
tt
tt
ivlo .
tt
Surplus
Total
Capital & profits deposits
(Bankers'Directory July 1931)
126,OOP
46,000
1 ,640,00b
1 ,729,000
750,000
248,000
77,000
223,000
50,000
288,000
1 ,161,000
46,000
« »
i>- 3
£
X-3962
-
Week ended October 23, 1931
l / e b r "banks indicated by an asterisk (* )
iIme
;
Name of Bank
District No. 10
Peoples Bank
Upland Banking Co.
Bank of Campbell
Farmers Bank
Farmers State Bank
Franklin County Bank
State Bank of Swedeburg
•First National Bank
Bloomington State Bank
State Bank of Ord
Union State Bank
Jackson County Bank
Crawford State Bank
Clay County State Bank
State Bank of Edgar
City
State
Date
closed
Surplus
Total
Capital & profits deposits
(Bankers'Directory July 1931)
Upland
Nebr. Oct. 16
it
t?
16
n
It
Campbell
17
it
Westboro
19
Mo.
tt
Wallace
Nebr.
17
tt
it
Hildreth
19
tt
•t
Swedeburg
20
Bucna Vista Colo. ft
20
Bloomington Nebr. it
20
It
It
Ord
20
ft
Tuna
Colo.
21
tt
Independence Mb.
23
Crawford
Nebr. tt
22
tt
tt
Edgar
22
It
it
it
22
tt
25,000
25,000
25,000
10,000
25,000
20,000
15,000
25,000
25,000
40,000
25,000
50,000
30,000
25,000
25,000
5,000
10,000
8,000
16,000
7,000
7,000
16,000
4,000
5,000
10,000
10,000
20,000
26,000
8,000
2,000
160,000
225,000
157,000
86,000
173,000
343,000
89,000
124,000
120,000
204,000
200,000
427,000
278,000
262,000
273,000
District No. 11
••First National Bank
Valley State Bank
•First National Bank
•First State Bank
Security State Bank
Farmers State Bank
•First National Bank
State Bank & Trust Co.
•First National Bank
•First State Bank
•First National Bank
Monday
Pharr
Texas Oct. 13
tt
tt
19
tt
tt
20
tt
tt
21
tt
tt
22
it
ft
22
tt
n
22
tt
tt
23
tt
tt
23
tt
tt
23
tt
it
23
100,000
70,000
25,000
35,000
25,000
100,000
50,000
50,000
60,000
35,000
50,000
184,000 1,022,000
42,000
855,000
5,000
62,000
7,000
150,000
20,000
472,000
57,000
393,000
25,000
409,000
14,000
591,000
2,000
440,000
85,000
1,000
335,000
District No. 12
State Bank of
•First National Bank
Baldwin Park Svgs. Bank
Pacific Com*l Bank
Manhattan Beach,Ca3. .Oct
.16
it
Baldwin Park
20
tt
tt
i>
tt
20
Seattle
Wash- it 22
35,000
35,000
25,000
150,000
5,000
216,000
15,000
306,000
6,000
104,000
65,000 2,556,000
Del Bio
Harlingen
Turkey
Seymour
Weslaco
Vernon
Mission
lb Allen
it
mm
mm
CLOSED BANKS BEOPENED:
District No. 5
Farmers & Merchants Bank Lawrencevillei Va. 10-15-31
it
it
Brunswick Bank & Tr. Co.
10-14-31
n
Bank of Lacrosse
Lacrosse
10-15-31
it
Citizens Bank
South Hill
10-16-31
Date open
28,000
75,000
50,000
50,000
1,000
34,000
82,000
50,000
10-19-31
10-23-31
10-21-31
10-23-31
^
X-3962
BANKS REPORTED CLOSED - J3EK ENDED OCT. 50, 1951
(For confidential use only- subject to correction)^
Member tanks indicated "by an asterisk (*).
Name of Bank
City
District No. 2
State Bank of Avnn,
Avon
•First National Bank
North Hose
*Federation Bank & Tr. Co. New York
Date
State closed
Surplus
Total
Capital
& profits deposits
(Bankers''Directory July 1951)
N. Y. Oct .26
It
26
,1
It
50
50,000
50,000
750,000
42,000
920,000
28,000
600,000
1,215,000 16,699,000
District No. 5
Security Trust Co.
Merion Title & Trust Co.
No.Branch Title & Tr.Co.
Far .& Mechanic s Bank
Harrisburg Pa.
Oct .26
ii
28
Ardmore
it
Sunbury
28
N orthumber land, Pa ti 29
500,000
750,000
200,000
75,000
105,000
1,475,000
145,000
18,000
1,599,000
7,542,000
952,000
194,000
District No. 4
Delaware Svgs. Bank Co.
Citizens Trust Co.
Iron City Savings Bank
Kinsman Banking Co.
•First National Bank
Seville State Bank
Bank of Eoyalton
•"Citizens National Bank
Delaware
Bellevue
Ironton
Kinsman
Cardington
Seville
Eoyalton
Seward
50,000
150,000
50,000
25,000
60,000
25,000
15,000
25,000
28,000
209,000
58,000
53,000
16,000
24,000
5,000
58,000
662,000
1,982,000
555,000
286,000
325,000
288,000
38,000
150,000
District No. 6
Farmers Bank
Luverne
Consolidated State Bank
Bobertsdale
•First National Bank
Graceville
Peoples Bank
Crystal Springs
American Bank & Trust Co. Opp
Citizens State Bank
Carbon Hill
Central Bank & Trust Co. Jasper
District No. 7
South Kokomo Bank
Peoples Trust & Svgs.Bank
•First National Bank
Wau-conda Tr. & Svgs.Bank
State Bank of Walkerton
Arcadia State Svgs. Bank
Bentley Savings Bank
Saline Savings Bank
Citizens Bank & Trust Co.
Brookfield State Bank
Farmers State Bank
•First National Bank
Congress Park State Bank
Arnott State Bank
Iowa State Savings Bank
Kokomo
Ohio
Pa.
Ohio
It
II
IT
Ky.
Pa.
Oct .24
TI
24
Tt
27
TI
27
Tt
28
VI
28
It
29
it
50
Oct .24
it
24
it
Fla.
25
M s s. S8p.21
Ala. Oct,
.27
ft
If
27
ft
it
28
Ala.
II
Ind • Oct .25
#t
ii
24
it
Sycamore
i n .
26
>t
ti
Wauconda
26
II
Walker ton
Ind.
26
Arcadia
Mich. it 26
n 26
Bentley
Iowa
it
Saline
26
Mch,
ti
Elwood
Ind.
27
it
Brookfield 111.
28
it
Hobbs
28
Ind.
it
it
Logansport
28
tt
Congress Park,111.
29
» 29
Arnott
Wis.
Malvern
30
Iowa
it
25,000
72,000
150,000
(no figures available)
55,000
9,000
195,000
50,000
11,000
500,000
50,000
11,000
40,000
50,000
10,000
266,000
70,000
59,000
679,000
25,000
100,000
175,000
25,000
25,000
20,000
10,000
25,000
75,000
100,000
25,000
250,000
50,000
10,000
25,000
7,000
21,000
61,000
15,000
15,000
4,000
1,000
40,000
18,000
27,000
12,000
170,000
12,000
7,000
8,000
104,000
448,000
1,705,000
189,000
345,000
82,00Q
60,000
505,000
994,000
277,000
107,000
5,626,000
157,000
161,000
595,000
—
2
X-39-62
—
Week ended Oct. 30, 1931.
Ilember banks indicated " y an asterisk
b
Name cf Bank
District No. 8
Citizens Trust Co.
Citizens Bank
*First National Bank
Oakland Bank
Security Bank
Bank of Slater
Bank of Henrietta .
Bank of Saline
*City National Bank
•National Bank of Albion
Bank of Atlanta
* Hut chings-First Nat.Bank
Farmers Bank
District No. 9
Cleveland State Bank
Farmers State Bank
Lake Henry State Bank
Security State Bank
*First National Bank
State Bank of Norcross
) ._
_
State
City
Total
Surplus
Capital & profits deposits
(Bankers'Direct ory July 1931)
Oct .24
IT
24
tt
tt
23
It
24
Ky.
It
26
iio.
tt
tt
26
tt
tt
26
Henrietta
It
tt
28
liar shall
it
tt
28
Paducah
tt
27
i n .
Albion
it
29
Mo.
Atlanta
Siloam Springs%Ark. ft 30
tt
30
Mo.
Essex
25,000
20,000
50,000
25,000
50,000
50,000
10,000
75,000
300,000
50,000
70,000
50,000
20,000
10,000
6,000
32,000
19,000
65,000
75,000
1,000
37,000
482,000
20,000
59,000
7,000
17,000
391,000
87,000
366,000
150,000
266,000
375,000
74,000
157,000
5,515,000
685,000
679,000
465,000
99,000
Cleveland
N.Dak. Oct .24
Elk Point
S .Dak • tt 26
it
27
Lake Henry
llinn.
tt
it
27
Paynesville
Belle Fourche,S.Dak. " 30
t!
30
Norcross
Minn.
* 15,000
20,000
10,000
30,000
25,000
10,000
4,000
7,000
2,000
6,000
40,000
6,000
70,000
155,000
347,000
646,000
106,000
Oct .26
tt
26
tt
24
tt
27
tt
29
It
30
It
30
20,000
75,000
60,000
35,000
25,000
10,000
15,000
5,000
32,000
7,000
30,000
6,000
2,000
2,000
100,000
455,000
419,000
668,000
130,000
147,000
87,000
Oct .24
tt
23
it
27
25,000
25,000
25,000
8,000
0,000
7,000
163,000
110,000
280,000
Ind.
LIo.
Huntingburg
Clarksville
Dexter
Oakland
Slater
n
District No. 10
Buffalo
State Bank of Buffalo
Liberty
Citizens Bank
IifcCook
Far. & lierch. State Bank
Crawford
Commercial State Bank
Cedar Eapids
Citizens State Bank
German-American State Bk. Chalco
Quenemo
Q,ue nemo State Bank
District No. 12
•Security National Bank
Far.Com'l & Svgs. Bank
Woodland State Bank
Date
closed
Fairfield
Oakley
Woodland
Kans.
I'O
lI.
Nebr.
it
t«
Tt
Kans.
Idaho
it
Wash.
Date ope]
REOPENED:
District No. 5
Gaston Loan & Trust Co. Gastonia
Brodnax
Bcjik of Brodnax
Halifax
Bank of Halifax
Keysville
Planters Bank
with "branch at Lleherrin. 7a.
,
Boydton
Farmers Bank
Wadestown
Bank of Wadestown
District No. 10
First State Bank
Jet
94,000
25,000
50,000
50,000
25,000
14,000
25,000
29,000
11,000
10-20-31
10-26-31
10-27-31
10-28-31
10-17-31
W.Va. 10- 6-31
25,000
25,000
25,000
34,000
10-28-31
10-28-31
Okla. 10- 9-31
20,000
7,000
10-28-31
N. C. 12-16-30
10-15-31
Va.
tt
10-12-31
it
10-13-31
tt
-
A.-39 62
BANKS KSPCHT3D CLOSED v WEEK ENDED NOV. 6, 1931
r
6
(For confidential usfe only - subject to correction)
i.ember "banks indicated " y an asterisk (t).
b
Date
Surplus
Total
Name of Bank
City
State closed Capital & profits deposits
(Bankers 'Directory July 1931)
District No. 2
11. Berardini State Bank
New York
N. Y. Oct. 31
150,000
737,000 2,095,000
Guaranty State Bank
Passaic
N. J. Nov. 2
100,000
38,000
643,000
Central Trust Co.
Medina
2
N. Y. it
100,000
100,000 1,797,000
Lyndhurst Trust Co.
lyndhurst
Nt J. tt
4
100,000
87,000
583,000
«
District No. 3
•Peoples Trust Co.
Frackville
Pa.
Nov.
District No. 4
•Union Trust Co.
•Citizens National Bank
•Farmers Svgs. & Trust Co.
Pendleton Bank
Richland Trust Co.
Dayton
Ellwood City
Mansfield
Falmouth
Iuansf ie Id
Ohio
Pa.
Ohio
Ky.
Ohio
Oct. 31 1,500,000 1,569,000 28,805,000
Nov. 3
100,000
40,000
905,000
it
4
225,000
315,000 2,588,000
it
•4
83,000
95,000 1,550,000
ti
5
300,000
365,000 2,591,000
Parkersburg
Grantsville
Parkersburg
17.Va. Nov. 2
m.
Oct. 31
V/.Va. Nov. 3
ft
it
tt
3
H
it
tf
4
tt
tt
It
5
District No. 5
Wood County Bank
First State Bank
•First National Bank
Central Bank & Trust Co.
Bank of Bipley
•First National Bank
ft
Ripley
tt
4
125,000
72,000
200,000
572,000
25,000
28,000
500,000 1,159,000
150,000
75,000
50,000
10,000
70,000
25,000
510,000
2,930,000
389,000
5,093,000
773,000
226,000
575,000
District No. 6
Bank of Ragland
Ragland
Ala. Nov. 2
15,000
4,000
29,000
•Phoenix National Bank
Columbia
Tenn. tr
2
200,000
28,000
725,000
it
Bank of Newbern
Newbern
Ala.
3
28,000
12,000
52,000
tt
Citizens Bank & Trust Co. Bunkie •
La.
3
80,000
70,000 1,003,000
with "branches at: Larksville, lloroauville and Plaucheville, La
Conmercial Savings Bank
Guin
Ala. Nov. 3
25,000
6,000
150,000
•American National Bank
Dayton
Tenn. it
4
25,000
83,000
634,000
tt
tt
Bank of Lynnville
Lynnville
5
30,000
13,000
182,000
District No. 7
Lucerne State Bank
Lucerne
Ind. Oct. 31
25,000
15,000
172,000
tt
Citizens Bank
1.1 lo
Iowa
31
20,000
6,000
208,000
tt
Citizens Bank
Anderson
Ind.
31
406,000
57,000 3,236,000
tt
Citizens State Bk.& Tr.Co. Sheldon
111.
31
40,000
10,000
204,000
Downers Grove State Bank Downers Grove w
Nov. 2
100,000
112,000
516,000
tr
Alexandria Bank
Alexandria
Ind.
2
30,000
19,000
533,000
tt
Traer State Bank
Traer
Iowa
2
30,000
20,000
240,000
it
tt
Bank of Buckingham
Buckingham
2
10,000
123,000
tt
tt
Farmers Bank
Voorhies
2
10,000
73,000
Wisconsin State Bank
Stevens Point; ,Wis, it
3
30,000
15,000
898,000
tt
Blakesburg Savings Bank
Blakesburg
Iowa
4
50,000
18,000
465,000
it
Union Stat e Bank
Rossville
Ind.
5
(no figures available)
it
State Bank of Nelsonville Nelsonville Wis.
5
10,000
7,000
149,000
t>
it
Liberty State Bank
Pulaski
5
25,000
16,000
487,000
it
Newton County State Bank Kent land
Ind.
6
50,000
10,000
215,000
tt
tt
Steuben County State Bank Angola
6
50,000
35,000 1,210,000
liichigan State Bank
E. Lansing
Mich. tt
6
25,000
2,000
227,000
mm
mm
mm
mm
Jeek ended November 6, 1931.
b
Jem"ber "banks indicated " y
Name of Bank
District No. 8
•First National Bank
Citizens Bank
•First National Bank
*Peoples National Bank
•Citizens National Bank
Bank of Centerton
Bank of Hardin
Prairie Home Bank
Owensville Bank
Bank of Malta Bend
Bank of Barnett
Waver ly Bank
State Bank of Bddyville
Bank of Longwood
•Lawrence County Bank
•First National Bank
Kevil Bank
District No. 9
First State Bank
First State Bank
Bank of Hot Springs
•First National Bank
Watkins State Bank
Farmers State Bank
City
State
Blytheville
Ark.
Mo.
Higfcee
Colconda
111.
St.Francisville "
Mo.
Sedalia
Centerton
Ark.
Ho.
Hardin
71
Prairie Home
It
Owensville
11
Malta Bend
11
Barnett
ft
Waverly
Eddyvilie
111.
Longwood
Mb.
• Walnut Ridge Ark.
Noble
111.
Ky.
Kevil
Vida
Judson
Hot Springs
St. Thomas
Watkins
Mandan
District No. 10
Alliance
•First National Bank
Mar3land
liars land State Bank
Wood River
Farmers State Bank
Del Norte
Bank of Del Norte
Farmers & Herch.State Bk. Concordia
Oak Grove
Bank of Oak Grove
Anselmo
Anselmo State Bank
Crookston
Farmers State Bank
District No* 11
•Security National Bank
First State Bank
•City Nat. Bank & Tr. Co.
Tivoli State Bank
District No. 12
•First National Bank
Coachella Valley St. Bk.
Paducah
Date
closed
Total
Surplus
Capital & profits deposits
(Bankers* Directory July 1931)
Oct. 3 1
.
100,000
20,000
31
10,000
8,000
100,000
Nov .
2
50,000
14,000
315,000
11
2
70,000
36,000
557,000
11
2
100,000
298,000
2,237,000
11
it
240,000
2
12,000
2,000
62,000
Oct . 3 1
Nov . 2
75,000
27,000
206,000
12,000
4,000
57,000
2
50,000
10,000
321,000
tt
it
2
30,000
30,000
92,000
IT
3
25,000
6,000
146,000
11
3
25,000
13,000
165,000
11
3
15,000
2,000
48,000
10,000
26,000
112,000
100,000
45,000
373,000
25,000
15,000
210,000
Oct . 3 1
15,000
6,000
06,000
Mont. Oct . 3 0
27
N.Dak.
S.Dak. Nov . 2
5
N.Dak. 1Y
11
5
Minn.
6
N .Dak. It
20,000
6,000
150,000
10,000
5,000
88,000
40,000
32,000
872,000
25,000
14,000
200,000
15,000
7,000
231,000
50,000
5,000
600,000
Oct . 3 1
100,000
93,000
2,640,000
31
10,000
11,000
30,000
Nov . 2
Oct . 3 0
Nov . 2
50,000
22,000
428,000
20,000
9,000
240,000
100,000
11,000
416,000
Nebr.
tr
it
Colo.
ICans.
Mo.
Ne"br.
It
5
5
It
11
11
3
20,000
18,000
165,000
3
25,000
13,000
289,000
5
20,000
2,000
135,000
Oct . 3 1
Nov . 3
50,000
50,000
557,000
30,000
30,000
142,000
105,000
2,434,000
tt
n
Texas
3
11
ft
Crowe11
tt
Corpus Christi
Tivoli
"
it
4
200,000
tt
it
6
25,000
5
300,000
172,000
2,464,000
5
25,000
4,000
72,000
Hoquiam
Thermal
Wash. Nov .
Calif. it
REOPENED:
District No. 5
8-14-31
Trappe
10,000
Md.
State Bank of Trappe
Saston, Md.)
(reopened as "branch of Farmers & iierchanbs Bank, ;
Bank of Ivlorgant own
Morgan town
100,000
W.Va. 9 - 2 8 - 3 1
District No, 10
Citizens Bank of
Roc kport
Atchison County
9-28.- 3 1
20,000
Mo.
—
—
54,000
Date Open
28,000
11-
2-31
279,000
11-
5-31
100,000
10-31-31
31,000
10-31-21
District No. 11
%
First National Bank
Las Cruces
N .Mex. 9 -
4-31
50,000
X-3962
BASICS RSP0BT3D CLOSED - WgEK ENDED NOV. 13, 1931
(For confidential use only - subject to correction)
Member tanks indicated " y an asterisk (•),,
b
"mte
Surplus
Total
;
Name of Bank
City
State closed
Capital & profits deposits
(Bankers'Directory July 1931)
District No. 2
226,000
30,000
100,000
N. J . Nov. 9
Singac
Singac Trust Co.
District No. 4
""Citizens National Bank
First State Bank
Nov. 10
tt
12
75,000
25,000
80,000
27,000
1,050,000
239,000
9
3
25,000
17,000
60,000
2,000
528,000
150,000
District No. 6
Lancaster Banking Co.
Lancaster
Tenn. Oct. 22
Silver Creek State Bank Silver Creek Miss. ft
26
tt
tt
Merchants & ivl&r ine Bank Pascagoula
15
Ideal
Peoples Bank
Nov. 9
Ga.
tt
«
Arlington
Bank of Arlington
10
it
tt
12
Irwinton Bank
^ Irwinton
15,000
10,000
75,000
15,000
50,000
15,000
4,000
10,000
17,000
3,000
35,000
5,000
23,000
90,000
545,000
65,000
220,000
85,000
7
9
10
12
12
50,000
30,000
200,000
200,000
25,000
14,000
5,000
235,000
117,000
5,000
450,000
170,000
2,005,000
1,445,000
424,000
Nov.
it
12
12
25,000
50,000
13,000
3,000
301,000
210,000
New Salem
n
i
t
N.Dak.N o v *
i i
t t tt
Ollie
Lewis
Frederic
Almont
Kenmare
Custer
Pettitone
Mont.
Wis.
6
6
6
7
9
12
12
13
12
20,000
20,000
20,000
12,000
25,000
10,000
25,000
25,000
10,000
11,000
23,000
5,000
7,000
7,000
. 15,000
17,000
1,000
13,000
337,000
320,000
52,000
74,000
317,000
142,000
272,000
195,000
50,000
. 9
10
10
12
12
13
25,000
10,000
35,000
25,000
20,000
50,000
31,000
22,000
13,000
13,000
3,000
1,000
469,000
98,000
243,000
327,000
66,000
300,000
New Lexington 0.
Ohio
Plain City-
District No. 5
Peoples Bank of Somerset Princess
Anne
County
Mirphy
Cherokee Bank
District No. 7
Calumet City State Bank Calumet City
State Bank of Beaver ton Beaver ton
Madison
Capital City Bank
•Citizens Nat.Bank & Tr.Co.Terre Haute
Volga
Iowa State Svgs. Bank
District No. 8
*First National Bank
Bank of Sweet Springs
District No. 9
Farmers & Merch. St. Bk.
First State Bank
Ollie State Bank
Lewis State Bank
•First National Bank
Farmers State Bank
•First Kenmare Nat. Bank
•First National Bank
Pettibone State Bank
Nov.
N. C. Odt.
M .
111.
Mich.
Wis.
Ind.
Iowa
Mareeline
Mo.
Sweet Springs "
Nov.
tt
tt
it
tf
it
tt
tt
tt
N.Dak.
i »
t
tt
S.Dak.
N.Dak.
tt
tt
tt
District No. 10
•First National Bank, Steamboat Springs, Cole> . N o v
M
Strasburg
Farmers Bank
Mo.
i
t
Security State Bank
Broken Bow
Nebr.
i
t
n
Arapahoe State Bank
Arapahoe
i
t
Lincolnville State Bank Lincolnville Kans.
i
i
First State Bank
Douglas
Wyo.
f • 89
- 2 -
Week ended Nov. 13, 1931.
I l m b r "banks indicated by an asterisk (*).
»e"e
Date
Name of Bank
City
State closed
District No. 11
*Beeville Bank « Trust Co.Beeville
Far.& Merch.State Bk.
MaTaank
First State Bank
Skidmore
District No. 7
Citizens Bank
Texas Nov.12
"
" 12
"
" 13
X-3962
Surplus
Total
Capital & profits
deposits
(Banker s'Directory July 1931)
50,000
25,000
25,000
32,000
5,000
5,000
Date open
REOPENED:
Mlo
Iowa 10-31-31
447,000
130,000
90,000
20,000
6,000
11-10-31
7 0
X-3962
BANKS REPORTED CLOSED - WEEK ENDED NOV. 80, 1931
(For confidential use only - subject to correction)
lumber "banks indicated ly —
a
City
State
Date
closed
*Fir st Nat ional Bank
Vincent D'Ambrosio
Houtzdale
Philadelphia
Pa.
M
Nov .16
345,000 1,633,000
125,000
oet .20 (Private hank - no figures)
District No, 4
•Peoples National Bank
•First National Bank
Lodi
Geneva
Ohio
I
I
Nov .19
i 20
i
50,000
50,000
32,000
80,000
958,000
850,000
District No. 6
Bank 6f Dwell on
Bank of Pompano
Citizens Bank
Dune11on
Pompano
Blake ly
Fla.
t
i
Nov .14
I 16
t
I 14
t
60,(l00
50,000
50,000
64,000
56,000
5,000
204,000
600,000
^44,0#
District No.i 7
Livingston State Bank
-Esmond State Bank
Livingston
Esmond
Wisr.. Nov .17
i 18
t
111.
25,000
25,000
15,000
6,000
177,000
93,000
District No. 8
Bank of Manila
*Ftirst National Bank
Farmers & merchants Bank
Peopled Bank
Bank of FortunePeoples Home Bank
Bank of Smithville
Farmerd Bank & Trust Co.
Citizens Bank
Bank of Green City
Manila
Corinth
Beaufort
St. Charles
Fortuna
Hampton
Smithville
St. Matthews
Foreman
Green City
Ark*
Kiss.
MO.
t
. t
I
.T
Ark.
Miss.
Ky.
Ark.
i:o.
Farmers & Merchants
State B&hk
•First National Bank
Morgan
Stanford
llinn. Nov . 1 6
t
Mont. i 1 8
District No. 10
FirsHi State Bank
•First Nat ional Bank
Wisher State Bank
Batik of Miller
St. Paul State Bank
First State Bank
Farmers State Bank
Aurora
Tilden
Wisner
Filler
St. Paul
Beaver City
Olustee
Kans.
Nehr.
n
Kans.
Nehr.
Okla.
District No. 11
Sonera Bank & Trust Co.
Kyl», State Bank
Nqgales
Kyle
Ariz.
T$z.
Name of Bank
District No. 3
Ga.
,20
NOV:,
1 20
1
I 20
I
I 20
I
i 20
l
.1 16
1
. I 16
I
I 17
I
I 18
I
I 18
I
Surplus
Total
Capital & profits deposits
(Bankers'Directory July '31)
15,000
100,000
20,000
bo,ooo
10,000
25,000
20,000
40,000
25,000
20,000
57,000
16,000
6,000 1,082,000
10,000
273,000
48,000
308,000
4,000
72,000
21,000
106,000
5,000
27,000
17,000
199,000
1,000
122,000
2,000
78,000
District No. 9
I
I
50,000
37,000
711,000
35,000
6,000
112,000
Nov 1 1 4
20,000
6,000
75,000
14
5'0,000
33,000
251,000
16
25,000
38,000
426,000
18
25,000
6,000
131,000
18
20,000
8,000
124,000
20
20,000
34,000
364,000
20
25,000
10,000
398,000
Nov . 1 9
100,000
39,000
1,415,000
19
30,000
3,000
53,000
ft
t
t
I
t
I
t
I
t
I
t
n
71
X-3962
- 2 *
Week ended November 20, 1951.
Member banks indicated " y an asterisk (•).
b
Name of Bank
City
State
Pat e
closed
Surplus
Date
reopened
Capital & profits
(Bankers'Directory July 1931)
CLOSED BANKS REOPENED:
District No. 4
Brewster Banking Co.
Brewster
Ohio
District
•Peoples
Bank of
Bank of
liar tins "burg
Ocean City
Ripley
Walker ton
Davis
Lucerne
Ind.
111.
Ind.
20,000
11-16-31
W.Va. 10-16-31 250,000
la. 10- 1-31 15,000
50,000
W.V&. 11- 4-31
152,000
18,000
10,000
11-14-31
11-14-31
11-16-31
10-26-31
8-25-31
10-31-31
25,000
25,000
25,000
15,000
13,000
15,000
11-12-31
11-16-31
11-20-31
District No. 9
* State Bank of Ivladelia Madelia
First State Bank
Vida
*Eirst National Bank
Mondovi
Minn. 5- 5-31
liont. 10-30-31
Wis. 10- 3-31
20,000
50,000
18,000
6,000
50,000
57,000
11-16-31
11-18-31
11-19-31
District No. 8
Triplett Bank
Triplett
Mo.
10-13-31
15,000
5,000
11-16-31
District No. 10
Union State Bank
Omaha
Nebr.
8-14-31
200,000
65,000
11-16-31
District No. 11
Texas 10-23-31
•First National Bank in to All en
(Restored to solvency and sold to a State tank)
60,000
20,000
11-12-31
No. 5
Trust Co.
Ocean City
Ripley
District No. 7
State Bank of
State Bank of Davis
Lucerne State Bank
10-22-31
25,000
X-3962
BaNKS K3P03T3D CLOSED WEEK ENDED NOV. 27, 1951
^
(For confidential use only - subject to correction) K
/**
Member "banks indicated by an asterisk (*).
Total
Surplus
deposits
& profits
Capital
(Bankers"Directory July 1931)
ITame of Bank
City
State
Date
closed
District No», 2
Bank of Angola
Angola
N. Y.
,27
Nov.
50,000
53,000
806,000
District No. 3
Idahantongo Valley Bank
Pillow
Pa.
Nov .23
25,000
51,000
304,000
District No. 4
Bank of Westerville Co.
Westervilie Ohio
.25
Nov.
50,000
64,000
664,000
District No. 5
S. C.
Farmers & ICerchants Bank Marion
Westminster u
•Westminster Bank
Nov.
.23
it
27
100,000
50,000
67,000
7,000
633,000
354,000
District No. 6
Escambia County Bank
""First National Bank in
Nov .21
tt
27
25,000
400,000
11,000
100,000
158,000
3,615,000
Nov .20
ft
20
tt
23
50,000
25,000
10,000
68,000
9,000
7,000
758,000
165,000
80,000
District No. 7
Commercial State Bank
Woodbine Savings Bank
Thayer Savings Bank
Fifth Avenue Trust &
Savings Bank
Farmers & Traders State
Bank
Corn Belt Savings Bank
Equitable Trust Co.
Eagle State Bank
Farmers State Bank
Farmers Bank
Farmers State Bank
•Ithaca National Bank
District
•Farmers
Bank of
Corinth
No. 8
State Bank
Greentop
State Bank
Flomaton
Gulfport
Ala.
Hiss.
Independence la.
ft
Woodbine
Tt
Thayer
lloline
111.
Ind.
llonon
Cedar Rapids la.
Chicago
111.
it
Casey
i«
Burgess
tt
Creston
Brandon
Iowa
Ivlich,
Ithaca
ft
24
100,000
45,000
622,000
ft
24
24
25
25
27
27
27
27
50,000
100,000
350,000
25,000
25,000
30,000
25,000
25,000
5,000
30,000
64,000
10,000
30,000
13,000
10,000
40,000
184,000
940,000
945,000
121,000
80,000
175,000
183,000
706,000
ft
n
ft
tt
tt
Tf
tt
Conway
Greentop
Corinth
Ark.
Mo.
Miss.
Nov .23
tt
23
ft
25
60,000
20,000
50,000
40,000
7,000
967,000
95,000
400,000
District No. 9
Peterson State Bank
Farmers State Bank
Peterson
Henning
llinn. Nov .21
tt 21
tt
25,000
10,000
3,000
7,000
120,000
235,000
District No. 10
Elba Stake Bank
Mason City Banking Co.
Security State Bank
Bank of Longdale
Bank of Holbrook
Peoples Bank
City Bank
Elba
Mason City
Ada
Longdale
Holbrook
Wauneta
Elm Creek
Nebr.
Nov .20
ft
20
ft
23
ft
24
ft
24
ft
27
ft
27
10,000
25,000
50,000
10,000
25,000
50,000
20,000
9,000
3,000
13,000
1,000
8,000
1,000
5,000
201,000
132,000
479,000
38,000
280,000
200,000
114,000
tt
Okla.
Nebr.
tt
ft
.: —
—
*
*
2 -
2-39 fe
7i
» e i ended November 27, 1931.
7e:
Member banks indicated "by ,an asterisk (*).
Name of B&nk
city
State
Date
closed
District No. 11
First State Bank
Temple
Texas
Nov. 2 ?
--
Idaho
Wash.
Idaho
Nov.21
" 23
" 23
District No. 12
•Twin Falls National Bank,Twin Falls
*First National Bank
Zillah
State Bank of Peck
Peck
Surplus
Total
Capital & profits
deposits
(Bankers'Directory July 1931)
50,000
35,000
295,000
150,000
25,000
10,000
5,000
413,000
366,000
31,000
28,000
2,000
Date
opened
CLOSED BANKS REOPENED;
District No. 4
United Bank of
Middlebourne
W.Va. 10-19-31
50,000
20,000
11-23-31
District No. 5
Bank of Williston
Williston
S. C. 10-15-31
50,000
28,000
11-24-31
District No. 10
Farmers State Bank
State Bank of Huntley
Wallace
Huntley
Nebr. 10-17-31
"
10-10-31
25,000
10,000
7,000
3,000
11-17-31
11- 5-31
District No. 11
•First National Bank
I L s si on
.i
Texas 10-22-31
50,000
25,000
11-23-31
District No. 12
•First National Bank
Ontario
Oreg. 9-12-31
50,000
(turned back to directors and sold to Ontario National Bank)
51,000
11-24-31
i,
X-3962
BANKS REPORTED CLOSED WEEK ENDED PEG. 4, 1931
(For confidential use only - subject to correction)
Member "banks indicated by an asterisk (•).
~
—
~
Date
Surplus
Total
& profits
deposits
Name of Bank
City
State closed Capital
(Bankers' Directory July 1931)
District No. 2
•First National Bank
& Trust Co.
Wood "bridge
150,000
N. J . Nov . 3 0
43,000
2 ,184,000
Sakser State Bank
New York
100,000
100,000
N. Y. Dec , 4
1 ,210,000
District No. 3
*Curwensville Nat.Bank,Curwensville
•Hopewe11 Nat. Bank
Hopewe11
District No. 4
•Second National Bank in Youngstown
•First National Bank Glen Campbell
Waynesburg Deposit Bk,Waynes"burg
Farmers State Bank
Hicksville
District No. 5
Bank of Blowing Bock Blowing Bock
•First National Bank Washington
Peoples-Enterprise Bk, Laurens
Peoples Bank
Jtoncks Corner
Farmers Bank
Loris
District Nol 6
Citizens Bank
New liarket Bkg. Co.
Bank of Gainesboro
Cairo
New larket
Gainesboro
District No. 7
LaJ.-oille State Bank LaMoille
State Bank of Reading, Reading
Exchange State Bank Sand Lake
•First National Bank Bay City
Bay County Svgs.Bank "
"
District No. 8
•Conmunity Bank & Tr.Co.,Hot Springs
Citizens Bank
Norfolk
•First National Bank Chaffee
Far.Bank & Tr. Co.
Russellville
Dorcheat Bank
Taylor
Bank of Annapolis
Annapolis
Cardwell Bank
Cardwel1
Pa.
Nov . 3 0
Dec . 2
100,000
157,000
642,000
25,000
30,000
269,000
Nov . 3 0
Dec . 3
200,000
31,000
1 ,820,000
100,000
120,000
529,000
4
15,000
4,000
99,000
4
25,000
3,000
200,000
N. C. Nov . 2 8
16,000
13,000
97,000
30
100,000
96,000
710,000
Dec . 1
Nov . 2 8
Dec . 4
100,000
47,000
506,000
25,000
3,000
265,000
10,000
7,000
108,000
it
Ohio
Pa.
Ky.
Ohio
tt
s. c.
tt
tt
ft
I
f
tt
Dec . 1
Ga*
Ala. Nov . 2 4
Term. Dec . 2
50,000
15,000
20,000
10,000
125,000
50,000
45,000
405,000
Nov . 2 8
35,000
10,000
228,000
28
25,000
13,000
453,000
111.
ivlich.
tt
»
ft
Dec .
1
25,000
2,000
142,000
3
400,000
481,000
5 ,486,000
3
400,000
345,000
6 ,754,000
Nov . 3 0
i 28
t
100,000
60,000
910,000
5,000
2,000
28,000
50,000
23,000
298,000
286,000
tt
ft
Ark.
it
Mo.
Ark.
tt
Mo.
n
348,000
it
Dec .
30
3
50,000
19,000
2
10,000
ft
3,000
30,000
4
10,000
tt
25,000
116,000
4
50,000
13,000
150,000
ft
I75
Week ended Deo en t e 4, 1931.
ir
IIem"ber "banks indicated " y an asterisk (•).
b
Name of Bank
District No. 9
Vivian State Bank
Far. & March. Bank
First State Bank
American State Bank
Joliet State Bank
Farmers State Bank
Farmers State Bank
Union Bank of IlcVille
City
State
Vivian
Argyle
Fergus Falls
S.Dak.
llinn.
Joliet
Hoople
Lesterville
IvjicVille
Mont.
N.Dak.
S.Dak.
N.Dak.
Hoskins
Norfolk
Ne"br.
It
It
Tt
ft
Date
closed
Surplus
Total
Capital
& profits deposits
(Bankers * Directory July 1931)
Nov .30
ft
30
Dec . 2
tt
3
Tt
1
tt
1
ft
3
U
4
10,000
25,000
35,000
50,000
25,000
25,000
25,000
25,000
Nov .30
tt
28
it
30
Dec . 1
1
ft
2
tt
4
25,000
100,000
15,000
40,000
25,000
10,000
25,000
13,000
354,000
12,000 1,002,000
21,000
212,000
13,000
288,000
5,000
166,000
2,000
79,000
10,000
200,000
14,000
10,000
12,000
20,000
1,000
—
—
10,000
—
—
62,000
195,000
550,000
612,000
180,000
220,000
104,000
287,000
District No. 10
Hoskins State Bank
•Norfolk National Bank
Norfolk Savings Bank
•First National Bank
Bank of Syracuse
Hiattville State Bank
Bank of Fulton
Brighton
Syracuse
Hiattville
Fulton
Colo.
Ne"br.
Kans.
District No. 11
•Nogales National Bank
•First National Bank
Nogales
Laredo
Ariz.
Texas
Nov .30
ft
30
50,000
250,000
61,000
823,000
55,000 1,287,000
Wash.
Utah
"
Idaho
Nov.30
Dec. 2
"
1
"
4
50,000
20,000
50,000
100,000
11,000
18,000
tt
n
it
District No. 12
Okanogan
•Commercial Bank
Grantsville Deseret Bk Grantsville
•Nephi National Bank
Nephi
•First National Bank
Twin Falls
District No. 8
Weakley County Bank
ti
224,000
140,000
225,000
33,000 1,335,000
Date
opened
CLOSED BANKS REOPENED:
Dresden
10-13-31
40,000
District No. 9
Far .& lierch.State Bank Boslyn
First State Bank
Pierpont
S.Dak. 9-29-31
" "
10- 1-31
10,000
30,000
12- 2-31
District No. 10
Hose land State Bank
Nebr.
25,000
4,000
10-19-31
Eoseland
Tenn,
10- 8-31
15,000
16,000
12- 1-31
6,000 12- 2-31
X-3962
76
BANKS K3P0BTED CLOSED WEEK ENDED DECEMBER 11, 1931
(For confidential use only - subject to correction)
Mem"ber "banks indicated "by an asterisk (•).
Surplus
Total
Date
City
State closed Capital & profits
Name of Bank
(Bankers'Directory July 1931)
District No. 2
49,000
783,000
25,000
Brushton
Nt Y . Dec , 5
•First National Bank
It
it
310,000 1,284,000
375,000
5
Long Beach
Long Beach Trust Co.
it
ft
461,000
7
32>000
25,000
Painted Post
•Painted Post Nat. Bank
it
It
337,000
13,000
9
25,000
Wilson
Wilson State Bank
»t
It
5,000
300,000
25,000
10
State Bank of Ransomville Bansomville
District No. 4
Perrysville Bank
Perrysville
Ohio
Dec .
8
10,000
2,000
115,000
District No. 5
Clayton Banking Co.
Clayton
N. C. Nov .
9
75,000
29,000
203,000
District No. 6
Canton Exchange Bank
Bank of Yazoo City
Canton
Yazoo City
Miss. Nov . 2 7
»
Dec . 1 1
110,000
94,000
1,097,000
200,000
68,000
1,328,000
District No. 7
Far. & Traders Svgs. Bank
Ogle County State Bank
Farmers State Bank
Farmers State Svgs. Bank
Cooper3ville State Bank
Immigrant State Bank
New Haven State Bank
State Bank of Oelwein
•First National Bank
District No. 8
•First National Bank
•First National Bank
Citizens State Bank
Scott County Bank
Bank of Dunnegan
•Bank of Jonesboro
Bank of Western Grove
West Frankfort State Bank
Christopher 1 1 1 .
ii
V/.Frankfort
Monette
Ark,
Mo.
Ivor ley
it
Dunnegan
Jones "boro
Ark.
Western Grove "
W. Frankfort 1 1 1 .
District No. 9
•National Bank of Aitkin
First State Bank
Ait kin
Hill City
Hillsboro
Oregon
Preemption
Fair "bank
Coopersville
Chicago
New Haven
Oelwein
Dougherty
Iowa
111.
it
Iowa
Mich.
Dec .
4
25,000
18,000
135,000
ft
8
100,000
29,000
467,000
ft
7
7
7
25,000
7,000
275,000
. 471,000
ft
It
30,000
65,000
918,000
111.,
It
10
200,000
40,000
370,000
Ind.
Iowa
»t
11
50,000
22,000
395,000
11
50,000
23,000
540,000
11
25,000
5,000
296,000
it
n
tt
Deo .
5
60,000
44,000
1,030,000
25,000
89,000
1,133,000
it
5
8
25,000
5,000
156,000
tr
7
15,000
6,000
55,000
tt
9
10,000
11,000
57,000
ti
11
200,000
133,000
1,014,000
?t
tt
it
Minn. Deo .
it
u
11
10,000
11,000
52,000
10
25,000
35,000
457,000
7
50,000
10,000
515,000
10
20,000
5,000
94,000
District No. 10
Colo. Dec . 7
Phillips County State Bank Holyoke
7
Neligh
Nebr. it
Security State Bank
8
City Exchange Bank
Davis
Okla. it
Idaho Springs Colo tt 1 1
•First National Bank
Winside
Nebr. n 1 0
Merchants State Bank
Okla. it 1 0
Citizens State Bank
Vici
Latimer State Bank
Latimer
Kans. it 1 1
26,000
40,000
25,000
5,000
288,000
30,000
5,000
376,000
25,000
2,000
244,000
50,000
13,000
225,000
25,000
20,000
336,000
10,000
5,000
102,000
20,000
10,000
90,000
«
j.,
X-3962
— 2 —
? ?
Week ended December 11, 1931.
Ilember banks indicated " y an asterisk (•).
b
Date
Surplus
Total
City
Name of Bank
State closed Capital
& profits
deposits
[Bankers 'Directory July 1931)
District No. 11
•First National Bank
Sweetwater Texas Dec.10
845,000
100,000
39,000
•First State Bank
Coahoma
"
"11
25,000
2,000
49,000
District No. 12
Bank of Cottage Grove
Citizens Bank
•First National Bank in
Cottage
Grove
Tenino
Aberdeen
Oreg. Dec. 7
Wash,
"
5
it
"
9
25,000
10,000
150,000
6,000
10,000
70,000
CLOSED BANKS BE OPENED t
District No. 5
Middletasrn Savings Bank
Terra Alt a Bank
181,000
219,000
1,695,000
Date open
liiddletown M .
10- 6-31
Terra Alta W.Va. 10-17-31
25,000
30,000
152,000
52,000
12- 5-51
12- 5-Z1
District No. 8
Maben Home Bank
Maben
Hiss. 1-10-31
Bank of Slater
Slater
li>.
10-26-31
(reopened under name of State Bank of Slater)
15,000
50,000
10,000
75,000
10-24-31
12- 5-31
District No. 10
Franklin County Bank
Bank of Longdale
Hildreth
Longdale
Nebr. 10-19-31
Okla. 11-24-31
20,000
10,000
7,000
1,000
12- 7-31
12- 8-31
District No. 12
•Security National Bank
Fairfield
Ida.
10-24-31
25,000
8,000
12-10-31
District No. 9
Henno State Bank
ifenno
S.Dak.10- 1-31
25,000
18,000
12- 4-31
r • 78
/
X-3962
BANKS BEP0BT3D CLOSED WEEK ENDED DECEMBES 18, 1931
(For confidential use only - subject to fcorrection)
Member tanks indicated "by an asterisk (*).
Name of Bank
City
District No. 1
Berlin
Guaranty Trust Co.
Brockton
Brockton Trust Co.
Cambridge
•Inman Trust Co.
(and branch office)
Lawrence
Lawrence Trust Co.
Salem
Salem Trust Co.
Worcester
Bancroft Trust Co.
(and "branch office)
•Middlesex National Bank Lowell
Lynn
•State National Bank in
Boston
•Federal National Bank
•Gloucester National Bank Gloucester
Hamden Bank & Trust Co. Hamden
Internat'l Tr.& Bkg. Co. Calais
•Boston-Continental Nat.Bk. Boston
Lowell
Lowell Trust Co.
Danielson
Danielson Trust Co.
Plymouth County Trust Co. Brockton
(and "branch office)
Lawrence
Arlington Trust Co.
Windsor
Windsor Leeks Trust &
Locks
Safe Deposit Co.
#These deposit figures furnished
State
N. H.
Mass.
Date
closed
Dec . 1 4
n
15
it
15
llass. Dec . 1 5
»»
Total
Surplus
deposits
Capital & profits
(Bankers'Directory July 1931)
53,000
775,000
100,000
128,000
1,384,000
200,000
240,000
3,760,000
50,000
200,000
651,000
9,700,000
tt
it
15
200,000
56,000
2,160,000
ft
tt
15
300,000
293,000
6,112,000
Dec . 1 5
200,000
54,000
4,670,000
it
15
200,000
82,000
2,321,000
it
15
1,910,000
820,000
28,959,000
tt
tt
15
100,000
157,000
1,732,000
Conn.
Maine
Mass.
it
17
200,000
143,000
1,924,000
ft
16
50,000
102,000
1,511,000#
n
17
1,000,000
182,000
6,366,000#
3,384,000ir
lass.
it
it
it
rt
16
240,000
282,000
Conn.
Mass *
11
18
100,000
160,000
2,689,000#
tt
17
200,000
151,000
3,772,000#
Dec . 1 7
200,000
342,000
6,990,000#
171,000
1,187,000#
Mass.
50,000
Conn* Dec . 1 8
" y Federal Eeserve Agent) •
b
JL
District No. 2
•Community Trust Co.
Bank of Spencerport
•Corinth National Bank
Union Bank of Medina
State Bank of CommerceU
State Bank of Hilton
•First National Bank
•First National Bank
•First National Bank
Kiddleport
Dec . 1 4
N. Y.
tt
tt
Spencerport
14
n
n
15
Corinth
tt
tt
15
Medina
ii
it
16
Brockport
ii
tt
16
Hilton
it
11
17
Gaspor t
tt
rt
17
lliddleport
White House Sta»,N .J." 1 7
100,000
53,000
50,000
36,000
824,000
35,000
106,000
1,671,000
District No. 3
Peoples Trust Co.
State Bank of
Pa.
Annville
Klinger st own "
100,000
53,000
702,000
100,000
26,000
1,672,000
50,000
32,000
905,000
25,000
5,000
274,000
25,000
29,000
580,000
30,000
82,000
627,000
Dec . 1 5
125,000
61,000
432,000
17
25,000
26,000
390,000
Dec . 1 5
200,000
128,000
1,430,000
18
50,000
16,000
663,000
18
60,000
11,000
757,000
,
District No. 4
Ohio
Marion
•Marion National Bank
tt
.
Citizens Savings Bank Co. Pemberville
Columbus Grove "
Peoples Excharge Bank
702,000
it
it
it
^
- 2 -
79
X-3962
Week ended Deceinber 18, 1531
Iilember "banks indicated "by an asterisk (_*)
Surplus
Total
Date
Fame of Bank
City
State
closed Capital & profits deposits
(Bankers'Directory July 1931)
District No. 5
•"First National Bank
Mallins
S . C.
Dec . 1 2 5 0 , 0 0 0 .
14,000
324,000
it
t?
it
Bank of Mullins
12
5,000
25,000
190,000
ft
V
Bank of Nichols
Nichols
12
10,000
25,000
170,000
ft
""First National Bank
Warsaw
N. C.
15
50,000
2,000
68,000
ii
ft
*First National Bank
Burlington
16 1 0 0 , 0 0 0
129,000
1,806,000
ii
ft
""Commercial National Bank Raleigh
17 600,000
90,000
4,850,000
ft
II
—
— "
Bank of Grover
Grover
18
10,000
76,000
ii
ft
Bank of Wake
Wake Forest
18
20,000
15,000
217,000
District No. 6
Sea Island Bank
Opelousas St. Landry
Bank & Trust Co.
Farmers & Merchants Bank
American Bank & Trust Co.
Hichton Bank & Trust Co.
Citizens Exchange Bank
Bank of Seminary
Bank of Unad ilia
Bank of Acadia
•First National Bank
Carthage Bank
Stat esboro
Ga.
Dec .
12
50,000
82,000
609,000
Opelousas
Athens
Cordele
Hichton
State Line
Seminary
Unadilla
Crowley
Kingston
Carthage
La.
Ala.
Ga.
Miss.
Dec . 1 4
200,000
198,000
2,194,000
14
80,000
57,000
573,000
14
150,000
28,000
446,000
Nov . 3 0
30,000
1,000
239,000
tt
14
10,000
2,000
44,000
ft
13
10,000
5,000
127,000
Dec . 1 6
50,000
15,000
137,000
16
50,000
114,000
829,000
tt
18
25,000
8,000
100,000
tt
4
25,000
13,000
314,000
Dec . 1 2
75,000
15,000
535,000
12
50,000
6,000
290,000
it
12
25,000
13,000
175,000
ft
14
50,000
23,000
403,000
II
it
Ga.
La.
Tenn.
Ii s s .
vi
District No. 7
*Eichig=m State Bank
Baton Rapids Mich.
Amboy State Bank
Amboy
111.
Iowa State Bank
Hazleton
Iowa
Citizens State Bank
Prophetstown 1 1 1 .
II
State Bank of New Boston New Boston
it
State Bank of Sheldon
Sheldon
State Bank of Deep River Deep River
Iowa
""First National Bank
llomence
111.
it
Byron State Bank
Byron
it
-Camargo State Bank
Camargo
it
Parish State Bank
Homenee
Aetna State Bank
Oelwein
Iowa
it
Peoples Savings Bank
Shells "burg
II
First Trust & Savings Bk. Sioux City
Farmers State Bank
Poneto
Ind.
Dimondale State Bank
Dimondale
rich.
Forest Park Tr. & Svgs.Bk.Forest Park
111.
•National Bank of Seymour Seymour
Iowa
University State Bank
Champaign
111.
ft
St ate Bank od Donovan
Donovan
American Tr. & Svgs.Bank Hammond
Ind.
Dundee Savings Bank
Dundee
Iowa
tt
rt
ft
ft
it
14
30,000
31,000
235,000
ft
14
60,000
10,000
280,000
rt
14
25,000
28,000
ff
449,000
15
50,000
ft
42,000
673,000
15
66,000
ft
17,000
370,000
15
15,000
15,000
87,000
15
25,000
15,000
240,000
ft
ft
15
50,000
60,000
1,035,000
15
25,000
9,000
273,000
Tt
15
100,000
25,000
962,000
ft
15
25,000
6,000
75,000
It
15
20,000
15,000
161,000
2,549,000
it
tt
ff
ft
ff
ft
tt
16
300,000
311,000
16
25,000
5,000
190,000
16
50,000
17,000
554,000
16
30,000
2,000
125,000
16
100,000
105,000
600,000
16
10,000
—
—
63,000
80
X-3962
— 3 —
Week ended December 18, 1951.
Member "banks indicated by an asterisk (*).
Name of Bank
City
District No» 7 (continued)t
Danfor th
Farmers State Bank
Haywood
Proviso State Bank
Mir ray
Farmers Savings Bank
Benton Harbor
•Amer. Nat. Bank & Tr.Co.
it
n
Benton Harbor State Bank
Gratiot County State Bk. St. Louis
Chicago
Ashland State Bank
Maywood
Maywood State Bank
Melrose Park State Bank Melrose Park
Park Bidge
Park Ridge Stat e Bank
Aplington
Exchange Bank
Random Lake
State Bank of
Monroe Center State Bank llonroe Center
Morrison
Morrison State Bank
Watseka
Citizens State Bank
Woodland
Woodland State Bank
Coloma
State Bank of Coloma
State
Date
closed
Surplus
Total
Capital & profits
deposits
(Bankers'Directory July 1931)
Dec . 1 7
30,000
21,000
17
100,000
50,000
550,000
tt
17
20,000
5,000
240,000
it
17
200,000
117,000
2 ,864,000
ft
Tt
17
100,000
115,000
1 ,716,000
n
tt
17
25,000
8,000
278,000
tt
18
250,000
145,000
726,000
rt
18
200,000
338,000
1 ,914,000
it
tt
»
18
200,000
351,000
1 ,575,000
tt
18
100,000
42,000
1 ,291,000
Iowa
Wise.
tt
18
50,000
23,000
340,000
ft
18
25,000
44,000
452,000
111.
tt
tt
18
50,000
35,000
444,000
it
18
25,000
31,000
462,000
111.
it
Iowa
Mich.
in.
it
rt
210,000
it
tt
18
50,000
24,000
608,000
it
ft
18
15,000
9,000
159,000
18
40,000
65,000
918,000
Dec . 1 8
50,000
27,000
297,000
12
10,000
1,000
50,000
12
20,000
7,000
187,000
tt
14
30,000
31,000
391,000
ft
16
50,000
35,000
375,000
tt
17
10,000
4,000
62,000
tt
17
50,000
5,000
218,000
Dec . 1 2
12,000
3,000
105,000
30,000
20,000
507,000
it
14
15
25,000
it
5,000
83,000
15
15,000
1,000
11,000
Mich.
District No. 8
Bank of Osceola
Citizens Bank
Bank of Newburg
Lonoke County Bank
Citizens Bank
Bank of ./ins low
Far.& Merch.Bk. & Tr.Co.
Osceola
Hickory Ridge
Newburg
Lonoke
Memphis
Winslow
Marked Tree
Ark.
District No. 9
Wendell State Bank
Bank of Norwood
•First National Bank
Security State B§nk
Wendell
Norwood
Starkweather
Warwick
Minn.
tt
tt
Mo.
Ark.
Ho.
Ark.
it
n
N.Dak.
tt
tt
ft
ft
it
CORRECTION: In weekly report of Dec. 4, 1 9 3 1 , the Vivian State Bank, Vivian , S. Dak
,
was reported closed in error. This is not a closed "bank.
District No. 10
•West Point National Bank
•Creighton National Bank
Cass oday State Bank
Bank of Ridgway
Farmers State Bank
Bank of Corning
Liberty State Bank
Farmers & Merch. Bank
Matfield Green State Bk
Citizens State Bank
West Point
Nebr. Dec . 1 2
tt
n
Creighton
12
ft
Cassoday
Kans.
14
tt
Ridgway
Colo.
14
tt
Bonner Springs,Kans.
14
ft
Corning
Mo.
15
ft
Sidney
Nebr.
15
it
ft 1 5
Lindsay
ft
Mat field Green,Kans.
18
Beaver Crossing,Nebr tt 1 7
50,000
125,000
856,000
25,000
25,000
170,000
10,000
6,000
74,000
15,000
10,000
94,000
25,000
14,000
130,000
15,000
12,000
185,000
25,000
25,000
487,000
25,000
3,000
245,000
10,000
8,000
61,000
15,000
8,000
150,000
X-3962
Week ended December 18, 1931.
Ilgnber 'banks Indicated fry an asterisk (*).
Surplus
Total
Capital & profits deposits
(Bankers' Directory July 1931)
Name of Bank
City
Date
State closed
District No. 11
Citizens Bank
Citizens State Bank
Channel State Bank
Cameron State Bank
Bedias
Detroit
Houston
Cameron
Texas Dec .14
ft
it
15
it
«
16
ti
Tt
18
15,000
35,000
25,000
60,000
Wash, Dec .12
M
14
Ida.
ft
18
Calif.
Oreg. ft 18
300,000
25,000
25,000
50,000
33,000 1,754,000
163,000
20,000
360,000
29,000
595,000
15,000
18
116,000
46,000
District No. 12
Azner ic an Exchange Bank Seattle
Sugar City
•Fremont County Bank
Victorville
•First National Bank
Milton
•First National Bank
(and branch at Freewater)
Santa Monica
Marine Bank
{and "branch at Ocean Park)
,
Calif,
"
BEOPENED:
District No. 4
State Savings Bank Co.
Maumee
District No. 6
Opelousas-St.Landry Bank
& Trust Co.
Opelousas
-
—
10,000
23,000
2,000
17,000
219,000
322,000
380,000
970,000
Date open
Ohio 8-18-31
25,000
14,000 12-14-31
La. 12-14-31
200,000
200,000 12-16-31
District No. 8
•Peoples National Bank
St.Francisville,111.11-4-31
70,000
36,000 12-15-31
District No. 9
*First-Kenmare Nat. Bank
Kenmare
N.Dak.11-12-31
25,000
17,000 12-11-31
District No. 10
Clay County State Bank
State Bank of Edgar
Edgar
"
Nebr.10-22-31
"
10-22-51
25,000
25,000
8,000 12-15-31
2,000 12-15-31
District No. 11
•First National Bank
Del Bio
Texas 10-13-31 100,000
(turned back to directors and sold to Del Bio Nat. Bank)
184,000 12-12-31
m
BANKS R3P0ET3D GfrQSSD WEEK ENDED DECEMBER 25, 1931
(For confidential use only - subject to correction)
X-3962
Member "banks indicated " y an asterisk (•).
b
Name of Bank
City
State
Date
closed
Surplus
Total
Capital & profits
deposits
(Bankers 'Directory July 1931)
District No. 1
Char lest own Trust Co.
Charlestown
llass. Dec .21
200,000
it
"
•Connecticut River Nat.Bk.
19
N. H.
25,000
tt
Broadway Bk & Tr. Co.
New Haven
Conn.
23
400,000
Tt
ii
Merchants Trust Co.
Waterbury
23
500,000
tt
it
West Havqp. Bk & Tr. Co. West Haven
24
100,000
#These deposit figures furnished " y federal Reserve Agent.
b
District No. 2
Port Covington Bkg.Co. Ft.Covington N. Y.
(Private "bank)
•Seacoast Trust Co.
Ashury Park
N. J.
tt
•Citizens National Bank Long Branch
ft
ft
it
New Jersey Trust Co.
ti
Merchants Trust Co.
Red Bank
ti
"First National Bank
Bradley Beach
As "bury Park & Ocean
tt
Grove Bank
Astury Park
(with "branch at:
Ocean Grove)
ti
*0cean Grove Nat. Bank
Ocean Grove
District No. 3
Lansdowne Bk & Tr. Co.
Drexel Hill Title &
Trust Co.
Citizens Bank & Tr.Co.
Cornwells State Bank
Drexel Hill
E. Lansdowne
Cornwells Hts
District No. 4
Waldo Bank
Standard Trust Bank
Gahanna Bank Co.
Waldo
Cleveland
Gahanna
Ohio
District No. 5
Accomack Banking Co.
(with "branch at:
Bank of Coleraine
Bank of Warren
•First National Bank
•Franklin Bank
Planters Bk & Tr. Co,
Citizens Bank
Bank of Riner, Inc.
Parksley
Bloxom, Va.)
Colerain
Warrenton
Louis "burg
Franklin
Lumber ton
Spring Hope
Riner
Va.
Lansdowne
Pa,
185,000
14,000
261,000
840,000
76,000
3,495,000
402,000i
2,948,000i
6,894,000
2,766,000
18,000
35,000
279,000
22
23
23
23
24
625,000
150*000
150,000
250,000
50,000
307,000
157,000
80,000
148,000
61,000
4,880,000
2,390,000
1,292,000
1,582,000
742,000
tt
24
600,000 1,401,000
8,340,000
it
24
100,000
160,000
1,669,000
Dec .19
375,000
533,000
3,805,010
125,000
125,000
50,000
93,000
45,000
70,000
942,000
493,000
300,000
Dec.21
ii
it
it
tt
it
it
it
ti
it
it
it
it
Tt
N. C.
tt
i
t
W.Va.
N. C.
it
Va.
19
23
24
Dec .19
25,000
8,000
118,000
it
21 2,000,000 1,107,000 16,850,000
it
21
25,000
9,000
218,000
Dec .22
38,000
i 23
i
24
tt
19
tt
19
tt
21
It
21
If
21
38,000
50,000
50,000
40,000
100,000
40,000
20,000
tt
225,000 > 849,000
20,000
34,000
22,000
13,000
61,000
11,000
5,000
312,000
335,000
339,000
248,000
527,000
123,000
67,000
X-3962
— 2 —
#
Week ended December 25, 1931.
Member "banks indicated " y an asterisk (*)•
b
Name . f Bank
o
City
. State
Date
closed
District No. 7
1 Anteno State & Svgs.Bk riant eno
111.
Dec .22
tt
22
Peoples State Bank
Crown Point
Ind.
?t
22
Albion
rich.
*Albion State Bank
tt
23
Coggon
Coggon State Bank
Iowa
tt
22
*Amer. State Svgs. Bank Lansing
1 2 0 h.
,.
tt
n
23
Citizens State Svgs. Bk.Otsego
it
18
* First National Bank
El Paso
111.
it
it
19
Farmers State Bank
Ashton
it
tt
19
State Bank of Kempt on Kempton
rt
19
I-iarne
1'iich.
Berlin State Bank
tt
Aledo
111.
21
Aledo State Bank
tt
11
21
State Bank of Cameron
Cameron
11
tt
Lombard
21
Lombard State Bank
it
Lamont
Iowa
21
Farmers State Bank
i»
t1
Olin
21
Citizens Savings Bank
ii
tt
21
Williamson
Farmers Savings Bank
tt
23
Michigantcwn Ind.
Peoples State Bank
tt
23
Peoples State Bank
Winthrop
Iowa
tt
Liberty Center State Bk Liberty Center Ind«
23
tt
Esnteno
. Citizens State Bank
111.
22
District No. 8
Bank of Ozan
Security Bank & Tr.Co.
Newton County Bank
Bank of Oxford
First State Bank
Bank of Concordia
Exchange Bank
Bank of Dover
Mackey State Bank
Somerville State Bank
Farmers Bank
*First National Bank
*First National Bank in
*Bozeman Waters First
National Bank
Old State Bank
Owensville State Bank
Boston Banking Co.
Bank of Batesville
•Peoples Exchange Bank
Bank of Defiance
Poseyville
Ind.
tt
Oakland City
tt
Owensville
Lebanon Jet. Ky.
Batesville
Kiss.
Huasellville Ark.
Defiance
Mo.
District No. 9
Farmers State Bank
Farwell State Bank
Farmers State Bank
Security State Bank
V/egdahl
Farwe 11
Denham
Starbuck
Ozan
Greenwood
J asper
Oxford
Dix
Concordia
Breckenridge
Dover
Mackey
Somerville
Braymer
Hound City
Mount Olive
Ark.
Dec.19
it
19
iliss.
tt
21
Ark.
ft
tt
19
Tt
111.
21
tt
Mo.
21
ft
tt
19
tt
Ark.
22
ft
22
Ind.
it
ft
22
ft
22
Mo.
tt
111.
19
ft
tt
23
Minn.
ft
1
1
ft
Surplus
Total
Capital & profits
deposits
(Bankers'Directory July 1931)
25,000
60,000
50,000
50,000
750,000
25,000
100,000
35,000
30,000
20,000
55,000
50,000
70,000
25,000
30,000
12,000
25,000
50,000
25,000
25,000
27,000
196,000
875,000
47,000
618,000
28,000
226,000
12,000
488,000 9,672,000
385,000
8,000
383,000
17,000
9,000
165,000
250,000
7,000
188,000
9,000
29,000
973,000
133,000
46,000
25,000
865,000
265,000
12,000
208,000
5,000
135,000
15,000
36,000
190,00C
15,000
162,000
8,000
203,000
70,000
310,000
10,000
50,000
20,000
10,000
15,000
50,000
21,000
15,000
25,000
25,000
25,000
25,000
50,000
6,000
5,000
1,000
4,000
43,000
6,000
12,000
3,000
5,000
5,000
22,000
20,000
80,000
328,000
140,000
14,000
117,000
285,000
126,000
100,000
85,000
80,000
83,000
147,000
578,000
23
23
tt
23
tt
23
11
16
ft
24
1 24
1
50,000
35,000
50,000
15,000
50,000
100,000
10,000
10,000
12,000
12,000
4,000
30,000
110,000
9,000
558,000
230,000
470,000
50,000
812,000
508,000
153,000
Dec .18
it
18
It
21
tl
23
20,000
10,000
10,000
10,000
11,000
1,000
6,000
6,000
243,000
199,000
167,000
223,000
tl
tt
—
—
X-3962
— 3 —
.
|
Week ended Deo ember 25, 1931.
84
Member "banks indicated by an asterisk" (*)»
Name of Bank
City
District
Farmers
Farmers
Farmers
Bank of
Farmers
Ceresco
Burdick
Elgin
Manitou
Cortland
No. 10
& Berch. Bank
State Bank
& Merck. Bank
Eanitou
State Bank
Date
, State closed
Ne"br. Dec ,19
it
21
Kans.
tt
Nebr.
21
tl
23
Okla.
ft
24
Nebr,
District No. 12
•Hibernia Com'l & Svga.Bk Portland
Oreg. Dec .19
Tt
21
San Bernardino Valley Bk San Bernardino,Cal
(with "branches at Needles and Barstow)
N
18
Cal.
Venice Savings Bank
Venice
ft
tt
18
•First National Bank
t»
23
•First National Bank
Kelso
Wash.
11
tt
Boy State Bank
Boy
21
tt
24
Culver City Cal.
•First National Bank
Surplus
Total
& profits
deposits
Capital
(Bankers' Directory July 1931)
15,000
35,000
35,000
10,000
30,000
12,000
10,000
15,000
8,000
11,000
247,000
90,000
204,000
111,000
151,000
500,000
175,000
230,000
27,000
7,030,000
1,532,000
25,000
50,000
100,000
10,000
100,000
25,000
8,000
26,000
6,000
35,000
401,000
398,000
702,000
112,000
992,000
Dat e
opened
CLOSED BANKS REOPENED:
District No. 5
Commercial Bank of M .
Branch at:
1
1
ft
9-26Frederick
-31 200,000
m .
H
9-26.
-31
Jefferson
ii
I I u t Airy
/on
9-26'
-31
(The Adams town "branch will not reopen)
204,000
12-19-31
12-21-31
12-21-31
District No. 7
SaJLine Savings Bank
Saline
Logansport Loan & Tr.Co. Logansport
10-26-31
Mich.:
Ind. 9-24-31
25,000
150,000
40,000
139,000
12-15-31
12-19-31
District No. 9
Olmsted County Bk & Tr.Co. Rochester
ilinn..:
10- 1-31
75,000
36,000
12-22-31
13,000
12-23-31
./
District No. 10
Security State Bank
Broken Bow
Nebr.11-10-31
-
-J
35,000
FEDERAL RESERVE BOARD
WASHINGTON
ADDRESS OFFICIAL CORRESPONDENCE T O
T H E FEDERAL RESERVE BOARD
X-6921
July 9, 1931.
Dear Sir:
There is attached hereto, for your information,
copy of a letter received from the Commissioner of the
Public Debt, with statement attached, reporting on audits
made by the Division of Public Debt Accounts and Audits
of the stock of incomplete Federal reserve notes held at
the Bureau of Engraving and Printing,
Very truly yours,
E. M. McClelland,
Assistant Secretary.
Enclosures.
TO ALL FEDERAL RESERVE AGEITTS.
Copy
X-6921~a
TREASURY DEPARTMENT
Office Of The Secretary
TASHHTSroH
July 6, 1931
kr» B. M. McClelland,
Assistant Secretary,
Federal Reserve Board,
Washington, D. G.
Sir:
In compliance with your request there is submitted herewith a
recapitulation of federal Reserve Uotes (Paces), 12 subjects, audited in the .
Bureau of Engraving and Printing by the Division of Public Debt Accounts and
Audit during the fiscal year 1931, and the balances of Uniform Backs and
Faces of Federal Reserve notes charged in the control accounts of that division to the Bureau of Engraving and Printing as of June 30, 1931,
It will be noted that the several denominations of Federal Reserve notes were audited on various dates during the year*
In preparing the
statement the results of the various audits have been consolidated and
fleet a total of 3,377,664-1/3 sheets of faces#
Due to subsequent printing
orders the stocks of faces on hand and in process June 30, 1931, as reflected in the control records of the Division of Public Debt Accounts and Audit,
have increased considerably since the dates of the respective audits*
With
respect to the stock of backs on hand and in process Juno 30, 1931, the control records of the Division of Public Debt Accounts and Audit reflect a
total of 5,488,208 sheets, which snount is sufficient to cover the required
stock of backs for Federal Reserve notes#
Respectfully,
MRL
(Signed) William S. Broughton,
Commissioner of the Public Debt.
86
FEDERAL RESERVE BOARD
WASHINGTON
ADDRESS OFFICIAL CORRESPONDENCE T O
THE FEDERAL RESERVE BOARD
X-6924
July 15, 1931.
Subject:
Code word to cover telegraphic transactions
in Treasury Bills.
Dear Sir:
In connection with telegraphic transactions
in Government securities "between Federal reserve "banks,
the code word "NOXBBEEZE" has been designated to cover
a new issue of Treasury Bills, dated July 17, 1931,
and maturing October 15, 1931.
This word should be inserted in the Federal
reserve telegraph code book, following the supplemental
code word *ITOXBLEIID", on page 172.
Very truly yours,
J. C• Noell,
Assistant Secretary.
TO GOVERNORS OF ALL F. R. B A M S
X-6926
STATEMENT OF BUREAU OF ENGRAVING AND PRINTING
Federal Reserve Notes, Series 1928
June 12 to 29, 1931.
k
j50
Chicago
.jlOO
^500
'41000
Total
Sheets
Amount
50,000
60,000
5,050
4,150
119,200
^11,377.64
119,200 sheets, © ^95.45 per M,
.,?11,377.64
^
FEDERAL RESERVE BOARD
WASHINGTON
ADDRESS OFFICIAL CORRESPONDENCE TO
THE FEDERAL RESERVE BOARD
X-6927
July 16, 1931.
SUBJECT: Expense, Main Line, Leased Wire System,
June, 1931.
Dear Sir:
Enclosed herewith you will find two mimeographed statements, X-6927-a and X-6927-b, covering
in detail operations of the main line, Leased Wire
System, during the month of June, 1931.
Please credit the amount payable "by your
"bank in the general account, Treasurer, U. S., on
your "books, and issue C/D Form 1, National Banks, for
account of "Salaries and Expenses, Federal Reserve
Board, Special Fund", Leased Wire System, sending
duplicate c / D to the Federal Reserve Board.
Very truly yours,
Deputy Fiscal Agent.
Enclosures.
TO GOVERNORS OF ALL F. R. B A M S EXCEPT CHICAGO.
89
x-6927-a
REPORT SHOWING- CLASSIFICATION AND NUMBER OP WORDS TRANSMITTED OVER MAIN LINE
OF TEE FEDERAL RESERVE LEASED WIRE SYSTEM FOR THE MONTH OF JUNE, 1931.
Business
reported
by tanks
From
Boston
lew York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Tansas City
Hallas
San Francisco
Total
Words sent by
New York chargeable to other
F. R. Banks (l)
28,349
161,929
31,632
80,013
57,986
56,852
103,359
65,843
32,312
80,091
61,867
95,547
855,780
3,601
—
2,028
3,071
3,234
9,125
4,349
3,168
4,296
3,341
13,641
4,520
54,374
I. R. Board business
Treasury Department business Incoming and Outgoing .
Net Federal
reserve
bank
business
31.950
161,929
33,660
83,084
61,220
65,977
107,708
69,011
36,608
83,432
75,508
100.067
910,154
Percent of total
bank business (*)
3.51
17.79
3.70
9.13
6.73
7.25
11.83
7-58
4.02
9.17
8.30
10.99
100.00
1,208,806
. • 298,652
. . . . . . . . . . . .
fetal words transmitted over main lines
(*)
These percentages used in calculatiig the pro rata share of leased wire expense as shown
on the accompanying stat ement (X-6927-b).
CD
Number of words sent by New York to other F. R. Banks for their sole benefit charged to
banks indicated in accordance with action taken at Governors' Conference
November 2 - 4 , 1925.
176.927
1,385*733
X-b927-'b
REPORT OF EXPENSE MAIN LIKE
FEDERAL RESERVE LEASED WIRE SYSTEM, JUNE, 1931.
Same of bank
Bo ston
lew York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Isais
Minneapolis
Kansas City
Dallas
San Francisco
federal Reserve Board
Total
(&)
(f)
(*)
(a)
fb)
Operators'
salaries
Operators'
overtime
$260.00
1,134.15
225.00
306.66
190.00
270.00
3,672.94 (#)
195.00
200.00
237.50
251.00
380.00
-
$7,372.25
$ 2.00
Wire
rental
$
—
-
-
-
*•
—
6.00
1.00
230.00 (&)
—
—*
—
-
—
-
—
• 75
-
—
$9.75
—
15,793.60
$16,023.60
Pro rata
share of
total
expenses
Total
expenses
$260.00
1,136.15
225.00
306.66
420.00
$716.65
3,632.23
755-44
1,864.09
1,374.0s
270.00
3,678.94
196.00
1,480.25
2,415.36
1,547.63
820.77
200.00
287.50
251.75
380.00
15.793.60
$23,405.60
1,872.26
1,694.63
2,243.85
Credits
$260.00
1.136.15
225.00
306.66
420.00
270.00
3,673.94
196.00
200.00
287-50
251.75
380.00
Payable to
Federal
Reserve
Board
$456.65
2,496.03
530.44
1,557.43
954.08
1,210.25
1,263.58 (*)
1,351.63
620.77
1,584.76
1,442.88
1,863.85
—
$20,417.24
$7,612.00
2.998.36(a)
$20,417.2%
$14,068.82
1,263.58 (b)
#12,805.24
Main line rental, Richmond-Washington.
Includes salaries of Washington operators.
Credit.
Received $2,958.36 from Treasury Department covering "business for the month of June, 1931.
Amount reimbursable to Chicago.
CD
FEDERAL RESERVE BOARD
WASHINGTON
ADDRESS OFFICIAL CORRESPONDENCE T O
THE FEDERAL RESERVE BOARD
X-6928
July 1 7 , 1931.
CONFIDENTIAL
SUBJECT:
Counterfeit Checks on the Dominion of
Canada.
Dear Sir:
There is attached hereto, for the information of the Federal reserve banks and their member
"banks, copy of a memorandum on the above subject
furnished the Federal Reserve Board by the Secret
Service Division of the Treasury Department.
Very truly yours,
E. M. McClelland,
Assistant Secretary.
Enclosure.
TO GOVERNORS OF ALL F. R. B A M S .
X-6928-a
Royal Canadian Mounted Police authorities have notified
this office of the appearance of counterfeit checks on The
Dominion of Canada, one of which was cashed early this month
in Trenton, Hew Jersey, in the amount of $88, the payee being
"D. B. Holmes". All Canadian government checks arc at present
drawn on the Bank of Montreal. The counterfeit checks are
drawn on the Royal Bank of Canada. The form is fictitious, as
are also the signatures, and, from the appearance, the only
legal thing about the counterfeit is the two-cent excise stamp
which it would not carry if the check were genuine.
The counterfeit check is drawn in the following form:
Ho. 213679
June 10th,
1931
Ottawa, Ontario
Pay Voucher
Dept. of Interior
24
Stamp
THE DOMINION OF CANADA
Pay to
The sum of
To any Branch of the
ROYAL B A M OF
CANADA
D. B. HOLMES
EIGHTY EIGHT
or order $88.00
- - Dollars
(Plus Exchange)
(Signed) D. V. LANBY,
Superintendent
(Signed)
G. S. Enright,
Auditor
FEDERAL RESERVE BOARD
WASHINGTON
ADDRESS OFFICIAL CORRESPONDENCE T O
THE FEDERAL RESERVE BOARD
X-6929
July 21, 1931.
SUBJECT:. Holidays during August, 1931.
Dear Sir;
On Saturday, August 1st, the Denver Branch
of the Federal Reserve Bank of Kansas City will
be closed in observance of Colorado Day, and will
not participate in clearings of that day.
Gold Fund transit clearing credits of August
1st for Denver Branch should be included in your
credits of August 3rd.
Please notify branches.
Very truly yours,
J. C. So ell,
Assistant Secretary.
TO GOVERNORS OF ALL FEDERAL RESERVE BAJJKS.
FEDERAL RESERVE BOARD
WASHINGTON
ADDRESS OFFICIAL CORRESPONDENCE T O
; THE FEDERAL RESERVE BOARD
X-6930
July 21, 1931.
CONFIDENTIAL.
Dear Sir;
There is enclosed herewith copy of Circular
Letter No. 652 and copy of a confidential letter addressed to Agents in Charge, issued by the Secret
Servicefiivisionof the Treasury Department, with regard to a new Counterfeit $5 Federal Reserve Note on
the Federal Reserve Bank of New York. This is for
the confidential information of the Federal reserve
banks and member banks and in transmitting it to your
member banks please caution them against giving the
information any publicity whatsoever.
Very truly yours,
E. M. McClelland,
Assistant Secretary.
Enclosures.
TO GOVERNORS OF ALL FEDERAL RESERVE BANKS.
COPY
X—6930—a
TREASURY DEPARTMENT
Secret Service Division
Washington
July 20,
CIRCULAR LETTER
Ho. 652
1931.
HEW COUNTERFEIT.
$5 FEDERAL RESERVE NOTE
On the Federal Reserve Bank of "Hew York, Slew York; 1928 A
Series; check letter "H"; face plate Ho. 65; back plate number
missing; W. 0. Woods, Treasurer of the United States; A,
Mel-
lon, Secretary of the Treasury; portrait of Lincoln.
This counterfeit is printed on two sheets of paper from
photo-mechanical plates of good workmanship, the general appearance of which is calculated to deceive the wary handler of
currency.
The serial numbering and seal are executed in dull, olive
green, the off-color tone being sufficient to excite suspicion.
The back is printed in a dark green shade which is also offcolor. The delicate detail work involved in the Treasury seal
is not perfected in the counterfeit, the lettering and design
being barely discernible.
This note is the handiwork of the counterfeiters responsible for the $5 United States Hote described in Circular 3 o T.
646. Specimens at hand bear serial numbers A41637092A and
A70924163A.
In view of the deceptive quality of this counterfeit, extreme care should be exercised in handling notes of this denomination and variety.
?. H. MORAH,
Chief.
X-6930-b
COP Y
TREASURY DEPARTMENT
Secret Service Division
Washington
OOHFIBMTIAL
To Agents in Charge:
July 20, 1931.
Circular Letter ITo. 552, herewith enclosed,
calls attention to an extremely dangerous counterfeit $5 note
on the Federal Reserve Bank of Hew York, which is the handiwork of the person or persons responsible for counterfeit $5
United States tTotc (#645). The latter note, although equally
deceptive, has not circulated actively. Although the #652
counterfeit has appeared with varying serial numbers, it has
been ascertained that this note is also carrying serial number A41637092A which number also appeared on $5 US note (#645).
The new counterfeit shows that the maker is not familiar with
the numbering system employed at the Bureau of Engraving and
Printing, the serial numbers on the #652 note beginning with
the letter A, which is the identifying letter of the Federal
Reserve Bank of Boston. The letter B precedes the numbering
on genuine notes on the Federal Reserve Bank of ETew York.
This information is not included in the general descriptive
circular for the reason that it is believed the counterfeiter
may see newspaper notices concerning the new note and may
change the numbering to coincide with the correct system.
You are directed to notify the Federal Reserve Banks and
branches of this discrepancy in the new counterfeit and
urge the officials to consider this information in confidence.
The portraiture in this counterfeit i - extremely well exs
ecuted.
W. H. IviORAK,
Chief.
X-6931
DIGEST OP FEDERAL AH) STATE LAWS
RELATING TO CONSOLIDATION, MERGER, ETC.,
OF BANKS AFD/03 TRUST COMPANIES.
The following is a digest of the laws of the United States
and of the several States, as of July 1, 1931, having reference to
the consolidation, merger, etc., of banks and/or trust companies,
which was prepared in the office of the General Counsel to the Federal Reserve Board, with the assistance of Counsel to the Federal
Reserve Banks, pursuant to a request of the Board's Committee on
Branch, Group and Chain Banking.
Except for provisions covering the
conversion of one bank or trust company into another this digest ii>cludes every provision of the Federal and State laws under which any
bank or trust company, or the assets and liabilities thereof, may be
united with, or transferred to, any other bank or trust company,
such as the provisions governing consolidations, mergers, purchases
of assets, etc.
X-6931
MTIOUAX. B A M ACT.
Consolidation of two or more national "banks.
The National Bank Act provides for the consolidation with the
approval of the Comptroller of the Currency of any two or more national
"banks located in the same county, city, town or village under the charter of one of the "banks. Such consolidation shall be on the terms and
conditions agreed upon by a majority of the board of directors of each
bank which must be ratified by the shareholders of each bank owning twothirds of its capital stock at a meeting of the shareholders held after
publication of notice in the newspapers for a period of four weeks and
after sending notice to each shareholder ly registered mail at least
ten days prior to the meeting.
The act makes provision for the payment
to any dissenting shareholders of the appraised value of the stock held
by such shareholders and for the disposal of any such shares at public
auction.
(Act of November 7, 1918; 40 Stat., 1043; U. S. Code, Anno-
tated, Title 12, sec. 33.)
Legal effect - transfer of rights and assets "by operation of law.
"All the rights, franchises, and interests of the said national
bank so consolidated in and to every species of property, personal and
mixed, and choses in action thereto belonging, shall be deemed to be
transferred to and vested in such national batik into which it is consolidated without any deed or other transfer, and the said consolidated national bank shall hold and enjoy the same end all rights of property,
franchises, and interests in the same maimer and to the same extent as was
held and enjoyed by the national bank so consolidated therewith".
(Act of
X-6931
(National Bank Act - cont'd.)
November 7, 1918; 40 Stat., 1044^
—2—
~
-
6< Code, Annotated, iitle 12, sec.
34.)
Consolidation of State and national "banks.
The National Bank Act also makes provision for the consolidation of any State bank or any bank incorporated in the District of
Columbia, when not in contravention of the law of the State under which
such bank is incorporated, with a national bank and under the charter
of the National Bank.
The procedure provided for effecting such con-
solidations is similar to the procedure provided for the consolidation
of two or more national banks which is described above. A similar
procedure is also provided for the satisfaction of dissenting shareholders.
(Act of February 25, 1927; 44 Stat., 1225; U. S. Code, Annotated, Title
12, sec. 34a.)
Legal effect - transfer of assets and rights by operation of law.
"All the rights, franchises, and interests of such State or District bank so consolidated with a national banking association in and to
every species of property, real, personal, and mixed, and choses in action
thereto belonging, shall be deemed to be transferred to and vested in such
national banking association into which it is consolidated without any
deed or other transfer, and the said consolidated national banking association shall hold and enjoy tho same and all rights of property, franchises,
and interests, including the right of succession as trustee, executor, or
in any other fiduciary capacity in the same manner and to the same extent
as was held and enjoyed by such State or District bank so consolidated with
such national banking association".
(Act of February 25, 1927; 44 Stat.,
X-6931
1
1225; U. S. Code, Annotated, Title 12, sec. 34a.)
ALABAMA..
Consolidation, merger or transfer of assets of banks and trust companies.
. "Any "bank or trust company doing a banking business may consolidate or merge with, or transfer its assets and liabilities to, another
bank or trust company, * *
"
(Civil Code of Alabama, sec. 6403; Banking
Law Pamphlet, 1928, sec. 6403, page 41 i)
Resolution of board of directors; consideration and approval of by stockholders and superintendent of banks; effect of approval.
In order to effect such consolidation, merger or transfer of
assets, the Board of directors of each bank or trust company affected
must pass a resolution stating that such consolidation, merger or transfer is desirable and call a meeting of the shareholders of each institution by giving at least thirty days' written notice to each shareholder
of the date, place and purpose of the meeting. A copy of the resolution
must also be furnished to the Superintendent of Banks and he must investigate the advisability of such consolidation, merger or transfer.
On the
day of the meeting of the shareholders, a resolution may be prepared
setting forth the desirability and terms of the consolidation, merger, or
transfer and if a majority of the shareholders of each institution approve
the resolution and the superintendent of banks approves all of the proceedings , such resolution shall have the force and effect of consolidating
or merging the institutions affected.
(Civil Code of Alabama, section
6404; Banking Law Pamphlet, 1928, sec. 6404, page 41.)
Submission of certificate of proceedings to Superintendent of Banks for
approval.
A certified copy of the minutes of the board of directors passing
x 6931
-
102
—4r-
(Alabama - cont'd.)
the resolution for consolidation, merger or transfer of assets and a
certified copy of the minutes of t t stockholders' meetings must " e made
fc
b
under corporate seal and acknowledged by the president and cashier of
each institution, and forwarded to the Superintendent of Banks for his
certificate of approval.
(Civil Code of Alabama, sec. 6405; Banking Law
Pamphlet, 1923, sec. 6405; p, 42.)
Certificate of approval by Superintendent of "banks; filing of.
If the superintendent of banks approves the entire proceedings,
he must issue his written certificate of approval in duplicate, one to
be filed in his office and the other to bo forwarded to the probate judge
of the county for record.
(Civil Code of Alabama, sec. 6406; Banking Law
Pamphlet, 1928, sec. 6406, p. 42.)
Examination of institutions by superintendent of banks.
Before approving proceedings to consolidate, the superintendent
of banks must make an exam nation of each institution to determine whether
the interests of the depositors, creditors and stockholders of each are
protected and that such consolidation or transfer is made for legitimate
purposes.
His approval or disapproval in the premises must be on the basis
of such examination and no "consolidation or transfer" can be made without
his written consent.
(Civil Code of Alabama, section 6407; Banking Law
Pamphlet, 1928, section 6407, page 42.)
Appeal from adverse decision of superintendent of banks.
In case the superintendent refuses to give his consent, an appeal
may be taken "to the circuit court of the county where such institution is
located, said court considering the s r . in equity."
a;e
(Civil Code of Alabama,
X-6931
(Alabama - cont'd.)
• 103
-5- •
section 6408; Banking Law Pamphlet j 1928, sec. 6408* page 42.)
ARIZ QUA..
Ho provisions applicable to consolidations, mergers, etc.
The laws of Arizona do not contain any provisions specifically
providing for the consolidation, merger, transfer of assets, etc., of
tanks or trust companies.
Definition of the term " ua;*-'.
The word ""bank" as used in the laws of Arkansas applies to any incorporated Dank, trust company or savings bank.
(Acts of 1923, Act 627, sec.
17; Crawford and Moses Digest,1927 Supplement, sec. 674; Banking Law Pamphlet
.1929, p. 14. )
'
Consolidation of Panics.
Any "bank may purchase the assets of,
or consolidate
with, another "bank by filing with the commissioner of banks, as an amendment
to its articles of agreement, two copies of a resolution to the effect
desired, adopted upon two-thirds vote of the stockholders of the respective
banks affected, both such copies to be verified by the president and
cashier or secretary, one to be retained by the commissioner and the other,
upon his approval, to be filed for record with the clerk of the county in
which the bank is located.
The purchase or consolidation becomes effective
only when such resolution is approved by the bank commissioner and so filed
with the county clerk.
It is further provided that upon the purchase of the
assets of another bank, or the consolidation of two or more banks, all or any
part of the assets may be accepted in lieu of cash at their actual value.
(Arkansas - cont'd.)
„
6 r
X-69ol
(Acts of,1923, Act 527, sec. 4; Crawford and Moses Digest, 1927 Supplement, sec. 674; Banking Law Pamphlet, 1929, p. 10.)
CALIFORNIA.
Definition of word "frank".
The term "tank" as used in the following provisions of the socalled California Bank Act includes commercial banks, savings "banks and
trust companies.
(Cal. Bank Act, sec. 1.)
Consolidation of tanks.
Any state "bank may consolidate with one or more state "banks
"its capital stock, properties, trusts, claims, demands, contracts, agreements, obligations, debts, liabilities and assets of every kind and description, * *
"
(Cal. Bank Act, sec. 31a.)
Directors* agreement for consolidation; sub.ject to approval of superintendent of banks.
The consolidation may be upon such terms and in such manner as
may be agreed upon by the board of directors of the banks involved. An
original copy of such agreement must be filed in the office of the superintendent of banks and it does not become valid until it is approved by
him.
(Cal. Bank Act, 1929, sec. 31a.)
Submission of consolidation agreement to stockholders.
No consolidation can take effect until the agreement has been
"ratified and confirmed" by the stockholders of each of the constituent
banks, either in writing by two-thirds of the respective stockholders, or
by the vote of two-thirds of such stockholders at a special meeting called
after two weeks' notice has been given to each stockholder specifying the
time, place and object of the meeting and after such notice has been
X-6931
-7(California - cont'd.)
published for two successive weeks in a certain designated newspaper.
(Cal. Bank Act, 1929, sec. 31a.)
Agreement for consolidation filed with superintendent of "banks mast be
accompanied with certain papers.
There mast be attached to the agreement which is filed with
the superintendent of "banks, either a memorandum of the ratification and
confirmation of the agreement, signed and acknowledged " y two-thirds of
b
the stockholders of each "bank, or a certificate of the secretary of the
"bank, under corporate seal and acknowledged by him, certifying that the
agreement has been ratified and confirmed as provided above.
(Cal. Bank
Act, 1929, sec. 31a.)
Articles of incorporation and consolidation, contents of.
Articles of incorporation and consolidation mast be prepared
which mast set forth:
"First - The name of the new corporation;
Second - The purpose for which it is formed;
Third - The place where its principal business is
to be transacted;
Fourth - The term for which it is to exist, which shall
not exceed fifty years;
Fifth - The number of its directors (which shall not
be less than three) and the names and residences
of the persons appointed to act as such until
their successors are elected and qualified;
Sixth - The amount of its capital stock and the number
of shares into which it is divided;
Seventh - The amount of stock actually subscribed, and by
whom;
Eighth - The names of the constituent corporations."
X-6931
—8—
(California - cont'd.)
The articles of incorporation and consolidation must " e signed and counterb
signed " y the president and secretary of each "bank and sealed with the corb
porate seal; and the approval of the superintendent of hanks must he attached thereto,
(Gal. Bank Act, 1929, sec. 31a.)
Filing of articles of incorporation and consolidation.
The articles of incorporation and consolidation must then be
filed with the secretary of state, and a copy of* such articles, certified
" y the secretary of state, must " e filed in his office, in the office of
b
b
the county clerk of the county in which is located the principal place of
"business of the new corporation and each of its constituents and in the
office of the superintendent of "banks.
The secretary of state must issue
over the seal of the state a certificate that the articles have "been filed
in his office.
(Cal. Bank Act, 1929, sec. 31a.)
Certificate of authorization to consolidated "bank; issuance and filing of.
Provision is made for the issuance of a certificate of authorization to the consolidated "bank " y the superintendent of "banks; and the
b
superintendent mist transmit to the secretary of state a duplicate of such
certificate which he must file in his office.
The superintendent must also
file a duplicate of such certificate in his own office.
(Cal. Bank Act,
1929, sees. 31a and 128.)
Certificate of superintendent of "banks showing approval and consummation
of consolidation.
Whenever two or more "banks "authorized and qualified to conduct
the "business of acting as executor, administrator, guardian of estates,
assignee, receiver, depositary or trustee" are consolidated into a "bank
X-6931
-9(California - cont'd.)
"likewise authorized and qualified", the superintendent of "banks upon
request, must issue a written certificate under his official seal and
acknowledged "by him, that the consolidation agreement has teen filed in
his office, that the consolidation has "been approved " y him and that it
b
has been completed and consummated. He must attach to the certificate
a true copy of the consolidation agreement which is on file in his office.
Such certificate is prima facie evidence of the regularity of the proceedings and the fact of such consolidation.
(Cal. Bank Act, 1929, sec.
Sic.)
Recordation of certificate of superintendent; effect of.
"The recordation of such certificate in the office of the recorder of any county shall "be, to all persons, in such county, constructive
notice that all of the rights, "benefits, privileges, duties and obligations
of whatsoever kind or nature, held or possessed " y or imposed upon the "bank
b
b
* * * that has expired "by such consolidation * * *, are retained " y and imposed upon the successor "bank."
(Cal. Bank Act, 1929, sec. 31c.)
Legal effect of consolidation.
When the superintendent of "banks authorizes the consolidated corporation to commence business as provided by law "the new or consolidated
corporation shall be a body politic and corporate by the name stated in the
certificate, and for the term of fifty years, unless it is, in the articles
of incorporation and consolidation, otherwise stated and thereupon each constituent corporation named in the articles of incorporation and consolidation must be deemed and held to have become extinct in all courts and places
and said new corporation nrus t be deemed and held in all courts and places
X-6931
1.08
- 10 -
(California - cont'd.)
to have succeeded to all their several capital stocks, properties, trusts,
claims, demands, contracts, agreements, assets, choses and rights in
action of every kind and description, "both at law and in equity, and to
" e entitled to possess , enjoy, and enforce the same and every
b
thereof, as fully and completely as either and every of its constituents
might have done had no consolidation taken place.
Said consolidated or
new corporation must also, in all courts and places, " e deemed and held
b
to have become subrogated to its several constituents and each thereof,
in respect to all their contracts and agreements with other parties, and
all their debts, obligations, and liabilities, of every kind and nature,
to any persons, corporations, or bodies politic, whomsoever, or whatsoever,
and said new corporation must sue and be sued in its own name in a'oy
and every case in which any or either of its constituents might have sued
or might have been sued at law or in equity had no such consolidation
been made.
Nothing in this section contained shall be construed to impair
the obligation of any contract to which any of such constituents were
parties at the date of such consolidation. All such contracts may be enforced by action or suit, as the case may be, against the consolidated
corporation, and satisfaction obtained out of the property which, at the
date of the consolidation, belonged to the constituent which was a party
to the contract in action or suit, as well as out of any other property
belonging to the consolidated corporation, and the stockholders of each
constituent corporation so entering into such agreement shall continue
subject to all the liabilities, claims and demands existing against then
at or before such consolidation to the same extent as if the same had not
X-6931
(California - cont'd.)
"been made.
- 11 -
The right of said new corporation to increase or decrease its
capital stock, to change the number of its directors, to amend its articles
of incorporation, to change its principal place of business, or its name,
or to effect any other organic change shall " e governed " y the general
b
b
corporation laws of this state and "by the bank act, and the procedure to
effect any such change shall be that defined by the general corporation
laws and the bank act." (Cal. Bank Act, 1929, sec. 31a.)
Merger of banks.
Any two or more banks empowered by their articles of incorporation and authorized by the so-called Bank Act "to do the business of a
commercial bank and savings bank and trust company, or any one or more or
all of them, are hereby authorized to merge one or more of such banks into
another of them," in accordance with the following requirements.
(Cal.
Bank Act, sec. 31b.)
Agreement of directors to merge; contents of.
The board of directors of each bank involved, may by a majority
of the membership of each board at a meeting duly called and held,
make
or authorize to be made a duplicate written agreement for the merger of the
banks.
The agreement imist specify the receiving bank and each bank to be
merged, "and it shall prescribe the terms and conditions of the merger
and the mode of carrying it into effect."
The agreement may also provide
for any matters to effect and accomplish the merger, not inconsistent with
the bank act or other laws of California.
(Cal. Bank Act, 1929, sec. 31b.)
Submission of merger agreement to superintendent of banks; approval of
necessary.
The merger agreement and sworn copies of the proceedings of the
X-6931
JL'J.
— 12 —
(California - cont'd.)
"boards of directors authorizing the mailing of the agreement must be submitted to the superintendent of banks in duplicate for his approval "and
shall not be valid until such approval is
obtained."
(Cal. Bank Act, sec.
31b.)
Merger agreement to be approved by stockholders.
The merger does not take effect until the agreement has been
"ratified and confirmed" in writing by two-thirds of the stockholders of
each bank, or approved by two-thirds of such stockholders at a regular or
special meeting.
When so adopted, the agreement "shall thereupon become
binding upon such banks."
(Cal. Bank Act, 1929, sec. 31b.)
Filing of approved merger agreement.
One original duplicate of the adopted agreement with a copy of the
written approval of the superintendent of banks and a sworn copy of the proceedings of the meetings at which such agreement was finally approved, made
by the respective secretaries, must be filed with the superintendent of banks,
and the other original duplicate must be filed in the office of the clerk of
the county where the principal place of business of the receiving corporation
is located.
(Cal. Bank Act, 1S29, sec. 31 b. )
When merger takes effect.
Upon filing the duplicates of the agreement as above described, the
agreement "shall take effect according to all of its terms and the merger
shall thereupon take place as provided in the agreement without further
or other act, transfer or substitution," and the merged corporations must
surrender their licenses to do a banking business for cancellation to the
superintendent of banks.
(Cal. Bank Act, 1929, sec. 31b.)
X-6931
- 13 (California - cont'd.)
Issuance of new stock for old; dissenting stockholders, rights of.
Provision is made for the issuance of new shares of stock to
stockholders in lieu of the stock held by them in the merging corporations and for the appraisal and payment of the value of the stock held
by any stockholder who votes against the merger or dissents thereto in
writing after the merger agreement has been adopted by the stockholders.
(Cal, Bank Act, 1929, sec. 31b.)
Certificate of superintendent of banks showing approval and consummation
of merger.
Whenever two or more banks "authorized and qualified to conduct
the business of acting as executor, administrator, guardian of estates,
assignee, receiver, depositary or trustee" are merged into a bank "likewise authorized and qualified", the superintendent of banks upon request,
must issue a written certificate under his official seal and acknowledged
by him, that the merger agreement has been filed in his office, that the
merger has been approved by him and that it has been completed and consummated. He must attach to the certificate a true copy of the merger
agreement which is on file in his office.
Such certificate is prima facie
evidence of the regularity of the proceedings and the fact of such merger.
(Cal. Bank Act, 1929, sec. 31c.)
Recordation of certificate of superintendent; effect of.
"The recordation of such certificate in the office of the recorder
of any county shall be, to all persons, in such county, constructive notice
that all of the rights, benefits, privileges, duties and obligations of
whatsoever kind or nature, held or possessed by or imposed upon the bank * *
that has expired * * * by such merger, are retained by and imposed upon the
X-6931
:
(California - cont'd.)
successor "bank."
- 14 -
11
(Cal. Bank Act, 1929, sec. 31c.)
Legal effect of merger.
"Upon the merger of any corporation or corporations into another,
as provided in this section:
(a) "Its corporate existence shall " e merged into that of such other
b
corporation, and all and singular its rights, privileges and franchises,
and its right, title and interest in and to all property, real, personal
or mixed, and choses in action, and every right, privilege, interest or
asset, of conceivable value or "benefit then existing or which would thereafter inure to it under an unmerged existence shall be deemed fully and
finally, and without any right of reversion, interruption, impairment or
limitation of title, right or privilege, transferred to and vested in the
corporation into which it shall have "been merged, without further act or
deed, and such last mentioned corporation shall have, hold, possess,enjoy
and enforce the same in its own right, as fully as the same was possessed,
enjoyed and held by the merged corporation from which it was, by operation
of the provisions of this section, transferred.
(b)
"Its rights, obligations, properties, assets, investments, de-
posits, demands, contracts, agreements, court and private trusts, as defined in the bank act, and other relations to any person, creditor, depositor
trustee, principal or beneficiary of any court or private trust, shall
remain unimpaired and without change or alteration in any respect, and the
corporation into which it shall have been merged shall, by
such merger,
ipso facto and by operation of law, without further transfer, substitution,
act or deed, and in all courts and placcs be deemed and held to have, and
shall become subrogated and shall succeed, to all such rights, obligations,
i
~ 18 -
X-6931
(California - cont'd.)
properties, assets, investments, deposits, demands, contracts, agreements,
court and private trusts and other relations to any person, creditor,
depositor, trustee, principal or "beneficiary of any court or private trust
obligations and liabilities, of every kind or nature, and shall execute
and perform all such court and private trusts in the same manner as though
it had itself originally assumed the relation or trust or incurred the
obligation or liability; the corporation into which it shall have been
merged shall succeed to and be entitled to take and execute and receive
the appointment to all executorships, trusteeships, guardianships and
other fiduciary capacities in which the merged corporation may be then
or thereafter named in wills theretofore or thereafter probated, or in
any other instruments; and the liabilities and obligations of such merged
corporation to the depositors, beneficiaries, principals and other creditors existing for any cause whatever shall not be impaired by such merger;
nor shall any obligation or liability of any stockholder in any corporation which is a party to such merger be affected by any such merger, but
such obligations and liabilities shall continue as fully and to the same
extent as existed before such merger.
(c) "Any action pending or other judicial proceedings to which any
corporation that shall so be merged is a party, shall not be doomed to
have abated or to have discontinued by reason of the merger, but
may bo
prosecuted to final judgment, order or other decree in the name of the
merged corporation, in the same manner as if the merger had not been made,
or such merging corporation may be substituted as a party to such action
X-6931
t
- 16 -
(California - cont'd)
or proceeding, and any judgment, order or decree may be rendered for or
against it that might have been rendered for or against such merged corporation, if the merger had not occurred."
(Cal. Bank Act, 1929, sec.
31b.)
Legal effect of consolidation or mergers on trusts held by the constituent banks.
"Whenever a national banking association authorized and qualified to conduct in this state the business of acting as executor, administrator, guardian of estates, assignee, receiver, depositary or
trustee under court and private trusts, has been heretofore or is created
by the conversion of a state bank likewise authorized and qualified; or
whenever one or more state berks or one or more national banking associations so authorized and qualified has been heretofore or is hereafter
consolidated with or me:gad into one or more other national banking associations or into one or more state banks, likewise authorized and qualified,
such state bank or national banking association into which such state bank
has been or is converted or into or with which such baric or banks has been
or are merged or consolidated shall by such conversion, merger or consolidation ipso facto and by operation of law, without further transfer, substitution, act or deed and in all courts and places, be deemed and held to
have, and shall become subrogated and shall succeed to, all rights, obligations, properties, assets, investments, deposits, demands, contracts, agreements, court and private trusts, and other relations to any person, creditor
depositor, trustor, principal or bcneficiary of any court or private trust,
and obligations and liabilities of every kind or nature which such prede-
X-6931
- 17 -
115
(California - cont'd.)
cessor bank or banks so converted or. merged or consolidated into or with
such state bank or national banking association shall have held or enjoyed
or been subject to, and shall execute and perform all such court and private
trusts in the same manner as though it had itself originally assumed the
relation or trust or incurred the obligation or liability.
Such state bank
or national banking association shall succeed to and be entitled to take
and execute and receive the appointment to all executorships, trusteeships,
guardianships and other fiduciary capacities in which the bank or banks so
converted or merged into or consolidated with such state bank or national '
banking association may be then or thereafter named, in wills theretofore
or thereafter probated, or in any other instruments.
When such conver-
sion, consolidation or merger is completed, there may be executed by the
president and secretary or cashier cf such state bank or national banking
association" a certificate certifying that the business formerly conducted
by the constituent corporation or corporations has been acquired and is
being conducted by the resulting corporation.
(Cal. Bank Act, 1939, sec.
31d.)
Recordation of certificate of bank; effect of.
"The recordation of such certificate in the office of the recorder of any county shall be, to all persons, in such county, constructive notice that all the rights, benefits, privileges, duties and obligations of whatsoever kind or naimre held or possessed by or imposed upon
the bank so converted or consolidated or merged are retained by and imposed
upon the successor bank."
Such certificate is prima facie evidence of the
regularity of the proceedings and the fact of such consolidation or merger.
116
• 18 —
•
(California - cont'd.)
CCal. Bank Act, 1929, sec. Bid.)
Sale of "business.
Any bank may sell the whole of its "business or
of any of its departments or branches to any other bank.
the business
(Cal. Bank Act,
1929, sec. 31.)
Consent of stockholders necessary to effect sale.
The consent of two-thirds of the stockholders of each of the
banks involved is necessary to effect such a sale; and the consent may
be either in writing and acknowledged by such stockholders and attached
to the instrummt of sale, or to a copy thereof, or by vote of such stockholders at a special meeting.
(Cal. Bank Act, 1929, sec. 31.)
Agreement for sale and purchase; contents cf.
The selling and purchasing banks mast enter into an agreement of
sale and purchase which must contain all the terms and conditions connected
with the transaction.
The agreement most contain proper provision for the
payment of liabilities of the selling bank and the assumption by the purchasing bank of all fiduciary and trust obligations of the selling bank,
and in these particulars, is subject to the approval of the superintendent
of banks and does not become valid until such approval is obtained.
The
agreement may contain provisions for the transfer of all deposits to the
purchasing "bank, subject to the right cf every depositor of the selling bank
to withdraw his deposit in full on demand after such transfer, regardless
of the terms under which it was deposited.
The agreement may also contain
provisions for the transfer of all court and private trusts to the purchasing banks, subject to the rights of trustees and beneficiaries after such
X-6931
-3 -S >y
'
- 19 (California - cont'd.)
transfer to nominate another and succeeding trustee of the trusts so transferred.
(Cal. Bank Act, 1929, sec. 31.)
Filing of agreement for purchase and sale.
The agreement or a duplicate original thereof must be filed in the
office of the superintendent of banks immediately after its execution by the
banks involved and its approval by the superintendent.
(Cal. Bank Act, 1929,
sec. 31.)
Publication of notice of agreement, for purchase and sale.
Notice of the agreement must be published for four successive
weeks in a newspaper in each of the comities in which either of the "banks
has its principal place of business.
An affidavit showing such publicap-
tion must be filed with the superintendent within ten days after the last
publication.
(Cal. Bank Act, 1929, sec. 31.)
Obligations and liabilities of selling bank not impaired by sale; liability
of stockholders of respective banks.
No obligation or liability of the selling bank or its stockholders
and no rights, obligations and relations of any parties, creditors, depositors, trustors and beneficiaries are impaired by any sale, but the
purchasing bank succeeds to all such relations, obligations, trusts and
liabilities and is liable to pay and discharge all debts and liabilities
and to perform all trusts of the soiling bank.
The stockholders of the
respective corporations also continue subject to all the liabilities, claims
and demands existing against them as such at or before the sale.
(Cal.
Bank Act, 1929, sec. 31.)
The affairs of the selling bank shall remain subject to the provisions of the so-called Bank Act.
(Cal. Bank Act, 1929, sec. 31.)
X~6931
—
l
l
—
(California - continued.)
Actions on account of transferred deposits, obligations, etc*; when estopped to "bring.
No action can "be "brought against the selling "bank or any of its
stockholders on account of any deposit, obligations, trust or liabilities,
which have been transferred to the purchasing bank, after the expiration
of one year from the last day of the publication above referred to.
(Cal.
Bank Act, 1929, sec. 31.)
Maintenance of capital and surplus by selling bank.
The selling bank must maintain for a period of one year after
the last day of the publication above described such an amount of capital
or capital and surplus as the superintendent of banks may deem necessary.
(Cal. Bank Act, 1929, sec. 31.)
Certificate of superintendent of banks showing approval and consummation
of sale of business.
Whenever there has been completed the sale of the business of
any bank "authorized and qualified to conduct the business of acting as
executor, administrator, guardian of estates, assignee, receiver, depositary or trustee, to another bank, likewise authorized and qualified", the
superintendent of banks upon request, must issue a written certificate
under his official seal and acknowledged by him, that the agreement of sale
and purchase has been filed in his office, that the sale and purchase has
been approved by him and that it has been" completed
and consummated.
He must attach to the certificate a true copy of the sale and purchase agreement which is on file in his office.
Such certificate is prima facie
evidence of the regularity of the proceedings and the fact of such sale
g
X-69S1
(California - cont'd.)
and purchase.
(Cal. Bank Act, 1929, sec. 31c.)
Recordation of certificate of superintendent, effect of.
"The recordation of such certificate in the office of the recorder of any county shall he, to all persons, in such county, constructive notice that all of the rights, "benefits, privileges, duties and
obligations of whatsoever kind or nature, held or possessed by or imposed
upon the hank so selling its business and assets * * * are retained by
and imposed upon the successor bank."
(Cal. Bank Act, 1929, sec. 31c.)
Legal effect on trusts held by selling bank.
"Upon the approval by the superintendent of banks of an agreement of sale and purchase and the transfer of the business of a trust
department or of a bank having a trust department the purchasing bank
shall, ipso facto and by operation of law and without further transfer,
substitution, act or deed, and in all courts and places, be deemed and
held to have succeedcd and shall become subrogated and shall succeed to
all rights, obligations, properties, assets, investments, deposits, demands,
contracts, agreements, court and private trusts and other relations to any
person, creditor, depositor, trustor, principal or beneficiary of any court
or private trust, obligations and liabilities of every nature, and shall
execute and perform all such court and private trusts in the same manner
as though it had itself originally assumed the relation or trust or incurred the obligation or liability."
(Cal. Bank Act, 1929, sec. 31.)
COLORADO
Consolidation of banks and/or trust companies.
Any state bank or trust company, or any national bank, "may be
(Colorado - cont' d.)
X-6931
— 22 —
consolidated with any state bank or trust company, or with any national
banking association, under the charter of such state bank or trust
company, or under the charter of such national banking association, or
under a new charter issued to such consolidated state bank or trust
company or to such consolidated national banking association, upon
such terms and conditions as may be lawfully agreed upon; * * * " (Laws
of 1931, ch. 54, sec. 1, p. 161.)
Consent of State Bank Commissioner or Comptroller of Currency necessary.
No state bank or trust company can consolidate with another
state bank or trust company "without the written consent of the State
Bank Commissioner; and no state bank or trust company shall consolidate
with a national banking association, nor shall any national banking
association consolidate with any state bank or trust company, without
the written approval of the State Bank Commissioner and the Comptroller
of the Currency; and no national banking association shall consolidate
with any other national banking association without the consent of the
Comptroller of the Currency."
(Laws of 1931, ch. 54, sec. 1, p. 161.)
Consolidations involving national banks to comply with laws of United
States and regulations of Federal Reserve Board.
The consolidation of a state bank or trust company with a
national bank must comply with the "Federal banking laws and the rules
and regulations of the Federal Reserve Board" and no consolidation of
any kind "shall be in contravention of the laws of the United States or
of the laws of the State of Colorado."
p. 161.)
(Laws of 1931, ch. 54, sec. 1.
1 Of)
X-6931_X^i
(Colorado - cont'd.)
- 23-
Legal effect of consolidation
1
1
At any time when such consolidation becomes effective all the
property of the merging or consolidating "banks, trust companies, or
associations, including all right, title, and interest in and to all
property of whatever kind of the institutions forming such consolidated
bank, trust company, or association, whether real, personal or mixed,
and things in action, and every right, privilege, interest, and asset
of any conceivable nature, or benefit then existing, belonging or pertaining to the banks, trust companies, or associations forming such
consolidated bank, trust company, or association, shall immediately,
by proper order of the court, act of law and without any conveyance,
transfer, and without any further act or deed, be vested in and become the property of such consolidated bank, trust company or association, which consolidated bank, trust company, or association shall
have, hold and enjoy the same in its own right as fully and to the
same extent as the same was possessed, held and enjoyed by the institutions,
or any of the institutions, forming such consolidated bank, trust company, or association."
"Such consolidated state bank or trust company, or such consolidated national bank or association, shall be deemed to be a consolidation of the entity and of the identity of the institutions forming
such consolidated bank, trust company, or association, and all the rights,
obligations, and relations of the banks, trust companies or associations
forming such consolidated bank, trust company or association, to or in
respect to any person, estate, creditor, depositor, trustee, or beneficiary
of any trust, and in or in respect to any executorship or trusteeship or
X-6931
(Colorado - cont'd.)
- 24other trust or fidiciary function, and in or with respect to any appointment or designation as executor, trustee or other fiduciary, shall remain unimpaired, and the consolidated bank, trust company, or association
as of the time of taking effect of such change or consolidation, shall
succeed to all the rights, obligations, designations, appointments, relations and trusts, and the duties and liabilities connected therewith,
and shall execute and perform each and every trust or relation in the
same manner as if such consolidated bank, trust company, or association
had itself assumed the trust or relation, including the obligations and
liabilities connected therewith.
If any bank, trust company, or associa-
tion forming such consolidated institution, is acting, or is designated
as administrator, co-administrator, executor, co-executor, trustee, or
co-trustee, of or in respect to any estate or trust being administered,
or to be administered, under the laws of this state, such designation or
relation, as well as any other and similar designation or fiduciary relations, and all rights, privileges, duties and obligations connected
therewith, shall remain unimpaired and shall continue into and in said
consolidated bank, trust company, or association, from and as of the
time of the taking effect of such consolidation, irrespective of the date
when any such designation or relation may have been made, created, or
established, and irrespective of the date of any instrument relating
thereto."
"All Acts and parts of Acts in conflict with this Act are
hereby repealed".
(Laws of 1931, sees. 2-4, ch. 54, pp. 152-164.)
X-S931
- 25 -
CONNECTICUT.
Merger or consolidation.
"Any two or more state banks, trust companies or state bank
and trust companies * * *, located and doing business in the same town
may, with the approval of the banking commission, merge or consolidate
into a single corporation to engage in the business of a state bank or
trust company or both".
(General Statutes, 1930, sec. 3890.)
Agreement of directors to merge or consolidate.
The directors of the corporations proposing to merge or consolidate may enter into an agreement prescribing the terms and conditions
of the merger or consolidation and containing certain prescribed statements of fact with reference to the name and location of the consolidated
corporation, the amount of its capital stock, the number of its directors,
etc.
(General Statutes, 1930, sec. 3891, as amended by Public Acts of
1931, ch. 88.)
Submission of agreement to stockholders.
The agreement must be submitted to the stockholders of each of
the corporations involved at a special meeting called after twenty days'
notice.
Such notice must also be published in a designated newspaper or
newspapers for three successive weeks.
(General Statutes, 1930, sec.
3892, as amended by Public Acts of 1531, ch. 88.)
Approval of consolidation by stockholders; submission to banking commission.
If the consolidation or merger is approved by two-thirds of the
X-6931
(Connecticut - cont'd.)
- 26 -
stockholders of each of the corporations, that fact must be certified
under corporate seal upon the agreement by the secretaries of the respective corporations, and such certified agreement must then be submitted
to the banking commission.
(General Statutes, 1950, sec. 3892, as
amended by Public Acts of 1531, ch. 88.)
Consideration and approval of agreement by banking commission; filing of
approved agreement.
If the banking commission, after a hearing held after publication for three successive weeks of notice of such hearing, determines
that the consolidation or merger "will promote public convenience" and
that the terms thereof are reasonable and in accordance with law and
sound public policy, it may approve such consolidation or merger.
If
approval is granted, the banking commission must certify its findings
and approval on the agreement and file such agreement in the office
of the Secretary of State.
1
1
When so approved and filed, the agreement
shall evidence the terms and conditions of such consolidation and
the legal existence and the organization of said consolidated corporation, and the provisions of the charters or organization certificates
of the consolidating corporations in so fax as they may be inconsistent
therewith shall be inapplicable to said consolidated corporation."
(General Statutes, 1930, sec. 3892, as amended by Public Acts of 1931,
ch. 88.)
Increase or reduce capital stock, change of name, or other amendments
to agreement; when may be made.
The consolidated corporation, subject to the approval of the
X-6931
(Connecticut - cont'd.)
- 27 -
banking commission, may at any time in the future change its name,
increase or reduce its capital stock, and make other amendments to
the agreement provided such change or amendment is approved at a
special meeting by two-thirds of the stockholders "and a certificate
setting forth such change or amendments and stating that the same
has been adopted by the stockholders shall be made by a majority of
the directors, approved by the banking commission and filed in the
office of the secretary of state."
(General Statutes, 1930, sec.
3892, as amended by Public Acts of 1931, ch. 88.)
NOTE: - The 1931 amendment referred to under the five preceding
headings is not yet obtainable; but, inasmuch as the bank commissioner of the State of Connecticut has advised that it is a
purely clarifying measure, the provisions as amended probably do
not differ substantially from the provisions as above digested.
Le£al effect of merger or consolidation.
"Upon the completion of such consolidation as hereinbefore prescribed, the consolidating corporation shall become a corporation by the name so provided and the corporate existence of the
consolidating corporations shall be continued by and in the consolidated corporation and the consolidated corporation shall possess all
the rights, provileges, powers
126
X-6931
- 28 —
(Connecticut - cont'd.)
and franchises of each of the consolidating corporations and the entire
assets, "business, goodwill and franchises of each of the consolidating
corporations shall he vested in the consolidated corporation without any
deed or transfer, provided the consolidating corporations may execute
such deeds or instruments of conveyance as may bo convenient to confirm
the same, and the consolidated corporation shall assume and be liable
for all debts, accounts, undertakings, contractual obligations and liabilities of every name and nature of the consolidating corporations and
shall exercise and be subject to all the duties, relations, obligations,
trusts and liabilities of each of the consolidating corporations, whether
as debtor, depositary, registrar, transfer agent, executor, administrator,
trustee or otherwise, and shall be liable to pay and discharge all such
debts and liabilities to perform all such duties and to administer all
such trusts in the same manner and to the same extent as if the consolidated corporation had itself incurred the obligation or liability or assumed
the duty, relation or trust, and all rights of creditors and all liens
upon the property of either of such consolidating corporations shall be
preserved
unimpaired and said consolidated corporation shall be entitled
to receive, accept, collect, hold and enjoy any and all gifts, bequests,
devises, conveyances, trusts and appointments in favor of or in the noma of
either of said consolidating corporations whether made or created to take
effect prior to or after such consolidation, and the same shall inure to
and vest in said consolidated corporation; and no suit, action or other
proceeding pending at the time of such consolidation before any court or
X-6931
- 29 (Connecticut - cont'd.)
tribunal in which either of said consolidating corporations is a party
shall he abated or discontinued because of such consolidation but may
be continued and prosecuted to final effect by or against the consolidated corporation.
The consolidated corporation shall have the right
to use the name of either of the consolidating corporations whenever
it can do any act or discharge any duty or obligation or enforce any
right under such name more conveniently or with greater advantage to
itself or to any person to whom it holds any relation of trust or owes
any duty under any contract or conveyance, and no other corporation shall
take or use the name of either of said consolidating corporations.
The
consolidated corporation shall possess all the powers granted by the
general statutes to banks and trust companies and shall be subject to all
provisions of the general statutes relating to such banks and trust companies."
(General Statutes, 1530, sec. 3893.)
Exchange of stock of consolidating corporations; stockholders dissenting
to consolidation.
Provision is made for the exchange of stock of the consolidating
corporations for stock of the consolidated corporation, and for the appraisal and payment of the value of stock held by stockholders who objected
to the consolidation.
(General Statutes, 1930, sec. 3894, as amended by
Public Acts of 1931, ch. 88.)
^Restrictions on branches.
The statute further provides that nothing herein shall be construed
X-6931
- 30 (Connecticut - cont'd.)
as giving the consolidated corporation the right to maintain more than
one tanking house for the conduct of its business.
(General Statutes,
1930, sec. 3395.)
Consolidation or merger of savings "banks.
Any two or more savings banks located within the same town ti
merge or consolidate into a single savings "bank.
(General Statutes, 1930,
sec. 4007.)
Procedure to effect consolidation.
The procedure prescribed to effect the consolidation of two or
more savings banks is substantially similar to the procedure above described with reference to the consolidation of banks or trust companies,
except that in the case of savings banks an appeal from the decision of
the bank commissioner upon a protest against such consolidation is allowed
to any judge of the Superior Court.
(General Statutes, 1930, sees. 4008-
4012; Banking Law Pamphlet, 1929, sees. 4008-4012, pp. 73 and 74.)
Legal effect of consolidation.
"Upon the completion of such consolidation, the several savings
banks shall become a single savings bank by the name provided in such
agreement, which may be a new name or the name of either of the consolidating banks; and said consolidated bark shall have all the powers and
authority contained in either of the charters of the banks so consolidating and may proceed to enact such "by-laws, rules and regulations for its
management as were authorized at the organization of either of said banks.
X-6931
- 31 (Connecticut - cont'd.)
"All liabilities of the respective consolidating banks for
current expenses shall be adjusted and paid by them before such
consolidation goes into effect; and certificates to that effect,
signed by the treasurer of each of said banks, shall be filed with
the consolidated bank.
"All the assets of each of said banks shall become the
property of the consolidated bank as soon as the certificate of
consolidation, approved by the bank commissioner, shall have been
filed in the office of the secretary of the state, and thereupon
no further business shall be transacted by either of such consolidating banks, except such as may be necessary for the completion of such consolidation; and the consolidated bank shall
thereupon become liable for all the deposits and other obligations of each of said consolidating banks."
(General Statutes,
1930, sees. 4013-4015; Banking Law Pamphlet, 1929, sees. 40134015, pp. 74 and 75.)
DELAWARE.
Consolidation or merger of banks and trust companies; approval of
State Bank Commissioner necessary,
"It shall be unlawful for any bank or trust company
doing business in this State to merge or consolidate with any
other bank or trust company or to take over any substantial
portion of the assets of and/or to assume the liabilities, in
: 180
X-6931
-
32 -
(Delaware - cont'd.)
whole or in part, of any other "bank or trust company
(Whether
said other bank or trust company is then doing business or has
ceased to do business or has surrendered its charter or has
dissolved) unless and until such action shall be approved by
the State Bank Commissioner, and the said Commissioner is
hereby authorized to require that he be furnished with such
information as to the said assets and liabilities and as to
the condition of the banks or trust companies concerned as
he shall deem necessary or proper to determine whether to
give or withhold his approval.
"It shall be the duty of the State Bank Commissioner
to refuse his approval whenever in his opinion the transaction
will weaken or tend to weaken any bank or trust company concerned.
"No title to any property shall pass where the
transaction is in violation of the provisions of this Section,"
(Act approved April 25, 1931.)
DISTRICT OF COLUMBIA.
No provisions relating to consolidations, mergers, etc.
The laws of the District of Columbia do not contain any pro-
- S3 -
X-6931
f *?^
(District of Columbia - cont'd.)
visions with specific reference to the consolidation, merger, etc. of
"banks or trust companies.
FLORIDA.
Consolidation or transfer of assets.
Any hank which is winding up its "business for the purpose of
consolidating with some other hank, may transfer its resources and liabilities to the hank with which it is in process of consolidating, "but
no consolidation shall "be made without the consent of the comptroller of
the State of Florida, nor shall such consolidation operate to defeat the
claim of any creditor or hinder any creditor from collection of his debt
against such banks or either of them.
(Act of June 7, 1913, sec. 12;
Banking Law Pamphlet, 1930, p. 32.)
G30K&IA.
Definition of word "bank".
The word "bank" as used in the following provisions of the laws
of Georgia includes banks, savings banks and trust companies.
(Banking
Law Pamphlet, with amendments to August 25, 1925, Art. I, sec. 1, p. 1.)
Merger or consolidation of banks.
Any two or more banks are authorized to consolidate with or merge
into another bank.
(Banking Law Pamphlet, with amendments to August 26,
1925, Article XIII, sec. 1, p. 49.)
Agreement to merge or consolidate; contents of.
In order to effect a merger or consolidation, the boards of
X-6931
- 34-
i
182
(Georgia - cont'd.)
directors of the banks involved may, under their corporate names and seals,
enter into an agreement prescribing the terms and conditions of the merger
or consolidation and the mode of carrying it into effect.
Such agreement
"shall "be subject to the approval of the Superintendent of Banks", and it
must specify the name of the proposed resulting corporation, must name the
persons who will constitute the hoard of directors after the merger or
consolidation has taken place and until a new board of directors "shall
be elected by the stockholders, and shall provide for a meeting of the
stockholders of the merged or consolidated banks within thirty (30) days
after the merger or consolidation, to elect such board of directors, with
such temporary provisions for conducting the affairs of the merged or
consolidated banks meanwhile, as shall bo agreed upon."
(Banking Law
Pamphlet, with amendments to August 26, 1925, Art. XIII, sec. 1» p. 50.)
Submission of agreement to stockholders; filing of certified copies of
proceedings approving; effect of.
After the agreement has been approved by the Superintendent of
Banks, it must be submitted to the stockholders of the banks involved at a
special meeting called after ten days' written notice specifying the time,
place and object of the meeting has been given to each stockholder.
If it
is approved by two-thirds of the stockholders of each bank, "the same shall
be the agreement of such banks".
A certified copy of such proceedings,
signed under corporate seal by the chairman and secretary of each bank is
evidence of the holding and action of such meetings.
Such certified copies
must also be filed in the office of the Superintendent of Banks, "and thereupon such banks shall be merged or consolidated as specified in such agree-
1
X-6951
£, >
- 35 -
-
3
(Georgia - cont'd.)
ment, and the banlc into which t i 1 other or others are merged, or the
if
consolidated bank, as the cast, nuy he, shall thereafter have the new
name specified in such agreement, and the provisions of such agreement
shall he carried incc effect as therein provided."
(Banking Law Pam-
phlet, with amendments to August 26, 1925, Art. XIII, sec. 2, pp. 50 and
51.)
Charter, application for, issuance and recording of.
When the acts described above have been performed, the merged
or consolidated bank must file in the office of the Secretary of State a
formal application in duplicate accompanied by a foe of $25.00 in which it
must state:
"(1)
The names and locations of the banks which have
been merged or consolidated, with the dates of
their original charters and all amendments thereto , respectively.
"(2)
The date of the consolidation agreement, and the
dates of the approval thereof by the Superintendent of Banks and by the stockholders of the several
contracting banks, respectively.
"(3)
The name under which the consolidated bank proposes to do business.
"(4)
The amount of capital stock of the consolidated
bank.
"(5)
The number of its Board of Directors."
Immediately upon filing the application, the Secretary of State
must transmit one copy to the Superintendent of Banks, and when it has
been approved by the latter and a certificate of such approval has been
filed by him with the Secretary of State, the "Secretary of State shall
issue to tho consolidated bank a certificate under the seal of the State,
X-6931
134
- 36 (Georgia - cont'd.)
certifying that the contracting "banks have been merged or consolidated
under the name adopted and with the capital stock ir. said application
set forth, which certificate shall be the charter of the consolidated or
merged batik; and the Secretary of State shall record the application,
the certificate by tlie Superlntondont of Banks approving the saxnc, and
his certificate, in the order named."
(Banking Law Pamphlet, -~ith a-
mendments to August 26, 1925, Art. XIII, sec. 2-a» pp. 51 and 62.)
Published notice of merger or consolidation necessary.
Notice of the merger or consolidation must "be published for
a certain prescribed time and in a certain 'designated newspaper or newspapers ,
Such notice must give the name and location of the consolidated
or merged bank and must state that such bank "has taken over the assets
of the banks respectively, entering into the consolidation or merger
agreement, and has assumed the liabilities of such banks, including the
liability to depositors."
(Banking Law Pamphlet, with amendments to Augus t
36, 1925, Art. XIII, sec. 3, p. W . )
Issuance of new stock for oil.
Provision is s l _ made for the issuance of new certificates of
.,o
stock of the oc ieoiida*ed or merged ban]: in lieu of original certificates
of stock of the merging or consolidating "banks.
(Banking Law Pamphlet,
with amendments to August 26, 1925, Art. XIII, sec. 4, p. 52.)
Legal effect of mcrgor or consolidation.
"Upon the merger or consolidation of any banks in the manner
herein provided, all and singular, the rights, franchises, duties and
X-6931
:
1 3 5
(Georgia - cont'd.)
liabilities, and the interests ox tx.e ban:: or baaKs bo merged or consolidated, and all the assets of evevy kind and charnc „ ~r, including the real
*
- . personal property j,na chosee in action thereunto belonging, shall be
id
deemed to be transferred to and vested in such bank into which oho otncr
or others have been uerged or in the consolidated bank, without any deed,
transfer or assignment, and a ail bank, shall hold, enj oy and be subject to
the same in the same manner and to the sane extent as the merged or consolidated banks, respectively, had, held, owned, enjoyed, and was subject
to the same.
"The rights of creditors of any bank that shall be so merged
or consolidated shall not be impaired in any manner by any such merger or
consolidation; nor shall any liability or obligation for the payment of
any money due or to become due, or any claim or demand in any manner or
for any cause existing against such bank, or against any stockholder
thereof, be in any manner released or impaired; and all the riot's, obligations and relations of all the parties, creditors, depositors, and
others shall remain unimpaired by such merger or consolidation.
3 vc cnxc1'
f
bank into which the other or others shall be merged, or the consolidated
bark, as the case may be, shall succeed to all obligations, trusts, and
liabilities, and be held liable to pa, and discharge all such debts and
liabilities and to perform all such irists in the same manner as though
such bank into which the other or others shall hav-> Lueo .e merged, or the
i
consolidated bank had itself incurred tho obligation
or liability; and the
stockholders of the respective bank, shall continue subject to all the
- 38 -
136
(Georgia - cont'd.)
liabilities, claims and demands, existing against them as such at or "before such merger or consolidation; and no suit < action, or other proceeding then pending "before any court or tribunal in which any bank that may
he merged or consolidated is a party shall be deemed to have abated or
been discontinued by reason of any such merger, but the same may be
prosecuted to final judgment in the same manner as if said bank had not
entered into said agreement, or the bank into which the others shall have
been merged, or the consolidated bank, as the case may be, may be substituted in the place of any bank so merged or consolidated by order of the
court in which such action, suit, or proceeding may pe pending.
Such bank
into which the other or others have been so merged, or the consolidated
bank, shall be subject to be sued in any court having jurisdiction, upon
any cause of action against any of the banks so merged or consolidated,
in the same manner as if such cause of action had originated against such
bank into which the other or others have been so merged or against such
consolidated bank."
(Banking Law Pamphlet, with amendments to August 26,
1925, Art. XIII, sees. 5 and 6, pp. 53 and 54.)
IDAHO.
Definition of word "bank".
The word "hank" as used in the banking laws of Idaho includes
commercial banks, savings banks, and trust companies.
(Idaho Banking Code,
1925, Art. 1, sec. 2, as amended» Laws of 1929, ch. 192, p. 353; Banking hear
Pamphlet, 1925, sec. 2, pp. 5 and 6, as amended, Laws of 1929, ch. 192, p.
353.)
Consolidation or sale of business.
Any bank may sell its business "to any other bah:% state or
X-6931
. Sg .
1 8 7
(ldal.0 - cont'd<)
national, or may, for the purpose of cvnsoliuating with another bank,
state or national bank, trail,.far its affairs, assets and liabilities to
the "bank with which it Intends? to consolidate, * * *."
(Idaho Banlcing
Code, 1925, Art. 1, sec. 48; Banking Law Pamphlet, 1925, sec. 48, p. 25.)
Consent of stockholders n^ce^bary; luevting; rtotico of.
ITo state bank, either as purchaser or seller, can enter into a
sale, purchase or consolidation unless such action is consented to by twothirds of the stockholders,
Such consent, if acknowledged, may be given
in writing by the stockholders, or by a vote at a.special stockholders1
meeting, if ten days advance written notice of such meeting has been
given to each stockholder stating its time, place and purpose.
(Idaho
Banking Code, 1925, Art. 1, soc. 48; Banking Law pamphlet, 1925,,sec.
48, p. 25.)
Consent of Commissi .ner of Finance neoessar.7-; examination of "banks involved; filing of certain documents.
Ho sale, purchase or consolidation can be made without the consent
of the Commissioner of finance, and before granting his consent he mast
examine each of the banks involved.
He must also, before granting his
consent, require each of the banks to file certified copies of all proceedings of their directors and stockholders relating to the transaction, showing a full compliance with the provisions herein digested, and alio copies
of any agreement or agreements which may have been entered into between the
banks.
(Idaho Banking Code, 1925, Art. 1, sec. 48; Barking Law Pamphlet,
1925, sec. 48, p. 25.)
X-6931
-40-
•
1 3 8
(Idaho - cont 1 d.)
Consent of Comptroller of Currency, ~'i n vecossary.
:;
The consent of the Comptroller of the Currency to a consolidation, liquidation, or purchase must be furnished to the Commissioner of
Tinance if either bank concerned is a national bank.
(Idaho Banking
Code, 1925, Art. 1, sec. 48; Banking Law Pamphlet, 1925, sec. 48, p. 25.)
Rights of creditors not affected.
A sale or consolidation "shall in no wise impair, defeat or
defraud any creditors of said bank or either of them." (Idaho Banking
Code, 1925, Art. 1, sec. 48; Banking Law Pamphlet, 1925, sec, 43, p. 25.)
ILLINOIS.
Consolidation of banks.
"Whenever the board of directors, managers or trustees of any
corporation having any banking powers * * * * may desire * * * to
consolidate such corporation with any other corporation having banking
powers * * * they may call a special meeting of the stockholders of such
corporation for the purpose of submitting to a vote of such stockholders
the question of such * * * consolidation with some other corporation
****."
(Laws of 1929, sec, 12, p. 184.)
Special meeting, notice of.
A special meeting of the stockholders may be calleo >y delivering personally, or by mailing thirty days before the time fixed for tho
meeting, a notice to each stockholder which must be signed by a majority of the directors, managers or trustees: and state the time, place
X-6931
1
3
9
(Illinois - cont'd.)
and object of such meeting.
in a designated newspaper.
Notice of such meeting must also "be published
(Laws of 1929, sec. 12, p. 184.)
Stockholders? approval of consolidation; cercificao^ o: , to "be filed T"ith
Auditor of Public Accounts.
At a special meeting, or at any regular meeting, if two-thirds
of the stockholders vote to approve the consolidation, a certificate of
such approval, verified under corporate seal by the affidavit of the
president or a vice presidentmust be filed immediately in the office
of the Auditor of Public Accounts.
(Laws of 1929, sec. 12, pp. 184 and
185.)
Approval of Auditor of Public Accounts; filing of certain papers with
recorder of deeds.
If the auditor of Public Accounts gives his written approval to
the consolidation such approval together with the certificate of the stockholders1 approval, must be immediately filed for record in the office of
the recorder of deeds of the county in which the principal business office
of such corporation is located, and the consolidation "shall be and is
hereby declared accomplished in accordance with the said vote of the
stockholders."
(Laws of 1929, sec. 12, p. 185.)
Conditions precedent to approval by Auditor of Public Accounts.
Before the Auditor can approve th-; consolidation, "he shall require to be filed with him a complete record of the proceedii.-g'-s of such
consolidation, a list of stockholders, the agreement or articles of consolidation approved by the stockholders, which shall include tne amount of
capital and surplus of the consolidated corporation, the plan of business,
name and time for which such consolidated corporation shall continue,
X-6931
'140
(Illinois - cont'd.)
which shall comply with the requirements of this Act as to application
for and organization in the case of a now association, a detailed financial statement showing the assets and liabilities of such proposed
consolidation and such other records as he may deem necessary, verified
"by the affidavit of one or more of the officers of each consolidating
corporation, and shall satisfy himself that said records and list are
true and complete and that said financial statement is true and that
a sufficient amount is dedicated to the "business of such proposed consolidation. "
The Auditor must also require each director of the
proposed corporation to take and subscribe a certain prescribed oath.
(Laws of 1929, sec. 13, pp. 186 and 187.)
Examination by Auditor.
The auditor is given authority to make an examination into the
affairs of such corporation.
(Laws of 1929, sec. 13, p. 187.)
Publication of change of organisation.
After the filing of the above described certificate in the recorder's office, the consolidated corporation must publish the change of
organization once each week, for three successive weeks, in a designated
newspaper.
(Laws of 1929, sec. 12, p. 185.)
Pending suits or rights of persons not affected by consolidate <
The consolidation of one corporation with another doos not affect
pending suits in which the consolidating banks are involved nor does it affect
causes of action or the rights of persons in any particular.
1929, sec. 12, p. 185.)
(Laws of
X-6931
(Illinois - cont'd.)
Dissenting stockholders, rights of.
Detailed provision is made for the payment to any stockholder,
who objects to the consolidation within a certain prescribed time, of the
stock held by such stocldiolder.
(LETS of 1929, sec. 12, pp. 185 and 186.)
Sale of assets.
With the approval of the Auditor of Public Accounts, which shall
state that the proposed sale is in his opinion necessary for the protection of depositors and other creditors, any bank may by a vote of twothirds of its directors and without a vote of its stockholders, sell all
or any part of its assets to another corporation organized under the Laws
of Illinois or the United States, provided that such other corporation
assumes in writing all of the liabilities of the bank other than its liabilities to stockholders as such.
Provision is also made for the payment
to any stockholders objecting to such sale of the value of the stock held
by such stockholders. (Laws of 1929, sec. 12, pp. 185-186.)
INDIANA.
Consolidation of State bank with national bank.
Any State bank "may be consolidated with any national banking
association or associations, under the charter of such nations • b-inking
.
association, or under a new charter issued to such consolidated association, upon such terms and conditions as may be lawfully agreed upon*.
(Act a proved February 21,
1331, sec. 1.)
X-5S31
- 44 (Indiana- cont'd.)
Legal Effect of Consolidation.
"Whenever any tank shall have become, or shall have become
consolidated with, a corporation for carrying on the business of banking under the laws of the United Sbates, it shall notify the bank commissioner of this state of such fact; and shall file with him a. copy
of its authorization as a national banking association or a copy of
the certificate of approval of consolidation, certified by the controller of the currency.
It shall thereupon cease to be a corporation
under the laws of this state, except that for the term of three years
thereafter, its corporate existence shall be deemed to continue for
the purpose of prosecuting or defending suits by or against it, and
of enabling it to close its concerns, and to dispose of and convey its
property.
Such change from a state bank to or consolidation of a
state bank with a national banking association
shall not release any
such bank from its obligations to pay and discharge all the liabilities
created by law or incurred by it before becoming, or becoming consolidated with, a national banking association, or any tax imposed by
the laws of this state up to the date of its becoming, or becoming
consolidated with, such national banking association in proportion to
the time which has elapsed since the next preceding payment s r r :-£'sassc.
ment therefor, or any assessment, penalty or forfeiture imposed or incurred under the laws of this state up to the date of its becoming,
or becoming consolidated with, a national banking association.
X-6931
.45 -
-
(Indiana - cont'd.)
"At such time when the consolidation of a state bank with a
national banking association under the charter of the latter company
or such charter as may thereafter be issued, becomes effective, all the
property of the state bank, including all its right, title and interest
in and to all property of whatsoever kind, whether real, personal or
mixed, and things in action, and every right, privilege, interest and
asset of any conceivable value or benefit then existing, belonging or
pertaining to it, or which would inure to it, shall immediately, by
act of law and without any conveyance or transfer, and without any
further act or deed, be vested in and become the property of the
national banking association which shall have, hold and enjoy the same
in its own right as fully and to the same extent as the same was
possessed, held and enjoyed by the state bank; and the national banking association shall be deemed to be a continuation of the entity and
of the identity of the state bank, and all the rights, obligations and
relations of the state bank to or in respect to any 'person, estate,
creditor, depositor, trustee or beneficiary of any trust, and in, or in
respect to, any executorship or trusteeship or other trust or fiduciary
function, or appointment thereto, shall remain unimpaired, and the national
banking association as of the time of the taking effect of sucL change
or consolidation shall succeed to all each rights, obligations, relations, appointments and trusts, and the duties and liabilities connected
therewith, and shall execute and perform each and every such trustor
relation in the same manner as if the national banking association had
X-S931
: 144
- 46 (Indiana - cont'd.)
ij
e
* •
••
itself been appointed to and/ or assumed the trust or relation, including the obligations and liabilities connected therewith.
If the
state bank is acting as administrator, co-administrator, executor, coexecutor , trustee or co-trustee of o* ia respect to azy estate or trust
being administered under the laws of this state, such relation, as
well as any other or similar fiduciary relations, and all rights,
privileges, duties, and obligations connected therewith shall remain
unimpaired and shall continue into and in said national banking association from and as of the time of the taking effect of such consolidation,
irrespective of the date when any such relation may have been created
or established and irrespective of the date of any trust agreement relationg thereto or the date of the death of any testator or decedent
whose estate is being so administered.
Hothing done in connection with
the consolidation of a state bank with a national banking association
shall, in respect to any such executorship, trusteeship or similar
fiduciary relation* be deemed to be or to effect, under the laws of
this state, a renunciation or revocation of any letters of administration or letters testamentary pertaining to such relation, nor a removal or resignation from any such executorship or trusteeship or
other fiduciary relationship, nor shell the same be deemed to b o f
the same effect as if the executor or trustee or other fiduciary had
died or otherwise become incompetent to act.
"All of the rights, -cowers, privileges, duties, obligations
and liabilities conferred on or extended to banking institutions which
X-3931
- 47 (Indiana - cont'd.)
are formed by the consolidation of a state bank with a national "banking
association, as hereinbefore provided, are hereby conferred upon and
extended to state banks '.vhich arc formed by the consolidation of two
or more previously existing state banks".
(Act approved February 21,
1931, sec. 2.)
Meaning of Terms.
The words "bank," "banks" or "state banks," as used in this
act slioll be held to include banks of discount and deposit, loan and
trust and safe deposit companies, private b-nks, and savings banks,
or any other corporations or institutions carrying on the banking
business under authority of the laws of this state."
(Act approved
February 21, 1531, sec. 5.)
IOWA.
Consolidation or sale of assets of bank or trust company in receivership.
The la',"8 of Iowa do not contain any provisions covering
the consolidation, merger, etc., of solvent brinks or trust companies.
With reference to banks or trust companies in receivership, the
l v ' provide that:
a-s
"If a majority of the creditors holding
direct unsecured obligations of such bank in excess
of ten dollars each, and totaling in the aggregate
amount seventy-five per cent of all direct unsecured
obligations, shall agree in writing to a plan of
X-S931
-
48 -
(Iowa - cont1d.)
disposition and listi,i>vtion oi assets through
sale to another bank, reopening, reorganization or consolidation of the bank, the district court in which such
receivership is pending, upon application of the superintendent of banking, may order a disposition and distribution conforming in general to the provisions of such plan."
(Banking Laws, 1829, ch. 415, sec. 9239-al.)
Secured Creditors, certain rights, not affected.
"Nothing contained in the five preceding sections shall
affect the rights of secured creditors in the security pledged, or to
share in the capital stock assessment, nor affect the rights of depositors or creditors on bonds or other contracts with third parties."
ITQTE: - Section 2239-al above quoted is one of the "five preceding
sections" referred to herein. (Banking Laws, 1929, ch. 415, sec.
9239-aS )
Applicability of above provisions to trust companies.
The laws of this State make the provisions above quoted applicable "with equal force and effect to all trust companies organized
or reorganized under this chapter".
(Banking Laws, 1929, ch. 415, sec.
9304.)
KANSAS' •
Consolidation of bank and trust company.
The laws of this State provide that
1
1
Any bank or trust company
authorized to do business in tie state of Kansas is hereby authorized and
. 147
X-S931
- 49 (Kansas - cont'd.)
"empowered to consolidate with any other bank or trust company authorized
to do "business in the state."
(Session Laws of Kansas, 1931, p. 148.)
Terms of consolidation; consent of bank commissioner necessary.
Such consolidation must be upon such terms as may lawfully
be agreed upon by the two banks or trust companies, and must have the
consent of the bank commissioner.
(Session Laws of Kansas, 1931, p.
148.)
Location, consolidation conditional upon.
The consolidating banks or trust companies must have their
banking houses in the same county in order to consolidate.
(Session
Laws of Kansas, 1931, p. 148.)
Legal effect of consolidation.
"In case of such consolidation, the consolidated bank and/
or trust company shall become, without deed or transfer of any kind,
the owner of and entitled to all rights, franchises and interests,
which shall be referred to in such agreement, of every bank andf or
trust company which shall be subject to the laws of the state of
Kansas and which shall so consolidate, including every species of
property and everything of value of every kind and description except real estate; and such consolidated corporation shall, without further appointment, act as trustee, executor, administrator
or in any other fiduciary capacity in which any such bank or trust
company subject to the laws of this state v/as acting ab the time
X-S931
— 50 r*
(Kansas - cont1d.)
"of such consolidation.11
1
1
(Session Laws of Kansas, 1931, p. 148.)
In case any bank or trust company shall be named as trustee
or in any other fiduciary capacity in any trust deed or other writing,
or shall be named as executor in any will, and shall afterwards consolidate with any other bank or trust company such consolidated company
shall be entitled to be appointed or to act as such trustee, fiduciary,
or executor, with the same effect as if such consolidated corporation
had been specifically named in the trust deed, writing, or will creating such trust or fiduciary relationship."
(Session Laws of Kansas
1931, p. 151.)
KENTUCKY.
Consolidation of two or more trust companies.
The laws of Kentucky do not appear to contain any provisions
covering the consolidation or merger of banks; and it has been held
that proceedings by the boards of directors of two banks were not
sufficient to effect a consolidation.
165 Ky. 669, 178
S. W. 1033.)
(La Rue v. Bank of Columbus,
With reference to trust companies,
however, the laws provide that "any t . or more corporations
vo
organized under the laws of this State, for the purpose of conducting- the business of trust companies, may consolidate their
capital stock, assets and management into one organization."
of Kentucky, 1912, ch. 41,' sec. 1; Carroll's Ky. Stats.. 1930,
(Laws
:
X-6931
-
51
r
(Kentucky - cont'd.)
sec. 603a-l;
Banking Law Pamphlet, including 1926 legisla-
tion, sec. S03a-1, p. 32.)
Specific legal effect of such consolidation.
"The separate existence of each corporation shall continue and all duties, powers and discretions of the constituent
companies as personal representative, trustee, assignee,
guardian, agent, or otherwise conferred, shall be imposed
upon and may be exercised by the consolidated corporation;
and such duty, power or discretion, at the time of consolidation or thereafter imposed upon either of the constituent companies, may be performed
M 9
X-6951
- 58 -
(Kentucky - cont'd.)
or exercised by the consolidated corporation in its own name or in the
name of the constituent company upon which was imposed or conferred
such duty, power or discretion; or by the constituent company upon
which was imposed or conferred such duty, power or discretion; but in
every case the consolidated corporation shall be liable for the proper
performance of such duty and the proper exercise of such power or discretion. "
The method and effect of such consolidation must be as provided
in the provisions below digested,
(Sections 555, 555a, 556, 557 and 558
of chapter 32, Carroll's 1930 Kentucky Statutes), "except that as above
provided, the separate existence of the constituent corporations shall
not cease, and the consolidated corporation and the constituent corporations shall continue to exist, the management of said consolidated
corporation and each of said constituent corporations being in the directors and officers of the consolidated corporation."
(Carroll's Ky. Stats.,
1930, sees. 603a-l, 603a-2; Banking Law Pamphlet, including 1926 legislation, sees. 603a-l, a-2, pp. 32 and 33.)
Agreement of directors to consolidate.
A majority of the directors of each corporation proposing to
consolidate, may enter into a signed agreement tc consolidate; 'Laws of
Kentucky, 1902, ch. 58, sec. 2, p. 118;Carroll1s Ky. Stats. , ]930, sec.555.)
Submission of agreement to stockholders for approval, notice of.
Notice of intention to consolidate must be mailed to each stock-
X-6931
:
3
(Kentucky - cont'd.)
holder at least twenty days prior to entering into the agreement and mast
he published at least two weeks in a designated newspaper.
The written
consent of two-thirds of the stockholders of each corporation "shall be
necessary to the validity of such agreement."
(Laws of Kentucky, 1902,
ch. 58, sec. 2, p. 118; Carroll's Ky. Stats., 1930, sec. 555.)
Names and addresses of stockholders not necessary.
All charters or articles of incorporation "heretofore taken
out" by two or more state companies consolidating "are hereby declared to
be valid, regardless of whether the names and addressed of the stockholders in the consolidating companies be inserted in the articles of
consolidation or not; and that all articles of consolidation heretofore
taken out are hereby declared to be valid without having the names and
addresses of the stockholders inserted therein; and said charters shall be
as valid and legal as if each and every stockholder in the companies composing the consolidated company was set out in such articles of consolidation."
(Laws of Kentucky, 1906, ch. 131, p. 458; Carroll's Ky. Stats.,
1930, sec. 555.)
Additional provisions relating to the legal effect of a consolidation.
Except as provided in the orovisions above referred to setting
out the specific legal effect of a consolidation or trust companies (Sections 603a-l and 603a~2 of Carroll's Kentucky Statutes), a consolidation
of trust companies also has a further effect under another section of the
Kentucky laws.
This section provides that '"When the agreement is signed,
acknowledged and recorded in the same manner as article:" of incorporation
are required to he, the separate existence of the constitutent corporations
X-6931
^ .Tib
±*3*5
- 5.4 (Kentucky - cont'd.)
shall cease, and the consolidated corporations shall "become a single
corporation in accordance with the said agreement, and subject to all
the provisions of this chapter and other laws related to it, and shall
be vested with all the rights, privileges, franchises, exemptions,
property, "business, credits, assets and affects of the constituent
corporations without deed or transfer, and shall "be "bound for all their
contracts and liabilities; Provided, that no consolidated company formed
under this chapter or the laws of this state shall be required to pay any
organization tax on the amount of capital stock on which the organization
tax has been paid by the constituent companies prior to the consolidation,
and when a foreign corporation consolidates with one or more corporations
in this state the organization tax as required by the laws of this state
shall be paid on the amount of capital stock of such foreign corporation
and the organization tax shall be paid on any increase of the capital
stock of the consolidated corporation over the aggregate capit al stock
of the constituent corporations prior to consolidation,"
1916, ch. 46, ;o. 490; Carroll's Ky.
(Laws of Kentucky,
Stats. , 1930, see. 556.)
Consolidated corporation subject to State Courts and general corporation laws.
The consolidated corporation becomes a corporation of Kentucky
for all purposes and is subject to the jurisdiction of its courts and all
its laws regulating corporations.
(Carroll's Ky. Stats., 1950, sec. 555.)
Pending suits not affected by consolidation.
Any suit pending by or against any of the constituent corporations
may be prosecuted to judgment as if no consolidation had taken place,
X-6931
— 56 ~
(Kentucky - cont'd.)
"or the new corporation may be substituted in its place."
(Laws of Kentucky,
1393, ch, 1.71,p. 612; Carroll1 s Ky. Stata., 1930, sec. 557.)
Dissenting stockholders, rights of.
Provision is made for the payment within a certain time of the
value of stock held by any stockholder who objected in writing to the
consolidation and who demands such payment within twenty days after the
consolidation agreement has been recorded,.
(Laws of Kentucky, 1893, ch.
171, p. 612; Carroll's Ky. Stats., 1930, sec. 558.)
LOUISIANA.
Sale of assets.
The laws of Louisiana do not contain any provisions specifically
covering the consolidation or merger of banks and trust companies; but
the laws do permit any State banking association, savings bank or trust
company to sell its assets to any other bank after having obtained the
consent of two-thirdg of the stockholders of both the selling and purchasing banks.
The consent must be either in writing and acknowledged by
such stockholders and attached to the instrument of sale, or to a copy
thereof, or by their vote at special meetings.
The agreement for such sale
shall contain provisions for the payment of liabilities of the selling bank
and it may contain provisions for the transfer of all deposits to the purchasing bank, subject, however, to the unconditional right of every depositor of the selling bank to withdraw his deposit in full on demand after
such transfer.
3, p. 50.)
(Act 193 of 1910, sec. 3; Banking Law Pamphlet, 1928, sec.
X-S931
-
36
:
-
MAINE.
Consolidation of savings banks or sale or lease of franchises,
property, etc.
The laws of this state provide that savings hanks "may exercise
the powers and shall be governed by the rules and be subject to the
duties, liabilities, and provisions in their charters, *** and in the
general laws relating to corporations, unless otherwise specially provided".
(R. S., 1930, ch. 57, sec. 13.)
The "general laws relating to corporations" provide that "Ho
corporation shall sell, lease, consolidate or in any manner part with
its franchises, or its entire property, or any of its property, corporate rights or privileges essential to the conduct of its corporate
business and purposes, otherwise than in the ordinary and usual course
of its business, except with the consent of its stockholders at an
annual or special meeting, the call for which shall give notice of
the proposed sale, lease or consolidation".
(R. 5., 1930, ch. 56,
sec. 63, p. 877.)
Agreement to consolidate, contents of, acknowledgment.
Any two or more state corporations, or any state corporation
or corporations and any corporation or corporations of any other state,
"may consolidate into a single corporation which may be either one of
said corporations, provided the same be a corporation originally organized under the laws of this state, or a new corporation under the laws
of this state to be formed by means of such consolidation", by entering
1-54
X-5931
-
57 -
(Maine - coht* d.)
*
into an agreement authorized by a majority of the directors of each
of the corporations involved and signed by the proper officers, "and
under the respective seals of said corporations, prescribing the terms
and conditions of the consolidation" and the mode of carrying it into
effect and whether the consolidated corporation will be one of the
constituent corporations or a new one.
The agreement must also state
such other facts as are necessary to be set out in the certificate of
organization of an organizing corporation and as are pertinent in the
case of a consolidation, the manner of converting the capital stock
of the constituent corporations into stock of the consolidated corporation, together with such other details as are deemed necessary to
perfect the consolidation.
The agreement must "be acknowledged by one
of the executing officers of each of the consolidating corporations"
before a person authorized to take acknowledgements of deeds "to be
the respective act, deed and agreement of each of said corporations".
(R. S., 1930, ch. 56, sec. 63, p. 877.)
Submission of agreement to stockholders; recordation and filing of;
when deemed to be act of consolidation.
The consolidation agreement must be submitted at a special
meeting to the stockholders of each corporation involved, and if
adopted by a majority of such stockholders, that fact must be
certified thereon by the clerk or secretary of each corporation,
"and the agreement so signed, acknowledged, adopted and certified,
after it has been examined by the Attorney General, and been by him
X-6931
- 58(Maine - cont'd.)
certified to be properly drawn and signed and to be conformable to the
constitution and laws of this state, shall be recorded in the registry
of deeds in the county where the said consolidated corporation is
located, and within sixty days after the day of the meeting at which
such consolidation agreement is adopted by the stockholders, a copy
thereof certified by such register shall be filed in the office of
the Secretary of State, who shall enter the date of filing thereon,
and on the original agreement, certified as aforesaid, to be kept by
the consolidated corporation, and shall record said copy.
From the time
of filing the copy of such agreement in the office of the Secretary
of State, said agreement shall be taken and deemed to be the agreement
and act of consolidation of the said corporations and the said
original consolidation agreement or a certified copy thereof shall
be evidence of the existence of such consolidated corporation and of
the observance and performance of all acts and conditions necessary
to have been observed and performed precedent to such consolidation".
(R. S., 1930, ch. 56, sec. 63, p. 877.)
Legal effect of consolidation.
When the agreement is signed, acknowledged, adopted, recorded
and filed,
1
1
the separate existence of all of the constituent corporations,
or all of such constituent corporations except the one into which such
constituent corporations shall have been consolidated, shall cease, and
the constituent corporations, whether consolidated into a new corporation
: I 3.5?
X^693l
-
56
(Maine - cont'd.)
or merged, into one of such constituent corporations, as the case may be,
shall "become the consolidated corporation by the name provided in said
agreement, possessing all the rights, privileges, powers, franchises
and immunities as well of a public as of a private nature, and being
subject to all the liabilities, restrictions and duties of each of
such corporations so consolidated and all and singular the rights,
privileges, powers, franchises and immunities of each of said corporations, and all property, real, personal and mixed, and all debts due
to any of said constituent corporations on whatever account, and all
other things in action of or belonging to each of said corporations,
shall be vested in the consolidated corporations; and all property,
rights, privileges, powers, franchises and immunities, and all and
every other interest shall be thereafter as effectually the property
of the consolidated corporation as they were of the several and
respective constituent corporations, and the title to any real estate,
whether by deed or otherwise, under the laws of this state, vested
in any of such constituent corporations shall not revert or be in any
way impaired by reason thereof; provided, that all rights of creditors
and all liens upon the property of any of said constituent corporations
shall be preserved unimpaired, limited to the property affected by such
liens at the time of the consolidation, and all debts, liabilities and
duties of the respective constituent corporations shall thenceforth
attach to said consolidated corporation and may be enforced against
X-j6931
: 158
- <5b (Maine - cont'd.)
it to the same extent as if said debts, liabilities and duties had
been incurred or contracted by it".
(R. S., 1930, ch. 56, sec. 63,
p. 877.)
Procedure where location of consolidated corporation is different
from that of constituent corporations.
"If the location of the consolidated corporation is not the
same as that of the constituent corporations, then the clerk of the
consolidated corporation shall within sixty days after such consolidation has become effective file a certificate of the consolidation,
setting forth the names and locations of the consolidated and constituent corporations, in the registry of deeds of each county, other
than that of the consolidated corporation, where the constituent corporations may be located."
(R. S., 1930, ch. 56, sec. 63 pp
877-879.)
Dissenting stockholders.
The laws also contain detailed provisions under which stockholders in any of the constituent corporations who dissent or object
to the consolidation, sale or lease, may obtain the value of the stock
held by them.
(R. S., 1930, ch. 56, sees. 63-74, pp. 877-881.)
MARYLAND.
Consolidation of banks and trust companies; transfer of resources and
liabilities.
Any banking institution having capital stock incorporated
under the laws of Maryland may consolidate with any other banking
X-6931
* 61-«r
*
(Maryland - cont'd.)
institution of the state having capital stock.
The consolidation mast
be effected in the same manner provided for the consolidation of corporations under the general laws of the state, and the rights of any
stockholder of any consolidating banking institution having capital
stock who dissents from the plan of consolidation at the stockholders'
meeting at which the said plan is submitted to the stockholders shall
be the same as the rights of a stockholder of an ordinary business
corporation.
Fo consolidation, however, can be made without the consent
of the Banking Commissioner, and not then to defeat or defraud any of
the creditors of any of the consolidating institutions.
The laws
also provide that a banking institution which is in good faith winding
up its business for the purpose of consolidating with some other banking institution may transfer its resources and liabilities to the banking institution with which it is in process of consolidation.
(Annotated
Code of Maryland for 1924, Article 11, Section 59, as amended by laws
of Maryland for 1931, Chapter 294, Page 751).
Provisions for the consolidation of corporations.
Since under the above statute the consolidation of banking
institutions is regulated by the general law applicable to the consolidation of corporations, the substance of such provisions is set forth
below.
Any two or more corporations having capital stock existing or
formed under the laws of Maryland which have been or shall have been
X-6931
-
62 -
(Maryland. - cont'd.)
duly authorized by law to carry on in whole or in part any business of
the same or a similar nature may consolidate, and by such consolidation
form one new corporation.
(Annotated Code of Maryland for 1924, Article
23, Section 33).
Proceedings for consolidation.
Such consolidations shall be made in the manner following:
There shall be an agreement of consolidation between the consolidating corporations giving; (a)
proposed consolidation; (b)
(c)
the terms and conditions of the
the mode of carrying the same into effect;
the name of the new corporation; (d)
the postoffice address of the
place at which the principal office of the corporation in this State
will be located as in the case of a certificate of incorporation and
the name or names and postoffice address or addresses of the resident
agent or agents who will be in charge thereof, as in the case of a
certificate of incorporation; (e)
the counties in this State in which
any of the consolidating corporations own property, the title to which
could be affected by the recording of an instrument among the land
records, and if any of the consolidating corporations own such property
in the City of Baltimore, the. agreement of consolidation shall so state;
(f)
the number, names and addresses of the directors and the names
of the officers, who shall act as such until their successors are duly
chosen and qualified; (g)
the am runt of authorized capital stock of
each consolidating corporation and the total amount of authorized capital
X-6931
*• 63 •
"
*
. (Maryland - cont'd.)
stock of the new corporation and the number and oar value of the shares
(h)
the total amount of capital stock of the new corporation to be
issued for stock of the consolidating corporations; (i)
the restric-
tions, if any, imposed upon the transfer of the shares or of any of
them; (j)
if the capital stock is classified, the amount, par v.-alue,
preferences, restrictions and qualifications of each class, specifying
the amount of each class authorized and the amount of each class to "be
issued for stock of the consolidating corporations; (k)
the manner of
converting the capital stock of each of the- consolidating corporations
into stock of the new corporation; (1)
all such other provisions and
details which shall be deemed necessary to perfect the consolidation.
The agreement of consolidation must be first submitted to
the boards of directors of the consolidating corporations, which must
pass resolutions declaring
that such consolidation is advisable and
calling separate meetings of the stockholders of the respective corporations to take action thereon.
Motice of the meetings of stock-
holders must be given in the manner provided by law and if the agreement of consolidation is approved by the affirmative vote of two-thirds
of all snares (or if two or more classes of stock have been issued,
two-thirds of each class) outstanding and entitled to vote of each
consolidating corporation, the agreement must then be signed and
acknowledged in the name and in behalf of the respective consolidating
corporations by their respective president or vice-president and
sealed with their respective corporate seals, attested by their
X-6931
- 64 -
: 162
(Marylstnd. - cont'd.)
respective secretaries or assistant secretaries.
The agreement thus executed must have attached to it the
affidavits of the chairmen or secretaries of the respective stockholders'
meetings, showing that the agreement was duly advised by the boards
of directors and approved by the stockholders of their respective corporations.
(Annotated Code of Maryland for 1924, Article 23, Section
33 ).
Legal effect of the consolidation.
When such agreement has been duly filed with the State Tax
Commission and the proper fees paid all of the property and assets
belonging to said consolidating corporations of whatever nature and
description, and all the cowers and rights and all debts and liabilities
of the said consolidating corporations of whatever nature and description shall be devolved upon said new corporation, which shall be regarded as substituted by operation of law in the room and stead of
said consolidating corporations.
(Annotated Code of Maryland for
1924, Article 23, Section 34.)
Rights of dissenting stockholders.
Any stockholder of any corporation consolidating as aforesaid, who at such meeting voted against the agreement submitted, may
withir/twenty days after the agreement of consolidation has been delivered to the State Tax Commission, but not afterwards, make upon
the consolidated corporation a written demand for the payment of his stock
X-6931
-
65
(Maryland - cont'd.)
and shall thereupon " e entitled to receive the fair value thereof.
b
If the stockholder and the corporation are unable to agree upon the
fair value of the stock, or if having agreed, the corporation shall
fail to tender the amount thereof, the dissenting stockholder may
within thirty days after such written demand apply by petition to
any court of equity, which must appoint three commissioners to
determine the fair value of the stock without regard to depreciation
which has occurred since the consolidation, and the award of said
commissioners, or the majority of them, when confirmed by the court
is final and conclusive on all parties except that the corporation
and stockholder have the right of appeal to the court of appeals.
(Annotated Code of Maryland for 1924, Article 23, Section 35 ).
Sale of all assets of a corporation.
Any corporation of the State of Maryland having capital stock
may at any meeting duly called in accordance with law sell, lease, or
exchange all of its property or assets as an entirety, including its
good will and franchises to and with any corporation organized under
the laws of Maryland, or of any other state which is duly authorized
to acquire and hold such or similar property.
An agreement containing
the terms and conditions of such proposed sale, lease, or exchange must
after approval by the board of directors be submitted for the approval
of the stockholders of any corporation organized under the laws of
the state, which shall be a party to such agreement at a duly called
163
X-6931
-
-5
jL
66 -
(Maryland - cont'd.)
meeting, and if approved by the affirmative vote of two-thirds of all
stock (or if two or more classes of stock have been issued of twothirds of each class) outstanding and entitled to vote, such agreement shall be executed and in terms and conditions performed by the
proper officers of the respective corporations.
If any stockholder
dissents at such meeting or votes against the agreement submitted
he may within twenty days after such meeting, but not afterwards,
require the payment to him by the corporation of the fair value of
his stock, which, if not agreed upon, mast be determined in a manner
substantially similar to that provided in the case of consolidations.
(Annotated Code of Maryland for 1924, Article 23, Section 36).
MASSACHUSETTS.
Consolidation or merger of trust companies.
The laws provide that "Ho trust company shall be merged
in or consolidated with another trust company except with the
written approval of the commissioner and under the provisions
of
sections forty-two and forty-six of chapter one hundred and fiftysix, which are hereby made applicable to the sale or exchange of
all the property and assets, including the good will and corporate
franchise, of a trust company."
(General Laws, ch. 172, sec. 44,
as amended by Acts of 1931, ch. 11.)
Section 42 of Chapter 156 above referred to provides that
X-5931
- 6? *
:
(Massachusetts - cont'd.)
"Every corporation may, at a meeting duly called for the purpose, by
vote of two-thirds of each class of stock outstanding and entitled
to vote, or by a larger vote if the agreement of association or act
of incorporation so requires, change its corporate name, the nature
of its business, the classes of its capital stock subsequently to be
issued and their preferences and voting power, or make any other
lawful amendment or alteration in its agreement of association or
articles or organization, or in the corresponding provisions of its
act of incorporation, or authorize the sale, lease or exchange of
all its property and assets, including its good will, upon such
terms and conditions as it deems expedient."
(General Laws, ch.
155, sec. 42.)
Section 46 of Chapter 156 provides for the appraisal and
payment of the value of stock held by any stockholder who at the
stockholders' meeting referred to in section 42 voted against a
sale, lease, exchange of property and assets, or a change in the
nature of the business of the corporation.
(General Laws, ch. 156,
sec. 46.)
Legal effect of consolidation or merger.
"The charter of a trust company the business of which
shall, on or after July first, nineteen hundred and twenty-two, be
consolidated or merged with, or absorbed by, another bank or trust
company, or the affairs of which shall, on or after said date, have
been liquidated, shall be void except for the purpose of discharging
1.65
X-6931 1 0 6
- 68 (Massachusetts - cont'd.)
existing obligations and liabilities.11
(General Laws, ch. 172, sec.
44, as amended by Acts of 1931, ch. 11.)
Office of consolidating or merging company may be maintained as branch
office.
1
1
Any office of a trust company the business of which
has been taken over under section forty-four by, or any office of
a national bank purchased by or merged in, a trust company located
in the same town, may be maintained as a branch office of such
corporation, if in the opinion of the commissioner public convenience will be served thereby,"
(General Laws, ch. 172, sec.
46, as amended by Acts 1922, ch. 396; Trust Company Pamphlet,
1929, sec. 45, p. 24.)
Consolidation or merger of savings banks.
Any savings bank may, if authorized at a special meeting by two thirds of its corporators, be dissolved and liquidate
its affairs, "provided, that the (bank) commissioner is satisfied
that such savings bank has given at least thirty days', notice to
each other savings bank, located within twenty-five miles, of its
willingness to enter into negotiations with a view to consolidation or merger and that no consolidation or merger with any such
savings bank can be arranged upon terms satisfactory to the commissioner; * * *.
If, however, the commissioner is satisfied that
a consolidation or merger of the savings bank proposing liquidation
X-6931
- 69 (Massachusetts - cont'd.)
with another savings bank located within twenty-five miles
can be effected on terms approved by him and if he finds
that such consolidation or merger is in the interest of the
depositors of the savings banks concerned, such consolidation
or merger may be effected upon such terms and subject to the
direction of the commissioner, provided that a vote authorizing the same is passed by at least two-thirds of the corporators of each of the savings banks aforesaid at meetings
specially called to consider the subject".
(Laws of 1930,
ch. 329, p. 377.)
MICHI&AIT.
Consolidation under so-called "Bank Act" of bank or trust company with
State bank; procedure.
"A bank or trust company which is in good faith winding
up its business for the purpose of consolidating with some other
state bank may transfer its assets and liabilities to the bank
with which it is in process
X-6931
- 70 (Michigan - cont'd,)
of consolidation."
Before such consolidation can "become effective each
•bank or trust company concerned, must file with the "banking commissioner,
with the secretary of state and in the office of the clerk of the county
in which the "bank or trust company is located, certified copies of all
proceedings had by its directors and stockholders.
The stockholders pro-
ceedings must state that stockholders owning at least two-thirds of the
stock voted in, the affirmative on the proposition of liquidation and consolidation and must also contain a copy of the agreement entered into
"between the consolidating institutions.
Qpon filing such stockholders
proceedings, the "banking commissioner must make an examination of each
"bank or trust company, and his consent to or rejection of such liquidation
and consolidation shall "be "based thereon.
Ho consolidation can be made
without the consent of the "banking commissioner, and not then to defeat
or defraud any of the creditors of any of the consolidating institutions.
(Public Acts, 1929, Act 66, sec. 57; Banking £aw Pamphlet, 1929, sec. 66,
p. 40.)
State bank - consolidation with,, or purchase of assets of national "bank;
absorption of State bank by national bank.
A State bank is given authority to consolidate with or purchase
the assets and assume the liabilities of any national bank.
In case any
State bank is to be absorbed' by a national bank, the banking commissioner
must require to be filed in his; office, with the secretary of state and
in the office of the clerk of the county in which the bank is located,
certified copies of all proceedings had by the stockholders of each bank,
X-6931
1 6 9
(Uichigan - cont'd.)
which must state that stockholders owning at least two-thirds of the
capital stock voted in favor of liquidation and consolidation.
Such
stockholders1 proceedings shall also recite an exact copy of the agreement entered into between the banks.
The banking commissioner nrust also
require the national bank to furnish a certified copy of the consent of
the comptroller of the currency to such consolidation, liquidation or
purchase.
In the instance of a State bank absorbing a national bank,
the transaction shall not become effective until each bank files with the
banking commissioner certified copies of all proceedings had by its stockholders , which proceedings shall set forth that stockholders owning at
least two-thirds of the capital stock voted in the affirmative on the
proposition of such consolidation or purchase. A copy of the agreement
entered into between the stockholders of each bank shall be set forth at
length in such stockholders' proceedings.
In addition, the national -bank
is required to furnish a certified copy of the consent of the comptroller of
the currency to such liquidation or consolidation under section 5220 of
the Revised Statutes of the United States.
It is also the duty of the bank-
ing commissioner to make an examination of each bank and no such consolidation shall be made without the consent of the commissioner, and not then to
defeat or defraud any of the creditors of either of the banks parties to
the consolidation.
The expenses of the examinations must be paid by the
banks but can not exceed ten dollars per day for each examiner and the
actual expenses incurred while making the examinations.
(Public Acts,
1929, Act 66, sec. 59; Banking Law Pamphlet, 1929, sec. 68, pp. 41 and 42.)
X-6931
1
(Michigan - cont'd.)
Legal effect of consolidation under so-called "Bank Act" of State tank
or trust company with State tank.
"In the event of any consolidation heretofore or hereafter
effected in any manner prescribed by this (bank) act, the consolidated
corporation, by whatever name it may assume or be known, shall be a continuation of the entity of each and all of the corporations so consolidated, and as such entity shall hold, exercise and perform all rights,
powers, privileges, duties and obligations appertaining to any and all
trust, representative or fiduciary relationships of whatsoever nature
of each of the consolidating corporations at the time of such consideration, whether the appointment of such consolidating corporation in any
such trust, representative or fiduciary capacity shall have been by any
court or • otherwise and shall hold, exercise and perform all rights,
powers, privileges, duties and obligations appertaining to any and all .
trust, representative or fiduciary relationships whatsoever as to or for
which either or any one of the corporations so consolidating may have
been appointed, nominated or designated by any will or conveyance or
otherwise, whether or not such will, conveyance or other act intended
to create such trust, representative or
.fiduciary relationship shall
have been executed or have come into or taken effect at the time of such
consolidation; and further, in the event of any such consolidation heretofore or hereafter effected, the consolidated corporation shall succeed to
and become the owner of all property, rights, powers, franchises, privileges and appointments, whether existing, contingent or future, corporeal,
X-6931
—
* :
I'
(Michigan - cont'd.)
or incorporeal, tangible, or intangible, of every nature whatsoever of
each of the consolidating corporations, and if any of the consolidating
corporations shall he acting or shall have "been nominated, appointed,
delegated or designated "by any court, person or otherwise irrevocably
or contingently to act as trustee, attorney, agent, executor, administrator, receiver, assignee, guardian, or in any fiduciary or respresantative capacity or relationship, or in any other capacity or relationship
whatsoever, the consolidated corporation shall succeed to all of the
property, rights, powers, privileges, duties and obligations appertaining
to each fiduciary, representative or other capacity or relationship,
without further or additional appointment, confirmation or designation
whatsoever, and said consolidated corporation shall file with each court
or other public tribunal, agency or officer by which any of the consolidating corporations shall have been so appointed and designated, and in"
the file of oach estate, suit or proceeding in which so then acting, a
statement setting forth the fact of such consolidation, the name of each
other corporation entering therein, the name of the consolidated corporation and its place of business, capital, and surplus; but nothing herein
contained is intended or shall be construed to limit or restrict in any
wise the powers and authority of any court of competent jurisdiction in
respect of any matter arising by reason of any such condition."
(Public
Acts, 1929, Act 66, sec. 57; Banking Law Pamphlet, 1929, sec. 66, pp. 40
and 41.)
X-6931
.74-
(Michigan - cont'd.)
Consolidation under so-called "Trust Company Act" of trust companies, or
of State or national Dank with trust company authorized to engage in
banking business.
Any two or more trust companies, or a State or national bank
and "a corporation organized or existing under this (trust company) act,
and which has obtained the consent of the Commissioner of the banking
department to engage in the banking business, may consolidate in pursuance of authority granted by the affirmative vote of the holders of at
least two-thirds of the capital stock of such corporation, in accordance
with either of the following methods;
(a) by the dissolution of each of the consolidating corporations and. the conveyance of all of their assets and liabilities
to a new corporation which must assume all of the liabilities,
duties and obligations of each of the consolidating corporations.
The capital and surplus of the new corporation shall
oe equivalent to the aggregate of the capitals and surplus
of the consolidating corporations.
(b) by the acquisition by one corporation of all the assets
and liabilities of one or more other corporations, and the
dissolution of each of the other corporations.
The acquir-
ing corporation shall deliver to the dissolvent corporation
or corporations such cash, stock, or property as may be
provided in the agreement for consolidation, and shall assume
all of the liabilities, duties and obligations of each of the
X-693I
- 75 (Michigan - cont'd.)
dissolving corporations.
Each dissolving corporation shall
distribute pro rata to its stockholders any cash or property
or stock received by it.
No such consolidation is valid unless and until it is approved by the banking commissioner and not then to defeat
or defraud any creditors.
Such consolidation does not be-
come effective, until each of the consolidating corporations
files with the banking commissioner, with the secretary of
state, and in the office of the county clerk of the county
in which the corporation is located, certified copies of all
proceedings had by its directors and stockholders, and the
stockholders' proceedings of each such corporation shall set
forth that two-thirds of the stockholders voted
sol idation.
for the con-
Such stockholders' proceedings shall also con-
tain a copy of the agreement for consolidation entered into
by the consolidating corporations.
If the consolidation is between a State or national bank
and a trust company, the directors' and stockholders' proceedings shall set forth the proportion of the capital of the
new or acquiring corporation
which will be allocated to the
banking business of such corporation.
Such allocation is
subject to the approval of the banking commissioner.
"For the purposes of this act the words 'consolidate',
•consolidation1,
be
1
consolidating', and 'consolidated' shall
construed to include in their meanings the meanings of
1 7 3
X-6931
- 76 (Michigan - cont'd.)
the words 'meiv.e', 'merger', 'merging'- and 'merged', respectively. "
(Public Acts, 1929, Act 67, sec. 30; Banking
Law Pamphlet, 1929, sec. 143, pp. 72 and 73.)
Legal effect of consolidation under so-called "Trust Company Act"
of trust companies, or of State or national bank with trust company
authorized to engage in banking business.
"In the event of any consolidation heretofore or hereafter
effected in any manner prescribed by this (trust company) act, the
consolidated corporation shall have, possess and bo the owner of all
property, rights, powers, franchises, privileges and appointments
whether existing, contingent or future, corporeal or incorporeal,
tangible or intangible, of every nature whatsoever of each of the
consolidating corporations, and if any of the consolidating corporations shall be acting or shall have been nominated, appointed,
delegated or designated by any court, person or otherwise irrevocably
or contingently to act as trustee, attorney, agent, executor, administrator, receiver, assignee, guardian, or in any fiduciary or
representative capacity or relationship, or in any other capacity
or relationship whatsoever, the consolidated corporation shall have,
possess and be tested with all of the property, rights, powers,
privileges, duties and obligations appertaining to each such
fiduciary, representative or other capacity or relationship, without further or additional appointment, obligation or designation
whatsoever.
In the event of any such consolidation heretofore or
1 7 4
X-6931
77 (Michigan - cont'd.)
hereafter effected in any manner aforesaid, the consolidated corporation, by whatever name it may assume or be known, shall be a continuation of the entity of each and all of the corporations so consolidated, and as such entity shall hold, exercise and perform all
rights, powers, privileges, duties and obligations appertaining to
any and all trust, representative or fiduciary relationships of
whatsoever nature of each of the consolidating corporations at the
time of such consolidation, whether the appointment of such consolidating corporation in any such trust, representative or fiduciary capacity
shall have been by any court or otherwise and shall hold, exercise
and perform all rights, powers, privileges, duties and obligations
appertaining to any and all trust, representative or fiduciary relationships whatsoever as to or for which either or any one of the
corporate ons so consolidating may have been appointed, nominated
or designated by any will, or conveyance or otherwise, whether or
not such will, conveyance or other act intended to create such trust,
representative or fiduciary relationship shall have been executed
or have come into or taken effect at the time of such consolidation.
"Said consolidated corporation shall file with each
court or other public tribunal, agency or officer by which any
of the consolidating corporations shall have been so appointed
and designated, and in the file of each estate,' suit or proceeding in which so then acting, a statement setting forth the
X-6931
- 78 -
(Michigan - cont'd.)
fact of such consolidation, the name of cach other corporation
entering therein, the name of the consolidated corporation and
its place of business, capital and surplus; but nothing herein
contained is intended or shall be construed to limit or restrict
in any wise the powers and authority of any court of competent
jurisdiction in respect of any matter arising by reason of such
condition.11
(Public Acts, 1929, Act 67, Sec. 30; Banking Law
Pamphlet, 1929, sec. 145, pp. 72 and 73.)
Purchase of assets by State bank or trust company of another bank or
trust company.
If any State bonk or trust company purchases the capital
stock of another bank or a trust company for the purpose of retiring such stock and takes over all assets and assumes all
liabilities, the banking commissioner mast require the stockholders of the bank or trust company selling
its business to
authorize such sale by a vote of the stockholders owning at
least two-thirds of the capital stock; and the commissioner
X-6931
j *9 * 7
(Michigan - cont'd.)
may, in M s discretion, require authorization of such purchase by the
acquiring tank or trust company " y a two-thirds vote of its directors
b
or stockholders, and may in his discretion make an examintion
of any
of the institutions involved "before consenting to the transaction.
Certified copies of all stockholders and directors' proceedings must he
filed with the "banking commissioner, the secretary of state and in the
office of the clork of the county in which the institutions are located,
and shall contain in detail the particulars relating to such sale ami
purchase, and a copy of any agreement entered into between the stockholders and directors of the institutions. Ho sale or purchase shall
"bo made without the consent of the commissioner and not then to defeat or
defraud any of the creditors of any of the institutions.
The expenses
of any examinations must be paid " y the institutions and shall not exb
ceed ten dollars per day for each examiner and the actual expenses incurred while making the examinations.
(Public Acts, 1929, Act 66, sec.
58, and Act 67, sec. 31; Banking Law Pamphlet, 1929, sec. 67, p. 41 and
see. 144, p. 74.)
MINNESOTA.
Consolidation of banks and trust companies.
The laws of Minnesota authorize the consolidation of State
banks or trust companies with other State banks or trust companies "operating in the same city or village" under such charter as the boards of
directors of the consolidating corporations may determine. All consolidations must be made in the manner prescribed below and when completed,
the consolidated corporation "shall be governed and conducted in all
X-6931
; 178
(Minnesota - cont'd.)
other respects" "by the statutes covering the operation of a corporation
of the same class as the corporation whose charter was adopted "by the
consolidated corporation.
(Laws of 1925, ch. 156, sec. 1, Act approved
Apr. 8, 1925; Banking Law Pamphlet, 1929, sec. 1, p. 25.)
Agreement for consolidation, terms of; capital stock; name.
A consolidation agreement may "be made by the "boards of directors of the institutions involved and this agreement must prescribe the
terms and conditions of and spccify the parties to, the consolidation.
The agreement must also prescribe the manner of carrying the consolidation
into effect, the name of the consolidated corporation, which may be the
name, in whole or in part, of any of the constituent corporations, and
the authorized capital stock of the resulting institution, which can not
exceed the aggregate authorized capital stock of all of the consolidating
corporations; and the city or village in which tho principal place of
business will be carried on must be specified.
The persons who will
constitute the board of directors of the consolidated corporation must
also be named, "but the number and qualifications of such directors shall
be in accordance with the statutes relating to the number and qualifications of directors of the class of corporation under whose charter the
consolidation is made,
(Laws of 1925, ch. 156, sec. 2, Act approved
April 8, 1925; Banking Law Pamphlet, 1929, sec. 2, p. 25.)
Approval of superintendent of banks necessary.
The consolidation agreement and certified copies of the proceedings of the boards of directors authorizing the making of the agreement must be submitted to the superintendent of banks for his approval\
and the agreement does not become effective until he has approved it.
X-6931
81 —
(llinnescta - cont'd.)
After such documents are1 received, the superintendent within twenty days
must take action on them "and he shall he entitled to such further information from the consolidated corporation as he may request or as he
may obtain upon a hearing directed by him."
(Laws of 1925, ch. 156,
sec. 3, Act approved April 8, 1925; Banking Law Pamphlet, 1929, sec.
3, p. 25.)
The laws of Minnesota also provide that "With the written
consent of the examiner, (superintendent of banks), it may
effect a
transfer of its assets and liabilities to another bank for the purpose
of consolidating therewith, but the same shall be without prejudice
to the creditors of either."
(General Statutes, 1923, sec. 7692; Bank-
ing Law Pamphlet, 1929, p. 25.)
Submission to and approval by stockholders of agreement, certificate
by superint endont of banks.
Either before or after the agreement has been approved by the
superintendent of banks, it must be submitted to a special meeting of the
stockholders of each corporation involved and it does not become binding
upon the consolidated corporation until it has been approved "by a vote
or ballot of the stockholders, holding at least a majority of the amount
of stock of the respective corporations".
Proof of the holding of such
meetings and such action as was taken must be made to the superintendent.
After the agreement has been approved by the stockholders and the superintendent , "the latter shall issue a certificate reciting that such
corporations have complied with the provisions of this act and declaring
the consolidation of such corporations; the name of the consolidated
3^.6931180
(Minnesota - cont'd.)
corporation, the amount of capital stock thereof and the names of the
first board of directors and the place of business of such consolidated
corporation, which shall he within the city or village where any one of
said constituent corporations shall have been previously authorized to
have its place of business". (Laws of 1925, ch. 156, sec. 4, Act approved
April 8, 1925; Banking Law Pamphlet, 1929, sec. 4. pp. 25 and 26.)
When incorporation complete and corporate existence begins.
When the superintendent of banks has issued the certificate
above described and it has been filed for record in the office of the
Secretary of State, and in the office
of the Register of Deeds for the
county in which the consolidated corporation will have its principal
place of business, "such incorporation shall be deemed to be complete,
and such consolidated corporation shall from the date of such certificate
have such term of corporate existence as may be therein specified not
exceeding the longest unexpired term of any constituent corporation."
The certificate of the superintendent is prima facie evidence that all
the provisions of the so-called consolidation act have been complied with
and "shall be conclusive evidence of the existence of such consolidated
corporation?.
(Laws of 1925, ch. 156, sec. 4, Act approved April 8,
1925; Banking Law Pamphlet, 1929, sec. 4, p. 26.)
Legal effect of consolidation^
"Upon the consolidation of any such corporation, with any one
or more corporations, into a consolidated corporation, as herein provided, the corporate existence of each former corporation shall be merged
X-6931
— 83 —
(Minnesota - cont'd.)
into that of the consolidated corporation, and all and signular its
rights, privileges, and franchises, and its right, title and interest
in and to all property of whatsoever kind, whether real, personal, or
nixed, and all things in action, and every right, privilege interest or
asset of conceivable value or benefit then existing which would inure
to it under an unmerged or unconsolidated existence shall he deemed
fully and finally transferred to and vested in the consolidated corporation without further act or deed and such last mentioned corporation
shall have and hold the same in its own right as fully as the same
was
possessed and held "by the former corporation from which it was, by operations of this act, transferred.
Its rights, obligations, and rela-
tions to any person, creditor, depositor, trustee, or beneficiary of
any Trust, shall remain unimpaired and the corporation into which it shall
have "been consolidated shall succeed to such relations, obligations,
trusts, and liabilities and shall execute and perform all such trusts in
the same manner as though it had itself assumed the relation or trust,
or incurred the obligation or liability; and its liabilities and obligations to creditors existing for any cause whatsoever shall not be impaired by such consolidation, nor shall any obligation or liability
of any stockholder in any corporation, which is party to such consolidation, he affected by any such consolidation,
but such obligations and
liabilities shall continue as fully and to the same extent as existed "before such consolidation.
The consolidated corporation shall become without
further act or deed, the successor of the consolidating corporations in
X-6931
- 04-
:
182
(Minnesota - cont'd.)
any and all fiduciary capacities, in which each such consolidated corporations may "be acting at the time of such consolidation, and shall
be liable to all beneficiaries as fully as if such consolidating corporations had continued its separate corporate existence.
If any con-
solidating corporation shall be nominated and appointed or shall have
been nominated or appointed as executor, guardian, administrator, agent
or trustee, or in any other trust relation or fiduciary capacities in
any will, trust agreement, trust conveyance or any other conveyance,
order or judgment of any Court, or any other instrument whatsoever prior
to such consolidation (even though such will or other instrument shall
not become operative or effective until after such consolidation shall
have becomo effective) every such office, trust relationship, fiduciary
capacity, and all of the rights, powers, privileges, duties, discretions
and responsibilities so provided to devolve upon, vest in, or inure to
the corporation so nominated or appointed, shall fully and in every
respect devolve upon, vest in, and inure to, and be exercised by the
consolidated corporation, whether there be one or more successive mergers
or consolidations."
(Laws of 1925, ch. 156, see. 5, Act approved April
8, 1925; Banking Law Pamphlet, 1929, sec. 5, pp. 26 and 27.)
Consolidation does not affect pending .judicial proceedings against
consolidating corporations.
Any judicial proceeding in which any consolidating corporation
is a party is not abated or discontinued because of the consolidation, but
it may be prosecuted to final disposition, or the consolidated corporation
X-6931
•
-
8 5 -
(Minnesota - cont'd,)
may be substituted as a party and judgment rendered for or against it.
(Laws of 1925, ch. 156, sec. 6, Act approved April 8, 1925; Banking Law
Pamphlet, 1929, sec. 6, p& 27.)
Rights of stockholders objecting to consolidation.
The so-called consolidation act also contains detailed provisions with reference to the rights of stockholders of any of the
consolidating corporations in case they object to the consolidation.
(Laws of 1925, ch. 156, sec. 7, Act approved April 8, 1925; Banking Law
Pamphlet» 1929, sec. 7, p* 27.)
MISSISSIPPI*
Mo provisions coveringfcoasolideltions.mergers, t etc.
I .
The laws of Mississippi do not contain any provisions specifically covering the consolidation, merger, etc. of State banks or trust
companies.
MISSOURI.
Banks, Sale of business to, or consolidation or merger with, another
bank or trust company.
"Any bpnk may sell the whole of its business, or the whole
of the business of any of its departments, to any other bank or trust
company, state or national, or may for the purpose of consolidating
or merging with another-bank or trust company, state or national,
transfer its affairs, assets arid liabilities to the bank or trust
company with which it intends to consolidate or merge; * *
of 1927, sec. 11. p. 232; Rev. Stats, of Mo. 1929, sec. 5379.)
(laws
(Missouri - cont'd.)
Consent of stockholders, when necessary.
Unless such sale, merger or consolidation is deemed by the
commissioner of finance to be a public necessity or advantage, it
can be entered into only after obtaining the consent of two-thirds
of the stockholders.
This consent may either be in writing, executed
and acknowledged by such stockholders, or by a special meeting of the
stockholders, prior notice of which, stating the time, place and object,
must be given to each stockholder of record.
(Laws of 1927, sec. 11,
p. 232; Rev. Stats, of Mo., 1929, sec. 5379.)
Consent of Commissioner of Finance finally accessary.
"Fo such salo, purchase, merger or consolidation shall be
made without the consent of the comnissionor of finance", and he must,
"before granting his consent, require each of the banks or trust
companies to file certified copies of all proceedings of their
directors' and stockholders' meetings relating to the transaction,
showing a full compliance with the requirements of this section,
and also copies of any agreement or agreements which may have been
entered into between said banks or trust companies."
(Laws of 1927,
sec. 11, p. 232; Rev. Stats, of Mo., 1929, sec. 5379.)
Commissioner of finance may examine institutions involved.
The commissioner of finance, before granting his consent
to such sale, purchase, merger or consolidation, may examine
each of the banks or trust companies involved, the expenses of
X-5931
- 87 (Missouri - cont'd.)
which must be paid, by such banks or trust companies.
1927, sec. 11, p. 232;
Rev. Stats,
of Mo.
(Laws of
1929, see. 5379.)
Rights of creditors not affected.
It is further provided that "such sale, merger, or •
consolidation shall in no wise impair, defeat or defraud any
creditor of said bank or trust company or either of them".
(Laws of 1927, sec. 11, p. 232; Rev. Stats, of Mo. 1929, sec.
5379.)
Trust companies - merger or consolidation with each other.
The laws of Missouri also provide that any trust company
organized under such laws may be merged in or consolidated with
any other such trust company or companies to form a single corporation.
sec. 5470.)
(Laws of 1919, p. ISO; Rev. Stats, of Mo., 1929,
X-6931
-
1
88-
(Missouri - Cont'd.)
Agreement to merge or consolidata; authorization for; execution and
acknowledgement.
Each trust company which is a party to a merger or consolidation, upon "being first authorized by a majority of all the members of
its "board of directors, most enter into an agreement with the other trust
companies which are parties to the merger or consolidation, providing for
such merger or consolidation.
The agreement must be in writing, and exe-
cuted and acknowledged under the seals of the trust companies involved
in such form as is required "by law for the execution and acknowledgement
of instruments conveying real estate.
(Laws of 1919, p. 160; Rev. Stats,
of Mo., 1929, sec. 5471.)
Merger agreement; terms, conditions and contents of.
The merger agreement most set out:
(1)
The names of the merging trust companies;
(2)
The terms and conditions of such merger, and the manner of
carrying it into effect;
(3)
The corporate name of the resulting trust company, which may
"be the name, in whole or in part, of any of the merging trust companies;
(4)
The names of the persons who are to constitute the board of
directors, provided that the number and qualifications of such directors
shall be in accordance with the provisions of law relating to the number
and qualifications of directors of trust companies;
(5)
The agreement shall provide further that the directors named
shall, after qualifying, divide themselves into certain classes, and that
X-6931
-6 a
8
18?
(Missouri - cont'd.)
they may adopt new by-laws for the consolidated trust company.
(Laws of
1919, p. 160; Eev. Stats, of lio., 1929, sec. 5472.)
Consolidation agreement; terms and contents of.
The consolidation agreement mast set forth:
(1) The terms and conditions of the consolidation and the method
of carrying it into effect;
(2)
The name of the resulting corporation, which may he the name,
in whole or in part of any of the consolidating corporations;
(3) The name of the city or town and county in Missouri in which the
consolidated corporation will be located;
(4) The amount of the capital stock of the corporation;
(5)
The number of shares into uhich the stock has been divided and
the par value thereof;
(6)
That the shares have been subscribed by the persons named therein
as the first board of directors as trustees for the stockholders of the
consolidating companies, and that all of the capital stock has been paid-up
either in lawful money of the United States, or by the capital stock,
surplus and undivided profits of the consolidating companies, provided
that such part of the capital as is paid for in the latter manner, shall
be received only for the amount which may be approved by the bank commissioner;
(7)
That the custody of all such cash and property has been placed in
the care and control of the persons named as the board of directors;
(8)
The number, names and addresses of the directors and that said
directors shall, after qualifying, divide themselves into classes in
X-6931
(Missouri - coilt'd.)
accordance with the provisions of law and that they may adopt new "by-laws
for the consolidated company;
(9)
The purposes for which the consolidated company is formed, which
shall be limited to the purposes then prescribed " y law for trust companies;
b
(10) The number of directors necessary to constitute a quorum;
(11) The duration of the company;
(12) Such other provisions as nay " e necessary fully to set out the
b
rights of the consolidating companies, their stockholders and creditors and
the plan of such consolidation.
(Laws of 1919, p. 161; Rev. Stats, of
Mo., 1929, sec. 5473.)
Consolidation or merger agreement and directors' proceedings as evidence.
A copy of the minutes of the proceedings of the "board of directors authorizing the making of the consolidation or merger agreement and
a copy of such agreement certified and verified "by the secretaries of the
trust companies involved "shall " e presumptive evidence of the action of
b
such respective "boards".
(Laws of 1919, p. 161;.Rov. Stats, of Mo., 1929,
sec. 5474.)
Consolidation or merger agreement and directors' proceedings mast "be
submitted to and approved " y "ban!: commissioner.
b
A copy of the consolidation or merger agreement and certified
and verified copies of the proceedings of the respective boards of directors
must be submitted in duplicate to the bank commissioner for approval or
disapproval.
In case the bank commissioner disapproves the agreement, "the
companies which are parties thereto may submit another plan for a merger or
consolidation under the provisions of this chapter."
(Laws of 1919, p. 161;
X-6931
(Missouri - cont'd.)
Eev. Stats, of Mo._, 1929, sec. 5475.)
Commissioner must certify finding; within thirty days .
The approval or disapproval of the "bank commissioner of the
agreement mast he certified " y him in writing to each trust company which
b
is a party to the merger or consolidation within thirty days after the
agreement has been submitted to him.
of Mo.,
(Laws of 1919, p. 162; Eev. Stats,
1929, sec. 5476.)
Agreement mast be submitted to stockholders within sixty days after its
approval.
In case the agreement is approved by the bank commissioner, it
must, within sixty days after such approval, be submitted at a special
meeting to the stockholders of each trust company. Notice of the time,
place and object of this meeting mast be given two weeks in advance to
each stockholder and mast also be likewise published once a week for at
least two successive weeks in a newspaper in each of the counties in
which any of the consolidating or merging trust companies has its place
of business, and for the purpose of such notice the city of St. Louis is
considered as a county.
(Laws of 1919, p. 162; Eev. Stats, of Mo., 1929,
sec. 5477.)
Agreement binding if two-thirds of stockholders of respective companies
vote favorably.
If two-thirds of the stockholders of each of the consolidating
or merging trust companies vote in favor of the agreement "then such
agreement shall be valid and binding upon such trust companies".
of 1919, p. 162; Eev. Stats, of Mo., 1929, sec. 5478.)
(Laws
X-6931
&2 -
i
190
(Missouri — copt'd.)
When merger agreement "becomes effective.
A copy of the minutes of the stockholders' meetings at which
an agreement for a merger has "been approved, T?ith a copy of such agreement and the "bank commissioner's approval thereof, all certified and
verified " y the secretaries of the respective stockholder's meetings,
b
must " e filed with the "bank commissioner and with the secretary of each
b
of the trust companies involved.
An identical copy of such minutes,
agreement and approval, together with an affidavit of the secretary of
the resulting company showing the filing of such copies with the "bank
commissioner and the secretary of each of the merging companies, "shall
be filed for record and recorded in the office of the recorder of deeds
of each county wherein is located the place of "business of each trust
company which is party to such agreement, it "being understood that the
City of St. Louis shall "be considered as a county in regard to the filing
and recording of such copies".
When such copies have "been "filed for
record in the office of the recorder of deeds, the agreement and merger
shall
"bocome effective according to its terms."
(Laws of 1919, p. 162;
Rev. Stats, of Mo., 1929, sec. 5479.)
When consolidation agreement "becomes effective.
A copy of the minutes of the stockholders meetings of the
consolidating companies at which the consolidation agreement was approved,
with a copy of the agreement and the "bank commissioner's approval thereof, all certified and verified " y the secretaries of such stockholders
b
meetings, mast " e filed in the office of the tank commissioner and with
b
the secretary of each of the consolidating trust companies.
A like copy
of such minutes, agreement and approval, with an affidavit of the secretary
X-S931
-
98
-
!
191
(Missouri - con1 tc,.)
of one of the consolidating companies shoeing the filing of such copies
with the Ijank commissioner and the secretary of each of the consolidating
companies, must also be filed and
recorded in the office of the recorder
of deeds in each county wherein is located the place of business of each
of the consolidating companies.
The city of St. Louis is considered as
a county as far as tho filing for record with the recorder of deeds of
such copies is concerned.
Upon the filing with the recorder of deeds of
the agreement, with the approval of the hank commissioner, "and the
proceedings above prescribed, the agreement for the consolidation of the
trust companies, which are parties thereto, shall take effect according
to its terms, and the consolidation shall thereupon be complete, provided
the legal fees for the incorporation of such consolidated trust companies
shell have been paid to the state bank commissioner, the same as if a new
corporation were organized for the same amount of capital authorized for
such consolidated company.11
(Laws of 1919, p. 163; Rev. Stats, of Mo.,
1929, sec. 5480.)
Hew certificates of stock, when resulting company shall issue.
The resulting company may require the return of the original
certificates of stock held by the stockholders in either the merging or
consolidating companies, unless such certificates have been lost or destroyed, "and shall cancel said original certificates and issue in lieu
thereof new certificate or certificates for such number of its own shares
as such stockholders may be entitled to receive under tho agreement providing for the merger or for the consolidation and according to the terras
X-5931
- 94
:
-
192
(Missouri - contra.)
and. conditions contained in the agreement for such merger or such consolidation; " "but if the original certificates have been lost or destroyed,
such loss or destruction must " e proved by affidavit or otherwise to the
b
satisfaction of the "board of directors of the resulting company, before
new certificates in liou thereof can " e issued.
b
(Laws of 1919, p. 163;
Rov. Stats, of l:o., 1929, sec. 5481.)
Stockholders dissenting to merger or consolidation; rights, privileges, etc.
There are also detailed provisions giving to stockholders who
object to or do not vote for a merger or consolidation the right to
receive a reasonable value for their stock, and prescribing the manner for
determining the value of the stock, the time within which the dissenting
stockholders must assert their rights, the procedure for doing so, etc.
(Laws of 1919, pp. 164-156; Bev. Stats, of Mo. , 1929, sees. 5482-5485.)
Legal effect of merger or consolidation.
(a) Corporate existence merged into new company - title to
property, etc. - "The corporate existence of the merging company or companies shall be merged into that of the receiving trust company, or in the
event of consolidation, the corporate existence of the consolidating companies shall be merged into that of the consolidated trust company; and
all and singular the rights, privileges and franchises, and the rights,
title and interest in and to all property of whatsoever kind, whether
real, personal or mixed, and things in action, and every right, privilege,
interest or asset of conceivable value or benefit then existing to which
either of such companies so merging or consolidating shall be entitled at
X-6931
-95-
:
1 9 8
(Missouri - cont'd.)
law or inequity, shall " e fully and finally and without any right of
b
reversion, transferred to and vested in the receiving trust company in
case of merger, or in the consolidated trust company, in case of a
consolidation, without further act or deed, and such receiving company
or such consolidated company shall have and hold the same in its own
corporate right as fully as the same was possessed and held by either
of the merging or consolidating corporations from which such rights were,
" y operation of the provisions of this article, transferred.11
b
(Laws of
1919, p. 166; Bev. Stats, of Mo., 1529, sec. 5485.)
(t>) Trust and fiduciary powers, passage of to new company. "The receiving corporation under merger of (or) the new corporation
under consolidation, shall "become, without further act or deed, the successor of the merging or of the consolidating corporation, in any and
all fiduciary capacities in which such merging or consolidating corporation may "be acting at the time of such merger or consolidation, and shall
" e liable to all "beneficiaries as fully as if such receiving or consolib
dating corporations had continued their separate corporate existence.
All and singular the rights and privileges and the right, title and interest
in and to all property of whatsoever kind, whether real, personal or mixed,
and things in action, and every right, privilege, interest or asset of
conceivable value or "benefit then existing to which either of such companies so merging or consolidating shall he entitled at law or in equity, in
any fiduciary capacity shall fully and finally, and without any right of
reversion, " e transferred to and vested in the receiving or consolidated
b
X-6931
a && -
19
(Missouri - Cont'd.)
corporation, without further act or deed; and such receiving or consolidated corporation shall have and hold the same as fully and in the same
fiduciary capacity and for the same purposes, and with the same powers,
duties, responsibilities and discretion, as the same were possessed and
held by the merging or consolidating corporation from which they were,
"by operation of the provisions of this article, transferred.
"If any trust company which merges with or shall have merged
with another, or if any trust company which consolidates with or shall
have consolidated with another or other trust companies to form a consolidated trust company, shall be nominated and appointed or shall have
been nominated cr appointed as executor, guardian, curator, administrator,
a
agent or trustee or in any other trust relation or fiduciary capacity
in any will, trust agreement, trust conveyance or any other conveyance
or instrument whatsoever prior to such merger or consolidation (even
though such will, trust agreement, trust conveyance, or other conveyance
or instrument shall not become operative or effective until after such
merger or consolidation shall have become effective) every such office,
trust relationship, fiduciary capacity and all of the rights, powers,
privileges, duties, discretions and responsibilities, so provided to
devolve upon, vest in, or inure to the company so nominated or appointed,
shall fully and in every respect devolve upon, vest in and inure to and
be exorcised by the trust company into which such company so designated
in such capacity shall be or shall have been merged, or shall devolve
upon, vest in, inure to and be exorcised by the consolidated trust company
X-6931
(Missouri - pont*d.)
formed "by any consolidation to which the trust company so designated
shall have teen a party, whether there be one or more successive
mergers or consolidations."
'
(Laws of 1919, pp. 156 a#d 167; Hev. Stats,
of Mo., 1929, sees. 5427-5490.)
(c)
Obligations of consolidating companies unaffected.*-
"The
rights, obligations and relations of either of the merged companies or of
the consolidating companies, in respect to any person, creditor, depositor, trustee or beneficiary of any trust shall remain unimpaired,
and the receiving corporation or the consolidated corporation shall, when
the merger or consolidation becomes effective, as in this chapter provided,
succeed to all such relations, obligations, trusts, powers and liabilities
and shall execute and perform all duties in relation thereto in the same
manner as though it had itself assigned or been clothed with such relation,
trust or power, or had itself incurred the obligation or liability; and
the liabilities and obligations to creditors of either of the merged
companies, or of either of the consolidating companies shall not be impaired by such merger or consolidation;
nor shall any obligation or
liability of any stockholder in any corporation which is a party to such
merger or consolidation be affected by any such merger or consolidation,
but such obligations and liabilities shall continue as fully and to the
same extent as existed before such merger or consolidation."
1919, p. 167; Rev. Stats, of
(Laws of
Mo. , 1929, sec. 5488.)
Merger or consolidation does not affect pending .judicial proceedings
against consolidating companies.
Any judicial proceeding in which any merging or consolidating
X-6931
:
4
196
(Missouri -,cont'a.)
cibmpany is a party is not affected "because of the merger or consolidation,
but it may " e prosecuted to final disposition, or the resulting company
b
may he substituted as a party and judgment rendered for or against it.
(Laws of 1919, p. 167; Rev. Stats, oi Mo. , 1929, sec. 5489.)
M W E .
Definition of word "hank".
The word "hank" as used in the laws of Montana, applies to
any incorporated hanlc, trust company or savings bank.
(Laws of 1927,
ch. 89, sec. 2, Act approved March 8, 1927; Banking Law Pamphlet, 1927,
sec. 2, pp. 7 and 8.)
Consolidation of banks.
"Any two (2) or more hanks may, with the approval of the Superintendent of Banks, consolidate into one (1) bank under the charter of
either existing bank, on such terms and conditions as may be lawfully
agreed upon by a majority of the board of directors of each bank proposing
to consolidate, and be ratified and confirmed by the vote of the shareholders of each such bank owning at least two-thirds of its capital
stock outstanding, at a meeting to be held on the call of the directors,
after sending notice to each shareholder of record by registered mail
at least ten (10) days prior to said meeting; provided, that the stockholders may unanimously waive such notice and may consent to such meeting
and consolidation in writing."
(Laws of 1927, ch. 89, sec. 94, Act
approved March 8, 1927; Banking Law Pamphlet, 1927, sec. 94, p. 56.)
X-6931
; 197
- 90 *
(Montana - cont' d i)
Capital required of consolidated corporation.
The capital stock of the consolidated bank must he not less
than that required under law for the organization of a bank of the
class of the largest consolidating bank.
(Laws of 1927, ch. 89, sec.
94, Act approved March 8, 1927; Banking Law Pamphlet, 1927, sec. 94, p.
56.)
Legal effect of consolidation.
"The assets and liabilities of the consolidated bank shall be
reported by the surviving bank.
All the rights, franchises, and interests
of said bank so consolidated in and to every specie of property, real,
personal and mixed and choses in action thereto belonging, shall be deemed
to be transferred to and vested in such bank into which it is consolidating
without other instrument of transfer, and said consolidated bank shall
hold and enjoy the same and ail rights of property, franchises, and interests in the same manner and to the same extent as was held and enjoyed by
the bank so consolidated therewith, provided, however, that merging bank
shall transfer to the surviving bank all of its real property by good and
sufficient deed of conveyance and for that and other purposes shall remain
a body corporate for a period of at least three (3) years after merger
and shall not then dissolve without the approval of the Superintendent of
Banks."
(Laws of 1927, ch. 89, sec. 94, Act approved March 8, 1927; Banking
Law Pamphlet, 1927, sec. 94, p. 57.)
MBRA.SEA.
Consolidation of banks - no provisions covering trust companies.
The laws of Nebraska do not contain any provisions covering the
X-693.1
A
JL
— IDG —
(Nebraska - cont'd.)
consolidation or merger of trust companies; "but, with reference to "banks,
the laws provide that "Any bank which is in good faith winding up its
business for the purpose of consolidating with some other bank,
may
transfer its resources and liabilities to the bank with rrhich it is in
process of consolidation but no consolidation shall be made without the
consent of the department of trade and commerce, nor shall such consolidation operate to defeat the claim of any creditor or hinder any creditor
in the collection of his debt against such banks or either of than."
(Comp.
Stats, of Nebraska,, 1929, sec. 3-130; Banking Law Pamphlet, 19.39, sec. 8021
20.)
NEVADA.
No provisions covering consolidation, merger, etc.
The laws of Nevada do not contain any provisions specifically
covering the consolidation, merger, etc. of banks and trust companies.
NSW HAMPSHIRE.
Consolidation of mutual savings banks with trust or banking companies or
with other savings banks.
The laws of New Hampshire do not contain any provisions covering
the merger or consolidation of so-called trust or banking companies or
savings banks with each other; but the laws do provide that "Any mutual
savings bank incorporated under the laws of this state, or a majority
of the members thereof, and any trust or banking company, or any other
savings bank, incorporated under the laws of this state, or a majority
of the members or the holders of a majority of the stock thereof, may
X-6931
- 101
-
199
(Hew Hampshire - cont'd.)
>
apply "by petition to the superior court in the county in which either
of said petitioning
corporations is located, or to any justice of said
court in vacation, for a decree authorizing a union of said savings bank
with said trust or "banking company, or other savings "bank, and a dissolution of said first named savings hank in the manner herein provided".
(Laws of 1917, ch. 54, sec. 1; Public Laws,ly26, ch. 263, sec. 1; Banking
Law Pamphlet, 1929, ch. 263, sec. 1, p. 30.)
Notice and hearing on petition; reference to "bank commissioner " y court.
b
When the petition for consolidation is filed, the court or
justice "shall fix a time for hearing thereon, and after duo notice by
publication to all parties interested, and such other notice as the court
may order, and hearing the court shall refer said petition to the bank
commissioner".
(Laws of 1917, ch. 54, sec. 2; Public Laws, 1926, ch. 263,
sec. 2; Banking Law Pamphlet, 1929, ch. 263, sec. 2, p. 30.)
Hearing by bank commissioner; character of duties after.
The bank commissioner, after notice and hearing, must ascertain
"whether the public convenience and advantage and the interest of said
institutions, their members, stockholders and depositors, will be promoted
by the proposed union."
(Laws of 1917, ch. 54, sec. 3; Public La™rs, 1926,
ch. 263, sec. 3; Banking Law Pamphlet, 1929, ch. 263, sec. 3, p. 30.)
Appraisal of assets and determination of amount due depositors.
If the bank commissioner approves the petition, "he shall appraise the assets and ascertain the liabilities of said savings bank, and
determine the net value thereof for the purpose of liquidation, the total
number of depositors therein and the amount of their respective deposits,
X-6931
c p
- 102 -
"
(Hew Hampshire ^ cont *&.)
and, upon
such appraisal and findings, determine the proportionate share
of the net deposits due such depositors".
The commissioner is authorized
to employ expert or other assistance at the
in making such appraisal.
-expense of ths petitioners
(Laws of 1917, ch. 54, sees. 3 and 4; Public'
Laws, 1926, ch. 263, sees. 4 and 5; Banking Law Pamphlet, 1929, ch. 263,
sees. 4 and 5, p. 30.)
Report to court of findings and determinations.
The Commissioner must "forthwith make a report to the court
of his findings and determinations, and of the expense of said hearings,
appraisal and findings.
Upon due notice to all parties of record the
court shall thereupon enter a final decree."
(Laws of 1917, ch. 54, sec.
5; Public Laws, 1926, ch. 263, sec. 6; Banking Law Pamphlet, 1929, ch.
263, sec. 6, p. 30.)
Decree of Court, extent of; depositor's option.
After receiving such report, if "it appears that the public convenience and advantage and the interest of said several parties will be
promoted by the action sought by said petition the court shall by decree
fix a date upon which the funds of the depositors in the savings bank to
be liquidated shall cease to draw interest, and shall authorize the trustees
or directors of said savings bank to sell and convey all of its assets to
said trust or banking company or other savings bank at the value fixed by
such appraisal, and to pay said depositors the several amounts found to
be their due".
Bach depositor in the mutual savings bank is given the
option to receive in cash from the sale of its assets the amount found to
X-6931
- 103 -
£ 0 1
(New Hampshire - cont'd*)
"be due him or to accept a deposit in the consolidated institution for the
same amount without loss of interest.
(Laws of 1917, ch. 54, sec. 6;
Public Laws, 1926, ch. 263, sees. 7 and 8; Banking Law Pamphlet, 1929,
ch. 263, sees. 7 and 8, pp. 30 and 31.)
Unclaimed deposits and dividends.
The laws contain provisions prescribing the manner of disposing
of unclaimed deposits and dividends in the consolidating mutual savings
bank at the time of the consolidation.
(Laws of 1917, ch. 54, sec. 7;
Public Laws, 1926, ch. 263, sees. 9 and 10; Banking Law Pamphlet, 1929,
ch. 263, sees. 9 and 10, p. 31.)
Other orders court may make.
"The court shall make all other and further orders and decrees
in respect to the winding up of the affairs of said liquidated savings
bank and its dissolution that may be necessary for the protection of all
parties interested".
(Laws of 1917, ch. 54, sec. 8; Public Laws, 1926,
ch. 263, sec. 11; Banking Law Pamphlet, 1929, ch. 263, sec. 11, p. 31.)
E5W JERSEY.
Merger of State banks.and/or trust companies.
The laws of New Jersey authorize State banks and trust companies
having their main offices or places of business in the same municipality
to merge into another State bank or trust company.
(Laws of 1925, ch. 198,
ch. 197 and ch. 203; Banking Law Pamphlet, 1930, sec. 11, p. 59, see. 19,
p. 119 and sec. 1, p. 155.)
Agreement for merger.
The boards of directors of such banks or trust companies may, by
X-6931
•
*
'
£02
(Hew Jersey - con'td.)
a vote of two-thirds of the entire membership of each "board, make or authorize to "be made between such hanks or trust companies a written merger
.
agreement in duplicate and under corporate seal. A sworn copy of the proceedings of the directors' meetings "shall " e presumptive evidence of the
b
holding and action of such meetings."
(Laws of 1935, ch. 198, ch. 197 and
ch. 203; Banking Law Pamphlet, 1930, sec. 12, p. 59, sec. 20, p. 119 and
sec. 2, p. 155.)
What merger agreement must specify.
The merger agreement must name each hank or trust company to he
merged and the hank or trust company which is to receive the merging institution or institutions, "and it shall prescribe terms and conditions
of the merger and the node of carrying it into effect."
It nay specify
the name of the receiving corporation, which may he the name of any of
the merging corporations; hut, in the case of a merger of a hank into a
trust Company or a trust company into a hank, such name must comply "with
the provision of the law under which said continuing corporation is organized. "
It may also name the persons who will constitute the hoard
of directors of the receiving corporation; hut the number and qualifications of such directors mast he in accordance with the pertinent provisions
of law covering the number and qualifications of directors of the
rl
r
of corporation into which the merging corporation or corporations are received; "or such agreement may provide for a meeting of the stockholders
to elect a board of directors within sixty days after such merger becomes
effective and may make provision for conducting the affairs of the corporation meanwhile."
(Laws of 1925, ch. 198, ch. 197, and ch. 203; Banking
X-5931
203
- 1 0 5 -
(iTew Jersey ~ oofrfc'd.)
Law Pamphlet, 1230, sec. 13, p. 50, sac. 21, p. 120 and sec. 3, pp. 155
and 156.)
Merger agreement mast be submitted to commissioner of "banking and Insurance for approval.
The merger agreement and sworn copies of the proceedings of the
boards of directors at which the making of the agreement
was authorized
mast be submitted in duplicate to the commissioner of banking and insurance for his approval.
(Laws of 1925, ch. 198, ch. 197, and cb. 203;
Banking Law Pamphlet, 1930, sec. 14,"p. 60, sec. 22, -p. 120 and sec. 4,
p. 156.)
After approval of commissioner, agreement must be submitted to stockholders.
Within sixty days after notice from the commissioner that the
merger agreement has been approved, it mast be submitted to a special
meeting of the stockholders of the merging corporations, and, if it is
approved by two-thirds of the stockholders of each corporation, it then
becomes binding upon such corporati on.
A sworn copy of the proceedings
of such meetings is presumptive evidence of the holding and action of
such meetings.
(Laws of 1925, ch. 198, ch. 197, and ch. 203; Banking Law
Pamphlet, 1930, sec. 15, pp. 50-51, sec. 23, p. 121, and sec. 5, pp. 156-157.)
Piling and recording of approved agreement and copies of proceedings.
After the agreement lias become binding upon the merging corporations, one copy with a copy of the written approval of the Commissioner
of Banking and Insurance, and a sworn copy of the proceedings of the
meetings at which the agreement was approved, must be filed in the office
X-6931
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'c
106 -
(Hew Jersey - cont'd.)
of the Commissioner of "banking and insurance.
An identical copy of sucli
agreement, approval and proceedings "shall " e recorded in the office of
b
the clerk of the county in which is located the place of "business of
the corporations so merged; such record "being made in the "book provided
for the record of certificates of incorporation of corporations organized under the laws of this State."
(Laws of 1925, ch. 198, ch. 197,
and ch. 203; Banking Law Pamphlet, 1930, sec. 16, p. 61, sec. 24, p. 121
and sec. 6, p. 15?.)
When merger "becomes effective.
Upon filing and recording the merger agreement with copies of
its approval by the commissioner of banking and insurance as above prescribed, "the merger agreement shall take effect according to its terms,
and the merger shall thereupon take place as provided in the agreement."
(Laws of 1925, ch. 198, ch. 197, and ch. 203; Banking Law Pamphlet, 1930,
sec. 17, p. 52, sec. 25, p. 122 and sec. 7, pp. 157-158.)
Legal effect of merger.
Upon the merger of any corporation into another as above provided
(1)
"Its corporate existence shall be merged into that of such
other corporation; and all and singular its rights, privileges and franchises, and its right, title and interest in and to all property whatsoever
kind, whether real, personal or mixed, and things in action, and every
right, privilege, interest or asset
of conceivable value or benefit then
existing which would inure to it under an uzsaerged existence, shall be
deemed fully and finally, and without any right of reversion, transferred
X-6931
» 107 .
(Heff Jersey
cont'd.)
to and vested in the corporation into rrhich it shall have
merged,
without further act or deed, and such last-mentioned corporation shall
have and hold the same in its own right as fully as the same was possessed
and held "by the merged corporation frocr which it was, Toy operation of the
provisions hereof, transferred."
(2)
Its rights, obligations and relations to any person, creditor
depositor, trustee or beneficiary of any trust, remain unimpaired, and
the receiving corporation succeeds to all such relations, obligations,
trusts and liabilities, and shall execute and perform all such trusts, in
the same manner as though it had itself assumed the relation or trust, or
incurred the obligations or liability.
Liabilities and obligations to
creditors existing for any cause whatsoever shall not be impaired by such
merger, nor "shall any obligation or liability of any stockholder in any
corporation
which is a party to such merger be affected by any such merger,
but such obligations and liabilities shall continue as fully and to the
same extent as existed before such merger."
(3)
ff
A pending action or
other judicial proceeding to which any
corporation that shall be so merged is a party shall not be deemed to have
abated or to have discontinued by reason of the merger, but may be prosecuted to final judgment, order or decree in the same manner as if the merger
had not been made; or the corporation into which such other corporation
shall have been merged may be substituted as a party to such action or proceeding, and any judgment, order or decree may be rendered for or against
it that might have
been rendered for or against such other corporation
X-6931
— 108 —
(Hew, Jersey
(*••
.•#
i st-
cont'd.)
if the merger had not occurred."
(laws of 1925, ch. 198, ch. 197, and
ch. 203; Banking Law Pamphlet, 1920, sec. IS, pp. 62-63, sec. 25, TO.
122-123 and sec. 3, pp. 158-159.)
Maintenance of offices of merged corporations; capital required for each
office, number further limited according to population.
The resulting corporation, "with the written approval of the
Commissioner of Banking and Insurance, may continue to conduct business
at the location or locations of the office or offices heretofore established by the merged corporations and under such office designation as.
the Commissioner of Banking and Insurance may approve"; but the paid-in
capital of the resulting corporation must be, if it is a bank, at least
fifty thousand dollars, and, if it is a trust company, at least one
hundred thousand dollars, for each office thereafter to be maintained.
Further limitations on the maintenance of such offices are that the resulting corporation can maintain but one office within the corporate
limits of a municipality "where the population by the last decennial
census is less than twenty-five thousand; not more than two offices where
such population by said census is more than twenty-five thousand and not
more than fifty thousand; not more than three offices where such population
by said census is more than fifty thousand and not more than one hundred
thousand and where such population is more than one hundred thousand only
such number of offices as the Commissioner of Banking and Insurance may
approve.11
In case of a merger of trust companies, it is provided further
"that the commissioner of banking and insurance shall not approve the
maintenance of more offices by the continuing corporation than the corpora^-
X-6931
- iod
(New Jersey - cont'd.)
tion into which the other corporation or corporations shall he merged
was authorized to maintain prior to the date of the merger agreement,
unless at the time of such approval national banking associations
organized under the laws of the United States and located in Few Jersey
shall by an act of Congress be enabled to originally establish branch
offices or agencies for the transaction of their business in this
State."
(Laws of 1925, ch. 198, as amended by Laws of 1927, ch. 21,:
ch. 157, and ch. 203, as amended by Laws of 1927, ch. 14; Banking Law
Pamphlet, 1930, sec'. 19, p. 53, sec. 27, p. 123 and sec. 9, p. 159.)
Issuance of new certificates of stock.
The new corporation may require the return of the
original certificates by the stockholders in any of the merging
corporations and may issue in lieu thereof new certificates.
(Laws of 1925, ch. 198, ch. 197 and ch. 205; Banking Law Pamphlet,
1930, sec. 20, p. 64, sec. 28, p. 125 and sec. 10, p. 160.)
Dissenting stockholders, rights of.
There are also detailed provisions giving the right to stockholders of any of the merging corporations who did not vote for or
object to the merger to demand payment for their shares of stock, and
prescribing the procedure and conditions for securing such payment.
(Laws of 1925, ch. 198, ch. 197 and ch. 203; Banking Law Pamphlet, 1930,
sec. 21, p. 64, sec. 29, pp. 125-125 and sec. 11, p. 160.)
J
4
£ 0 ?
x-5931-;
-
110 -
(K"ew Jersey - cont'd.)
>
Consolidation of State bank or trust company with national bank;
surrender of charter.
When two-thirds of the stockholders of any State bank or
trust company give their written consent to consolidate with a national
bank, and the directors of such bank or trust company file in the
Department of Banking and Insurance a certificate under their hands
that such consent has been given and that the directors intend to act
in pursuance thereof, such bank or trust company "shall be deemed and
taken to have surrendered its charter".
(Laws of 1902, ch. 28 and
Laws of 1920, ch. 300, as amended by Laws of 1928, ch. 208 and ch. 207;
Banking Law Pamphlet, 1928, sec. 1, p. 47, and sec. 8, p. 98.)
Continuance of corporate existence for three years for certain purpose.
It is provided, however, that every such State bank or trust
company "shall be continued a body corporate for the term of three
years after the time of such surrender for the purpose of prosecuting
and defending suits by or against it, and closing its concerns, but
not for any other business or purposes whatsoever".
The board of
directors of the consolidated bank is to act as, and be taken to be,
the board of directors of such bank or trust company while closing
its concerns during such three year period.
(Laws of 1902, ch. 28,
and Laws of 1920, ch. 300, as amended by Laws of 1928, ch. 208 and
ch. 207; Banking Law Pamphlet, 1928, sec. 1, p. 48, and sec. 8, p.
99.)
£ 0 8
X-6931
- Ill (New Jersey - cont'd.)
Legal effect of consolidation:
(a) of State with national bank.
"When the charter of such bank shall be surrendered to the
State, as hereinabove provided, and any such bank shall have been
organized as or consolidated with a banking association under
the laws of the United States, or have become capable in law as
a new or consolidated national bank to take and hold property,
all the assets, real and personal, choses in action and all rights
and privileges of every nature and description, of any such bank
shall immediately, by act of law and without any conveyance or
transfer, be vested in and become the property of the said association, formed or consolidated as aforesaid under the laws of the
United States, to be held by said association or its stockholders
in as ample and beneficial manner for all purposes as the same can,
by virtue of the laws of the United States, be held and enjoyed;
but nothing in this section shall be so construed as to impair
the obligation existing in the first section of this act."
(Laws
of 1902, ch. 28, as amended by Laws of 1928, ch. 208; Banking Law
Pamphlet, 1928, sec. 4, p. 50.)
(b) of trust company with national bank.
In this connection the laws provide " * * * that all rights,
privileges, choses in action, property, real and personal, and
all trust powers, duties, designations and appointments made or
contained by or in any deed, will, instrument, order or decree,
X-6931
- 112 -
(Hew Jersey - cont'd.)
executed or made before the filing of such certificate, shall
vest in, devolve upon, and inure to the benefit of said new or
consolidated national bank."
(Laws of 1920, ch. 300, as
amended by Laws of 1928, ch. 207; Banking Law Pamphlet, 1928,
sec. 8, p. 99.)
Dissenting stockholders, rights of.
The laws also contain detailed provisions with reference
to the rights of stockholders who dissent to the consolidation.
(Laws of 1902, ch. 28, and Laws of 1920, ch. 300; Banking Law Pamphlet,
1928, sees. 2, and 3, pp. 48 and 49, and sec. 9, p. 99.)
Extent of act relating to consolidation of State bank with national
bank.
"The authority conferred by this act may be exercised by
the stockholders of any bank incorporated or organized by the authority of this state, notwithstanding said bank may have been converted
into a national banking association under the laws of the United
States prior to the passage of this supplement."
(Laws of 1902, ch.
28; Banking Law Pamphlet, 1928, sec. 5, p. 50.)
Merger or consolidation of corporations "for the insurance or guaranty of
title to lands" with trust companies.
The laws of New Jersey also contain detailed provisions providing for and regulating the merger or consolidation of corporations
"for the insurance or guaranty of title to lands" with State trust
companies which, in many respects, are substantially similar to the
X-6931
J_JL
" 113 (Hew Jersey - cont'd.)
provisions digested above.
(Laws of 1923, ch. 97; Banking Law Pamphlet,
1930, sees. 1-6, pp. 146-150.)
NEW MEXICO.
Consolidation or merger of "banks or trust companies.
The laws of New Mexico covering banks and trust companies do not
contain provisions having specific reference to the merger, consolidation,
etc., of such institutions; but these laws do provide that "Except as herein limited incorporated banks shall exercise and enjoy all the rights and
privileges and be subject to all the liabilities and restrictions provided
by law for corporations in general."
(Laws of 1915, ch. 67, sec. 55; New
Mexico Stats., Annot., 1929, sec. 13-156, p. 325; Banking Law Pamphlet, 1929,
sec. 55, p. 20.)
These so-called banking laws also provide that the word
"bank", as used therein, includes commercial banks, savings banks and trust
companies but does not include national banks.
(Laws of 1915, ch. 67, sec. 2;
Hew Mexico Stats., Annot., 1929, sec. 13-102, p. 316; Banking Law Pamphlet,
1929, sec. 2, p. 5.)
The law covering "corporations in general" contain elaborate consolidation or merger provisions,
(Laws of 1905, ch. 79, sees. 109-115; New
Mexico Stats., 1929, sees. 32-213 to 32-219 inclusive)
and also provide that
such provisions shall be held applicable to banks and trust companies.
(Laws of 1905, ch. 79, sec. 131; New Mexico Stats. , Annot., 1929, sec. 32234 ).
Such provisions are set forth below.
Authority for consolidation or merger.
"Any two or more corporations organized under any law or laws
X-6951
— 114 —
^
-J
(ITew Mexico - cont'd.)
of this state for the purpose of carrying on any hind, of "business of the
same or a similar nature may merge or consolidate into a single corporation, which may be either one of said merging or consolidating corporations , or a new corporation to be formed by means of such merger and
consolidation."
(Laws of 1905, ch. 79, sec. 109; Hew Mexico
Stats.,
Annot., 1929, sec. 32-213, p. 483.)
Directors1 agreement to merge or consolidate; contents of.
The directors of the several corporations involved may under
corporate seal enter into a "joint agreement" for the merger or consolidation of such corporations.
The agreement must prescribe the terms and
conditions of the merger or consolidation, the mode of carrying it into
effect, the name of the resulting corporation with the number, zames and
residences of its first directors and officers, the number and value of
the shares of capital stock, the manner of converting the stock of the
constituent corporations into stock of the resulting corporation, and, if
a new corporation is created, how and when the directors and officers
will be chosen or appointed.
The agreement may also contain such other
provisions as the contracting directors may deem necessary to perfect
such merger or consolidation.
(Laws of 1905, ch. 79, sec. 110, subd. 1;
New Mexico Stats., Annot., 1929, sec. 32-214, subd. 1, pp. 483 and 484.)
Submission of agreement to stockholders; approval of; effect of.
The agreement must be submitted to tho stockholders of each of
the corporations involved at a special meeting after twenty days* notice
of the time, place and object of such meeting has been given to each stock-
X-6931
2
»iis (New Mexico
holder.
1
3
cont'd.)
If two thirds of the stockholders of each, corporation vote for the
adoption of the agreement, that fact must be certified thereon by the secretary of each corporation under its corporate seal.
The agreement
so adopted and certified must be filed with the state corporation commission
and then must "be deemed and taken to be the agreement and act of merger
or consolidation of the said corporations."
A copy of this agreement
certified under seal by the corporation commission is "evidence of the existence
of such new or consolidated corporation."
(Laws of 1905, ch. 79, sec.
110, subd. 2; New Mexico Stats., Annot., 1929, sec. 32-214, subd. 2, p.
484.)
Legal effect of consolidation or merger.
"Upon making and perfecting the said agreement and act of merger
or consolidation, and filing the same, in the office of the state corporation commission* the several corporations shall be one corporation, by
the name provided in said agreement (in case a new corporation shall be
created thereby), or by the name of the consolidated corporation into
which said other contracting corporation or corporations, shall be so
merged or consolidated, as the case may be, and possessing all the
rights, privileges, powers and franchises, as well of a public as of a
private nature, and being subject to all the restrictions, disabilities
and duties of each of such corporations so merged or consolidated, except
as altered by the provisions of this article."
(Laws of 1905, ch. 79,
sec. Ill; New Mexico Stats., Annot., 1929, sec. 32-215, p. 484.)
"Upon the consummation of said act of merger or consolidation,
all and singular, the rights, privileges, powers and franchises of each
X-6931
r>
" lis •
*
*
(Net? Mexico,. •. coilt'd.)
*
of said corporations, and all property, real, personal and mixedt and
all debts due on whatever account, as well for stock subscriptions as
all other things in action or belonging to each of such corporations,
shall be vested in the consolidated corporation; and all property, rights,
privileges, powers and franchises, and all and every other interest shall
be thereafter as effectually the property of the consolidated corporation
as they were of the several and respective former corporations, and the
title to any real estate, whether by deed or otherwise, under the laws
of this state, vested in either of such corporations, shall not revert or
be in any way impaired by reason of this article: Provided, that all
rights of creditors and all liens upon the property of either of said former corporations shall be preserved unimpaired, and the respective former
corporations may be deemed to continue in existence, in order to preserve
the same; and all debts, liabilities and duties of either of said former
corporations shall thenceforth attach to said consolidated corporation,
and may be enforced against it to the same extent as if said debts,
liabilities and duties had been incurred or contracted by it."
(Laws of
1905, ch. 79, sec. 112; New Mexico Stats., Annot., 1929, sec. 32-216, p.
484.)
Dissenting stockholders, rights of.
Provision is made for the appraisal and payment of the value of
stock held by any stockholder of any of the corporations involved who
did not vote in favor of the merger or consolidation.
(Laws of 1905,
ch. 79, sees. 113 and 114; Hew Mexico Stats., Annot., 1929, sees. 32-217
and 32-218, pp. 484 and 485.)
X-S931
(iTew Mexico - cont'd.)
State corporations authorized to merge with, corporations of ''other states
and territories."
"Corporations organized under the laws of other states and territories may also he merged with corporations organized under the laws of
this state, in accordance with the provisions of this article."
(Laws
of 1905, ch. 79, sec. 115; New Mexico Stats., Annot., 1929, sec. 32-219,
p. 485.)
Consolidated corporation authorized to issue "bonds and mortgage property.
The consolidated corporation is authorized to issue "bonds or
other obligations "to an amount sufficient with its capital stock to
provide for all the payments it will "be required to make or obligations
it will "be required to assume," in order to effect the merger or consolidation; and to secure the payment of such "bonds or obligations it may
mortgage its property.
The consolidated corporation may also purchase
and sell stocks of other corporations and may issue capital stock to the
stockholders of the constituent corporations in exchange or payment for
their original shares in the manner and on the terms specified in the
agreement of merger or consolidation.
{Laws of 1905, ch. 79, sec. 115;
New Mexico Stats., Annot., 1929, sec. 32-219, p. 485.)
Sale or purchase of assets.
The laws also provide that "any corporation * * * shall have
power to sell, convey and transfer or exchange all of its assets, property
rights, privileges, franchises (except its primary franchise), good will,
easements, rights of way, and all other property and property rights it
X-6931
- 118 —
*
(New Mexico - cont'd.)
may use or possess; provided, however, that no corporation shall have
the right to sell, transfer or exchange any contract, or property, or
rights derived therefrom or thereunder, not assignable by its terms."
(Laws of 1927, ch. 85, sec. 1; Few Mexico Stats., Annot., 1929, sec.
32-1201, p. 514.)
Any corporation is also empowered "to purchase and acquire all
of the assets, property, rights, privileges, franchises (except its primary
franchise), good will, easements, rights of way, and all other property
and property rights, of any other corporation * * * ".
(Laws of 1927,
ch. 85, sec. 2; New Mexico Stats., Annot., 1929, sec. 32-1202, p. 514.)
Consent of stockholders necessary.
The consent of two-thirds of the stockholders of the vendor
corporation to " such sale or exchange" is required which shall be given
at a special meeting called for that purpose, "or if the by-laws fail to
provide for special meetings, then according to requirement for notice of
annual meeting, which notice shall clearly state the time, place and
purpose of such meeting".
(Laws of 1927, ch. 85, sec. 3; Hew Mexico
Stats. , Annot., 1929, sec. 32-1203, p. 515.)
Dissenting stockholders of the vendor corporation may
notify its secretary in writing of the fact of their objection to
the proposed sale or exchange on or before the day of the meeting of the stockholders.
Within ninety days after the sale or
X-6931
- 119 (New Mexico - cont'd.)
exchange, the vendee corporation-, upon demand of such dissenting
stockholders and upon their surrender to the vendor corporation
of their stock for cancellation, shall pay them the market value
of their stock, which in no event can be less than the book value
of such stock according to the last balance sheet of the selling
corporation*
Amounts so paid shall be deducted from the purchase
price of the property in question..
(Laws of 1927, ch. 85, sec.
3; Hew Mexico Stats., Annot., 1929, sec. 32-1203, p. 515.)
Limitations on actions to question legality of sale.
Suits to attack any sale or exchange mast be brought
within three months after the recording of the conveyance or other
instrument evidencing such sale in the county wherein the
property or any part of it sold or exchanged is located.
(Laws
of 1927, ch. 85, sec. 4; New Mexico Stats., Annot., 1929, sec.
32-1204, p. 515.)
NEW YORK.
Merger of banks and trust companies.
The laws of New York provide that "Any two or more
corporations, other than savings banks, organized under any
one article of this chapter
(ch. 2 of the Consolidated Laws
of 1914, ch. 369, as amended ) or under the laws of this state
for the purposesor any of them mentioned in any one article of
X-69S1
•
- iso (Few York - cont'd.)
this chap tor, or for tho purposes or any of them mentioned in "both
articles three (covering "banks) and five (covering trust companies) of
this chaptor, are hereby authorised to merge one or more of such corporations into another of them as prescribed in succeeding sections of
this article."
(Banking Law, sec. 487, subd. 1. )
With particular reference to savings "banks, the laws provide
that
any two of such "banks "located in a city of the first class and in
the same county or "borough, or any two or more savings "banks located elsewhere in the state and in the same or adjoining counties, are hereby authorized to merge as prescribed in succeeding sections of this article.-#
(Banking Law, sec. 487, subd. 2.)
The laws also provide that "Any national banking association
is hereby authorized to merge itself into a State bank or trust company
located in the same county, city, town or village in the manner prescribed
in succeeding sections of this article."
(Banking Law, sec. 487, subd. 3.)
Agreement for merger.
The boards of directors of each of the corporations which are a
party to the merger, by a vote of the majority, or, if the corporations
are savings banks, by a vote of two-thirds of the entire membership of
each board of trustees, may make or authorize to be made a written merger
agreement in duplicate and under corporate seal. A sworn copy of the
proceedings of such meetings, made by the respective secretaries, is
presumptive evidence of the holding and action of such meetings.
Law, sec. 488.)
(Banking
X-6931
u
(Hew York
181 -
cont'd,).
What agreement merger mast, specify.
The merger agreement must specify each corporation to he merged
and the corporation which is to receive the merging corporation or corporations "and it shall prescribe the terms and conditions of the merger
and the mode of carrying it into effect."
It may provide the name of
the receiving corporation, which may be the name of any of the merging
corporations, and it may also name the persons who will constitute the
"board of directors or trustees of the receiving corporation; but the
number and qualifications of such directors or trustees must be in accordance with the provisions of law relating to the number and qualifications of directors or trustees of the class of corporation into which
the merging corporation or corporations are merged; "or, except in the
case of savings banks, such agreement may provide for a meeting of the
shareholders or stockholders to elect a board of directors within sixty
days after such merger, and may make provision for conducting the affairs
of the corporation meanwhile. "
In case of a merger agreement between trus t
companies, the agreement mast provide that the directors named or elected,
after qualifying, shall divide themselves into classes as provided by the
pertinent provisions of the law covering trust companies, and that they
may adopt new by-laws for the resulting corporation.
(Banking Law, sec.
488.)
Agreement must be submitted to superintendent for approval.
The merger agreement and sworn copies of the proceedings of the
boards of directors or trustees at which the making of the agreement was
authorized, must be submitted in duplicate to the superintendent of banks
X-6931
- 122 (Hew York « cont'd.)
*
for M s approval.
(Banking Law, sect 489.)
Submission of approved agreement to stockholders necessary.
Except in the case of savings "banks, the merger agreement must
" e submitted to a special meeting of the stockholders of the: merging
b
corporations within sixty days after notice of its approval "by the superintendent of banks.
If it is approved " y two-thirds of the stockholders
b
of each of the corporations, or in the case of "savings and loan associations by the affirmative vote of at least two-thirds of the members present in person or by proxy at such meetings," provided a copy of the merger
agreement shall have accompanied the required notice by mail of such
special meetings, it then becomes binding upon the corporations involved
in the merger.
(Banking Law, sec. 490.)
The merger agreement of savings "banks, within sixty days after
notice to such banks of its approval by the superintendent of banks, oust be
submitted to a special meeting of the board of trustees if
banks.
cach of the savings
A notice of at least fifteen days specifying the time, place and object
of the meeting, and accompanied by a complete copy of the merger agreement,
must be given by mail to each trustee.
If the agreement is approved by a vote
of throe-fourths of all the members of each board of trustees, it then becomes
binding upon such savings banks.
(Banking Law, sec. 491.)
Filing of approved agreement and copies of proceedings.
After the agreement has become binding upon the merging corporations , one copy with a copy of the written approval of the superintendent
and a sworn copy of the proceedings of the meetings at which the agreement
was approved, made by the respective secretaries, mast be filed in the
X-6931
— 123 •
*
(Uew York - cont*&.)
office of the superintendent.
Another like copy of such agreement, ap-
proval and proceedings must be filed in the office of the clerk of the
county in which is located the principal place of business of the
receiving corporation.
(Banking Law, sec. 492.)
" T e merger takes effect.
.hn
Upon filing of the papers as above prescribed, "the merger
agreement shall take effect according to its terms and the merger shall
thereupon take place as provided in the agreement."
(Banking La\7, sue.
493.)
Legal effect of merger.
"Upon the merger of any corporation into another as provided in
this article:
"1.
Its corporate existence shall be merged into that of such
other corporation; and all and singular its rights, privileges and franchises, and its right, title and interest in and to all property of whatsoever kind, whether real, personal or mixed, and things in action, and
every right, privilege, interest or asset of conceivable value or benefit
then existing which would inure to it under an unmerged existence, shall
be deemed fully and finally, and without any right of reversion, transferred to and vested in the corporation into which it shall have been
merged, without further act or deed, and such last-mentioned corporation
shall have and hold the same in its own right as fully as the same was
possessed and held by the merged corporation from which it was, by operation of the provisions of this article, transferred.
"2.
Its rights, obligations and relations to any person, credi
X-6S31
-
1S4 -
(New Yorjc - cont'd.)
tor, depositor, trustee or beneficiary of any trust, shall remain unimpaired, and the corporation into which it shall have been merged shall
" y such merger succeed to all such relations, obligations, trusts and
b
liabilities, and shall execute and perform all such trusts, in the same
manner as though it had itself assumed the relation or trust, or incurred the obligation or liability; and its liabilities and obligations
to creditors existing for any cause whatsoever shall not be impaired by
such merger; nor shall any obligation or liability of any stockholder or
shareholder in any corporation which is a party to such merger be effected by any such merger, but such obligations and liabilities shall
continue as fully and to the same extent as existed before such merger.
"3. A pending action or other judicial proceeding to which any
corporation that shall be so merged is a party, shall not be deemed to
have abated or to have discontinued by reason of the merger, but may be
prosecuted to final judgment, order or decree in the same manner as if
the merger had not been made; or the corporation into which such other
corporation shall have been merged may be substituted as a party to such
action or proceeding, and any judgment, order or decree may be rendered
for or against it that might have been rendered for or against such other
corporation if the merger had not occurred."
(Banking Law, sec. 494.)
Issuance of new certificate of stock.
The receiving corporation may require the return of the original
certificate of stock held by the stockholders in the merging corporations
and may issue new certificates in lieu thereof.
(Banking Law, sec. 495.)
X-6931
- 136 (3Tew York - cont'd,.)
Dissenting stockholders, rights of.
The laws also contain provisions giving to stockholders of any
of the merging corporations who did not vote in favor of the merger,
the right to object thereto and demand payment for their shares; in the
case of savings and loan association or credit unions, if such stockholders are borrowers, to demand liquidation of their obligations and
cancellation of their shares.
(Banking Law, sec. 496.)
Consolidation of State bank or trust company with national bank.
Whenever a State bank or trust company "shall have become consolidated" with a national bank it mast notify the superintendent of banks of such
fact "and shall file with him a copy of its authorization as a national
banking association or a copy of the certificate of approval of consolidation, certified by the Comptroller of the Currency.11
(Banking Law, sees.
137 and 226.)
Legal effect of consolidation.
Upon doing the acts above described, such State bank or trust
company "shall thereupon cease to be a corporation under the laws of this
state, except that for the term of three years thereafter, its corporate
existence shall be deemed to continue for the purpose of prosecuting or
defending suits by or against it, and enabling it to close its concerns,
and to dispose of and convey its property".
Such consolidation does not
release any such State bank or trust company from its obligations to pay
and discharge all the liabilities created by law or incurred by it, or
any tax imposed by the laws of this state in proportion to the time which
has elapsed since the next preceding payment therefor , or any assessment,
X-6931
•>0/1
J
C
- 136
(Hew York
cont'di)
penalty or forfeiture imposed or incurred under the laws of this state,
up to the date of its becoming consolidated with a national "bank.
At the time when such consolidation "becomes effective all the
property of the State bamc or trust company "including all its right,
title and interest in and to all property of whatsoever kind, whether
real, personal or mixed, and things in action, and every right, privilege,
interest and asset of any conceivable value or "benefit then existing,
belonging or pertaining to it, or which would inure to it, shall immediately by act of law and without any conveyance or transfer, and without
any further act or deed, be vested in and become the property of the
national bank, which shall have, hold and enjoy the same in its own
right as fully and to -the same extent as the same was possessed, held
and enjoyed" by the State bank or trust company.
The national bank is a
continuation of the entity and identity of the state bank or trust company
and "all the rights, obligations and relations of the State bank or trust
company to or in respect to any person, estate, creditor, depositor,
trustee or beneficiary of any trust, and in, or in respect to, any executorship or trusteeship or other trust or fiduciary function, shall remain
unimpaired, and the national bank as of the time of the taking effect of
such * * * consolidation shall succeed to all such rights, obligations,
relations and trusts, and the duties and liabilities connected therewith,
and shall execute and perform each and every such trust or relation in the
same manner as if the national bank had itself assumed the trust or relation
including the obligations and liabilities connected therewith.
If the State
X->6931
(New York - cont'd.)
"bank (or trust company) is acting as administrator, co-administrator,
executor, co-executor, trustee or co-trustee, of or in respect to any
estate or trust "being administered under the laws of this state, such
relation, as well as any other or similar fiduciary relations, and all
rights, privileges, duties and obligations connected therewith shall
remain unimpaired and shall continue into and in said national "bank from
and as of the time of the taking effect of such * * * consolidation,
irrespective of the date when any such relation may have been created or
established and irrespective of the date of any trust agreement relating
thereto or the date of the death of any testator or decedent whose estate is being so administered." Nothing done in connection with the
consolidation of a State bank or trust company with a national bank,
"shall, in respect to any such executorship, trusteeship or similar
fiduciary relation, be deemed to be or to effect, under the laws of this
state, a renunciation or revocation of any letters of administration or
letters testamentary pertaining to such relation, nor a removal or resignation from any such executorship or trusteeship or other fiduciary relationship, nor shall the same be deemed to be of the same effect as if
the executor or trustee or other fiduciary had died or
incompetent to act".
otherwise become
(Banking Law, sees. 137 and 225.)
Superintendent of banks mast post names and locations of merging corporations, and dates of such merger.
The superintendent of banks is required to keep in his office
a bulletin board accessible to the public upon which must be posted every
Friday the names and locations of all corporations that have been merged
X-6931
~ 126 (Hew York - cont'd.)
under any of the provisions above digested and the dates of
such merger.-
(Banking Law, sec. 82 (12.).)
FORTH CAROLINA-.
Definition of the word "hank".
The term "bank" when used in the following provisions of the laws of North Carolina "shall be construed
to mean any corporation, partnership, firm, or individual
receiving, soliciting, or accepting money or its equivalent
on deposit as a business;
Provided, however, this definition
shall not be construed to include building and loan associations, Morris Plan companies, industrial banks or trust companies not receiving money on deposit".
(Cons. Stats, of N.
C. , sec. 216 (a); Banking Law Pamphlet, 1927, sec. 216 (a),
p. 3.)
Consolidation or transfer of assets.
The laws of North Carolina provide that "A bank
may consolidate with or transfer its assets and liabilities
to another
bank".
(Cons. Stats, of N. C., sec. 217 (k);
Banking Law Pamphlet, 1927, sec. 217 (k), p. 7.)
It is further provided that any bank or trust company incorporated under the laws of North Carolina may con-
£26
X-6931
• 1139 *
i
»
(North Carolina - cont'd.)
solidate with any national bank under the charter of the
latter or under a new charter issued to such consolidated
bank upon such terms and conditions as may be lawfully
agreed upon, provided the laws of Forth Carolina governing
the consolidation of such banks shall be first complied
with as to the consolidation of such bank or trust company.
(Laws of 1929, ch. 148, p. 171.)
Proceedings authorizing consolidation or transfer of
assets; agreement; filing of.
Before such consolidation or transfer of assets can
become effective, each bank involved must file with the
commissioner of banks certified copies of all proceedings
of its board of directors and stockholders setting forth
that two-thirds of the stockholders voted for the consolidation or transfer.
The stockholders proceedings
must also contain a complete copy of the agreement of
consolidation
£.6931 £28
- ice •
>
(Nofrth Carolina - cont'd;)
of transfer of assets which was entered into by the "banks concerned.
(Cons. Stats, of N. C., sec. 217 (k), as amended " y Act of April 2, 1931;
b
Banking Law Pamphlet, 1927, sec. 217 (k), p. 7, as amended "by Act of
April 2, 1931.)
Examination of "banks involved; consent of commissioner of "banks necessary
to consolidation or transfer; notice of consolidation or transfer must " e
b
published.
When the stockholders1 and directors' proceedings have "been
filed as above prescribed, the commissioner of "banks must make an examination of each "bank to determine whether the interest of the depositors,
creditors, and stockholders of each "bank are protected, and whether such
consolidation or transfer is made for legitimate purposes.
No consolida-
tion or transfer can "be made without the consent of the commissioner of
"banks and his consent or rejection most be based upon the examination
above referred to.
examined.
Expenses of such examination mast be paid by the banks
Notice of the consolidation or transfer must be published
for four weeks before or after the same is to become effective, at the
discretion of the commissioner of banks, in a newspaper published in a
city, town, or county in which each of the banks concerned is located.
A certified copy of such published notice must be filed with the commissioner of banks.
(Cons. Stats, of N. C., sec. 217 (k), as amended by Act
of April 2, 1931; Banking Law Pamphlet, 1927, sec. 217 (k), p. 7, as
amended by Act of April 2, 1931.)
Rights of creditors not impaired by consolidation or transfer; corporate
existence continued for three years.
In case of either transfer or consolidation the rights of creditors
X-6931
- 131 (Horth Carolina - cont'd.)
are preserved unimpaired, and the respective companies are
continued in existence to preserve such rights for a period
of three years.
(Cons. Stats, of M. C., sec. 217 (k);
Banking Law Pamphlet, 1927, sec. 217 (k), p. 7.)
Legal effect of consolidation.
In case of a consolidation, when the agreement
for consolidation is made and a certified copy together with
a certified copy of its approval by the commissioner of banks
sire filed with the Secretary of State, the consolidating
banks " shall be held to be one company, possessed of the
rights, privileges, powers, and franchises of the several
companies, but subject to all the provisions of law under
which it is created."
Directors and other officers named
in the agreement, may serve until the first annual meeting
for election of officers and directors, the date for which
must be named in the agreement.
"On filing such agree-
ment, all and singular, the property and rights of every
kind of the several companies shall thereby be transferred and vested in such new company, and be as fully
its property as they were of the companies parties to the
X-6931
• 133 *
*
*
(North Carolina - cont'd.)
agreement."
(Cons. Stats, of IT. C. , sec. 217 (1), as
amended by Act of April 2, 1931; Banking Law Pamphlet,
1927, sec. 217 (1), p. 7, as amended by Act of April
2, 1931.)
A similar provision is made in the case of the
consolidation of a State bank or trust company with a
national bank under the charter of the latter or under
a new charter; and it is expressly provided that the right
of succession as trustee, executor or any other fiduciary
capacity shall pass to the consolidated institution.
(Laws
of 1929, ch. 148, p. 171.)
I'OItTH DAKOTA.
Consolidation or merger of "banking associations".
The laws of North Dakota provide that any two
or more State banking associations
capital,
assets,
and liabilities,
"may consolidate their
,wtil
X-6931
OO-1
— 133 •
•
(North Dakota - cont'd.)
or one or more of such associations may be merged into another" in the
manner set out "below.
(Supp. to 1913 Comp. Laws, sec. 5191cl; Banking
Law Pamphlet, 1929, sec. 5191cl, p. 52.)
Meaning of terms..,
"The term 'consolidation1 as used herein shall mean the consolidation of the liabilities, assets and corporate existence of two or more
associations into a single association, which shall issue its stock to
stockholders in the consolidating associations in return for the assets of
the consolidating associations.
"The term 'merger1 as used herein shall mean the taking over, or
the absorption of the assets of one association by another, and the assumption of the liabilities of the association, or associations, whose assets
and liabilities are taken over.
"The term 'old association' where hereinafter used means the
associations which are consolidating or merging into the other associations,
and the term 'new association' means the association into which the other
associations are being consolidated or merged."
(Supp. to 1913 Comp.
Laws, sec. 5191c2; Banking Law Pamphlet, 1929, sec. 5191c2, p. 52.)
Meeting to act upon consolidation or merger; notice of.
If two or more banking associations desire to consolidate or
merge, the directors of each association "shall call.a special meeting of
the stockholders", the notice of which must state definitely the purpose
for which it is called, to act upon the consolidation or merger, or the
matters may be acted on at a regular stockholder's meeting.
In the latter
X-5931
«• 1 3 4
"
(North Dakota - cont^d.)
»
event, notice that the consolidation or merger will be considered must be
given to each stockholder at least ten days prior to the meeting.
(Supp.
to 1913 Cornp. Laws, sec. 5191c3; Banking Law Pamphlet, 1929, sec. 5191c3,
p • 52.)
Vote of stockholders.
The stockholders must put the question of the proposed consolidation or merger to a vote and the question so put "shall embody the proposed amount of capital stock of the consolidated or merged corporation";
but such amount may be varied by the State Examiner or court on passing on
the consolidation or merger.
"The proposal for consolidation or merger
shall be deemed lost, unless two-thirds of all the stock shall vote in
favor thereof."
(Supp. to Comp. Laws of 1913, sec. 5191c4; Banking Law
Pamphlet, 1929, sec. 5191c4, p. 52.)
Capital required of new association.
A consolidation can not be made unless the new association "have
a capital of at least two-thirds of the aggregate capital of the old associations, but it may have a larger capital than that of the old associations."
(Supp. to 1913 Comp. Laws, sec. 5l91c5; Banking Law Pamphlet, 1929,
sec. 5191c5, p. 52.)
Time of stockholders meeting.
The several stockholders meetings at which the consolidation or
merger is acted upon must be held at such times that the result of all
of them may be certified to the State Examiner within thirty days from
the date of the holding of the first meeting.
The result of each meeting,
X-6931
- 136'
(Forth Dakota - cont'd.)
Within ten days after it is held, must " e certified to the State Examiner
b
by the chairman and secretary of the meeting.
(Supp. to 1913 Comp. Laws,
sec. 5191c6; Banking Law Pamphlet, 1929, sec. 5191c6, p. 53.)
Examination of consolidating associations.
Upon receiving certificates showing favorable action by all of
the consolidating associations, "the state Examiner shall cause a thorough
examination of the condition of the said associations to be male with a
view of determining whether their condition is such that the proposed
consolidation or merger would result in a sound and efficient banking
association adapted to the needs of the community in which it is proposed
to operate."
(Supp. to 1913 Comp. Laws, sec. 5191c7; Banking Law Pamphlet,
1929, sec. 5191c7, p. 52.)
Notice of findings; State Examiner may require chafes in conditions.
Upon completing his examination, the State examiner must advise
each of the associations if he finds that a consolidation or merger is
desirable.
If the conditions existing are not desirable for the consoli-
dation or merger, the State Examiner shall indicate any changes therein
necessary to correct the situation; and he may prescribe a time within
which such changes may be made to warrant his approval.
(Supp. to 1913
Comp. Laws, sec. 5191c8; Banking Law Pamphlet, 1929, sec. 5191c8, p. 53.)
Appeal may be taken from adverse decision of State Examiner.
If the State examiner reaches a decision adverse to the consolidation or merger, an informal appeal nay be made to the Banking Board, "and
the Board shall, as speedily as possible, set a time when, it will hear any
X-6931
- 136 (iTorth Dakota - oont W
reasons that may be advanced why the findings of the State Examiner
should " e reversed; and upon such hearj."g, it she.ll make such order
b
as seems proper in the premises."
(Supp. to 1913 Comp. Laws, sec. 5191c8;
Banking Law Pamphlet, 1929, sec. 5191c8, p. -53.)
Finding favorable to consolidation or merger, representative of participating associations must meet; schedule of assets; proportion of stock to
" e accredited to old stockholders.
b
If the State examiner, or the Banking Board on appeal, finds
favorably with reference to the consolidation or merger, each of the
participating associations, "by its Board of Directors, must appoint one
or more representatives to meet with the representatives of the other
association.
These representatives must determine and make a schedule
of the assets of each of the participating associations and must also
"schedule all the indebtedness of the old associations, and only such
assets shall be retained by the old associations as the State Examiner
shall deem not proper assets to bo held by the new association". In case
of a consolidation, the representatives must agree rpon tho proportion
of the stock in tho now association to be accredited to the stockholders
of each of the old associations;
"but tho distribution of such stock
among the stockholders of the several old associations shall be by the
old associations as hereinafter provided for."
(Supp. to 1913 Comp. Laws,
sec. 5191c9; Banking Law Pamphlet, 1929, sec. 5191c9, p. 53.)
Schedules and agreement must be put in writing; State examiner may approve
or disapprove; appeal from decision of.
The schedules and agreement above referred to must be put in
writing and signed in duplicate by the representatives of the old associa-
X-6931
iitiJ
- 137 (Forth Dakota - cont'd.)
tions and are ""binding upon them and non-revocable".
If the associations
cannot agree, no consolidation or merger shall take place.
Upon "agree-
ing and signing the agreement as aforesaid, one of the duplicates shall
be delivered to the State Examiner who may either approve or disapprove
the same, or make suggestions for the modification thereof as a condition
of approval, and he may fix a time within which the conditions shall be
met, and likewise agreed to in writing are resubmitted to him.
And in this
case likewise the association may informally appeal from the decision of
the State Examiner to the Banking Board."
(Supp. to 1913 Comp. Laws, sec.
5191cl0; Banking Law Pamphlet, 1929, sec. 5191cl0, pp. 53 and 54.)
Approval of agreement; notice to participating associations.
If the State Examiner, or the Banking Board on appeal, approves
the agreement or modified agreement, an endorsement to this effect must be
made on the duplicate of the agreement held by the State Examiner, "and
each of the associations shall " e immediately notified of such approval."
b
(Supp. to 1913 Comp. Laws, sec. 5191cll; Banking Law Pamphlet, 1929, sec.
5191cll, p. 54.)
After notice of approval, petition for decree of consolidation or merger
mast be filed with district court.
After notice of the above approval has been received by the
participating associations, they must "file in the office of the clerk of
the district court of the county in which at least one of the associations
is doing "business, a petition asking for a decree of consolidation or
merger".
Such petition must set out the "names and location of the new
X-6931
'
* ia§ »
(North. Dakota - cont'd.)
association, and shall recite "briefly the talcing of the several successive
steps hereinbefore provided for and a statement of the amount of the
assets and indebtedness of each of the old associations to be transferred
to and assumed by the new association, the amount of the capital stock,
and the amount thereof to be apportioned to the stockholders of each of
the old associations and the names of the first board of directors of the
new association."
(Supp. to 1913 Comp. Laws, sec. 5191cl2; Banking Law
Pamphlet, 1929, sec. 5191cl2, p. 54.)
Notice of filing of petition to be issued by clerk of court; publication of
When such petition has been filed, the Clerk of the district
court must issue a notice which must set out (1) that the petition has
been filed in his office, (2) that the effect of the consolidation or
merger will be to transfer the principal assets of the petitioning associations to the new association and to create in the latter association a
liability to pay all of the debts of the petitioning associations and to
establish a novation by the petitioning associations, creditors, and the
new association, and (3) that a hearing in the office of the clerk on the
petition will be held on a specified date.
This notice must be signed by
the clerk and attested by the seal of the court and must be published for
a certain length of time "in some newspaper qualified to publish legal
notices in the county in which such petition is filed."
Proof of such
publication must be filed with the clerk of the district court.
(Supp.
to 1913 Comp. Laws, sec. 5191cl3; Banking Law Pamphlet, 1929, sec. 5191cl3,
p. 55.)
X-6031
-
xto -
• »>T
;«
(Forth Dakota - cont'd.)
Decree of court permitting consolidation or merger.
If no objection has been made to the petition within twenty
days after its last publication, "the court shall at once upon the showing of the default, malce its decree permitting the consolidation, or
merger, as the case may be."
(Supp. to 1913
Comp. Laws, sec. 5191cl4;
Banking Law Pamphlet, 1929, sec. 5191cl4, p. 55.)
Opposition to petition; stry of proceedings, bond; decree.
Any opposition to the petition made by any creditor will be
heard by the court and the only cause for denying the petition "shall be
that the objecting creditor is in danger of being substantially damaged
in his financial rights".
If the creditor establishes this fact, the
court may order the proceedings to be stayed; but if a bond of indemnity
is given to the creditor to the effect that all of his legal claims will
be paid by the new association when due "the proceedings shall be considered as though no opposition had been made thereto" and the court shall
accordingly enter its decree permitting the consolidation or merger.
(Supp. to 1913 Comp. Laws, sec. 5191cl5; Banking Law Pamphlet, 1929, sec.
5191cl5, p. 55.)
General offect of decree.
"The effect of a decree permitting consolidation, or merger,
shall be to bar forever all objections thereto, and to establish a complete
novation between the old associations, and creditors, and the new association to the end that from that time henceforth, the old associations are
relieved of all liabilitiy to creditors, all such creditors having a valid
and legal claim against the new association to the full extent that they had
X-6931
(Horth Dakota - cont'd.)
a claim against any of the old associations, ana the new association is
liable for all indebtedness of all the old associations to the same extent that they were liable, and all of the stockholders' liability, as
stockholders, in the several old associations are merged into their
stockholders' liability as stockholders in the new association."
(Supp.
to 1913 Comp. Laws, sec. 5191cl6; Banking Law Pamphlet, 1929, sec. 5191cl6,
pp. 55 and 56.)
Conclusiveness of decree.
The decree of the district court is "final and conclusive, not
subject to appeal, nor to motion to vacate or set aside, and not subject
to be set aside or vacated on motion for a new trial."
(Supp. to 1913
Comp. Laws, sec. 5191cl7; Banking Law Pamphlet, 19,99, sec. 5191cl7, p. 56.)
Objections, who may make; dissenting stockholders, rights of.
No stockholder who voted, or refrained from voting, for a
consolidation or merger, can object thereto; but any stockholder who voted
against such consolidation or merger, at any time prior to the filing of
the petition in court, may file objection and appear before the State examiner or Banking Board and show cause why the consolidation or merger
should not be allowed, "but the determination of the State Examiner or the
Banking Board shall be conclusive of his rights."
Ho action or proceeding
in court can be maintained by any person questioning the validity of the
consolidation or merger, or to recover anything on account thereof, unless such action or proceeding was commenced prior to the time of entry
of the decree of consolidation or merger.
The court in which the petition
for consolidation or merger is filed or the appropriate federal court has
X-6931
-
141 -
(North Dakota - con'td.)
"exclusive jurisdiction of such action or proceedings."
(Supp. to 1913
Comp. Laws, sec. 5191cl8; Banking Law Pamphlet, 1929, sec. 5191cl8, p.
56.)
Decree of merger or consolidation, when necessary to do further acts after;
contents of decree of consolidation; filing of certified copy of decree;
issuance of certificate of authority.
When a decree of merger has been entered, "no further act shall be
necessary to be done, except to make the transfers of tho assets from the
old associations to the association into which they are merged;" but in
case of
a consolidation,
the decree must specify the name and location,
and the amount of capital stock of the new association with the proportions
in which it is allotted to each of the old associations.
The decree mast
also name the first board of directors, or in case of death or disability
of any of such directors, "shall substitute another or others to be nominated by the petitioners."
"A certified copy of such decree" with a fee of five dollars
must then be filed in the office of the Secretary of State, "and such new
association shall thereupon become a banlcing association in all things the
same as though originally organized under the Banking Laws and the Secretary
of State shall thereupon issue to it a certificate of authority, as in the
case of the incorporation of other banking associations, which certificate
should be delivered to the State Examiner to be in turn delivered by him
to the said new association upon its being made to appear to him that all
the terms and conditions of the consolidation have been complied with."
(Supp. to 1913 Comp. Laws, sec. 5191cl9; Banking Law Pamphlet, 1929, sec.
5191cl9, p. 57.)
X-6S31
-
142 -
(Forth Dakota - cont'd.)
Election of officers.
As soon as the certificate of authority has "been delivered to
the directors they must meet and elect officers, and until such election
the directors shall supervise and conduct the business of the new association.
(Supp. to 1913 Comp. Laws, sec. 5191c20; Banking Law Pamphlet,
1929, sec. 5191c-20, p. 57.)
Consolidation or merger, operation of old corporations mast cease; officers
and directors to continue; when corporate existence extinguished.
When either a consolidation or merger has been consummated, "the
old associations shall cease to operate as banking associations or to
transact any business other than to administer any assets that under the
terms of the consolidation or merger have not been transferred.
They shall
not elect any new officers or directors, but the directors and officers
holding at the time of the consolidation or merger shall continue and the
corporation itself shall remain in existence for a period of one (1) year
during which time its remaining assets, if any must be disposed of, and
tlie proceeds distributed among its stockholders, and at the end of one
year from the filing of the decree of consolidation or merger, the said
old associations shall cease to exist, unless upon good cause shown, and
before the expiration of the said period of one (1) year any of said old
associations shall obtain from the court an order extending the time of
their existence, which order shall only be granted upon a showing of a
substantial reason therefor."
(Supp. to 1913 Comp. Laws, sec. 5191c21;
Banking Law Pamphlet, 1929, sec. 5191c21, p. 57.)
* 1 43 *
*
: *
X-6931
(North Dakota - con'td.)
Statement as to new stock due to old stockholders; proportionment of.
When a consolidation has "been completed, the "board of directors
of each of the old associations must furnish to the board of directors of
the new association a statement of the amount of stock due to each of the
stockholders of the old associations and the new association must then
issue stock proportioned upon their former holdings to such stockholders.
Provision is also made for the issuance of stock to stockholders where
the amount to which they are entitled does not consist of even multiples
of one hundred dollars.
(Supp. to 1913 Comp. Laws, sec. 5191c22; Banking-
Law, Pamphlet, 1929, see. 5191c22, p. 57.)
Remedial purpose of above provisions; liberal construction required.
"The
purpose of the Act is remedial, and it is intended to remedy
a well understood condition existing in the banking business of the State
of North Dakota, a part of which condition is the need of larger and
stronger banking institutions, and the supplying of more efficient banking
service, to various communities, and to the end that such conditions may
be remedied to the utmost extent possible, this Act shall be in all tilings
liberally construed, for the accomplishment of its ultimate purpose." (Supp.
to 1913 Comp. Laws, sec. 5191c23; Banking Law Pamphlet, 1929, sec. 5191c23,
p. 58.)
Additional authorization for consolidation or merger of banks.
Additional provisions covering the consolidation or merger of
banks, which were enacted in 1927, provide that "any two or more banks*
with the approval of the State Examiner, may consolidate or merge under
the charter of either existing bank.
The merger or consolidation may be
X-6931
• 144 —
»
»
(North Dakota - cont'd.)
on such terms as may be agreed upon by the majority of the "board of directors of each bank, and must be "ratified and confirmed" at a special
meeting by two-thirds of the stockholders of each bank.
Eotice of such
meeting must be given to the stockholders "at least ten days prior to
said meeting"; but the stockholders "may unanimously waive such notice
and may consent to such meeting and consolidation or merger in writing."
(S. L. 1927, ch. 93; Banking Law Pamphlet, 1929, p. 58.)
Capital stock required of consolidated institution.
The capital stock of the "consolidated bank shall not be less
than that required under existing law for the organization of a bank of
the
class of the largest consolidating bank."
(S. L. 1927, ch. 93;
Banking Law Pamphlet, 1929, p. 58.)
Report of assets and liabilities.
"The assets and liabilities of the consolidated bank shall be
reported by the surviving bank."
(S. L. 1927, ch. 93; Banking Law Pamphlet,
1929, p. 58.)
Legal effect of consolidation or merger under chapter 93 of laws of 1927.
"All the rights, franchises, and interest of said bank so consolidated in and to every species of property, real, personal and mixed
and choses in action thereto belonging, shall be deemed to be transferred
to and vested in such bank into which it is consolidated without other
instrument of transfer, and the said consolidated bank shall hold and
enjoy the same and all rights of property, franchises, and interests in
the same manner and to the same extent as was hold and enjoyed by the bank
so consolidated therewith, provided, however, that the merging bank shall
X-6931
- 145(Forth Dakota,
cont'd.)
transfer to the surviving bank all of its real property "by good and sufficient deed of conveyance and for that and other purposes shall remain
a body corporate for a period of at least three years after merger and
shall not then dissolve without the approval of the State Examiner."
(S. L. 1927, ch. 93; Banking Law Pamphlet, 1929, p. 58.)
Additional provisions with reference to legal effect of consolidation or
merger of "corporations, including "banks and trust companies."
Additional legislation enacted in 1927 provides further with
reference to the legal effect of a consolidation or merger that "Whenever
any two or more corporations, including "banks and trust companies, organized under the Laws of this State have heretofore consolidated, merged
or otherwise transferred, or shall hereafter consolidate, merge or otherwise transfer, its business to another corporation, including bank or trust
company, organized, or to be organized, under the laws of this State, the
consolidated or new corporation, by whatever name it may assume, or be
known, shall, unless otherwise provided in the agreement or order of merger
or consolidation, be a continuation of the entities of each and all of
the corporations, including banks and trust companies, so consolidated,
merged or otherwise transferred to such consolidated or new corporation
for all purposes whatsoever, and all of the rights, franchises and interests
of said corporations, including banks and trust companies, so consolidated,
merged or transferred in and to every species of property, real, personal
and mixed and choses in action thereto belonging shall be deemed to be so
transferred to and vested in the corporation which acquires the same on
such consolidation, merger or other transfer without any assignment, deed
X-6931
:
- 1*6 (North Dakota - coa'td.)
or other transfer, and such corporation shall hold and enjoy the same
and all rights of property, franchises and interests in the same manner
and to the same extent as was held and enjoyed " y the corporation, or
b
corporations, including "banks and trust companies,
so consolidated,
merged or otherwise transferred, including the holding and performing
by any "bank or trust company of any and all trusts and fiduciary relations whatsoever as to or for which either or any of the "banks or trust
companies so consolidating, merging or otherwise transferring may have
been, or may be appointed, nominated or designated by any will, agreement, conveyance, or otherwise, whether or not such trust or fiduciary
relation shall have come into being, or shall have taken effect at the
time of such consolidation, merger or other transfer.M
(S. L. 1937, ch.
108; Banking Law Pamphlet, 1929, pp. 58 and 59.)
OHIO.
Definition of word "bank".
The term "bank" when used in the following provisions of the laws
of Ohio includes commercial banks, savings banks and trust companies.
(General Code, sec. 710-2; Banking Law Pamphlet, 1928, sec. 710-2, p. 5.)
Consolidation or transfer of assets.
The laws of Ohio provide that "A bank may consolidate with or
transfer its assets and liabilities to another bank".
(General Code,
sec. 710-86; Banking Law Pamphlet, 1928, sec. 710-86, p. 33.)
Proceedings authorizing consolidation or transfer of assets; agreement;
filing of.
Before a consolidation or transfer of assets can become effective,
X—6931
»*/ f ~
'•$
,w-dLt>
* 14*7 (Ohio - cont'd.)
each corporation concerned mast file m t h the superintendent of tanks,
"Certified copies of all proceedings had " y its directors and stockholders
b
which such stockholders' proceedings shall set forth that holders of at
least two-thirds of the stock, voted in the affirmative on the proposition
of consolidation or transfer."
The stockholders' proceedings must also
contain a complete copy of the agreement for consolidation or transfer of
assets which was entered into " y the corporations involved.
b
(General Code,
sec. 710-86; Banking Law Pamphlet, 1928, sec. 710-86, p. 33.)
Consent of commissioner of "banks necessary to consolidation or transfer;
appeal from adverse decision of; examination of corporations involved;
publication of notice of consolidation or transfer.
When the stockholders' and directors' proceedings have been filed
as above prescribed, the superintendent of banks nrast make an examination
of each corporation "to determine whether the interests of the depositors
and creditors and stockholders of each bank are protected and that such
consolidation or transfer is made for legitimate purposes."
No consolida-
tion or transfer can be made without the consent of the superintendent of
banks and
his consent or rejection nrast be based upon the examination
above referred to.
If he refuses to give his consent, an appeal may be
taken in the manner as is provided in the case of a refusal by the superintendent to certify that a new bank may commence business.
Expenses of
such examination must be paid by the corporations examined, and notice of
the consolidation or merger "shall be published for four weeks, before or
after the same is to become effective, at the discretion of the superintendent of banks, in a newspaper published in a city, village or county,
in which each of such banks is located, and a certified copy thereof shall
X-6931
#
148
-
(OhiO - cont'd.)
" e filed with the superintendent of banks.11
b
(General Code, sec. 710-86;
Banking Law Pamphlet, 1928, sec. 710-86, p. 33.)
Rights of creditors.
"In Case of either transfer or consolidation, the rights of
creditors shall " e preserved unimpaired and the respective companies deemed
b
to be in existence, to preserve such rights."
(General Code, sec. 710-87;
Banking Law Pamphlet, 1928, sec.. 710-87, p. 33.)
Legal effect of consolidation.
"In case of consolidation, when the agreement of consolidation
is made and a duly certified copy thereof is filed in the office of the
secretary of state, together with a certified copy of the approval of
the superintendent of "banks to such consolidation, the banks, parties
thereto, shall be held to be one company possessed'of the rights, privileges,
powers and franchises of the several companies, but subject to all provisions
of law relating to the different departments of its business.
The direc-
tors and other officers named in the agreement of consolidation shall serve
until the first annual election, the date for which shall be named in the
agreement.
On filing such agreement all and singular the property and
rights of every kind of the several companies, including the exclusive
right in and to the corporate name of each of the banks parties to such
agreement shall thereby be transferred to and vested in such new company,
and be as fully its property as they were of the companies parties to such
agreement.
The secretary of state shall not file or record any articles
of incorporation of any company organized to do the business of a bank,
a building and loan association, or a mortgage or investment company, within the county
within which said consolidated bank is situated, if such name,
X-5931
u 1-1-9 *
"
(Ohio - cont'd.)
or the distinguishing part thereof, is that of any bank party to such
agreement, or so similar thereto as to be likely to mislead the public,
unless the written consent of the consolidated bank, signed by its
president and secretary, be filed with such articles."
(General
Code, sec. 710-88; Banking Law Pamphlet, 1928, sec. 710-88, pp. 33,
and 34.)
OKLAHOMA.
Ho provisions covering consolidation, merger, etc.
The laws of Oklahoma do not contain any provisions having
specific reference to the consolidation, merger, etc., of banks and
trust companies.
OHEGON.
Consolidation of bank or trust company: transfer of assets and liabilities
including trusts and fiduciary 'business.
The laws of Oregon provide that if two-thirds of its stockholders vote to do so, "any bank or trust company may consolidate
with any other bank or trust company doing business under the laws
of this state or under the laws of the United States".
The written
consent of the superintendent of banks is also necessary to such consolidation and it mast be "upon such terms and conditions as he
shall require and not otherwise".
Any such bank or trust company
X-6931
~ 150
(Oregon - cont1d.)
may transfer its assets and liabilities, including its trusts and
fiduciary business, to the proposed successor corporation; but if
any trust or fiduciary business is transferred, the latter corporation must have at the time of the transfer authority from the superWhen the superintendent
intendent of banks to do a trust business.
is satisfied that the consolidation "has been completed and is effective he shall furnish the successor corporation a certificate bearing
the seal of the state banking department to the effect that such consolidation has taken place and is effective".
the recordation of this certificate and it
1
1
Provision is made for
shall be prima facie
evidence that such consolidation has been made and is effective"•
(Oregon Code, 1930, sec. 22-1703, as amended by General Laws, 1931,
ch. 278, sec. 25, p. 466.)
The Oregon laws also provide that any bank or trust company
in the process of voluntary liquidation may sell or transfer its
deposit liabilities or its trust and fiduciary business to some
other bank or trust company by a resolution of its board of directors
authorizing such sale or transfer, and surrender its certificate of
authority to the superintendent of banks; but no such sale or transfer can be made without first having obtained the written approval
and consent of the superintendent of banks, and then only upon such
terms and conditions as he shall require.
The purchasing corporation
to which any trust or fiduciary business is transferred must have at
the time of such transfer authority from the superintendent of banks
X-6931
- 151 (Oregon - cont' d.)
to do a'trust business.
When the superintendent is satisfied that
the sale or transfer has been completed and is effective, "he shall
furnish the purchasing corporation with a certificate bearing the seal
of the state banking department to the effect that such sale or transfer has taken place and is effective".
cordation of this certificate and it
1
1
Provision is made for the reshall be prima facie evidence
that such sale or transfer has been made and is effective".
(Oregon
Code, 1930, sec. 22-1702, as amended by General Laws, 1931, ch. 278,
sec. 24, p. 4S5.)
Legal effect of sale of assets or consolidation.
If any bank or trust company sells all or any of its assets to
another bank or trust company which takes over and assumes its deposit
liabilities, "such corporation may not thereafter engage in the banking or
trust business and shall amend its articles of incorporation by eliminating
therefrom the power to engage in a banking and/or trust business or shall be
and is dissolved, except for the purpose of winding up its affairs, and shall
not thereafter be reinstated and shall surrender its charter.
If any bonk
or trust company shall consolidate with another bank or trust company one of
the corporations shall be dissolved, except for the purpose of winding up its
affairs, and shall not thereafter be reinstated and shall surrender its
charter."
(General Laws of 1925, ch. 207, sec. 178, as amended by General
Laws of 1929, ch. 380, sec. 40(b), p. 483.)
PSNi'TSYLYA \I A.
xT
Merger of State banks and trust companies.
The general corporation laws of Pennsylvania provide that any State
corporation may
X-6931
-
(Pennsylvania - cont'd.)
"merge its corporate rights, franchises, powers, and. privileges with and
into those of any other corporation or corporations transacting the same
or a similar line of "business, so that " y virtue of this act such corb
porations may consolidate, and so that all the property, rights, franchises,
and privileges then by law vested in either of such corporations, so merged,
shall he transferred to and vested in the corporation into which such
merger shall he made."
(Act of May 3, 1909, P. L. 408, sec. 1; Banking
Laws, 1930, sec. 496, p. 269.)
Procedure for merger; agreement of directors, conditions and contents of;
approval of stockholders necessary to make effective.
The directors of each corporation are required to enter into a
joint agreement, under the corporate seal of each corporation, for the
merger and consolidation of such corporations.
The agreement must pre-
scribe the terms and conditions of the merger or consolidation, the mode
of carrying it into effect, the name of the new corporation, the number,
names and residences of its directors and other officers, who shall "be the
first directors and officers, the number and amount or par value of shares
of the capital stock, and the manner of converting the capital stock of each
of such corporations into the stock of the new corporation.
The agreement
must also set out how and when directors and officers shall he chosen, with
such other details as shall be deemed necessary to perfect the consolidation
and merger; but the agreement does not become effective unless it is
approved by the stockholders of such corporations, in the manner hereinafter
"set forth.
(Act of May 3, 1909, P. L. 408, sec. 2; Banking Laws, 1930,
sec. 497, pp. 269 and 270.)
x
-6931
- ifcs (Pennsylvania - c out'd.)
Submission of agreement to stockholders; vhen deemed to "be act of
consolidation.
The agreement mast he submitted at a special, or any anrual,
meeting of the stockholders of each of the corporations involved, and
advance notice of the time, place and object of such meeting must he
given in certain designated newspapers.
If a majority of the entire
stock of each corporation votes in favor of the agreement, merger and
consolidation, then that fact must he certified under corporate seal
" y the secretary of each corporation.
b
These certificates, together
with the agreement, or a copy thereof, must be filed in the office of
the Secretary of the Commonwealth, who shall forthwith present the same
to the Governor for his approval.
When approved by the Governor such
agreement "shall be deemed and taken to be the act of consolidation of
said corporation.If
(Act of May S, 1909, P. L. 408, sec. 2; Banking Laws,
1930, sec. 498, p. 270.)
Certified copy of agreement and secretary's certificate as evidence of
merger.
A certified copy of the certificate of the secretary of each
of the consolidating corporations that the directors' agreement, merger
and consolidation has been approved as aforesaid, and the agreement itself, or a copy thereof, filed in the office of the Secretary of the
State, is evidence of the lawful holding and action of such stockholders1
meetings, and of the merger and consolidation of the corporations.
(Act
of May 3, 1909, P. L. 408, sec. 4; Banking Laws, 1930, sec. 500, p. 272.)
Legal effect of merger; issue of "new letters patent"; payment of bonus.
Upon the filing of the papers as above described "and upon the
SOI
X-6931
-154(Pennsylvania - cont'd.)
issuing of new letters patent thereon " y the Governor, the said merger
b
shall be deemed to have taken place, and the said corporations to be one
corporation under the name adopted in and by. said agreement, possessing
all the rights, privileges, and franchises theretofore vested in each of
them, and all the estate and property, real and personal, and rights of
action of each of said corporations, shall be deemed and taken to be
transferred to and vested in the said new corporation without any further
act or deed:
Provided, That all rights of creditors and all liens upon
the property of each of said corporations shall continue unimpaired,
limited in lien to the property affected by such liens at the time of
the creation of the same, and the respective constituent corporations may
be deemed to be in existence to preserve the same; and all debts not of
record, duties, and liabilities of each of said constituent corporations
shall thenceforth attach to the said new corporation, and may be enforced
against it to the same extent and by the same process as if said debts,
duties, and liabilities had been contracted by it."
Such merger is not
complete, however, and no business of any kind may be transacted until
the consolidated corporation has obtained from the Governor new letters
patent and has paid to the State Treasurer a certain prescribed bonus upon
its capital stock, in excess of the amount of the capital stock of the
consolidating corporations.
New letters patent can not be issued until
each of the consolidating corporations has filed with the Secretary of the
Commonwealth a certificate from the Department of Revenue, setting forth
that all reports required by the Department of Revenue have been duly
filed, and that all State taxes due have been paid, up to and including
X-6931
- 155 (Pennsylvania - cont'd.)
*
the date of the proposed merger.
(Act of May 3, 1909, P. L. 408, sec. 3,
as amended "by Act of April 29, 1915, P. L. 205; Banking Laws, 1930, sec.
499, pp. 271 and 272.)
Dissenting stockholders; rights of.
The laws of Pennsylvania also contain detail ed provisions granting to stockholders in any of the consolidating corporations, who have
voted against the consolidation and who "shall be dissatisfied with or
object to such consolidation", the right within a certain prescribed
time and -upon compliance with a certain prescribed procedure, to be paid
for the stock held by them.
(Act of May 3, 1909, P. L. 408, sec. 5;
Banking Laws, 1930, sec. 501, p. 273.)
Trust estate and property specifically transferred to and vested in
consolidated corporation; obligations, duties and liabilities assumed;
substitution of trustees.
Whenever a State bank exercising trust powers, or a trust company, merges or consolidates with another such bank or trust company
"all the estate and property, real and personal, held by either of such
merging corporations in any trust or fiduciary capacity shall be deemed
and taken to be transferred to and vested in the consolidated corporation
without any further act or deed or any order or decree of any court or
other tribunal, and the consolidated corporation shall have and hold
the same as fully as the same was possessed and held by the constituent
corporations from which it was, by operation of the provisions of this
act, transferred; and said consolidated corporation shall succeed to all the
relations, obligations, and liabilities, and shall executc and perform all
X-S931
- 156 (Pennsylvania - cont'd.)
the trusts and duties devolving upon it in the same manner as though it
had itself assumed the relation or trust".
(Act of May 9, 1923, P. L.
174, sec. 1; Banking Laws, 1930, sec. 502, p. 274.)
If within thirty
days after notice to any person or corporation interested in any trust
involved in the consolidation, such person or corporation files a written
objection with the consolidated corporation and applies to the court
having jurisdiction of the trust estate for the appointment of a substituted trustee or other fiduciary, such court may appoint another
trustee or fiduciary and may "order said consolidated corporation forthwith to file an account of such trust estate and to pay over and transfer the assets
X-6931
£ 5 5
- 157(Pennsylvania - cont1d.)
and property thereof to the substituted trustee or fiduciary so
appointed."
(Act of May 9, 1923, ?. L. 174, sec. 1; Banking Laws, 1930, sec. 503, p.
275.)
Succession of consolidated corporation to appointments of consolidating
corporations.
In all cases where a State "bank or trust company or a national
bank located in Pennsylvania "has been heretofore, or shall hereafter be,
named or appointed executor, guardian, trustee, or to any other fiduciary
capacity, by or in any will, deed or other instrument, such nomination or
appointment shall not be deemed to have lapsed by reason of the merger
or consolidation of such company with another trust company or banking
company, incorporated under any general or special law of this Commonwealth,
or under any law of the United States, and located in this Commonwealth,
where such merged or consolidated company is possessed of fiduciary powers,
but such merged or consolidated company shall be entitled to act in the
same fiduciary capacity under such instrument as the constituent company
could have acted if no
such merger or consolidation had been effected."
(Act of April 26, 1929, P. L. 839, Ho. 365; Banking Laws, 1930, sec. 505,
p. 276.)
Validation of exercise of fiduciary powers by consolidated corporation.
Wherever a State trust company or banking company, possessed of
trust powers, or a national banking company located in Pennsylvania, formed
by a merger or consolidation of two or more trust companies, or State
"banks or national banks, or both, "has heretofore been granted letters
testamentary, or has heretofore assumed any fiduciary relationship, and
X-6931
- 168 -
(Pennsylvania - cont'd.
has heretofore performed any acts pursuant thereto, under the terms
of any instrument naming or appointing one of such constituent companies to any fiduciary capacity, such grant of letters, and all relationships of any fiduciary nature heretofore assumed, and all acts
heretofore performed pursuant thereto by such merged or consolidated
company, shall be taken to be as valid and effectual for all purposes
as if such letters had been granted to, and such relationships had
been assumed and acts performed by, the constituent company."
(Act
of Aoril 26, 1929, P. L. 839, Ho. 365; Banking Laws, 1930, sec. 504,
p. 275.)
Merger of national bank with State bank or trust company; definition of
term "State bank".
The laws of Pennsylvania provide that the term "State Bank" as
X—6931
- 1B9(Pennsylvania - cont'd.)
used in the following provisions, "shall mean a "bank, trust company, or
bank and trust company, organized under the laws of this Commonwealth.n
(Act of April 16, 1929, P. L. 522, sec. 1; Banking Laws, 1930, sec. 506,
p. 277.)
Authority for merger of national "bank with State hank or trust company.
Any national "bank located in the State of Pennsylvania "may be
merged and consolidated with any state hank, under the charter of such
state "bank, on such terms and conditions as may " e lawfully agreed upon
b
" y a majority of the hoard of directors of the national "banking associab
tion and of the state "bank to he merged and consolidated".
(Act of April
16, 1929, P. L. 522, sec. 2; Banking Laws, 1930, sec. 507, p. 278.)
Confirmation of agreement by stockholders; notice Of meeting.
Before the directors' agreement for merger and consolidation
becomes effective, it mast be ratified and confirmed by two-thirds of the
stockholders of each of the merging corporations at a meeting called by the
directors, after publishing notice of the time, place and object of the
meeting for two weeks in certain designated newspapers. A copy of such
notice must also be sent to each shareholder at least two weeks prior to
the day fixed for such meeting.
Where notice of such meeting is waived
in writing by all of the stockholders, the advertisements and personal
notices above provided for are not required.
(Act of April 16, 1929,
P. L. 522, sec. 3; Banking Laws, 1930; sec. 508, p. 278.)
Capital stock of resulting corporation.
"The capital stock of the merged and consolidated state bank
f
r
X-6931
,
- 1.60-
(Pennsylvania ^ cont'd.)
shall not be less than that required for such institutions under the laws
of the Commonwealth."
(Act of April 16, 1999, P. L. 522, sec. 4; Banking
Laws, 1930, sec. 509, p. 379.)
Compliance with laws of United States; approval of merger agreement by
Secretary of Banking*
The merger and consolidation must not be in contravention of the
laws of the United States and does not become effective until the national
bank has fully complied with the laws of the United States relating to
the merger of national banks with State banks or providing for their
liquidation or the shares thereof, "nor until the agreement entered into
by the boards of directors of the institutions so merging and consolidating
and ratified by the shareholders as before provided lias been submitted to
and approved by the Secretary of Banking".
(Act of April 16, 1929, P. L.
522, sec. 5; Banking Laws, 1930, sec. 510, p. 279.)
Dissenting shareholders, rights of.
After the completion of the merger, any shareholder of the
merging corporations "who has not voted for such merger and consolidation"
may give notice within a certain prescribed time that he dissents from the
merger and is then entitled to receive the value of the shares held by him.
Detailed provision is also made for. the appraisal, payment and disposition
of the shares held by such dissenting stockholder.
(Act of April 16, 1929,
P. L. 522, sec. 6; Banking Laws, 1930, sees. 511 and 512, pp. 279 and 280.)
Legal effect of merger.
"All the rights, franchises, and interests of such national
banking association, so merged and consolidated with a state bank, in and
X-6931
-
151
-
(Pennsylvania - cont'd.)
to every species of property, real, personal and mixed, and choses in
action thereto belonging, shall " e deemed to " e transferred to and vested
b
b
in such state "bank into which it was merged and consolidated, without any
deed or other transfer; and the said merged and consolidated state hank
shall hold and enjoy the same, and all rights or property, franchises and
interests, including the right of succession as trustee, executor or in
any tother fiduciary capacity, if qualified by its charter under the laws
of this Commonwealth, in the same manner and to the same extent as was
held and enjoyed " y such national "banking association".
b
(Act of April
16, 1929, P.I). 522, see. 7; Banking Laws, 1930, sec. 513, p. 280-)
5
Salo, assignment, ctc., of franchises and property " y one trust company
b
to another.
The laws of this State also contain what is known as the "Short
Merger Act".
This act makes it lawful, among other things, for one trust
company to sell, assign, dispose of and convey its franchises and property
to another trust company, the pertinent provisions providing as follows:
"Any corporation created under the provisions of this
act (the creation of "banks not being provided for thereunder),
and any corporation of the classes named in the second section
hereof, (trust companies, i. e., title insurance companies
which have accepted the provisions of subsequent supplementary
acts giving them trust powers), that is now in existence by
virtue of any law of this Commonwealth, may reduce its capital
stock or alter and change the par value of the shares thereof,
X-6931
&6G
- 162-
.(Pennsylvania - cont'd.)
" y a vote of the stockholders taken in the manner and under
b
the regulations prescribed in the eighteenth, nineteenth,
twentieth, twenty-first and twenty-second sections of this
act; and it shall be lawful for any corporation in the same
manner to sell, assign, dispose of and convey to any corporation created under or accepting the provisions of this
act, its franchises, and all its property, real, personal
and mixed, and thereafter such corporation shall cease to
exist, and the said property and franchises not inconsistent
with this act, shall thereafter he vested in the corporation
so purchasing as aforesaid: * * *"(Act of April 29, 1874, P.L.
73, sec. 23, as amended by Act of April 17, 1876, P. L. 30,
sec. 5, and Act of June 2, 1915, P.L. 724, No. 333; Banking
Laws, 1930, sec. 272, p. 153.)
RHODE ISLAND.
Sale, lease or exchange of assets; no provisions covering consolidation
or merger.
The laws of Bhode Island do not contain any provisions having specif-?
ic reference to the consolidation or merger of' banks or trust
companies.
The laws do provide that "Every bank, savings bank, and trust company * * *
shall have all the powers, rights, and privileges, and be subject to all
the duties, restrictions and liabilities, set forth in chapter two hundred
and forty-eight so far only as is not repugnant to or inconsistent with
the provisions of this title."
(General Laws of 1923, ch. 271, sec. 1.);
and chapter 248, (Section 55), as amended by P.L. 1927, ch. 1008, empowers
a corporation to sell, lease or exchange all or substantially all of its
assets and property, including good will "upon such terms and conditions as
X-6931 ;
£ 0 1
* 163 (Rhode Island - cont'd.)
it deems expedient" if the holders of two-thirds of each class of its
capital stock outstanding vote therefor, unless a higher proportion of
affirmative votes is required " y tho articles of association.
b
Section
56 of the same chapter outlines the procedure as to dissenting stockholders in such a case.
SOUTH CAROLINA..
Consolidation of State "banks and trust companies with national "banks and
other State "banks and trust companies.
With specific reference to "banks and trust companies, the State
of South Carolina, in an act approved April 7, 1930, provides that any
State "bank or trust company "moy " e merged. or consolidated with any national
b
"banking association or associations under the charter of such national "banking association or under a new charter issued as may " e lawfully agreed
b
upon," or such "bank or trust company "may " e merged with or consolidated"
b
X-6951
w j4 g(South Carolina - cont'd.)
with any other State "banlc or trust company, "provided that the laws of
South Carolina governing the consolidation of State "banks and trust
companies shall first be complied with as to the consolidation of such
"banks or trust companies."
(Act approved April 7, 1930, sec. 1.)
The
laws further provide that "All acts or parts of acts in conflict with
this act are hereby repealed."
(Act approved April 7, 1950, sec. 2.)
General legal effect of consolidation of "banks and trust companies under
provisions of act approved April 7, 1930.
When a consolidation under the provisions of the act approved
April 7, 1930, "shall have been effected and approved as provided by law,
all the right, franchises and interests of such bank or trust company so
consolidated with the national banking association or national banking
associations, or state banlc or trust company, in and to every species
of property, real, personal, and mixed, and choses in action thereto
belonging, shall be deemed to be transferred to and vested in such national
banking association, or in such state banlc or trust company into which it
is consolidated, without any deed or other transfer, and the said consolidated national banking association or consolidated state bank or trust
company shall hold and enjoy the same and all rights of property, franchises, and interests, or in any other fiduciary capacity in the same
manner, and to the same extent, as was held and enjoyed by such bank or
trust company so consolidated.
In case of such consolidation the rights
of creditors of such bank or trust company shall be preserved unimpaired
and all lawful debts and liabilities of such bank or trust company shall
be deemed to have been assumed by such consolidated national banking
X-6931
- 161} (South Carolina - cont'd.)
association and such consolidated state "bank or trust company.n
(Act
approved April 7, 1930, sec. 1.)
Legal effect of merger or consolidation of trust companies on trust
powers and property.
"When any trust company organized under the laws of this State
shall have been appointed executor of the last will of any deceased
person, or administrator, with or without the will annexed, of the estate of any deceased person, or as guardian, trustee, receiver, assignee,
or in any other fiduciary capacity, if such trust company has heretofore
merged or consolidated with or shall hereafter merge or consolidate with
any other trust company organized under the laws of this State, then, at
the option of said first-mentioned company and upon the filing "by it with
the court having jurisdiction of the estate being administered, of a
certificate of such merger or consolidation, together with a statement
that such other trust company is to thereafter administer the estate held
by it and an acceptance by said latter trust company of the trust to be
administered, such certificate, statement and acceptance to be executed by
the president or vice-president of said respective companies and to have
affixed thereto the corporate seals of said respective companies, attested
by the secretary thereof, and further upon the approval of said court, all
the rights, privileges, title and interest in and to all property of
whatever kind, whether real, personal or mixed, and things in action, belonging to said trust estate, and every right, privilege or asset of conceivable value or benefit then existing which would inure to said estate
under and unmerged or unconsolidated existence of said first mentioned
company, shall be fully and finally and without right or reversion trans
X-6931
-166(South Carolina - cont'd.)
ferred to and vested in the corporation into which it shall have "been
merged or with which it shall have been consolidated, without further
act or deed, and such last-mentioned corporation shall have and hold the
same in its own right as fully as the same was possessed and held toy the
corporation from which it was, " y operation of the provisions of this
b
section, transferred, and said corporation shall succeed to all the
relations, obligations and liabilities, and shall execute and perform all
the trusts and obligations devolving upon it, in the same manner as though
it had itself assumed the relation or trust."
(Code of 1922, ch. XI, sec.
10(6); Banking Law Pamphlet, 1928, sec. 10(6), p. 118.)
Certain provisions of act covering consolidation of corporations in
general also apparently applicable,
Other than the provisions set forth above, the laws of South
Carolina contain no further provisions specifically covering the merger
of consolidation of banks and trust companies.
These laws, however, con-
tain rather elaborate provisions covering the consolidation of corporations
in general (Act approved April 14, 1925); and because the above digested
provisions of the act approved April 7, 1930, require consolidating banks
and trust companies to comply with the "laws of South Carolina governing
the consolidation of State banks and trust companies", and, particularly,
because none of the provisions above digested prescribes the machinery
for effecting a consolidation or covers the matter of a consolidation
in as elaborate a manner as the act approved April 14, 1925, it would
seem that the provisions of the latter act are the "laws of South Carolina"
referred to in the act approved April 7, 1930, and that, therefore, such
X-6931
(South Carolina - cont'd.)
provisions are also applicable, wherever they may be made so, to the
consolidation of "banks and trust companies.
The act approved April 14, 1925, except in some few irrelevant
cases, specifically authorizes any two or more corporations to "consolidate into a single corporation which may he either one of said consolidated
corporations or a new corporation."
(Section 1.)
This provision and
other provisions prescribing in detail the procedure for effecting a
consolidation and defining the powers, duties, rights and liabilities of
the consolidated corporation are digested below.
Agreement for consolidation of corporations in general.
All or a majority of the directors of the corporations desiring
to consolidate "may enter into an agreement signed by them under the
corporate seals of the respective corporations, prescribing the terms
and conditions of consolidation, the mode of carrying the same into effect
and the manner and basis of converting the shares of each of the old
corporations into the new corporation, with such other details and provisions as are deemed necessary or desirable."
(Act approved April 14, 1925,
Ho. 169, sec. 1.)
Agreement must be submitted to stockholders; notice of meeting; approval
or rejection of agreement; certification of agreement to Secretary of
State; recording of; chartor fees.
The consolidation agreement must be submitted to a special
meeting of the stockholders of each of the corporations involved, and advance notice of the time, place and object of such meeting must be given
by publication at least once a week for four consecutive weeks in one or
X-6951
-168-
,*£66
(South Carolina - cont'd.)
more newspapers published, in the county in which each corporation either
has its principal office or conducts its "business. A copy of such notice
must also " e mailed to each stockholder at least twenty days prior to
b
the meeting.
At such meeting, if a majority of the stockholders of each
corporation vote to adopt the agreement, that fact nrust "be certified
under corporate seal on the agreement by the secretary of each corporation.
Such certified agreement mast then be signed under corporate seal by the
president or vice-president and secretary or assistant secretary of each
of the corporations and acknowledged under oath "by such president or vicepresident11 to "be the act, deed, and agreement of each of said corporations,
respectively, and the agreement so certified and acknowledged shall " e
b
filed in the office of the Secretary of State and shall thereupon "be taken
and deemed to be the agreement and act of consolidation of the said corporations
A copy of the agreement and act of consolidation, certified
by the Secretary of State under the seal of his office, must also be recorded
with the Clerk of the Court of the county in which the principal office of the
consolidated corporation is or is to bo established, and with the Clerks
of the Courts of the counties where the original charters of the consolidating corporations have been recorded.
If any of the corporations have
been created by a special act of the General Assembly the agreement must
be recorded in the county where such corporation had its principal office.
Such record, or a certified copy thereof is "evidence of the existence of
the corporation created by the said agreement and of the observance and
performance of all antecedent acts and conditions necessary to the creation
thereof:
Provided, That the Secretary of State shall collect charter fees
as now fixed by law for granting new charters on their having the total
X-6931
(ZO /
^69 "
(South Carolina « cont'd.)
•
capital stock of the consolidated corporation".
(Act approved April 14,
1925, No. 169, sec. 1.)
Legal effect of consolidation under provisions of act approved April 14, 1935.
When the agreement is signed, acknowledged, filed and recorded,
"the separate existence of the constituent corporations shall cease, and the
consolidating corporations shall become a single corporation in accordance
with the said agreement, possessing all the rights, privileges, powers and
franchises, as well of a public as of a private nature, and being subject to
all the restrictions, disabilities and duties of each of such corporations
so consolidated, and all and single, the rights, privileges, powers and
franchises of each of said corporations:
Provided, however, where there is
a right enjoyed by one corporation and a restriction as to the same matter
enjoined on the other or either of the others, the latter shall prevail;
and all property, real, personal and mixed, and all debts due on whatever
act, and all other things, action or belonging to each of such corporations
shall be vested in the consolidated corporation; and all property, rights,
privileges, powers and franchises, and all and every other interest shall
be thereafter as effectually the property of the consolidated corporation
as they were of the several and respective former corporations, and the
title to any real estate, whether by deed or otherwise, under the laws of
this State, vested in either of such corporations, shall not revert or be
in any way impaired by reason of this Act; provided, that all rights of
creditors and all liens upon the property of either of said former corporations shall be preserved
unimpaired, limited in lien to the property af-
fected by such liens at the time of the consolidation, and all debts, liabilities and duties of the respective former corporations shall thenceforth
X-6931
-
170
-
(South. Cayoliaa - cont'd.)
attach to said consolidated corporation, and may he enforced against it to
the same extent as if said debts, liabilities and duties had been incurred
or contracted by it."
(Act approved April 14, 1925, Ho. 169, sec. 2.)
Dissenting stockholders, rights of.
If any stockholder in the consolidating corporation, entitled to
vote, votes against the consolidation, or if any stockholder not entitled to
vote, at or prior to the taking of the vote, objects thereto in writing,
and, within twenty days after the consolidation agreement has been filed
and recorded, demands payment of the stock held by him, the consolidated
corporation "shall within thirty days thereafter pay to him the value of the
stock at the time of the consolidation".
Detailed provision is made for
X-6931
-171(South Carolina - cont'd.)
the appointment of appraisers to appraise the value of the stock in Case
of disagreement as to its value«
Stockholders who do not vote against or
object to the consolidation as set forth above, cease to " e stockholders
b
in the constituent corporations and are deemed to have assented to the
consolidation.
(Act approved April 14, 1925; Ho. 169* sect 3.)
Actions pending,.
rt
Any action or proceeding pending by or against either of the
corporations consolidated may he prosecuted to judgment, as if such consolidation had not taken place or the new corporation may he substituted in
its place."
(Act approved April 14, 1925, No. 169, sec. 4.)
Certain liabilities and rights not affected by consolidation.
The liability of corporations, "or of the stockholders or officers
thereof, or the rights or remedies of the creditors thereof or of persons
doing or transacting business therewith, shall not in any way be impaired
or diminished by the consolidation of two or more such corporations under
the provisions thereof."
(Act approved April 14, 1925, ITo. 169, sec. 5.)
Bond and stock issues by consolidated corpoi-ations.
When two or more corporations are consolidated, the consolidated
corporation? subject to State laws, may issue bonds or other obligations
with or without coupons or interest certificates attached, to an amount
sufficient with its capital stock to provide for all the payments it will
be required to make or obligations it will be required to assume, in order
to effect such consolidation.
To secure the payment of such bonds and
obligations it may mortgage the corporate franchise, rights, privileges
and property.
The consolidated corporation may also issue capital stock
X-6931
£ 7 0
-173(South Carolina - cont'd.)
to such amount as may " e necessary, to the stockholders of such consolib
dated corporation in exchange or payment in whole or in part for the
original shares in the manner and on the terms specified in the agreement
of consolidation.
(Act approved April 14, 1925, No. 169, sec. 6.)
Matters prohibited "by certain sections of laws not validated.
"Ho consolidation or merger under the terms of this Act shall
render valid any matter or thing declared unlawful under any provisions
of Article XIV, Section 3530-3554, Volume 3, Code of Laws of South Carolina,
1922, relating to Trusts, Pools and Monopolies, or any amendment thereof
now effective or hereafter adopted, and no consolidation or merger under
the provisions of this Act shall " e deemed to be lawfully accomplished if
b
in contravention of any provision of Article XIV, Sections 3530-3554, Vol.
3, Code of Laws of South Carolina, 1922, relating to Trusts, Pools and
Monopolies, or any amendment thereof now effective or hereafter adopted,
every provision of which shall remain in full force and effect after the
passage of this Act and shall in no respect be impaired thereby".
(Act
approved April 14, 1925, Ho. 169, sec. 6a.)
SOUTH DAKOTA.
Consolidation of banks.
The laws of South Dakota provide that a State bank "which is in
good faith liquidating its business, may for such purpose consolidate with
some other bank in the same city or town by transferring its resources
and liabilities to such bank with which it is in process of consolidation,
but no consolidation shall be made without due notice in writing of such
X-6931
-173(South..Dakota - cont'd.)
intention, to the superintendent of banks, and not then until a thorough
examination has been made by him and his consent in writing obtained;
provided, that in no case may any bank consolidate for the purpose of
defrauding or delaying any of its creditors."
(Laws of 1909, ch. 222,
art. 2, sec. 24, as amended by Laws of 1915, ch. 102, art. 2, sec. 27;
South Dakota Rev. Code of 1919, sec. 8974; Banking Law Pamphlet, 1927,
sec. 8974, p. 24.)
Consolidation of trust companies.
Any trust company "which is in good faith liquidating its
business for the purpose of consolidating with some other like corporation
may transfer its assets and liabilities to the corporation with
which it
is in the process of consolidation; but no such consolidation of corporations shall be made without the consent of the superintendent of banks,
and not then to delay or defraud any of the creditors of either corporation. "
(Laws of 1911, ch. 255; South Dakota Sev. Code of 1919, sec. 9061;
Banking Law Pamphlet, 1927, see. 9061, p. 70.)
TEHEES SEE.
Definition of word "bank".
The laws of Tennessee provide that the word "bank" as used in
the following provisions, "shall signify, mean, cover and include every
trust company, loan company, mortgage security company, safe deposit
company, receiving money on deposit, and every individual, firm, corporation, association or company doing a banking, loan or discount business
and receiving money on deposit and performing functions of a bank."
:
X-6931
£72
-174(Tennessee - cont'd.)
(Public Acts of 1913, ch, 20, sec. 44; Banking Law Pamphlet, with amendments to and including 1925,. sec, 44, p. 28.)
Consolidation or merger of tanks.
No State "bank "shall have authority or power to * * * consolidate or merge with any other bank, except in pursuance of the provisions
of this (1913 hank) act; * *
(Public Acts of 1913, ch. 20, sec. 23;
Banking Law Pamphlet, with amendments to and including 1923, sec. 23, p.- PI.)
Procedure to merge or consolidate; application, examination, issuance of
certificate "by superintendent of "banks, filing of.
A written application setting out all of the facts of the merger
or consolidation must "be filed with the superintendent of "banks by the
bank desiring to merge or consolidate "and before such * * * merger or
consolidation becomes effective,, the Superintendent of Banks must examine
into the proceedings to * * * the consolidation or merger, and must issue
his certificate in triplicate certifying that the * * * consolidation
or merger has been in pursuance of the requirements of law."
One of the
certificates must be kept on file in the office of the Superintendent, one
must be filed for record in the office of the Register of Deeds, of the
County in which is. located the bank's principal place of business, and one
must be filed with the bank.
The superintendent "shall issue his certifi-
cate, if the requirements of the law have been complied with * * * for
such consolidation or merger, but shall.refuse to issue his certificate
unless the requirements of the law have been complied with; provided,,
however, that the capital stock of no bank shall be decreased below the
minimum amount required by law for the incorporation of banks in this
^|g.te."
(Public Acts of 1913,, ch.. 20, sec. 23; Banking Law Pamphlet, with
X-6931
- 175 (Tennessee — cont'd.)
with amendments to and including 1923,. sec. 25, p. 21.)
TEXAS-
Purchase of assets of another bazk^
The laws of Texas do not contain any provisions having specific
reference to the consolidation or merger of banks or trust companies; "but
they do provide that "Any State "bank or bank and trust company which purchases the assets of any other "bank shall, before the purchase of the
assets of such other hank, increase its capital to such an amount that
the same will have the ratio to the total deposits of tho bank, the assets
of which it has purchased, as defined and required in Article 506".
(Acts
of 1909, • 2nd C. S.;: Banking Law Pamphlet, 1929, • Art. • 513, p. 44.)
UTAH.
Consolidation of banks.
The laws of this state specifically covering banks and trust
companies do not contain any provisions expressly authorizing the consolidation, merger, etc. • of such institutions; but these laws do provide that
,
"corporations to conduct commercial or savings banks or banks having departments for both such classes of business may be formed under the provisions of chapter 1, of title 19,•Compiled Laws of Utah, 1917 (Sections
860-899)* respecting corporations for pecuniary profit, and all the
rights,-privileges, and powers, and all the duties and obligations, of
such corporations and the officers and stockholders thereof shall be as
provided in said chapter, except as in. this chapter otherwise provided;
* * *i"
(Comp* Laws of Utah,,1917,.Title 19, ch..6, as amended, sec.
X-6931
~»17 6 ~
»
(Utah - cont'd.)
979; Banking Law Pamphlet, 1927, sec; 979, p. 6.)
"This chapter" does
not provide "otherwise", so it would seem that "commercial or savings
"banks or "banks having departments for both such classes of "business",
may consolidate under the following provisions.
Consolidation of corporations.
State corporations "of the same kind, engaged in the same
general "business,, in the same vicinity, * * * may consolidate * *
(Laws of 1921,, ch.. 22, p.. 76.)
Stockholders must agree.
The consolidation may be "upon such terms and conditions conformable to the law as shall "be agreed upon" "by a majority of the stockholders of each corporation at a special meeting after notice stating
the time, place and object of such meeting has been published at least
thirty days prior thereto in a newspaper in the county in which each
corporation has its principal place of business.
(Laws of 1921, ch.. 22,
p. 76.)
Consummation of consolidation.
The "consolidation may be effected either by joining two or
more corporations together or by formation of a new corporation under the
laws of this State for the purpose of buying in and talcing over and operating
the properties, rights and franchises of the corporation desiring to consolidate."
sale
And if by purchase, such purchase may be made at a private
or any public judicial sale,
liens".
"or in the enforcement of mortgages or
If the sale is a so-called private one, it must be approved by at
least a majority of the stockholders of the selling companies, unless the
Xr-6931
ul77»
(Utah - cont'd.)
articles of association provide how and " y whose authority it shall " e
b
b
made.
In the latter event • the sale must be in accordance with such
,
provision.
If the consolidation is effected by forming a new corporat-
i o n to purchase, the articles of association of the new corporation
must contain, in addition to the regular contents, a provision that the
corporation is formed for the purpose of purchasing in and taking over
the properties, rights, privileges, and franchises of such corporations
so desiring to consolidate.
Such articles of association must
be filed in the office of the Secretary of State, and upon his filing of
the articles and issuing a certificate of incorporation to the corporation, "the association shall without further act be deemed and held to
have been duly formed and created a corporation with all the powers
specified," that are not inconsistent with the state constitution or
laws.
If the consolidation is effected by joining two or more companies
together, "such consolidation shall be evidenced by a certificate under
the corporate seals of the respective corporations, signed by the president and secretary of each, briefly reciting the act or acts sought to
be accomplished, and describing in a general way, the property sought to
be consolidated, together with the name of the corporation thus formed
by amalgamation or consolidation, with such other provisions as the law
may require to be inserted in the original articles of incorporation, and
such others being conformable to law, as may be deemed necessary to perfect
such consolidation".
This certificate must be filed and recorded in
the same manner as original articles of incorporation, and a copy, certified by the county clerk, must be filed with the secretary of state, "whose
X-6931
-178(Utah - cont'dt)
certificate shall constitute such consolidated corporations, a new corporation". Any consolidated corporation has the right to work, operate,
and maintain the properties acquired, and all the rights, privileges,
franchises and powers named in the new articles of incorporation, including those formerly enjoyed by the original corporations,
(laws of
1921, ch. 22, pp. 76-77.)
Legal effect of consolidation.
"Upon the consummation of such consolidation, all the rights,
privileges, and franchises of each of said consolidating corporations, and
all the property, real and personal, and all subscriptions and debts due
on whatever account, shall be deemed to be transferred to and.vested in
such new corporation without further act or deed; and such consolidation
shall not relieve the consolidating corporations, or either of them, or
the stockholders, from any liabilities, nor shall it extinguish or limit
any franchise or right; but all debts, liabilities, and duties of either
of said corporations shall henceforth attach to such new corporation,
and be enforcible against it to the same extent as if incurred or contracted by it."
(Comp. Laws of Utah, 1917, Title 19, Ch. 6, Sec. 889.)
VERMONT.
Sale, lease or exchange of assets.
The banking laws of this State do not contain any provisions
specifically covering the consolidation or merger of banks; but such laws
do provide that "A savings bank or trust company shall not make a sale,
X-6931
„
f- § e
'w
179 -
(Vermont ~ cont'd.)
lease or exchange of all of its assets pursuant to the provisions of
section four thousand nine hundred and twenty-six, except with the consent of the hank commissioner given on petition and after hearing.
Such
notice of the hearing shall be given as the commissioner directs",
(Gen-
eral Laws, 1917, ch. 225, sec. 5351; Banking Law Pamphlet, 1918, sec.
5351, p. 5.)
Section 4926 above referred to provides that "A corporation
having a capital stock and able to meet its liabilities then matured may,
subject to the rights of creditors, sell, lease or exchange all its assets,
including its franchises, to any other corporation authorized to do business
under the laws of this state and to acquiro such assets, for cash, stock
of other corporations or other property.
Such sale, lease or exchange
shall first be authorized by such vote of the stockholders of both corporations as is provided in their articles of association, or, if provision is
not so made therein, then by the vote, at meetings called upon twenty days'
notice for such purpose, of the holders of two-thirds of the outstanding
stock, of both corporations, or, if the stock is divided into classes, "then
by the vote of the holders of two-thirds of each class of outstanding stock
entitled to vote, or, if the purchasing corporation is organizing and issuing stock for the property to be acquired, thon by the vote, at a mooting
called upon twenty days' notice for such purpose, of all the incorporators
of such corporation.
If stock of another corporation is received in full
or part payment, all of such stock must be disposed of within two years
from the time it was acquired,
Failure to make such disposition shall be
cause for the dissolution of the corporation, under the provisions of
X-6931
* 180 *
(Vermont - cont'd.)
section four thousand nine hundred and forty-four. A corporation having
a capital stock and unable to meet its liabilities then matured may,
subject to the rights of creditors, so sell, lease or exchange all its
assets, including its franchises, " y the vote of the holders, at a meetb
ing called upon twenty days' notice for such purpose, of the holders of
a majority of the stock represented at such meeting and entitled to
vote."
(General Laws, 1917, Ch. 210, sec. 4926, as amended by Public
Acts, 1919, No. 125.)
X-6931
£ 7 9
ioih-
VIRGII7IA.
Merger or consolidation of "banks.
Any State "bank is authorized to merge or consolidate with another State "bank, or national "bank doing "business in Virginia, "upon
compliance with the provisions of sections thirty-eight hundred and
twenty-one, and thirty-eight hundred and twenty-two of the Code of
Virginia relating to mergers or consolidations of corporations, except
that such mergers or consolidations of banks shall be ratified and confirmed by an affirmative vote of the shareholders of each of such banks
owning at least two-thirds of its capital stock outstanding and having
voting power.
The provisions of sections thirty-eight hundred and
twenty-three, thirty-eight hundred and twenty-five, and thirty-eight
hundred and twenty-six of the Code of Virginia shall apply to such merged
or consolidated corporation, except as otherwise provided in this act;
* * * ' (Va. Code of 1930, sec. 4149 (10), p. 1047.)
.»
Legal effect of merger or consolidation.
"In the event of any such merger or consolidation, the merged
or consolidated corporation (whether it be one of said merging or consolidating banks, or a new bank, State or national, formed by means of such
merger or consolidation) shall succeed to, and be vested with, without
further act or deed, all offices of trust or of a fiduciary nature with
which any one or more of the banks, parties to such consolidation.or merger,
were vested immediately prior to the time at which such consolidation or
X-6931 ixa,
9
*
-192(Virginia - cont'd.)
merger "became effective."
(Va. Code of 1930, Sec. 4149(10), p. 1047)
The sections of the laws of Virginia referred to in the provision first above quoted, which "banks proposing to merge or consolidate must comply with, are digested under the following captions.
When merger or consolidation may " e effected.
b
Any State corporation ''may merge or consolidate into a single
corporation with any other corporation organized for the purpose of
carrying, on the same or a similar "business" under any State or Federal
law "which said consolidated corporation shall upon the payment of a
proper charter fee, thereby "become a domestic corporation of this State
and "be subject to its laws, and to the jurisdiction of its courts, and
may " e either one of said merging or consolidating corporations, or a
b
new corporation to " e formed by iL3ans of such merger or consolidation,
b
and by virtue of this charter, ?nd the proceedings had pursuant thereto,
such corporation shall be consolidated and merged, so that all property,
rights, franchises, and privileges by law vested in such corporations so
merged or consolidated shall be transferred to and vested in the corporation into which such consolidation or merger shall be made."
(Va. Code
of 1930, sec. 3821, p. 840.)
Agreement of directors to merge or corsolidc.te.
The board of directors of oach of the corporations proposing to
merge or consolidate may under corporate seal enter into a joint agreement
for the merger or consolidation of such corporation.
The agreement must
prescribe the terms and conditions of the merger or consolidation, the
mode of carrying it into effect, the name of the resulting corporation,
X-6931
-183-
^
(Virginia - cont'd.)
the number, names and residences of its board of directors and principal
officers, the aggregate amount and rate of interest of any of its bonds,
the number and par value of its shares of stock, the manner of converting the stock of its constituents into new stock, and, if a new corporation is created, how and when the directors and principal officers to
succeed those named in the agreement are to be chosen or appointed.
The
agreement may also contain such other provisions as the contracting
board of directors deem necessary or convenient to perfect the merger or
consolidation.
(7a. Code of 1930, sec. 3822
(a), p. 941.)
Submission of agreement to stockholders and State corporation commission
for approval.
The agreement mast " e submitted at a special meeting to the
b
stockholders of each of the corporations involved.
Notice of the time,
place and object of such meeting must be given by publication at least
six times a week for two successive weeks in a certain designated newspaper, and by mailing a copy of such notice at least ten days prior to
such meeting to each stockholder.
If a majority of the votes cast at
each of these meetings be in favor of the agreement, consolidation and
merger, then that fact mist be certified by the president or one of the
vice-presidents of the corporation, and attested by each secretary under
corporate seal.
Such certificates, acknowledged by the president or vice-
president signing them and by the respective secretaries, must be presented
to the State corporation commission, which must ascertain and declare
whether the corporations, by complying with the legal requirements, have
entitled themselves to the merger or consolidation.
sec. 3822(b), p. 941.)
(Va. Code of 1930,
X-6931
£ 8 2
-184r
(Virginia - coat fa.)
Certificate of merger or consolidation, issuance of by State corporation
commission; filing and recordation of; effect of.
If the corporation commission issues a certificate of merger or
consolidation, it and the agreement must 'be certified "by the commission
to the Secretary of State and recorded in the same manner as an original
certificate of incorporation or articles of association.
When so filed
for recordation, "the said merger or consolidation shall "be complete and
the merged or consolidated corporation may proceed to carry out the details of said merger and consolidation according to the terms of the
agreement and to transact and carry on the "business for which' it was
formed; * * *.'*
(7a. Code of 1930, sec. 2822(b), p. 941.)
Dissenting stockholders, rights of.
Detailed provision is made for the appraisal and payment of the
value of stock held by any stockholder who did not vote for the merger or
consolidation and who dissents to such merger or consolidation within a
certain prescribed time.
(7a. Code of 1930, sec. 3822, pp. 941-943.)
Effect of merger or consolidation under general corporation law; rights of
former corporations vest in new corporation; rights and liabilities assumed.
"Upon the perfecting, as aforesaid of the said merger or consolidation, the several corporations parties thereto shall be deemed and taken
as one corporation, upon the terms and conditions and subject to the restrictions sot forth in said agreement, and all and singular the rights,
privileges, and franchises of each of said corporations, parties to the
same, except as restricted by law, and all property, real and personal,
and all debts due on whatever account, as well of stock subscriptions as
X-6931
k,83
-185r
(Virginia - cont'd.)
other things in action, "belonging to each of such corporations, shall he
taken and deemed as transferred to and vested in such new corporation
without further act or deed; and all property, all rights of way, and
all and every other interest shall be as effectually the property of the
new corporation as they were of the former corporations parties to the
said agreement; and the title to real estate, either " y deed or otherwise,
b
under the laws of this State vested in either corporation, shall not he
deemed to revert or "be in any way impaired " y reason of this chapter; "but,
b
the rights of creditors and all liens upon the property of either of said
corporations shall he preserved unimpaired; and the respective corporations shall " e deemed to continue in existence to preserve the same; and
b
all debts, liabilities, and duties of either of said companies shall
thenceforth attach to said new corporation and be enforced against it to
the same extent as if the said debts, liabilities, and duties had been
incurred or contracted by it."
(Va. Code of 1930, sec. 3823, p. 944.)
Suits against new corporation; effect- of merger or consolidation on pending
suits.
Suits can be maintained against the new corporation in any of
the courts of Virginia in the same manner as against any other corporation,
and suits pending by or against any of the constituent corporations can be
prosecuted as if a consolidation had not taken place or the new corporation
may be substituted as a party.
(Va. Code of 1930, sees. 3825 and 3826,
p. 944.)
WASHIITGrTOH.
Transfer of assets for purpose of consolidation.
The laws of Washington provide that "a bank or trust company may
X-6931
-186 r
(Washington - cont'd.)
for the purpose of consolidation or voluntary liquidation transfer its
assets and liabilities to another bank or trust company, by a vote, or
with the written consent of the stockholders of record owning two-thirds
of its capital stock, but only with the written consent of the supervisor
of banking and upon such terms and conditions as he may prescribe."
(laws
of 1923,*p. 312, sec. 12; Hem. 1927 Sup., sec. 3282; Banking Law Pamphlet,
1929, sec. 97, p. 45.)
Certificate of authority and corporate existence, termination of.
When a bank or trust company has transferred all of its assets
and liabilities, or has been liquidated or is no longer engaged in business as a bank or trust company, "the supervisor of banking shall terminate
its certificate of authority, which shall not thereafter be revived or
renewed." 'When any such corporation has had its certificate of authority
revoked, "it shall forthwith collect and distribute its remaining assets,
and when that is done the supervisor of banking shall certify the fact to
the secretary of state, whereupon the corporation shall cease to exist and
the secretary of state shall note that fact upon his records."
(Laws of
1923, p. 312, sec. 12; Rem. 1927, Sup., sec. 3282; Banking Law Pamphlet,
1929, sec. 97, p. 45.)
Report required showing entire net income; taxation of consolidated
corporation.
Every bank or corporation which acquires by merger or by consolidation, the major portion of the assets or franchises of another bank or
corporation in this state, or which merges or consolidates with another bank
or corporation, must in its annual report show its own and the consolidated
X-6931
- 187 (Washington - cont'd.)
entire net income of all such banks or corporations for the preceding
fiscal or calendar year to the extent that all such income has not been
used or included in measuring a tax under this act.
In any event, it
is liable for and must pay all taxes that would have been due and payable
by the bank or corporation whose assets or franchises were acquired or
which was merged or consolidated, had it continued in business.
(Laws of
1929, ch. 151, sec. 20; Banking Law Pamphlet, 1929, sec. 20, p. 135.)
WEST VIRGINIA.
Consolidation or sale of assets.
Any banking institution may at any time with the consent in
writing of the Commissioner of Banking take over the business and assets
and assume the liabilities of another banking institution, all of the terms
or conditions of any such purchase or consolidation to be first approved
by the Commissioner of Banking.
(Code.of West Virginia for 1931, Chapter
31, Article 8, Section 29.)
Legal effect of consolidation or sale.
Upon the completion of any such purchase or consolidation and
by operation of law the purchasing or consolidated banking institution
shall be substituted in the room and stead of each of the participating
institutions in all fiduciary relationships, and all and singular the
titles, properties, offices, appointments, rights, powers, duties,
obligations, and liabilities of each participating institution as trustee,
executor, administrator, guardian, depository, registrar, transfer agent,
or other fiduciary shall be vested in and devolve upon the purchasing or
X-6931
*<-86
- 188 -
(West Virginia - cont'd.)
consolidating institution, and such purchasing or consolidating institution shall he entitled to take, receive, accept, hold, administer,
and discharge any and all grants, gifts, "bequests, devises, and conveyances, trusts, and appointments made by deed, will, agreement,
order of court, or otherwise in the future or in the name of any such
participating institution, whether made, executed, or entered into
before or after such purchase or consolidation, and whether to vest
or become effective before or after such purchase or consolidation
as fully and to the same effect as if the purchase or consolidated
institution had been named in such deed, will, agreement, order, or
other instrument instead of another participating institution.
(Code
of West Virginia for 1931, Chapter 31, Article 8, Section 29).
Bo corporation except consolidating or purchasing corporation .may use
the name of participating corporation.
After a purchase or consolidation no other corporation shall
#
be allowed to take or use the name of any institution participating in
such purchase or consolidation.
(Code of West Virginia for 1931, Chapter
31, Article 8, Section 29).
General laws relating to consolidation of corporations.
A note by the Committee of the Legislature appointed to consider
tho report of the revisers who prepared, the draft for the Code of 1931
indicates that the above quoted provisions of law are supplementary to the
general provisions of law relating to the consolidation of corporations.
Under these general provisions of law any two or more corporations organized
or existing under the laws of West Virginia for the purpose of carrying on
any kind of business may consolidate or merge into a single corporation,
X-6931
£ 8
- 189 (West Virginia - cont'd.)
Thiclx may " e any one of such constituent corporations or a new corporation
b
to " e formed by such consolidation or merger, as shall he specified in
b
the agreement mentioned below.
Proceedings for consolidation.
The directors or a majority of them of such corporation as desire
to consolidate or merge must enter into an agreement signed by them and
under the corporate seals of the separate corporation, prescribing the
terms and conditions of consolidation or merger, the mode of carrying same
into effect, and stating such other facts required or permitted by law to
be sot out in an agreement of incorporation as can be stated in the case
of a consolidation or merger, stated in such altered form as the circumstances of the case may require, as well as the manner of converting the
shares of the constituent corporations into shares of the consolidated
corporation, with such other details as are deemed necessary.
Such agreement shall be submitted to the stockholders of each
constituent corporation at a meeting thereof called separately for the
purpose of taking same into consideration. Due notice of the time, place,
and object of said meeting must be given by publication at least once a
weelc for four successive weeks in one or more newspapers published in the
county wherein each such corporation has its principal office or conducts its
business, and a copy of such notice shall be mailed to the last known postoffice address of each stockholder or such corporation at least twenty
days prior to the date of meeting.
At such meeting the said agreement must be considered and a vote
by ballot in person or by proxy taken for the adoption or rejection thereof,
x 5931
"
•»
288
1 9 0 *•
(West Virginia - cont'd.)
each share entitling the holder thereof to one vote.. If the votes of
stockholders of each of such corporations representing two-thirds of the
total number of shares of its capital stock shall be for the adoption of
such agreement, then that fact must be certified on such agreement by
the secretary of each such corporation under the seal thereof, and the
agreement so adopted and certified shall be signed by the president and
secretary of each of such corporations under the corporate seals thereof
and acknowledged by the president of each such corporation, and the agreement most be filed in the office of the secretary of the state and recorded as provided by law.
When such agreement has been so filed and
recorded such record is evidence of the agreement and act of consolidation
or merger of such corporation and the observance of all acts and conditions
to hav.e been observed and performed precedent to such consolidation or
merger.
(Code of West Virginia for 1931, Chapter 31, Article 1, Section 63.)
Sale of entire assets and franchises.
Every corporation organized and existing under the laws of West
Virginia may at any meeting of its board of directors sell, lease, or exchange all of its property and assets, including its good will and its
corporate franchises, upon such terms and conditions and for such consideraation as its board of directors shall deem expedient and for the best
interest of the corporation when and as authorized by the affirmative vote
of sixty per cent of the stock issued and outstanding having voting power
given at a stockholders1 meeting duly called for that purpose, or when
authorized by the written consent of the holders of sixty per cent of the
voting stock issued and outstanding, unless the certificate of incorpora
X-6931
- 191 (West Virginia - cont'd.)
tion requires the vote or written consent of the holders of a larger pro
portion of the stock issued and outstanding.
1931, Chapter 31, Article 1, Section 64).
(Code of West Virginia for
X-6931 £ 9 0
-193(West Virginia - cont'd.)
Consolidated or purchasing corporation may use name of participating
corporati ons.
The purchasing or consolidated corporation is given the right
to use the name of any of the participating corporations "but no other corporation can take or use the name of any of such participating corporations.
(Laws of 1929, ch. 23, sec. 31.)
Wisconsin.
Consolidation of banks.
The laws of Wisconsin provide that "A hank, which is in good
faith winding up its business, for the purpose of consolidating with some
other bank, may transfer its resources and liabilities to the bank with
which it is in process of consolidation; but no consolidation shall be
made without the consent of the commissioner of banking, and not then to
defeat or defraud any of the creditors in the collection of their debts
against such banks, or either of them."
(Wise. Stats., sec. 221, 23.)
The laws further provide that, with the approval of the commissioner of banking, any two or more banks located in the same county, city,
town or village may consolidate under the charter of any of the consolidating banks.
(Wise. Stats., sec. 221. 25 (1).)
Terms of consolidation;
egreerient of directors; ratification by stockholders.
The consolidation may be on such terms and conditions as may be
agreed upon by a majority of the board of directors of each consolidating
bank and mast be "ratified and confirmed" by two-thirds of the outstanding
stock of each bank at a meeting called by the directors, after sending notice
X-6931, 5-; ,
-193--(Wisconsin - cont'd.)
of the time, place and object of the meeting to each shareholder byregistered mail at least thirty days prior to the meeting.
(Wise. Stats.,
sec. 221.25(1)*)
Capital stock required of consolidated bank.
The capital stock of the consolidated bank "shall not be less
than that required under existing law for the organization of a state
bank in the place in which it is located; * *
"
(Wise. Stats., sec.
221.25 (1).)
Dissenting stockholder, rights of.
Within twenty days after the commissioner of banking has approved the consolidation, any stockholder of the consolidating banks
who has not voted for the consolidation may give notice to the
directors of the consolidated bank that he dissents from the consolida-*
tion whereupon he becomes entitled to receive the value of the shares held
by him.
Provision is made for an appraisal of such shares and for a re-
appraisal in case the value first appraised is not satisfactory.
(Wise.
Stats., see. 221.25(1).)
Iiioruidation not essential; report of assets and liabilities of consolidating .
bonks,
"The bank or banks consolidating with another bank under the provisions of the preceding subsection (Sec. 221.25(1).) shall not be required
to go into liquidation but their assets and liabilities shall be reported
by the bank with which they have consolidated; * * *.n
221.25(2).)
(Wise. Stats., sec.
X-6931
9 X QC>
-194(Wisconsin - cont'd.)
Legal effect of consolidation of "banks.
"All the rights, franchises and interests of said "banks so
consolidated in and to every species of property, personal and mixed,
and choses in action thereto "belonging, shall " e deemed to be transferred
b
to and vested in such "bank into which it is consolidated without any
deed or other transfer, and the said consolidated "bank shall hold and enjoy the same and all rights of property, franchises and interests in the
same manner and to the same extent as was hold and enjoyed "by the bank or
"banks so consolidated therewith."
(Wise. Stats, sec., 221.25(2).)
Consolidation of trust companies.
Any State trust company "may consolidate with any other similar
corporation in the same county, city, town or village in the manner provided for the consolidation of "banks under section 221.25; * *
(Wise.
Stats.| sec. 223.11.)
Legal effect of consolidation of trust companies.
"In the event of such consolidation the consolidated corporation,
" y whatever name it may assume or " e known, shall be a continuation of the
b
b
entity of each and all of the corporations so consolidated for all purposes
whatsoever, including holding and performing any and all trusts and fiduciary relations of whatsoever nature of which the corporations so consolidating, or either or any of them, was fiduciary at the time of such consolidation, and also including its appointment in any fiduciary capacity by
any court or otherwise, and the holding, accepting and performing of any and
all trusts and fiduciary relations whatsoever as to or for which either or
any one of the corporations so consolidating may have been appointed,
nominated or designated by any will or conveyance or otherwise, whether or
. £93
X-6931
(Wisconsin - cont'd.)
not such trust or fiduciary relation shall have come into being or taken
effect at the time of such consolidation."
(Wise. Stats., sec. 223.11.)
F/CMIF5.
Definition of ''State "bank".
"Every hank, "banker or corporation in this state doing a banking
business under the provisions of this Act, shall be known as a state bank;
and any and all reference herein made in this Act to state banks shall
apply to every individual, firm or corporation doing a banking business
under the provisions of this Act".
(Laws of 1925, ch. 15?, sec. 5, as
amended by Laws of 1929, ch. 54, sec. 1.)
Definition of "bank" or "banking; business".
"Any person, firm or corporation (except national banks) having
a place of business within this state where credits are opened by the
deposit or collection of money or currency or negotiable paper subject to
be paid or remitted upon draft, receipt, check, or order, shall be regarded
as a bank or banker, and as doing a banking business under the provisions of
this Act."
(Laws of 1925, ch. 15.7, sec. 10; Banking Law Pamphlet, with
1927 amendments, sec. 10, p. 13.)
The laws also provide "that the term •trust company1 may be used
by a person, firm or corporation when the business transacted is in no sense
a banking business".
(Laws of 1225, ch. 157, sec. 11; Banking Law Pamphlet,
with 1927 amendments, sec. 11, p. 13.)
Transfer of assets and liabilities for purpose of consolidation.
"A state bank which is in good faith winding up its business for
X-6931
-196-
(Wyoming; - cont'd,)
the purpose of consolidating with some other bank may transfer its assets
and liabilities to the "bank with which it is in process of consolidation,
upon receiving written consent of the State Examiner, and not otherwise."
(Laws of 1925, ch. 15 7, sec. 109; Banking Law Pamphlet, with 1927 amendmentse sec. 108, p. 59.)
F E D E R A L
R E S E R V E
B O A R D
WASHINGTON
ADDRESS OFFICIAL CORRESPONDENCE TO
THE FEDERAL RESERVE BOARD
X-S934
July 23, 1931.
SUBJECT:
Code word to cover telegraphic
transactions in Treasury Bills.
Dear Sir:
In connection with telegraphic transactions
in Government securities between Federal reserve
banks, the code word "HOXGABOT" has been designated to cover a new issue of Treasury Bills, dated
July 27, 1931, and maturing October 26, 1931.
This word should be inserted in the Federal
reserve telegraph code book, following the supplemental code word "NOXBRE^IZE"» on page 172.
Very truly yours,
J. C. Hoell,
Assistant Secretary.
TO GOVERNORS OP ALL J. R. BANKS
F E D E R A L
R E S E R V E
B O A R D
WASHINGTON
ADDRESS OFFICIAL CORRESPONDENCE TO
T H E FEDERAL RESERVE BOARD
X-6935
July 28, 1931.
SUBJECT:
Code word to cover telegraphic
transactions in Treasury Bills.
Dear Sir:
In connection with telegraphic transactions in
Government securities between Federal reserve hanks,
the code word "UOXCAGE" has been designated to cover
a new issue of Treasury Bills, dated August 3, 1931,
and maturing Fovomber 2, 1931.
This word should be inserted in the Federal reserve telegraph code book, following the supplemental
code word "KOXCABOT" on page 172.
Very truly yours,
J. C. Moell,
Assistant Secretary.
TO GOVEBKORS OF ALL F. B. B A M S .
F E D E R A L
R E S E R V E
B O A R D
WASHINGTON
ADDRESS OFFICIAL CORRESPONDENCE TO
T H E FEDERAL RESERVE BOARD
X-6937
July 30, 1931.
SUBJECT:
Changes in Inter-District Tine Schedule.
Dear Sir;
Upon agreement "between the Federal reserve
banks affected, the Federal Reserve Board has approved the following changes in the inter-district
time schedule:
From
From
From
From
Richmond
Richmond
Richmond
Baltimore
To
To
To
To
Portland.
Seattle
Spokane
Omaha
From
From
From
From
5
5
5
3
days
days
days
days
to
to
to
to
Very truly yours,
J. C. Soell,
Assistant Secretary.
TO GOVERNORS OF ALL F. R. BANKS.
4
4
4
2
days
days
days
days
F E D E R A L
R E S E R V E
B O A R D
WASHINGTON
ADDRESS OFFICIAL CORRESPONDENCE TO
THE FEDERAL RESERVE BOARD
X-6938
August 5, 1931.
SUBJECT:
Code Word to covet Telegraphic
Transactions in Treasury Bills.
Dear Sir:
In connection with telegraphic transactions in
Government securities between Federal reserve tanks,
the code word "KOXCALLER" has "been designated to cover
a new issue of Treasury Bills, dated August 10, 1931,
and maturing November 9, 1931.
This word should be inserted in tho Federal reserve tolograph code book, following tho supplemental
code word "MOXCAGB", on Pago 172.
Very truly yours,
J. C. Nooil,
Assistant Secretary
TO GOVERNORS OF ALL, J.R.BANKS
F E D E R A L
R E S E R V E
B O A R D
WASHINGTON
ADDRESS OFFICIAL. CORRESPONDENCE T O
T H E FEDERAL. RESERVE BOARD
X-6940
August 11, 1931.
SUBJECT:
Topics for Joint Conference of Governors and
Federal Reserve Agents.
Dear Sir:
There is enclosed herewith copy of a letter the
Board is today addressing to the Chairmen of the Governors'
and Federal Reserve Agents' Conferences, suggesting two topics
for consideration at the next joint conference of the Governors
and Federal Reserve Agents.
Although the date for such conference has not yet
"been fixed, this matter is called to your attention at this time
for your information. In connection with the second topic outlined in the attached letter, it will be helpful if each Federal
reserve bank will advise the Federal Reserve Board, in advance
of such conference, of its total expense in handling securities
of member banks for safekeeping during the year 1930, or as close
an estimate of such expense as can be made.
By order of the Federal Reserve Board.
Very truly yours,
E. M. McClelland,
Assistant Secretary.
Enclosure.
TO GOVERNORS AUD AGENTS OF ALL F. R. BANKS.
C O P Y
X-6940-a
August 11, 1931.
Dear Mr.
The Federal Reserve Board's attention has been called
to the fact that one of the Federal reserve banks recently made a delivery, on forged orders, of securities held in safekeeping for a raemrber bank. The Federal reserve agent at the Federal reserve bank involved has suggested that additional safeguards should be developed in
order to prevent the possibility of losses occurring in this manner.
Under these circumstances the Board has voted to request the Governors
of the Federal reserve banks and the Federal reserve agents to consider
the following topics at their next joint conference:
(1) "The advisability of securing from all member banks
depositing securities with Federal reserve banks for safekeeping an agreement whereby the depositing bank would agree to
approve and accept the insurance policy carried by the Federal reserve bank, and all liability other than that covered in
the Federal reserve bank's policy would be assumed by the depositing bank, which, if it desired, could itself carry insurance against such additional liability."
(2) "Cast of the safekeeping function at Federal reserve banks."
You are accordingly requested to have these topics placed
on the program of the next Federal Reserve Agents' Conference. The
Chairman of the Governors' Conferonce is also being requested to have
such topics placed on the program of that Conference.
By Order of the Federal Reserve Board.
Yours very truly,
E. M. McClelland,
Assistant Secretary.
5-6941
STATI3U2TT 0T 3TJRUA.U 0" ^ ( W I F C - MJ , rCUTTING
Federal Reserve rotes, Series 1928
July 1 to 51, 1931.
5
Boston
: ew York
Philadelphia
Olevelnud
n
ichmond
Atlanta
Chicaro
°t- Louis
Minneapolis
K'nsps City
"alias
^an "r^ncisco
' 10..
: 20
' 50
35,000 100,000
2,000
199,000 180,000 66,000
91,000 45,000 13,000 46,000
67,000 42,000 40,000
64,000 31,000 37,000
21,000 10,000
10,000
200,000
1,000
25,000 10,000 10,000
1,00)
1,000 1,000
31,000
51,000 15,000 10,000
200,000 90,000 J:0,000 lo,oon
—
1^014,000 531,010 2i7_,000 69,000
1 ,351,500 sheets, 0
i
T
92.50 per I
f 100
—
'500 (1000
200
-
14,000
-
-
-
-
7,000
-
1,000
-
5,000
27,000
-
500
-
750
-
150
50
400
Total
Sheets
i 5000 :10000
•
100
137,200
445,000
207,100
149,000
152,000
56,700
200,000
2,200
45,000
51,300
5.,100
5:5,700
—
-
-
-
-
-
-
-
-
-
-
500
50
-
-
-
"50
50
-
-
-
-
1,850 1,550
-
-
150
50
500
-
-
-
-
_50
.
_50
Amount
17,516.00
41,162.50
19,156.75
15,732.50
12,210.00
5,244.75
18,500.00
205.50
4,lb2.50
5,265.25
5,193.25
51,052.25
1 ,351,500 171,245.25
171,245.25
V>
F E D E R A L
R E S E R V E
B O A R D
WASHINGTON
ADDRESS OFFICIAL CORRESPONDENCE TO
THE FEDERAL RESERVE BOARD
X-6942.
August 12, 1931.
SUBJECT:
Code Word to cover Telegraphic
Transactions in Treasury Billii
Dear Sir:
In connection with telegraphic transactions in
Government securities between Federal reserve "banks,
the code word "NOXCAMP" has been designated to cover a
new issue of Treasury Bills, dated August 17, 1931,. and
maturing November 16, 1931.
This word should be inserted in the Federal reserve telegraph code book, following the supplemental
code word "HDXCALLBR", on Page 172,
Very truly yours,.
J. C. Noell,.
Assistant Secretary
TO GOVERNORS Of ALL FJLBAJHS
2
Copy
X-6944
August 13, 1931.
Mr. John S. Walden, Chairman,
Standing Committee on Collections,
Federal Reserve Bank of Richmond,
Richmond, Virginia.
Dear Mr. Walden:
I have "been so overwhelmed with the pressure of urgent
official "business that last night was the first opportunity I had
had to read the tentative draft of the Report of the Standing Committee on Collections on the subject of "Cashing" Government checks and
warrants, which was enclosed in your letter of July 22, 1931; and this
morning I received your letter of August 12, 1931, enclosing a copy of the
final report of the Committee.
I have not yet had an opportunity to study this report carefully "but, upon reading it hastily, I certainly am not prepared to approve it. On the contrary, I disagree vory strongly with some of the
views expressed in the report; I feel that the Committee has not completely covered the entire subject; and I regret very much that the report makes
no mention of the question of the treasurer* s right to stop payment on such
checks after the Federal reserve hanks have given immediate credit for
them, merely in ordor to give a special privilege to the payee of the
chock who has deposited it in a "bank about to fail.
The reasons for my disagreement with certain portions of
the Committee*s report are indicated in my memorandum of April 17, 1931,
and I have not time to state those reasons at length in this letter. .
I disagree znoet strongly with the views expressed by the
Committee in the paragraph commencing on page 4 of the report, and especially in the view that, "in fairness to the Treasury Department," its action
in refusing to define the status of the Federal reserve banks in cashing
Government chocks is only what might bo expected of anyone in the same
position and under the same circumstances.
I assume that the Attorney General's opinion referred to is
the one resulting from the effort of the Treasury Department to fix upon
the Federal reserve banks the loss resulting from the redemption of
several million dollars' worth of counterfeit war savings stamps, which
wore such offoctivo counterfeits that the Treasury Department itself
did not discover the fraud until many months after they had boon finally paid by the Treasury Department. In that opinion, the Attorney
X-6944-
2
l
3
"
General hold that tho Federal reserve "banks wero doting only as agents
and could not bo hold liable for tho loss in the absonco of actual
nogligonco on their part. It sooms to me that that was a fair and just
opinion and thAt, in fairness to tho Federal rosorvo banks tho Treasury
Department should cloarly define tho status of tho Federal rosorvo banks
in handling chocks and warrants as it did in tho circular covering tho
collections of war savings stamps. This is simple justice, and I cannot
think that any honest person, much loss the Treasury Department of tho
United States, could reasonably rofuso to dofino precisely tho status of
tho Federal reserve bank in handling chocks and warrants when they are
compelled to do so under tho law, and When the capacity in which they act
has such an important bearing -upon what their rights and liabilities are
in performing this froo service for the Government,
I fool so strongly on this subject that I cannot concur in tho
Committee1s view that "thoro is little hopo that this can bo accomplished."
On tho contrary, I boliovo that tho officials of the Treasury Department
are fair enough to clarify this subject whenever a determined effort is
made to havo thorn do so and whenever tho matter is presented to thorn clearly and vigorously and not in a half-hearted, "defeatist" spirit.
Tho Committee sooms to lay much stress upon tho fact that
Federal rosorvo banks are not required to guarantee prior endorsements when
thoy forward Government chocks to tho Treasurer of tho United States for
final payment. I fool, however, that this is of little importance when
tho Federal rosorvo banks advance cash or give immediate credit on such
chocks, and the Treasury reserves tho right to rofuso to pay them and requires the Federal rosorvo banks to cash thorn only for "responsible" banks
or bankers.
If it wore cloarly understood between all parties concerned
that, in cashing Government chocks and warrants tho Federal reserve banks
are acting solely as agents of tho banks from which such chocks are received, I think many of tho legal difficulties could bo eliminated. This,
however, would require amendments to tho Treasury circular eliminating all
indication that Federal rosorvo banks act either as depositaries or as
fiscal agents for tho Treasury, and in my opinion, should bo accompanied
by discontinuance of tho prosont practice of giving immediate credit for
such chocks.
On tho whole, I think tho Commit too has made some valuable
suggestions based on practical considerations; but I do not believe
that this matter can bo finally disposed of in a satisfactory manner until it has boon considered by a Conference of tho Counsel of all of tho
Federal reserve banks hold after advance notice sufficient to give tho
Counsel an opportunity to study this subject carefully.
I know tho Committoo has dono a lot of hard, conscientious
work on this subject and I rogrot exceedingly that I an unable to agree
with its views,
X-6944
- 3 ~
I bolicvo that the difficulty is that this subject involves both
legal questions and practical questions and that the legal and practical
aspects of the problem cannot bo considered separately but oust " e conb
sidered togothor. I feci that the Committoo has failed to appreciate
sono of the legal dangers and difficulties; and X an sure that, if this
matter had boon considered alono by the Counsel to the Federal reserve
banks, they would have failed to appreciate sono of the practical difficulties.
It was unfortunate that the natter was not referred jointly to
the Standing Committoo on Collections and to tho Conference of Counsel«
If it is referred to the Conference of Counsel, I certainly shall invito you and tho members of your Committee to attend tho Conference.
road
it.
will
them
I no to your statement that Counsel for throe of tho banks have
tho Committee's report and expressed favorable opinions regarding
I am confident, however, that Counsel for several of the other banks
not bo satisfied with it, in V^pEu-sf tho statements I have heard
mako on this subject in tho past.
I have been working night and day all summer in order to dispose of a number of very important and urgent matters; and I am planning
to go away for a little rest on Saturday, August 15, returning about
September 1.
With kindest personal regards and all best wishes, I am
Cordially yours,
W
sad
(Signed) Walter Wyatt,
General Counsel.
S O G
F E D E R A L
R E S E R V E
B O A R D
WASHINGTON
ADDRESS OFFICIAL CORRESPONDENCE TO
THE FEDERAL RESERVE BOARD
X-6945
August 15, 1931.
SUBJECT:
Holidays During September, 1931.
Dear SirOn Monday, September 7th, Labor Day, there will be
neither Gold Fund nor Federal Reserve STote clearing, and
the hooks of the Board will be closed.
In addition to the Labor Day holiday, the following
Banks and Branches will observe holidays during the month
of September:
Wednesday,
September
Saturday,
"
9, San Francisco, (Admission
Los Angeles
(
Day
12, Baltimore
Defenders'
Day
Therefore, on the dates indicated the offices affected
will not participate in either of the clearings. Please include your credits for the Banks affected on each of the
holidays with your credits for the following business day,
and make no shipment of Federal reserve notes for account
of the Federal Reserve Bank of San Francisco on Wednesday,
September 9th.
Please notify Branches.
Very truly yours,
1. M. McClelland,
Assistant Secretary.
TO GOVERNORS OF ALL F. R. BANKS.
F E D E R A L
R E S E R V E
B O A R D
WASHINGTON
ADDRESS OFFICIAL CORRESPONDENCE TO
THE FEDERAL RESERVE BOARD
. X-6946
.August 18, 1931.
SUBJECT:
Code ford to cover Telegraphic
Transactions in Treasury Bills,
Dear Sir:
In connection with telegraphic transactions in
Government securities between federal Reserve "banks,
the code word "MDXCJSHTBD" has teen designated to cover a
new issue of Treasury Bills, dated August 24, 1931, and
maturing November 23, 1931*
This word should he inserted in the Federal reserve telegraph code "book, following the supplemental
code word "HOXCAMP", on Page 172,
Very truly yours,
E. M, McClelland,
Assistant Secretary.
TO GOVERNORS Of ALL F.R.BAUKS
F E D E R A L
R E S E R V E
B O A R D
WASHINGTON
ADDRESS OFFICIAL CORRESPONDENCE TO
THE FEDERAL RESERVE BOARD
X-6947 (Corrected)
August 24, 1931.
SUBJECT:
Expense, Main Lines, Leased. Wire System,
July, 1931.
Dear Sir:
Enclosed herewith you will find COEHECTED mimeographed statements, X-6947-a and X-6947-b, covering in
detail operations of the main lines, Leased Wire System,
during the month of July, 1931.
Please credit the amount payable by your bank
in the general account, Treasurer, U. S. , on your books,
and issue C/D Form 1, national Banks, for account of
"Salaries and Expenses, Federal Reserve Board, Special
Fund", Leased Wire System, sending duplicate C/D to the
Federal Reserve Board.
Very truly yours,
Fiscal Agent.
Enclosures.
TO GOVERNORS OF ALL F. R. BANKS.
x-6947-a
Corrected "Statement.
REPORT SHOWING. CLASSIFICATION AND NUMBER OF WORDS TRANSMITTED OVER MAIN LINES
OF THE FEDERAL RESERVE LEASED WIRE SYSTEM FOR THE MONTH OF JULY, 1931.
Business
reported
by banks
From
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St, Louis
Minneapolis
"Kansas City
.Dallas
San Francisco
Total
Words sent by
New York chargeable to other
F. R. Banks (1)
27,834
183,608
30,378
77,609
53,730
54,496
94,042
76,549
32,467
77,489
62,006
92,637
962,845
2,733
-
2,047
2,659
3,032
8,119
3,212
2,259
3,256
2,429
11,855
4,194
45,795
F. R. Board business
Net Federal
reserve
bank
business
30,567
183,608
32,425
80,268
56,762
62,615
97,254
78,808
35,723
79,918
73,861
96.831
908,640
Percent of total
bank business (*)
3.36
20.21
3.57
8.83
6.25
6.89
10.70
8.67
3.93
8.80
8.13
10.66
100.00
297,534
Treasury Department business Incoming and Outgoing
Total words transmitted over main lines
(*)
These percentages used in calculating the pro rata share of leased wire expense as shown
on the accompanying statement (X-6947-b).
(l)
Number of words sent by iffv York to other F. R. Banks for their sole benefit charged to
banks indicated in accordance with action taken at Governors' Conference
November 2 - 4 , 1925.
1,206,174
94.278
1,300,452
X-6947-t
Corrected. Statement.
REPORT OF EXPENSE MAIN LIHES
FEDERAL RESERVE LEASED WIRE SYSTEM, JULY, 1931.
Name of bank
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St- Louis
Minneapolis
Kansas City
Dallas
San Francisco
Federal Reserve Board
" To tal
(&)
(#)
(*)
(a)
(b)
Operators'
salaries
Operators 1
overtime
$260.00
1,134.15
225.00
306.66
232.00
270.00
4,027.57 (#)
195.00
212.76
287.50
251.00
380.00
-
$7,781.64
$ *"»
-
-
2.00
1.00
-
-
-
$3-oo
Wire
rental
$
Total
expenses
Pro rata
share of
total
expenses
$260.00
$736.32
4,428.89
1,134.15
225.00
782.34
306.66
1,935.04
230.00 (&)
462.00
1,369.65
—
270.00
1,509.90
2,344.84
4,029.57
196.00
1,899.98
861.24
212.76
1,928.46
287.50
251.00
1,781.64
380.00
2,336.07
—
15,612.62
15,612.62
$15,842.62
$23,627.26
$21,914.37
1.712.39(a)
$21,914.37
-
Credits
$260.00
1,134.15
225.00
306.66
462.00
270.00
4,029.57
196.00
212.76
287.50
251.00
38O.OO
Payable to
Federal
Reserve
Board
$476.32
3,294.74
557.34
1,628.38
907.65
1,239.90
1,684.73 (*)
1,703.9s
648.48
1,640.96
1,530.64
1,956.07
—
$8,014.64
$15,584.46
1,684.73 (b)
$13,599.73
Main line rental, Richmond-Washington.
Includes salaries of Washington operators.
Credit.
Received $1,712.89 from Treasury Department covering business for the month of July, 1931.
Amount reimbursable to Chicago.
03
:'i
*r
c
FEDERAL RESERVE BOARD
WASHINGTON
ADDRESS OFFICIAL CORRESPONDENCE TO
THE FEDERAL RESERVE BOARD
X-6950
August 26, 1931.
SUBJECT;
Code Word tocover Telegraphic Transactions
in Treasury Bills,
Dear Sir:
In connection with telegraphic transactions in
Government securities between Federal reserve bariks,
the code word "NOXCiSDII" has been designated to cover a
new issue of treasury Bills, dated August 31, 1931, and
maturing November 30, 1931.
This word should be inserted in the Federal reserve telegraph code book, following the supplemental
code word "N0XCA£TEDn, on Page 172.
Very truly yours,
E. Mj McClelland,
Assistant Secretary.
TO GOVERNORS OF ALL F. R. BANKS.
FEDERAL RESERVE BOARD
WASHINGTON
ADDRESS OFFICIAL CORRESPONDENCE TO
THE FEDERAL RESERVE BOARD
X-6951
August 26, 1931.
SUBJECT:
Changes in Inter-District Time Schedule.
Dear Sir:
Upon agreement "between the Federal reserve "banks
affected, the Federal Reserve Board has approved the following changes in the inter-district time schedule:
From
i
t
1
1
i
i
i
i
i
t
i
t
I
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i
t
i
i
i
i
i
i
i
i
Dallas
To
f
t
f
t
t
t
i
t
t
t
El Paso
i
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n
i
t
f
t
f
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Houston
t
f
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t
t
San Antonio
t
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t
f
Jacksonville
Helens
San Francisco
New York
Buffalo
Baltimore
Omaha
San Francisco
Cincinnati
Charlotte
San Francisco
Helena
Omaha
From
f
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i
t
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»
f
t
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3 days to 2 days
t
t
t 4 »
t
3
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t
n 3 «
4
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f 3 "
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4
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t
t 3 «
f
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i
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4
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2
Very truly yours,
E. M. McClelland,
Assistant Secretary,
TO GOVERNORS OF ALL F. R. B A M S .
FEDERAL RESERVE BOARD
WASHINGTON
ADDRESS OFFICIAL CORRESPONDENCE TO
THE FEDERAL RESERVE BOARD
X-6953
August 27, 1931..
SUBJECT:
Elections of Class A and B Directors.
Dear Sir:
Under the Board's letter of February 12, 1930,
(X-6507), November 1st is fixed as the regular date for
the opening of the polls in the annual elections of Class
A and B directors of the Federal reserve banks, which
makes it necessary that the polls be closed as of November 15th. However, in view of the fact that these dates
this year fall on Sunday, the Board has decided that the
polls for the 1931 elections should open on November 2nd
closing, as a consequence, on November 16th.
The group classifications 6f member banks which
have governbd in these elections for the last several yedrs
will again be effective.
Very truly yours,
E. M. McClelland,
Assistant Secretary.
TO CHUEMEN OF ALL F. B. BANKS.
:
C O P Y
X-6954.
314
UNITED STATES CIRCUIT COURT OF APPEALS
EIGHTH CIRCUIT
No. 9073
John Hirning as Receiver of the
Farmers National Bank of Brookings
Appellant,
vs
FEDERAL RESERVE BANK OF MINNEAPOLIS
Minnesota, a corporation,
JSjppellee
)
)
)
!
)
Appeal from the
District Court of
the United States
for the District
of Minnesota.
)
)
Mr, J. H. Colman (Mr. John Junell and Messrs. June 11, Oakley,
Driscoll & Fletcher were with him on the brief) for appellant.
Mr. A. Ueland (Mr. Sigurd Ueland was with him on the "brief) for appellee
Before KENYON and BOOTH, Circuit Judges, and
DEWEY, District Judge.
BOOTH, Circuit Judge, delivered the opinion of the Court,
An action at law was brought by appellant, plaintiff below, to recover from appellee the sum of $21,355,82,
being the amount of two remittances made by the Farmers
National Bank of Brookings, South Dakota, to the Federal
Reserve Bank of Minneapolis, on the ground that said remittances constituted unlawful preferences under Section
5242, R.S. (12 USCA Sec, 91.)
X-6954.
A jury was duly waived, and the case was tried to
the court*
At the close of the evidence, plaintiff moved for
judgment in his favor; defendant moved for judgment of
dismissal on the merits.
The latter motion was granted,
and judgment was entered for defendant.
This appeal fol-
lowed.
The relevant statute under which the action was
brought reads as follows:
"All transfers of the notes, bonds, bills of exchange, or other evidences of debt owing to any national
banking association, or of deposits to its credit; all
assignments of mortgages, sureties on real estate, or of
judgments gr decreos in its favor; all deposits of money,
bullion, or other valuable thing for its use, or for the
use of any of its shareholders or creditors; and all payments of money to either, made after the commission of an
act of insolvency, or in contemplation thereof, made with
a view to prevent the application of its assets in the
manner prescribed by this chapter, or with a view to the
preference of one creditor to another, except in payment
of its circulating notes, shall be utterly null and void;
and no attachment, injunction or execution, shall be issued
against such association or its property before final
judgment in any suit, action, or proceeding, in any State,
County or Municipal court." (U.S. Sec. 5242; 12 TJSCA
Sec. 91.)
From the findings, the admissions of the pleadings,
and the undisputed evidence, the following facts appear;
the Federal Reserve Bank of Minneapolis (hereafter called
the Reserve Bank) on November 13, 1926 received from
certain of its member banks for collection checks on the
Farmers National Bank of Brookings, South Dakota (hereafter
called the Brookings Bank), amounting to $22,114.22.
On
the same day, the Reserve Bank, as agent of said member
banks, forwarded said checks to the Brookings Bank for
~3~
collection.
X-6954.
On November 15, 1926, the Reserve Bank, as
agent for certain member banks, received for collection
other checks on said Brookings Bank amounting to $15,020,88
and on the same day forwarded these checks to the Brookings
Bank for collection.
The Reserve Bank, as agent, had
authority to receive cash or drafts for the checks so sent.
On the 16th of November, the Brookings Bank accepted most
of said checks, and on that day sent to the Reserve Bank
two drafts drawn on the Reserve Bank and payable to its
order, one for $22,059.11 covering the checks accepted from
the first list, and one for $14,880.86 covering the checks
accepted from the second list.
The drafts were drawn by Mr
Haroldson, Cashier of the Brookings Bank,
In the usual
course of business, the drafts would have been drawn on
some bank other than the Roservo Bank, but in this instance
they were drawn on the Reserve Bank because the Brookings
Bank realized that it would not reopen the following day
and the drafts would not clear on November 17th if the
drawee banks received prior notice of the closing of the
Brookings Bank.
The checks were charged by the Brookings
Bank against the various drawers who were depositors in
said bank on November 18th,
At the time of sending the two drafts to the Reserve Bank, the Brookings Bank did not have in the Reserve
Bank sufficient reserve account to meet the drafts,
Accord
ingly, and in order to provide funds with which to meet
the drafts, the Brookings Bank, on November 16th, by its
X-6954.
Cashier, Mr. Haroldson, wrote a letter to the Reserve Bank
enclosing collection ifiiS&s belonging to the Brookings Bank
for collection by the Reserve Bank.
These items on their
face amounted to $10,029.07, but the Reserve Bank collected
thereon only $8,355.82.
This letter enclosing the collec-
tion items was not mailed until late in the evening of
November 16th, and until after a resolution had been passed
by the Board of Directors suspending the operation of the
bank. (Resolution in the margin.)
On the afternoon of
the 16th, the Brookings Bank also made up a bundle of
currency amounting to $13,000, and this was sent to the
Reserve Bank on the morning of November 17th.
On the
morning of November 17th, the Reserve Bank was notified by
"Farmers National Bank
Capital and Surplus $65,000.00.
Brookings, So. Dale.
November 16, 1926.
W.
0.
1.
H.
J.
J.
A.
P.
A. Caldwell, President
J. Otternes, Vice Prest.
A. Otternes, Vice Prest.
P. Haroldson, Cashier
Clevan, Asst. Cashier
L. Murphy, Asst. Cashier,
E. Johnson, Asst. Cashier.
M. Story, Asst. Cashier.
Special Meeting of Board of Directqrs.
Due to heavy withdrawals of deposits, a special
meeting of the Board of Directors was held this 16th day
of November to discuss plans of raising funds to meet the
withdrawals, and after a general discussion it was unanimously decided that the Directors were unable to raise sufficient funds for this purpose. Also due to the fact
that it is impossible at this time to estimate the amount
that would likely be withdrawn, owing to general conditions
and rumors that have been carried for some time. Therefore
a motion was made by L. A. Otternes and seconded by H. P.
X-6954.
Haroldson that the following resolution be passed:
Resolved That due to the depletion of our reserve,
the heavy withdrawals of deposits, and our inability to
raise sufficient funds to moet these demands, and considering it to " e for the best interest of the depositors and
b
creditors, it was the unanimous vote of all the Board of
Directors to suspend operation ponding reorganization and
tho Chief National Bank Examiner of Minneapolis, Minn, bo
notified immediately.
w. A. CALDT7ELL
0. J, OTTERHES
A. M. WOLD
C. D. KENDALL
H. F. HAROLDSON
0. G. OYLAR
Li. R. STAVEN
L. A. 0TTER2IES
AEffHJS R. JOHNSON
the Brookings Bank by telephone that the Brookings Bank had
suspended operations.
On the same morning, the Reserve
Bank received the collection items which the Brookings Bank
had mailed on tho 16th.
The Reserve Bank made the collec-
tions and credited the proceeds to tho reserve account of
the Brookings Bank, provisionally on the 17th, and finally
on the 22nd.
On November 18th, the Reserve Bank received
the $13,000 currency sent by the Brookings Bank, and credited that amount to the reserve account of the Brookings
Bank.
These remittances by the Brookings Bank to the
Reserve Bank of the collection items and of the currency
were made by the Brookings Bank in contemplation of insolvency, and after the Brookings Bank was in fact insolvent,
Mr, Haroldson had been in Minneapolis on November 15th and
had had a conference with Mr. Young of the Reserve Bank
3 1 8
-?6—
X-6954|
there, with a view to borrowing money to help the financial
situation of the Brookings Bank.
The condition of the
Brookings Bank was gone into, the depletion of its reserve,
and the decrease in its deposits. Mr. Haroldson testified
that as a result of this conference, he reached the conclusion as managing officer of the Brookings Bank that the
only thing to do was to closo tho "bank, and that he returned
homo, reaching Brookings on tho morning of November 16th,
and took steps to close the bank; that one of the steps taken
was to call the meeting of the Board of Directors; that the
cash letter with the collection items and the $13,000 currency
were sent after ho had stated to the Board of Directors the
condition, after the resolution above mentioned was passed, and
in tho execution of his plan of closing tho bank.
The Bank Examiner took possession of tho bonk on
November 18th, and a Receiver was appointed Docomber 3rd.
Tho Ho servo Bank, on rocoiving from its momber
banks on November 13th and November 15th the checks on the
Brookings Bank, had credited those checks to the member banks.
On receiving word on November 17th of the failure of the Brookings
Bank, these credits to the member banks were reversed.
On Docember 17, 1926, the Reserve Bank wrote to
the member banks which had sent the checks tin the Brookings
Bank for collection as follows:
~7~
X-6954.
"Federal Reserve,Bank
Chicago, I l l i n d *
Gentlemen:
"Referring to the transit items listed
"below on the Farmers National Bank of Brookings, South
Dakota, received from you November 15, 1926, and charged
back for non-remittance and for no return of the items,
we write to say that we will endeaver to have the item
made chargeable against the reserve account with us of the
Brookings bank. If we succeed, wo will remit to you in
full for your item, but should we fail, tho charging of
tho itoms back to you will havo to stand.n
The Reserve Bank did not enter on its books the
two drafts from the Brookings Bank until January 37, 1927,
as will be noted later.
Following the appointment of the Receiver for the
Brookings Bank, correspondence was had between tho Reserve
Bank and tho Recoiver relative to tho state of tho accounts
botweon the two banks and relative to cortain items not
here involved.
In a letter from the Receiver of tho Brook-
ings Bank dated January 3, 1926, the following appears:
"Federal Reserve Bank,
Minneapolis, Minn.
Gentlemen:
"I am enclosing copy of letter received
today from the Comptroller of Currency regarding the account of the Farmers National Bank with you.
£ * * * * * * * * * *
"You will also note regarding the unpaid drafts
which is being loft to your wishes in the matter. Personally as Receiver I would not raiso any objection to you
charging tho account with those drafts and believe that it
would simplify matters if you would do so."
The letter referred to in the Receiver's letter,
was from J. B. Fouts, Assistant Supervising Receiver, and
sofar as here material, read as follows:
X-6954,
"AS to the un$teil| drafts held by the reserve "bank
which represent aa atteteptitt remittance by the Brookings
"bank to the reserve bank of the proceeds of the cash collection letters, you are advised that if the reserve bank
desires and elects to assert ownership of the items involved, it has the right to do so, and if it takes this
position it is believed that you cannot prevent it from
charging the unpaid drafts to the account of your trust."
In answer to the Receiver's lotter, counsel for
the Reserve Bank wrote as follows:
"January 17, 1927
"1. C. Kranhold, Receiver
Farmers National Bank
Brookings, So. Dak.
Dear Sir:
"This bank has directed me to write you
in answer to your letter of the 3rd inst. accompanied by
copy of letter to you of December 29th from the Assistant
Supervising Receiver, Division of Insolvent National Banks.
"Acting upon the statements in your
letter and in that of Mr. Pouts, the assistant supervising
receive , the Inderal Reserve Bank has charged up against
the reserve account of the Farmers National Bank of Brookings the two drafts for respectively $22,114.22 and $15,020.88
described in my letter to you of December 16th.11
On January 27, 1927, the Reserve Bank charged the
two drafts which the Brookings Bank had sent on November
16, 1926, against the reserve account of the latter bank;
and on January 27, 1927, also, the Reserve Bank again credited the member banks with the amounts of the checks on
the Brookings Bank which they had sent in to the Reserve
Bank on November 13th and November 15th.
From the foregoing facts it seems clear: (l) that
the passage of the resolution by the Board of Directors
of the Brookings Bank on the evening of November 16th was
-9-
X-6954.
an act of insolvency; that, therefore the Brookings Bank
was involvent at the time it sent the currency and the
collection items to the Reserve Bank, and that these transfers wero mado in contemplation of insolvonco (Mat. Sac,
Bank v. Butler, 129 U.S. 223; Federal Res. Bank v. Omaha
Bat. Bank 45 Pod. (2) 511 (CCA 8); Ball v. Gorman Bank 187
Fed. 750 (CCA 8); (2) that on ITovember 16th, when the Brookings Bank accepted the checks of the member "banks and sent
to their agent, the Reserve Bank, the two drafts, it "became
a debtor to the member "banks, and they "became its creditors;
(3) the transfers of the currency and the collection items
"by the Brookings Bank were void as within the statute.
$hey were made after an act of Insolvency and in contemplation of insolvency; they were made with a view to prevent the application of the assets of the Brookings Bank
in the manner prescribed "by the statute; they were made
with a view to the preference of one creditor to another.
If the transfers stood, some creditors of the Brookings
Bank would receive a preference over other creditors; the
member "banks which had owned the checks,, wer© the creditors,
and they would receive a preference "by having their claims
paid in full.
It is contended by the appellee that the checks
sent "by the Reserve Bank to the Brookings Bank constituted
a trust fund, and that this trust fund has "been traced into
the currency and collection items sent "by the Brookings
Bank to the Reserve Bank.
,
3 ^ 3
-10-
X-6954.
;
3 2 3
The trial court seems to have adopted this view
as one of the grounds of its decision in ordering judgment
for defendant.
We do not agree with this contention.
It mast "be
remembered that the checks sent to the Brookings Bank by
the Be serve Bank were all of them checks drawn on the
Brookings Bank.
When the Brookings Bank accepted the
checks, this produced no additional funds in its hands.
Its assets were not augmented.
Ho trust fund was created.
If there was no trust fund, there could, of course, be no
tracing of the trust fund into any assets of the Brookings Bank.
The doctrine that a trust fund is created when checks drawn on
bank A by a depositor therein are sent to bank A by bank B for
collection, i.e., for payment has been disapproved by the decisions
in this Circuit; as has also the doctrine that the forwarding bank
or its principal has a general lien on the asse*6; of the drawee bank
for the payment of such checks.
Bo rebeck v. Benedict, etc. Co.,
26 F. (2d) 440; Farmers National Bank v. Pribble, 15 P. (2d) 175;
larabee Flour Mills v. First ITat. Bank, 13 F. (2d) 330; Macy v.
Boedenbeck, 227 F. 346 , 352; Beard v. Independent Dist., 88 F. 375.
But even if it should be conceded that the Brookings Bank
was an agent for the collection of the checks drawn on itself, and
that the checks constituted trust property, yet the owners of the
checks would have no preference over other creditors of the Brookings
Bank unless there was a specific identification of the trust fund and
a clear tracing of the same into the assets of the insolvent Brookings
Bank.
Farmers Mat. Bank v. Pribble, supra, and cases cited; Dickson
-11-
X-6954.
v. First National Bank, 26 F. (2d) 43.1 (C.6.A. 8); Macy v. Roederibeck,
supra.
In the Fribble case, this court, speaking by Judge Walter H.
Sanborn, said (p. 176):
It is indispensable to the maintenance by a cestui que
trust of a claim to preferential payment (by a receiver) out of the
proceeds of the estate of an insolvent that clear proof be made that
the trust property or its proceeds went into a specific fund or into
a specific identified piece of property which came to the hands of
the receiver, and then the claim can be sustained to that fund or
property only, and only to the extent that the trust property or its
proceeds went into it. It is not sufficient to prove that the trust
property or its proceeds went into the general assets of the insolvent estate and increased the amount and value thereof which came to
the hands of the receiver.' * * *
"The doctrine that a cestui que trust, whose property had
helped to swell the general assets of a corporation which was or
became insolvent, has a prior right to or interest in those general
assets, without specific identification and tracing of such claimant's
property, was again expressly repudiated by this court in the case last
cited. The fact that the claimant's property paid or reduced the
indebtedness or liability of the insolvent corporation, so that it
will pay a larger percentage of its debts, justifies no lien on its
assets by or preference in payment to the cestui que trust (l) because
such a reduction of indebtedness does not increase the property or the
value of the property of tho insolvent; and (2) "bocause the property
of the claimant so used to pay a part of the insolvent's general indebtedness or liability never goes into, and therefore cannot be
traced into, the property or assets of the insolvent which subsequently
come into the possession of the receiver*"
That there has been no such tracing here, we think too clear
for argument.
But it is contended that there was a segregation by the Brookings Bank in sending the currency and the collection items to the
Reserve Bank.
The answer is that such segregation was made after the
insolvency of the Brookings Bank and at a. time when it had no authority
to make such a segregation.
The segregation items were not tho proceeds
of the collection of the checks.
Indeed, no such proceeds of collection
V
X-6954
came into the hands of the Brookings $ank<
'
0 2 5
There was simply a "bookkeep-
ing transaction - a shifting of credits.
Another contention of appellee is that the Reserve Bank was not
a creditor of the Brookings Bank, but merely an agent of the member "banks
in forwarding their checks for collection; and hence that the Reserve Bank
cannot "be held liable for a preference.
This view also was taken by the
trial courto
We agree with the contention that the Reserve Bank was not a
creditor of the Brookings Bank but an Agent of the member banks.
We are
of the opinion, however, that the question of liability of the Reserve
Bank in this case is not necessarily disposed of by the finding that it
was not a creditor.
If we are correct in what we have previously said, there was a
preference in favor of some of the creditors of the Brookings Bank growing out of the transfers of the currency and the collection items to the
Reserve Bank.
The Reserve Bank participated in those transfers.
It re-
ceived the property transferred and it, in turn, transferred it to the
creditors of the Brookings Bank.
The action of the Reserve Bank as agent
helped bring about the preference.
What the Reserve Bank did, it did with
full knowledge of the insolvency of the Brookings Bank.
Under these circumstances, we think the Reserve Bank can and
should be held liable to the Receiver of the Brookings Bank.
Ordinarily,
where an agent receives money paid to him for his principal, to which his
principal is not entitled, and without knowledge of the mistake pays the
money to his principal, the agent is not liable.
case.
But that is not this
The Reserve Bank had full knowledge of all the essential facts.
-13-
X-6954.
. 826
Under such circumstance^ it could not rightfully pay ovet to its
principals the money which had come into its hands from the insolvent
Brookings Bank.
In Larkin v. Hapgood, 56 Vt. 597, one, Sawyer, paid certain
moneys to the defendant who was acting as agent for his sister, and the
defendant paid the moneys over to his sister.
The payment to the
defendant was illegal, as it was made when Sawyer was insolvent to the
knowledge of the defendant and was made with the intent to prefer the
defendant's sister, a creditor of Sawyer.
The court held that the
plaintiff, Sawyer's assignee in insolvency, could recover from the
defendant, saying (p. 600)j
"Where an agent received money which the law prohibits him
from taking, it is no defence to a suit brought by the party from whom
it was unlawfully taken, or one who has acquired the right to sue for
the benefit of his estate to show that he has paid the money over to
his principal."
In Ex parte Edwards, 13 Q. B. Div. 747, in which somewhat
similar circumstances existed, it was said (p. 751)j
"* • * if a person is employed as an agent to do a particular thing, and receive a money for his principal in the course of his
agency, still, if the person who employs him has no right to the money,
the agent is not entitled to hand it over to him, and is liable for it
to the true owner if he does so hand it over."
In the case of Vann, as Receiver, v. Federal Reserve Bank of
Richmond, 47 F. (2d) 786, facts existed which, in many respects, were
quite similar to those in the case at bar.
The Federal Reserve Bank
of Richmond had forwarded certain items for collection to a bank at
St. George©
Under facts which clearly showed insolvency and contem-
plation thereof, the St. George bank delivered a draft to the Federal
Reserve Bank for certain of the items.
Before notice of any claim on
the part of the receiver of the St. George Bank, the Federal Reserve
~14~
£-6954. '
5 3 7
$
Bank paid over the amount of such draft to its depositing banks.
The
court held the Federal Reserve Bank liable notwithstanding such payment,
since the payment was made in violation of Sec. 5342, Revised Statutes,
and was void, and the Federal Reserve Bank having participated in an
illegal act, it could not exonerate itself by showing it was acting for
others.
In its opinion the court said (p. 788):
"If the collection of the money by the bank was a violation of
the statute, and I have reached the conclusion that it was, and if the
Reserve Bank knew that the effect of the payment would be to violate
the statute and create a preference though it did not itself profit
thereby, the act was obviously wrong, and the party participating in
such a wrong may not exonerate himself by showing that he was acting
for another,"
See also Elliott v. Swartwout, 10 Pat. 137; United States v. Pinover, 3
P. 305, 309; Wright v. Baton, 7 Wis# 595, followed in Blizzard v. Brown,
139 M ,
737 (Wis.); Motes, Ann. Cas. 1912D 721; 20 A.L.R. 123; see
Mechem on Agency (2nd Ed.) sees. 1440, 1441; 1 Am. & Eng. Encyc. of law
(2nd Ed.) p. 1131; 2 C.J., p. 823, sec. 497.
It is farther contended by appellee that the correspondence above
set out, and the fact that no answer was made by the receiver of the
Brookings Bank to the letter of counsel for the Reserve Bank dated January
17, 1927, estopped the receiver of the Brookings Bank from claiming that
the Reserve Bank could not rightfully charge the drafts which the Brookings
Bank had sent against the reserve account of the Brookings Bank, including
therein the currency and the collection items, and pay over to the member
banks the amounts of the several checks which they had sent to the Reserve
Bank on ITovember 13th and 15th.
Assuming, but without deciding, that the receiver of a national
bank may be subject to an estoppel which would prevent him from carrying
out the purposes of the national Banking Act, yet we think this conten
-15-
X-6954.
tion of estoppel is without merit, for several reasons: first, we think
the letters of the receiver of the Brookings Bank and the letter of
Mr. Pouts do not, by fair construction, refer to the paying over of money
by the Be serve Bank to the member banks, but simply to a disposition of
the drafts; second, the statement in the Pouts letter was conditional on
the Reserve Bank's electing to assert ownership of the checks which it
had sent to the Brookings Bank.
This condition was not fulfilled by the
Reserve Bank, but, on the contrary, the Reserve Bank has at all times
maintained that the member-banks were the owners of the checks and that
it was a mere agent; third, the Reserve Bank apparently did not rely on
failure of the receiver of the Brookings Bank to reply to the letter of
January 17, 1927, because that letter states that the Reserve Bank had
already charged up the two drafts against the reserve account of the
Brookings Bank; fourth, the Reserve Bank is not in a position to set up
an estoppel.
All of the essential facts in the situation were known to
the Reserve Bank as fully as they were to the receiver of the Brookings
Bank or to Mr. Pouts, and probably even more fully.
stances, estoppel would not arise.
Under such circum-
21 C. J., p. 1129, sec. 131, p. 1131,
sec. 132; 11 An. & Eng. Bncyc. of law, p. 434; Pomeroy's Eq. juris. (3rd
Ed.) sec. 810; Bailey v. Lisle Mfg. Co. 238 P. 257 , 268 (CCA 8); Pel lows
v. National Can Co., 257 P. 970, 977, and cases cited; First Bfat. Bank v.
Hoyes, 257 P. 593; Andrew Jergens Co. v. Woodbury, Inc., 273 P. 952, 965,
affirmed 279 P. 1016; Murphy v. Paine, 15 F (2d) 570 , 572; see Sturm v.
Boker, 150 XT. S. 312, 335.
What the Reserve Bank apparently tried to do was to build up the
reserve account of the Brookings Bank after the latter's insolvency; and
329
- 1 6 -
X-6954.
then exercise the right of set-off, not in its own "behalf, but in behalf
of the member "banks, against this reserve account so "built up.
We think
neither of these things could legally "be done.
In view of the facts that this action was brought to recover from
the Reserve Bank on the theory that it was a creditor of the Brookings
Bank, and the evidence has failed to show this; and in view of the facts
disclosed by the present record which, in our opinion, point to liability
on the part of the Reserve Bank, we think the ends of justice will be
best served by reversing the judgment and remanding the cause with instructions to grant a new trial, first granting leave to the parties to
amend their pleadings so as to cover issues suggested in this opinion.
It is so ordered.
Filed August 34, 1931.
F E D E R A L
R E S E R V E
B O A R D
WASHINGTON
ADDRESS OFFICIAL CORRESPONDENCE T O
THE FEDERAL RESERVE BOARD
X-6955
September 2, 1931.
SUBJECT:
Code Words to cover Telegraphic Transactions in
Treasury Bonds and Certificates of Indebtedness.
Dear Sir:
In connection with telegraphic transactions in
Government securities between Federal reserve banks, the
following oode words have been designated:
"NOWCEDAR"
Treasury 3% Bonds of 1951-55, dated
September 15, 1931.
"NOWHINT"
Treasury Certificates of Indebtedness,
Series TS-1932, dated September 15,
1931, due September 15, 1932.
These code words should be inserted in the Federal reserve telegraph codfe book on f'age 172.
Very truly yours,
E. M. McClelland,
Assistant Secretary.,
TO GOVERNORS OF ALL FEDERAL RESERVE BANKS
F E D E R A L
R E S E R V E
381
B O A R D
WASHINGTON
X-6956
ADDRESS OFFICIAL CORRESPONDENCE TO
THE FEDERAL RESERVE BOARD
September 2, 1931.
Dear Sir:
In the fall of 1930 the Assistant Secretary of State advised the
Board that a committee, of which he was a member, had "been appointed
"by the President, in accordance with a resolution of Congress, to prepare recommendations with regard to participation by the United States
Government in the Chicago World Fair in 1933, and stated that if the
Board considered that it should "be represented the committee would
appreciate being furnished with a statement outlining a general plan of
its exhibit. The Board replied that the scope and details of a Federal
Reserve System exhibit would be referred to a committee for study and
report, and requested advice as to the space which would be available
for a display which would probably be in the nature of an exhibition of
charts, illustrating the organization and operation of the Federal Reserve System, and, possibly, if space permitted, a demonstration of
certain labor-saving devices employed by the Federal reserve banks in
listing checks, sorting currency, counting coin, etc., which would be in
line with the theme of the Fair, "A Century of Progress."
The President's committee made its report, and the bill providing for
an appropriation and for the appointment of a commissioner and staff to
supervise the Government exhibit was presented at the last Congress and
defeated, the Board is advised, on a technicality. The bill will again be
presented at the forthcoming session of Congress, but until it is approved
and the commissioner and staff appointed, no definite allotments of space
can be made. It is suggested, however, that the Federal Reserve Board appoint its committee as soon as possible to work out the general character
of the Federal Reserve System exhibit, leaving the size of the exhibit to
be determined when final allocations of space are made.
It is the thought of the Board that the Federal reserve banks should
give some consideration to the matter, and be prepared to submit, for the
use of the committee to be appointed, suggestions as to the general nature
of the exhibit or specific displays which might be interesting and helpful
in developing the theme of the exhibit. The Board vould like also to have
suggestions as to the personnel of the committee to be appointed. It has
had in mind that the committee might consist of a member of its own staff
and representatives of several of the Federal reserve banks, probably
those who in the past have prepared exhibits for conventions of the American
Bankers Association. The Board would be pleased to have both the question
of the personnel of the committee and the general character of the exhibit
discussed at the forthcoming conference of Federal reserve agents.
By order of the Federal Reserve Board.
Very truly yours,
TO ALL F. R. AGENTS
E. M. McClelland,
Assistant Secretary.
F E D E R A L
R E S E R V E
B O A R D
WASHINGTON
X-6958
ADDRESS OFFICIAL CORRESPONDENCE TO
THE FEDERAL RESERVE BOARD
September 3, 1931,
Dear Sir:
The Federal Reserve Board has received replies
from the Chairmen of all Federal reserve tanks to its
letter of June 10th, B-378, requesting certain data with
regard to the group life insurance policies carried by
the banks, and there are attached hereto, for your information, copy of a memorandum dated August 12th from
the Assistant Chief of the Division of Bank Operations,
and copy of a tabulation summarizing the information
furnished by the various Federal reserve banks.
This information was compiled in connection with
the Board's consideration of the opinion expressed by
the last Governors' Conference that the question whether
any further increase in life insurance for officers and
employees of a Federal reserve bank is desirable ig a
matter for the determination of the board of directors
of that bank, subject, if necessary, to the approval of
the Federal Reserve Board.
Before taking amy definite action on the matter,
the Board would be pleased to receive any comments or
suggestions which you may care to make in the light of
the information submitted by the other Federal reserve
banks.
Very truly yours,
B. M. McClelland,
Assistant Secretary.
TO ALL GOVERNORS AND CHAIRMEN
U
U
4.
A—btibti-a
4.
333
FEDERAL RESERVE
BOARD
To:
Federal Reserve Board
Prom:
Mr. Van Fossen
Date:
August 12. 1931
Sub ject;
Group life insurance.
Referring to the Board's request of June 3, I "beg to advise that we
have received from the Federal reserve hanks information in regard to the
cost of their group life insurance during the current and the preceding
years, together with group life insurance policies taken out and riders
attached to group life insurance policies since March 1927 when the Board
received copies of all group life insurance policies then in effect.
Amount of insurance and how determined. From the statement attached
hereto, it will he noted that all Federal reserve hanks, except Boston and
St. Louis, carry group life insurance on officers and employees equal in
amount to one year's salary with a maximum of $5,000 at eight reserve banks,
$7,000 at Richmond and $10,000 at Dallas. The Federal Reserve Bank of
Boston carries insurance ranging from $500 on employees with less than six
months' service to $3,000 on employees with ten years' service or more, and
the Federal Reserve Bank of St. Louis carries insurance equal to two years'
salary with a maximum of $10,000.
Employees of all Federal reserve hanks, except Philadelphia, Richmond
and St. Louis, may take out additional insurance and in the case of Boston,
Minneapolis, Kansas City and San Francisco the Federal reserve bank makes a
contribution toward the expense of such insurance. Aggregate insurance paid
for by the Boston bank amounts to 135.8 per cent of the bank's payroll while
in the case of the St. Louis bank such insurance amounts to slightly over
200 per cent of the bank's payroll. The reason why the insurance carried by
the St. Louis bank is more than twice the amount of its payroll, notwithstanding the limit of two year's salary on any one life, is that the insurance carried on each employee, instead of being the exact amount of two
year's salary, is equal to the ^ext multiple of $500. In the case of the
other ten Federal reserve banks the amount of insurance carried ranges from
about 91 per cent of the bank's payroll to over 96 per cent.
Average cost of insurance. For the twelve banks as a whole the average insurance on which the entire expense is borne by the Federal reserve
banks is $1,806 per employee. The average amount of additional insurance
carried by such employees as have taken advantage of the opportunity to obtain such insurance was $1,941. The annual cost per employee of the insurance
carried by the bank exclusively is $12.21 and the average cost of the additional insurance paid for largely by the employee is $14.28. The average
cost por $1,000 of insurance is $6.76 per annum on insurance paid for by the
bank and $7.35 per annum on insurance paid for by the employee. The net cost
of insurance carried by the banks amounts to about two—thirds of 1 per cent
of the total salary roll.
• Conversion option. All of the group life insurance policies contain
a conversion option permitting an employee on leaving the service of the
Federal reserve bank to convert his insurance into one of the standard forms •
of life insurance other than term insurance. In the case of the Philadelphia
X-6958-a;
£>34
and Kansas City Bankst however, the dOilVersicn option is contingent upon*
the consent of the federal reserve tank.
Double indemnity for accidental death. The policies of the Kansas
City and Dallas Banks contain a provision for doable indemnity in the case
of accidental death, at an additional cost of 75 cents per one thousand
dollars at Kansas City and $1.11 per one thousand dollars at Dallas.
Accidental death or dismemberment. In the St. Louis and Minneapolis
policies there is a provision for double indemnity in the case of accidental
death or dismemberment, at a cost of ten cents per month per thousand dollars. The premium on this insurance at Minneapolis is borne entirely by
the employees.
Permanent total disability before age 60. All of the group life insurance policies include a provision for the payment of the face amount of
the policy in the event of permanent total disability before age 60. The
policies issued by the Equitable Insurance Company also contain a provision
whereby the insurance on employees receiving permanent disability benefits
may be continued at the option of the Federal reserve bank by continuing payment of the regular premium. There is nothing to indicate whether any of the
Federal reserve banks have exercised this option.
Beneficiary. The employees aire given the right to name the beneficiary under all of the policies except those of the Kansas City and Dallas
Banks. The Federal Reserve Bank of Kansas City is specified as the beneficiary in its policy and the Governor of the bank as the beneficiary in the
Dallas policy. The reason assigned by Kansas City and Dallas for this arrangement is that they are thereby enabled to make sure that the benefits
go to the proper persons.
Mode of settlement. The policies generally provide the usual options
as to mode of settlement, with the provision that payment shall be in a lump
sum unless otherwise specified. The option as to the mode of settlement is
given to the Federal reserve bank in the case of insurance paid for exclusively by the Federal reserve bank and to the employee in the case of the
additional insurance, the cost of which is borne at least largely by the
employees.
Waiting period. At five Federal reserve banks insurance on new employees is effective immediately, while the other seven Federal reserve banks
have a waiting period from one to three months.
Time limit of eligibility for additional insurance. An employee who
applies for additional insurance after the expiration of a specified time
limit is required to furnish evidence of insurability. This time limit is
two months in the case of four banks and three months in the case of the
other five banks which make provision for additional insurance.
Percentage of eligibile employees required to participate in contributory plan. The earlier policies providing for additional insurance contained a
provision requiring 75 per cent of the employees, with a minimum of not less
than 50 persons, to participate before the contract became effective. The more
recent ones either do not contain any such provision or merely give the insurance company the option of discontinuing the policy at the end of any policy
year in the event that the number of employees participating falls below these
limits.
C O P Y
GROUP LIFE INSURANCE CARRIED OT FEDERAL RESERVE BANKS
Boston
New York
Insurance company
Conn.General Equitable
Participating nolicyNo
Yes
Insurance plan started:
(a) "Bank's insurance
7-1-19
7-20-16
(b) Employees additional insurance*
7—1—24
1— —26
Insurance per individual:
(a) Bank's insurance
$500-$3000 Years sal.
up to 10 vrs
x
>
yrs
•
service
(b) Employees' additional insurance
do
$5000(3)
in
surance
Travellers Equitable Equitable
Yes
Yes
4-22-19
5-13-30
1-2-17
4-15-25
12-2-18
-
(1)
g-20-17
11-20-27
Chicago
St. Louis
Equitable
Yes
Equitable
Yes
8-16-16
6-30-27
11-27-16
$3,000
3,000
5,000
$5,000
5,000
10,000
Kansas
City
Dallas
San
Francisco
Minnesota
Yes
Aetna
No
5-1-17 4-15-17 12-23-16
7-12-27 9- 3-25
9-24-24
3-1-18
7-1-25
Equitable
Yes
Aetna
No
Years sal. Years sal. Years sal.Years sal. Years sal. 2 years
Years sal. Years sal .Years sal. Years sal
/o\
salary(2)
Men $750$3000(4)
$5000
do
$1000-$5000
do $1000-5000 $1000-5000 $1000-4000
Women $500-
$5,000
3,000
8,000(5)
$1,542,000 $4,116,663
2,846,000
$1,095,882
™
31,000
2,429
751
689
11
$2,075
$1,736
Ratio of bank's insurance to total sal. 135.8#
96.5#
Net animal premium on bank's ins.
$12,170.54 $21,094.00
Net contribution of bank to employees
additional insurance.
449.47
Net annual payment by employees
7,898.56 14,438.03
$1,591
93-9#
$7^660.00
$5,000
5,000
10,000
$7,000
7,000
$5,000
5,000
10,000
$5,000
5,000
10,000
$10,000
10,000
875
803
575
4l4
383
1,435
1,114
$5,000
5,000
10,000
515
294
277
593
532
$1,560
$1,608
$1,657
$1,825
$1,678
$3,337
94.5 #
201.4#
95-1
91.3 4
§6.6#
94.3#
93.9#
$11,804.88 $5,269.36 $6,270.22 $19,137-84 $6,374.07 $5,076.73 $9,473.06
$1,780
-
472.41
$5,000
5,000
10,000
$1,557,900 $897,182 $685,848 $2t30?,46l $1,716,500 $536,572 $995,400
$536,572 $995,400
"
•
~
1,199,250
646,4oo 1,861 ,'500
520,600
827,000
9,843.65
-
5,862.51
15,379.59
Expense borne in nart. by F. R. bank in case of Boston, Minneapolis, Kansas City and San Francisco.
(1) To next multiple of *100, if salary is not a multiple of $100.
(2) To next multiple of $500, if two years' salary is not a multiple of $500.
(3) $2,000 for employees receiving salaries under ^2,000 ner annum.
(4) For officers only.
DIVISION OF BANK OPERATIONS
(5) Not to exceed one year's salary.
AUGUST 12, 1931.
Minneapolis
$2000
(b) Bnployees' additional insurance 1,095,600
Number of lives insured:
(a) Bank's insurance
743
(b) Bnployees' additional ins.
66l
Average amount of bank's ins. tier
individual
Aetna
No
Atlanta
2,323.62 2,386.52
2,738.49
4,962.00
$10,000
5,000
10,000
OOO
SvJ
Cleveland Richmond
888
Maximum insurance per individual:
(a) Bank's insurance
(b) Bnployees' additional insurance
(c) Total
Aggregate insurance carried:
Philadelphia
X-6958-b
$781,730 $L,364,480
r
740,185
951,000
423
423
758
566
$1,848
$1,800
94.0$
94.4#
$4,699.49 $9,886;22
4,454.67
540.00
7,066.64
Q
03
Oi
: 836
X-6969
FEDERAL RESERVE BOARD
STATEMENT FOB THE PRESS
For immediate release.
September 8, 1931.
Mr. Floyd. B. Harrison has been appointed by the Federal
Reserve Board to the position of Assistant to the Governor,
effective September 16, 1931.
FEDERAL RESERVE BOARD
WASHINGTON
ADDRESS OFFICIAL CORRESPONDENCE TO
T H E FEDERAL RESERVE BOARD
X-6960
September 8, 1931
Dear Sir;
This is to advise you that Mr. Floyd E.
Harrison has been appointed by the Federal Reserve Board to the position of Assistant to the
Governor.
Mr. Harrison is resigning as a member of
the Federal Farm Loan Board to accept this appointment and will assume the duties of the office on September 16, 1931.
Very truly yours,
E. M. McClelland,
Assistant Secretary.
To all Chairmen and Governors
FEDERAL RESERVE BOARD
WASHINGTON
ADDRESS OFFICIAL CORRESPONDENCE TO
T H E FEDERAL RESERVE BOARD
X-6961
September 9, 1931.
SUBJECT:
Federal Reserve Note Shipments.
Dear Sir:
Reference is made to the Board's letter of April 6,
1923, X-3684, requesting that in the future requisitions for
Federal reserve notes in denominations of $500 and upwards
include a request for a small amount of lower denominations,
preferably fives or tens, in order to avoid as far as possible
shipments of large amounts in partially filled pouches. This
request, which was made in compliance with a suggestion of
the Post Office authorities and the United States Secret
Service, is being overlooked by some of the Federal reserve
agents who lately have been requisitioning a small number of
packages of large denomination notes without an accompanying
request for a sufficient amount of smaller denominations to
fill out the pouch.
Attention is called to the fact, however, that since
the Board's letter above referred to, arrangements have been
made for the shipment of the five dollar denomination by
•parcel post, and this reduced postal rate is lost when fives
are pouched with denominations carrying the first class rate.
Accordingly, it is suggested that henceforth tens or twenties
be requisitioned to fill out pouches containing small shipments
of the higher denominations.
Very truly yours,
E. M. McClelland,
Assistant Secretary.
TO ALL FEDERAL RESERVE AGENTS,
con
X-6962
FEDERAL RESERVE B A M
OF MINNEAPOLIS
September 5, 1931.
Mr. Walter Wyatt,
General Counsel
Federal Reserve Bo a rd,
Washington. D. C.
My dear Mr. Wyatt;
I have your letter of the 3rd about the decision
of the Circuit Courts of Appeals of August 24th in the
case of Hirning, Receiver, vs. Federal Reserve Bank of
Minneapolis.
Sigurd and I have decided not to make any application for reargument, thinking it would be a mere waste
of time, for the decision covers every point in the case
argued fully on our brief, and the Rules of the Court of
Appeals say —
"The sole purpose of a petition for rehearing is
to call attention to material matters of law or fact
inadvertently overlooked by the court, as shown by
its opinion. Mere reargument of issues determined by
the opinion will be entirely disregarded".
In a petition for rehearing we could not show that the court
had "inadvertently" overlooked any matter of law or fact.
The Federal Reserve Bank has directed us to petition
the Supreme Court for a certiorari. I enclose copies of a
tentative draft of such a petition, so that you may know what
Sigurd and I rely on for having it granted. I also enclose
a copy of the Record in the Court of Appeals, except only
the decision in the case, which I judge you have seen.
The Clerk of the Court of Appeals has 35 copies of
the Record, available to us for use in connection with the
petition for certiorari. For a sufficient number of those
records with the petition for the writ it is only necessary 1
for the Clerk of the Court of Appeals to add in printing to
the records the decision in the case, the cost of which, he
says, will not exceed $60. The printing of the petition and
brief for certiorari will not amount to much, so you see the
cost of getting the matter before the Supreme Court will not
amount to much.
389
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X-6962
Mr. Wyatt — 2
Sept. 5, 1931
I send you copy of our draft for petition, which will
show you our views of the decision of the Court of Appeals.
In the brief we shall prepare in support of the petition, I think we can point out clearly that the case comes within the subd. 5(b) of Rule 38 of the Supreme Court for the issuance of writ of certiorari, subject to the court's judicial discretion.
The Court of Appeals holding—
"That on November 16th when the Brookings bank accepted
the checks of the member banks and sent to their agent,
the Reserve Bank, the two drafts, it became a debtor to
the member banks and they became its creditors".
cannot but seriously affect all the Federal reserve banks, and so
are several of the other holdings specified in our draft of the
petition, as, for instance, that the Federal Reserve Bank of
Minneapolis, doing nothing with the checks and currency sought
to be recovered as a preference, except to give the Brookings
bank available credit for them, until it had the consent of the
receiver and the supervising receiver to charge the drafts against
the reserve account, yet to stand liable as agent for the
owners of the checks because of a wrong on its part in charging
up the drafts and paying over the money coming to the owners of
the checks.
You will also note that the Court of Appeals holds, in
effect, that tha lower court could not have given judgment
against the Federal Reserve Bank, the suit having been brought
against it as a creditor of the Brookings bank, and it being
not a creditor.
Sec. 225(a) of Title 28 of U.S.C.A. says—
"The circuit court of appeals shall have appellate
jurisdiction to review by appeal or writ of error final
decisions", etc.
It is held that the jurisdiction of the Circuit Court of Appeals
is statutory, and this is the statute, and it seems to me that
it may be a serious question where, as in this case, the appeal
is from a judgment of the district court, the circuit court of
appeals has jurisdiction to grant a new trial upon pleadings
framing new issues in that court; but I have not yet had time
to study that question.
X-6962
Mr. W y a t t — 3
Sept. 5, 1931.
While Sigurd and I think that we can properly present
the petition and "brief to the Supreme Court for a writ of certiorari, we have no objection to have Mr. Baker or any other
counsel for the System on the petition and "brief, nor would
the petitioner have any objection to that, so will you please
inform us what you or your Board may desire in that respect.
Yours very truly,
(Signed)
AU/MG
Enclo.
A. Ueland
I
COPY
X-6962-a
SUPREME COURT OF THE UNITED STATES
OCTOBER TERM, 1931
NO.
JOHN HIRNING, as Receiver of the
Farmers National Bank of Brookings,
Respondent,
-vsFEDERAL RESERVE BANK OF MINNEAPOLIS,
Petitioner.
PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES CIRCUIT COURT OF APPEALS FOR
THE EIGHTH CIRCUIT. AND BRIEF IN SUPPORT
THEREOF.
To the Honorable, the Chief Justice and the Associate Justices
of the Supreme Court of the United States:
Your Petitioner, the Federal Reserve Bank of
Minneapolis, prays that a Writ of Certiorari in the above entitled cause be issued to the United States Circuit Court of
.Appeals for the Eighth Circuit.
SUMMARY STATEMENT OF THE MATTER INVOLVED.
The Respondent brought this suit in the District
Court of the United States for the District of Minnesota to recover $21,355.82 and interest, alleging that the Petitioner had
342
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X-6962-a
'
received checks arid currency to th&t amount of the Farmers National
Bank of Brookings (hereinafter called the Brookings Bank) as a preferred creditor of that Bank,
As a clearing house for its member
tanks under Section 16 of the Federal Reserve Act and Regulations
of the Federal Reserve Board the Petitioner had received from member
tanks checks on the Brookings Bank, on November 13, 1926, to the
amount of $22,140.22, and on November 15, 1926, to the amount of
$15,020.88, and had forwarded them "by mail on the dates of receipt
to the Brookings Bank for payment and remittance.
As some checks
were returned unpaid, the suit involved checks for $22,059*11 of those
sent on the 13th, and for $14,880.86 of those sent the 15th, in all
checks for $36,939.97.
Under the Regulations the Petitioner gave provisional credit
for the checks to the "banks from which they were received.
The Regu-
lations provided that the Petitioner would act as agent only, and
assume no liability except for its own negligence; that it could send
the check direct to the hank on which they were drawn; that it might
in its discretion accept either cash or hank draft in payment or
remittance, and not "be liable for any loss resulting from acceptance
of hank draft instead of cash, nor for the failure of the drawee bank
to remit, nor for the non-payment of any "bank draft accepted in payment or as a remittance, and that any check fcr which payment in
actually and finally collected funds Was not received should be charged
back to the forwarding bank, regardless of whether or not the check
itself was returned.
All the checks were in the Brookings Bank in the morning of
November 16th.
During the banking hours that day the Brookings Bank
»3»
**
X-6963-a
drew and ifiailed to the Petitioner two drafts, one for the amount of
the unre turned checks of November 13th, the other for the amount of
the unre turned checks of November 15th, both drawn on the Petitioner,
Its account with the Petitioner was insufficient to meet these drafts,
and for the purpose of providing sufficient funds for the drafts, the
Brookings Bank, daring its banking hours November 16th, segregated
from its assets checks it held against other banks to the amount of
$10,029.07 and currency to the amount of $13,000.00, and enclosed the
checks in a letter addressed to the Petitioner, which was mailed in the
evening of the 16th.
The currency was on that day placed in a package
addressed to the Petitioner, but as the postmaster did not want to keep
the currency overnight for the mail, it was not mailed until in the
morning of the 17th.
The checks were received by the Petitioner in the
morning of the 17th, and the currency in the morning of the 18th. . The
Petitioner credited the Brookings Bank's account with the $8,355,82 collected on the checks, and with the $13,000.00 in currency, but the
account being still insufficient to meet the drafts the Petitioner refused to accept the drafts and on the 18th it charged back the checks
for $36,939.97 to the member banks from whom they were received. -During
banking hours on the 16th, the Brookings Bank entered upon its books a
charge against the Petitioner for the two drafts and a credit to itself
for the checks and the currency.
The Board of Directors of the Brookings
Bank met in the evening of the 16th, after those book entries were made,
and after the two drafts were mailed, but before the letter with the
checks and the package with the currency had been placed in the mail, and
«*4—
X—6962—a
•ffiBdOliVS), that due to the depletion of our
reserve, the heavy withdrawals of deposits, and our
inability to raise sufficient funds to meet these demands, and considering creditors, it be unanimous vote
of the Board of Directors to suspend operation pending
reorganization, and the Chief National Bank Examiner
of Minneapolis, Minn, be notified immediately."
The Brookings Bank had cash on hand in the morning of November
16th to the amount of $39,347.31.
During the day this was reduced to
$6,735.73, which came into the hands of the Receiver.
Counting the
$13,000.00 in currency, set apart the 16th and mailed the 17th, the
Brookings Bank had on band when it closed, cash to the amount of $19,735.73
On November 16th, the Petitioner was directed by telegram from
the Brookings Bank to purchase for its account Liberty Bonds to the
amount of $10,000.00,
It did so the same day, paying $10,188.83, which
it charged against the Brookings Bank's account, and on the same day the
Brookings Bank credited Petitioner this upon its books.
A national bank examiner came to the Brookings Bank in the
morning of November 18th.
He called in the Directors, who thereupon
passed a resolution stating "That the Bank be erdered continued closed and
its affairs placed in full and complete charge of
Win. F. Hack, national bank examiner, with full and
complete power to employ such assistance as is necessary to protect the assets of the bank for the best
interest of the depositors and stockholders while he
is in charge."
On November 18th, while this national bank examiner was in
charge, the checks for $36,939.97 were charged up against the accounts of
the depositors and drawers, and after a receiver had been sppointed for
the Bank December 3, 1936, he returned the checks to the drawers.
The Receiver appointed contended that the Petitioner was not
entitled to credit for the $10,188.83 paid for the Liberty Bonds and
suit against
brought
it to recover this sum.
In course of time this suit
-5~
Was dismissed I
Bat no claim Wili
X-6962-a
by the Redbiverftgairistthe
Petitioner for the $8,355.82 in checks or the $13,000.00 in currency
until shortly 'before the present suit was commenced on March 14, 1929.
In the meantime, and on January 3, 1927, the Receiver wrote
to the Petitioner, enclosing a copy of a letter to him from J„ E. Pouts,
Assistant Supervising Receiver of Insolvent Banks, dated November 29,
1926, in which the writer said:
"As to the unpaid drafts held "by the reserve bank
which represent an attempted remittance by the Brookings
Bank to the reserve "bank of the proceeds of the cash
collection letter" (referring to the two drafts of
November 16 and the checks of November 13th and 15th)
"you are advised that (if the reserve hank desires and
elects to assume ownership of the items involved it has
the right to do so, and if it takos this position it is
believed that you cannot prevent it from charging the
unpaid drafts to the account of your trust)."
In his letter enclosing this copy the Receiver said:
"You will also note regarding the unpaid drafts
which is being left to your wishes in the matter. Personally, as Receiver, I would not raise any objection
to your charging the account with t&ese drafts and believe that it would simplify matters if you would so do."
On January 27, 1927, the Petitioner, relying on these letters
and on advice of counsel, charged the two drafts against the reserve
account of the Brookings Bank and remitted the $36,939,97 to the member
banks for the checks received from them November 13th and 15th.
Credit stood on its books to the Brookings Bank for nearly two
and one-half months for the $8,355,82 in checks, and for the $13,000,00
in currency, subject with the other credits to the account to the
Receiver's check, and would have been paid he he not also drawn for the
$10,188,82 which had been charged against the account for the Liberty
Bonds.
346
!
i6c
-f
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X-6963~a
$he case was tried "before Judge John B. Sanborn of the District
Court, who gave judgment for the Petitioner.
Prom this judgment Respond-
ent appealed to the Circuit Court of Appeals for the Eighth Circuit*
On
August 24, 1931, that Court filed its decision "by which it disposed of
the appeal as follows;
"In view of the facts that this action was brought
to recover from the Reserve Bank on the theory that it
was a creditor of the Brookings Bank, and the evidence
has failed to show this; and in view of the facts disclosed "by the present record which, in our opinion,
point to liability of the Reserve Bank, we think the
ends of justice will be best served by reversing the
judgment and remanding the cause with instructions to
grant a new trial, first granting leave to the parties
to amend their pleadings so as to cover issues suggested in the opinion. It is so ordered."
THE REASONS RELIED ON FOR THE .ALLOWANCE OF
THE WRIT.
In its decision the Circuit Court of Appeals held 1.
That "the checks were charged by the Brookings Bank against the
various drawers who were depositors in said bank on November 16th",
although the record showed, conclusively, that they were so charged by
the National Bank Examiner after the Brookings Bank had closed and while
he was in possession of the Bank's assets and the checks.
2.
"That on November 16th, when the Brookings Bank accepted the
checks of the member banks and sent to their agent, the Reserve Bank, the
two drafts, it became a debtor to the member banks, and they became its
creditors."
3.
That "the transfers of the currency and the collection items by
the Brookings Bank were void as within the Statute", that is to say as a
preference under Sec. 5242, Revised Statutes, Title 12, Section 91 U. S.
C. A.
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X-6962-a
(That "If the transfers stood, some creditors of the Brookings
Bank would receive a preference over other creditors; the member "banks
which had owned the checks were the creditors, and they would receive a
preference by having their checks paid in full".
5.
That "When the Brookings Bank accepted the checks this produced
no additional funds in its hands.
Its assets were not augnented.
No
trust fund was created".
.6.
"But even if it should be conceded that the Brookings Bank was
an agent for the collection of the 6hecks drawn on itself, and that the
checks constituted a trust property" that trust property was not traced
to the checks set apart for the Petitioner on November 16th, and mailed
that day, or to the $13,000.00 in currency set apart in a package for
the Petitioner on the same day and mailed November 17th, or to any of the
cash on hand "by the Brookings Bank on November 16th which came into the
hands of the Receiver.
7.
That "the segregation items were not the proceeds of the col-
lection of the checks".
8.
That although the National Bank Examiner had charged up the
checks against the depositors' accounts, and the Receiver had returned the
checks to the drawers, and the $21,355.82 sought to "be recovered and other
credits of the Brookings Bank had stood on the books of the Petitioner for
nearly two and a half months as available credit to the Brookings Bank,
and subject to the Receiver's check, and the Receiver and the Supervising
Receiver had consented in writing to have the two drafts charged against
the reserve account of the Brookings Bank, and the Petitioner relying
thereon, and on the advice of counsel, had done so, and had paid over to
owners the $36,939,97 called for by the checks, there was no estoppel
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X-6962-a
against the Receiver.
9,
That although, as held by the Court "the Reserve Bank was not
a creditor of the Brookings Bank, "but an agent of the member banks, * * *
there was a preference in favor of some of the creditors of the Brookings
Bank growing out of the transfers of the currency and the colle ction items
to the Reserve Bank".
fers".
That "The Reserve Bank participated in those trans-
That "It received the property transferred and it, in turn, trans-
ferred it to the creditors of the Brookings Bank"*
That "The action of the
Reserve Bank as agent helped bring about the preference.
* * *"
That "Undor the so circumstances we" (the Court of Appeals) "think
the Reserve Bank can and should be held liable to the Receiver of the
Brookings Bank".
10.
That although (said the Court) "this action was brought to re-
cover from the Reserve Bank on the theory that it was a creditor of the
Brookings Bank, and the evidence has failed to show this," there should be
a new trial on new and different pleadings in the lower court.
The Petitioner is advised by counsel and believes that the
Circuit Court of Appeals erred with respect to the several holdings specie
fied above, and relies thereon as reasons for granting this petition.
In the brief attached, the Petitioner points out more specifically these errors, and that this cause comes within the provisions of
Section 5 (b) Rule 38 of this Court for the issuance of a Writ of Certiorari,
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X-6962*a
AMDEEAS UELAHD
SIGURD UBLAMD
Counsel for Petitioner.
UNITED STATES OF AMERICA)
DISTRICT OF MINNESOTA
)ss
COUNTY OF HENNEPIN
)
ANDREAS UELAHD, being duly sworn, says that he is one of the
counsel for the Petitioner named in the foregoing petition and that he
knows the contents of said petition, and that the facts therein stated
are true to the best of his knowledge and belief.
ANDREAS UELAHD
Subscribed and sworn to before me
this
day of
.1931.
(Maud Qoldsbury)
Notary Public, Hennepin County, Minn.
My Commission expires Dec. 16, 1936
X-6964
STAIEISNT OF BUBEAU OF ENGRAVING AMD PRINTING
Federal Reserve Notes, Series 1928.
August 1 to 31, 1931.
yilO
New York
#1000
V50
18,000
Cleveland
108,000
79,000
6,000
4,000
4,000
-
50,000
25,000
34,000
17,000
100,000
45,000
20,000
12,000
5,000
283,000
174,000
51,000
68,000
26,000
610,550 sheets # <^92.50 per M,
1,700
5,900
850
2,550
100
17,861.75
740.00
11,890.88
182,000
100
545.75
128,550
100
5,900
193,100
1,700
1,665,00
8,000
4,100
llinneapolis
Kansas City
Amount
18,000
-
St. Jjcuis
Total
sheets
. 75,000 | 6,937.50
.
75,000
Philadelphia
San Francisco
$5000
16,835.00
610,550 #56,475.88
$56,475.88
Q
Ol
X-6965
COPY
BECQMMEHDATIONS OF
AMJ
I.
6r THE CUBBBMCY
Group and Chain Banking
No national "bank should he permitted to "become a part of a group
hanking system, except on the condition that all other hanks in the group
are national hanks; and when a State member hank of the Federal reserve
system is a part of a group, the Federal Government should he given visitorial powers over the entire group. More specifically:
(a) No corporation should he permitted to own a majority of the stock
of a national hank if it owns at the same time a majority of the stock of a
State hank,
(h)
The Comptroller of the Currency should he given visitorial power
over any corporation owning a majority of the stock of a national hank.
(c) Ho national hank should he permitted to make a loan on the security
of the stock of a corporation owning a majority of the stock of the lending
hank.
II. Branch Banking
A.
The McFadden Act should he amended to permit national hanks; in
important commercial and financial centers to establish branches in the area
that is economically and financially tributary to such centers without regard to State boundaries or to State banking laws.
The privilege should be
limited to banks in cities serving a territory sufficient to provide economic
diversification. The trade area within which banks located in such cities
may extend their branches should be defined by a committee consisting of the
Comptroller of the Currency, the Secretary of the Treasury, and the Governor
of the Federal Reserve Board. Banks permitted to have branches in a trade
area should have a minimum capital of $1,000,000 and the extension of
branches should be subject to the approval of the Comptroller of the Currency*
-2B.
X-6965
The National iahk Consolidation Act should be amended to permit
any Hank within the trade area to consolidate under national charter with
the approval of the Comptroller of the Currency.
Ill* Affiliates
A*
The Comptroller of the Currency should have authority to examine
security or investment companies affiliated with national hanks*
IV.' Fiduciary Powers
A*
The law should be amended to provide that the exercise of fidu-
ciary powers shall he one of the corporate powers of a national banking
association, subject to the existing limitations regarding State laws now
contained in the Federal Reserve Act.
V.
Liquidation gf National Banks
A.
The Comptroller of the Currency should be given supervision of
national banks going into voluntary liquidation and the liquidating agent
should be required to give bond and render reports to the Comptroller of
the Currency in the same maimer as the receiver of an insolvent bank.
VI.
Circulating; False Reports
A*
It should be made a crime to maliciously make or circulate any
false report concerning a national bank, or a member of the Federal reserve system, which inputes insolvency or unsound financial condition.
VII. Banks i& t&g. District of Columbia.
A. Certain recomnendations are included regarding changes in the laws
governing banks in the District of Columbia.
3 5 4
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&ECO
I.
X-6965
OF
YOHK w v m i m m m s OFBANKS,
A. BRO&BRICK, IN BIS jamxL BBPoac,
m S A S S D JAHUARY 7, 1931.
Supervision
A* Permit the Superintendent of Banks in his discretion to omit one
examination a year of a bank or trust company which is a member of the Hew
York Clearing House Association and accept in lieu thdreof the report of the
Clearing House examination made during the year,
B. Require the directors of a banking institution to examine it at
least every six months, such examinations to include a complete review by
each director of all loans and investments in excess of one-tenth of 1 per
cent of the capital and surplus of the institution*
At least once in every
two years this examination to include a complete verification of the bank's
deposit liabilities.
II. Officers and Directors
-A*
Permit the Superintendent of Banks to remove officers and directors
of banking institutions who have persistently violated the banking laws or who
have been guilty of continuance of unsafe or unsound banking policies.
B» Prohibit any officer or employee of a bank to borrow from or otherwise become directly or indirectly obligated to the institution by which he is
employed.
C» Prohibit any officer of a bank from becoming an officer of any company engaged primarily in the purchase or sale of securities.
S. Require a director of a banking institution who is directly or indirectly obligated on any loan made by such institution either to M m or to
others to file once a year with the bank, and at such other times as the
S^erintendent of Banks may require, a statement of his financial condition.
[ 355
• 4 U
*
X-6965
. B. Require banks to rdM&r efch year to stockholders a report of the
attendance of directors at meetings held during the year*
III*
Chain, group, and Branch Banking
A* Permit the Superintendent of Banks to examine any corporation owning
10 per cent or more of the capital stock of any corporation organized under the
"banking laws.
B»
Require any holding company owning stock in a hanking institution to
maintain reserves or to furnish a surety bond to protect the double liability
attaching to such stock.
- C. Permit savings banks, with the approval of the Superintendent of Banks,
to establish deposit and withdrawal stations in the county in which the principal office is located, and to move to another place within a county branch
offices acquired by a merger with other savings banks.
• IV. Affiliates
- A*
No banking institution should be permitted to invest more than 10 per
cent of its capital and surplus in the stock or obligations of an affiliate or
its subsidiaries, or to extend to an affiliate a loan of over this amount or to
lend more than this on security of shares or obligations of an affiliate.
B.
The stock of all banks subject to the department of banking should be
evidenced by individual certificates of stock which shall not be coupled with
the s f o k of any other corporation. All such arrangements now obtaining should
jrc
terminate within two years.
•V. Mergers
A. Permit prompt mergers of banking institutions in emergency without a
vote of the stockholders and without the usual two weeks notice. This should be
possible only with the approval of the Superintendent of Banks and on his declaration that the merger is necessary to prevent the closing of one of the insti
tutions.
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X-6965
Reserve fteqUireiAentB
jL
Require banks and trust companies to maintain reserves against time
deposits.
B.. Forbid deduction of foreign exchange balances in confuting net demand deposits subject to reserves.
VII.
Investments
A. .Limit the aggregate amount a banking institution may infrest in stocks
and bonds of other corporations. .
B. Permit the Superintendent of Banks at the expense of banking institutions, including savings banks, to order an appraisal of real estate owned or
mortgaged to the bank by an independent impartial appraiser of recognized
standing*
VIII. . Segregation of Accounts
A. . Require segregation of thrift accounts in commercial banks in cities
over 75,000 and place a restriction on the investment of such thrift funds,
IX. Bankers Balances
JL
Limit the funds a banking institution may deposit in any other bank,
distinguishing deposits in designated reserve depositaries, in domestic institutions not acting as reserve agents, and in foreign banking institutions.
X. Private Bankers
A, Require a periodic audit of the deposit liabilities of private bankers by an independent auditor.
B. Require private bankers to discontinue accepting deposits by June 30,
1931 and to liquidate their deposit liabilities by December 31, 1931,
•
X-6965
PRINCIPAL RECOMMENDATIONS MADE BY GOVERNOR ROOSEVELT'S BANKING' COMMISSION (GEOESE W. DAVISON, CHAIRMAN); JANUARY 29, 1930.
I*
Supervision
The Banking Department should be kept out of politics.
It should
also be enlarged and reorganized and salaries should be raised—»e,g*, the
salary of the Superintendent should be raised from $13,000 to $15,000, he
should have an assistant at $12,500, and the next six members of his department—all to be under civil service—should get $12,000 each.
The Banking Department should be given more extensive powers relative
to the examination of such private banks as make a practice of accepting
deposits.
The Banking Superintendent should be given a limited authority to examine affiliates of banks—i.e., to the extent required to obtain full information as to the financial condition of the bank.
Investment trusts should remain exempt from examination by the Banking
Department,
Caution should be exercised in chartering new institutions*
II. Officers and Directors of Banks
Law enforcement officers, including judges and district attorneys,
should be prohibited from serving as officers or directors of banks.
It should be the duty of bank officers to inform their directors of
disciplinary communications from the Banking Department.
To impose additional responsibilities on bank directors, beyond
specified limits, would discourage men of the type needed by banks from
serving as directors.
III, Chain and Branch Banking
Chain banking should be prohibited and branch banking confined to
limited
regions,
It is important, however, that State and federal Laws
-7-
0-6965
on these matters shouldtieuniform, and for this reason further study
should precede further legislation*
Savings hanks, subject to the approval of the Banking Superintendent,
should he permitted to open receiving and paying stations.
IV. Be serve Requirements
The law should be amended to require the establishment for State institutions of 3 per cent reserves against all time deposits—which are at
present exempt from reserve requirements; attention is called to the fact
that so-called thrift deposits in commercial banks are for practical purposes demand deposits.
The segregating of thrift or savings accounts is
not recommended.
The same reserves against deposits should be required of private
bankers as are required of incorporated banks.
V.
Fiduciary Powers
The law should be amended to permit any banking association organized
under federal law to become a trust company under State law,
This commission was appointed August 19, 1929, and reported January 29
1930.
It was composed of George W. Davison of New York, Chairman; Howard
Bissell of Buffalo; James Byrne, Darwin B. James, Russell C. Leffingwell,
Henry W, Pollock, Ray Morris, Jesse Isadora Strauss, and William H« Woodin,
all of New York, and Messrs, Campbell and Cheney, members of the New York
State Senate.
The report of this commission was submitted at the same time as a report from another investigating agency—the so-called "Legislative Committee, « which had been named to consider savings banks. The reports of
the two agencies do not agree in all respects.
X 66
9B
MR. WARBURG'S SUGGESTIONS FOB CHANGES IN BANKING
LAT AND PRACTICE
- ' 959
The following suggestions made by Mr. Warburg are listed without ranch
explanation as they appeared in his Chapter XII entitled "Looking Forward"
in the book on the Federal Reserve System, Volume I, page 456, et sequ.
1, He believes that the introduction of term settlement would increase
the market for bills and diminish the amount of call loans,
2, He wants to bring about some rule by which each bank that invests a
given amount in call loans should be required to invest an equal amount in acceptances or loans thereon. This also would increase the market for bills
would give the banks a secondary reserve in the discount market,
• 3, He wants to have a similar rule apply to loans made by banks for account of noribanking lenders*
Only in that case the amount invested in bills
does not need to be 100 per cent of the loan. He thinks that the law might fix
a maximum percentage and the Federal Be serve Board determine a minimum percentage,
4, Remove income tax on income from acceptances#
5, Possibly establish a higher rate on discounts secured by Governments,
6,
Is negative. He disapproves of lombard loans.
"One shudders to t.MwV
what would happen to the Federal reserve system if its doors; were ppen for the
carrying of stock exchange collateral."
7, He does not believe in regulating commodity prices,
8, He wants to introduce a system by which immediate credit will be
given to banks for all checks deposited and interest charged for the time
necessary for the check to reach its place of payment, but not for the return
trip. He believes that this would give the system a very large contact with
the market and would supplement its open-market powers. He thinks that member
banks might have the choice of getting deferred credit, or pay interest and
- 9 -
: 360
X-6965
get immediate credit* •
9* ' In order not to Taring about inflation by the adoption of immediate
crediti the Board should have authority to raise required reserves on time deposits. "
This matter of immediate credit at interest is not sufficiently clearly
stated in the hook*
Presumably there are other places where Mr, Warburg has
elaborated,
10, Abolish national bank notes* 11,
Establish and maintain a definite relationship between the discount
rate and the rate paid by banks on deposits.
12, • Modification of Federal Reserve Board membership:
(a) Each appointive member to spend his last four years:
Governor, and 2 as Governor of the Board,
2 as Vice-
(b) The Governor should be Chairman of the Board and the Vice-Governor
the Vice-chairman.
(c) Secretary of the Treasury should not be on the Board, but the
Undersecretary should.
(d) The Comptroller of the Currency should either be under the Board
or off the Board,
(e) Board members whose terms expire should be eligible for reappointment by the President without confirmation of the Senate.
(f) In addition to the eight members of the Board now provided for,,
there should be four members selected by the President from a list submitted by four groups of Federal reserve directorates. Each group should
comprise the directorates of three reserve banks acting jointly. These
four members would, therefore, be representatives of the Federal reserve
banks on the Board. The members should attend only monthly meetings at
which open-market policy and discount rate policy would be determinedV
They would live outside of Washington and be contact points. Their salaries would be paid by the reserve banks and the intimation is that they
would be in proportion to the salaries paid to officers of the reserve
banks, rather than to the Federal Reserve Board.
13*
Mr. Warburg also proposes a change in the method of electing director-
ates of the reserve banks*
The election should be made by the branch terri-
- 10 -
X-6965
tories, each brandh territory selecting three Class A and Class B directors,
and the Board appoint three Class C directors*
Trom each of these "branch
territories one of the Class A and one of the Class B directors should " e
b
selected to serve on the directorate of the Federal reserve "bank, the Class C
directors being appointed for the purpose fcy the Federal Reserve Board as at
present.
TELEGRAM
X-6966
5 W E U 1 RESERVE SYSTEM
52bs
Boston Sept 9 1213?
Walter ffyatt
General Counsel Washington
Referring to case of Hiring v. federal Reserve Bank of
Minneapolis think it presents unusual facts and does not
necessarily incolve any legal point of importance to system
as whole believe therefore that tJeland should use his own
judgnent as to petitioning Supreme Court for certiorari tut
do not think it necessary to employ system counsel
Weed
11281
• 883
COPY
TmT.nwB^
FEDERAL EESERVE SYSTEM
116dea
Cleveland 1250p sep 9
Wyatt
Washn
Your wire September 8 after considering opinion of
circuit court of appe&ls in
hirning case tut before
reading Uelande's proposed petition we feel filing
petition in supreme court in-advisable and if same
is filed that system counsel should not participate
in case in supreme court of UnitedStates.
Sterling Hewel1
1353p
X-6966-a
364
CdPY
mEGRiai
X-6966-b
IliZDEBAL RESERVE SYSTEM
70rhu
Richmond 345p sept 9
wyatt
Washington
Your telegram September ninth approve petition to Supreme Court
Of United States for certiorari in Hirning against Federal Reserve
Bank Of Minneapolis stop
Think Importance of case would justify
employment of system counsel but somewhat doubtful as to whether
system counsel would materially increase chance of success.
Wallace
352p
COPY
Tmsmm
X-6966-c
ranSBJUi BBSERVB SYSTEM
55fy
Atlanta 1114a
»
Sept 10
Wyatt
Washington
q
Referring Hirning against Be serve Bank i y pergonal opinion is that
court would not grant petition for certiorari and that even if case
were reviewed neither Minneapolis hank nor system as a whole would
he benefited
Stop Under facts of case there was in my opinion a
void transfer of assets rendering Reserve Bank liable although
certain portions of court's reasoning might be subject to criticism
Stop In view of change in regulation J any subsequent case would
necessarily differ from decided case in certain essential facts
but am afraid supreme court in deciding case might lay down broad
principles which would hereafter embarrass reserve banks in routine
collection transactions with banks known to be weak Stop Personally
I see no reason for retaining special counsel but if Judge Ueland
desires counsel and you think advisable Atlanta bank will cooperate
with other banks Stop Above are my personal views although I hesitate
to suggest that Minneapolis bank refrain from taking further steps
which might save possible monetary loss
Parke??
1225pm
COPY
WmiAM
X-6966-d
FSDEEAL RESERVE SYSTEM
190gar
Chicago Sept 11 237p
Tfyatt
General Counsel Federal Heserve Board Washington
Referring your telegram September eighth feel that it would " e
b
wise to have the petition for Certiorari Riming case filed
stop In case of Carson verses Federal Reserve of New York
172 Northeastern reporter 475 court of appeals of NY through
cardozo held federal reserve "bank merely agent and therefore
liability was on its principals stop
If counsel for other
federal reserve banks think matter important enough I am
ready to advise Chicago bank to participate in making matter
a system matter.
Meyer*
248p
t 367
im.v.(xnaft
COPY
X-6966-e
FEDERAL RESERVE SYSTEM
161gb
StLouis Sept 9 1209p
Walter Wiratt,
Board Washington.
Hirning against Minneapolis "bank opinion came to me yesterday
morning. Your wire came after % had left the office stop.
The
opinion of the Circuit Court while sound on some of its points
I believe to be unsound on others, which, if left unchallenged,
will undoubtedly work a hardship on the system stop.
I believe
the writ of certiorari should be applied for and while I have
the highest regard for Judge Uelands ability I believe the system
should be represented.
Mcconkey
118p
368
COPY
flBLSffllAM
rami,
X-6966-f
RESERVE SYSTEM
84gb
Kansascity 1011am Sept 9
iiyatt
Board Washington
Can see no harm in review of Hirning case "by Supreme Court although
it seems to me that it will be difficult to obtain writ. Believe that
it is unlikely that Similar transaction will occur with any federal
reserve "bank in future and do not consider that case involves questions
of system importance. Tor that reason do not believe system counsel
should be employed but am sure our bank will readily join if it
shouls be determined that case be handled in that manner
H ( Leedy
J
1125am
i 869
COPY
TELEQRiM
X-6966-g
FEDERAL RESERVE SYSTEM
53gb
Dallas Sept 9 910am
Wyatt,
Washington
Be your wire yesterday and letter September third concerning Hirning
vs. Reserve Bank Minneapolis stop.
See no objection to application
for writ of Certiorari but doubt that supreme court will grant same*
Refusal may strengthen circuit court opinion stop* Our opinion decision
circuit court probably sound unless court erroneously states facts
stop. See no objection to employing system counsel if facts stated
incorrectly by court or if majority bank counsel think opinion unsound,
Stroud,
1025am.
i 870
COPY
TSLEO&m
X-6966-h
TEDEEIAL RESERVE SYSTM
203gb
Sanfrancisco Sept 10 1139am
Wyatt
Washington.
Your letter September 3 regarding Hirning receiver against
Minneapolis and your wire September 8 stop* Yesterday "being
state holiday have today thoroughly discussed this matter with
officers this "bank stop.
They feel as I do that district court
decision adopting theory of peters case under circumstances
existing was improper and that decision circuit court appeals
constitutes sound law stop.
This conclusion predicated first
upon fact that at time remittance drafts were received reserve
balance was insufficient and second when reserve "balance became
sufficient' through remittance of cash and collection items
reserve bank had actual notice of insolvency stop. In neither
Case we believe could remittance drafts be properly functioned.
We therefore feel that no petition for certiorari should be
filed.
This conclusion is predicated upon particular facts
recited in opinion circuit court appeals and upon general rule
which we believe sound that federal reserve bank should refuse
to function remittance drafts on reserve balances after actual
notice of insolvency.
Agnew
323p
S
COPY
FEDERAL R E S W l BAUK
X-6966-i
Of HEW YORK
September 12, 1931,
Walter Wyatt, Bsq«, General. Counsel,
Federal Heserve Board,
Washington, D. 0.
Dear Mr. Wyatt:
I have received your letters and telegrams regarding the case
of Hirning v. Federal He serve Bank of Minneapolis, and I @m writing
you now in order to indicate briefly what my views are although I have
not been able to study as carefully as I would like the opinion and
other papers which you have sent me.
From the standpoint of the Federal Reserve System as a whole,
it seems to me that it would be better if no application for a writ of
certiorari to the Supreme Court were made in the case, I believe the
chances are against a reversal even if such an application were granted
and we have found from experience in other cases that there is always
the danger that an opinion may contain dictum which goes beyond the
facts of the immediate case* I recognize the importance of establishing the principle that Federal Reserve Banks are not liable to refund
remittances received from banks which subsequently close, but I think
this case is an unfavorable one from the standpoint of Federal Reserve
Banks in which to test that principle, because at the time the remittance was received a definite decision to close the remitting bank had
been made and was known to the Federal Reserve Bank. I think there is
a real distinction on this ground between this case and a case in which
at the time the remittance is received no steps have been taken to
close the remitting bank, and the alleged liability of the Federal Reserve Bank is predicated merely on the ground that it had sufficient
information regarding the affairs of the remitting bank to constitute
knowledge of an insolvent condition.
These comments are offered merely for what they may be worth.
The Federal Reserve Bank of Minneapolis and its counsel are of course
in a much better position than anyone else to make the decision as to
whether or not it is advisable to apply for a writ of certiorari, and
I am sure that whichever they decide their decision will be the sound
one under all the circumstances.
As a matter of principle, I think the employment of System
counsel is always advisable in cases which are of particular importance to all Federal Reserve Banks, and I believe that this is such a
case. If application for wtit of certiorari is made, therefore, I
think it would be appropriate to follow the usual procedure in regard
-2-
X-6966-i
to the employment of System counsel as Judge Ueland has already suggested, and I m sure that this hank will " e glad to pay its pro rata
b
share of the expense involved.
Yours faithfully*
(Signed) Walter S» Logan,
Deputy Governor and General Counsel.
: 373
COPy
X-6966-j
Squire, Sanders & Dempsey
Counsellors at Law
Cleveland
September 9, 1931.
In re; Hirning, Receiver of Farmers Rational Bank of
Brookings vs. Federal Reserve Bank of Minneapolis#
Walter %att, General Counsel,
Federal Reserve Board,
Washington, D. C.
Dear Mr,: Wyattj
I have just wired you as per copy enclosed, with respect
to the above case*
It seems to me that the opinion of the District Court,
upholding the position taken by the Federal Reserve Bank of Minneapolis,
Court
is unsound, and that the opinion of the United States Circuit/of Appeals,
reversing the District Court, is proper unless there are facts which are
not disclosed in either the opinion of the District Court or of the
Circuit Court of Appeals.
In these circumstances, I feel that the Federal Reserve
System should not support the Federal Reserve Bank of Minneapolis in
attempting to have this case reviewed by the Supreme Court of the United
States, and it is, therefore,, not a case in which the System should
participate in the expense of the trial in the Supreme Court of the
United States or in any wiay sponsor the attempt to procure a reversal of
the Circuit Court of .Appeals
Very truly yours,
SN:RG
-enclosure.
(Signed) Sterling Newell
COPY
X~6966«k
m m &
Aksmvs BAHK
Of RICHMOND
September 9, 1931
Federal Eeserve Board,
Washington, D. C.
Attention: Mr. Walter Wfratt, general Counsel,
Dear Mr, Wyattt
% received your letter of September 3rd enclosing a
copy of the opinion of the Circuit Court of Appeals for the
Eighth Circuit in the case of Hirning, Receiver, v. Federal
Reserve Bank of Minneapolis. I deferred my reply to your
letter "because Mr. Seay was absent on vacation and Mr* Peple
had met with a slight accident which kept him in bed. I have
now talked with Mr. Peple and enclose a confirmation of my
wire of today,
I heartily approve of applying to the Supreme Court
for a petition for certiorari to review this decision, which
I think involves several important questions. However, I
read with a great deal of care and interest the "brief filed
by Judge Ueland in the Circuit Court of Appeals, and I am in
some doubt as to whether or not the employment of System
counsel would materially increase the possibility of success.
Of course, my only argument against the employment of Systemcounsel is the advisability of incurring additional expense,
and X suppose that this matter is one which the governors
of the banks are better able to decide. You may record me
as thinking that it is most desirable to petition the Supreme
Court for a certiorari and the employment of System counsel is
desirable but not necessary.
Very truly yours,
(Signed) M. 6« Wallace,
Counsel.
mow a
'
^ ^
COPY
X-6966-%
COLQPlMi BARKER, EROUTMAU
f<75
& JtRMRlGKS
ATToiSBYS A ? LAW
3
ATLANTA, OA.
September 10, 1921.
Mr. Walter Wyatt, General Counsel,
Federal Reserve Board,'
Washington, D. C.
Dear Mr. Wyatt:
. Re: John Hirning, Receiver, etc,
v. Federal Reserve Bank of
Minneapolis
X have today telegraphed you, stating, in effect, that, in my
opinion, It would not be desirable to petition the Supreme Court for a writ
of certiorari in this case and that I, personally, saw no reason for retaining special counsel on behalf of the Federal Reserve Banks. I further stated,
however, that if Judge Ueland desired special counsel and if you felt that
the retaining of such counsel were desirable, the Federal Reserve Bank of
b
Atlanta would, in my opinion, " e glad to do its part.
It appears from the opinion of the court that the Brookings bank,
knowing itself to be insolvent and within a few hours of suspension, drew its
remittance draft, covering two cash letters, against its reserve balance and
then undertook, in contemplation of insolvency, to build up its balance in
order that the draft might be paid. The collection items and the cash which
were to be sent for credit to the reserve account were not even deposited in
the mails until after the directors had passed a resolution suspending operas
tions. While the remittance draft was drawn prior to the passage of the
aforementioned resolution, it likewise was not mailed until after the drawer,
to all intents and purposes, had closed. The Reserve Bank had actual notice
of the closing prior to the receipt of the remittance draft and of the items
and cash which were to be placed to the credit of the Brookings bank.
I cannot escape the conviction that the Circuit Court of Appeals
was right in holding that the transfers of the cash and of the collection
items by the Brookings bank were void because violative of the Federal statute
cited. You will understand, of course, that I am not even suggesting any
criticism of the Federal Reserve Bank of Minneapolis. It was doing what it
could to protect its endorsers and was collecting checks under a Check Collection Circular which reserved the right to make charges for outstanding cash
letters against the reserve accounts of its members at any time. Furthermore,
as pointed out by Judge Ueland in his letter of September 5th, the Reserve
Bank did nothing with the checks and currency, sought to be recovered as a
preference, until it had received what it regarded as the consent of the
X-6966-1
?
-
Receiver and of the Supervising Recdiver to charge the draft against the
reserve account.
Regarded as a strict matter of law, however, I think that the inevitable result of the transaction was to work a preference within the meaning of the Federal statute and that the: Receiver could recover from the
Reserve bank under the particular facts of the case notwithstanding the fact
that the latter had merely acted as an agent for collection*
Naturally the Reserve Bank does not wish to pay the amount of the
recovery, particularly since it may not be able to reimburse itself after
having disbursed the funds to its endorsers# I do not believe, however, that
any relief would be obtained even though the certiorari were granted, since,
in my opinion, the Supreme Court would affirm the judgment below and I am
somewhat apprehensive that the higher court might say something in its opinion
which might embarrass the Federal Reserve Banks in their future routine collection transactions with banks known to be in a weakened condition. Even
though under the present Regulation J a remittance draft could not be charged
against the reserve account of the drawer after notice of the suspension of the
latterj there might be some question raised in some future case as to whether
or not the Reserve Bank, acting for its endorsers, obtained an illegal preference when it charged the reserve account of a bank known to be weak, if not
actually failing, shortly prior to its closing.
In Judge Ueland's letter he states
effect that when the Brookings bank accepted
and sent to their agent, the Federal Reserve
became a debtor to the member banks and they
seriously affect all Federal Reserve Banks."
that the court's holding, to the
the checks of the member banks
Bank, the remittance draft it
become its creditors, "cannot but
I have not had the benefit of an expression in full of Judge Ueland1 s
views on this particular phase of the question*' Speaking more or less offhand,
however, I do not believe that this holding would have the anticipated bad
effect. As a holder for collection of checks, the Reserve Banks of course
require that remittances should be made to them and that they should be accorded other rights which appertain to any bank as the holder of checks duly
endorsed to it* As a matter of fact, however, Reserve Banks do act as agents
in the collection of checks and, in the broad sense in which the court doubtless intended to use the language referred to, the actual owners of the checks
are the real creditors of the collecting or drawee bank after such checks are
collected and paid and until returns therefor in finally collected funds are in
the hands of the agents of such actual owners* I doubt whether the language
used was intended to mean anything except that when the Brookings bank paid or
collected the checks it became a debtor to the real owners, nor do I believe
that such language would be given any broader meaning.
In point of fact, whenever a Reserve Bank files with the Receiver of
a closed bank a proof of claim based upon unremitted for checks it is conceded
that such proof of claim is made for the account of the actual creditors,
although, of course, it is taken for granted that the Federal Reserve Bank has
sufficient interest, despite its representative or agency capacity, to mqira the
proof of claim and to assert the same,
> 377
X-6966-1
Judge Ueland also points out the danger which might inhere in a
situation in which a Federal Be serve Bank had disbursed the proceeds of a cash
letter to its endorsers in reliance upon what it deemed to " e the consent of
b
the Receiver to such disbursement only to learn later that its right to charge
the reserve account of the "bank making the "remittance," the proceeds of which
bad been disbursed, was being questioned. The ruling in this particular case
of course works a hardship upon the Minneapolis bank in that it thought, and
not unnaturally, that it was making disbursement of the fund with the approval
and acquiesence of the Comptroller's office* I do not believe, however, that
any court would extend the liability beyond facts similar to those which were
involved in the Hirning case.* nor do I anticipate that the Comptroller1 s office
would ever question the propriety of making a charge to the reserve account in
any instance where it had given explicit assent thereto#
If any bad effects to the System as a whole follow the decision of
the Circuit Court of .Appeals it will be, as suggested above, because of some
extension of the doctrine of "illegal preferences" to states of fact other than
those which the court had before it and to cases where a Federal Reserve Bank
did nothing to secure such "preferences" for its endorsers beyond crediting
the reserve account of a bank, known to be in a weakened condition, with
amounts deposited to the account in regular routine and then charging the
amount of the ca.sh letters thereto shortly prior to suspension, is stated, I
do not believe that this possible danger would be mitigated by a review of the
case by the Supreme Court, I do not believe that the Supreme Court would
reverse the court below for reasons set out above, and even an affirmance of
the judgnent below upon any ground would emphasize the importance of the case
to any one desiring to utilize it in some subsequent litigation.
As stated in my telegram, the Federal Reserve Bank of Atlanta would
hesitate even to suggest anything which would deprive the Federal Reserve Bank
of Minneapolis of the opportunity, in the Supreme Court or elsewhere, to avoid
paying to the Receiver the amount of the funds which it has in good faith disbursed, I, personally^ hesitate to express any opinion which may be contrary
to an opinion which the Messrs, Ueland have reached through a careful study of
the case. Since, however^ you have asked the opinion of all Federal Reserve
Bank counsel, 1 am transmitting my personal views for whatever they may be
worth.
With personal regards, 1 am
Sincerely yours,
(Signed) Robt* S« Parker#
RSP/w.
378
FEDERAL RESERVE BOARD
WASHINGTON
X-696?
September 15, 1931.
ADDRESS OFFICIAL CORRESPONDENCE TO
T H E FEDERAL RESERVE BOARD
SUBJECT: Holidays during October, 1931.
Dear Sir:
On Monday, October 12th, in observance of Columbus
Day, there will be neither Gold Settlement Fund nor Federal
reserve note clearing, and the books of the Board's Gold
Settlement Fund will be closed. The offices of the Board,
and the following Federal Reserve Banks and Branches will be
open for business as usual:
Richmond
St. Louis
Charlotte
Little Rock
Memphis
Atlanta
Birmingham
Minneapolis
Nashville
Jacksonville
Kansas City
Denver
Oklahoma City
Detroit
In addition to the holiday mentioned above, the following Branches of the Federal Reserve Bank of Atlanta will
be qlosed on the dates indicated:
Friday
October 9 Jacksonville
Farmers' Day
Saturday
October 10 Havana Agency Revolution of Yara
Tuesday
October 13 Birmingham
Fraternal Day
Please notify branches.
Very truly yours,
J. C. Noell,
Assistant Secretary.
TO GOVERNORS OF ALL F. R. BANKS.
FEDERAL RESERVE BOARD
WASHINGTON
ADDRESS OFFICIAL CORRESPONDENCE T O
T H E FEDERAL RESERVE BOARD
X-6968
September 16, 1931.
SUBJECT: Redemption of Old Size Federal reserve
notes.
Dear Sir;
The Federal Reserve Board is advised by the
Treasury Department that it will no longer "be necessary for the Federal reserve banks to accumulate full
packages of old size Federal reserve notes, either of
their own banks or others, before sending such notes
in to the Treasury Department for redemption. It will
be agreeable to the Treasury for the Federal reserve
banks to send in, preferably once a month, but more
frequently, if necessary, whatever old size notes they
may accumulate, although it is suggested that redemptions in the smaller denominations be made in multiples
of $50.00.
In this connection, attention is called to the
request made by Assistant Secretary of the Treasury Hope,
in a letter addressed to all Federal reserve banks under
date of December 10, 1930, that, if possible, monthly
shipments of old size notes be made between the 5th and
15th of the month.
Very truly yours,
E. M. McClelland,
Assistant Secretary.
TO GOVERNORS OF ALL F. R. BAMS.
* 380
FEDERAL RESERVE BOARD
WASHINGTON
ADDRESS OFFICIAL CORRESPONDENCE T O
T H E FEDERAL RESERVE BOARD
X-6969
September 16, 1931.
SUBJECT: Expense, Main Lines, Leased Wire System,
August, 1931.
Dear Sir:
Enclosed herewith you will find two mimeographed statements, X-6969-a and X-6969-b, covering
in detail operations of the main lines, Leased Wire
System, during the month of August, 1931.
Please credit the amount payable by your bank
in the general account, Treasurer, U. S,, on your
books, and issue C/D Form 1, National Banks, for account of "Salaries and Expenses, Federal Reserve
Board, Special Fund", Leased Wire System, sending duplicate C/D to the Federal Reserve Board.
Very truly yours,
Fiscal Agent.
Enclosures.
TO GOVERNORS OF ALL F. R. BAMS.
X-o9b9-a
REPORT SHOWING- CLASSIFICATION AND NUMBER OF WORDS TRANSMITTED OVER MAIN LINES
OF TEE FEDERAL RESERVE LEASED WIRE SYSTEM FOR THE MONTH OF AUGUST, 1931.
Business
reported
by banks
From
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
JEansas City
jB&llas
San Francisco
Total
Words sent by
New York chargeable to other
F. R. Banks ( )
1
24,496
348,545
30,054
78,283
53,627
49,764
89,925
64,749
33,207
76,944
59,255
93,024
1,001,873
2,777
-
1,930
2,484
2,842
7,830
3,350
2,691
3,5^8
2,606
11,751
4,453
46,262
X. R. Board business
Net Federal
reserve
bank
business
Percent of total
bank business (*)
2.60
33.25
3.05
7.71
5.39
5.50
8.90
6.43
3.51
7.59
6.77
9.30
100.00
27,273
348,545
31.984
80,767
56,469
57.594
93.275
67.440
36,755
79.550
71,006
97.477
1.048,135
297.3$+
1.345.439
110,708
Treasury Department business Incoming and Outgoing
Total words transmitted over main lines
.
(*)
These percentages used in calculating the pro rata share of leased wire expense as shown
on the accompanying statement (X-6969-b).
(l)
Number of words sent by New York to other F. R. Banks for their sole benefit charged to
banks indicated in accordance with action taken at Governors' Conference
November 2 - 4 , 1925.
1,456,147
X—e9o9-"b
REPORT OF EXPENSE MA.IN LINES
FEDERAL RESERVE LEASED WIRE SYSTEM, AUGUST, 1931.
Pro rata
share of
total
expenses
Operators* Operators1 Wire
Total
salaries
Name of tank
overtime
rental
expenses
Boston
$260.00
$ 2.00
$262.00
$563.72
Sew York
1,134.15
8.00
1,142.15
7,209.16
Philadelphia
225.00
225.00
661.29
Cleveland
306.66
306.66
1,671.66
Richmond
190.00
230.00 (&)
420.00
1,168.64
Atlanta
270.00
270.00
1,192.49
Chicago
3,962.03 (#)
1.00
3,963.03
1.929.67
St. Xouis
195.00
195.00
1,394.13
Minneapolis
200.00
200.00
761.03
Kansas City
287.50
287.50
1,645.64
Dallas
251.00
251.00
1,467.85
San francisco
380.00
380.00
2,016.40
Federal Reserve Board
i5.563.39
- 15,563.79
"Total
$7,661.34
$11.oo$i5,793.39
$23,465.73
$21,681.68
1.784.05(a)
Credits
$262.00
225.00
306.66
$301.72
6,067.01
436.29
1,365.00
270.00
922.49
1,142.15
420.00
3,963.03
195.00
200.00
287.50
251.00
380.00
$7,902.34
$21,681.68
(&) Main line rental, Richmond—Washington.
(f) Includes salaries of Washington operators.
(*) Credit.
(a) Received $1,784.05 from Treasury Department covering business for the month of August,
(b) Amount reimbursable to Chicago.
Payable to
Federal
Reserve
Board
748.64
2,033.36 (*)
1.199.13
561.03
1.358.14
1,216.85
1,636.40
$15,812.70
2.033.36 ( b )
$13,779.34
1931.
fy*s
X-6969
C O P Y
HeMebln County
ko. 418
Osage national Bank,
Bibell, J.
Endorsed
Filed September 18, 1931,
Grace Kaercher Davis, Clerk,
Minn. Supreme Court.
Appellant,
28039 -vsFederal Reserve Bank of
Minneapolis,
Respondent.
SYLLABUS
1. The Federal Reserve Bank of Minneapolis, under Regulation J, series 1920, of the Federal Reserve Board, and its own
Circular 228, and the custom of the region in which it operated,
was authorized to forward in its district, for payment and return
of proceeds, checks sent it by another federal reserve bank or
directly by a member bank. It was not required to exact currency
in payment. It might accept exchange.
2. If the defendant was negligent in forwarding the
checks or in securing payment it was liable. The court found that
there was no negligence. The evidence does not require a different
f inding.
Aff irmed.
OPINION
DIBELL, J.
Action to recover the amount of two checks drawn by the
w2-
X-6969
treasurer of Williams cdunty, Itfdi'th Dakota, upon the Tilliston State
Bank in favor of the plaintiff, Osage national Bank (of Iowa). One
was for $2,022.30 and the other for $6,420. They came to the
defendant Reserve Bank in due course of clearance and for collection
and remittance of proceeds. Their course is hereafter shown. There
were findings and judgment for the defendant. The plaintiff appeals
from the judgment.
1. The evidentiary facts are not much in dispute. The
plaintiff is a member "bank of the Federal Reserve Bank of Chicago
in the 7th Reserve District. The Corn Exchange national Bank of
Chicago is also a member bank. The defendant is a reserve bank of
the 9th Reserve District. The Williston State Bank is a state bank
of 2Torth Dakota within the 9th District but not a member bank of
the defendant. It is on the par list of the defendant. On March
15, 1921, the plaintiff was the owner of two checks drawn payable
to its order by the treasurer of Williams county, north Dakota,
for $2,022.30 and $6,420, respectively, both dated March 11, 1921,
upon the Williston State Bank of '-Tilliston, north Dakota. The'
plaintiff endorsed them "pay to the order of any bank or banker"
and forwarded them to the Corn Exchange national Bank of Chicago,
They were enclosed in a form letter reading "we enclose for collection and credit." The Corn Exchange national Bank received
the checks on March 16, 1921, gave plaintiff credit therefor and
notified it that it credited the checks "subject to final payment."
On the same day it sent the checks, endorsed "pay to the order of
any bank, banker or trust company", to the defendant reserve bank
X-6969
—3n
at Minneapolis in a form letter stating that they were enclosed "for
credit" and containing instructions as follows:
"We enclose for credit items stated below. Wire
nonpayment items $500.00 or over, or those listed 'T.JT.P.'
Do not protest items $10.00 or under, items listed 'Fo.. Pro.*
or any items bearing stamp (IT 2/5 3?) or similar authority
of a preceding endorser. Protest all items not covered by
above instructions."
On March 17, 1921, the defendant endorsed the checks "pay
to any bank, banker or trust company" ,, and forwarded them by mail
to the drawee bank, Williston State Bank. They were forwarded for
collection and returns with instructions similar to those given by
the Corn Exchange national Bank as follows:
"We enclose the following items for collection
and returns. Do not hold items for any reason whatever. Wire non-payment of items of $500.00 or over.
Do not protest items of $10.00 or under or those bearing
this stamp - No Pro. 17.8 - or similar authority of a
preceding bank endorser. Protest All Other Items.
"Return this letter with your draft.
•'Date 3 17."
On March 22, 1921, the Williston State Bank marked the
checks paid and charged them to the account of the county treasurer
of Williams county. The treasurer had on deposit sufficient funds
to pay them. The bank returned the checks to him by mail on March 30,
1921, cancelled. On March 24, 1921, and again on March 30, 1921,
the defendant advised the Corn Exchange bank by letter that it was
without returns on the checks. In both of these letters it said;
"We communicate this information to you for such
action as may seem best to you under the circumstances."
The Corn Exchange bank did not answer. It claims that it did not
receive them. On March 26, 1921, the defendant wiredthe Williston
me
* 4X-6959
bank asking it to wire disposition of the checks. On March 28, 1921,
the Williston bank wired;
"Matter referred to your telegram twenty sixth has
been taken care of."
On March 29, 1921, the defendant wrote the Williston bank suggesting in effect that unless payment was made it would be necessary
to make demand at the counter for cash. In part it said:
"It has been necessary that we telegraph to you
& telephone to you in an effort to secure some satisfaction for the amounts of these cash letters, but to
the present writing have only your telegram sent the
28th, which says that the matter has been taken care of.
Had these remittances been paid immediately upon receipt,
such payment should have been in our hands long ago and
even had they been remitted for when your telegram of the
28th was sent, we believe remittance should have been in
our hands this morning.
"Under these circumstances we are under the impression
that our remittances are not receiving your prompt and
careful attention, and we take this opportunity, therefore, to demand that immediately collectible fund's be
furnished us at once or the original items enclosed in
these remittance letters be returned to us with proper
protest. Owing to instructions under which these items
are received by us we cannot permit you to delay payment
for any reason whatsoever, and unless immediate satisfaction is received as above, it will be necessary for
us to make arrangements for presenting your items at
your counter and demand payment therefor in cash. It
is apparent that we should sincerely regret the necessity of an action of this nature, nevertheless under
the circumstances as above mentioned, we feel that this
would be our only recourse.
"Please give this matter your immediate attention."
On April 1, 1921, the defendant wired the Williston bank;
"We demand immediate payment orxreturn items referred to in our telegram yesterday."
On March 31, 1921, the Williston bank wrote enclosing
draft on Merchants National Bank of St. Paul, for $8,6.19.02, dated
- 5X-6969, 3 Q 7
March 22, 1921. It stated, that it had "been held on account of a
depleted reserve; that its president was in the cities making
arrangements to replete the reserve; and that it had every reason
to believe he would succeed. It was received by the defendant
on Saturday, April 2, 1921, after clearance hours. Regularly it
would not be given attention until the next business day. The
Williston bank was overdrawn at the Merchants National Bank and
had been since Inarch 26, 1921. Its overdrafts increased. On March
22 it had in its bank money equal in amount to substantially onehalf of the checks. It had in currency and accounts in other banks
enough to pay both checks. The defendant ascertained that the draft
was not likely to be paid. The letter of transmittal was not encouraging. • The next business day was Monday, April 4, 1921. On
that day the Will iston bank closed. The draft was formally presented
and protested on April 7, 1921.
On April 4, 1921, defendant wired the Williston bank as
follows: :
"Drafts on Merchants totalling over ten thousand.
Insufficient funds. Telegraph at once."
On April 4 or 5, 1921, the defendant telegraphed the Corn
Exchange bank that checks had not been paid, that it held draft
covering them, and that the bank was reported closed.
The defendant charged back the checks to the Federal Reserve Bank of Chicago. That bank charged to the account of the
Corn Exchange Bank. That bank charged the account of the plaintiff.
The plaintiff did not asquiesce until December 28, 1921, when, under
the ruling of the Comptroller of the Currency, it credited
—
6
—
X-6969
the Corn Sxchange and charged to undivided profits.
Section 11 of the federal Reserve Act of December 23, 1923,
provides that the federal reserve ""board shall perform the duties,
functions, or services specified in this chapter, and malce all rules
and regulations to enable said board effectively to perform the same".
38 Stat. 262, c. 6, §11; 12 USCA, Tit. 12, c. 3, §248 (i), p. 318.
Section 13 of the Act, 38 Stat. 253, c. 6, §113; 40
Stat. 234, c. 32, §4, 12 USCA, Tit. 12, c. 3, §342, p. 334, provides in part:
11
Any Federal reserve bank may receive from any
of its member banks, and from the United States, deposits
of current funds in lawful money, national-bank notes,
Federal reserve notes, or checks, and drafts, payable
upon presentaton, and also, for collection, maturing
notes and bills; or, solely for purposes of exchange
or of collection, may receive from other Federal reserve
banks deposits of current funds in lawful money, nationalbank notes, or checks upon other Federal reserve banks,
and checks and drafts, payable upon presentation within
its district, and maturing notes and bills payable within its district; or, solely for the purposes of exchange
or of collection, may receive from any nonmember bank or
trust company deposits of current funds in lawful money,
national-banknotes, Federal reserve notes, checks, and
drafts payable upon presentation, or maturing notes and
bills;"
Referring to §13, and certain provisions of Regulation J,
series 1917, in a case having some features similar to this, the
court said in Transcontinental Oil Co. v. Federal Reserve Bank of
Minneapolis, 172 Minn. 58, 214 F. W. 918;
"Member banks of the federal reserve banks send
their items for clearance and collections to the reserve
bank of which they are members; but to save time and work
there existed an arrangement, in August, 1920, between
the First National Bank of Chicago, the Federal Reserve
Bank of Chicago, and the defendant whereby the former
might send direct to defendant for collection items upon
X-6969
banks within its district, the proceeds of such items so
routed being credited by defendant to the Federal Reserve
Bank of Chicago, it being agreed by and between all these
banks that their rights and liabilities should in all
respects be the same as if items so routed had been first
deposited by the First Rational Bank of Chicago with the
Federal Reserve Bank there and by the latter deposited for
collection with defendant."
In Pascadoula Hat. Bank v. Federal Reserve Bank, 3 F. (2d)
405, the court, referring to §13, said;
-
?
»
"A check sent by a member bank by the authority
and .for the account of its reserve bank is in effect
received from the latter."
The court found that the checks were received directly from
the Corn Exchange bank pursuant to an arrangement between the Federal
Reserve Bank of Chicago, the Corn Exchange Bank, and the defendant,,
whereby it was understood that the Corn Exchange might route its
checks direct to the Federal Reserve Bank of Minneapolis instead of
putting them through the Federal Reserve Bank at Chicago. The
direct evidence of this is meager. There was some correspondence
suggesting such arrangement. It was in harmony with Regulation J,
series 1920, which provided:
"Each Federal Reserve Bank will receive at par from
other Federal Reserve Banks, and from all member and nonmember clearing banks, regardless of their location, for
the credit of their accounts with their respective Federal
Reserve Banks, checks drawn upon all member and nonmember
clearing banks of its district and upon all other nonmember
banks of its district whose checks are collected at par by
the Federal Reserve Bahk,11
The substance of the finding is sustained. In this connection the amended finding requested by the plaintiff is noted;
"That at the time said checks of plaintiff were received
by said Corn Exchange National Bank, and at the time of all
i
X-6969
* 8—
transactions involved in this action it was the law of the
State of Illinois," in which state said Corn Exchange National
Bank was situated and where it received of plaintiff for
deposit, that a hank in which checks drawn on a bank in a distant city, are deposited for collection and credit and endorsed
by the depositor; *Pay to the order of any bank or banker,1
becomes the agent of the depositor to collect such checks, and
that any bank to which said checks are forwarded for collection
by the bank in which they we$e first deposited, becomes likewise in turn the agent of the depositor for purposes of collection; and is accountable to such depositor for all breaches
of duty and obligation on its part that may occur. That this
is true, even though the bank in which said checks are first
deposited, permits the depositor to draw against such checks
before they are actually collected."
Section 16 of the act, 38 Stat. 255, c. 6, §16, 12 USCA»
Tit. 12, c. 3, §248 (m), p. 320, provides:
"The Federal Reserve Board shall make and promulgate from
time to time regulations governing the transfer of funds and
charges therefor among Federal reserve banks and their branches,
and may at its discretion exercise the functions of a clearing
house for such Federal reserve banks, or may designate a
Federal reserve bank to exercise such functions, and may also
require each such bank to exercise the functions of a clearing
house for its member banks."
Regulation J, series 1920, provides:
"In handling items for member * * * banks, a Federal
Reserve Bank will act as agent only. The Board will require
that each member * * * bank authorize its Federal Reserve Bank
to send checks for collection to banks on which checks are
drawn, and, except for negligence, such Federal Reserve Bank
will assume no liability. * * * Each Federal Reserve 3ank will
also promulgate rules and regulations governing the details of
its operations as a clearing house, such rules and regulations
to be binding uoon all member * * * banks which are clearing
through the Federal Reserve Bank."
The defendant bank, responding to this regulation,
provided by circular 228 (6), effective in October, 1920, as
follows:
"Checks received b/ the Federal Reserve Bank drawn on its
meniber banks will be forwarded direct to such member banks and
are to be remitted for by the member banks on day of receipt
r
391
X-69S9
- 9"if possible, by their draft on the Federal 'Reserve Bank, provided they have a balance in excess of their required reserve,
or by their draft on a bank in Minneapolis or St. Paul.
Member banks are required by the Federal Reserve Board to provide funds to cover at par all checks received from their
FederalfieserveBank. * * *
"In handling items for member banks, the Federal Reserve
Bank of Minneapolis acts as agent only. It is understood
that each member bank authorizes it to send checks for collection direct to banks on which checks are drawn, and except for negligence the Federal Reserve Bank of Minneapolis
assumes no liability until funds are actually in its hands,
and is authorized to charge back any item for which it has
not received final payment, including items lost in transit."
This circular was sent to the Corn Exchange Bank, There is
evidence that it was not received. It was not sent to the plaintiff.
It was sent to the Federal Reserve Bank at Chicago. As noted before
there was an arrangement between the Corn Exchange bank and the
defendant that the Corn Exchange might route its checks directly to
the defendant. It was bound by the terms of Regulation J and
Circular 228. In Fergus County v. Federal Reserve Bank, 75 Mont. 582,
244 P. 883, a case much the same on its facts, there was involved
circular 286, later and more definite than Circular 228. The court
said of it:
"Circular 286 constituted a continuing offer by this defendant to perform the services of a collecting agent for the Lewistown bank
upon the conditions therein expressed, (1) that defendant might send
the items for collection directly to the bank upon which they were
drawn, and (2) that it might receive 'payment in cash or bank draft.
And under section 228 quoted above, providing that checks
may be sent directly to the payor bank and that except for negligence
the defendant assumes no liability until funds are actually in its hands,
892
- iO X-6969
and that it may chtirge bask any items for which it has not received
payment, there is no liability, except for negligence, in taking
payment by draft.
We see nothing in the regulations or the circular which
limits the right of sending direct to the payor bank whether it is
a federal reserve bank, or member bank, or non-member bank. It is
true that a member bank is required to keep a definitely determined
deposit with the reserve bank. This is not made the basis of a distinction. When an item comes to the reserve bank to be presented
to a state bank or non-member bank, it can be sent direct and payment
received in exchange. It is not a requirement that in one case exchange may be taken and in the other the payment mast be in currency.
The plaintiff claims that it can recover because the defendant
sent the two checks directly to the '"illiston bank; and because it
did not make collection in currency; and in any event that it was
negligent in doing as it did on and after March 17, 1921.
The cases are numerous and diverse in their facts and in the
applicable local law or the contract of the parties and are confusing.
In Federal Reserve Bank v. Malloy, 264 U. S. 160, it was held
that the authority under Regulation J, series 1920, to send dircct
to the payor bank did not include authority to accept a draft in payment; that if a bank responsible to the payee of the check for collection surrendered the check to the drawee bank and accepted in payment an exchange draft which proved worthless the collecting bank was
liable to the payee of the check; and the court said that Regulation
J, series 1920, while it contemplated the sending of checks for collection directly to the payor bank did not expressly permit the ac
X-6969
— 11 «*
ceptance of payment other than In inoheyt and that such authority
V
could not be inferred from the authority to send directly to the payor
bank. The court, however, said;
"The state decisions in respect of the liability of a correspondent bank-to the owner of a check forwarded for collection
by the initial bank of deposit are in conflict beyond the possibility of reconciliation. A number of States, following the
•New York rule,' so-called, have held that there is no such
direct liability, but that the initial bank alone is responsible
to the owner. On the other hand, an equal, if not a greater,
number of States following the 'Massachusetts rule', have held
exactly the contrary, viz; that the initial bank by the mere
fact of deposit for collection, is authorized to employ subagents, who thereupon become the agents of the owner and directly responsible to him for their defaults. This Court, in
Exchange national Bank v. Third national Bank, 112 U. S. 276,
after reviewing the two lines of decisions, approved the 'Hew
York rule.' But the rule may, of course, be varied by contract,
express or implied. Here the relations of the drawee to the
initial bank of deposit are controlled by the Florida statute
with respect to which it must be presumed they dealt with each
other. This statute had the effect of importing the 'Massachusetts
rule' into the contract, with the result that the initial bank had
implied authority to intrust the collection of the check to a subagent and that subagent, in turn, to another; and the risk of any
default or neglect on their part, rested upon the owners."
In Exchange National Bank v. Third National Bank, 112 U. S
276, which adopted the so-called New York rule in preference to the
Massachusetts rule, the court said, at page 289:
"And, while the rule of law is thus general, the liability
of the bank may be varied by consent, or the bank may refuse to
undertake the collection. It may agree to receive the paper
only for transmission to its correspondent, and thus make a different contract, and become responsible only for good faith and
due discretion in the choice of an agent."
In Douglas v. Federal Reserve Bank, 271 U. S, 489, the difference between the Massachusetts rule and the New York rule is
stated as follows:
"Both plaintiff and defendant concede that it is the
rule of the federal courts that a bank which receives commercial
X-6969
** 12 -•
*
paper for collection is not drily "bound to use due care
itself, but is responsible to its customer for a failure to collect, resulting from the negligence or insolvency
of any bank to which it transmits the1 check for collection..
This is the so-called 'Few York rule, which in effect makes
the first bank a guarantor of the solvency and diligence of
the correspondents which it employs to effect the collection..
Exchange Nat. Bank v. Third Eat. Bank, 112 U. S. 276. And
see Federal Reserve Bank v. Malloy, 254 U. S. 160, 164, for
a comparison of this rule of liability with the 'Massachusetts
rule' by which the initial bank is liable only for its failure
to exercise duo care in the selection of an agent to make the
collection. Under the Massachus 311s rule the agent selected
becomes the agent of the owner of the paper, who may maintain
an action directly against it for the negligent performance
of its undertaking. See Federal Reserve Bank v, Malloy, supra,
164. Compare Bank of Washington v. Triplett, 1 Pet. 25, where
the undertaking of the initial bank was to transmit paper for
collection."
We adopted the rule of the Malloy case in Hummerberg v.
State Bank of SIayton, 170 Minn. 15, 212 H. W. 16, and have followed
it in others. Tobiason v. First State Bank of Ashby, 173 Minn. 533.,
217 H. W. 934; Holdingford Milling Co. v. Hillman Farmers Co-Op.
Creamery, 181 Minn. 212, 231 KV W. 928. And see Streissguth v.. Bank,
43 Minn. 50,- 44 N. W. 797; Semingson v. Stockyards' Hat. Bank, 162
Minn. 424 , 203 IT. W. 412. We note that the rule pronouncing liability when the transmitting bank sends directly to the payor bank
or receives payment in the draft of the payor bank instead of in
currency is abrogated in Minnesota by Laws 1927, c. 128, Mason, 1927,
§7233-1; Schram v. Askegaard, 34 F. (2d) 348«• And so in North
Dakota, S. L. 1925, c. 170; S. L.. 1927, c. 92; State v. Bismarck
Bank,
IT. D„
, 220 IT. W. 636. •
In the concurring opinions in the Hommerberg case, supra,
it was suggested that the result there reached, following the Malloy
case, was logical but harsh; that its enforcement was impracticable
J
395
X-6969
- 13
and perilous; that it necessitated every .bank entering into contractus
relations with its customers and correspondents to avoid its effect
and attendant loss; and that the rule was rut of harmony with modern
banking practice. This may have suggested our statute.
We hold that the plaintiff was bound by Regulation J, series
1920, and Circular 228, both of which were effective when the transaction
was had in March, 1921. The parties assented to the defendant bank
transmitting the plaintiffs check just as it did, that is, directly
to the payor bank; and it assented to payment by the payor's draft,
It is at once seen that if the rule obtained that currency must be
sent, and it always was observed, the business of convenient exchange
the country over would be paralyzed. The outside districts would be
drained of their currency. The banks do not and can not keep currency
on hand to meet all paper demands. This fact made easy the establisbrmont of a par of exchange. CIeve v. Craven Chemical Co. 18 7, (2d)
711. The purpose of a clearance system is to prevent the use of
actual currency. And in this connection the following finding of the
court made upon sufficient evidence is noted;
"That during all if March and April, 1921, and prior
thereto, it was the established, general, uniform and certain usage and custom among banking institutions in Minnesota
and Horth Dakota, where checks deposited for collection drawn
on banks located at a distance had been forwarded direct to
the drawee or payor bank for collection, for the drawee or
payor bank to remit the proceeds of the collection in exchange
drafts drawn on banks in the vicinity of the forwarding
bank, and it was the established, general, uniform and
certain usage and custom among banking institutions in
said states for the forwarding bank to permit such remittance by draft, and upon receipt of the exchange or remittance drafts to endeavor to collect the same."
i 896
- 14 X-6969
The presence of such a custom distinguishes one feature
of the Malloy case. Hicks Co. v. Federal Reserve Bank, 174 Ark.
587 , 296 S. W. 46; Spokane Valley State Bank v. Lutes, 133
Wash. 65, 233 P. 308. It is held that the defendant dealt with
the checks as it was intended that it should and that it was not
liable unless it was negligent.
2. The plaintiff claims that the defendant was negLigent
in sending the checks to the payor bank at Williston for collection
and in taking payment "by its draft instead of demanding currency.
'The bank was in good repute. It was on the par list of the defendant.
It had been doing business with the defendant for two months and
their relations were satisfactory. The other state bank at Williston
was in doubtful condition. The national bank located there had not
been satisfactory in its dealings with the plaintiff and did not
want the exchange business. The bank situation in ITorth Dakota at
the time was not good. Five, per cent of the banks had failed,
forty out of eight hundred; but in what sections of the state and
at what times does not appear. Business had to be done, debts paid,
money transmitted, and the business of exchange had to go on. A bad
banking condition ought to make forwarding banks wary. The transaction of March, 1921, was not an unusual transaction or an infrequent
one though the two checks were of considerable amounts. The evidence
shows that the daily transactions through the bank by way of checks
and drafts amounted to as much as $10,000,000 to $15,000,000; that
there were so many as 75,000 to 80,000 checks or drafts handled
each day; and that they were drawn on 3,000 banks. These figures
I 397
X-6969
- 15 »
may exaggerate the situation but they are of some value.
It is urged that the defendant should have been more active
after March 22, 1921, when the remittance was due and none came.
The effort it exorcised has been narrated. The Villiston bank,
if it could not pay, should have had the checks presented and protested. It assumed to pay, charged the county treasurer, but did
not transmit, It misrepresented the facts to the defendant bank,
to which it should have remitted or whose command for protest it
should have observed. Evidently the bank was in trouble and was
trying to save itself and its depositors and creditors. It failed
and is to be blamed. It was in the position of a collecting bank
and also payor bank. It failed in its duties as a collecting bank.
It put the checks out of its possession. If they had been dishonored and put in the way of return to the county treasurer with
a demand for the debt which they had not paid, the original liability
of the county would have been preserved. This was a fault of the
Williston bank. It was not the intention of the parties that the
defendant itself should present the checks at the counter. It was
to forward then).
The defendant did not obey the instruction to wire non^
payment. The transit schedule, going and returning, was four
business days. A Sunday intervened. This extended the period to
March 22, 1921. It notified the Corn Exchange bank on March 24 and
again on March 28, It was trying to get payment and the Williston
bank was trying to make payment. It did not refuse payment or
assume to dishonor the checks. The defendant did not have actual
; 898
- 15 -
X-6969
knowledge until April 2 , 1 9 2 1 , after clearance hours, that payment
would nbt be made.
A finding of
negligence for failure to wire was
not required.
It is urged further that the defendant was at fault in respect of the 'Till is ton bank draft on the Merchants National, which
was sent on March 31, 1921, and which reached the defendant on April
2, 1921. Its sending was pretty much a sham. When sent the Williston bank had an overdraft of $10,000. It continued until it closed
its doors. It had had an overdraft since March 25. Protest was
useless. It was not necessary to the fixing of the liability of
the Williston bank. It was a neglect or misuse of the two checks
which brought the trouble and that was days prior to the Merchants
draft, and, as found by the trial court, was not the fault of the
defendant. Whether there might have been something done immediately
after the wrong of the Williston bank to restore the checks to the
plaintiff so that it might fix liability upon the treasurer, or
whether the misdealing with the checks gave it a preference upon
the theory of a trust, is not of concern here.
The defendant urges that it should have consideration because it was rendering an uncompensated service. Wc do not agree.
It was charged with definite duties,. It is given definite -rights
and privileges of great consequence by the statute of its organization. It was to do a banking business of a particular character
and was given extensive powers. It was required to give free exchange. It was not doing a free service though there was no specific
charge for this incidental one..
-• 17 -
X-6969
•fcho court finds;
"That until April 2, 1921, defendant had no knowledge or notice of the unsafe condition of said Williston State Bank and that defendant in handling said checks
for $6,420 and $2,022,30 for collection was not negligent
in any particular."
This finding is sustained by the evidence.
Judgment affirmed.
COPY
X-6971
September 16, 1931,
Mr. Robert S. Parker,
1607 William-Oliver Building,
Atlanta, Georgia.
My dear Bob:
I have received your letter of September 14, 1931, with
further reference to your proposed "bill of interpleader in the
Central National Bank and Trust Company of St. Petersburg matter,
and I am very glad to know that, in my telegram of the same date,
I hit upon the exact problem which was troubling you.
As I told you in my telegram, it seems obvious to me that,
under the existing circumstances, the proper thing to do is to offer
to pay the money to the court and file a bill of interpleader requiring the other parties to come in and let the court decide to
whom the money is due. I do not see how there can be any question
as to the propriety of this method of procedure.
The only possible objection to this procedure is due to
the fact that we have not yet had a decision distinguishing the
rights, duties and liabilities of the fWderal reserve banks in
collecting checks under Regulation J as amended a year ago from
the rights, duties and liabilities of Federal reserve banks as stated
by the Supreme Court in the Early case; and there is a danger that,
if these issues are tried out in a case in which counsel for one of
the Federal reserve banks does not represent one of the parties or
otherwise participate actively in the trial of the case, the issues
may not be presented properly to the court and the decision may not
be satisfactory to the Federal reserve banks. I believe, however,
that the precautions which you are taking will safeguard us against
any such unhappy results#
It seems to me that, having initiated the litigation by
filing a bill of interpleader, it would be entirely proper for you
to ask leave of the court to file a brief as sulcus curiae* stating
your views as to the rights, duties and liabilities of the Federal
reserve banks under Regulation J, and especially calling attention
to the amendment made to Regulation J after the Supreme Court decision in the Early case* The decision in this case will so vitally
affect all of the Federal reserve banks that I believe the counsel
for any Federal reserve bank could properly ask for leave to file
such a brief, though, of course, if you do so, it will not be
necessary for any of the other counsel to do so. Furthermore, I know
that the office of the Comptroller of the Currency will be greatly
interested in this litigation and through cooperation with them, I
«*2-»
X-6971
shall be ia a position to render some assistance.
It occurs to me that, having disclaimed any interest in
the controversy or in the fund over which the controversy arises,
it might be embarrassing to you to file a brief as amicus curiae.
I do not think that you should be embarrassed, since the proper
interpretation of the Board's Regulation and of the Federal reserve
bank's check collection circular is of great importance to the
Federal reserve bank, and your specialized knowledge of the subject
would enable you to be of much assistance to the court in dealing
with the highly technical questions presented. If, however, you do
feel reluctant to ask leave to file a brief as amicus curiae, it
occurs to me that, if I can obtain the consent of the Federal Reserve
Board, I might file such a brief on behalf of the Federal Reserve
Board, on the theory that the interpretation and application of one
of the Board's important regulations is involved in this suit and the
Board is interested in having its regulation properly interpreted and
applied.
I believe, therefore, that, even if counsel representing the
owners of the checks should refuse to accept your views on this point,
it would be reasonably safe to go ahead and file a bill of interpleader.
While I have read your tentative bill of interpleader, and
find nothing wrong with it, I have not studied it carefully; because
I realize that you are in a much better position to prepare such a
bill than I am, and I do not feel that I can add anything whatever
to your efforts along that line.
I believe that the United States District Court properly has
jurisdiction of this case, because the receiver of an insolvent national
bank is a party and the suit is in the nature of a proceeding to wind
up the affairs of an insolvent national bank. There may be some doubt,
however, as to the proper venue. It occurs to me that the suit may
be deemed to be one within the provisions of Section 57 of the Judicial
Code (28 U.S.Code, Sec. 118) and that, in such event, the proper venue
might be the district in which the res is situated. The question is
whether this is in Atlanta, Jacksonville or St. Petersburg. I am inclined to think that it must be either Atlanta or Jacksonville; but,
under the peculiar procedure which you have in handling matters of this
kind, I am unable to determine whether the property in dispute is situated
in Atlanta or Jacksonville. If it is in Jacksonville, that would probably
eliminate any question as to whether the proper district is the district
in which the insolvent national bank is located or the district in which
the branch Federal reserve bank is located; because I believe that St.
Petersburg and Jacksonville are both in the northern District of
Florida.
You probably have given very careful consideration to the
question of jurisdiction and venue; and I have been so busy with other
matters that I have given this only hasty consideration. However, I
*•6971 • i 4 0 2
submit the above observations fgr whatever they may " e worth.
b
In this connection, I invite your attention to the case of
Omaha National Bank v. Federal He serve Bank of Kansas City, et al.,
26 Fed.(3d) 884, 45 Fed.(3d) 511, certiorari denied, 49 Supreme Court
19, 278 U.S. 615.
Because of the fact that this suit,may result , g a decision
i^
interpreting and applying Regulation J as amended, it""is of interest
to all Federal reserve banks and, therefore, I telegraphed you this
morning for permission to send copies of your bill and of our correspondence to counsel for all Federal reserve banks for their information.
I shall also appreciate it if you will kindly keep me advised of all
developments in this case.
With kindest personal regards and all best wishes, I am
Cordially yours,
Walter Wyatt,
General Counsel.
WW gc
COPY
X-6971-a
v
COLQUITT, PARK©,' TROUTMAJ? & ARKWRIGHT
ATTORMTS AT LAW
ATLANTA, GA.
September 14, 1931.
Mr. Walter Wyatt, General Counsel,
Federal Reserve Board,
Washington, D. C*
Dear Walter:
Re:
Central Nat'l Bank & Trust Co.
I thank you very much for your telegram, stating that
you have read the tentative hill in the above matter and see no
objection to the same.
In your telegram you have touched on the only question
which has been giving me concern, namely, whether or not, after
having paid the money into court and retired from the litigation,
I could so far control or suggest the points to be pressed as
to avoid any possibility of some decision which might prove embarrassing to the Federal Reserve Bank.
I have already discussed the Early case with counsel
representing most of our endorsers and unless I convince him that
that decision will not be relied on and he promises not to use
it, the bill of interpleader will not be filed.
When he first
began to investigate the question he, of course, discovered the
Early case and wrote me that he deemed that case to be conclusive
on the questions involved. I wrote him, stating (I am afraid
a little abruptly) that I did not regard the Early case as being
even persuasive when applied to the facts in this case, much less
conclusive. One reason why I am going to St. Petersburg is to
assure myself so far as I can that the question will be argued
on the proposition of whether or not presentation for payment
at the Branch, while the drawer ba#k was still open, was, in law,
the same as if the check had been presented at the counter of
the parent bank in Atlanta for payment in regular course.
At
any rate, special counsel representing the Comptroller's office
is one of my close personal friends. He has represented the
Federal Reserve Bank in one or two matters and I feel sure
that I can count on him to present his side of the case in such
a way as to avoid complications which would be inimical to
Federal Reserve Banks in their check collection functions.
Mr. John D. Harris, of the firm of Cook & Harris, who will
Mr. falter Wyatt - ,#3«
X-6971-a
represent most, if not substantially all, of the claims on
the other side, is a very high class lawyer, who is grateful
for the cooperation which has been given him by the Federal
He serve Bank. I feel that he will tell me frankly just how
he proposes to present his side of the case.
I am afraid that after the fund is paid into court,
a mere stakeholder would have no right to suggest by brief or
otherwise What, in our opinion, is the law* I shall watch
the situation closely and will not file the bill if I "believe
there is any reasonable ground to apprehend the development
in the case of anything detrimental to the interest of the
federal Reserve Bank.
Again thanking you for your very prompt review of
my letter and the bill, I am
Sincerely yours,
(Signed) Eobt. S. Parker
ESP/w.
X»697i4)
COPY
Parker
Atlanta*
September 14,
1931.
Have read tentative bill in Central National Bank and Trust Company,
St. Petersburg, case and see no objection to same* Have not considered
technical questions re form and contents of bill because you are better informed on that subject that I am. It occurs to me that this suit
may result in decision distinguishing rights, duties and liabilities
of Federal reserve banks under Regulation J as amended from those stated
by Supreme Court in Early Case. Therefore believe you should follow
case closely and see that this point is properly presented even
if it is necessary for you to file brief as amicus curiae*
Wyatt
W OMC
COPY
X-6971-c
September 14, 1931.
Parker
Atlanta
Your letter September 11th re Central National Bank and
Trust Company St. Petersburg, Florida received this morning. Upon
hasty consideration "believe suggested procedure is obviously correct
and proper. Have not had time to study the bill thoroughly but will
wire you by five o'clock eastern standard time today if I can find
time to do so.
Wyatt
WW gc
COPY
X-6971-d
COIQAIITI
B O U M U & ARKWRIGHT
ATTORNEYS AT U N
ATLANTA, OA.
September 11, 1931.
Mr. Walter Wyatt, General Counsel,
Federal Reserve Board,
Washington, D. C.
Dear Mr. Wyatt|
He: Central Nat'l Bank & Trust Co.
St. Petersburg. Florida.
I have intended for the last week or two to write you
with reference to a situation which has arisen out of the closing
of the Central National Bank and Trust Company of St. Petersburg,
Florida.
Shortly before that bank suspended, the Jacksonville
Branch of the Federal Reserve Bank had sent it two cash letters,
enclosing items aggregating seventy-five thousand and odd dollars.
On April 16th these cash letters were received, the items were
paid, charged to the accounts of the makers and the St. Petersburg bank drew its draft on its reserve account and sent the same
out by mail. The remittance draft was received in Jacksonville
about eight o'clock on the morning of the 17th.
The St. Petersburg Bank was then open for business but closed about ten o'clock
A. M. on that day.
Before the draft had been charged to the
reserve account advice of the suspension of the St. Petersburg
bank was received. The Federal Reserve Bank charged the item
enclosed with the cash letter back to its endorsers, but, at the
same time, charged the amount of the remittance draft against the
reserve balance and placed the fund in a suspense account awaiting some proper determination as to rights therein.
The banks forwarding the items to the Reserve Bank
claim that the Jacksonville Branch was an office of the Federal
Reserve Bank and that, since the draft was presented to that
office through the mails while the drawer was still open, the
same should be regarded as paid as of the time of its actual
receipt. The Receiver, on the other band, acting upon instructions from the Comptroller, claims that the Jacksonville
4 0 8
Mr. Walter ffyatt - #2
X-6971-d
Branch could not pay the draft "but could only advise the parent
bank of its amount to the end that entries could he made on the
books in Atlanta* It was the practice of the Federal Reserve
Bank to furnish its Jacksonville Branch specimen signatures and
also daily advices showing amounts to the credit of members in
their reserve accounts. Upon receipt of any check drawn by
a bank on its reserve account, the Jacksonville Branch would
inspect the same for genuineness of signature and also in respect of the sufficiency of the reserve balance, etc.
At intervals during each day the Jacksonville Branch
advises by wire of the checks drawn on reserve balances which
it has on hand.
I go into the practice obtaining between the parent
bank and its Branch since that may be material in a determination
of the rights of the claimants to the fund.
After considerable correspondence between the Comptroller's office and counsel representing certain of our endorsers, it has been decided that the quickest and most economical
way to dispose of the matter would be for the Federal Heserve Bank
of Atlanta to file a bill of interpleader in Tampa, setting up
all of the pertinent facts and having the court settle the rights
of the parties. I have drafted a tentative bill and hand .you
a copy of the same herewith. I -.mow that you are unusually
busy, but- I would appreciate your examination of this bill as
soon as possible and your advice by wire as to whether or not
you soo any objection to its being filed. Personally, I see
no objection and know of no oth?r way to get the matter settled.
We don't want to get in a position where we may have to pay out
the fund twice. I realize that the .bill which I have prepared
might be subject to technical objections and that it might,
in the absence of agreement, be impossible to make parties.
The situation is, however, that the Comptroller wishes the bill
filed and his counsel will raise no objections to the procedure
adopted. About forty per cent, in amount of the claims of
our endorsers are already in the hands of a firm at St. Petersburg for attention. r:e have thought it proper for the Federal
?..3serve 3ank to advise all of its endorsers of just what it
proposes to do, suggesting the advisability of voluntary
appearances in the Federal court at farapa.
In this way we
Mr. Walter Wyatt-#3*
X-6971—d
hope to have all, or substantially all, of the parties at
interest actually "before the Court.
I am leaving Atlanta Monday evening for St. Petersburg
on another matter#
While there, however, I will have a conference with counsel who represent, respectively, the Comptroller
and a large percentage of those interested in the items which
If it is not asking too
were involved in the cash letters.
much, I would like to get your reactions to the proposed procedure
by wire on Monday "before I leave for St. Petersburg.
In any
event, however, I will withhold putting the bill in final shape
until I hear from you.
With best regards, I am
Sincerely yours,
(Signed) Bobt. S. Parker.
ESP/w.
End.
4
£0 £ Y
X-6971-e
IN THE DISTRICT COURT OP THE UNITED STATES,
FOR THE SOUTHERN DISTRICT OF FLORIDA,
TAMPA, DIVISION.
Federal Reserve Bank of Atlanta,
Complainant
vs
)
(
A. M. Anderson, as Receiver of
Central National Bank and Trust
Company of St. Petersburg, Florida,
et als,
)
No.
Defendants*
BILL OF INTERPLEADER.
TO THE HONORABLE, THE JUDGES OF SAID COURT:
Federal Reserve Bank of Atlanta, averring itself to "be a "body
corporate, organized and existing under and " y virtue of the laws of the
b
United States, having its principal office and place of "business in the
City of Atlanta, Fulton County, Georgia, presents this its bill of complaint, the same being a bill of interpleader, against A. M. Anderson,
the duly appointed and acting receiver of the Central National Bank and
Trust Company of St. Petersburg, Florida, a national banking association,
having its principal office and place of business in the City of St. Petersburg, Hillsboro County, Florida and in the Southern District of Florida;
Federal Reserve Bank of Boston; Federal Reserve Bank of New York; Federal
Reserve Bank of Philadelphia; Federal Reserve Bank of Cleveland; Federal
Reserve Bank of Chicago; Federal Reserve Bank of St. Louis; Federal Reserve
Bank of Richmond; Federal Reserve Bank of Kansas City (all of said defend
X-6971-e
411.
(3)
ant Federal Reserve Banks being bodies corporate under the laws of the
United States and having their respective principal offices and places
of business in the Cities, the names of which are incorporated in the
respective corporate names of such defendants); and also against the
following named State and National banks, to-wit:
Citizens and Southern
National Bank, Atlanta, Georgia; First National Bank, Atlanta, Georgia;
Fulton National Bank, Atlanta, Georgia; Florida National Bank, Bartow,
Florida; First National Bank, Miami, Florida; Monroe & Chambliss National
Bank, Ocala, Florida; First National Bank and Trust Company, Macon, Georgia;
First National Bank* Lake City, Florida; American National Bank, Pensacola,
Florida; Hamilton National Bank, Chattanooga, Tennessee; First National
Bank, Chattanooga, Tennessee; East Tennessee National Bank, Knoxville,
Tennessee; American National Bank, Nashville, Tennessee; Hibernia Bank and
Trust Company, New Orleans, Louisiana; First National Bank, Mobile, Alabama;
and Whitney National Bank, New Orleans, Louisiana, (all of said defendant
State and national banks being corporations, organized and existing ei&©r under
the laws of the United States or of the respective States in which their
principal offices and places of business are located, such principal offices
and places of business being indicated in the listing of said State and
national bank defendants).
-2-
Said parties, that is to say, the said A. M. Anderson, as Receiver as aforesaid, and the various banks and banking associations or
corporations hereinabove listed, axe made parties defendant to this action.
Complainant avers that the interests of all of said defendants (excepting
defendant A. M. Anderson, as Receiver) are identical and that such of said
defendants, other than defendant A. M. Anderson, as Receiver, as may be
X-697l-e
(3)
served by the processes of this
4 1 a
and/or as may appear herein volun-
tarily are made defendants as representatives of a class, to-wit, a class
composed of all of the above named defendants, excepting only the said
A. M. Anderson as Receiver.
Complainant is advised and believes, and upon
such information and belief avers the fact to be, that many of said defendants, whose offices and places of business are located without the
State of Florida, will acknowledge or waive service of subpoena and enter
an appearance herein.
—
This cause arises under the Constitution and laws of the United
States for that one of the parties defendant, to-witr A. M. Anderson, is
Receiver of the Central National Bank and Trust Company of St. Petersburg,
a national banking association as heretofore stated, he having been appointed
as such by the Honorable, the Comptroller of the Currency of the United
States acting under and pursuant to the statutes of the United States for
such cases made and provided, and, as such Receiver, being an officer of
the United States.
This cause arises under the Constitution and laws of the
United States for the further reason that the same involves a fund claimed
by the said defendant A. M. Anderson in his capacity as Receiver, and the
cause if, therefore, one for the winding up of the affairs of a national
banking association, of which the courts of the United States are given
jurisdiction by the statutes of the United States.
-4This is a suit in equity, to-wit, a bill of interpleader, seeking
such equitable relief as is hereinafter prayed, and the amount involved,
exclusive of interest and costs, exceeds the sum or value of three thousand
dollars.
, <1
13
X-697l-e
(4)
-5Complainant is one of the twelve Federal Reserve Banks organized
and now functioning pursuant to the provisions of that certain Act of
Congress known as the Federal Reserve Act as from time to time amended.
-6-
•Among the powers and duties granted to and imposed upon complainant as a Federal Reserve Bank, under and " y virtue of said Federal Reserve
b
Act, is the power and duty to receive from any of its member hanks deposits
of checks and drafts payable upon presentation and also for collection
maturing bills and notes and also to receive for purposes of exchange or of
collection from other Federal Reserve Banks deposits of checks and drafts
payable upon presentation within its District, as well as to receive for
the purposes of exchange or of collection from any non-member bank or trust
company deposits of checks and drafts payable upon presentation or maturing
notes and bills , provided any such non-member bank or trust company maintains with complainant a balance sufficient to offset the items in transit
held for its account by complainant.
-7Under and by said Federal Reserve Act it was provided that "every
Federal reserve bank shall receive on deposit at par from member banks or
from Federal reserve banks checks and drafts drawn upon any of its
depositors, and when remitted by a Federal reserve bank, checks and drafts
drawn by any depositor in any other Federal reserve bank or member bank upon
funds to the credit of said depositor in said Reserve bank or member bank;"
also that "the Federal Reserve Board"* * "may at its discretion exercise
the functions of a clearing house for such Federal reserve banks, or may
X-6971-e
designate a Federal reserve "bank to exercise such functions, and may also
require each such bank to exercise the functions of a clearing house for
its member "banks."
-8-
Acting in pursuance of the provisions of said Federal Reserve Act
and desiring to afford both to the public and to the various tanks of the
country a direct, expeditious and economical system of check collection and
settlement of balances, the Federal Reserve Board has heretofore arranged
to have each. Federal Reserve Bank (including complainant) exercise the
functions of a clear fog house and collect checks for such of its n r - b e •
e.i.r
banks as may desire to avail themselves of its privileges and for such nonmember State banks and trust companies as may maintain with the Federal
Reserve Bank balances sufficient to qualify then, under the provisions of
the aforesaid Act, to send items to Federal Reserve Banks for purposes of
exchange or of collection.
Said Federal Reserve Board has also promulgated
regulations touching or concerning the clearing and collection of checks
sent to a Federal Reserve Bank for collection by its own member banks,
qualified non-member clearing banks in its District and by other Federal
Reserve Banks or by banks or trust companies in other Federal Reserve Districts for the account of other Federal Reserve Banks.
-9Complainant further shows that, pursuant to the provisions of
law hereinabove set out or referred to and in conformity with and under
the said Regulations of the Federal Reserve Board, it received at all of
the dates and times herein mentioned, and now receives, for collection
X-6971-e
> 415
(6)
checks and drafts payable upon presentation when sent to it for that purpose by its member banks, by qualified non-member clearing within its
District, by other Federal Reserve Banks and by banks or trust companies
located in other Federal Reserve Districts for the account of other Federal
Reserve Banks.
-10-
On and prior to April 17, 1931 Central National Bank and Trust
Company was a member bank of complainant, that is to say, it owned shares
of the capital stock of complainant and was otherwise qualified as a member
bank under the terms and provisions of the Federal Reserve Act.
On and
prior to said date complainant received for collection from its member banks,
other Federal Banks and others entitled to avail of the check collection
facilities of the Federal Reserve System, checks and drafts drawn on or
payable at the said Central National Bank and Trust Company.
Such checks
and drafts complainant, acting by and through its Jacksonville, Florida,
Branch, forwarded to said Central National Bank and Trust Company in conformity with and under the provisions of the aforesaid Regulations of the Federal
Reserve Board.
Under the terms of collection set out in and imposed by the
said Regulations, complainant acted in the collection of such checks and
drafts only as agent of the banks from which it received the same.
Such
checks and drafts were, in the regular course of dealing obtaining between
complainant and said Central National Bank and Trust Company, sent by the
Jacksonville, Florida Branch of complainant to said Central National Bank
and Trust Company for collection and/or payment and remittance enclosed with
what were, and are, known as "cash letters."
Upon receipt of such checks
X-6971-e
(7)
and drafts drawn upon or payable at said Central National Bank and Trust
Company, it was the duty of said Central National Bank to collect and/or
to pay such items and to remit for the same to the said Jacksonville
Branch of complainant, it, complainant, acting in the transaction as agent
for the "banks from which it had received such items, as heretofore set out.
-11-
On April 17, 1931 and prior thereto, and now, it was and is
one of the functions of complainant, as a Federal Reserve Bank, to take
on deposit the reserve accounts or "balances of its member "banks.
On April
17, 1931, and prior thereto, said Central National Bank and Trust Company
maintained its reserve account with complainant, a portion of the same,
to-wit, the fund hereinafter mentioned, still "being in the hands of complainant .
—13—
The reserve "balance or account of a member "bank is that "balance
required by law to be maintained with.the Federal Reserve Bank of the District in which the member is located.
Said reserve balance is an account
subject to withdrawal by check of the depositor and is otherwise governed
(in so far as is material for the purposes of this action) by the ordinary
rules, usages and practices obtaining between a bank of deposit and its
depositors.
-13In the carrying on of its check collection functions hereinbefore
described, complainant maintains branches or branch offices, among the same
being a branch or office located in the City of Jacksonville, Florida,
hereinbefore referred to as complainant's Jacksonville Branch.
Checks sent
X-
6 9 7 1
-e^
(8)
by complainant to "banks in Florida for collection, or payment and remittance were at all the tiiD.es and dates herein mentioned, and now ars, so sent
out for such purpose "by and from the said Jacksonville Branch and remittances to complainant for the cash letters enclosing items so sent Fere,
and are, made "by "banks in Florida to such Branch.
-14At all of the times and dates herein mentioned, as well as at the
present time, the said Jacksonville Branch was and is furnished specimens
of the signatures of the officers of member "banks in the State of Florida
authorized to check against the reserve accounts of such members.
At all
of such times and at the present time there were and are dispatched daily
from the Atlanta office of complainant to its Jacksonville Branch statements showing the reserve balances to the credit of each such member as
of the close of business upon the day the said statements of the balances
are so sent to the said Branch.
Member banks in the State of Florida (in-
cluding said Central National Bank and Trust Company prior to its closing)
customarily remitted to complainant for cash letters sent to them by drafts
or checks drawn upon their respective reserve accounts, such remittances
being made to complainantjs Jacksonville Branch as heretofore set out.
-15Upon receipt of such remittance drafts, drawn upon such reserve
balances, complainant's Jacksonville Branch inspects the same for genuineness of signature and also in respect of the sufficiency of reserve balances
for payment.
At intervals during each business day complainant's Jackson-
ville Branch telegraphs to complainant's Atlanta office lists showing the
7
X-6971-e
(9)
drafts drawn by member banks upon their reserve balances and the amounts
thereof, this information being furnished to the end that entries may
be made on complainant's books in Atlanta showing charges of such checks
to the reserve accounts of the drawers. This practice obtained at all
of the dates and times herein mentioned and now obtains.
-16-
On April 15, 1931 complainant, through its Jacksonville Branch,
forwarded for collection or payment and remittance to the Central national
Bank and Trust Company items aggregating Seventy-five Thousand, Eighty and
96/100 Dollars ($75,080.96) enclosed with two cash letters, said items
consisting of checks drawn on said national Bank by its own depositors and
being known as "cash items."
Complainant is informed and believes and,
upon such information and belief, represents the fact to be that said items
were received in St. Petersburg by said Central National Bank and Trust
Company on April 16, 1931, upon which date said items were cancelled and
charged to the respective accounts of the drawers.
On said last mentioned
date Said Central National Bank and Trust Company drew its check or draft
in the amount of Seventy-five Thousand, Eighty and 96/100 Dollars ($75, 080.96) upon its reserve account maintained with complainant and dispatched
the same by mail to complainant1 s Jacksonville Branch.
-17Said remittance draft, drawn upon the reserve account of said
Central National Bank and Trust Company, reached Jacksonville in the early
morning mail on April 17, 1931 and the same was received by complainant
at its Jacksonville Branch at about 8:00 o'clock A. M. Eastern Standard
Time, At approximately 10:00 o'clock Eastern Standard Time on the same day,
X-6971-e
(10j
April 17, 1931, said Central National Bank and Trust Company closed its
doors and suspended "business and its affairs were taken in charge " y the
b
Comptroller of the Currency of the United States pursuant to the statutes
of the United States for such cases made and provided.
Subsequently, A. M.
Anderson, one of the defendants herein, was duly appointed receiver for
said National Bank.
-18-
Corjplainant received advice both at its main office in Atlanta
and at its Jacksonville Branch of the closing of said Central National Bank
and Trust Company shortly after its suspension.
-19At the time said remittance draft was received at the Jacksonville
Branch of complainant the drawer was open for "business. Complainant had,
however, not made any entry charging the amount of said check to the reserve
account of said Central National Bank and Trust Company prior to the receipt
of the notice of suspension, nor had complainant's Jacksonville Branch
telegraphed to complainant the information upon which to make entries at
the time notice of suspension was received in Jacksonville and Atlanta.
-20-
Each of the defendants herein named (other than defendant A. M.
Anderson, as Receiver) had, on or prior to April 15, 1931, sent to complainant's Jacksonville Branch certain of the cash items which were enclosed
with one or the other of the cash letters of that date, which complainant's
said Branch sent to said Central National Bank and Trust Company as aforesaid.
In the case of certain of the defendant Federal Reserve Banks, some
tzv
&SS
X-6971-e
(11)
of the it e a herein referred to as having "been sent to complainant for
rs
collection " y such Federal Reserve Banks were not actually transmitted to
b
b
complainant or to its Branch " y such Federal Reserve Banks but were, in
fact, forwarded to complainant's Jacksonville Branch by member banks of
such Federal Reserve Banks but for the account of such Federal Reserve
Banks. Such direct sending, however, was, in legal effect, the same as
if such items had been sent by the member banks to their Federal Reserve
Banks for collection and by the latter to complainant for collection since
the direct forwarding was for the account of the said Federal Reserve Banks
and was undertaken merely to facilitate speedy collection.
-21-
Complainant further shows that the items enclosed with said two
cash letters included items which had been forwarded to complainant's Jacksonville Branch by the following named defendants to the aggregate amounts
set opposite their respective names, to-wit.
NAME
Federal Reserve Bank of Boston,
Federal Reserve Bank of Hew York,
AMOUNT.
$ 3 258 12
33 042 71
Federal Reserve Bank of Philadelphia,
1 627 65
Federal Reserve Bank of Cleveland,
2 318 13
Federal Reserve Bank of Chicago,
8 471 38
Federal Reserve Bank of St. Louis,
Federal Reserve Bank of Richmond,
Federal Reserve Bank of Kansas City,
634 42
1 880 35
136 76
< 421
X-6971-e
(W
NAME
Citizens and Southern Hational Bank,
Atlanta, Georgia,
First National Bank,
Atlanta, Georgia.
MOUNT;
$ 1 763 52
1 283 97
Fulton National Bank,
Atlanta, Georgia.
16 62
Florida National Bank,
Bartow, Florida.
5 00
First National Bank,
Miami, Florida.
Munroe and Chambliss National Bank,
Ocala, Florida.
First National Bank and Trust Company,
Macon, Georgia.
First National Bank,
Lake City, Florida.
514 52
90 45
373 56
10 00
American National Bank,
Pensacola, Florida.
5 00
Hamilton National Bank,
Chattanooga, Tennessee.
11 32
First National Bank,
Chattanooga, Tennessee.
5 61
East Tennessee National Bank,
Knoxville, Tennessee.
109 80
American National Bank,
Nashville, Tennessee.
240 02
Hibernia Bank and Trust Company,
New Orleans, Louisiana.
80 00
First National Bank,
Mobile, Alabama.
61 40
Whitney National Bank,
New Orleans, Louisiana.
115 40
X-6971-e
(13)
<
^
The aggregate of all of laid items above listfed, as having "been
forwarded to Complainant1s Jacksonville Branch for collection, is Fiftysix Thousand * Fifty-five and 71/100 Dollars ($56,055.71).
Said items
were all enclosed with one or the other of said two cash letters as heretofore averred. The remaining of the items enclosed with said two cash
letters (the total of said cash letters having been $75,080.96, as heretofore set out) were handled for collection exactly as were the items included
within the amounts hereinabove particularly set out. Neither such other
items, however, nor any question as to whether or not the owners or holders
thereof are entitled to any portion of the fund in the hands of complainant, hereinafter more particularly referred to, is now involved in this
cause according to the knowledge, information and belief of complainant.
Should it hereafter develop that the owners and holders of said other items,
or any of the same, are claiming any interest in the said fund, complainant
will ask leave of the court to amend its bill of interpleader accordingly.
—S3Complainant is further advised and believes, and, upon such information and belief charges the fact to be, that the various defendant
Federal Reserve •Banks and/or certain of their respective branches had received cash items, included in the totals hereinbefore set out opposite
the names of the defendant Federal Reserve Banks, as agents for collection
of certain of their own member banks or non-member clearing banks. Upon
such information and belief complainant sets out next below a list or
schedule indicating the names of various of the member banks of such defendant Federal Reserve Banks as had sent certain of said items to their
Federal Reserve Banks or direct to complainant's Jacksonville Branch for the
account of their respective Federal Reserve Banks, and the total of items
X*6971-e
(14)
|
433
so forwarded by such, member banks 6f etich defendant Federal Reserve Banks:
FEDERAL RESERVE BANK OF BOSTON.
NAME
AMOUIfT
First National Bank
Boston, Massachusetts.
$
State Street Trust Company,
Boston, Massachusetts.
1 050 00
Industrial Trust Company,
Providence, R. I.
693 30
Merchants National Bank,
Boston, Massachusetts.
Atlantic National Bank,
Boston, Massachusetts.
98 12
6 10
1 215 00
National Shasnmit Bank,
Boston, Massachusetts.
195 60
FEDERAL ESSERVE BANK OF NEW YORK.
Federal Reserve Bank,
New York, N. Y.
1 949 22
Chase National Bank,
New York, N. Y.
26 770 94
National City Bank,
New York, N. Y.
44 37
Bank of America,
New York, N. Y.
25 00
Guaranty Trust Company,
New York, N. Y.
476 04
Marine Midland Trust Company,
New York, N. Y.
11 25
Fifth Avenue Bank,
New York, N. Y.
10 68
Central Hanover Bank and Trust Company,
New York, N. Y.
New York Trust Company,
New York, N. Y.
335 62
1 608 00
X-6971-e
. 424
(15)
FEDERAL RESERVE 3 A M OF # W YORK (Cont'd)
1A.E
TIC
AMOUNT
Irving Trust Company,
Hew York, N. Y.
Chatham & Phenix national Bank,
New York, I . Y.
T
$
24 73
1 067 14
Chemical National Bank,
New York, N. Y.
National Commercial Bank,
Albany, N. Y.
216 67
6 30
First Trust Company,
Albany, N. Y.
128 25
First National Bank,
Jersey,City, I . J.
T
150 00
National Newark & Essex Banking Company,
Newark, N. J.
27 67
Federal Reserve Branch Bank,
Buffalo, N. Y.
61 81
Marine Trust Company,
Buffalo, N. Y.
57 09
Liberty Bank,
Buffalo, N. Y.
72 03
FEDERAL RESERVE BANK OF PHILADELPHIA.
Federal Reserve Bank,
Philadelphia, Pa.
44 78
Corn Exchange National Bank,
Philadelphia, Pa.
695 18
Central-Penn. National Bank,
Philadelphia, Pa.
175 12
Market Street National Bank,
Philadelphia, Pa.
15 00
Philadelphia National Bank,
Philadelphia, Pa,
254 92
Wilmington Trust Company,
Wilmington, Delaware.
442 65
X-6971-e
(is)
t
FSDEBAI RESE&# S A M OF CljffEIANft.
M A
G-uardian Trust Company,
C lev eland, Ohi o.
Union Trust Company,
Cleveland, Ohio.
AMOUHT
$
36 96
732 11
Cleveland Trust Company,
Clev eland, Ohi o.
28 00
Huntington national Bank,
Columbus, Ohio.
100 00
Toledo Trust Company,
Toledo, Ohio.
10 00
First National Bank,
Norwood, Ohio.
99 30
Federal Reserve Branch Bank,
Cincinnati, Ohio.
18 98
First National Bank,
Cincinnati, Ohio.
572 43
Lincoln National Bank,
Cincinnati, Ohio.
3 15
Provident Trust and Savings Bank,
Cincinnati, Ohio.
9 25
Fifth Third Union Trust Company,
Cincinnati, Ohio.
92 62
Atlas National Bank,
Cincinnati, Ohio.
15 00
Second National Bank,
Cincinnati, Ohio.
Federal Reserve Branch Bank,
Pittsburgh, Pa.
Bank of Pittsburgh,
Pittsburgh, Pa.
Mellon National Bank,
Pittsburgh, Pa.
397 07
1 56
74 01
127 69
as
X-6971-e
, 426
(17)
'MSB
FEDERAL RES##E B1I% OF CHICAGO
0
Federal Reserve Bank ,
Chicago, 111,
Continental-Illinois Sank and Trust Company,
Chicago, 111.
Central Trust Company of Illinois,
Chicago, 111.
AMOUNT
$
18 29
7 513 73
58 31
First National Bank,
Chicago, 111.
373 70
Foreman State Bank,
Chicago, 111.
148 41
First Wisconsin National Bank,
Milwaukee, Wis.
167 95
First National Bank,
Joliet, 111.
Fletcher-American National Bank,
Indianapolis, Ind.
97 58
7 63
FEDERAL RESERVE BANK OF CHICAGO,
(DETROIT BRANCH.
Peoples Wayne County Bank
Detroit, Michigan.
12 16
First National Bank,
Detroit, Michigan.
73 62
FEDERAL RESERVE B A M OF ST. LOUIS
First National Bank
St. Louis, Mo.
8 91
United Bank & Trust Company,
St. Louis, Mo.
8 37
Mercantile Commerce Bank and Trust Company
St. Louis, Mo.
20 14
Mississippi Valley Trust Company,
St. Louis, Missouri.
54 08
X-6971-e
(18)
jTEDSBAL RESERVE SASIK OF ST. LOUIS.
(MEMPHIS BRANCH)
First National Bank,
Memphis, Tenn.
Bank of Commerce and Trust Company,
Memphis, Tenn.
AMOUNT
$
284 00
101 31
FEDERAL EE SERVE BANK OF ST. LOUIS,
(LOUISVILLE BRANCH)
Citizens Union National Bank,
Louisville, Ky.
Liberty Bank and Trust Company,
Louisville, Ky.
154 11
3 50
FEDERAL RESERVE BANK OF RICHMOND.
Federal Reserve Bank,
Richmond, Va.
State Planter Bank and Trust Company,
Richmond, Va.
505 00
9 79
First and Merchants National Bank,
Richmond, Va.
10 54
American Bank and Trust Company,
Richmond, Va.
57 95
National Metropolitan Bank,
Washington, D. C.
20 75
Commercial National Bank,
Washington, D. C.
14 06
Wachovia Bank and Trust Company,
Winston-Salem, N. C.
30 60
FEDERAL RESERVE BANK OF RICHMOND,
(BALTIMORE BRANCH)
Federal Reserve Branch Bank,
Baltimore, Md.
First National Bank,
Baltimore, Md.
1 181 66
50 00
X-6971-e
i 428
(19)
ariHE
FEDERAL E3S3EV3 S A M OF KANSAS CITY
AMOUNT
$
First National Bank,
Kansas City, Mo.
36 76
FEDERAL RESERVE B A M CF KANSAS CITY
(DENVER BRANCH)
Federal Reserve Branch Bank,
Denver, Colo.
100 00
-23Complainant further shows that shortly after the suspension of
said Central national Bank and Trust Company the Receiver of said hank
demanded of complainant that all of the reserve balance of said hank " e
b
turned over to him. At the sane tine various of the other defendants
were demanding that the said remittance draft "be charged to the account
of the drawer and that they be given credit by complainant for the amounts
of their items enclosed with said two cash letters. To none of such
demands has complainant acceded for the reason that it was, and is, a mere
stakeholder of said reserve balance, or of so much of the sane as
is in
controversy between the parties defendant, that is to say, between the
said A.
Anderson, as Receiver, on the one
herein named on the other.
hand and the other defendants
Complainant did, however, charge the said
remittance draft to said reserve balance (the same having been on April
17, 1931 more than sufficient to pay the said remittance draft) and placed
the amount thereof in a suspense account to be there held by complainant
in trust and for the account of the party, or parties, entitled thereto,
pending some judicial determination as to the conflicting rights of the
respective claimants.
-24Complainant shows that the defendant A. M. Anderson, as Receiver,
on the one hand, claims that the entire reserve balance to the credit of
Central National Bank and Trust Company, as of the tine of suspension and
b
without charging thereto the amount of said remittance draft, should " e
paid over " y complainant to him for the reason that, as said defendant
b
contends, the said remittance draft had not been paid " y complainant or
b
charged against the reserve "balance when notice of suspension was received
by complainant, and for the further reason that said remittance draft could
not have been paid by complainant's Jacksonville Branch and charged against
the said reserve balance by the Jacksonville Branch and that complainant
had no notice of the receipt of said draft at its main office in Atlanta
until after the drawer bank had closed. The other defendants, on the other
hand, represent to complainant that when said remittance draft was received
at complainant's Jacksonville Branch the drawer bank was open and doing
business and that said draft should be regarded as having been duly paid,
cancelled and charged against the account of the drawer prior to its suspension and as of the time when the said draft was received at the Jacksonville Branch. Complainant does not undertake to set up fully and in detail
the conflicting claims of said defendants but adverts in general terras to
the same to the end that the court may be advised that there is a bona
fide dispute as to the ownership of the said fund.
-25With these conflicting contentions this complainant has no concern. Complainant has retained in its hands a portion of said reserve
balance equal in amount to said remittance draft and is willing to give
X-6971-e
) am)
(2D
credit, or otherwise pay over, to the respective defendant banks the
portions of said fund claimed, respectively, by them should it be determined that the same were and are properly chargeable against said
reserve balance of said Central National Bank and Trust Company. Complainant is willing to pay over the full amount in its hand to the
Receiver of the Central National Bank and Trust Company should it be
determined by proper decree of this court that the Receiver is entitled
thereto, and is also willing to turn over to said Receiver any portion
of said fund to rhich the Receiver may be entitled under a proper decree.
Complainant holds said fund in trust and as a mere stakeholder.
Com-
plainant is entirely indifferent between the parties and is not in collusion with any of them. While, as stated, complainant took said cash
items for collection as agent for the banks which had sent the sane to it,
complainant was acting, quoad such checks, as a mere collection agent,
without liability except for its own negligence and guaranty of prior endorsements; it has no interest in the premises except to disburse the fund
in its hands as may be legally proper and as this Honorable Court, being
advised, may direct.
—26—
Complainant hereby offers to pay into the registry of this
Honorable Court the sum of Fifty-six Thousand, Fifty-five and 71/100 Dollars
($56,055.71), being the amount of the fund now in its hands actually in
dispute (according to the knowledge, information and belief of complainant)
between the parties herein named as defendants, that is to say, between
the Receiver of the Central National Bank and Trust Company on the one
hand, claiming all of said fund, and the defendant banks, claiming the
X-6971-e
right to receive out of said fund the amounts hereinbefore stated.
Com-
plainant also offers to pay into the registry of this Honorable Court
such other or further portion of said fund as nay be necessary to cover
the mount of any other claim to any portion of said fund which nay
hereafter be made by any person not herein named as defendant.
—27—
Complainant attaches hereto a true copy of Regulation J of the
Federal Reserve Board, which Regulation was in effect at all of the dates
and times herein mentioned and was the aforementioned Regulation pursuant
to the terms of which complainant undertook the collection of tho checks
enclosed with said two cash letters.
Complainant also attached hereto a
true and correct copy of its own Check Collection Circular, issued in
conformity with said Regulation J. A copy of said Check Collection Circular
had been sent to said Central National Bank and Trust Company upon its
promulgation.
The said copies are hereby incorporated into this petition
to the sane effect as if fully set out herein, and leave of reference thereto
is hereby prayed when and as often as may be necessary.
—28—
Complainant says that it is without remedy at law; that if it
pays to the Receiver the said fund it will be subjected to the claims,
demands and suits of said defendant banks, or some one or more of them;
that if it pays to said defendant banks the amounts demanded, respectively,
by thaa, it will have to answer the suit of the Receiver.
Complainant is
advised by its counsel that the conflicting claims and contentions of said
parties raise questions of law that are doubtful and difficult of solution, and complainant is, therefore, uncertain as to how said fund should
X-6971-e
*2
(23)
be disbursed. teiile the defendant banks each claim a portion of said
fund and the Receiver is claiming the whole thereof, the legal rights
of the banks named, and each of then, are determinable upon exactly
the same principles and there is no issue which could arise in the determination of the claim of any one of said defendant banks which would
not be involved in the determination of the claims of all.
The bring-
ing of this bill of interpleader will obviate a multiplicity of suits
and will afford the opportunity of settling in one action the claims of
all parties asserting an interest in and to said fund, or any part thereof.
-29Complainant avers that, in the bringing of this suit, it has
incurred the expense of counsel fees and asks that such sum as may appear
proper to the Court be decreed in its favor to cover the cost of the services of counsel and that any sum so allowed, as well as the costs of this
action, be charged against the fund which is in its hands as a stakeholder
as heretofore more particularly set out.
-30As heretofore more particularly shown, complainant has
named
as parties defendant the said Receiver and the banks from whom it had received the said cash items for collection.
Included among said defendant
banks are certain other Federal Reserve Banks, who were, in turn, handling
said items for collection for their own member banks or non-member clearing
banks. As more fully set out in the prayers hereof, complainant asks that
said named defendants be required to interplead herein.
Complainant ' asks,
however, that should any owner or holder of any of the aforementioned cash
items or checks, not herein named as defendant, appear or intervene in
X-6971-e
(24)
I
this -cause, claiming a portion of said fund, such claimant be allowed
to interplead and to set up his or its claim and " e "bound " y any decree
b
b
rendered herein to the same extent as if such claimant had "been by
complainant specifically named as a party defendant.
WHEREFORE, being remediless except in a court of equity, where
matters of this sort are properly cognizable and relievable, and to the
end that complainant may have the relief herein prayed, it brings this
its bill of interpleader and respectfully prays of the court:
1.
That this Honorable Court may enter an order permitting
it to pay into the registry of the Court the sum of Fifty-six Thousand,
Fifty-five and 71/100 Dollars ($56,055.71), being the amount of the find
which, according to the knowledge, information and belief of complainant,
is now in controversy between the parties to this cause and is now in the
hands of complainant as a stakeholder as aforesaid; that the Clerk of this
Court be authorized to receive and receipt for said sum; and that, upon
the payment of the same into court, said complainant be discharged from
any and all further liability to said defendants, or any of them,
2.
That complainant may hereafter have the right to pay into
the registry of the Court such other or further portion of said fund as
may be necessary to cover the amount of any other claim to any portion of
said fund of Seventy-five Thousand, Eighty and 96/100 Dollars ($75,080.96)
which may hereafter be made by any person not herein named as defendant.
3.
That the defendants herein named may be decreed to inter-
plead and settle between themselves their rights or claims to the said
fund in the hands of complainant, or any portion thereof.
4.
That, should any owner or holder of any of the cash items
or checks in complainant's bill referred to, not heroin named as defendant
X-6971-e
(25)
t
434
appear or intervene in thii Cau&ej claiming a portion of said fund, such
claimant be allowed to intervene and to set up his or its claim and " e
b
"bound " y any decree rendered herein to the sane extent as if such claimb
ant had been " y complainant specifically named as a party defendant.
b
5.
That the defendants, and each of them, " e restrained " y a
b
b
preliminary order of injunction from commencing or prosecuting any action
or proceeding against complainant concerning the matters above stated, and
that, in due course, this injunction be made perpetual.
6.
That the Court issue a rule or order nisi, requiring said
defendants, and each of them, to show cause at some time to be limited by
the Court why the relief herein prayed should not be granted.
7.
That complainant have such other and further relief as may
be meet and agreeable to equity and as the nature of its case may require.
8. May it please your Honors to grant unto complainant not only
a writ of injunction conforming to the prayers of this bill, but also to
grant a writ, or writs, of subpoena, to be issued by or out of this Court,
to be directed to the defendant A. M. Anderson as Receiver of Central National
Bank and Trust Company of St. Petersburg, Florida, and to the banks, Federal
Reserve, State and National, hereinbefore specifically named as defendants,
commanding them, and each of them, at a certain time and under a certain
penalty to be therein specified, to be and appear before this Court, then
and there to answer the allegations hereof, but not under oath (answer under
oath being hereby expressly waived), and to abide by the orders and decrees
of the Court heroin, and that the defendants may appear heroin according to
law.
Solicitors for Complainant
FEDERAL RESERVE BOARD
WASHINGTON
ADDRESS OFFICIAL CORRESPONDENCE TO
T H E FEDERAL RESERVE BOARD
^ 6972
September 21, 1931.
Dear Sir :
From the various cases which have been "brought to
the attention of this office from time to time involving check
collections " y Federal reserve "banks, I have recently had ocb
casion to have compiled a list of the opinions construing Regulation J of the Federal Reserve Board and/or the check collection circulars of the Federal reserve "banks.
Thinking that you may find information of this
kind of assistance at some time in the future, I am giving "below
the references to these opinions.
Malloy v. Federal Reserve Bank of Richmond, 281 Fed.
997, (affirmed 291 Fed. 763; "but regulation and circular not specifically construed), affirmed 44 S. Ot. 296, 264 U.S. 160;
Paacagoula national Bank v. Federal Reserve Bank of
Atlanta, 3 F.(2d) 465, affirmed, 11F (2d) 866, petition for writ
of certiorari denied, 46 S.Ct. 637, 271 U.S. 685;
Early v. Federal Reserve Bank of Richmond, unpublished opinion of United States District Court for Eastern District of South Carolina (X-6064, enclosed herewith), reversed
in part, 30 F (2d) 198, affirmed 50 S. Ct. 235, 281 U.S. 84;
Federal Reserve Bank of Minneapolis v. First national Bank of Eureka, 277 Fed. 300;
Capital Grain and Feed Company v. Federal Reserve
Bank of Atlanta, 3 F. (2d) 614;
Louisville & Uashville Railroad Co. ». Federal
Reserve Bank of Atlanta, unreported decision of Chancery Court
at Nashville, Tenn. (X-4858, enclosed herewith; affirmed " y Sub
preme Court of Tennessee, "but regulation and circular not specifically passed upon, 10 S.W, (2d) 683).
-3-
7d6;
X-6972
-
Vann v. Federal Reserve Bank of Richmond, 47 F.(2d)
Transcontinental Oil Co. v. Federal Reserve Bank
of Minneapolis, 214 N.W. 918;
Carson v. Federal Reserve Bank of New York, 235 N.Y.
S. 197, affirmed, 172 U.S. 475;
Fergus County v. Federal Reserve Bank of Minneapolis,
344 Pac, 883;
Odle v. Barnes, 2 S.W. (2d) 577;
Chicago, Milwaukee and St. Paul Railway Co. v. Federal Reserve Bank of San Francisco, 260 Pac. 262;
First National Bank of Denver v. Federal Reserve
Bank of Kansas City, 286 Pac. 117 (See also 6 F.(2d) 339);
Hirning v. Federal Reserve Bank of Minneapolis, unreported decision of the United States District Court, District
of Minnesota, Fourth Division, (X-6671, enclosed herewith; judgment reversed by United States Circuit Court of Appeals for Eighth
Circuit and cause remanded with instructions to grant new trial
(X-6954, enclosed herewith) - regulation and circular not specifically passed upon and decision not yet reported);
Bank of Wesleyville v. Rose, 85 Pa. Superior Ct.52.
If you know of any opinions in addition to those
referred to above, it will be appreciated if you will bring
them to my attention.
Very truly yours,
SES CMC
Walter Tyatt
General Counsel
TO COUNSEL FOR ALL FEDERAL RESERVE BASKS AND BRANCHES.
436
FEDERAL RESERVE BOARD
WASHINGTON
ADDRESS OFFICIAL CORRESPONDENCE T O
T H E FEDERAL RESERVE BOARD
X-6972
October 2, 1931.
Dear S i r :
This i s to advise you that Mr. Chester Morrill
has been appointed by the Federal Reserve Board to the
p o s i t i o n of Secretary of the Board.
Mr. Morrill, who has been connected with the
Federal Farm Loan Board i n the capacity of Secretary
and General Counsel, w i l l assume his new duties on
October 7, 1931.
Very t r u l y yours,
E. M. .McClelland,
Assistant Secretary.
TO GOVERNORS AND AGENTS OF ALL F. H. BANKS.
-cc"
X-6973
(Third Tentative Draft - September 22, 1931.)
A BILL
To amend Section 19 of the Federal Reserve Act, and f o r other
purposes.
BE IT ENACTED BY THE SENATE A D HOUSE OP REPRESENTATIVES OF THE
H
UNITED STATES 01 AMERICA IB CONGRESS ASSEMBLED, That Section 19 of the
Federal Reserve Act (United States Code, Title 12, Sections 461 to 466,
inclusive, and Section 374), as amended, "be f u r t h e r amended and reenacted
to read as follows:
"BAHK RESERVES
"Section 19. (a)
Each member bank s h a l l e s t a b l i s h and maintain r e -
serves equal to f i v e per centum (5$) of the amount of i t s net deposits,
plus f i f t y per centum (50$) of the amount of i t s d a i l y d e b i t s ; but, in no
event, s h a l l the aggregate reserves required to be maintained by any member bank exceed t h i r t e e n per centum (13$) of i t s gross d e p o s i t s .
"(b) Each member bank in a c i t y in which a Federal reserve bank or
a branch thereof i s located, or in any other c i t y i n close proximity thereto designated by the Federal Reserve Board, s h a l l maintain not l e s s
than
f o u r - f i f t h s of i t s t o t a l required reserves in the form of a reserve balance
on deposit with the Federal reserve bank: Provided, however. That, with the
permission of the Federal Reserve Board which may be granted, denied, or
revoked in the d i s c r e t i o n of said Board, banks in outlying sections of such
c i t i e s may maintain not l e s s than t w o - f i f t h s of t h e i r t o t a l required reserves
in the form of reserve balances on deposit with the Federal reserve bank.
Every other member bank s h a l l maintain not l e s s than t w o - f i f t h s of i t s t o t a l
required reserves in the form of a reserve balance on deposit with the Fede r a l reserve bank.
The remainder of
-3*
X-6973
the t o t a l required r6serves of each member bank, over and above the amount r e quired to be maintained in the form of a reserve balance on deposit with the
Federal reserve bank, may, a t the option of such member bank, consist e i t h e r
of a reserve balance on deposit with the Federal reserve bank, or of cash
owned by such member bank on i t s premises or in t r a n s i t between such member
bank and the Federal reserve bank.
"(c)
The term 1 gross d e p o s i t s ' , within the meaning of t h i s section,
s h a l l include a l l deposit l i a b i l i t i e s of any member bank of any kind or
character, including demand d e p o s i t s , time deposits, savings accounts, time
c e r t i f i c a t e s of d e p o s i t , p o s t a l savings deposits, deposits of public moneys
of the United S t a t e s or of any State, county, c i t y , town, v i l l a g e , municipali t y or p o l i t i c a l subdivision thereof, c e r t i f i e d checks outstanding, c a s h i e r s ' ,
t r e a s u r e r s ' and other o f f i c e r s ' checks outstanding, cash l e t t e r s of c r e d i t ,
t r a v e l e r s ' checks outstanding, and a l l other similar l i a b i l i t i e s , as f u r t h e r
defined and s p e c i f i e d by the Federal Reserve Board.
n
(d)
The term ' n e t d e p o s i t s ' , as used in t h i s section, s h a l l mean
the amount of the gross d e p o s i t s of any member bank, as above defined and
as f u r t h e r defined by the Federal Reserve Board, minus the sum of (1) a l l
balances due to such member bank from other member banks in the United
States and t h e i r domestic branches, and (2) checks and other cash items in
process of c o l l e c t i o n which are payable immediately upon presentation in the
United S t a t e s , within the meaning of those terms as f u r t h e r defined by the
Federal Reserve Board.
"(e)
The term ' d e b i t s ' , as used in t h i s s e c t i o n , s h a l l mean the
t o t a l d a i l y amount of charges or 'debits made by any member bank to any and
; 440
X-6973
a l l accounts included in gross deposits as above defined and as f u r t h e r defined "by the f e d e r a l Reserve Board, except charges r e s u l t i n g from the payment
of c e r t i f i e d checks and c a s h i e r s ' , t r e a s u r e r s ' and other o f f i c e r s ' checks.
" ( f ) The term ' c a s h ' , within the meaning of t h i s section, s h a l l
include gold b u l l i o n , gold coins, standard s i l v e r d o l l a r s , subsidiary s i l v e r
coins, minor coins, United States notes, gold c e r t i f i c a t e s , s i l v e r c e r t i f i c a t e s , Treasury notes of 1890, national "bank notes, Federal reserve notes,
and Federal reserve bank notes, lawfully coined or issued under the laws of
the United S t a t e s , as f u r t h e r defined by the Federal Reserve Board.
"(g) The teim
T
re serve balance *, as used i n t h i s section, s h a l l mean
a member bank's a c t u a l net balance on the books of the Federal reserve bank
representing a c t u a l l y collected funds available f o r immediate withdrawal
or f o r reserve purposes under regulations prescribed by the Federal Reserve
Board.
"(h)
With respect to each member bank, the term 'Federal reserve
bank', as used in t h i s section, shall mean the Federal reserve bank or branch
Federal reserve bank of the d i s t r i c t in which such member bank i s l o c a t e d .
"(i)
For the purpose of computing and maintaining the reserves r e -
quired by t h i s s e c t i o n , each member bank and each branch of a member bank
s h a l l be deemed to be a separate bank#
Each branch of a member bank s h a l l
maintain i t s reserve balance on deposit with the Federal reserve bank or
branch Federal reserve bank of the d i s t r i c t in which i t i s located, unless
the Federal Reserve Board, in i t s d i s c r e t i o n , d i r e c t s that i t s reserve
balance be maintained on deposit with the Federal reserve bank or branch
X-46973
Federal reserve "bank of the d i s t r i c t in which the parent "bank i s
located.
" ( j ) The Federal Reserve Board i s authorized and empowered to
p r e s c r i b e r e g u l a t i o n s defining f u r t h e r the various terms used in t h i s
Act, f i x i n g periods over which reserve requirements and actual r e serves may he averaged, determining the methods "by which reserve
requirements and actual reserves s h a l l "be computed, and p r e s c r i b i n g
p e n a l t i e s f o r d e f i c i e n c i e s in r e s e r v e s .
Su.cn regulations and a l l
other lawful regulations of the Federal Reserve Board s h a l l have the
force and e f f e c t of law and the courts s h a l l take j u d i c i a l notice
of them.
"(k)
Subject to such regulations and p e n a l t i e s as may be
prescribed by the Federal Reserve Board, any member bank may draw
against or otherwise u t i l i z e i t s reserves f o r the purpose of meeting
e x i s t i n g l i a b i l i t i e s : Provided, however. That, i f a member bank in a
c i t y in which a Federal reserve bank or branch thereof i s located,
or in any other c i t y in close proximity thereto designated by the
Federal Reserve Board, s h a l l f a i l f o r six consecutive business days
to maintain the r e s e r v e s required by t h i s section, or
i f a member
bank in any other c i t y s h a l l f a i l f o r twelve consecutive business
days to maintain the reserves required by t h i s s e c t i o n , the d i r e c t o r s of such bank s h a l l be j o i n t l y and severally l i a b l e f o r any and
a l l l o s s e s to such bank a r i s i n g out of any new loans or investments
made following such periods of continued d e f i c i e n c i e s and p r i o r to
the r e s t o r a t i o n of i t s reserves to the amount required by t h i s
Act.
- 5 "(1)
X-6973
/
All p e n a l t i e s f o r deficiencies in reserves which are here-
a f t e r incurred under regulations prescribed by the Federal Reserve Board
pursuant to the provisions of t h i s Act shall be paid to the Federal r e s e r v e
bank by the member bank against which they a r e assessed.
"(m)
Whenever, in the judgment of the Federal Beserve Board such
action i s necessary to p r o t e c t the gold reserves of the Federal Reserve System, the Federal Reserve*Board, in i t s d i s c r e t i o n and upon the a f f i r m a t i v e
vote of f i v e of i t s members, may require any or a l l member banks to pay
and deliver to the Federal reserve bank any or a l l gold coin, gold bullion,
and gold c e r t i f i c a t e s owned by such member bank or banks.
Upon r e c e ipt of
such gold coin,- gold b u l l i o n or gold c e r t i f i c a t e s , the Federal reserve bank
shall pay t h e r e f o r an equivalent amount of other cash or s h a l l give the
member bank immediate c r e d i t therefor in i t s reserve balance, at the option of the member bank, and shall pay a l l costs of the t r a n s p o r t a t i o n of
such gold b u l l i o n , gold coin, gold c e r t i f i c a t e s or other cash, including
the cost of insurance, (protection, and such other incidental costs as may
be reasonably necessary.
"(n)
Ho member bank shall keep on deposit with any S t a t e bank or
t r u s t company which i s not a member bank a sum in excess of ten per centum
of i t s own paid-up c a p i t a l and surplus.
"(o)
Except with the permission of the Federal Reserve Board,
which may be granted, denied or revoked in the discretion of said Board,
no member bank s h a l l a c t as the medium or agent of a non-member bank in
applying f o r or receiving discounts or other c r e d i t accommodations from
a Federal reserve bank under the provisions of t h i s Act.
X-6S73
11
(p)
6 -
National banks or banks organized, under local laws, located
in Alaska or in a dependency or insular possession or any p a r t of the United
States outside of the continental United States may remain non-member banks,
and shall in t h a t event maintain the reserves and comply with a l l the
other conditions provided by law regulating them p r i o r to the enactment
of the Federal Reserve Act; or said banks may, with the consent of the
Federal Reserve Board, become member banks of any one of t h e Federal Reserve D i s t r i c t s , and shall in that event take stock, maintain reserves,
and be subject to a l l the other provisions of t h i s Act.
"(q)
The provisions of Section 7 of the F i r s t Liberty Bond
Act, approved April 24, 1917, Section 8 of the Second l i b e r t y Bond Act,
approved September 24, 1917, and Section 8 of the Third Liberty Bond
Act, approved April 4, 1918 (U.S. Code, T i t l e 31, Section 771) which
exempt deposits of public moneys by the United S t a t e s in designated dep o s i t a r i e s from the reserve requirements of t h i s Act and a l l other a c t s
or p a r t s of a c t s in c o n f l i c t with t h i s Act are hereby repealed only in
so f a r as they are in c o n f l i c t with the provisions of t h i s Act."
Section 2.
This Act s h a l l become e f f e c t i v e six months a f t e r
i t s approval by the President of the United States.
4
COPY
X-6976
TELEGRAM
FEDERAL RESERVE SYSTEM
(LEASED WIRE SERVICE)
RECEIVED AT WASHINGTON, D. C.
67 f y
Atlanta 1110a
Sept. 24,
Wyatt
Washington
Referring your suggestion as to interpleader in central national tank
and t r u s t co
matter do not think we could f i l e b i l l with Reservation
of r i g h t to appear f o r any purpose which might influence decision of
court.
Do not think either side w i l l make any attempt to give regu?
l a t i o n J an i n t e r p r e t a t i o n a t variance with i t s clear intendment,
as s t a t e d in former correspondence think case will turn e n t i r e l y
upon proposition of whether remittance d r a f t should he regarded as
having been paid as of the time when i t reached the Jacksonville
branch
Parker
1250 p
C O P Y
X-6976-a
September 24, 1931.
Mr. Robert S. Parker,
Suite 1607, William-Oliver Building,
Atlanta, Georgia.
Dear Bob?
Please accept my thanks f o r your l e t t e r of September 18,
1931, with f u r t h e r reference to your proposed b i l l of interpleader
in the case of Federal Reserve Bank of Atlanta v. .Anderson, Receiver
of the Central National Bank and Trust Company of St. Petersburg,
Florida.
I note with i n t e r e s t that you have discussed t h i s subject
with counsel who w i l l represent respectively the receiver and a l a r g e
percentage of the other claimants to the fund and that they seem to be
agreed t h a t the Early Case will in no way be involved in t h i s case, because of the changes which have been made in Regulation J . I note,
however, that you a n t i c i p a t e that counsel f o r some of your endorsers
may contend t h a t the remittance d r a f t operated as an assignment pro
tanto of the reserve balance.
Even though the decision of the Supreme Court in the Early
Case i s not r e l i e d upon by counsel f o r the owners of the checks, I
hardly see how i t w i l l be possible f o r the court to avoid the necess i t y of construing Regulation J as amended; and, even if the court
should avoid a l l reference to Regulation J , I believe the question
whether a d r a f t on the reserve balance operates as an assignment pro
tanto of that balance i s a question of almost equal importance to the
Federal reserve banks. If the court should hold that such a d r a f t
operates as an equitable assignment pro tanto of the reserve balance,
the p r a c t i c a l r e s u l t would be s u b s t a n t i a l l y the same as if the Federal reserve bank were required to charge checks to the reserve b a l ance a f t e r the insolvency of the remitting bank. I cannot help f e e l ing, t h e r e f o r e , that t h i s case w i l l involve questions of great int e r e s t to the Federal Reserve System and that every p o s s i b l e p r e c a u t i o n should be taken to see that the views of the Federal reserve
banks as to the proper i n t e r p r e t a t i o n and application of Regulation
J are properly presented to the court.
In t h i s connection, one of my associates here suggested
yesterday that i t might be possible f o r you to amend your b i l l of
X-6976-a
interpleader so as to say t h a t , while the Federal reserve bank has no
i n t e r e s t in the fund involved, i t i s v i t a l l y i n t e r e s t e d in the questions
of law involved, and especially in the i n t e r p r e t a t i o n of i t s check coll e c t i o n c i r c u l a r and of the applicable provisions of Regulation J , and
that the Federal reserve bank, t h e r e f o r e , requests the p r i v i l e g e of presenting i t s views on these questions to the court, either as amicus
curiae or in some other capacity. This seems to mo to be a good idea
and to be a more accurate statement of the Federal reserve bank's true
p o s i t i o n than the statement that the Federal reserve bank has no i n t e r est in the controversy. I , t h e r e f o r e , sent you a telegram yesterday
submitting t h i s suggestion f o r your consideration.
At the Conference of Counsel of a l l Federal reserve banks
held in Washington, June 9 and 10, 1930, at which the r e v i s i o n of Regul a t i o n J was prepared, we reached an informal understanding that Counsel
for a l l Federal reserve banks should confer as to the best method of
p r o t e c t i n g the i n t e r e s t s of a l l Federal reserve banks in the f i r s t case
a r i s i n g under the amended regulation. The case of Skinner and Company
v. Federal Reserve Bank of Richmond having been disposed of as a r e s u l t
of the reorganization of the bank on which the check involved in that
case was drawn, t h i s appears to be the f i r s t case in which the courts
w i l l have an opportunity to pass upon the amended regulation. After obt a i n i n g your permission, t h e r e f o r e , I am sending counsel f o r a l l of the
Federal reserve banks copies of our correspondence and of your proposed
b i l l of interpleader and i n v i t i n g t h e i r suggestions as to how the int e r e s t s of the Federal reserve banks may best be protected in t h i s matt e r . In view of your f i n e s p i r i t of cooperation, I am sure that you
w i l l bo glad to have any suggestions which they may care to submit.
Assuring you of my deep appreciation of your courtesy in
conferring with me about t h i s case, and with warmest personal r e gards , I am
Cordially yours,
Walter # y a t t ,
General Counsel.
WW-sad
X-6975-b
C O P Y
COLQUITT, PARKE&, TROUfMAiT & ARKfRIGHT
ATTOB1TEYS AT L W
A
SUITE 1607 WILLIAM-OLIVER BLDG-.
AT'LMTA, GA.
September 18, 1931.
Mr. Walter Wyatt, General Counsel,
Federal Reserve Board,
Washington, D. C.
Dear Walter;
He: Central N a t ' l Bank & Trust Co.,
St. Petersburg, Fla.
I thank you very much f o r your l e t t e r of September 16th,
w r i t t e n with reference to the proposed b i l l of interpleader to be
f i l e d in the above matter.
I was in St. Petersburg and Tampa t h i s week and, while
there, submitted the proposed b i l l to counsel who w i l l represent,
r e s p e c t i v e l y , the Receiver and a large percentage of the other
claimants to the fund.
Counsel seem to be agreed that the Early case w i l l in
no way be involved in t h i s case, because of the changes which
have been made in Regulation J .
I think that counsel will concede that the c o n t r o l l i n g
question in the case i s whether or not the remittance d r a f t should
be regarded as having been paid as of the time when i t was received
through the mails by the Jacksonville Branch of the Reserve Bank,
although counsel f o r some of our endorsers may make the contention
that the d r a f t operated as an assignment pro tan to of the fund
on which i t was drawn. Ho contention will be made that the
Federal Reserve Bank had the r i g h t or r e s t e d under any duty to
"pay" the d r a f t a f t e r receiving notice of the insolvency of the
Central National Bank.
If the respective contentions of the p a r t i e s are made
as I now a n t i c i p a t e , there would seem to be no danger of the
development in the case of any question which might embarrass the
Federal Reserve Banks. I s h a l l , however, keep a close watch on
the s i t u a t i o n .
So f a r as j u r i s d i c t i o n is concerned, I think there i s
no doubt about the f a c t t h a t the court at Tampa would have
X-6976-b
COLQUITT, PARKER, T O T A & A2KWRIG-HT
R UM N
COUTDTUAIIOH SHEET
Mr. Walter Wyatt, - #2.
9-18-31.
j u r i s d i c t i o n inasmuch as the Central national Bank and. Trust
Company of St. Petersburg had i t s o f f i c e in the Southern D i s t r i c t
of Florida, Tampa Division, and the Receiver i s one of the p a r t i e s
defendant. I do not think that any defendants, c i t i z e n s or
r e s i d e n t s of States other than Florida, could be made defendants
without t h e i r consent. Within the next few days, however, the
Federal Reserve Bank of Atlanta w i l l write a l l of i t s endorsers,
s t a t i n g i t s intention to f i l e the b i l l of interpleader and suggesting the a d v i s a b i l i t y of making voluntary appearances. As
I wrote you a day or so since, I a n t i c i p a t e that a l l , or subs t a n t i a l l y a l l , of the claimants to the fund will be b e f o r e the
Court when the case i s heard.
With personal regards, I am
Sincerely yours,
(Signed)
Robt. S. Parker.
Robt.S. Parker.
RSP/w.
X-6977
COPY
FEDERAL RESERVE BANK
OF RICHMOND
September 8, 1931.
Federal Reserve Board,
Washington, D. C.
Attention;
Mr. Walter Wyatt, General Counsel.
Dear Mr. Wyatt;
You w i l l r e c a l l our correspondence concerning
the case of W. I. Skinner and Company v. Federal Reserve
Bank of Richmond and t h e Receiver of the National Bank
of Greenville. The State Bank and Trust Company of
Greenville, a r e c e n t l y organized s t a t e bank, has purchased
the a s s e t s of the national Bank of Greenville and assumed
i t s l i a b i l i t i e s upon c e r t a i n terms and condition's. In
pursuance of t h i s agreement we have received payment of
the claim f i l e d by t h i s bank upon our cash l e t t e r containing the check of Person-Garrett Company to the order of
W. I . Skinner and Company on the National Bank of
Greenville with i n t e r e s t from the d a t e of suspension.
As you w i l l r e c a l l , t h i s claim was f i l e d under
an agreement between myself and counsel f o r the p l a i n t i f f s
f o r the b e n e f i t of whom i t might concern, and we a r e today
t r a n s f e r r i n g to them the amount of the check through
banking channels as they requested. This w i l l I assume
end the l i t i g a t i o n , as nothing could possibly remain to be
s e t t l e d except the amount of costs, and I suppose that our
opponents w i l l be e n t i r e l y w i l l i n g to dismiss the s u i t
upon each side paying i t s own costs. Since Mr. Baker was
kind enough to consult with me in t h i s case, I am w r i t i n g
him to n o t i f y him that the controversy has been s e t t l e d
and enclose a copy of my l e t t e r .
Thanking you f o r the i n t e r e s t which you have
taken and the a s s i s t a n c e which you have given in t h i s matter,
I remain,
Very t r u l y yours,
(Signed)
MW R
G
M. G. Wallace
M.G. Wallace,
Counsel.
4 5 0
COPY
X-6977-a
FEDERAL RESERVE BAH 01 RICHMOED
September 8, 1931
Honorable Newton D. Baker,
c/o Baker, Hostetler, Sidlo, and Patterson,
Union Trust Bldg.,
Cleveland, Ohio,
My dear Mr. Baker;
You will r e c a l l that you were kind enough
to consult with me concerning the conduct of the
defense in a s u i t e n t i t l e d W. I . Skinner and Company
v. Federal Reserve Bank and V. P. Wright, Receiver
of the National Bank of Greenville, pending in the
U. S. D i s t r i c t Court f o r the Eastern D i s t r i c t of
North Carolina.
Under a plan of reorganization the Receiver
of the f a i l e d bank has paid to t h i s bank the f u l l
amount of our unpaid cash l e t t e r which contained
the check in that s u i t , together with i n t e r e s t from
the date of the suspension, and we a r e today
s e t t l i n g the .claim by crediting W. I . Skinner and
Company with the amount of the check and i n t e r e s t ,
which, of course, ends the controversy.
Thanking you f o r the a s s i s t a n c e which
you rendered to me in t h i s case, I am,
Very c o r d i a l l y yours,
M. G-. Wallace,
Counsel.
M- 1
G
W
Copy to - Mr. Walter Wyatt,
Federal Reserve Board,
Washington, D. C.
FEDERAL RESERVE BOARD
WASHINGTON
X-6978
ADDRESS OFFICIAL CORRESPONDENCE TO
T H E FEDERAL RESERVE BOARD
September 25, 1931.
SUBJECT:
Code Word to cover Telegraphic Transactions
in Treasury B i l l s .
Dear S i r :
In connection with telegraphic transactions in
Government s e c u r i t i e s between Federal reserve banks, the
code word "HOXCENT" has been designated to cover a new
issue of Treasury B i l l s , dated September 30, 1931, and
maturing December 30, 1931.
This word should be inserted in the Federal r e serve telegraph code book, following the supplemental
code word "NOXCEDE", on Page 172.
Very t r u l y yours,
J . C. Noell,
Assistant Secretary.
TO GOVERNORS OF ALL F. S. BANKS.
X-6981
Z i D BH AL l l S l i n
BOARD
STATEMENT FOR THE PRESS
For immediate release
October 8, 1931,
The Federal Reserve Board announces that the Federal
Reserve Bank of New York has established a rediscount r a t e of
3jk per cent on a l l classes of paper of a l l m a t u r i t i e s , e f f e c t i v e
October 9, 1931;
X-6982
F E D E R A L R E S E R V E BOARD
STATEMBHT FOR THE PRESS
For release at 3:00 p.m.
October 9, 1931
The Federal Reserve Board announces that the Federal
Reserve Bank of Cleveland has established a rediscount r a t e of
3 per cent on a l l classes of paper of a l l m a t u r i t i e s , e f f e c t i v e
October 10, 1931.
454
X-6983
FEDERAL
B E SI E VE BOARD
STATEME1® FOE THE PRESS
For release a t 3:00 p.m.
•
October 9, 1931.:.
The Federal Reserve Board announces that the Federal
Eeserve Bank of Boston has established a rediscount r a t e of
2 l / 2 per cent on a l l classes of paper of a l l m a t u r i t i e s , e f f e c t i v e
October 10, 1931..
FEDERAL RESERVE BOARD
WASHINGTON
ADDRESS OFFICIAL CORRESPONDENCE T O
T H E FEDERAL RESERVE BOARD
X-6984
October 12, 1931.
SUBJECT; • Code Word to cover Telegraphic Transactions
in Treasury B i l l s .
Dear S i r ; :
In connection with telegraphic transactions in
Government s e c u r i t i e s "between Federal reserve "banks, the
code word "MOXCIST22R5Pr has been designated to cover a new
issue_of Treasury B i l l s , dated October 15, 1931 r and
maturing January 13, 1932.
This word should be inserted in the Federal r e serve telegraph code book, following the supplemental
code word "NOXCEKT" on Page 172.
Very t r u l y yours,. *
J . C- Hoell,
Assistant Secretary.
TO GOVERNORS OP ALL F. E. BANKS
• 456
FEDERAL RESERVE BOARD
WASHINGTON
ADDRESS OFFICIAL CORRESPONDENCE TO
THE FEDERAL RESERVE BOARD
X-6985
October 12, 1931.
SUBJECT:
Expense, Main Lines, Leased Wire System,
September, 1931.
Dear S i r :
Enclosed herewith you w i l l f i n d two mimeographed statements, X-6985-a and X-6985-b, covering
in d e t a i l operations of the main l i n e s , Leased Wire
System, during the month of September, 1931.
Please c r e d i t the amount payable "by your bank
in the general account, Treasurer, U. S., on your
hooks, and issue C/D Form 1, National Banks, f o r account of "Salaries and Expenses, Federal Reserve
Board, Special Fond", Leased Wire System, sending dupp l i c a t e C/D to the Federal Reserve Board.
Very t r u l y yours,
F i s c a l Agent,
Enclosures.
TO GOVERNORS OF ALL F. R. BAIHS
X~6985»a
REPORT SHOWING- CLASSIFICATION A D NUMBER OF W B S TRANSMITTED OVER MAIN LINES
M
OD
OF THE FEDERAL RESERVE LEASED WIRE SYSTEM FOR THE M N H OF SEPTEMBER, 1931.
OT
Business
reported
by banks
From
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
S t . Louis
Minneapolis
Kansas City
Dallas
San Franciscc
Total
Words sent by
New York chargeable to other
F, R. B&lflaS ( l )
25,255
157,756
32,688
76,586
60,976
51,368
97,H3
57,632
34,586
74,977
68,6o4
95,i6o
832,701
3,540
—
2,244
3.143
4,220
9,200
4,977
3,511
4,638
3,431
15,947
4,969
59,820
F. R. Board business
Net Federal
reserve
bank
business
28,795
157.756
34,932
79,729
65,196
60,568
102,090
61,143
39,224
78,408
84,551
100,129
892,521
Percent of t o t a l
bank business (*)
3.23
17.68
3.91
8.93
7.30
6.79
11.44
6,85
4.39
8.79
9.47
11.22
100.00
. 288,495
Treasury Department business Incoming and Outgoing
Total words t r a n s m i t t e d over main l i n e s
(*)
Number of words sent by New York to other F. R. Banks f o r t h e i r sole b e n e f i t charged to
banks indicated in accordance with a c t i o n taken a t Governors' Conference
November 2 - 4 , 1925.
1,316,336
These percentages used in c a l c u l a t i n g the pro r a t a share of leased wire expense as shown
on the accompanying statement (X-6985-b).
(1)
135,320
Q?
x-6985-b
REPORT OF EXPENSE MAIN LINES
FEDERAL RESERVE LEASED WIRE SYSTEM, SEPTEMBER, 1931.
Name of bank
Boston
New York
Philadelphia
Cleveland
Richmond '
Atlanta
Chicago
S t . Louis
Minneapolis
Kansas City
Dallas
San Ffancisco
Federal Reserve Board
Total
Operators'
salaries
Operators 1
overtime
$260.00
$ 1,134.15
225.00
306.66
—
190.00
—
270.00
3,668.28 ( f ) 3.00
195.00
200.00
287.50
251.00
380.00
-
$7,567.59
-
$3.00
Wire
rental
Total
expenses
Pro r a t a
share of
total
expenses
$260.00
$677.52
1,134.15
3,708.55
820.16
225.00
306.66
1,873.15
420.00
230.00 (&)
1,531.25
1,424.27
270.00
3,871.28
2,399.65
1,436.85
195.00
—
200.00
920.85
287.50
1,843.79
1,986.42
251.00
380.00
2,353.50
«15,578.78
15,578.78
$15,808.78
$23,379.37 $20,975-96
$
-
-
Credits
$260.00
1,134.15
225.00
306.66
420.00
270.00
3,871.28
195.00
200.00
287.50
251.00
380.00
—
$7,800.59
$20,975.96
(&)
(#)
(*)
(a)
(b)
Main l i n e r e n t a l , Richmond-Washington.
Includes s a l a r i e s of Washington o p e r a t o r s .
Credit.
Received $2,403.4l fram Treasury Department covering business f o r t h e month of September, 1931.
Amount reimbursable to Chicago.
Payable to
Federal
Reserve
Board
$417.52
2,574.40
595.16
1,566.49
1,111.25
1,154.27
1,471.63 (*)
1,241.85
720.85
1,556.29
1,735.42
1,973.50
-
$14,647.00
$13,175.37
X-6986
STATEMENT O 3UH2A.U 0? 2J1TCRAYIKG & PRINTING
F
Federal Reserve Notes, Series 1928.
September 1 to 50, 1931.
C5
Boston
New York
Philadelphia
Cleveland
Atlanta
Kansas CityDallas
San Francisco
(10
10,000
100,000
40,000
30,000
50,000
104,000
20,000
50,000
25,000
217,000
16,000
10,000
10,000
50,000
514,000
578,000
-
817,750
(20
12,000
J,100
C-50
(>500
42,000
54,000
4,000
20,000
9,000
4,000
500
36,000
51,000
58,000
(1000
500
sheets, @ (92.50 per H.
>
•
»
<
Total
Sheets
50,000
150,000
77,000
323,000
46,000
10,000
27,750
250
174,000
250
817,750
Amount
C2,775.00
12,025.00
7,122.50
29,877.50
4,255.00
925.00
2,566.88
16,095.00
(75,641.88
. $75,641.88
Oi
CD
X-6988
FEDERAL
RESERVE
BOARD
STATEMENT FOR THE PRESS
For immediate r e l e a s e .
October 15, 1931.
The Federal Reserve Board announces that the Federal
Reserve Bank of New York has established a rediscount r a t e of
3 l / 2 per cent on a l l classes of
f e c t i v e October 16, 1931.
paper of a l l m a t u r i t i e s , e f -
461
X-6989
FEDERAL
RESERVE
BOARD
STATEMENT FOR THE PRESS
For r e l e a s e at 3:00 p. m.
October 16, 1931.
The Federal Reserve Board announces that the Federal
Reserve Bank of Chicago has established a rediscount r a t e of
3 l / 2 per cent on a l l classes of
f e c t i v e October 17, 1931.
paper of a l l m a t u r i t i e s , e f -
X-6990
FEDERAL
RESERVE
BOARD
STATEMENT FOR THE PRESS
For r e l e a s e at 3:00 p. m.
October 16, 1931.
The Federal Reserve Board announces that the Federal
Reserve Bank of Boston has established a rediscount r a t e of
3 l / 2 per cent on a l l classes of paper of a l l m a t u r i t i e s ,
e f f e c t i v e October 17, 1931.
X-6991
FEDERAL
RESERVE
BOARD
STATEMENT FOR THE PRESS
For r e l e a s e at 3:00 P.M.
October 19, 1931.
The Federal Reserve Board announces that the Federal
Reserve Bank of Richmond has established a rediscount r a t e of
4$ on a l l classes of paper of a l l m a t u r i t i e s , e f f e c t i v e
October 20, 1931.
4G4
FEDERAL RESERVE BOARD
WASHINGTON
X-6993
ADDRESS OFFICIAL CORRESPONDENCE TO
THE FEDERAL RESERVE BOARD
October 19, 1931*
SUBJECT: Holidays during November, 1931.
Dear S i r :
On Monday, November 2nd, the New Orleans Branch of
the Federal Reserve Bank of Atlanta w i l l be closed i n observance of All S a i n t s ' Day.
On Tuesday, November 3rd, Election Day, the following head o f f i c e s and branches w i l l be closed:
New York
Buffalo
Philadelphia
Cleveland )at 1 p.m. E.S.T.
Cincinnati)will p a r t i c i p a t e
)in clearings
P i t t sburgh
Richmond
Please include c r e d i t s for the banks a f f e c t e d on
each of these holidays with your c r e d i t s for the following
business day, and make no shipments of Federal reserve notes
f o r account of the head o f f i c e s a f f e c t e d on November 3rd.
On Wednesday, November 11th, i n observance of
Armistice Day, and on Thursday, November 26th, Thanksgiving
Day, there w i l l be neither gold settlement fund nor Federal
reserve note clearing, and the books of the Board's gold
settlement fund w i l l be closed.
The o f f i c e s of the Federal Reserve Board and of the
Federal Reserve Bank of New York and i t s Buffalo Branch w i l l
be open f o r business on November 11th.
Please n o t i f y branches.
Very t r u l y yours,
J . C. Noell,
Assistant Secretary.
TO GOVERNORS OF ALL F. R. BANKS.
X-6993
FEDERAL
RESERVE
BOARD
STATEMENT FOR THE PRESS
For r e l e a s e a t 4:00 p.m.
October 20, 1931.
The Federal Reserve Board announces t h a t the Federal
Reserve Bank of Dallas has established a rediscount r a t e of
4 per cent on a l l classes of paper of a l l m a t u r i t i e s , e f f e c t i v e
October 21, 1931.
FEDERAL RESERVE BOARD
WASHINGTON
ADDRESS OFFICIAL CORRESPONDENCE TO
THE FEDERAL RESERVE BOARD
X-6994
October 20, 1931.
SUBJECT:
Code Word to cover Telegraphic Transactions
i n Treasury B i l l s .
Dear S i r :
In connection with telegraphic transactions i n
Government s e c u r i t i e s between Federal reserve banks, the
code word "NOXCITED" has been designated to cover a new
issue of Treasury B i l l s , dated October 26, 1931, and maturing January 25, 1932.
This word should be inserted in the Federal r e serve telegraph code book, following the supplemental code
word "HOXCISTBEH" on Page 172.
Very t r u l y yours,
J . C. Noell,
Assistant Secretary.
TO GOVERNORS OF ALL F. R, BAMS.
X- 6995
FEDERAL
RESERVE
BOARD
STATEMENT FOR THE PRESS
For release a t 6:00 p.m»
; October 20, 1931.
The Federal Reserve- Board announces that the Fede r a l Reserve Bank of San Francisco has established a r e d i s count r a t e of 3 | $ on a l l classes of paper of- a l l m a t u r i t i e s ,
e f f e c t i v e October 21, 1931.
X-6996
F E D E R A L . R BSE R V E BOARD
STATEMENT FOR THE PRESS
-For r e l e a s e at 3:00 P. M.
October 21, 1931.
The Federal Reserve Board announces that the
Federal Reserve Bank of Philadelphia has established
a rediscount r a t e of 3|- per cent on a l l classes of
paper of a l l m a t u r i t i e s , e f f e c t i v e October 22, 1931.
X-6997
FEDERAL
RESERVE
BOARD
STATEMENT FOR THE PRESS
For r e l e a s e at 3:00 P. M.
October 21, 1931.
The Federal Reserve Board announces that the
Federal Reserve Bank of S t . . Louis has established a
rediscount r a t e of Z\ per cent on a l l classes of paper
of a l l m a t u r i t i e s , e f f e c t i v e October 22, 1931.
X-7000
FEDERAL
HESEETE
BOARD
STATEMENT FOR THE PRESS
For release at 4;30 p.m.
Oct. 22, 1931.
The Federal Reserve Board announces that the Federal
Reserve Bank of Kansas City has established a rediscount r a t e
of 3g$ on a l l classes of paper of a l l m a t u r i t i e s , e f f e c t i v e
October 23, 1931.
X- 7001
1 1 . D E R A X: R I S E R V E . BO A R B
STATEMENT FOR THE PRESS
For r e l e a s e a t 3:00 p . m. .
October 23, 1931.
The Federal Reserve Board announces that the Fede r a l Reserve Bank of Cleveland has established a rediscount
r a t e of 3 l / 2 per cent on a l l classes of paper of a l l
m a t u r i t i e s , e f f e c t i v e October 24, 1931.
FEDERAL RESERVE BOARD
WASHINGTON
ADDRESS OFFICIAL CORRESPONDENCE TO
THE FEDERAL RESERVE BOARD
X-7002
October 23, 1931.
SUBJECT:
Group Life Insurance at Federal
Reserve Banks.
Dear S i r :
Referring to the Board's l e t t e r of September 3 on the above subject, there i s attached
hereto f o r your f u r t h e r information, copy of a
memorandum prepared by the Division of Bank
Operations under date of September 25 on the cost
of group l i f e insurance at Federal reserve banks.
Very t r u l y yours,
E. M. McClelland,
Assistant Secretary.
Enclosure.
TO GOVERNORS AND CHAIRMEN OF ALL F. R. BANKS.
COPY
TO
X-7003-a
DATE: September 35, 1931.
Federal Reserve Board
SUBJECT:
FROM Mr. Van Fossen
Group Life Insurance
Since the preparation of my memorandum of August 12 on the above subject,
we have compiled c e r t a i n information, shown below, on the cost per $1000 of
group l i f e insurance c a r r i e d by the various Federal reserve banks, which may
be of i n t e r e s t to the Board. In t h i s connection i t should be borne i n mind
that the cost of group l i f e insurance v a r i e s considerably from year to year
at a given Federal reserve bank, and accordingly only very general conclusions
can be drawn from the t a b l e below as to the r e l a t i v e cost of such insurance at
the respective Federal reserve banks. The cost per $1,000 of insurance shown
i n the f i r s t column below i s based on e s s e n t i a l l y the same scale of r a t e s at
each reserve bank and the r e l a t i v e l y high average r a t e s at c e r t a i n of the
banks axe due to a correspondingly high r a t i o of employees of advanced age.
For example, at Minneapolis and Kansas City 15 per cent of the employees are
over 50 years of age and the cost of insurance on these l i v e s i s 52 per cent
of the t o t a l cost at Minneapolis and 47 per cent at Kansas City. None of the
other banks, except Philadelphia perhaps, have more than 10 per cent of t h e i r
employees i n t h i s age group and the cost of insurance on such employees i s
but 28 per cent of the t o t a l cost at Boston and but l i t t l e over 30 per cent
at a number of other banks.
Cost per $1,000 of Group L i f e Insurance c a r r i e d by Federal reserve banks.
Average
Federal Reserve tabular
Bank
or policy
rate*
Annual Premium
Policies
Philadelphia
$11.28
12.29(a)
Kansas City
9.48
San Francisco
8.91
Cleveland
9.27(b)
8.89
Boston
9.65(a)
Dallas
Monthly Premium
Policies
New York
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
9.95
10.44
10.20
10.10
10.86
12.72
Experience
Dividends
discount —
received —
per cent of per cent of
tabular r a t e tabular r a t e
Actual cost per $1,000
Per cent
of
Amount
tabular r a t e
n
44.1
64
73
77
85
81.8
88
55.9
$7.21
8.97
7.30
7.58
7.58
7.82
5.39
37.6
24.4
7.7
8.5
43.8
None
51.7
56.1
90.0
81.8
46.8
84.0
5.14
5.86
9.18
8.26
5.08
10.68
36
27
23
15
18.2
12
None
Non-participating
n
n
ii
10.7
19.5
2.3
9.7
9.4
16.0
• S l i g h t l y higher r a t e s are charged on the monthly premium p o l i c i e s due to
i n t e r e s t on deferred payments. Allowing f o r t h i s the s c a l e of r a t e s
at each age i s i d e n t i c a l f o r a l l banks, except Cleveland.
(a) After deduction of e x t r a premium f o r double indemnity f o r accidental death.
(b) Calculated on the scale of r a t e s charged the other reserve banks.
X-7004
COPY
October 26, 1931.
Mr. M. G. Wallace, Counsel,
Federal Reserve Bank,
Richmond, V i r g i n i a .
My dear Mr. Wallace:
Please accept my sincere apologies f o r not acknowledging
more promptly your kind l e t t e r of July 9, 1931, t r a n s m i t t i n g
foi; my information a copy of an opinion that you had given to
Governor Seay with reference to the e f f e c t of the decision of
the Circuit Court of Appeals i n the case of Gamble v . Wimberly,
44 Fed. (2nd) 329, on the r i g h t s of Federal reserve banks
against r e c e i v e r s of insolvent national banks.
I have been
l i t e r a l l y overwhelmed with work and t h i s i s the f i r s t opport u n i t y I have had to read your l e t t e r and the enclosures with
care.
I agree with your conclusion that the decision of the
Circuit Court of Appeals i s wrong, because i t i s i n c o n f l i c t
with the decisions of the Supreme Court of the United S t a t e s ,
and i t w i l l be advisable f o r one of the Federal reserve banks
located i n another c i r c u i t to attempt to take a t e s t case on
t h i s question to the Supreme Court of the United States when a
favorable opportunity presents i t s e l f .
I am t h e r e f o r e t r a n s -
mitting a copy of your l e t t e r and the enclosures t h e r e t o and a
copy of t h i s l e t t e r to Counsel f o r a l l Federal reserve banks f o r
t h e i r information.
X-7004
M. G-. Wallace
- 2
If any steps have "been taken, to obtain a review of the
decision of the Circuit Court of Appeals by the Supreme
Court of the United S t a t e s , or i f there have been any f u r t h e r
developments with r e s p e c t to the p r a c t i c a l a pplic a tion of
t h i s decision i n the administration of the a f f a i r s of the
insolvent national "banks "by the Comptroller of the Currency,
I should appreciate i t if you would kindly advise me.
With kindest personal regards and best wishes, I am,
Cordially yours,
Walter Wyatt,
General Counsel.
COPY
X-7004-a
FEDERAL RESERVE BAM
OF RICHMOND
July 9, 1931
Federal Reserve Board,
Washington, D. C.
s
Attention: Mr. Walter Wyatt, General Counsel.
My dear Mr. Wyatt:
I am enclosing you herewith a copy of an opinion that I have
given to Mr. Seay, the Governor of t h i s tank, upon the subject of the
decision of the Circuit Court of Appeals i n t h i s c i r c u i t i n the case of
Gamble v. Wimberly.
If the reasoning of the court i n t h i s case i s c a r r i e d to i t s
logical conclusion i t w i l l probably involve considerable changes i n the
working arrangements which were agreed upon by Counsel f o r a l l Federal
reserve "banks and r e p r e s e n t a t i v e s of the Comptroller of the Currency at
the j o i n t conference held July 13th, 1925. You w i l l see from my opinion
that I am inclined to consider that the reasoning of t h i s case i s cont r a r y to the previous decisions of the Supreme Court, and I a t t a c h to my
opinion a memorandum of the previous f e d e r a l decisions which were cited
and r e l i e d upon by the court i n rendering the opinion i n the case under
discussion.
I do not know j u s t how f a r the o f f i c e of the Comptro" a* w i l l
be disposed to extend the r u l e l a i d down i n t h i s case; but i n ct bain
correspondence which I have had with receivers i t seems that the Compt r o l l e r may be disposed to consider that t h i s case n e c e s s i t a t e s a material
a l t e r a t i o n i n the p r i n c i p l e s upon which h i s o f f i c e has previously acted.
You w i l l notice that the case holds only that dividends cease
when collections upon c o l l a t e r a l and previous dividends equal to the a mount of the proven claim without i n t e r e s t . There has been no decision
that the l i e n upon c o l l a t e r a l ceases before i n t e r e s t has been paid, and
the case of Morrill v . National Bank of Jacksonville and other cases
appear to be a u t h o r i t y for the r u l e that c o l l a t e r a l secures i n t e r e s t as
much as p r i n c i p a l . Upon the other hand, i f the r i g h t to receive dividends
ceases as soon as t h e p r i n c i p a l i s paid but the c o l l a t e r a l then on hand
may s t i l l be held f o r the i n t e r e s t , the decision r e s u l t s i n making a
d i s t i n c t i o n where there i s no d i f f e r e n c e , f o r i t means that c o l l a t e r a l
liquidated before a dividend tends to reduce the amount of dividends
paid to the c r e d i t o r , but i f the creditor does not l i q u i d a t e h i s c o l l a t e r a l
u n t i l a f t e r the dividends he may get the f u l l dividends and then c o l l e c t
accrued i n t e r e s t out of the c o l l a t e r a l .
In a proposed settlement which was submitted to me by a receiver
4^
477
Xr-7004-*a
Mr. Walter Wyatt,
Federal Reserve Board,
Washington, D. C.
-3-
July 9, 1931
I notice that the receiver had apparently assumed that a l l c o l l a t e r a l and
a l l payments received from makers of rediscounted notes should "be added
together and when the Federal reserve hank had received from any source
a sum equal to i t s o r i g i n a l claim without i n t e r e s t t h i s r i g h t to dividends
ceases. Payments made by makers are, of course, not made from assets of
the insolvent bank*s e s t a t e and the ordinary r u l e i s well established
that a payment by a maker of a note i s f i r s t applicable to a reduction of
accrued i n t e r e s t and afterwards to the reduction of the p r i n c i p a l . I can
see no reason why the f a c t t h a t the endorser of a note becomes insolvent
should a l t e r the r u l e as to application of payments by the maker and I
can see nothing in the decision of the Circuit Court of Appeals which
shows that the court would of necessity adopt such a conclusion, although
I admit that a l i n e of reasoning similar to that which the court adopted
with respect to the application of the proceeds of c o l l a t e r a l might well
lead to the adoption of a similar r u l e reversing the usual r u l e concerning the a p p l i c a t i o n of payments made by p a r t i e s to the o b l i g a t i o n .
The proposed settlement to which I alluded also appeared to
have been prepared upon the theory that the proceeds of stock held by the
insolvent bank i n a Federal reserve bank would of necessity be applied
j u s t as money r e a l i z e d from c o l l a t e r a l * We, of course, have heretofore
been so handling the surrender value of the stock because i t was a convenient way of keeping the account and did not a f f e c t the u l t i m a t e r i g h t s
of the p a r t i e s . I t does not appear to me that i t necessarily follows that
the surrender value of the stock i s f o r a l l purposes analogous to c o l l a t eral pledged, because the a c t s seem to contemplate that the surrender value
of the stock s h a l l not be applied except i n the f i n a l closing of the account *
which would of necessity mean the payment of i n t e r e s t upon any past due
obligation.
I t has also been the p r a c t i c e of the Comptroller's Office in
closing the books of a f a i l e d bank before paying a f i n a l dividend to d i s t r i b u t e the c o l l e c t i o n s made upon c o l l a t e r a l pro r a t a to each rediscount.
This, of course, was immaterial as long as collections made upon c o l l a t e r a l
did not a f f e c t our r i g h t to dividends u n t i l each note was paid i n f u l l , but
if the d i s t r i b u t i o n of the proceeds of c o l l a t e r a l i s to a f f e c t the r i g h t s
of dividends on a p a r t i c u l a r note, i t i s obvious that i n some instances
i t w i l l be much more advantageous to the Federal reserve banks to apply the
proceeds of c o l l a t e r a l to some note upon which the makers have made no
payments and upon which the balance due upon p r i n c i p a l exceeds any dividend
which w i l l be paid r a t h e r than to d i s t r i b u t e c o l l a t e r a l upon c e r t a i n notes
upon which large part payments have been made by makers, so that the payments
from the makers plus the d i s t r i b u t i o n of c o l l a t e r a l w i l l exceed the p r i n c i pal amount due on the note. I t seems to me that the holder of the c o l l a t e r a l
i s clearly e n t i t l e d to apply i t upon any obligation selected by him and
cannot be compelled to prorate i t among a l l obligations.
There may be other questions which w i l l a r i s e , and t h e above
X-7004-a
Mr. Walter Wyatt,
Federal Reserve Board,
Washington, D. C.
-3-
July 9, 1931
propositions represent only my t e n t a t i v e opinion. I have not as yet made
a f u l l study of any of the questions other than the single one considered
in the case of Gamble v. Wimberly. I t occurred to me, however, t h a t your
o f f i c e and perhaps Counsel for the other Federal reserve "banks might be
i n t e r e s t e d i n the probable e f f e c t of t h i s decision and I t h e r e f o r e send
you a copy of my opinion of July 1st and the memorandum of cases.
With kindest regards, I am,
Very t r u l y yours,
(S)
M. G. Wallace,
Counsel.
MW E
G
COPY
X-7004-b
FEDERAL HE SERVE BAM OF RICHMOND
July 1, 1931
Mr. George J . Seay, Governor.
M. G. Wallace, Counsel.
Decision of the Case of Gamble
v . Wimberly Relating to the Comput a t i o n of I n t e r e s t on Claims Against
Insolvent Banks.
My dear Mr, Seay:
I wish to c a l l your a t t e n t i o n to an opinion in the case e n t i t l e d
Gamble v. Wimberly, decided "by the Circuit Court of Appeals f o r the Fourth
Circuit October 21, 1930, and reported in 44 Federal Reporter (2nd) 329,
which may n e c e s s i t a t e some change i n the computation of i n t e r e s t in our
settlements with f a i l e d hanks upon claims f o r which we hold s e c u r i t y .
As you know, there are two d i s t i n c t r u l e s adopted in d i f f e r e n t
j u r i s d i c t i o n s concerning the "basis upon which dividends should be paid to
creditors of an insolvent who hold s e c u r i t y f o r t h e i r debts. One r u l e i s
generally c a l l e d the English chancery r u l e and under i t a c r e d i t o r proves
a claim f o r the amount of h i s debt as i t existed at the time of bankruptcy
or insolvency, making due allowance f o r i n t e r e s t accruing p r i o r to i n solvency or f o r r e b a t e of i n t e r e s t on claims not due. The c r e d i t o r then
receives dividends on h i s claim u n t i l the amount of dividends and the amount
realized from c o l l a t e r a l equal to the amount of the claim.
The second r u l e i s commonly r e f e r r e d to as the bankruptcy r u l e and
under i t a c r e d i t o r i s obliged to l i q u i d a t e h i s c o l l a t e r a l and credit the
amount r e a l i z e d from i t before proving a claim, or e l s e to appraise his
c o l l a t e r a l and c r e d i t i t s estimated value. The creditor then receives
dividends only upon the net amount due a f t e r due allowance i s made f o r the
value of the c o l l a t e r a l .
There are c e r t a i n minor v a r i a t i o n s in the a p p l i c a t i o n of these
r u l e s so that i t i s o f t e n said t h a t there are four d i s t i n c t r u l e s , but I
mention them as two because the two d i s t i n c t r u l e s present the only points
of d i f f e r e n c e with which we are concerned at t h i s time.
Some years ago at a conference between r e p r e s e n t a t i v e s of the
Comptroller of the Currency and representatives of Federal reserve banks i t
was generally agreed that the English chancery r u l e was the proper r u l e to
apply in claims against insolvent national banks. This conclusion seemed
to be in accordance with several decisions of the Supreme Court of the
United S t a t e s . You w i l l r e a d i l y observe that i n the a p p l i c a t i o n of t h i s
r u l e at any time a f t e r insolvency a statement of the amount due on the
preferred claim w i l l always involve two d i s t i n c t amounts. For the purpose
of determining the amount of dividends payable the fixed sum due as of the
date of insolvency i s always the unchanging b a s i s . To determine the e n t i r e
amount due the c r e d i t o r i n t e r e s t must be accrued on the claim t o the date
at which a settlement i s contemplated. The Supreme Court held that as
X-7004-Td
FEDERAL RESERVE B N OF RICHMOND
AK
Mr. George J . Seay, Governor.
M. G. Wallace, Counsel.
July 1, 1931
Decision of the Case of Gamble v,
Wimberly Relating to the Computation
of I n t e r e s t on Claims Against Insolvent Banks.
long as the claim remained unpaid the c r e d i t o r was e n t i t l e d to dividends
on the o r i g i n a l amount of the claim i r r e s p e c t i v e of c o l l e c t i o n s on c o l l a t e r a l
u n t i l the claim was p a i d .
We and r e p r e s e n t a t i v e s of the Comptroller of the Currency have
u n t i l now both assumed that t h e claim was not paid u n t i l the e n t i r e amount
due the c r e d i t o r had "been received by him; that i s to say, that the creditor
was e n t i t l e d to t r e a t dividends merely as part payments and to c r e d i t them
along with r e c e i p t s from c o l l a t e r a l u n t i l r e c e i p t s from "both sources applied
as p a r t payment equalled to the amount of the claim and accrued i n t e r e s t .
In the decision to which I allude the Circuit Court of Appeals
has held that t h i s i s not t r u e , but that when the c r e d i t o r has received
from dividends and from the p r i n c i p a l or corpus of h i s c o l l a t e r a l an amount
equal to the proven claim the right to receive dividends ceases, or, p u t t i n g
the matter i n a s l i g h t l y d i f f e r e n t way, the court has held that r e c e i p t s
froifl the corpus of c o l l a t e r a l cannot be applied t o accrued i n t e r e s t on the
debt.
The case to which I r e f e r arose as follows: The Commercial National
Bank of Wilmington f a i l e d , owing to the F i r s t National Bank of Rocky Mount
a note of $25,000.00 secured by c e r t a i n customers' notes of the Commercial
National Bank of Wilmington. The F i r s t National Bank of Rocky Mount had on
deposit i n the Wilmington bank the sum of $3,402.90. After the f a i l u r e
the F i r s t National Bank of Rocky Mount consolidated with another bank and
the claim against the Commercial National Bank of Wilmington was t r a n s f e r r e d
to a l i q u i d a t i n g t r u s t e e . The t r u s t e e proved a claim upon the note and the
deposit balance mentioned above and collected i n the process of time from
the c o l l a t e r a l i n h i s hands the sum of $23,331.30. Dividends were paid to
the t r u s t e e aggregating $4,260.44. The t r u s t e e applied the proceeds from
c o l l a t e r a l f i r s t to extinguish accrued i n t e r e s t on the note, f o r which i t
was pledged, and the balance to reduce the p r i n c i p a l on the note and applied
the dividends to reduce the p r i n c i p a l . The accrued i n t e r e s t amounted to
$2,372.89. When the time f o r a f i n a l dividend came the t r u s t e e contended
that there was due to him the sum of $3,184.05, which the f i n a l dividend
would have been s u f f i c i e n t to pay i n f u l l . The Receiver of t h e Wilmington
bank contended that the amount due was only $311.16; t h a t i s to say, that
so f a r as the payment of dividends was concerned the claim was discharged
when the payments received equalled to the dividend b a s i s and that accrued
i n t e r e s t could not be taken into consideration. The D i s t r i c t Court sustained
the contention of the t r u s t e e and the case was taken to the Circuit Court
of Appeals. Judge Coleman i n the opinion cited above reversed the D i s t r i c t
Court, s t a t i n g the question as follows:
X-7004-b
FEDERAL BESERVE BANK OF RICHMOND
J u l y 1, 1931
Decision of the Case of Gamble
v . limberly Relating to the Comput a t i o n of I n t e r e s t on Claims Against
Insolvent Banks.
Mr. George J . Seay, Governor.
M. G. Wallace, Counsel.
- 3-
"Summarized, the question presented f o r our d e c i s i o n i s
whether a c r e d i t o r of an insolvent n a t i o n a l "bank may he
permitted to apply c o l l e c t i o n s from c o l l a t e r a l s e c u r i t y
which he holds to the l i q u i d a t i o n of i n t e r e s t accruing upon
h i s claim subsequent to the "bank's insolvency, "before applying such c o l l e c t i o n s to the reduction of the p r i n c i p a l of
h i s claim."
A f t e r reviewing nearly a l l of the previous d e c i s i o n s of the f e d e r a l
courts upon t h e subject thu opinion s t a t e s the conclusion of t h e court as
follows:
"Summarizing our conclusions, wo f i n d t h a t whereas t h e judgment
of the lower court was correct i n so f a r as i t r e q u i r e d the r e ceiver t o pay dividends r a t a b l y to the t r u s t e e based upon the
l a t t e r ' s o r i g i n a l claim, i t was n e v e r t h e l e s s , i n e r r o r i n permitt i n g t h e t r u s t e e to apply c o l l e c t i o n s from c o l l a t e r a l to the
l i q u i d a t i o n of i n t e r e s t , as the t r u s t e e did and thereby increase
the amount s t i l l unpaid, of h i s o r i g i n a l claim by t h e amount of
i n t e r e s t so l i q u i d a t e d . Although not required to do so, the
t r u s t e e having i n f a c t sold the c o l l a t e r a l , the t o t a l of a l l
dividends p a i d and a n t i c i p a t e d being much l e s s than the f u l l
amount of h i s claim, he should apply i n f u r t h e r l i q u i d a t i o n
t h e r e o f , not merely the balance of the proceeds r e a l i z e d from
the c o l l a t e r a l (as he has v o l u n t a r i l y done), but the t o t a l amount
of such proceeds l o s s only any i n t e r e s t and dividends t h a t may
have accrued upon the c o l l a t e r a l i t s e l f since t h e date of the
Wilmington bank's insolvency."
The opinion contains c e r t a i n expressions from which i t might be
argued t h a t the court intended to hold t h a t when the c r e d i t o r had c o l l e c t e d
an amount equal to the proven claim the e n t i r e claim of the c r e d i t o r was
discharged and he would not only receive no f u r t h e r dividends, but would be
compelled to surrender h i s c o l l a t e r a l . Those expressions appear to a r i s e
c h i e f l y from t h e f a c t t h a t t h e Circuit Court of Appeals r e f e r s t o decisions
of the Supreme Court of the United S t a t e s , saying t h a t the c r e d i t o r i s
e n t i t l e d to r e c e i v e dividends u n t i l such dividends and the proceeds of t h e
c o l l a t e r a l equal to t h e claim. I , myself, am i n c l i n e d to t h i n k t h a t the
Supreme Court of the United S t a t e s intended to say t h a t the c r e d i t o r could
r e c e i v e dividends and hold the proceeds of c o l l a t e r a l u n t i l the e n t i r e
debt was discharged, and t h e Circuit Court of Appeals has i n r e a l i t y
r e s t r i c t e d the e f f e c t of previous decisions of the Supreme Court. Therefore,
4^
X-7004-.Td
FEDERAL RESERVE B N OF RICHMOND
AK
July 1, 1931.
Decision of the Case of Gamble
v . limberly Relating to the Comput a t i o n of I n t e r e s t on Claims
Against Insolvent Banks.
Mr. Goorgo J . Soay, Governor.
M. G. Wallace, Counsel.
-4-
in my own opinion the decision of the Circuit Court of Appeals is probaby
unsound, but since the j u r i s d i c t i o n of the Circuit Court of Appeals of the
Fourth Circuit includes a l l of the s t a t e s of the F i f t h Federal Reserve
D i s t r i c t , i t s decision must he accepted as law as f a r as we arc concerned
u n t i l the question i s otherwise decided by the Supreme Court of the United
States, and, as I say, the precise question has never "been considered by
the Supreme Court of the United S t a t e s .
If t h i s decision means t h a t our l i e n upon our c o l l a t e r a l ceases
when we have received an amount equal to the claim as i t existed at the
date of insolvency, the decision would be a most important one; but, as I
say, while the reasoning of the court appears to point to such a conclusion,
the court has not taken i t s reasoning to that extent, and I think that in
a subsequent case the court would be f u l l y as l i k e l y to modify or l i m i t
i t s previous decision as i t would to carry the reasoning of that opinion
further.
I discussed t h i s case informally with r e p r e s e n t a t i v e s of the
Comptroller. They then informed mo that they did not intend to take the
p o si t i o n that our l i e n upon our c o l l a t e r a l ceased before we had received
payment of accrued i n t e r e s t , "but merely that no dividends would he paid to
us a f t e r we had received an amount equal to the dividend b a s i s and that
t h e r e a f t e r we would be l e f t to our c o l l a t e r a l t o secure our accrued and
accruing i n t e r e s t . This conclusion i s illogicaL because i t amounts i n
e f f e c t to saying that the proceeds of c o l l a t e r a l may be applied to accrued
i n t e r e s t i f the proceeds .are received a f t e r the e s t a t e i s closed but may
not he so applied i f received before the e s t a t e i s closed; b u t , as I stated
above, t h i s seeming inconsistency i s apparently inherent i n the d i s t i n c t i o n
which the court made.
While the statements of the representatives of the Comptroller
would not bind them i n any way, as they were made i n a merely informal
discussion of the case and at a time Then neither they nor I had had an
opportunity to study i t c a r e f u l l y , I an inclined to think t h a t they intend
to adopt the policy outlined above, at l e a s t u n t i l some f u r t h e r j u d i c i a l
decision i s made.
I t i s , of course, not necessary to say that t h i s opinion e f f e c t s
a l l Federal reserve banks, as well as t h i s bank, and i f , indeed, there i s
any thought of challenging the soundness of the opinion, i t w i l l be b e t t e r
far
• 483
X-7004-b
FEDERAL RESERVE 1/OlK OF RICHMOND
July 1, 1931
Decision of the Case of
Gamble v. Wimberly Relating to
the Computation of I nte r e st on
Claims Against Insolvent Banks.
Mr, George J . Seay, Governor.
M. G. Wallace, Counsel.
- 5-
the question to "be r a i s e d by some other Federal reserve bank as i t would
n a t u r a l l y be e a s i e r to secure an opinion from the Circuit Court of Appeals
of some other c i r c u i t d i f f e r e n t from the opinion of the Circuit Court of
Appeals of t h i s c i r c u i t than i t would be to induce the Circuit Court of
Appeals of t h i s c i r c u i t to reverse i t s e l f .
Accepting the opinion as the law for the time being, there arc t?o
points under i t which we should considers F i r s t , while the court holds
that the proceeds from the corpus of c o l l a t e r a l may not be applied to
i n t e r e s t accruing a f t e r insolvency, i t holds that i n t e r e s t on c o l l a t e r a l
may be so a p p l i e d . We should t h e r e f o r e keep any i n t e r e s t received on
c o l l a t e r a l separate from the corpus or payments on p r i n c i p a l or c o l l a t e r a l
and i n a settlement with the receiver show only collections on p r i n c i p a l
or the corpus of c o l l a t e r a l .
Second, i n the case above quoted there was only one claim and
consequently no doubt as to the application of c o l l a t e r a l . In most cases
in which we are concerned there are many claims and the c o l l a t e r a l i s
held f o r a l l of the claims without d i s t i n c t i o n as to the p a r t i c u l a r claim.
In some correspondence that I have had with one receiver he i s inclined to
the view that we are obliged to prorate c o l l a t e r a l equally among a l l claims.
I am inclined to think that we could apply c o l l a t e r a l to any claim or claims
which we p r e f e r r e d , as wo do reserve balances, and so apply i t upon notes
which no payments had been made by the makers, and upon which, t h e r e f o r e ,
the balance duo would exceed the dividends to be paid and the c o l l a t e r a l
to bo applied.
I t i s probable that the r u l e as adopted by the Circuit Court of
Appeals w i l l not make any great d i f f e r e n c e in our settlements as f a r as the
amounts received are concerned as i t can operate only i n those few cases
in which a dividend would be s u f f i c i e n t with the application of c o l l a t e r a l
to pay the amount f o r which we had proved a claim but not s u f f i c i e n t to pay
the claim and accrued i n t e r e s t .
Very t r u l y yours,
M. G-. Wallace,
Counsel.
MW R
G
M M R N U UPON THE DEtilStOM* THE CIRCUIT COURT OF APPEALS
E OA D M
FOR THE FOURTH CIRCUIT OCTOBER 21, 1930, DELIVERED IN 44
FEDERAL REPORTER (2nd) 329.
The court i n the case cited holds in substance that a secured
creditor of a national tank may prove a claim for the present value of
his debt determined at the time of insolvency and receive dividends on
the amount so proven u n t i l the amount of dividends and the amount r e a l ized from the corpus of c o l l a t e r a l held equal to the proven claim, at
which time the r i g h t to receive f u r t h e r dividends ceases. The opinion
does not decide whether or not the l i e n upon the c o l l a t e r a l simultaneously ceases, but i t i s expressly stated that i n t e r e s t accruing upon
s e c u r i t i e s held as c o l l a t e r a l i s applicable i n p a r t i a l payment of i n t e r e s t accruing upon the secured debt. In the course of i t s opinion
the court c i t e s and r e l i e s upon the following previous decisions of
f e d e r a l courts:
Story v. Livingston,
U. S. Sup. Ct, 1839, 13 Peters 359, 10 L. Ed. 200.
This was a b i l l f i l e d f o r an accounting under Louisiana law
against a defendant who seems to have been regarded as i n a p o s i t i o n
analogous to t h a t of a mortgageein possession, and the opinion delivered
by J u s t i c e Wayne holds, among other things, that r e n t s on the mortgaged
property are applicable to reduce as p a r t payments upon i n t e r e s t accruing on the mortgage debt during s u i t . I t appeared, however, that the
rents were more than s u f f i c i e n t to discharge the accrued i n t e r e s t and
a portion of the r e n t s were t h e r e f o r e applicable to the reduction of
the p r i n c i p a l .
National Bank of the Commonwealth v. Mechanics National Bank,
U. S. Sup. Ct. 1876, 94 U.S. 437, 24 L. Ed. 176.
This case holds that depositors i n national banks are e n t i t l e d
to i n t e r e s t from the date of suspension on claims proven. I t seems,
however, that the a s s e t s were s u f f i c i e n t to pay a l l claims i n f u l l . The
opinion, however, quotes with approval Lord Mansfield i n Robinson v.
Bland, 2 Burr. 1087, as follows:
"The i n t e r e s t i s an accessory to the p r i n c i p a l , and the p l a i n t i f f
cannot bring a new action f o r any i n t e r e s t grown due between the
commencement of his action and the judgment i n i t . I don't lenow
of any court i n any country (and I have looked into the matter)
which don't carry i n t e r e s t down to the l a s t act by which the sum
is liquidated."
Cook County National Bank v. United S t a t e s ,
U. S. Sup. Ct. 1882, 107 U. S. 445, 2 Sup. Ct. 561, 27 L. Ed. 534.
This case involved the r i g h t of a national bank to apply a surplus
X-7004-c
— 2
—
from the sale of bonds to the payment of Government d e p o s i t s . I t was
held that t h e United States was not a p r e f e r r e d c r e d i t o r and the court
does not appear t o have considered with any p a r t i c u l a r care any question
involving i n t e r e s t .
White v. Knox,
U. S. Sup. Ct. 1884, 111 U. S. 784, 28 L. Ed. 603.
This case holds that i n t e r e s t accruing a f t e r suspension cannot
"be added to a claim against an insolvent national "bank f o r the purpose
of determining the amount upon which dividends are payable.
Armstrong v . American Exchange Bank,
U. S. Sup. Ct.
, 133 U. S. 433, 10 Sup. Ct. 450.
The primary question i n t h i s case was as to the v a l i d i t y of a
d r a f t issued i n an unlawful t r a n s a c t i o n , hut the court held t h a t d i v i dends which should have been paid to claimant hut were withheld during
the l i t i g a t i o n should hear i n t e r e s t from the date that such dividends
were paid to other c r e d i t o r s as t h i s was necessary to place the creditor
whose dividends had not been paid upon equality with other c r e d i t o r s .
Richmond & I . Construction Co. v . Richmond N. I . & B. Railway Co.,
Circuit Court of Appeals f o r Sixth C i r c u i t , 68 Fed. 105, 34 L.R.A.
625.
This case was decided by Judges T a f t . Lurton and Sever ens, and
held that i n t e r e s t on a l i e n claim i s payable to the claimant before anything i s payable to general c r e d i t o r s or upon subsequent l i e n s .
Murrill v . National Bank of Jacksonville,
U. S. Sup. Ct. Feb. 20, 1899, 173 U. S. 131, 19 Sup. Ct. 390,
43 L. Ed. 640.
The F i r s t National Bank of Paluka, F l a . , was indebted to National
Bank of Jacksonville i n the sum of $6,010.47 on sundry d r a f t s and i n the
sum of $10,093.34 upon a note f o r $10,000.00 and i n t e r e s t (probably to date
of suspension). This note was secured by customers' notes of the Paluka
bank aggregating $10,896*22. The F i r s t National Bank of Paluka was closed
and a receiver appointed and the Jacksonville bank of f e r e d to prove a claim
for the above amounts. The Comptroller of the Currency ruled that the a mount collected on c o l l a t e r a l must be credited before dividends were computed. The court says i n an opinion by Chief J u s t i c e Fuller (173 U. S.
135) that there are four r u l e s f o r computing dividends to c r e d i t o r s of
insolvent e s t a t e s :
"Rule 1. The creditor desiring to p a r t i c i p a t e in the fund i s r e quired f i r s t to exhaust h i s security and c r e d i t the proceeds on h i s
claim, or to c r e d i t i t s value upon his claim and prove f o r the balance;
i t being optional with him t o surrender his security and prove for his
f u l l claim.
486
X-7004-C
— 3 *
*
"Rale 2. The creditor can prove f o r the f u l l amount, "but s h a l l r e ceive dividends only on the amount due him at the time of d i s t r i b u t i o n of the fund, that i s he i s required to credit on h i s claim, as
proved, a l l sums received from Ms s e c u r i t y , and may receive d i v i dends only on the "balance due him.
"Rule 3. The creditor s h a l l "be allowed to prove f o r and receive
dividends upon, the amount due him at the time of proving or sending i n h i s claim to the o f f i c i a l l i q u i d a t o r , being required to credit
as payments a l l sums received from his security p r i o r t h e r e t o .
"Rule 4. The creditor can prove f o r and receive dividends upon,
the f u l l amount of h i s claim, regardless of any sums received from
h i s c o l l a t e r a l a f t e r tho t r a n s f e r of t h e a s s e t s from the debtor in
insolvency, provided ho s h a l l not reccivc more than the f u l l amount
due him."
The court adopts the fourth r u l e , saying:
(173 U.S. 141);
"We think the c o l l a t e r a l i s security f o r the whole debt and every
p a r t of i t , and i s to any balance that remains a f t e r payment from
other sources as to the o r i g i n a l amount due".
J u s t i c e s White, Harlan and McKenna dissented, i n an elaborate
opinion by J u s t i c e White advocating the adoption of the f i r s t r u l e . J u s t i c e
Gray f i l e d a separate opinion sustaining the dissent but advancing somewhat
d i f f e r e n t grounds.
Aldrich v. Chemical National Bank, U. S. Sup. Ct. March 5, 1900.
176 U. S. 618, 20 Sup. Ct. 498, 44 L. Ed. 611.
The Chemical National Bank discounted a c e r t i f i c a t e of deposit
issued by F i d e l i t y National Bank secured by c e r t a i n notes. The chief
question was with respect to the v a l i d i t y of the c e r t i f i c a t e , which was
fraudulently issued by a Vice-President of the F i d e l i t y National Bank f o r
his own personal purposes.
The court held the c e r t i f i c a t e enforceable. A claim was also
made that the c e r t i f i c a t e should be credited with the sum of $25,000.00
because the Chemical National Bank had released the endorser of a note for
that amount held as c o l l a t e r a l by f a i l i n g to give notice of dishonor. In
an opinion by Mr. J u s t i c e Harlan the court quotes with approval the opinion
of the Circuit Court of Appeals for the Sixth Circuit decided by Judges
Brown, Taft and Lurfcon, the opinion being w r i t t e n by Judge Taft (59 Fed.
372), as follows:
"Our conclusion upon t h i s main question in the case makes i t unnecessary f o r us to consider the other questions discussed by counsel, which
were material only in view of the p o s i t i o n taken by the court below on
the issue j u s t considered. If the Chemical Bank should receive from
dividends and collections payment of debt p r i n c i p a l and i n t e r e s t now
'•AST;
X-7004-c
.U
^
U*
owing to i t by the F i d e l i t y Bank- the question would a r i s e whether
i t could not properly be charged with the note for $25,000.00,
which, through negligence, i t f a i l e d to c o l l e c t . I t i s quite
c l e a r , however, that dividends declared and to be declared, t o gether with a l l collections from c o l l a t e r a l s including such as
the note j u s t r e f e r r e d to w i l l f a l l short of paying the $300,000.00
and i n t e r e s t due the Chemical Bank on the original debt. The question suggested, t h e r e f o r e , does not a r i s e on the f a c t s of the case."
The opinion of the Circuit Court of Appeals also a f f i r m s the
rule as to i n t e r e s t upon dividends which are not promptly paid.
Sexton v. Dreyfus,
U. S. Sup. Ct. Jan. 23, 1911, 219 U. S. 339, 31 Sup. Ct. 256, 55 L.
Ed. 244.
Secured creditors sold c o l l a t e r a l sometime a f t e r bankruptcy and
offered to prove claims a f t e r applying the proceeds of c o l l a t e r a l to accrued i n t e r e s t and then to p r i n c i p a l . I t was held that the proceeds of
c o l l a t e r a l must be applied to reduce the principal as the amount of the
debt provable was determined at the time of bankruptcy, exccpt tho i n t e r e s t
received on c o l l a t e r a l a f t e r bankruptcy might be applied to reducc i n t e r e s t
on p r i n c i p a l . In the opinion by J u s t i c e Holmes i t i s said that the delay
in s e l l i n g the c o l l a t e r a l b e n e f i t t e d the secured c r e d i t o r s . There i s no
discussion, as to the e f f e c t of a f l u c t u a t i o n in the value of the c o l l a t e r a l ;
that i s to say, no discussion as to whether an enhancement in the value of
the c o l l a t e r a l a f t e r bankruptcy would be treated as income from c o l l a t e r a l
or merely as a part of the value of the corpus. This case arose from bankruptcy proceeding and applies the bankruptcy r u l e , although the court
s t a t e s that i t s conclusions f i n d some support in the decisions applicable
to the liquidation of national banks.
American Iron and Steel Mfg. Co. v. Seaboard Air Line By.,
U. S. Sup. Ct. April 6, 1914, 233 U. S. 263, 34 Sup. Ct. 502,
58 L. Ed. 949.
Dividends on a claim bearing i n t e r e s t should be paid on the amount
of the debt with i n t e r e s t to the date on which the receiver was appointed,
but i n t e r e s t i s payable to a l l creditors if the e s t a t e i s s u f f i c i e n t . The
claim under consideration was a claim f o r supplies and therefore by s t a t u t e
a preferred claim, but the e s t a t e was returned to the defendant railway
company and apparently a l l creditors were paid in f u l l .
Washington - Alaska Bank v. Dexter Horton Rational Bank,
263 Fed. 304, C.C.A. 9th Feb. 24, 1920,
Dexter Horton National Bank preferred a claim against the WashingtonAlaska Bank in insolvency proceedings. The l a s t mentioned bank had been
organized under the laws of Nevada, but was authorized to engage in business
and had engaged i n business i n Alaska. The claim was f o r $129,465.62, f o r
which the Dexter Horton Bank held as security certain gold mining stock.
X-7004-c
- 5 Dividends amounting to 50$ wdrd paid to other c r e d i t o r s "but none to the
Dexter Horton National Bank. Then the receiver and the Dexter Horton
National Bank made an agreement s t i p u l a t i n g that $25,000.00 was to "be
paid to the Dexter Horton National Bank on account of dividends and t h e
Dexter Horton National Bank agreed not to s e l l the c o l l a t e r a l "before
December 1, 1912, and not before June 1, 1913, i f the balance due i t as
dividends were paid. No f u r t h e r dividends were paid and the Dexter
Horton National Bank in a foreclosure suit in a s t a t e court sold the
c o l l a t e r a l f o r $100,000.00, and a f t e r crediting t h i s amount and the
$25,000.00 received on account of dividends and adding i n t e r e s t (apparently on t h e whole claim), presented a claim f o r $27,248.76 and f i l e d
a suit i n the f e d e r a l court asking that the receiver be required to pay
i t i n f u l l . The lower court directed the receiver to pay the amount
i n f u l l . On appeal t h i s was sustained i n a decision by Judges Gilbert,
ROBS and Hunt.
The opinion deals c h i e f l y with the a p p l i c a b i l i t y of a
s t a t u t e i n Nevada, under the laws of which s t a t e the insolvent bank was
organized. This s t a t u t e was held inapplicable as the insolvent bank
was authorized to do business and was doing business i n Alaska, but Judge
Ross dissented on t h i s p o i n t . The opinion r e s t s i n some measure on the
contract, but delivering the opinion of the court Judge Gilbert says:
"A pledge which secures an i n t e r e s t - b e a r i n g debt secures the i n t e r e s t
as much as the p r i n c i p a l of the debt."
This case would apparently be d i r e c t l y in c o n f l i c t with the case
under consideration i f i t were not for the s t i p u l a t i o n made between the
receiver and the secured creditor before the c o l l a t e r a l was sold, but
the court does not apparently consider that the s t i p u l a t i o n did more than
acknowledge r i g h t s e x i s t i n g under the f e d e r a l r u l e s when the s t i p u l a t i o n
was made.
Ohio Savings Bank and Trust Co. v. Willys Corporation,
C.C.A. 2nd June 8, 1928, 8 Fed. (2nd) 463, 44 A.L.R. 1162.
This case holds that i f an insolvent e s t a t e i s able to pay a l l
claims i n f u l l , including i n t e r e s t , dividends are to be credited as part
payments on the claim, f i r s t applied to i n t e r e s t due when the dividends
are paid and then to the reduction of p r i n c i p a l . In other words, dividends
are credited merely as p a r t payments by a solvent person would be credited.
CONCLUSION
The d i f f i c u l t y of the question involved in the case under considerat i o n appears to l i e i n the f a c t that under the so-called English chancery
rule r e f e r r e d to i n Murrill v. National Bank of Jacksonville as Rule 4, there
are always two d i s t i n c t aspects to a secured c r e d i t o r ' s claim; one a provable
amount determined as of the date of insolvency, the other the amount due with
i n t e r e s t which would be payable i n the absence of insolvency.
The secured c r e d i t o r has also two d i s t i n c t sources of payment,
dividends reckoned always on the b a s i s of the provable claim and the proceeds
4 8 9
X-7004-C
-
6 -
of c o l l a t e r a l which i t seems under the decisions of the Supreme Court
cited above are applicable e i t h e r to p r i n c i p a l or i n t e r e s t . The question involved i s whether or not the claim of the secured c r e d i t o r i s
discharged when he has received from his two sources a sum equal to
the proven claim without the addition of i n t e r e s t or whether h i s claim
i s not discharged u n t i l he has received from the two sources a sum
equivalent to h i s debt with i n t e r e s t , applying dividends and collections
on c o l l a t e r a l as p a r t payments upon t h i s debt.
There are three possible views:
1. The secured creditor i s e n t i t l e d to apply dividends and the
proceeds of c o l l a t e r a l merely as p a r t payments and to receive dividends
u n t i l h i s e n t i r e debt i s discharged.
2. That he i s
of c o l l a t e r a l u n t i l the
h i s r i g h t s to dividends
e r a l u n t i l the o r i g i n a l
e n t i t l e d to receive dividends and the proceeds
amount of the provable debt i s paid, at which time
cease but he continues to have a l i e n upon c o l l a t debt and i n t e r e s t i s paid.
3. That he can only receive dividends and apply the proceeds of
c o l l a t e r a l u n t i l an amount equal to the proven claim i s paid, at which
time h i s claim i s discharged and dividends cease and the c o l l a t e r a l must
likewise be surrendered.
The f i r s t view appears to me to be i n accord with the previous
decisions of the Supreme Court, as i n a l l of those decisions i t i s stated
that the c r e d i t o r has the r i g h t to receive dividends u n t i l his debt i s
paid and i t i s also s t a t e d that i n t e r e s t i s an i n t e g r a l p a r t of the debt.
In no case does the Supreme Court suggest that the r i g h t to receive d i v i dends and the l i e n upon the c o l l a t e r a l do not end simultaneously.
The Circuit Court of Appeals has adopted the second view. I have
found no decision t h a t appears to have discussed the exact d i s t i n c t i o n
made by the Circuit Court of Appeals as to the time at which dividends
cease. There are expressions i n the opinion of the Circuit Court of Appeals
which tend to i n d i c a t e that i t would follow i t s conclusions to the point of
adopting the t h i r d view, f o r there i s no i n d i c a t i o n i n the opinion of the
court t h a t , although the secured creditor would receive no f u r t h e r d i v i dends, he s t i l l has a l i e n on the c o l l a t e r a l . To carry t h i s l i n e of
reasoning, however, to i t s l o g i c a l conclusion would "be in e f f e c t to deny
the previous statements of the Supreme Court, saying that c o l l a t e r a l i s
pledged f o r the e n t i r e debt and i s not released u n t i l every part of the
debt i s paid, and i n e f f e c t to declare that a c r e d i t o r holding a debt
amply secured by c o l l a t e r a l l o s t h i s r i g h t to charge i n t e r e s t i f the
debtor became i n s o l v e n t .
On the other hand, to adhere to the second and intermediate view
is to reach the somewhat s t a r t l i n g conclusion t h a t the c r e d i t o r who s e l l s
his c o l l a t e r a l before h i s dividend i s paid cannot hold the proceeds f o r
i n t e r e s t accruing up to the time of sales but i f he f i r s t receives dividends,
X-7004-c
— 7 —
and a f t e r the insolvent e s t a t e i s closed he may apply the proceeds of
c o l l a t e r a l to the payment of i n t e r e s t on the whole claim.
While i t appears to me that to follow the reasoning of the Circuit
Court of Appeals to i t s logical conclusion would r e s u l t in the adoption
of the t h i r d view i t also appears to me that to carry i t s reasoning to t h i s
logical conclusion would render s e l f - e v i d e n t the f a c t that the reasoning
of the Circuit Court of Appeals i s divergent from the reasoning of the
Supreme Court i n the cases c i t e d . I t t h e r e f o r e appears to me that the
decision of the Circuit Court of Appeals i s unsound.
For p r a c t i c a l purposes the r u l e announced in t h i s case w i l l not
seriously a f f e c t Federal reserve banks, as i t w i l l operate only i n cases i n
which dividends and c o l l a t e r a l would he claims in f a l l , but c o l l a t e r a l and
dividends up to the time at which payment of an amount equal to the proven
claim and subsequent collections on c o l l a t e r a l would not pay claims in f u l l .
The decision, however, introduces several accounting questions:
F i r s t , in that i t w i l l require a separate account f o r sums r e a l i z e d by
collecting i n t e r e s t on c o l l a t e r a l and sums r e a l i z e d by a s a l e or collect i o n of the corpus of the c o l l a t e r a l i t s e l f ; and also opens the question
that when c o l l a t e r a l i s pledged for many claims the c r e d i t o r may a l l o c a t e
i t to any claim which he sees f i t or must prorate i t equally upon a l l
claims. The f i r s t view seems proper under the rule of bankruptcy which
permits a c r e d i t o r holding security for a non-provable debt and a provable
debt to apply a l l the security upon the non-provable debt i f he so d e s i r e s .
The statement of the court that i n t e r e s t from c o l l a t e r a l may be
applied to i n t e r e s t on the claim i s another evidence of the inconsistency
of the c o u r t ' s reasoning since of necessity i t would create a d i s t i n c t i o n
between the type of c o l l a t e r a l from which inccme i s received by v i s i b l e and
readily computable payments of i n t e r e s t and the type of c o l l a t e r a l in which
income i s received, i f at a l l , by enhancement of the corpus.
FEDERAL RESERVE BOARD
WASHINGTON
ADDRESS OFFICIAL CORRESPONDENCE TO
THE FEDERAL RESERVE BOARD
X-7005
October 28, 1931,
SUBJECT:
Change i n I p t e r - B i s t r i c t Time Schedule,
Dear S i r :
Upon agreement "between the Federal Reserve
Banks of Richmond and Boston, the Federal Reserve
Board has approved a change in the i n t e r - d i s t r i c t
time schedule of a v a i l a b i l i t y items from Baltimore
to Boston from two days to one day.
Very t r u l y yours,
E. M. McClelland,
Assistant Secretary.
TO GOVERNORS OF ALL F. R. BASKS,
FEDERAL RESERVE BOARD
WASHINGTON
ADDRESS OFFICIAL CORRESPONDENCE TO
THE FEDERAL RESERVE BOARD
X-7006
October 28, 1931.
SUBJECT:
Code Word to cover Telegraphic Transactions
i n Treasury B i l l s .
Dear S i r :
In connection with telegraphic transactions i n
Government s e c u r i t i e s between Federal reserve "banks, the
code word %0XC0AL* has been designated to cover a new
issue of Treasury B i l l s , dated Nov ember 2, 1931, and
maturing February 1, 1932.
This word should be inserted i n the Federal r e serve telegraph code book, following the supplemental
code word "EOXCITED" on Page 172.
Very t r u l y yours,
J . C. Noell,
Assistant Secretary.
TO GOVERNORS OF ALL F. R. BASKS.
FEDERAL RESERVE BOARD
WASHINGTON
X-7008
ADDRESS OFFICIAL CORRESPONDENCE TO
T H E FEDERAL RESERVE BOARD
November 6, 1931.
SUBJECT:
Legal and P r a c t i c a l Problems a r i s i n
Under the Bank Collection Code.
Dear Sir •
On April 1, 1531, I sent you copies of correspondence
(X-S851) between Mr. Walter S. Logan, Deputy Governor and General Counsel of the Federal Reserve Bank of Few York, and the
undersigned with reference to the above subject and on June 11,
1931, I sent you copies of l e t t e r s (X-6910) written by Counsel
of the various Federal reserve banks on the same subject.
On
July 24, 1931, I sent you copies of an opinion of the Supreme
Court of New York in the case of In re Jayne & Mason, P r i v a t e
Bankers, and a copy of Mr. Logan's memorandum of a u t h o r i t i e s
in that case, which also dealt with the Bank Collection Code.
I now enclose f o r your information copies of the f o l lowing correspondence on the same subject;
1.
Undated memorandum addressed to me by Mr. ?. Gr.
Await, Deputy Comptroller of the Currency, enclosing copies of
telegraphic correspondence dated May 27 to June 5, 1931, in
elusive, between him and the Federal Reserve Bank of San Fran-
— 2 —
X-7008
cisco with reference to the a p p l i c a b i l i t y of the bank c o l l e c t i o n
code to checks drawn on insolvent national banks.
2.
Letter with enclosures addressed to me under date
of June 11, 1931, by Mr. Walter S. Logan, Deputy Governor and
General Counsel of the Federal Reserve Bank of New York.
3.
Letter addressed to me under date of June 15, 1931$
by Mr. Albert C. Agnew, Counsel to the Federal Reserve Bank of
San Francisco.
4.
L e t t e r addressed to me by Mr. M. G. Wallace, Counsel
to the Federal Reserve Bank of Richmond, June 17, 1931, enclosing
copy of a l e t t e r addressed to Mr. Logan on the same date with
r e f e r e n c e to a recent decision of the Supreme Court of South
Carolina in the case of Ex Par t i e Wachovia Bank and Trust Company
158 S. 3. 214.
5.
Letter addressed to me by Mr. M. G. Wallace, Counsel
to the Federal Reserve Bank of Richmond, of July 17, 1931, enclosing copy of a memorandum to the Executive Committee of the Federal
Reserve Bank of Richmond r e method to be used when checks sent to
a national bank are charged to the drawers but remittance i s not
received by the Federal Reserve Bank.
6.
L e t t e r addressed to me by Mr. Walter S. Logan, Sep-
tember 30, 1931, enclosing a copy of a l e t t e r addressed to the
Comptroller of the Currency r e Checks on Insolvent National Banks
t r e a t e d as dishonored under Section 11 of the Bank Collection
Code.
7.
Letter addressed to me by Mr. Logan, October 6, 1931,
' 495
— 3 —
X-7008
enclosing copy of l e t t e r to the Comptroller of the Currency r e
Checks on Peoples National Bank of Pulaski, New York.
I r e g r e t exceedingly that the great pressure of matters
upon which i t has "been necessary f o r me to advise the Federal
Reserve Board has made i t impossible f o r me to give t h i s subject
s u f f i c i e n t study to enable me to answer the above l e t t e r s in det a i l , and I f e a r that i t w i l l be impossible f o r me to give t h i s
subject the study which i t deserves at any time in the near
future.
The subject i s one of such i n t e r e s t and importance to
a l l Federal reserve banks, however, that I f e e l that I should
not delay longer in transmitting to Counsel for a l l the Federal
reserve banks the information and views contained in the attached
correspondence, in the b e l i e f that an interchange of views on t h i s
subject between the Counsel f o r the various Federal reserve banks
would be h e l p f u l .
If Counsel f o r any Federal reserve bank sends me an expression of h i s views on any of the questions discussed in the
enclosed correspondence, I shall send copies to Counsel f o r a l l
of the other Federal reserve banks f o r t h e i r information as
promptly as p o s s i b l e , without waiting u n t i l I have an opportunity
to discuss the subject, in order that an interchange of views
between Counsel for a l l of the Federal reserve banks may proceed without f u r t h e r delay.
I understand that the Comptroller of the Currency s t i l l
has under advisement the question presented in Mr. Logan's l e t t e r
of September 30th, 1931; but, as soon as he takes a d e f i n i t e p o s i t i o n
X-7008
- 4 in the matter, I s h a l l advise Counsel f o r a l l Federal reserve hanks.
I hope that Counsel for each of the Federal reserve hanks
who has w r i t t e n to me on t h i s subject w i l l consider t h i s communication an acknowledgment of h i s l e t t e r , and w i l l excuse my f a i l u r e
to acknowledge i t more promptly, and to discuss the questions which
he has r a i s e d .
Whenever I can f i n d time to do so, I s h a l l study
t h i s subject c a r e f u l l y and attempt to answer each of these l e t t e r s
in d e t a i l ; hut, from the present outlook, I f e a r that i t w i l l be
many months before I can f i n d such an opportunity.
I t has occurred to me that i t might be advisable to
arrange f o r a conference of counsel f o r a l l Federal reserve banks
to discuss t h i s subject; but the counsel with whom I have d i s cussed the matter seem to f e e l that t h i s problem has not developed
to such a point that a conference would be very p r o f i t a b l e .
More-
over, the present conditions are such that i t might be d i f f i c u l t
for Counsel to spare the time to come to Washington f o r a conference.
If Counsel f o r a number of the Federal reserve banks
f e e l that such a conference should be arranged, however, I shall
be glad to do everything in my power to arrange i t .
Very t r u l y yours,
Walter Wyatt,
General Counsel.
TO COUNSEL FOB ALL FEDI3AL RESERVE BAHCS.
X-7008-
COPY
TREASURY DEPARTMENT
WASHINGTON
COMPTROLLER OF THt CURRENCY
Memorandum fof Mi*. Wyatt*
Counsel,
f e d e r a l Reserve 3oat*d.
Pursuant to your request there are attached hereto
copies of the communications between t h i s o f f i c e and
the Federal Reserve Bank of San Francisco concerning the
application of c e r t a i n provisions of the Uniform Coll e c t i o n Code to checks sent the Farmers National Bank
of Pomeroy, Washington, for c o l l e c t i o n and remittances,
the insolvent "bank's remittances therefor having f a i l e d
to clear p r i o r to i t s suspension.
(Signed)
F. G. A.
F. G. A A T
WL
Deputy Comptroller.
Enc.
COPY
X-7008-a-l
COPY
Sanfrancisco 10-37 May 27
Comptroller of the Currency
Washington
Farmers n a t i o n a l "bank Pomeroy Washn closed May 16th. On May 13th
and 14th our cash l e t t e r s of these dates were forwarded aggregating
$4,548.16 f o r which on May 16th we received two d r a f t s of closed
tank drawn on i t s correspondent f i r s t n a t i o n a l t r u s t and savings
"bank spokane. These were presented May 16th and payment r e f u s e d
account "bank closed. Washington adopted j&Brican bankers a s s o c i a t i o n
uniform c o l l e c t i o n code 1929. See chapter 203 laws of Washington
1929 under the p r o v i s i o n s thereof the a s s e t s of the payer bank a r e
impressed with a t r u s t in favor of the owners of the items included
in the cash l e t t e r i r r e s p e c t i v e of whether the fund r e p r e s e n t i n g
such items can be t r a c e d into and i d e n t i f i e d a s p a r t of the a s s e t s
of t h e closed bank. Attorneys f o r one of the banks f o r which we
handled items and to which we have charged back the items embraced
in the unpaid d r a f t s without the r e t u r n of the items themselves
have advised t h e i r c l i e n t t h a t c o l l e c t i o n code a p p l i e s to n a t i o n a l
banks and t h a t owners a r e e n t i t l e d to p r e f e r e n c e . This s i t u a t i o n i s
s i m i l a r to t h a t which r e c e n t l y arose in connection with f e d e r a l
r e s e r v e Newyork except t h a t in t h a t case the c o l l e c t i n g bank e l e c t e d
to Treat the items as dishonored under another s e c t i o n of the code
and reclaimed the same with the consent of your o f f i c e . See l e t t e r
await to Logan a p r i l 15, 1931 r e f i r s t n a t i o n a l bank Macedon.
Kindly advise by wire as to your opinion regarding the a p p l i c a b i l i t y
of the p r e f e r e n c e s e c t i o n of the code to n a t i o n a l banks doing
business in Washington.
Hale, Federal r e s e r v e bank Sanfrancisco
499
COPY
X-7008-a-2
COPY
May 28, 1931.
Federal Reserve Bank,
San Francisco, California.
Your telegram 27th. National Bank Act provides for winding up a f f a i r s of an insolvent National Bank as in a code
by i t s e l f . Uniform Collection Code and a l l other S t a t e
s t a t u t e s wholly inapplicable to insolvent National Banks
where they c o n f l i c t with the mandate of Congress r e q u i r i n g
pro r a t a d i s t r i b u t i o n of bank's a s s e t s among a l l c r e d i t o r s .
Cook County National Bank v. United S t a t e s 107 U. S. 445;
Davis v. Elmira Savings Bank 161 U. S. 275; Easton v. Iowa
188 U. S. 220. To e s t a b l i s h a p r e f e r r e d claim against Pomeroy no augmentation and tracing p o s s i b l e . Unless a l l three
e s s e n t i a l s a r e a f f i r m a t i v e l y established to Comptroller's
s a t i s f a c t i o n without reference to the Uniform Collection
Code Receiver w i l l vigorously defend s u i t e to e s t a b l i s h same
in Federal Court which has cognizance independent of amount
involved, hence Federal r u l e controlling. Macedon case you
r e f e r to did not involve p r e f e r r e d claim. The collowing
cases discuss c o n t r o l l i n g p r e f e r r e d claim p r i n c i p l e s . Itatpire
State Surety Co. v. Carroll County 194 Fed. 593; Studebaker
Corp. v. Bank 10 Fed. (2nd) 590; Larabee Mills v. Bank 13
Fed. (2nd) 330, c e r t i o r a r i denied 273 U. S. 727; Farmers
National Bank v. P r i b l e 15 Fed. (2nd) 175; Ellerbe v.
Studebaker Corp. 21 Fed. (2nd) 993; Burns National Bank v.
Spurway 28 Fed. (2nd) 40.
F. Gr. A A T
WL
Deputy Comptroller.
500
COPY
X-7008-a-3
COPY
Sanfrancisco 239p June 2
Comptroller of the Currency
Washington
Re Farmers National Bank Pomeroy Washington See our t e l e gram May 27th and your reply May 28th r e l a t i v e to claim
f o r preference on items embraced within unpaid remittance
d r a f t involved in our cash l e t t e r s of May 13th and 14th.
In view of your r e f u s a l to grant preference as s t a t e d in
your telegram of May 28th in behalf of our endorsers we
hereby e l e c t to t r e a t the items embraced in our cash l e t t e r s of May 13th and 14th agregating $4,548.16 as dishonored
by non payment and request the return of said items to us
duly p r o t e s t e d . This pursuant to the provisions of section
137 subdivision 2 chapter 203 laws of Washington 1929. We
are advised by Eckerson examiner in charge of pomeroy bank
that cancelled items are s t i l l in h i s possession and w i l l
be held pending drains a r r i v a l . We have made similar demand
upon Eckerson who has suspended action u n t i l Drains a r r i v a l .
Kindly acknowledge r e c e i p t of t h i s telegram and advise us
of your decision.
Hale
F. B Sank of Sanfrancisco.
• . 501
COPY
X-7008-a-4
COPY
June 4, 1931.
Federal Reserve Bank,
San Francisco, California.
Reference your telegram June 2nd advising of your
election under the Washington s t a t u t e to t r e a t
as dishonored items included in your cash l e t t e r s
dated May 13th and 14th to Farmers National Bank
Pomeroy. As we understand i t the Washington s t a t u t e you r e f e r to i s intended to continue the
l i a b i l i t y of the drawers and indorsers independent
of the item i t s e l f and without recourse on the
f a i l e d hank under the circumstances here presented.
Accordingly we f a i l to see why the Receiver i s
i n t e r e s t e d or has any duty to return the cancelled
items although he has been instructed by telegraph
to forward to you p h o t o s t a t i c copies of the canc e l l e d items unprotested f o r use as evidence. As
we view i t notice of your election to t r e a t the
items as dishonored should be directed not to the
Receiver but to the drawers or indorsers based upon
the p h o t o s t a t i c copies such drawers or indorsers
when making payment of the amounts of the items to
thereby become owners of a proportionate share of
the claim against the Receiver based upon the case
l e t t e r remittances.
F. G. AWAIT
Acting Comptroller.
502
C 0 F Y
X-7008-a-5
COPY
San Francisco
June 4
504p
Await
Acting Comptroller
Washington
Your wire today replying to ours of June second Farmers National
Bank Pomeroy stop Washington Statute r e f e r r e d to i s i d e n t i c a l
with section three f i f t y J of New York negotiable instruments
law sto^ In t h i s connection see your l e t t e r April f i f t e e n t h
addressed to Logan general counsel Federal Reserve New York
r e l a t i v e F i r s t National Bank Macedon stop the s i t u a t i o n presented
there and the one presented by our demand f o r the return of the
items are i d e n t i c a l except that we are demanding return of a l l
items embraced in our cash l e t t e r s May t h i r t e e n t h and fourteenth
instead of only one stop Return of items w i l l not c r e a t e any
preference w i l l leave a s s e t s of involvent bank in same condition
as at present giving drawers of checks claims predicated upon
deposits r a t h e r than payees thereof predicated upon unpaid remittance d r a f t stop Notice of our election to t r e a t items as
dishonored i s properly addressed to Receiver inasmuch as if
items have not been returned to makers we are e n t i t l e d to
possession thereof duly protested as evidence of dishonor through
nonpayment stop Ultimate l i a b i l i t y will then r e s t upon drawees of
items who are undoubtedly e n t i t l e d to possession of unpaid checks
stop The s t a t u t e c l e a r l y contemplates that upon return of items
as dishonored e n t r i e s charging same to drawees accounts w i l l be
reversed and owners thereof restored to t h e i r o r i g i n a l p o s i t i o n
stop P o s i t i o n taken your wire June f o u r t h seems to us contrary
to intent of s t a t u t e and c e r t a i n l y contrary to p o s i t i o n taken by
you in Macedon case Kindly consider f u r t h e r and wire decision
Hale.
COPY
X-7008-a-6
COPY
June 5, 1931.
Federal Reserve Bank,
San Francisco, California.
Your telegram f o u r t h . Macedon case was f i r s t p r e s e n t a t i o n
of t h i s question and action taken therein was with express
understanding i t was not to be considered a precedent. Since
that time the matter has been given f u r t h e r consideration
and the p o s i t i o n adopted outlined in our telegram of f o u r t h .
We believe t h i s p o s i t i o n sound from both an administrative
and legal viewpoint. We deny that your bank is e n t i t l e d to
have the items p r o t e s t e d or delivered and a s s e r t t h a t the
placing of the unprotested p h o t o s t a t i c copies in your hands
by the Receiver permits you to obtain f o r your customers a l l
the r e l i e f the s t a t u t e a f f o r d s . Statute provides quote where
the item i s received by mail by a solvent drawee or payor bank
i t s h a l l be deemed paid when the amount i s f i n a l l y charged
to the account of the maker or drawer unquote. National banks
become insolvent when t h e i r a f f a i r s are taken over by the
Comptroller. The r i g h t s of a l l o a r t i e s against such banks
a r e f i x e d by suspension. Scott versus Armstrong one hundred
f o r t y six United S t a t e s four hundred ninetynine. The s t a t e
s t a t u t e cannot change t h i s r u l e and we do not believe i t was
intended to do so. Accordingly if as we understand was the
case the items were charged to the Pomeroy depositors accounts
and cancelled before the banks a f f a i r s were taken over by the
Comptroller the Washington Statute not providing f o r p r o t e s t
by insolvent bank or return of the items the Receiver i s without
a u t h o r i t y to reverse e n t r i e s p r o t e s t the items or d e l i v e r them
to your bank.
F. G. AWAIT,
Acting Comptroller.
X-7008-b
C0 P Y
504.
fthtiRAL RESERVE BANK
OF H W Y R
E OK
June 11, 1931.
Walter Wyatt, Esq., General Counsel,
Federal Reserve Board,
Washington, D. C.
Dear Walter;
You w i l l r e c a l l that some time ago I had some correspondence with
you regarding the exercise of the election to t r e a t items as dishonored, pursuant to Section 350-j of the Negotiable Instruments Law of New York (Section
11 of the Uniform Bank Collection Code), when a remittance d r a f t received by
a Federal Reserve Bank from a national bank i s dishonored due to the closing
of the national bank; and that in one instance t h i s bank exercised t h a t
e l e c t i o n , the o f f i c e of the Comptroller of the Currency authorizing the r e turn of the dishonored item but explaining in a l e t t e r to me, dated April
15, 1931, that t h i s should not be regarded as a precedent in f u t u r e cases.
We have been considering t h i s subject since t h a t time, and have
about made up our minds t h a t , if a t some f u t u r e time we should again
f i n d ourselves holding an unpaid remittance d r a f t of a closed national
bank in New York or New Jersey (in both of which s t a t e s the Bank Collection
Code has been adopted), we would ask our endorsing banks to i n s t r u c t us
whether or not to t r e a t the items which we received from them as d i s honored in accordance with t h i s section.
I am enclosing a memorandum,
dated June 8, 1931, addressed by me to Mr. Sailer and Mr. G i l b e r t , which
discusses the matter and to which are attached suggested forms of l e t t e r s
and debit advice. I t occurs to me that these might be of some i n t e r e s t to
you, and I shall of course be glad of any comments you may care to make r e garding them.
I think t h e only legal question involved i s whether, if the suggested program were followed, i t might possibly be contended that the election to
dishonor had not been "exercised with reasonable diligence". Personally, i t
seems to me that the c o l l e c t i n g bank would be acting with "reasonable diligence"
if i t delayed the exercise of the election while i t communicated with i t s ern
dorsers for the purpose of obtaining i n s t r u c t i o n s from them. The owners of the
items and not the c o l l e c t i n g bank are the i n t e r e s t e d p a r t i e s and should have the
opportunity to decide whether they p r e f e r to preserve the l i a b i l i t y of the
makers of the checks o r to have a claim against the closed bank, and I think a
construction of the law which would n e c e s s a r i l y deprive them of t h i s opportunity
would be unreasonable.
Yours f a i t h f u l l y ,
(Signed) Walter S. Logan
Ends.
Walter S. Logan,
Deputy Governor and General Counsel.
505
COPY
FEDERAL RE55&VE 3AHK OF N W Y R
E OK
OFFICII CORRESPONDENCE
DATE
X-7008-Td-I
June 8, 1931.
!T0 Mr. Sailer and Mr. Gilbart
FO
RM
Walter S. Logan
When a national bank closes with i t s unpaid remittance d r a f t
in our possession the owners of the items covered by the remittance d r a f t
probably do not have p r e f e r r e d claims. Under the Bank Collection Code,
however, we as the c o l l e c t i n g bank apparently have the r i g h t to t r e a t the
items covered by the remittance d r a f t as dishonored, the e f f e c t of which
i s that the owner's r i g h t of recourse i s preserved and that the maker
instead of the owner i s the c r e d i t o r of the closed bank. In most cases
I assume t h a t the owner would p r e f e r to have h i s recourse against the
maker preserved, r a t h e r than to have a claim against the closed bank which
may not r e a l i z e 100 cents on the dollar and payment of which will in any
event be delayed. In some cases, however, the claim against the closed
bank may be more valuable than recourse against the maker.
In view of these considerations we might (1) Ask our endorsing banks for i n s t r u c t i o n s as to whether
or not to t r e a t t h e i r items as dishonored.
(2) N o t i f y the Receiver or Examiner and the Comptroller of the
Currency that we have asked f o r such i n s t r u c t i o n s .
(3) Immediately upon receipt of i n s t r u c t i o n s from endorsing banks
give notice to the Receiver or Examiner and to the Comptroller of the
Currency of e l e c t i o n to t r e a t p a r t i c u l a r items as dishonored.
(4) Communicate again with endorsing banks from which we do
not receive prompt i n s t r u c t i o n s , and possibly advise them that unless
we receive i n s t r u c t i o n s to the contrary we w i l l on a s p e c i f i e d date
(say, one week a f t e r the closing) elect to t r e a t t h e i r items as d i s honored by giving appropriate n o t i c e to the Receiver or Examiner and t o
the Comptroller of the Currency.
The attached forms of debit advice and l e t t e r to endorsing
banks, and l e t t e r to t h e Receiver or Examiner, might be used to carry out
steps (1) and (2) of t h i s procedure. What would you think of sending
such debit advices and l e t t e r s if another national bank should close with
i t s unpaid remittance d r a f t in our possession?
The possible objection to
t h i s course, as I see i t , i s that i t might be confusing to our endorsing
banks and to the owners of the items; and that by r a i s i n g the question
we might make more work and trouble f o r ourselves and possibly increase
the likelihood of controversies as to whether or not we have handled the
matter properly.
Ends.
WSL: GSR
» 506
.
X-7008-b-2
C 0 PY
F3D3ELAL RESERVE B N
AK
OF N W Y R
E
OK
DEBIT
ADVICE
BOOKKEEPING DIVISION
ADJUSTMENT SECTION
DATE
MAIL
TO
Y U ACCOUNT HAS BEEN DEBITED today $
OR
f o r an item of
t h i s amount drawn on .
National Bank,
, New York, included
in your cash l e t t e r to us dated
, totaling $
, sheet
. We presented said item by mail to said bank in our cash
$
l e t t e r dated
and received a d r a f t of said bank on another
bank in remittance f o r said item and other items included in our
said cash l e t t e r , which d r a f t was not paid in due course but was dis~
honored upon presentation f o r payment. We have been advised t h a t
said
National Bank,
New York, has been closed.
FEDERAL RESERVE BANK OF N W Y R
E OK
BY
I
5 0 7
X-700S-b-3
COPY
Form of l e t t e r
endorsing banks
(Date)
(Fame of bank)
(Address)
SUBJECT:
Enclosed advice of debit of $
for items of $
drawn on Blankville National Bank & Trust Co., Blankv i l l e , M. Y., included in your cash l e t t e r to us
dated
, totaling $
, sheet $
.
Gentlemen;
We enclose our advice of debit in the above amount made today to
your account f o r items drawn on Blankville National Bank & Trust Co.,
Blankville, N. Y., and which became involved in the closing of t h a t
bank. We presented said items by mail to said bank in our cash l e t t e r
dated
and received a d r a f t of said bank on another bank
in remittance f o r said items and other items included in our said cash
l e t t e r , which d r a f t was not paid in due course but was dishonored upon
presentation f o r payment, due to the closing of said Blankville National Bank & Trust Co., Blankville, New York.
Section 350-j of the Negotiable Instruments Law of New York
provides as follows:
1
1
Sec. 350-j. Election to t r e a t as dishonored
items presented by mail.
Where an item i s duly p r e sented by mail to the drawee or payor, whether or not
the same has been charged to the account of the maker
or drawer thereof or returned to such maker or drawer,
the agent c o l l e c t i n g bank so presenting may, at i t s
e l e c t i o n , exercised with reasonable diligence, t r e a t
such item as dishonored by nonpayment and recourse may
be had upon p r i o r p a r t i e s thereto in any of the following cases:
(1) Where the check or d r a f t of the drawee or
payor bank upon another bank received in payment therefor
s h a l l not be paid in due course;
*
*
*
*
*
it
I t i s our opinion that t h i s provision of law a p p l i e s to items
5
—3 ~
X-7008-V3
drawn on national 'banks located in 17ew York as well as to New York State
tanks and t r u s t companies; and that under i t s terms we, as the agent coll e c t i n g bank, may, by giving proper notice to said Blankville National
Bank & Trust Company or to the Receiver or Examiner in charge thereof,
elect to t r e a t the items remitted for by said unpaid d r a f t of said bank
as dishonored by nonpayment; and that if said items are t r e a t e d as d i s honored pursuant to the terms of t h i s provision the owners of said items
w i l l be e n t i t l e d to have said items returned to them and w i l l have
recourse against the makers or drawers of said items but w i l l have
no claims against said Blankville National Bank & Trust Co., whereas if said items are not t r e a t e d as dishonored the owners w i l l have
claims against said Blankville National Bank & Trust Co. f o r the
amounts of the respective items but the l i a b i l i t y of the makers or
drawers on said items w i l l be discharged.
Please i n s t r u c t us whether or not to t r e a t as dishonored
the items above r e f e r r e d to* drawn on said Blankville National Bank &
Trust Co., which we received from you. Such i n s t r u c t i o n s should be
forwarded to us j u s t as soon as possible, as you w i l l note t h a t the
election to t r e a t items as dishonored pursuant to the above quoted
provision should be "exercised with reasonable diligence."
Very t r u l y yours,
End.
X-7008-0-4
COPY
To
Hat'ional Bank,
, Hew York.
and
Beceiver or Examiner in Charge,
National Bank,
, Hew York.
Gentlemen:
The d r a f t of
National Bank,
, Hew
York, dated
drawn on
, Hew York, H. Y.,
to the order of Federal Reserve Bank of Mew York for $
,
received by us in remittance for certain items drawn on said
Hational Bank,
'
Hew York, which we had p r e sented to i t by mail, was not paid in due course but was d i s honored upon presentation for payment, due to the closing of
Hational Bank,
Hew York. We t h e r e f o r e charged
the items, f o r which remittance was made by said d r a f t , back to the
banks from which we had received them for c o l l e c t i o n . For your information we enclose a copy of the form of l e t t e r we have w r i t t e n
today to each of these banks.
In these l e t t e r s we r e f e r to section 350-j of the negotiable Instruments Law of Hew York and request our endorsing banks
to i n s t r u c t us whether or not to t r e a t as dishonored by nonpayment
under the terms of t h i s section the items which we received from
such banks and which were remitted for by the d r a f t of
national Bank f o r $
. We expect to receive such i n s t r u c t i o n s
shortly and to send appropriate notice to the
national
Bank, and to the Receiver or Examiner in charge thereof, to the
e f f e c t t h a t we e l e c t to t r e a t some or a l l of these items a s d i s honored, and that we request the return of such items. In the
meantime, we request
national Bank and the Receiver or Examiner In charge to keep possession of a l l of these items and, of
course, not to return them to the makers or drawers.
Very t r u l y yours,
End.
WSL:GSR(MAR)
(Copy to Comptroller of the Currency)
X-7008-c
COPY
FEDERAL 'RESERVE EAITK OF SAtt FRANCISCO
Juna 15, 1931.
Walter Wyatt, Esq.,
General Counsel,
Federal Reserve Board,
Washington, D. C.
Dear Mr. Wyatt:
A s i t u a t i o n has recently arisen with regard to
check c o l l e c t i o n s in t h i s d i s t r i c t , which I think I should
c a l l to your a t t e n t i o n .
The 1929 Session of the Legislature of the S t a t e
of Washington adopted the Uniform Check Collection Code
proposed by the American Bankers Association. The same
s t a t u t e has been r e c e n t l y adopted by the 1931 Legislature
in the S t a t e s of Idaho and Oregon. In the l a t t e r s t a t e ,
the Uniform Code was adopted with some s l i g h t amendments
which are not material to the matter here under discussion.
In the State of Washington, p r i o r to the adoption
of t h i s code, when a member bank f a i l e d and we were l e f t
with an unpaid remittance d r a f t in our hands, we were r e quired to f i l e f o r the e n t i r e amount of the unpaid d r a f t
and were given a c l a s s i f i c a t i o n as a general c r e d i t o r .
In Oregon a d i f f e r e n t method of procedure was f o l lowed p r i o r to the adoption of the code. The Superintendent
of Banks, acting under an opinion of the Attorney-General
of the State of Oregon but apparently without any d i r e c t
warrant of law, pursued the p r a c t i c e of reversing the
e n t r i e s on the records of the f a i l e d bank, marking the
checks "Paid in Error" or with other appropriate symbol
and returning the checks themselves to us. We, in turn,
delivered them to our endorsers and the p a r t i e s were
restored to t h e i r o r i g i n a l p o s i t i o n .
In Idaho, p r i o r to the adoption of the code, we
were given a c l a s s i f i c a t i o n as a general creditor of an
insolvent member bank.
Since the adoption of the code in Washington,
we have had occasion to f i l e claims against two or t h r e e
X-7008-c
Walter Wyatt, Esq*
- 2 *-
June 15, 1931.
insolvent s t a t e banks predicated uoon unpaid remittance
d r a f t s . Action has been taken in only one of these cases,
and in that one, we have been accorded a p r e f e r r e d s t a t u s .
We have r e c e n t l y had one insolvency in Oregon, in which
the same question i s involved, and we are informed by our
Portland Branch that the s t a t e banking a u t h o r i t i e s of
Oregon intend to give us a p r e f e r r e d s t a t u s .
We have not yet had any experience under the new
code in the State of Idaho.
You are, of course, f a m i l i a r with the Uniform
Check Collection Code proposed by the American Bankers
Association and are conversant with the f a c t that under the
provisions of Section 11 thereof, the agent c o l l e c t i n g
bank presenting the checks may, at i t s election, exercised
with reasonable diligence, t r e a t the items as dishonored
by non-payment, with recourse against p r i o r p a r t i e s in a l l
cases where the d r a f t of the drawee or payor bank upon
another bank, received in settlement, shall not be paid in
due course.
Under the provisions of Section 13 of the same
code, except in those cases where the item or items are
t r e a t e d as dishonored by non-payment under the provisions
of Section 11, the a s s e t s of the drawee or payor bank
are impressed with a t r u s t in favor of the owner of the
items involved in the unpaid remittance d r a f t .
Heretofore, under our Failed Bank Manual, i t has
been our uniform p r a c t i c e immediately upon the insolvency
of a member bank to demand the return of any check involved
in an unpaid remittance d r a f t .
Since the adoption of the Uniform Code in the
s t a t e s mentioned, i n s t r u c t i o n s have been issued to our
branches not to demand from the agent in charge of an insolvent s t a t e bank the return of the items. We have taken
t h i s p o s i t i o n f e a r i n g that if we demanded the return of
the items themselves, such demand would be construed as an
election on our p a r t to proceed under the provisions of
Paragraph 11 of the Uniform Code, and t h a t i t might be
held that we had elected to t r e a t the items as dishonored
by non-payment, thereby preventing us from g e t t i n g a
preference in behalf of our endorsers.
512
X-7008-C
Waited Wyatt, Esq.
- 3 -
June 15, 1931.
Recently, we have had some correspondence "by
telegraph with Mr. Logan, Counsel to the Federal Reserve Bank
of New York, r e l a t i v e to t h i s matter. Mr. Logan informs us
that in New York a l l claims f o r preference have to be submitted to a court f o r determination p r i o r to the granting of
the preference. He s t a t e s that the attorneys f o r the Superintendent of Banks of the State of ITew York take the p o s i t i o n
that if the Federal Reserve Bank charges the items involved
in an unpaid remittance d r a f t back to t h e i r endorsers,
such charge-back c o n s t i t u t e s in i t s e l f an election on the
p a r t of the Federal Reserve Bank to t r e a t the items as d i s honored, thereby foreclosing any r i g h t under Section 13
of the code which would otherwise grant a preference. ?e
have had no such contention r a i s e d in any of the s t a t e s of
t h i s d i s t r i c t which have adopted the Uniform Code. I s t a t e d
to Mr. Logan that I could not possibly see how the act of
the Federal Reserve Bank in charging back the checks involved in an unpaid remittance d r a f t constituted an election
on i t s p a r t to accept the r e l i e f granted under Section 11
of the code r a t h e r than that under Section 13. I t seems to
me t h a t the act of charging the items back to our endorsers
i s e s s e n t i a l l y a matter between the Federal Reserve Bank
and i t s endorsers and in no way involves the r i g h t of the
Federal Reserve Bank or i t s endorsers as a claimant against
the insolvent bank. If you agree with me in t h i s contention,
we w i l l continue to charge the items back as soon as we are
n o t i f i e d of the insolvency of a s t a t e member bank in a l l
cases where we hold an unpaid remittance d r a f t .
To do otherwise than charge back would seem to me
to be extremely dangerous f o r the Federal Reserve Bank. If
we do not n o t i f y our endorsers that the items which they have
sent to us f o r c o l l e c t i o n remain unpaid and that the c r e d i t
given them under the immediate a v a i l a b i l i t y schedule has
been reversed, i t may very e a s i l y occur that our endorsers
w i l l claim t h a t t h e i r r i g h t s were prejudiced by not having
been n o t i f i e d of the f a t e of t h e i r items.
Another complication a r i s e s on account of the f o l lowing f a c t s . Two d i s t i n c t r i g h t s are granted to our endorsers - that of t r e a t i n g the items as dishonored under the
provisions of Paragraph 11, and that of obtaining a p r e f e r r e d claim against the insolvent bank under the provisions
of Paragraph 13. In nearly every s t a t e , we are not oermitted to f i l e
f o r l e s s t h a n the amount of t h e unpaid remittance d r a f t ; in
other words, we are not e n t i t l e d under our general procedure
X-7008-c
Walter Wyatt, Esq.
June 15, 1931.
to p r e d i c a t e our claim upon anything other than the unpaid
remittance d r a f t . I t may well occur that some of our endorsers
would p r e f e r to have t h e i r original checks back, t r e a t e d as
dishonored by non-payment, so that they might have recourse
against the makersof the checks, while others of our endorsers
would p r e f e r to obtain a preference against the insolvent bank.
In such event, we w i l l be placed in a dilemma, a r i s i n g from
one set of i n s t r u c t i o n s from one set of endorsers and other
i n s t r u c t i o n s from other endorsers.
For the p r e s e n t , however, we intend to pursue our
r i g h t s under Paragraph 13 of the Uniform. Code and obtain
p r e f e r r e d claims f o r our endorsers in every case where t h i s
may be done.
You w i l l doubtless r e c a l l some correspondence
had f a i r l y r e c e n t l y between your o f f i c e and the Federal Reserve Bank of New York, involving the question of the
r e t u r n of items drawn on an insolvent national bank, the name
of which now escapes me. In that case, if my memory serves
me c o r r e c t l y , Mr. Logan requested the receiver of the insolvent national bank to return the items to him as d i s honored. The matter was r e f e r r e d to the Office of the Compt r o l l e r of the Currency, and a f t e r some correspondence, and
I believe a f t e r negotiations on your p a r t , the Comptroller
agreed to r e t u r n the items as dishonored by non-payment,
s t a t i n g , however, that h i s act in so doing was not to be considered as a precedent f o r f u t u r e cases.
Recently, we had an insolvency in a national
bank in Washington. Having in mind the experience of
Mr. Logan in obtaining the return of the items involved in
h i s matter, we demanded of the receiver that he return to
us the items involved in our unpaid cash l e t t e r . W also
e
transmitted t h i s demand to the O f f i c e of the Comptroller of
the Currency. The Comptroller's O f f i c e very promptly advised us that they would not permit t h e i r receiver to r e t u r n
the items to us. The New York case was c i t e d as a precedent,
but they s t a t e d that they had reversed t h e i r previous
p o s i t i o n and would not now consent to the return of the
items. We argued the matter a t some length by correspondence,
but obtained only a f l a t r e f u s a l , The Comptroller did,
however, authorize the agent in charge to f u r n i s h us with
photostat copies of the checks in question.
X"7008-c
''alter Wyatt» Eaqi
•» 5 -
June 15, 1931.
Having obtained, t h i s r e f u s a l , we informed the Compt r o l l e r ' s O f f i c e that we elected to proceed under the provisions of Paragraph 13 of the Uniform Code in Washington and
t h a t we would ask for a preference. We were equally promptly
advised by the Comptroller's Office that the would i n s t r u c t h i s
r e c e i v e r s not to grant a preference, inasmuch as t h i s would "be
a v i o l a t i o n of the provisions of the National Bank Act.
I r e f e r to these matters merely as a matter of int e r e s t . I think the Comptroller i s undoubtedly r i g h t in r e f u si n g to allow h i s receivers to proceed under the provisions
of Paragraph 13, but I cannot, for the l i f e of me, see why he
should r e f u s e to allow h i s receivers to proceed under 'the provisions of Paragraph 11. The return of the checks involved
in an unpaid remittance d r a f t , marked "Paid in Error", or
with other similar designation, the reversal of the e n t r i e s on
the books of the f a i l e d bank and the cancellation of the o b l i gation a r i s i n g out of the issuance of the unpaid remittance
d r a f t , i t seems to me places the drawee or payor bank exactly
in the p o s i t i o n i t was in before the transaction took place
and does not in any way involve a preference to anyone. I
took t h i s p o s i t i o n in the case which Mr. Logan r e f e r r e d to me
sometime ago and s t i l l believe that the provisions of Paragraph 11 of the Uniform Check Collection Code are applicable
to national banks and are binding upon the receivers of insolvent national banks. However, we s h a l l , unless otherwise
advised, continue to f i l e claims against insolvent national
banks, asking f o r and accepting a general claim.
This brings me to the discussion of another phase
of t h i s check c o l l e c t i o n question in which I am i n t e r e s t e d and
in r e l a t i o n to which I would l i k e your advice.
I have observed that some of the other Federal
Reserve Banks have, in the p a s t , indulged in l i t i g a t i o n involving unpaid remittance d r a f t s . In such cases, an attempt has
been made under the theory of the P e t e r s case to obtain
preference in behalf of the endorsers. I t has been and i s my
opinion that i t i s not a part of the duty of a Federal Reserve
Bank to indulge in l i t i g a t i o n as a p l a i n t i f f in a case involving the f a t e of an unpaid remittance d r a f t . I have always
taken the p o s i t i o n , and have so advised the o f f i c e r s of t h i s
bank, that the Federal Reserve Bank of San Francisco, a c t i n g
in i t s capacity as a gratuitous collection agent, i s under no
duty other than that of exercising ordinary care and diligence
in the c o l l e c t i o n of checks. I have also taken the p o s i t i o n
X-7008-c
Walter Wyatt, Esq.
June 15, 1531.
" 6 -
that where a member bank f a i l s with a cash l e t t e r outstanding,
we should advise our endorsers of the f a t e of the items in which
they are i n t e r e s t e d and await t h e i r i n s t r u c t i o n s as to the
f i l i n g of claims. I do not believe i t i s the duty of a Federal
Reserve Bank to enter l i t i g a t i o n in an e f f o r t to obtain in "behalf of i t s endorsers any s p e c i f i c kind of r i g h t against an
insolvent bank. In the case of the insolvent national bank in
Washington, to which I r e f e r r e d previously, one of our endorsers had been advised by i t s attorneys that Section 13 of the
Uniform Code was applicable to national banks and t h a t i t was
e n t i t l e d to a preference. Therefore, when we were advised by
the O f f i c e of the Comptroller of the Currency that no p r e f e r ence would be granted, we merely transmitted t h i s information
back to our endorsers, with the statement that if they desired
to l i t i g a t e the matter we would be glad to assign the claim
represented by the unpaid remittance d r a f t f o r such action as
our endorsers might see f i t to take.
This p o l i c y has, no doubt, saved us a great deal of
l i t i g a t i o n and, possibly, has saved us the establishment of
some precedents which would have proved embarrassing to t h i s
and other Federal Reserve Banks. We have been made defendant
in a number of check collection s u i t s , a l l predicated upon the
old theory of the Molloy case, but we have won them a l l and in
some cases have obtained opinions which have been of advantage
r a t h e r than disadvantage.
I am not attempting to c r i t i c i s e the action h e r e t o f o r e taken by other Federal Reserve Banks or the counsel thereof
but I do b e l i e v e that a uniform policy of "Hands Off" should be
adopted by a l l Federal Reserve Banks in a l l cases involving unpaid checks and unpaid remittance d r a f t s . I would l i k e very
much to have your opinion on t h i s subject.
I have wandered about considerably in t h i s l e t t e r ,
but I thought you would be i n t e r e s t e d in knowing of the new
conditions which have been created by the adoption of the
Uniform Check Collection Code in the three s t a t e s which I have
mentioned.
If anything which I have said herein does not agree wi
your opinion, I should l i k e very much to have your observations.
With kindest personal regards, I am
Very t r u l y yours,
ACA: M
A
(Signed)
Albert C. Agnew
Counsel.
COPY
X-7008-a
FEDERAL RESERVE BANK
OF RICHMOND
June 17, 1931
Federal Reserve Board,
Washington, D. C.
Attention Mr. Walter Wyatt,
General Counsel
Dear Mr. Wyatt;
I enclose a carbon copy of my l e t t e r today to Mr.
Loaan upon the subject of the decision of the Supreme Court
of South Carolina which may "be applicable to the Uniform
Bank Collection Code.
I remain
Very t r u l y yours,
(SIGNED) M. G. Wallace
M.
M W EC
G :
enclosure
Gr. Wallace,
Counsel.
X-7008-a-l
COPY
FEDERAL
OF RICHMOND
June 17, 1931
Mr. Walter S. Logan,
Counsel mid. Deputy Governor,
Federal Reserve Bank of ITew York,
Hew York, H. Y.
Dear Mr. Logan;
I have received from the Federal Reserve Board an i n t e r e s t ing f i l e of correspondence upon the subject of the a p p l i c a t i o n of Section 11 of the Uniform Bank Collection Code to n a t i o n a l banks. In connection with t h i s general s u b j e c t I am c a l l i n g your a t t e n t i o n to the
decision of the Supreme Court of South Carolina in a case e n t i t l e d
Ex p a r t e Wachovia Bank and Trust Co., 158 S. B. 214.
That p a r t i c u l a r case dealt with the c o n s t i t u t i o n a l i t y of an
a c t of the L e g i s l a t u r e of South Carolina which gave p r i o r i t y to claims
f o r c o l l e c t i o n items including checks on a f a i l e d bank. The Supreme
Court of the s t a t e has f i l e d three d i f f e r e n t opinions in the case*
In the f i r s t two i t held the s t a t u t e u n c o n s t i t u t i o n a l because i t s t i t l e
r e f e r r e d only to the l i a b i l i t y of banks in*tho s t a t e sending checks
f o r c o l l e c t i o n d i r e c t l y to the drawee, while the second s e c t i o n of the
act attempted, to define the p r i o r i t y of claims against banks in the
s t a t e . After r e a r gument, the second opinion of the court indicated
t h a t the act might bo u n c o n s t i t u t i o n a l upon other grounds, as making
a r b i t r a r y d i s t i n c t i o n between the r i g h t s of banks within the s t a t e
and banks without the s t a t e . The t h i r d opinion held the a c t uncons t i t u t i o n a l upon the grounds set out in the opinion. The court does
not s t a t e s p e c i f i c a l l y whether or not i t r e f e r s to the Federal or
s t a t e c o n s t i t u t i o n , but i t s statements appear to r e f e r to the f o u r t e e n t h
Amendment, and the court holds that the d i s t i n c t i o n mado between
checks forwarded by one bank to another and checks presented or
forwarded by i n d i v i d u a l s to a bank i s repugnant to the c o n s t i t u t i o n a l
p r o v i s i o n securing due process of law. The court probably intended to
say "the equal p r o t e c t i o n of the law."
The court r e f e r s in i t s opinion to the Act of 1930, 36
S t a t u t e s 1368, which i s the Uniform Bank Collection Code, and s t a t e s
that i t i s not r e t r o a c t i v e , - s o , of course, the decision cannot be taken
as r e f e r r i n g to the Collection Code, but some p a r t s of the reasoning
of the court would, be applicable to the code, as i t apparently makes
a d i s t i n c t i o n between checks presented by mail and those deposited or
presented a t the counter of the drawee bank, and apparently r e f e r s
only to checks presented through the mails by one bank to another.
X-7008-d-l
F2DTRAL BlMVB B I K OB RICHMOND
AT
Mr. Walter g. Logan,
Counsel and Deputy Governor,
Federal Reserve Bank of Hew York
Page 2
June 17, 1931.
I t seems to me that the d i s t i n c t i o n between checks handled
through banking channels and those presented by individuals i s a reasonable d i s t i n c t i a n and that the s t a t u t o r y r u l e might be applicable to the
payment of one class without offending the c o n s t i t u t i o n a l guarantee of
the equal p r o t e c t i o n of the law.
I have been endeavoring to a d j u s t a claim of t h i s character
with the attorney f o r the receiver of a f a i l e d s t a t e bank in South
Carolina and he has suggested that the Act of 1930 may be unconstitutional
upon the grounds suggested in the opinion to which I r e f e r . He has,
however, taken no d e f i n i t e stand as yet. I t occurred to me that inasmuch as you have been i n v e s t i g a t i n g t h i s question somewhat f u l l y you
would be i n t e r e s t e d in examining the opinion in the case mentioned
above.
With kindest regards, I am
Very t r u l y yours,
M. G. Wallace,
Counsel.
MOW:EC
COPY
X-7008-e
FEDHAL RESERVE BAH
OF RICHMOND
July 17, 1931
Federal Reserve Board,
Washington, D. C.
Attention;
Mr. Walter Wyatt, General Counsel.
Dear Mr. Wyatt;
I enclosc a copy of a memorandum dated July 8th
from myself to the Executive Committee of t h i s bank recommending
a method to "be used when checks sent to a national bank a r e
charged to the drawers but remittance i s not received by a
Federal reserve bank.
The "plan suggested in the memorandum has been approved by the Executive Committee and w i l l be followed by t h i s
bank in cases of the f a i l u r e of national banks in the s t a t e s
of South Carolina, West Virginia, and Maryland.
We have acted in accordance with t h i s system in
the case of the F i r s t National Bank of Federalsburg, Md.,
which closed '"hile we were discussing the inauguration of
the method outlined in the memorandum. I have not, however,
received d e f i n i t e advice as to whether or not the receiver
w i l l r e t u r n the checks which we may request him to r e t u r n .
You w i l l notice that the system outlined in the
memorandum i s in a l l material respects the same as t h a t suggested
by Mr. Logan in a similar case. I am merely sending you
copies of the memorandum and our forms in order that your
o f f i c e may be advised of the course that we are following.
For your information, I also enclose a l i s t of the s t a t e s
which have adopted the Bank Collection Code. I believe that
t h i s l i s t i s correct to July 1st.
Very t r u l y yours,
(Signed)
MW E
G
M. G. Walla.ce,
M. G. Wallace,
Counsel.
COPY
X-7008-e-l
July 8, 1931
Executive Committee
M. G-. Wallace, Counsel.
Handling of Checks Sent
to National Banks which are Charged
to the Drawers but for which No Remittance i s Made Before Suspension of
the Drawee Bank.
Dear Sirs:
The Uniform Bank Collection Code has been adopted in three s t a t e s of
t h i s d i s t r i c t ; that i s to say, Maryland, South Carolina, and 7 e s t Virginia, which
appears as Section 93, A r t i c l e 11, of the Code of Maryland, Laws of 1929, Page
1147, and as Section 11, Chapter 822, Statutes of South Carolina of 1930, Page
1371. In West Virginia the act has j u s t become e f f e c t i v e and has not been
o f f i c i a l l y p r i n t e d , but I am informed that i t w i l l appear in the Acts of the
Legislature f o r 1931.
Under Section 11 of t h i s code i t is provided that if any check be sent
to a drawee bank f o r remittance and the drawee bank f a i l e d to remit in solvent
c r e d i t s the forwarding bank may at i t s election t r e a t such check as dishonored and
proceed as in the case of a check a c t u a l l y returned dishonored, or at i t s election
e s t a b l i s h a claim against the f a i l e d bank. While the Act recognizes t h a t the
forwarding bank i s in most cases an agent f o r the depositor, i t apparently gives
to the forwarding bank the r i g h t of election, and provides t h a t no claim shall
be made against the forwarding bank because of i t s act in making e ithe r election
if i t has acted in good f a i t h .
Section 13 of the Code provides t h a t claims f o r checks and other
instruments sent to a bank for collection and remittance shall c o n s t i t u t e a
p r i o r l i e n on the a s s e t s of the f a i l e d bank.
The Uniform Code by i t s terms i s applicable to a l l banks in the s t a t e ;
consequently, I think i t clear that both of the sections mentioned above are
applicable to s t a t e b a nks.
I am inclined to think that the section providing that such claims
shall be p r i o r l i e n s i s not applicable to national banks. Claims against national
banks are determined by the National Bank law as i n t e r p r e t e d by the federal
courts, and these courts have c o n s i s t e n t l y held that the c o l l e c t i o n of a check
on a f a i l e d hank by the mere cancellation of i t and charging of i t to the
drawer does not c r e a t e a t r u s t fund but r e s u l t s in a mere t r a n s f e r of l i a b i l i t y
from the drawer of the check to the holder, so t h a t such a claim i s merely a
general claim. The National Banking Act provides that a l l c r e d i t o r s of national
banks s h a l l be paid equally and r a t a b l y , and I do not think t h a t a s t a t e s t a t u t e
could give p r i o r i t y to a claim against a national bank merely by declaring that
the obligation of a national bank should be deemed that of a t r u s t e e r a t h e r than
that of a debtor, when the federal courts had decided t h a t the r e l a t i o n s h i p was
that of a debtor. In other words, Section 13 appears to me to be a law providing f o r the p r i o r i t y of claims against insolvent e s t a t e s and t h e r e f o r e
inapplicable to national banks.
521
X-7008-e-l
M y 8, 1931
Executive Committee
M. G. Wallace, Counsel.
Handling of Checks Sent to national
Banks which are Charged to the Drawers "but
for which No Remittance i s Made Before
Suspension of the Drawee Bank.
— 2 —
I think, however, that Section 11, which gives to the forwarding bank
an option to t r e a t the check as dishonored and hold the drawer and p r i o r endorsers, i s not a s t a t u t e granting p r i o r i t y to any p a r t i c u l a r claim, f o r i t s
only e f f e c t i s to provide that the claim which in the absence of the s t a t u t e
the holder has against the f a i l e d bank s h a l l , if the holder e l e c t s to proceed on
the drawer, be t r a n s f e r r e d to the drawer. I t seems to me, t h e r e f o r e , that t h i s
section of the s t a t u t e i s merely a law of what c o n s t i t u t e s the payment of a
debt and t h e r e f o r e one which operates upon national banks as upon a l l other
persons within the j u r i s d i c t i o n of the s t a t e .
I t seems to me that the above conclusions w i l l n e c e s s i t a t e a s l i g h t
modification of the course which wo have been pursuing with respect to claims
a r i s i n g out of unpaid 'cash l e t t e r s to f a i l e d banks in the s t a t e s mentioned.
We have h e r e t o f o r e been charging the amount of chocks in such l e t t e r s to our
endorsing banks, n o t i f y i n g them that unless i n s t r u c t e d to the contrary we
would prove a claim f o r t h e i r b e n e f i t . I think we could lawfully continue
such course under the s t a t u t e , as we could in every case elect to-hold the
f a i l e d bank and prove a claim f o r the b e n e f i t of the owners or holders of
checks, as the s t a t u t e expressly provides t h a t we shall not be l i a b l e f o r o.ur
act in making such e l e c t i o n .
In the case of s t a t e banks, member and non-member, i t seems to me
wise to continue t h i s course, as in almost a l l cases the holders of the checks
will p r e f e r to e s t a b l i s h a claim against the f a i l e d bank if t h i s claim i s ent i t l e d to p r i o r i t y . In the case of national banks, however, since the claim
would not be e n t i t l e d to p r i o r i t y , most check holders w i l l probably p r e f e r to
proceed upon the drawers, and while we are under no legal obligation to advise
the holders of t h e i r r i g h t s in the premises, i t seems to me that our p o s i t i o n
as agents for the holders i s such that i t would be most proper to advise them
of the s i t u a t i o n before making a f i n a l election, especially as by the terms of
the s t a t u t e we are allowed a reasonable time in which to make the election.
I am t h e r e f o r e submitting f o r your consideration a t e n t a t i v e d r a f t
of three form l e t t e r s . Letter No. 1 i s a form f o r a l e t t e r which with appropriate
changes to meet the individual case we can use in advising our endorsing banks
of the f a i l u r e of a national bank to which checks have been sent but from which
we have not obtained f i n a l payment. Letter No. 2 i s a form l e t t e r to be enclosed
with l e t t e r No. 1 f o r use by our endorsing banks in giving us i n s t r u c t i o n s .
Letter No. 3 i s a form l e t t e r to be used as a suggestion in w r i t i n g to the
examiner in charge or the receiver of the bank n o t i f y i n g him of our action.
X-7008-e-l
July 8, 1931
Executive Committee
M. G. Wallace, Counsel.
Handling of Checks Sent to national
Banks which a r e Charged to the Drawers but
f o r which JTo Remittance i s Made Before
Suspension of the Drawee Bank.
- 3 -
I had intended submitting these l e t t e r s to you with the suggestion that
I might forward them to our Baltimore Branch and our Charlotte Branch with ins t r u c t i o n s to use them in any f u t u r e case; but before I was able to submit them
f o r your approval we were advised of the f a i l u r e of the F i r s t National Bank of
Federalsburg, Md., and, t h e r e f o r e , a f t e r discussing the matter with Mr. Peple
and Mr. Seay, and also discussing the matter by telephone with Mr. Dudley, I
seat to Mr. Dudley a d r a f t of l e t t e r s s u b s t a n t i a l l y in the form attached f o r
use in that s p e c i f i c case.
This p a r t i c u l a r question has received some consideration from counsel
for other Federal reserve banks, p a r t i c u l a r l y by Mr. Logan, General Counsel and
Deputy Governor of the Federal Reserve Bank of New York, i l l counsel for Federal
reserve banks who considered the question hold s u b s t a n t i a l l y the same views as
those expressed above as to the e f f e c t of the s t a t u t e and i t s application to
national banks. I might add that the s t a t u t e i s in force in sixteen s t a t e s and
so i s in force in at l e a s t one s t a t e of almost every Federal reserve d i s t r i c t .
jtfo d e f i n i t e opinions were expressed by counsel f o r the other Federal reserve
banks as to whether i t would be wiser f o r a Federal reserve bank to elect to
t r e a t checks as dishonored without r e f e r r i n g the matter to endorsing banks or
whether i t would be wiser to f i r s t r e f e r the matter to endorsing banks. In a
single case the Federal Reserve Bank of 2?ew York elected to t r e a t a l l checks
in an unpaid cash l e t t e r as dishonored and the Comptroller of the Currency
therefore returned the checks, but in doing so s t a t e d that the Comptroller's
Office would not commit i t s e l f as to i t s actions in f u t u r e cases. Mr. Logan
did not s t a t e in h i s correspondence whether the election was made without
reference to h i s endorsing banks or not, but I gathered from the correspondence
that the number of checks in the cash l e t t e r were few and that he seemed to be
confident that h i s endorsing banks desired to have them returned.
Very t r u l y yours,
M. G. Wallace,
Counsel.
MW S
G
523
X-7008-O-2
COPY
1;
Letter Giving Notice of Failure of a National Bank in West Virginia,
Maryland, or South Carolina, which has not Paid f o r Checks Drawn on
Such Bank Sent to I t .
TO THE M M E H N ADDRESSED:
E BR A K
The checks received from you in your cash l e t t e r as shown below
were sent by us to the
National Bank, on which they were
drawn, in our cash l e t t e r of
. In settlement f o r checks in
t h i s cash l e t t e r the drawee bank sent us (an authorization to charge i t s
reserve account) (a d r a f t ) covering the amount of checks (but before t h i s
authorization was acted on or honored by us we were advised that the
'
National Bank was closed) (but before t h i s d r a f t was
paid the
National Bank was closed.)
Since a l l checks are credited subject to f i n a l payment, we have
charged the amount of these checks to your account.
We are advised that under the Bank Collection Code which i s in
f o r c e in (West Virginia, South Carolina, or Maryland, as the case maybe)
we have an option to t r e a t such checks as dishonored or to f i l e a claim
against the f a i l e d bank, which claim we are advised w i l l probably be c l a s s i f i e d
under the national banking act as a general claim.
If you d e s i r e to t r e a t the check as dishonored, you should give
notice of dishonor to a l l p r i o r endorsers and the drawer and look to them for
payment and we w i l l demand and endeavor to obtain the return of the check.
If you f i l e a claim against the f a i l e d bank, you will r e l e a s e the drawer from
f u r t h e r l i a b i l i t y and w i l l receive dividends on the amount of the check from
the f a i l e d bank.
As we must n o t i f y the Receiver promptly whether we elect to prove
a claim against the f a i l e d bank or to t r e a t the checks as dishonored, please
advise us as soon as p o s s i b l e , using the enclosed form, and giving the name
of the drawer of the check, if obtainable.
Very t r u l y yours,
.
Federal Reserve Bank of Richmond.
X-7008-e-3
COPY
2.
Reply Letter to "be Enclosed, with Letter Ho. 1 Giving
Directions as to Proving Claim.
Federal Reserve Bank of Richmond
Dear S i r s :
Referring to your l e t t e r of
upon
the subjcct of items drawn o,n the
'
National
Bank, we e l e c t to prove a claim against the f a i l e d hank on
the following items, and i n s t r u c t you to f i l e a claim f o r
our b e n e f i t .
Date and Total of Our Letter
Drawer
Amount of Item
We e l e c t to t r e a t the following items as dishonored and
confirm your charge to our account. Please demand a r e t u r n of
them from the receiver of the drawee hank;
Date and Total of Our Letter
Drawer
Very t r u l y yours,
Amount of Item
525
X-7008-O-4
COPY
Letter to be sent to Receiver ;,r Examiner in Charge as soon as
Possible a f t e r Failure.
Bear Sir:
We c a l l your a t t e n t i o n to the checks contained in our cash l e t t e r
sent to the
National Bank on
.
In settlement f o r t h i s l e t t e r the f a i l e d bank sent us (an authorization to charge i t s reserve account f o r the sum of ip
) (a
d r a f t Ho.
drawn on
for $
).
(Before t h i s d r a f t was paid the
Motional Bank
closed) (Before t h i s authori za.t i : n was acted on by us we received notice of the
<
closing of the
national Bank.)
In pursuance of our collection c i r c u l a r s and the Regulations of the
Federal Reserve Board we have charged the amount of these checks to our
endorsing banks.
",re wish to c a l l your a t t e n t i o n to the Bank Collection Code (Section
93, A r t i c l e 11, Code of Maryland, Laws 1929, Page 1147; Section 11, Chapter
822, S t a t u t e s of South Carolina 1930, Page 1371; Section 11, Act 1931, ^est
Virginia, as the case may be.) Under t h i s Statute we have the r i g h t at our
election to t r e a t such items as dishonored or to prove a claim against the
f a i l e d bank.
V'e have w r i t t e n to our endorsing banks for whom we acted as agent
for i n s t r u c t i o n s . As soon as we receive such i n s t r u c t i o n s we shall advise
you f u r t h e r . In the meantime we n o t i f y you not to cancel any of the items
in our unpaid cash l e t t e r if not previously cancelled and not to surrender
a,ny of such checks t : the drawers, but to hold them pending f u r t h e r advice
from us.
Very t r u l y yours,
I
Idaho,
Chapter 60, Laws 1931, Page 98.
Indiana,
Chapter 154, Act 1929, Page 514.
Kentucky,
Chapter 13, Act 1930, Page 49.
Maryland,
Chapter 454, Laws 1929, Page 1143.
Michigan,
#240 Acts 1931, not published.
Missouri,
Laws 1929, Page 205 (Section 11 omitted).
Nebraska,
Chapter 4, Laws 1929, Page 177.
Hew Jersey,
Chapter 270, Laws 1929, Page 544.
Hew Mexico,
Chapter 138, Laws 1929, Page 324.
Mew York
Chapter 589, Laws 1929, Page 1267.
Oregon,
Chapter 138, Laws 1931, Page 189.
South Carolina,
Chapter 822, Statutes 1930, Page 1368.
Washington,
Chapter 203, Laws 1929, not published.
West Virginia,
Chapter 15, Act 1931, not published.
Wisconsin,
Chapter 354, Laws 1929, Page 542.
Wyoming,
Chapter 74, Laws 1931, not published.
527
0 P Y
X-7008-f
f S b m l I ^ S V E BARK
OF 1T3K Y R
OK
September 30, 1931.
Walter Wyatt, Esq., General Counsel,
Federal Reserve Board,
Washington, D. C.
Dear Mr. Wyatt:
I am enclosing a copy of l e t t e r which I have j u s t w r i t ten to the o f f i c e of the Comptroller of the Currency f o r the a t tention of Mr. Barse in an e f f o r t to persuade that o f f i c e to permit the r e t u r n of items involved in national bank closings and
t r e a t e d as dishonored under Section 350-j of the Negotiable Instruments Law of Hew York (Section 11 of the Uniform Bank Coll e c t i o n Code).
If you can do anything to help I shall g r e a t l y
appreciate i t .
I am convinced that as a matter of law the own-
ers are e n t i t l e d to have t h e i r items returned to them and t h a t
the policy which the Comptroller's o f f i c e has followed r e c e n t l y
of not permitting the returti. of the o r i g i n a l items r e s u l t s in much
inconvenience and hardship.
Yours f a i t h f u l l y ,
(Signed)
'"alter S. Logan
Walter S. Logan,
Deputy Governor and General Counsel.
End.
528
COPY
X-7008-f-l
F5D23AL kfiSSRVB BAM
OF 1 E Y R
TW O K
September 30, 1931.
Honorable J . W. Pole,
Comptroller of the Currency,
Washington, D. C.
Attention:
Mr. George P. Barse
Dear Sir;
I enclose a copy of l e t t e r dated September 29, 1931, which
we have addressed to The Peoples National Bank of Pulaski, Pulaski,
Hew York, (notice of the closing of which we received on that date),
advising that we have requested i n s t r u c t i o n s from our forwarding
banks as to whether to t r e a t the items involved in that closing as
dishonored by nonpayment pursuant to Section 350-j of the Negotiable
Instruments Law of Hew York (Section 11 of the Uniform Bank Coll e c t i o n Code).
TThen Mr. Barse was in Mew York about two weeks ago
I urged upon him the a d v i s a b i l i t y of your o f f i c e permitting r e ceivers of closed national banks to return items which we e l e c t to
t r e a t as dishonored pursuant to Section 350-j, in the same way that
the Banking Departments of New York and Hew Jersey have permitted
the return of such o r i g i n a l items by closed s t a t e banks.
Mr. Barse suggested at t h a t time that I write to your o f f i c e and s e t f o r t h at length the reasons and a u t h o r i t i e s in support
of our p o s i t i o n that the o r i g i n a l items which are thus dishonored
should be returned by the receivers of national banks.
Due to the
pressure of other work I have been unable to do t h i s , but neverthel e s s we want to urge your o f f i c e to reconsider t h i s question in
539
X-7003-f-l
2
Honorable J . W. Pole
September 30, 1931.
connection with the closing of the Peoples National Bank of Pulaski,
Pulaski, New York, and permit the return of such of the items involved in the closing of that bank as we may elect to t r e a t as d i s honored pursuant to the provisions of Section 350-j.
I believe there
i s no doubt t h a t the return of such o r i g i n a l items by national bank
receivers i s authorized by law and our experience has demonstrated
t h a t the r e f u s a l to return them causes much inconvenience and r e s u l t s
in denying the b e n e f i t s of t h i s section of the Bank Collection Code
to the owners of such dishonored items.
I w i l l attempt b r i e f l y to o u t l i n e in t h i s l e t t e r the reasons
which seem to me to make i t clear that the owners of items involved
in the closing of national banks are e n t i t l e d to the r e t u r n of the
items when they are t r e a t e d as dishonored pursuant to the provisions
of Section 350-j.
1.
There i s no question of preference involved.
We agree
with the p o s i t i o n taken by your o f f i c e that the provisions of subd i v i s i o n 2 of Section 350-1 of the Negotiable Instruments Law of New
York (Section 13 of the Uniform Bank Collection Code) in regard to
preferences i n favor of owners of items involved in bank closings do
not apply to national banks, because they are in c o n f l i c t with the
provisions of the National Bank Act providing f o r r a t a b l e d i s t r i b u t i o n among a l l c r e d i t o r s .
Te have advised our forwarding banks ac-
cordingly whenever the question has been r a i s e d .
2.
The present question r e l a t e s only to another section
530
3
X-7008-f-l
Honorable J . W. Pole September 30, 1931
of the Bank Collection Code, Section 550-j, which has nothing to do
with preferences, or with claims against closed i n s t i t u t i o n s as such,
and which i s not in any way in c o n f l i c t with the National Bank Act,
This section provides that when a remittance d r a f t i s dishonored the
agent c o l l e c t i n g bank which has presented the items so remitted for
may, at i t s election, t r e a t any of such items as dishonored by nonpayment and thereby preserve the recourse of the owners of the items
against p r i o r p a r t i e s .
I t also permits the exercise of the same elec-
tion in c e r t a i n other s p e c i f i e d circumstances.
These circumstances
are not at a l l confinsd to cases of bank closings, and in f a c t the
section makes no reference whatever to the subject of bank suspensions
or insolvencies.
For example, under the terms of Section 350-j the
option to t r e a t an item as dishonored a r i s e s whenever a drawee bank's
remittance d r a f t i s dishonored i r r e s p e c t i v e of whether the reason for
such dishonor i s the closing of the remitting bank or some other
reason.
According to the weight of a u t h o r i t y , in the absence of any
s t a t u t o r y provision, the drawer of a check is discharged when the
bank on which the check i s drawn issues i t s remittance d r a f t t h e r e f o r ,
and charges the check against the maker's account; so t h a t if the
remittance d r a f t i s not paid the owner of the item has only the obl i g a t i o n of the remitting bank.
In some s t a t e s , however, the law i s
otherwise, and the drawer of the check i s not discharged u n t i l the
remittance d r a f t i s a c t u a l l y paid.
The e f f e c t of t h i s section of the
Bank Collection Code is to amend and s e t t l e the law on t h i s p o i n t , by
4
X /008—f—1
—
Honorable J . ?« Pole
September 30, 1931
creating an option so that the owner of the item may choose whichever
he p r e f e r s , i . e . , to keep a l i v e h i s r i g h t s against p r i o r p a r t i e s including the maker, or to r e l y only on the obligation of the remitting
bank.
This section i s , t h e r e f o r e , merely an amendment of the local law
r e l a t i n g to negotiable instruments and, as i t does not c o n f l i c t with any
provision of the National Sank Act, i t seems to me that there can be
no doubt that i t applies to cases in which national bank depositors
issue checks to t h e i r c r e d i t o r s in settlement of o b l i g a t i o n s .
The incidental e f f e c t of the exercise of the option to t r e a t
a check as dishonored in accordance with the provisions of Section
350-j i s a l s o , of course, to c o n s t i t u t e the maker of the check, instead
of the owner, the c r e d i t o r of the drawee bank.
This does not, however,
prevent the application of the section to checks drawn on national
banks, f o r the general p r i n c i p l e of law i s well established that the
contracts and legal r e l a t i o n s h i p s between national banks and the p a r t i e s
with whom they deal are governed by local law i f such local law does
not c o n f l i c t with any provision of the National Bank Act.
For your convenience I quote Section 350-j of the Negotiable
Instruments Law of New York, (Section 11 of the Uniform Bank Collection
Code), in f u l l :
1
1
Sec. 350-j. Election to t r e a t as dishonored items
presented by mail. Where an item i s duly presented by mail
to the drawee or payor, whether or not the same has been
charged to the account of the maker or drawer thereof or
returned to such maker or drawer, the agent c o l l e c t i n g bank
so presenting may, at i t s election, exercised with reasonable
d i l i g e n c e , t r e a t such item as dishonored by nonpayment and
recourse may be had upon p r i o r p a r t i e s thereto in any of the
following cases:
, 532
5
X-7008-f-l
Honorable J .
Pole
September 30, 1931.
(1) Whore the check or d r a f t of the drawee or payor
hank upon another bank received in.payment t h e r e f o r s h a l l
not be paid in due course;
(2) Where the drawee or payor bank shall without r e quest or a u t h o r i t y tender as payment i t s own check or
d r a f t upon i t s e l f or other instrument upon which i t i s
primarily liable;
(3) Where the drawee or payor bank shall give an unrequested or unauthorized c r e d i t therefor on i t s books or the
books of another bank; or
(4) Inhere the drawee or payor shall r e t a i n such
item without remitting therefor on the day of r e c e i p t or
on the day of maturity if payable otherwise then on demand
and received by i t p r i o r to or on such day of maturity.
Provided, however, that in any case where the drawee oy
payor bank s h a l l return any such item unpaid not l a t e r than
the day of r e c e i p t or of maturity as aforesaid in the exerc i s e of i t s r i g h t to make payment only at i t s own counter,
such item cannot be t r e a t e d as dishonored by nonpayment and
the delay caused thereby shall not r e l i e v e p r i o r p a r t i e s from
liability.
Provided f u r t h e r that no agent c o l l e c t i n g bank shall be
l i a b l e to the owner of an item where, in the exorcise of
ordinary care in the i n t e r e s t of such owner, i t makes or does
not make the election above provided or takes such steps as
i t may deem necessary in cases (2), (3) and (4) a,bove."
3.
In cases in which the election to dishonor an item i s ex-
ercised pursuant to Section 350-j, the owner of the item continues to
have recourse against the p r i o r p a r t i e s including the maker, and the
owner has t i t l e to and r i g h t to possession of the item, j u s t as he
would have to any bond or other security belonging to him which the
bank had in i t s possession f o r safekeeping.
I t i s a great inconven-
ience, and a r e a l hardship and i n j u s t i c e , to the owner to deny him
possession of the dishonored item which i s his property.
To be sure,
6
X-7008-f-l
Honorable J . T. Pole
September 30, 1931.
i t may "be t h e o r e t i c a l l y possible for the owner of the item to bring
s u i t on a copy of i t against the maker and other p r i o r p a r t i e s , but
t h i s t h e o r e t i c a l a b i l i t y to sue i s not an adequate remedy.
He wants
to get h i s money without s u i t and as a p r a c t i c a l matter the f a c t that
he can not r e t u r n the o r i g i n a l item very o f t e n prevents him from accomplishing t h i s .
This has been brought out in a number of instances
in connection with the closed national banks in t h i s d i s t r i c t .
That
the i n a b i l i t y to obtain the o r i g i n a l item o f t e n r e s u l t s i n denying to
the owner the r i g h t s which i t was intended he should acquire under t h i s
provision of law i s shown by the f a c t that we are i n s t r u c t e d to t r e a t
as dishonored a much smaller proportion of the items involved in
national bank closings than of items involved in s t a t e bank closings.
In the case of the Queensboro National Bank, Corona, Hew York, the
l a s t national bank to close in t h i s d i s t r i c t p r i o r to The Peoples National Bank of Pulaski, Pulaski, New York, we have received i n s t r u c t i o n s
to t r e a t as dishonored only 51 per cent of the items concerning which
we have heard to date (55 out of a t o t a l of 212); whereas in the case
of the l a s t s t a t e bank closing, The Capitol Trust Company, Schenectady,
New York, we have received i n s t r u c t i o n s to t r e a t as dishonored 78 per
cent of the items concerning which we have heard to date (71 out of a
t o t a l of 91).
4.
I t does not seem to me that i t i s oossible f o r the Comp-
t r o l l e r ' s o f f i c e to avoid taking a d e f i n i t e stand on the question of
whether Section 350-j applies to national banks.
?hen the Federal
Reserve Bank, acting under i n s t r u c t i o n s from the owners of items,
7
X-7008-f-l
Honorable J . W. Pole
September 30, 1931.
t r e a t s the items as dishonored and demands the return of them by the
receiver on the ground that they are the property of such owners, I do
not see how, in the absence of an adverse claim on the n a r t of some
t h i r d p a r t y , t h f t demand can be refused, unless the Comptroller's o f f i c e takes the a f f i r m a t i v e position that Section 350-j does not apply
to national banks.
5.
If the receivers of closed national banks w i l l comply
with our demand f o r the return of the o r i g i n a l items which we elect
to t r e a t as dishonored under Section 350-j, we will be glad to make
p h o t o s t a t i c copies of such items at our own expense and send such
copies to the r e c e i v e r s , so that the records of the closed b^nk will
be complete.
I am sorry that I have not had time to supplement t h i s l e t t e r
with the c i t a t i o n of legal decisions in suoport of our p o s i t i o n , but,
f r a n k l y , i t does not seem to me that the c i t a t i o n of a u t h o r i t i e s i s
necessary or would be p a r t i c u l a r l y h e l p f u l .
I know of no court decision
on the p r e c i s e p o i n t , and I f e e l sure that there i s none; so that i t
would only be p o s s i b l e to c i t e a u t h o r i t i e s f o r the general p r i n c i p l e s
of law involved, and I believe these p r i n c i p l e s are a l l well established
and w i l l be conceded by your o f f i c e without the c i t a t i o n of any authorit i e s to support them.
We hope your o f f i c e will give t h i s matter c a r e f u l consideration, and w i l l permit the receiver of The Peoples National Bank of
Pulaski, Pulaski, Hew York, to return the items involved in the closing
of that bank which we may elect to t r e a t as dishonored under Section
8
X-7008-f-l
Honorable J . T. Pole
350-j Of the Negotiable Instruments Law of New York.
September 30, 1931.
We f e e l very
strongly that both as a matter of p r i n c i p l e and as a matter of p r a c t i c a l
j u s t i c e the owners of such items are e n t i t l e d to have t h e i r property
returned to them.
The Federal Reserve Banks, as you know, act only
as c o l l e c t i n g agents and t h i s bank has no i n t e r e s t in the matter except
to f u l f i l l i t s duty as such agent and to work out a procedure which
w i l l be as e f f e c t i v e and convenient as possible to a l l concerned.
We shall appreciate i t if you w i l l l e t us have your reply
as soon as p o s s i b l e .
Very t r u l y yours,
Walter S. Logan,
Deputy Governor and General Counsel.
End.
WSLrJMC
0
P
X-7008-f-2
Y
COPY
FEDHAL 3ESEHV3 EAFK
OF FEW Y R
OK
September 29, 1931.
Registered Mail
The Peoples Mational Bank of Pulaski,
Pulaski, New York.
and
Receiver, or Examiner in charge of
The Peoples Mational Bank of Pulaski,
Pulaski, Few York.
Gentlemen;
The d r a f t Ho. 12041 of The Peoples National Bank of Pul a s k i , Pulaski, Few York, dated September 28, 1931, drawn on the
Federal Reserve Bank of Hew York to the order of Federal Reserve
Bank for $3,192.28, received by us in remittance for c e r t a i n items
drawn on said The Peoples National Bank of Pulaski, Pulaski, Few York,
which we had presented to i t by mail, was not paid due to notice of the
closing of said The Peoples National Bank of Pulaski, Pulaski, Few
York, ^e have t h e r e f o r e charged said items back to the forwarding
banks from which we received them f o r c o l l e c t i o n , and have requested
such banks to i n s t r u c t us whether or not to t r e a t such items as d i s honored by nonpayment pursuant to the provisions of Section 350-j of the
negotiable Instruments Law of Few York (Section 11 of the so-called
Uniform Bank Collection Code).
If in reply to such requests wc are
instructed to t r e a t some or a l l of said items as dishonored, we w i l l
send appropriate n o t i c e or notices to said The Peoples National Bank
of Pulaski, Pulaski, ITew York, and to the receiver or examiner in charge
thereof, in accordance with such i n s t r u c t i o n s . In such n o t i c e or
notices we will of course demand the return of any items which we may
be instructed to t r e a t as dishonored. In the meantime, we request said
The Peoples National Bonk of Pulaski, Pulaski, Few York, and the r e ceiver or examiner in charge thereof to r e t a i n possession of a l l
said items and, of course, not to cancel any of said items nor r e turn any of said items to the makers or drawers.
Very t r u l y yours,
Walter S. Logan,
Deputy Governor and General Counsel.
WSL:GSR
(Copy to the Comptroller of the
Currency, Washington, D. C.)
X-7008-g
FEDERAL RESERVE 5AITK
OF A
YR
OK
October 6, 1931.
Walter Wyatt, Esq., General Counsel,
Federal Reserve Board.,'
Washington* D. C.
Dear Mr. Wyatt;'
I enclose a copy of a l e t t e r and i t s enclosure
which I have sent today to the o f f i c e of the Comptroller
of the Currency for the a t t e n t i o n of Mr. Barse, supplementing my l e t t e r of September 30, concerning The Peoples Nat i o n a l Bank of Pulaski, Pulaski, Hew York, copy of which
was forwarded to you on that day.
Yours f a i t h f u l l y ,
(Signed)
Walter S. Logan
Walter S. Logan,
Deputy Governor and General Counsel.
Encs.
P
Y
X-7008-g->l
C
0
P
Y
FIDF2AL RTSERVE BMK
OF FEW Y R
OK
October 5, 1931.
Honorable J .
Pole,
Comptroller of the Currency,
Washington, D. C.
Attention:
Mr. George p. Barse
Dear SirIn our l e t t e r of September 30, 1931, wo requested you to
permit the receiver or examiner in charge of The Peoples Fational
Bank of Pulaski, Pulaski, Mew York, to return such of the items
involved, in the closing of that bank as we might e l e c t to dishonor
pursuant to the provisions of Section 350-j of the Negotiable Instruments Law of iTew York.
I now enclose a copy of l e t t e r dated
October 5, 1931, which we have written The Peoples National Bank of
Pulaski, P u l a s k i , Few York, and to the receiver or examiner in
charge t h e r e o f , advising t h a t , in accordance with the i n s t r u c t i o n s
we have received to date, we e l e c t to t r e a t c e r t a i n items as d i s honored.
We w i l l be glad to receive your reply to our l e t t e r of
September 30, 1931, as soon as i t i s possible for you to l e t us
have i t .
Yours very t r u l y ,
Snc.
WSL:Jt,;C
Walter S. Logan,
Deputy Governor and General Counsel
C O P Y
X-7008-g-2
539
COPY
FFDrSAL ,aES"2V3 I AH
Of NET Y R
OK
October 5, 1931.
The peoples National Bank of Pulaski,
Pulaski, New York.
and
Receiver or Examiner in charge of
The Peoples National Bank of Pulaski,
Pulaski, New York.
Gentlemen:
We r e f e r to our l e t t e r dated September 29, 1931, in which we
advised you that the d r a f t #12041 of Peonies National Bank of Pulaski,
Pulaski, New York, dated September 28 drawn on the Federal Reserve Bank
of New York to the order of Federal Reserve Bank for $3,092.28, received
by us in remittance f o r c e r t a i n items drawn on Peoples National Bank of
Pulaski, Pulaski, New York, which items we had presented to i t by mail,
was not paid due to the closing of said Peoples National Bank of Pulaski,
Pulaski, New York.
As we also advised you in that l e t t e r , we have requested our
forwarding banks to i n s t r u c t us whether or not to t r e a t such items as d i s honored by nonpayment, pursuant to the provisions of Section 350-j of the
Negotiable Instruments Law of New York. ?e have now received i n s t r u c t i o n s
with reference to some but not a l l of such items, and in accordance with
the i n s t r u c t i o n s already received, we hereby e l e c t , pursuant to the provisions of Section 350-j of the Negotiable Instruments Law of New York,
to t r e a t as dishonored by nonpayment the items described below which were
among those in remittance for which we received the dishonored d r a f t above
r e f e r r e d to; and we hereby request the Peoples National Bank of Pulaski,
Pulaski, New York, and the ."Receiver or Examiner in charge of the a s s e t s
of said bank, to cause said items described below to be p r o t e s t e d (except
those opposite which we have w r i t t e n "Do not p r o t e s t " ) and any others on
which appears the A.B.A. no p r o t e s t symbol of a bank indorser) and to
cause a l l said items described below to be returned to us as soon as
possible. As we receive additional i n s t r u c t i o n s from our forwarding banks
to t r e a t other items as dishonored by nonpayment we w i l l send you appropriate
notice in accordance with such i n s t r u c t i o n s .
Kindly acknowledge receipt of t h i s l e t t e r .
Very t r u l y yours,
J . M. Rice,
Assistant Deputy Governor.
Copy to: Peoples National Bank of Pulaski,
Pulaski, N. Y. sent v i a Registered Mail.
COPY
X-7008-g-2
Peoples Hational Bank, Pulaski, F. Y.
and.
Receiver or Examiner in charge of
Peoples National Bank, Pulaski, IT. Y.
October 5, 1931.
Description of items r e f e r r e d to in above
l e t t e r which we hereby elect to t r e a t as dishonored.
Amount of
Items
Do not p r o t e s t
Do not p r o t e s t
$
Do not p r o t e s t
Do not p r o t e s t
Do not p r o t e s t
30.00
2.00
2.00
10.68
10.00
12.50
38.23
93.14
4.25
12.00
40.80
Do not p r o t e s t
Do not p r o t e s t
14.13
6.12
.98
37.01
67.08
18.00
200.00
HS : C
K
Fames of
Drawers
Ada Stowell
Lina C. Williams
ii
ii
ii
Fanes of our
Forwarding Banks
H. Y. State National Bank,Albany, F.Y.
II
ii
ii
ii
ii
ii
ii
II
ii
ii
ii
ii
C. 3. Williams
ii
ii
ii
ii
ii
it
•
ii
ii
ii
ii
ii
ii
ii
ii
Everett Eastman
Dairymen's League
Corp. Assoc.
F i r s t national Bank, Lacona, F. Y.
ii
n
ii
ii
ii
Parish or Rarish
ii
ii
ii
ii
ii
Stowell
Ida Dinnie
Merchants ITatl. Bank & Tr. Co. ,
Syracuse, Ii. Y.
Acker & Murray
Watertown National Bank, Watertown,
I . Y.
ii
ii
ii
ii
H. A. Broome
ii
ii
n
n
C. H. Williams
Charmaphone Co.
Central Penn F a t l . Bank, Philadelphia,
Pa.
Unknown
Corn Exchange F a t l . Bank & Tr. Co.
Philadelphia
ii
F i r s t Tr. & Deposit Co., Syracuse,F.Y.
ii
ii
ii
ii
11
ii
u
ii
FEDERAL RESERVE BOARD
WASHINGTON
T VO
—OQ
ADDRESS OFFICIAL CORRESPONDENCE TO
THE FEDERAL RESERVE BOARD
A—
October 30, 1931.
SUBJECT: Procedure i n Approving Applications of State
Banks for Membership.
Dear S i r :
The procedure followed "by the Federal Reserve Board in
the past in connection with the approval of applications of State
banks f o r membership i n the Federal Reserve System has involved,
what i s believed to be, an unnecessary exchange of telegrams between the Board and the Federal reserve agent, and, in order not
to delay the admission to the System of banks whose applications
have been approved by the Board, i t has been decided to simplify
the procedure, as set out below.
In the past the Board has advised the Federal reserve
agent by wire of i t s approval of an application f o r membership,
subject to the regular conditions of membership contained i n
Section IV of Regulation H, and any special conditions considered
necessary (code word "anchoring"). This was followed by a l e t t e r
to the Federal reserve agent, enclosing a l e t t e r to the applicant
bank, to be transmitted by him, advising formally of the approval
of the a p p l i c a t i o n , s e t t i n g f o r t h in d e t a i l the conditions prescribed by the Board, and i n s t r u c t i n g the bank to advise the
Board of i t s acceptance of such conditions. Upon r e c e i p t of
notice of acceptance from the applicant bank, e i t h e r d i r e c t l y or
through the Federal reserve agent, the Board dispatched a second
wire to the Federal reserve agent authorizing him to proceed with
the f i n a l arrangements f o r the admission of the State bank (code
word "anchoress"). Membership was considered as being e f f e c t i v e
from the date payment was made on the Federal reserve bank stock,
the Federal reserve agent advising the Board of such payment by
wire (code word " n a r r a t e l l " ) .
H e r e a f t e r , upon approval of an application of a State
bank f o r membership i n the System, the Board w i l l wire you
X-7009
— 2
—
advising of such approval and. authorizing you, when notice of
acceptance of the conditions of membership has been received
from the applicant hank, to arrange f o r the issuance of the
necessary Federal reserve hank stock, upon receipt of payment
t h e r e f o r , and f o r acceptance of the t r a n s f e r of the required
reserves (code word "anchoring' 1 ). The usual l e t t e r to the
hank, s e t t i n g f o r t h the conditions of membership, w i l l he
sent to your o f f i c e as at present, but w i l l i n s t r u c t the bank
to f i l e with you, instead of the Federal Reserve Board, a
c e r t i f i e d copy of a resolution of i t s Board of Directors accepting such conditions of membership. The Board's l e t t e r
w i l l s t a t e that you have been authorized, upon r e c e i p t of
notice of acceptance, to proceed with arrangements f o r i t s
admission to the System, a l l of which must be accomplished
within t h i r t y days from the date of the Board's l e t t e r , unl e s s , on the bank's a p p l i c a t i o n , the time i s extended by the
Board f o r good cause. Upon completion of a l l arrangements for
the membership of the bank, you are requested to wire advice
to the Board (code word " n a r r a t e l l " ) , and to forward promptly,
f o r the Board's f i l e s , the c e r t i f i e d copy of the r e s o l u t i o n
of the Board of Directors of the applicant bank accepting the
conditions of membership. Upon receipt of t h i s advice from
you, a formal c e r t i f i c a t e of membership w i l l be mailed to the
bank.
Whenever special conditions of membership are i n volved which are to be complied with p r i o r to admission, you
are requested to assure yourself that such conditions have been
met i n every respect before proceeding with arrangements f o r
the completion of membership. In any case where acceptance of
conditions i s q u a l i f i e d , or there i s question as t o whether the
bank has complied properly with any special conditions, the
matter should be taken up with the Federal Reserve Board before
arrangements f o r the admission of the bank are completed.
The code words to be used under the new procedure are
set out below:
1.
Anchoring. The application of (name and location
of applying bank) f o r membership i n the Federal
Reserve System has been approved by the Federal
Reserve Board, subject to the conditions contained
i n Section IV, Regulation H, Series of 1930, numbered 1 t o 7 inclusive (special conditions, i f
any, to be quoted). When notice of acceptance of
these conditions by the applicant bank has been
received, you arc authorized to arrange f o r the
5 4 2
\ 543
X-7009
- 3 issuance of Federal reserve bank stock, upon
payment t h e r e f o r , and f o r acceptance of the
required reserves. Please advise the Board
the date upon which the hank's membership "becomes e f f e c t i v e .
2.
H a r r a t e l l . (Name and location of applying
bank) has completed arrangements f o r membership, e f f e c t i v e ( d a t e ) .
The code word "anchoress" w i l l , under the new procedure, become obsolete and w i l l be discontinued.
By order of the Federal Eeserve Board.
Yours very t r u l y ,
Chester Morrill,
Secretary.
TO AGENTS OF ALL F. B. BANKS.
X-7010
C O P Y
'
544
FEDERAL RESERVE 3AM
OR RICHMOND
October 29, 1931
Federal Reserve Board,
Washington, D. C.
Attention;
Mr. Walter Wyatt, General Counsel.
Dear Mr. Wyatt:
I have your l e t t e r of October 25th upon the subject of my memorandum on
the e f f e c t of the decision in Gamble v. Wirnberly, 44- Fed. (2nd) 329. I knew when
I sent you t h i s memorandum that you were so overwhelmed with work that you could
not well f i n d time to consider i t and sent i t only because I thought i t l i k e l y t h a t
if anything in connection with t h i s case came up you might f i n d i t convenient to
have the memorandum in your f i l e s . Of course, I am very glad to have i t sent to
Counsel for the other banks, although I doubt if the decision w i l l ever give r i s e
to a d i f f e r e n c e of any great amount in the case of any single f a i l e d bank.
I have had no d i r e c t correspondence with the Comptroller's O f f i c e on t h i s
subject, except in the one instance mentioned below. From correspondence, however,
with receivers i t Appears that the o f f i c e of the Comptroller of the Currency intends to be guided by the decision and to take the p o s i t i o n that whenever coll e c t i o n s made from p a r t i e s to a rediscounted note p r i o r to the f a i l e d bank and a
pro r a t a p a r t of a l l general c o l l a t e r a l , together with any dividends which have
beon paid, equal the amount of the claim proven on t h i s note, no f u r t h e r dividends
will be paid.
1
This p o s i t i o n i s obviously in accord with the decided case, except that
the decided case did not expressly deal with payments made by the maker of a note
or endorsers p r i o r to the f a i l e d bank. The reasoning of the court, however, would
support the application of the p r i n c i p l e made by the Comptroller's o f f i c e . You
will r e a d i l y see, however, that the decision only operates in the comparatively
r a r e cases in which a dividend i s paid which would extinguish the balance due on
the note i r r e s p e c t i v e of i n t e r e s t , but would not extinguish the note and i n t e r e s t .
The number of notes so s i t u a t e d in any one case i s l i k e l y to be small and the d i f ference in money upon each note i s also l i k e l y to be small.
In one or two d i s t r i b u t i o n s receivers have sent me dividend checks computed under the r u l e s t a t e d above. The d i f f e r e n c e in the amount was so small that
the o f f i c e r s of t h i s bank did not consider i t advisable to do more than n o t i f y the
receivers that while we would make no objection in the p a r t i c u l a r case, we would
not consider ourselves hound by the decision in a case where the amounts were
substantial.
The one occasion on which I have had any correspondence with the Compt r o l l e r ' s o f f i c e r e l a t e d to a common form of settlement which we adopted in
Mr. Walter Wyatt,
Federal Reserve Board,
Washington, D. C.
X-7010
-2-
October 29, 1931
closing a l l accounts with a f a i l e d national bank. Then the receiver i s ready to
close the e s t a t e and s e l l a l l f r e e a s s e t s , in order not to delay matters f u r t h e r ,
we frequently agree to purchase from the receiver h i s equity in the rediscounted
notes and marginal c o l l a t e r a l which we s t i l l hold. I t i s agreed that the nominal
purchase p r i c e shall be credited as the proceeds of marginal c o l l a t e r a l and the
nominal purchase p r i c e is usually computed by taking the estimated amount of s a l vage in the notes which we s t i l l hold e ithe r as rediscounts, as marginal c o l l a t e r a l ,
or as c o l l a t e r a l f o r any note of the f a i l e d bank. In short, f o r the purpose of r e f l e c t i n g the true s t a t e of the a s s e t s we endeavor to estimate the f u t u r e l i q u i d a t i o n
and give a present book credit based on t h i s estimate in order t h a t the r e c e i v e r ' s
accounts may show the probable amount which would have been c o l l e c t e d and applied
on our claim if the l i q u i d a t i o n had been i n d e f i n i t e l y continued. In making such
settlement agreements we have always s t i p u l a t e d that nothing in them should a f f e c t
our r i g h t to p a r t i c i p a t e in dividends upon the b a s i s of our claims as they stood
at the time that the settlement i s made, which i s , of course, before the f i n a l
dividend. In one case the receiver in paying the f i n a l dividend d i s t r i b u t e d the
nominal book c r e d i t mentioned above among a l l the rediscounted notes, which had
the e f f e c t of reducing the amount of dividends which we would receive upon several
of the notes. I took the matter up d i r e c t l y with the receiver and pointed out to
him that we could make no such contract in the f u t u r e , if by making i t our dividends were a f f e c t e d , because under the decision in Gamble v. Timberly i t was
clear that if we f i r s t received the dividend and then r e a l i z e d on the c o l l a t e r a l
we could apply the amount r e a l i z e d on the c o l l a t e r a l to unpaid i n t e r e s t ; but if we
f i r s t r e a l i z e d on the c o l l a t e r a l and then a dividend was paid, we could not apply
the dividend to i n t e r e s t .
I also pointed out that the p a r t i c u l a r s i t u a t i o n in which a s t i p u l a t i o n
had been made was covered by the decision in Washington Alaska Bank v. Dexter Horton National Bank, 263 Fed. 304.
A r e p r e s e n t a t i v e of the Comptroller of the Currency wrote me d i r e c t l y
from the Comptroller's o f f i c e concerning t h i s and stated that they did not intend
to claim that such a s t i p u l a t i o n would in any way a f f e c t our dividends. I
gathered from the l e t t e r , however, that the Comptroller's o f f i c e considered themselves bound by the r u l e announced in Gamble v. T imberly when there was no
stipulation.
With kindest personal regards, I remain,
Very t r u l y yours,
(Signed)
-WR
i
G
M. G. Wallace,
M. G. Wallace,
Counsel,
P. S.
There has been nothing to indicate t h a t the Comptroller's o f f i c e
construes the decision as meaning that the l i e n on the c o l l a t e r a l ceases when
fc-7010
Mr. f a l t e r Wyatt,
Federal Reserve Board,
Washington, D. C.
-3-
October 29, 1931
the face amount of the proven claim i s paid, so at present the decision operates
only in a few cases in which we are not paid in f u l l before a f i n a l dividend, and
then i t only applies to a few individual notes.
We have made no e f f o r t in our accounting to segregate c o l l e c t i o n s on
the corpus of c o l l a t e r a l from c o l l e c t i o n s of i n t e r e s t on c o l l a t e r a l , as our
experience to t h i s time indicates that the amounts involved would not j u s t i f y the
extra bookkeeping.
FEDERAL RESERVE BOARD
WASHINGTON
address official correspondence t o
the federal reserve board
X-7012
November 4, 1931.
SUBJECT:
Code Word to cover Telegraphic Transactions
in Treasury B i l l s .
Dear S i r ;
In connection with telegraphic transactions in
Government s e c u r i t i e s between Federal reserve banks, the
code word "NOXCUBIT" has been designated to cover a new
issue of Treasury B i l l s , dated November 9, 1931, and
maturing February 8, 1932.
This word should be inserted in the Federal r e serve telegraph code book, following the supplemental
code word "ITOXCOAL" on Page 172.
Very t r u l y yours,
J . C. No e l l ,
Assistant Secretary.
TO GOVERNORS OF ALL F. B. BANKS.
COPY
X-7014
COLQUITT, PARKER, T O T A & ABKWRIGHT
R UM N
Attorneys at Law
Suite 1607 William-Oliver Bldg.
ATLANTA, GA.
November 4, 1931.
Mr. Walter Wyatt, General Counsel,
Federal Reserve Baord,
Washington, D. C.
Dear Mr. Wyatt:
I thank you f o r yours of October 28th, enclosing
copies of c e r t a i n correspondence passing "between you and Mr.
Wallace, counsel to the Federal Reserve Bank of Richmond,
with r e f e r e n c e to the decision of the Circuit Court of
Appeals f o r the Fourth Circuit i n the case of Gamble v.
Wimberly. 44 Fed (2d) 329.
I have read the enclosures with i n t e r e s t . I
h e s i t a t e to disagree with you and with Mr. Wallace as to the
soundness of the decision, p a r t i c u l a r l y since I have never
c a r e f u l l y studied the question. I t seems to me, however,
that the decision i s unobjectionable so f a r as Federal
Reserve Banks are concerned and i s probably c o r r e c t . Of
course, i f the court meant to say, or i f any court should
ever hold, t h a t c o l l a t e r a l in the hands of the Federal
Reserve Bank could not be u t i l i z e d f o r the purpose of paying
i n t e r e s t and t h e expenses of l i q u i d a t i n g or preserving the
c o l l a t e r a l , the e f f e c t would be f a r - r e a c h i n g . I do not think,
however, t h a t the court i n the case c i t e d meant to so hold
nor do I b e l i e v e that any court would ever go to t h a t extent.
Similar questions have a r i s e n several times i n t h i s
d i s t r i c t as between the Atlanta bank and various r e c e i v e r s
of national banks and I have h e r e t o f o r e advised the Atlanta
bank t h a t the receivers could not pay dividends a f t e r the
p r i n c i p a l of the obligations had been extinguished by p r i o r
dividends and collections made on c o l l a t e r a l . I t may be
that my ready acquiescence i n the decision of the court i s
because i t accords with my p r i o r advice to the A t l a n t a bank.
In any event, we have never had any d i f f i c u l t y here nor has
the handling i n accordance with t h i s p r a c t i c e (so f a r as I
have been advised) worked to the detriment of the Reserve Bank.
I t has been the immemorial p r a c t i c e of the Compt r o l l e r , i n l i q u i d a t i n g national banks, never to declare
X-7014
COLQUITT, PARKER, fROUTMAN & ARKWRIGHT
Continuation Sheet
Mr. Walter Wyatt - #3.
11-4-31.
dividends f o r the purpose of paying i n t e r e s t u n t i l the p r i n c i pal of a l l proven claims has been paid and then only "by a
special dividend covering i n t e r e s t . In other words, the
Comptroller's o f f i c e has always taken the p o s i t i o n t h a t d i v i dends paid on claims f i l e d with the receiver cannot be
u t i l i z e d f o r the purpose of paying i n t e r e s t u n t i l the p r i n c i pal of a l l claims has been paid i n f u l l . Whether or not t h i s
p r a c t i c e i s j u s t i f i e d by the general law or the National Banking Act I do not know. I am c e r t a i n , however, that i t e x i s t s .
In the case of rediscounts, our bank of course undertakes to
make c o l l e c t i o n both from the maker and out of any c o l l a t e r a l
pledged f o r the payment of the rediscounted item. Such coll e c t i o n s as a r e e f f e c t e d from the maker or out of c o l l a t e r a l
(and I am speaking now of c o l l a t e r a l pledged s p e c i f i c a l l y f o r
a p a r t i c u l a r item as distinguished from general or marginal
c o l l a t e r a l ) are applied on the p r i n c i p a l of the o b l i g a t i o n as
are dividends paid by the receiver upon h i s c e r t i f i c a t e issued
upon the claim based upon the rediscounted item. When the
p r i n c i p a l amount of the c e r t i f i c a t e i s paid or s a t i s f i e d from
any or a l l of the sources mentioned, the r e c e i v e r ' s c e r t i f i c a t e
i s surrendered but the discounted note i s held u n t i l i n t e r e s t
has been p a i d , according to the tenor of the c o n t r a c t .
In the case of the d i r e c t note of a member bank,
c o l l e c t i o n s made of c o l l a t e r a l pledged f o r the payment of such
note are credited when and as received and applied i n reduct i o n of the p r i n c i p a l as are dividends paid by the r e c e i v e r .
We would not, however, surrender such note nor r e l e a s e any
c o l l a t e r a l u n t i l i n t e r e s t and expenses had been collected out
of the c o l l a t e r a l .
I understand that collections made on marginal or
general c o l l a t e r a l (that i s , c o l l a t e r a l held f o r the payment
of any and a l l obligations of the insolvent bank) are held
unapplied u n t i l there i s a f i n a l accounting as between the
receiver and the Reserve Bank.
Shortly a f t e r the decision of the court i n the
Gamble case one receiver of a national bank did w r i t e a l e t t e r
which was susceptible of the construction t h a t , i n h i s opinion,
the Federal Reserve Bank could not c o l l e c t out of c o l l a t e r a l
and/or dividends more than the amount of the p r i n c i p a l of i t s
debt. We wrote him, s t a t i n g that while we did not expect
to receive dividends from h i s t r u s t a f t e r c o l l e c t i o n s from a l l
sources, including dividends, had been s u f f i c i e n t to extinguish
the p r i n c i p a l of the obligations of h i s t r u s t , we would hold
the c o l l a t e r a l f o r the payment of i n t e r e s t and expenses. The
X-7014
COLQUITT, PARKER, T O T A & ARKWRIGHT
R UM U
Confcihtlktion Sheet
Mr. Walter Wyatt - #3.
11-4-31.
receiver then r e p l i e d that we had misunderstood h i s l e t t e r
and that he had not intended to contend that we would not
have the r i g h t so to u t i l i z e the c o l l a t e r a l .
Thanking you again f o r your courtesy i n sending me
copies of the correspondence r e f e r r e d t o , I am
Very t r u l y yours,
(S)
Robt. 8. Parker.
RSP/w.
Copy t o :
Mr. M. G-. Wallace, General Counsel,
Federal Reserve Bank of Richmond,
Richmond, Virginia.
FEDERAL RESERVE BOARD
WASHINGTON
address official correspondence t o
the federal reserve board
Xr-7015
November 10, 1931.
SUBJECT:
Code Word to cover Telegraphic Transactions
in Treasury B i l l s .
Dear Sir;
In connection with telegraphic transactions in
Government s e c u r i t i e s between Federal reserve banks, the
code word "NOXCULT" has been designated to cover a new
issue of Treasury B i l l s , dated November 16, 1931, and
maturing February 15, 1932.
This word should be inserted in the Federal r e serve telegraph code book, following the supplemental
code word "N0XCU3IT" on Page 172.
Very t r u l y yours,
J . C. No el 1,
Assistant Secretary.
TO GOVERNORS OF ALL F. R. BANKS.
X-7016
STAE2-TSHT OF JUTIA.U 0^ ITaitJlIVC- /J-J nOTIl'G
f e d e r a l Reserve Totes, Series 1923,
October 1 to 31, 1951.
Boston
>rew York
Phila elphia
Cleveland
Atlanta
Kansas City
Dallas
Fan "^r-ncisco
420
(50
(1000
-
100., 000
64,000
17,000
17,000
-
-
-
-
-
-
5,000
-
-
-
-
-
-
-
-
-
-
-
250,000
448,000
372,000
98,000
40,000
-
1,055,450
3,400
35,000
-
23,000
-
-
-
14,000
10,000
54,000
34,000
500
-
30,000
220,000
16,000
16,000
10,000
80,000
-
20,000
Total
Sheets
Amount
t
t
("10
it
; 5
•
—
sheets, @ (*92.50 Per M,
14,000
_21,_00_0__
1,500
850
35,000
7,350
f97,629.13
-
750
450___
5,100
34,500
100,000
155,400
220,000
50,000
50,000
59,250
406,300
^3,191.25
9,250.00
14,374.50
20,350.00
4,625.00
2,775.00
5,480.63
37,582.75
1,055,450
(97,629.13
C0 £ Y
X-7020
DEPARTMENT OF AGRICULTURE
Washington, D.C.
November 9, 1931
Hon. Eugene Meyer,
Governor of the Federal Reserve Board,
Washington, D. C.
Dear Mr. Meyer:
For some time I have "been emphasizing the f a c t that i n the
long run a sound policy of land u t i l i z a t i o n i s a necessary basis
of a prosperous a g r i c u l t u r e . Emergency conditions of the past
several years, due i n considerable p a r t to the lack of an adequate
land p o l i c y , have strengthened my conviction.
A f t e r due consideration I have decided to c a l l a conference
where I may discuss t h i s subject with members of the Association of
Land Grant Colleges and U n i v e r s i t i e s , State o f f i c i a l s , r e p r e s e n t a t i v e s
of farm organizations, railways, mortgage and insurance companies,
banks, and other organizations primarily concerned with the land. I
believe i t possible to make s u b s t a n t i a l progress toward the development of a long-time policy of land u t i l i z a t i o n , and also to consider
h e l p f u l l y some of the immediate land problems growing out of the present
emergency.
The three days, November 19 to 21 i n c l u s i v e , immediately
following the meetings of the Association of Land Grant Colleges
and U n i v e r s i t i e s appear to be a favorable time to hold the conference.
The Executive Committee of the Association has expressed approval of
the proposal and has authorized the collaboration of the Association
i n c a l l i n g the conference, which w i l l convene at the Stevens Hotel,
Chicago.
I am w r i t i n g to say t h a t we s h a l l be very glad to have you
or any of your colleagues of the Federal Reserve Board present at
the conference, and I s h a l l also appreciate i t i f you w i l l bring the
conference to the a t t e n t i o n of the o f f i c i a l s of each of the Federal
Reserve Banks. You w i l l understand, of course, that the United States
Department of Agriculture does not have funds available f o r paying the
expenses of those who may a t t e n d .
For your information I am inclosing a copy of the t e n t a t i v e
program.
Sincerely yours,
(S)
Inclosure
Arthur M. Hyde
Secretary.
554
COPY
(ReVialtih of 11-6^31)
X-7020-a
Tentative Program of Proposed Conferences on Land U t i l i z a t i o n
Chicago, November 19-21, 1931
F i r s t Day, November 19
Forenoon, 9 A. M. to 12 N.
LAND UTILIZATION AND THE F R PROBLEM
AM
Presiding, R. A. Pearson, President, University of Maryland and Chairman,
Executive Committee, Association of Land Grant Colleges and
Universities.
1.
The a g r i c u l t u r a l outlook and a g r i c u l t u r a l planning, Nils
Chief, Bureau of Agricultural Economics
A. 01sen,
2.
The place of Federal reclamation in a National land policy,
Elwood Mead, Commissioner of Reclamation, Department
of the I n t e r i o r
3.
Relation of Land U t i l i z a t i o n to the general objectives of the
Federal Farm Board, J.C. Stone , Chairman cf the Federal Farm Boazd
4.
Developing a national policy of land u t i l i z a t i o n , Arthur M. Hyde,
Secretary of Agriculture
Afternoon, 2 P. M. - 5.30 P. M.
LAND:
ITS USE AND MISUSE
Presiding, Charles E. Hearst, Vice President, National Farm Bureau Federation
1.
Extent and emergency character of the problems of submarginal
land, Thomas P. Cooper, Dean and Director Kentucky Agricultural
College
2.
Land U t i l i z a t i o n i n the western range country, William Peterson,
Director of Extension Utah Agricultural College
3.
The program of New York State f o r handling submarginal land,
C. E. Ladd, Director of Extension, Cornell University
4.
Some ways of dealing with t h e problems of submarginal land,
L. C. Gray, In Charge, Division of Land Economics,
Bureau of Agricultural Economics.
555
X-7020-a
-
2 -
Ten-minute discussions
1. Homestead and other p o l i c i e s a f f e c t i n g the u t i l i z a t i o n of the
public domain, A. C. Hardison, Fruit Grower and Vice P r e s i dent , Tax Payers 1 League of California
2. An economic c l a s s i f i c a t i o n of land as a "basis of a u t i l i z a t i o n
program, L. E. Schoeneman, i n charge of Land Economic Survey,
Michigan Department of Conservation
3. What methods should "be employed to take submarginal lands out of
a g r i c u l t u r a l production? H. W. Mumford, Dean and Director,
I l l i n o i s College of Agriculture
rive-minute discussions from the f l o o r
Evening. 7:30 - 10:30 P.M.
THE PLACE OF FORESTRY IN A NATIONAL LAND UTILIZATION P O R M
RGA
Presiding, L. J . Taber, Master of the National Grange
1. National economic and social objectives i n f o r e s t policy,
Raphael Zon, Director Lake States Forest Experiment Station
2. Land u t i l i z a t i o n and conservation, George D. P r a t t , President,
National Forestry Association
3. F i t t i n g f o r e s t r y into a general program of land u t i l i z a t i o n ,
Major R. Y. S t u a r t , F o r e s t e r , U. S. Forest Service.
4. The coordination of State and Federal e f f o r t s i n the development
of a land u t i l i z a t i o n program, Cully A. Cobb, Associate E d i t o r ,
Progressive Farmer and Southern Rural!st
556
X-7020-a
- 3 Ten minute discussions
1. Making f o r e s t s contribute to a more s t a b l e a g r i c u l t u r a l prosperity,
Bradford Knapp, President, Alabama Agricultural College
2. Cooperation among f o r e s t owners i n making f o r e s t r y more p r o f i t a b l e ,
Joseph Hyde P r a t t , Executive Secretary Southern Forestry Congress
3. Turning submarginal crop lands within the farm to woodlot uses,
James Fowler, Farmer, Soperton, Georgia
4. What a r e the p o s s i b i l i t i e s of p r i v a t e r e f o r e s t a t i o n ? S. T. Dana,
Dean University of Michigan School of Forestry
5. Along what l i n e s should the public a c q u i s i t i o n program be amplified?
Earl C. Smith, President I l l i n o i s Agricultural Association
Five minute discussions from the f l o o r
Second Day, November 20, 1931
Forenoon. 9 A. M. - 12 M.
READJUSTMENTS IN TAXATION M D NECESSARY BY CHANGES IN
AE
LAND UTILIZATION
Presiding - Dr. Arthur W. Gilbert, Secretary National Association
Commissioners and Secretaries of Agriculture
1. F i s c a l problems of local communities r e s u l t i n g from changing
conditions of land u t i l i z a t i o n , George F. Wehrwein,
Professor of Economics, University of Wisconsin
2. Adjustments f o r greater economy i n local public expenditures,
John C. Watson, I l l i n o i s Agricultural Association
3. Replanning public i n s t i t u t i o n s on the b a s i s of a land u t i l i z a t i o n program, Ralph Compton, Professor of Economics, Yale
University, and formerly Research I n v e s t i g a t o r , Department
of Taxation and Finance, New York S t a t e
4 . Changes i n taxation r e q u i s i t e f o r a sound program of land
u t i l i z a t i o n , Eric Englund, Assistant Chief Bureau of
Agricultural Economics
5 5 7
X-7020-a
- 4 Ten-minute discussions
1. Should other i n d u s t r i e s help t e a r the f i n a n c i a l "burden of maint a i n i n g a r u r a l c i v i l i z a t i o n ? C. V. Gregory, E d i t o r , the
P r a i r i e Farmer. Chicago
2. Redistribution of the r e s p o n s i b i l i t y f o r l o c a l public services
between State and local governments, Fred Brenckman,
Washington r e p r e s e n t a t i v e , The National Grange
Five-minute discussions from the f l o o r
Afternoon - 2:00 - 5:30 P.M.
ADJUSTMENTS IN FARMING- IN THE BETTER FARMING AREAS
Presiding - C. E. Huff, President Farmer's National Grain Corporation
and former President Farmer's Educational and Cooperat i v e Union
1. Soil conservation a major problem of a g r i c u l t u r a l readjustment,
H. G. Knight, Chief, U. S. Bureau of Chemistry and Soils
2. The Outlook a b a s i s f o r adjustments i n the b e t t e r farming areas,
H. R. Tolley, Director Giannini Foundation, University of
Calif ornia
3. A regional approach to the problems of farm reorganization, C. L.
Holmes, In charge, Division of Faro Management and Costs,
Bureau of A g r i c u l t u r a l Economics
4. How can mechanization and s c i e n t i f i c management strengthen the
competitive p o s i t i o n of American a g r i c u l t u r e ? M. L. Wilson,
Chairman Department of Agricultural Economics, Montana
A g r i c u l t u r a l College
5. What i s the f u t u r e r o l e of the small farm and by what methods
can i t be made to hold i t s own i n world competition? John
D. Black, Professor of Economics, Harvard University, Chief
Economist, Federal Farm Board
6. Helping the farmer t r a n s l a t e economic information into a c t i o n ,
C. W. Warburton, Director of Extension Work, United States
Department of Agriculture
Ten-minute discussions
1. Soil c l a s s i f i c a t i o n a b a s i s of a g r i c u l t u r a l adjustments, J . C.
Lipman, Dean and Director, New Jersey Agricultural College
2. Greater e f f i c i e n c y i n a g r i c u l t u r e as a sound National o b j e c t i v e ,
W. J . Kerr, President Oregon Agricultural College
X-7020-a
- 5 ±
558
FiVe^mjnute d i s c o s ions from the f l o o r
Evening, t . 3 0 P. M. - 10.30 P. M.
CREDIT PROBLEMS IN THE READJUSTMENT OF LAW UTILIZATION
AND FARM ORGANIZATION
Presiding - C. 0. Moser, President National Cooperative Council
1. Functions of farm mortgage agencies i n a g r i c u l t u r a l readjustment,
S. J . Westbrook, Vice President, Aetna Insurance Company
2. The management of farm lands held by credit agencies, Elbert S.
Brigham, National Life Insurance Company of Vermont and formerly
member of Congress from Vermont
3. Providing c r e d i t f o r needed readjustments i n land u t i l i z a t i o n
and farm organization, Norman J . Wall, Bureau of Agricultural
Economics
4. Strengthening the country bank as an e s s e n t i a l p a r t of the r u r a l
c r e d i t s t r u c t u r e , Nathan Adams, President F i r s t National Bank,
D a l l a s , Texas
5.
Increasing the usefulness of the Intermediate Credit system as a
supplement to the country bank, Wood Net her land, President
Federal Land Bank and Intermediate Credit Bank, S t . Louis,
Missouri
Ten-minute discussions
1. Broadening the debenture market, B. H. Thompson, Pr e side nt,
Federal Land Bank, S p r i n g f i e l d , Massachusetts
2. How the country bank can influence the farm production program,
J . P h i l Campbell, Director of Extension, Georgia Agricultural
College
Five-minute discussions from the floor
Third Day
A NATIONAL LAND UTILIZATION PROGRAM
(Summaries and conclusions)
Presiding, Arthur M. Hyde* Secretary of Agriculture
1.
2.
3.
4.
5.
6.
Submarginal lands
Forests and other nonagricultural uses
Taxation
Farm reorganization and s o i l conservation
Mortgage c r e d i t
Intermediate and short term credit
FEDERAL RESERVE BOARD
WASHINGTON
address official correspondence t o
the federal reserve board
X-7021
November 13, 1931.
SUBJECT:
Complimentary Copies of Federal Reserve
Bulletin for State Bank Examiners.
Dear Sir;
The Federal Reserve Board will f u r n i s h a
complimentary copy of the Federal Reserve B u l l e t i n
during the year 1932 to State bank examiners who
may d e s i r e i t .
Please f u r n i s h t h i s o f f i c e , not
l a t e r than December 15th, with the name and address
of each State bank examiner in your d i s t r i c t who
d e s i r e s to receive a complimentary copy of each
issue.
Very t r u l y y o u r s ,
J . C. ffoell,
Assistant Secretary.
TO AIL F. E. AG-EL'TIS.
X-7022
FEDERAL
RESERVE
BOARD
STATEMENT FOR THE PRESS
For r e l e a s e at 4;00 p.m.
November 13, 1931.
The Federal Reserve Board announces that the Fede r a l Reserve Bank of Atlanta has established a rediscount
r a t e of 3g$ on a l l classes of paper of a l l m a t u r i t i e s , e f f e c t ive November 14, 1931.
X-7024
FOREIGN BRANCHES OF AMERICAN
BANKING INSTITUTIONS
Bank of America National Trust & Savings Assn.. Sail Francisco. Calif.
Branch:
England
London
Bankers Trust Company. New York. N. Y.
Branches;
England;
London
France;
Paris
Chase National Bank. New York. N. Y.
Branches;
Cuba;
Havana
England:
London (two o f f i c e s )
Panama:
Panama CityCanal Zone:
Cristobal
Empire Trust Company. New York. N. Y. (Non-Member)
Branch;
England;
London
F i r s t National Bank. Boston. Mass.
Branches:
Argentina:
Avellaneda
Buenos Aires (four o f f i c e s )
Rosario
Havana
(three o f f i c e s )
Cuba:
Santiago
Cienfuegos
Sancti Spiritus
Guaranty Trust Company. New York. N. Y.
Branches:
Belgium;
.Antwerp
Brussels
England:
London (three o f f i c e s )
Liverpool
France;
Paris
Havre
National City Bank of New York. New York. N. Y.
Branches:
Argentina:
Buenos Aires (three o f f i c e s )
Rosario
Belgium;
Antwerp
Brussels
Brazil:
Pernambuco
Rio de Janiero
Santos
Sao Paulo
Chile:
Santiago
Valparaiso
China:
Canton
Dairen
Hankow
Harbin
Hongkong
-2-
X-7024
national City Bank of Hew York. Hew York. U. Y. (continued)
Branches:
China:
Moukden
Peiping
Shanghai
Tientsin
Colombia:
Bogota
Call
Medellin
Cuba:
Caibarien
Camaguey
Cardenas
Ciego de Avila
Cienfueggs
Florida
Guantanamo
Havana ( s i x o f f i c e s )
Holgain
Manzanillo
Matanzas
Moron
}?ue v i t a s
Falma Soriano
Pinar del Eio
Remedies
Sagua l a Grande
Sancti S p i r i t u s
Santa Clara
Santiago
Dominican Republic:
Barahona
La Vega
Puerto P l a t a
San Pedro de Macoris
Santiago de Los Caballeros
Santo Domingo City
England:
London - City Branch
West End Branch (City Bank
Farmers Trust Co., 11 Waterloo Place, Ltd., a B r i t i s h
Company handling t r u s t operations only, e n t i r e stock
owned "by National City Bank,
Hew York, i s also at t h i s
address)
-3-
X-7024
National City Bank of Hew York. Hew York. N» Y» (continued)
Branches:
India!
Bombay
Calcutta
Rangoon
Italy:
Genoa
Milan
Japan:
Kobe
Osaka
Tokio
Yokohama
Mexico:
Mexico City
Panama:
Colon
Panama City
Peru;
Lima
Philippine Islands:
Cetrn
Manila
Porto Rico:
Arecibo
Bayamon
Caguas
May aguez
Ponce
San Juan
Santurce
S t r a i t s Settlements:
Singapore
Uruguay:
Montevideo
Venezuela:
Caracas
BRANCHES OP FOREIGN BANKING CORPORATIONS OPERATING
UNDER EDGE ACT OR UNDER AGREEMENT WITH THE FEDERAL RESERVE BOARD
The Chase Bank. New York. N. Y.
Branches:
China:
France:
Mexico:
(Edge Act Corporation stock of which
i s owned by the Chase National Bank
of New York.)
Shanghai
Hongkong
Tientsin
P a r i s (two o f f i c e s )
Mexico City
-4-
X-7024
I n t e r n a t i o n a l Banking Corporation (Subsidiary of National City Bank
of Hew York, N. Y.)
London
Branches:
England:
Barcelona
Spain:
Madrid
International Banking Corporation
France:
owns stock of National City Bank
of New York, France, S» A., operating branches a t :
P a r i s (two o f f i c e s )
Nice
Haiti:
Bank of H a i t i , I n c . , subsidiary
of the I n t e r n a t i o n a l Banking
Corporation, holds stock of
Banque Nationale de l a Republique
d ' H a i t i , operating at the following points in the Republic of
Haiti.
Port au Prince (Head Office)
Aux Cayes
Cape Haitian
Gonaives
Jacmel
Jeremie
P e t i t Goave
Port de P a i s
S t . Marc
Aquin (Agency)
Miragoane (Agency)
Fort L i t e r t e (Agency)
Federal Reserve Board,
November 23, 1931.
FEDERAL RESERVE BOARD
WASHINGTON
address official correspondence t o
the federal reserve board
X-7025
November 18, 1931.
SUBJECT:
Code Word to cover Telegraphic Transactions in
Treasury B i l l s .
Dear S i r ;
In connection with telegraphic transactions in
Government s e c u r i t i e s between Federal reserve banks, the
code word "NOXCURATOR" has been designated to cover a new
issue of Treasury B i l l s , dated November 23, 1931, and
maturing February 24, 1932.
This word should be inserted in the Federal r e serve telegraph code book, following the supplemental
code word "NOXCULT" on Page 172.
Very t r u l y yours,
J . C. Hoell,
Assistant Secretary.
TO GOVERNORS OF ALL F. R. BAMS,
566
FEDERAL RESERVE BOARD
WASHINGTON
address official correspondence t o
the federal reserve board
X-702*5
November 19, 1931.
SUBJECT: Expense, Main Lines, Leased " i r e System,
October, 1931.
Dear S i r :
Enclosed herewith you w i l l f i n d two mimeographed statements, X-7028-a and X-JOSS-b, covering
i n d e t a i l operations of the main l i n e s , Leased Wire
System, during the month of October, 1931.
Please credit the amount payable by your bank
in the general account, Treasurer, U. S., on your
books, and issue C/D Form 1, National Banks, f o r account of "Salaries and Expenses, Federal Reserve
Board, Special Fund", Leased Wire System, sending dupl i c a t e C/D to the Federal Reserve Board.
Very t r u l y yours,
Fiscal Agent.
Enclosures.
TO GOVERNORS OF ALL F. R. BANKS.
X-"/0 28-a
REPORT SHOWING CLASSIFICATION AND N M E OF W R S TRANSMITTED OVER MAIN LINES
U BR
OD
OF THE FEDERAL RESERVE LEASED WIRE SYSTEM FOR THE M N H OF OCTOBER, 1931.
OT
Business
reported
by banks
From
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
S t . Louis
Minneapolis
Kansas City
Dallas
San Francisco
Total
Words sent by
New York chargeable to other
F. R. Banks ( l )
29,810
204,150
43,129
88,921
76,438
60,438
109,761
79,505
39,225
89,59S
85,516
100,112
1,006,603
6,015
-
3,887
5,519
5,060
8,816
6,597
3,944
6,182
4,741
18,462
6,700
75,923
F. R. Board, business
Net Federal
reserve
bank
business
35,825
204,150
47,016
94,440
81,498
69,254
116,358
83,449
45,407
94,339
103.978
106,812
1,082,526
Percent of t o t a l
bank business (*)
3-31
18.86
4.34
8.72
7-53
6.40
10.75
7.71
4.19
8.71
9.61
9.87
100.00
314,957
Treasury Department "business Incoming and Outgoing
Total words transmitted over main l i n e s
(*)
103,588
1,501,0%!
These percentages used in c a l c u l a t i n g the pro r a t a share of leased wire expense as shown
on the accompanying statement (X-7028-b).
(1)
1,397,483
Number of words sent "by New York to other F. R. Banks f o r t h e i r sole b e n e f i t charged to
banks indicated in accordance with a c t i o n taken a t Governors' Conference
November 2 - U, 1925.
Dl
OS
rsl
X-702S-b
EEPOHT OF EXPENSE MAIN LINES
FEDERAL RESERVE LEASED WISE SYSTEM, OCTOBER, 1931.
Name of bank
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas CityDallas
San Francisco
Federal Reserve Board
Total
(&)
(#)
(*)
(a)
(b)
Operators'
salaries
$260.00
1,134.15
225.00
306.66
190.00
270.00
3,618.07 (#)
190.00
201.13
287.50
251.00
380.00
-
$7,313.51
Operators 1
overtime
$ 1.00
3.00
Wire
rental
Total
expenses
Pro r a t a
share of
total
expenses
$261.00
$712.78
4,061.33
1,137.15
225.00
934.5S
—
306.66
1,877.77
230.00 <&)
420.00
1,621.52
—
270.00
1,378.18
6.00
3,624.07
2,314.92
1.00
191.00
1,660.28
201.13
902.28
287.50
1,875.62
1.50
252.50
2,069.43
38O.OO
2,125.41
15,574.30
15,574.30
$12e50$15,804.30
$23,130.31
$21,534.10
1,596.21(a)
$21,534.10
$
-
Credits
$261.00
1,137.15
225.00
306.66
420.00
270.00
3,624.07
191.00
201.13
287.50
252.50
380.00
—
$7,556.01
Payable to
Federal
Reserve
Board
$451.78
2,924.18
709.58
1,571.11
1,201.52
1,108.18
1,309.15 (*)
1,469-28
701.15
1,588.12
1,816.93
1,745.41
—
$15,287.24
1,309.15 (b)
$13,978.09
Main l i n e r e n t a l , Richmond-Washington.
Includes s a l a r i e s of Washington o p e r a t o r s .
Credit.
Received $1,596.21 from Treasury Department covering business f o r the month of October, 1931.
Amount reimbursable to Chicago.
o?
00
FEDERAL RESERVE BOARD
WASHINGTON
address official correspondence t o
the federal reserve board
X-7029
November 19, 1931.
SUBJECT:
Holidays during December, 1921.
Dear Sir?
The Havana Agency of the Federal Reserve Bank of Atlanta will be closed on Monday,
December 7th, Cuban Memorial Day.
On Christmas Day the o f f i c e s of the
Federal Reserve Board and a l l Federal reserve hanks
and branches will be closed.
Please n o t i f y branches.
Very t r u l y yours,
J . C. iloell,
Assistant Secretary.
TO GOVERNORS OF ALL F. R. BALTICS.
FEDERAL RESERVE BOARD
WASHINGTON
address official correspondence t o
the federal reserve board
X-7030
November 23, 1931.
SUBJECT:
I n q u i r i e s involving matters of System policy
or i n t e r e s t .
Dear Sir:
There i s enclosed herewith, f o r your information,
copy of a l e t t e r on the above subject, addressed to the
Federal reserve agent at one of the Federal reserve banks»
along the l i n e s of which the Board i s today addressing
a l l Federal reserve agents.
The Board i s desirous of discussing with the
governors of the Federal reserve tanks at t h e i r Conference
beginning November 30 the question of the procedure outlined
in t h i s l e t t e r , and the matter i s hereby made a topic f o r
inclusion on the program of the Conference.
Very tr uly yours,
Chester Morrill,
Secretary.
Enclosure.
TO ALL GOVERNORS.
COPY
FBD&tAL RESERVE BOARD
WASHINGTON
X-7030-a
November 23, 1931.
Dear S i r :
Recently one of the Federal Reserve Agents transmitted to
the Federal Reserve Board a copy of a l e t t e r received by him from
Harold L. Reed of the College of Arts and Sciences, Cornell Univers i t y , Ithaca, New York, in regard to the policy of the Federal Reserve Bank in connection with paying out gold c e r t i f i c a t e s .
The
Board was advised that the Federal Reserve Agent had acknowledged
r e c e i p t of the l e t t e r , s t a t i n g that i t had been r e f e r r e d to the
Federal Reserve Board f o r the reason that i t involved a matter of
System p o l i c y .
Thereupon inquiry was made of the other Federal
Reserve Agents as to whether they had received similar i n q u i r i e s
and as to the nature of the r e p l i e s , if any, made t h e r e t o .
You
responded by telegraph on November 13 and transmitted to the Board
a copy of a reply which had been made to such an inquiry from Mr.
Reed as to the p r a c t i c e of the Federal Reserve Bank of
.
I t developed tl*at a l l of the other Federal Reserve Agents also had
received similar i n q u i r i e s and had replied d i r e c t l y .
The r e p l i e s
were mere or l e s s general in character, d i f f e r i n g however in some
respects.
I t w i l l be r e c a l l e d that a c i r c u l a r l e t t e r had been sent
to a l l Federal Reserve Agents on May 5, 1925, by the then Governor
-2-
X-7030-a
of the Federal Reserve Boaf&t outlining a procedure under which an
inquiry of t h i s character might have "been d e a l t with uniformly.
In
the circumstances the Board suggests t h a t in the f u t u r e i f i n q u i r i e s
of t h i s or any other character are received a t the "banks involving
matters of common concern to the System as a whole from the standpoint of p o l i c y , the Replies to which would not he governed by any
e x i s t i n g i n s t r u c t i o n s or agreement as to the nature t h e r e o f , such
i n q u i r i e s he submitted to the Board with the suggestions of the Fede r a l Reserve Agents as to the nature of the r e p l i e s that should he
made, so that consideration may "be given to the matter involved,
including the question whether the response should "be made "by each
individual "bank or "by the Board f o r the System as a whole.
Very t r u l y yours,
(Signed)
Chester Morrill
Secretary.
(.
X-7031
COPY
IN THE MUNICIPAL COfeT OF PHILADELPHIA
CIVIL DIVISION
MORBIS WEBBER
March Term, 1931
vs.
No. 1417
FEDERAL RESERVE B N
AK
OF PHILADELPHIA.
MEMO. OPINION
LEWIS, J . , November 17, 1931.
The p l a i n t i f f , holder of a check of $500, payable to
h i s order, and drawn on the Darby Bank and Trust Company, of
Darby, Pennsylvania, endorsed i t in blank, on the 5th day of
January, 1931, and deposited i t to h i s account with the
Pennsylvania Company f o r Insurances on Lives and Granting
Annuities.
That company credited p l a i n t i f f ' s account
conditionally with the amount of the check and forwarded the
same to the Federal Reserve Bank of Philadelphia, the defendant,
for collection.
The defendant bank promptly sent the check,
together with other items, to the drawee, Darby Bank and Trust
Company, f o r payment.
I t received from that bank, in payment
of the several items, a d r a f t on the Philadelphia National
Bank, the Darby Bank and Trust Company a t the same time marking
p l a i n t i f f ' s check "paid," and charging the account of the drawor
on i t s books with the amount of the check.
Before defendant p r e -
sented the drawee bank* s remittance d r a f t to the Philadelphia
5 7 3
« 574
;
- 2 -
X-7031
National Bank the drawe6 "b&ijk closed i t s doors and possession of i t s
business and a s s e t s was taken over by the Secretary of Banking of
the Commonwealth of Pennsylvania.
Payment of the remittance d r a f t
was thereupon stopped, the defendant advised the Pennsylvania Company of that f a c t , and the l a t t e r company in turn n o t i f i e d the
p l a i n t i f f of i t s i n a b i l i t y to c o l l e c t the check, and charged back
the p l a i n t i f f ' s account on i t s books f o r the amount t h e r e o f .
The
p l a i n t i f f therqjapon i n s t i t u t e d t h i s action of assumpsit against the
defendant f o r the amount of the uncollected check, a l l e g i n g
in substance that in c o l l e c t i n g the p l a i n t i f f ' s check the
defendant was negligent in accepting payment therefor of the
remittance d r a f t of the drawee bank instead of cash.
We now
have before u s t h i s r u l e f o r judgment for want of a s u f f i c i e n t
a f f i d a v i t of defense f o r the purpose of t e s t i n g the various
defenses s e t up by the defendant bank.
These defenses may be summarized under three headings;
(1)
By the terms of the d e p o s i t o r ' s agreement
defendant i s absolved from r e s p o n s i b i l i t y because of the
acceptance by i t of something other than cash, in payment
of an item.
(2)
That there i s a custom of c o l l e c t i n g banks,
which custom i s c e r t a i n , uniform and reasonable, and j u s t i f i e s
the acceptance by defendant of something in l i e u of money, and
t h e r e f o r e r e l i e v e s the defendant from l i a b i l i t y ,
(3)
That the acceptance by the defendant Federal
Deserve Bank of an exchange d r a f t in payment of a check, which
- 3 -
X-7031
i t holds f o r -collection, does frot Constitute negligence, in
view of the a u t h o r i t y given i t in Regulation J .
(Series of
1930) of the Federal Reserve Board, and c i r c u l a r 477, issued
by the Federal Reserve Bank of Philadelphia (Sept. 2, 1930).
The p r i n c i p a l and c o n t r o l l i n g question r a i s e d by the
pleadings may be s t a t e d as follows*
I s a Federal Reserve Bank,
in c o l l e c t i n g checks endorsed and transmitted to i t by a
member bank, negligent when i t accepts a d r a f t , instead of
cash, f o r the items transmitted to i t f o r collection?
The general r u l e in Pennsylvania i s t h a t , a p a r t from
custom of agency or special authority, a bank in the c o l l e c t i o n
of commercial paper has no r i g h t to accept in payment thereof
anything except money.
(See exhaustive note in 61 American
Law Reports Annotated, page 739, and the Pennsylvania cases
c i t e d on page 742 of the n o t e ) .
Brady on Bank Checks (2nd Ed.
p . 456, Sec. 282).
The Supreme Court of the United S t a t e s , in 1924,
decided the case of Federal Reserve Bank of Richmond vs Mayloy,
264 U. S . , 160, which created considerable discussion and concern in banking c i r c l e s because of the r u l i n g therein announced.
I t was there held that if the bank responsible to the payee f o r
the c o l l e c t i o n of a check surrenders the check to the drawee bank
and accepts in payment an exchange d r a f t of that bank which proves
worthless, the c o l l e c t i n g bank i s l i a b l e to the payee of the check
f o r the r e s u l t i n g l o s s .
The regulations of the Federal Reserve Board
- 4 -
X-7031
authorized Federal He serve Battles in handling checks forwarded
to them f o r c o l l e c t i o n to send them d i r e c t to the banks on
which they are drawn and accept the drawee's d r a f t in payment.
The Malloy case, (supra), held that such a regulation cannot be
enlarged by implication to include a u t h o r i t y to accept a d r a f t
of the drawee of a check in payment.
To counteract the e f f e c t
of t h i s decision, Regulation J , Series of 1930, was promulgated,
(superseding Series of 1924), and Circular 477, issued by the
Federal Reserve Bank of Philadelphia, (September 2, 1930,)
which r e g u l a t i o n and c i r c u l a r declare that every bank sending
checks to the reserve bank would be understood to have agreed
to the terms and conditions therein s t a t e d authorizing the
reserve bank to receive payment in cash or bank d r a f t s f o r
the c o l l e c t i o n items.
We think that these regulations are v a l i d , and
persons dealing with member banks of the Federal Reserve
system are chargeable with knowledge of t h e i r existence,
L o u i s v i l l e and Nashville Railroad Co. vs. ITashville Branch of
the Federal Reserve Bank of Atlanta, 44 Bankers Law Journal,
665; Transcontinental Oil Co, vs
Federal Reserve Sank of
Minnesota, ( i n f r a ) .
Bank of Wesleyville vs
Rose, 85 Pa. Super Co. 52,
r e l i e d upon in support of p l a i n t i f f ' s contention, i s not
c o n t r o l l i n g , in view of the amendatory and supplementary
regulations of the Federal Reserve Bank promulgated since t h a t
• 577
- 5case was decided.
X-7031
Moreovel*j in the present case the a f f i d a v i t
of defense avers knowledge of the Federal Reserve r e g u l a t i o n s
on the p a r t of the p l a i n t i f f depositor, l i m i t i n g l i a b i l i t y
by the defendant.
See A r t i c l e s , "Some Aspects of Regulations
of Federal Reserve Board and State S t a t u t e s authorizing
Forwarding of Checks f o r Collection d i r e c t to Drawee Bank
and Acceptance of Drafts in payment."
4 Wash. Law Rev. 39. •
L i a b i l i t y of Collecting Bank f o r Accepting Draft as Payment
f o r Commercial Paper,
41 Harv. L. Rev. 249.
An illuminating statement upon t h i s subject w i l l
be found in the opinion of that eminent scholar and j u r i s t ,
Cordoza, C. J . , in Carson vs
218, where he s t a t e s :
•
Federal Reserve Bank, 254, ft. Y. •
"By the Federal Reserve Act, as f i r s t
enacted in 1913; a reserve bank was authorized to c o l l e c t
only those checks which were drawn on member banks and which
were deposited by a member bank or another reserve bank or the
United S t a t e s .
(Farmers Bank vs
Federal Reserve Bank, 252
U. S. 649.) • Even then, however, the regulations of the
Board provides:
' I n handling items f o r member banks, a
Federal Reserve Bank w i l l act as agent o n l y . ' . . .. .. . The
s t a t u t e was amended in September, 1916, (Section 13) so as to
authorize a reserve bank to receive for c o l l e c t i o n from any
member checks drawn on nonmember banks located in t h e d i s trict.
The Board renewed i t s order that the r e l a t i o n should
be one of agency . . . . .
In 1917 the s t a t u t e was again
amended, t h i s time by • a provision t h a t ' ' s o l e l y f o r the purposes
of exchange or of c o l l e c t i o n , 1 a reserve bank may receive from
a nonmember bank or t r u s t company the checks payable upon p r e sentation, upon condition t h a t such nonmember bank or t r u s t
company maintain an adequate balance with t h e reserve bank of
its district.
(Act of Congress, June 21, 1917, ch, 32, Sec. 4 ) .
Collections were thus permissible both f o r members and f o r
nonmembers."
The following statement of the Supreme Court
of Minnesota in Transcontinental Oil Co. v. Federal Reserve
Bank of Minneapolis, (1917) i s s i g n i f i c a n t "The defendant was employed by the p l a i n t i f f 1 s
authorized agent, the F i r s t National Bank of Chicago, to c o l l e c t the checks.
Such agent knew that the only terms and coiv-
d i t i o n s upon which defendant would accept such employment were
those of Regulation J . , Series 1917, and Clearing and Collection
Circular Ho. 193, and t h e r e f o r e must be held to have consented
and agreed in behalf of p l a i n t i f f that not only the checks
might be sent d i r e c t l y to the payer bank f o r c o l l e c t i o n , but
also that such bank might remit to defendant by d r a f t upon a
bank in Minneapolis.
Defendant i s not compelled by law to
c o l l e c t checks or d r a f t s f o r i t s member banks or for member
banks of other Federal Reserve Bp.nks.
I t i s authorized to
render such service under terms and conditions established
579
- 7 -
X-7031
by the Federal He serve Board and by i t s own regulations
communicated to banking i n s t i t u t i o n s who see f i t to r e quest the service."
Adopting and employing the language of Judge Cordoza
in the Carson case (supra), as applicable to the present controversy, we repeat:
"In the s e t t i n g of t h i s s t a t u t e ,
Regulation J (Series 1930) was adopted by the Board and i s
now to be construed.
I t r e c i t e s (in terms s u b s t a n t i a l l y the
same as those of e a r l i e r regulations) that the Board, ' d e s i r i n g
to a f f o r d , both to the public and to the various banks of the
country, a d i r e c t , expeditious and economical system of check
c o l l e c t i o n and settlement of balances has arranged to have
each Federal Reserve Bank exercise the functions of a c l e a r i n g
house and c o l l e c t checks f o r such of i t s member banks as desire
to avail themselves of i t s p r i v i l e g e s ' , to which i s added a
r e c i t a l t h a t l i k e p r i v i l e g e s will be accorded to nonmember
banks and t r u s t companies qualifying in c e r t a i n ways.
I t then
proceeds to a statement of the terms and conditions on which
business may be done.
'The Federal Reserve Board hereby
authorizes t h e Federal Reserve Banks to handle such checks
subject to the following terms and conditions, and each member
and nonmember c l e a r i n g bank which sends checks to any Federal
Reserve Bank s h a l l by such action be deemed (a)
To authorize
a l l Federal Reserve Banks to handle such checks subject to
the following terms and conditions:
(b)
To warrant i t s own
- 8 a u t h o r i t y to give a Federal Bank such a u t h o r i t y , and (c)
X-7031
To
agreb to indemnify any Federal Reserve Bank for any l o s s r e s u l t i n g from the f a i l u r e of such sending bank to have such authority.
f
Among the terms and conditions thus prescribed are these:
•A Federal "Reserve Bank w i l l act only as agent of the bank from
which i t receives such checks.
A Federal Beserve Bank may present
such checks f o r payment or send such checks for c o l l e c t i o n d i r e c t
to the bank on which they are drawn,' or forward them 1 to another
agent 1 .
'A Federal Reserve Bank may *** a t i t s option e i t h e r
d i r e c t l y or through an agent, accept *** bank d r a f t s *** in l i e u
of cash, without being l i a b l e f o r any l o s s thereby r e s u l t i n g . '
•The amount of any check, for which payment, not actual and f i n a l l y c o l l e c t e d funds, i s not received, s h a l l be charged back to the
forwarding bank regardless of whether or not the check i t s e l f can
be r e t u r n e d . '
F i n a l l y , each Federal Reserve Bank may promulgate
i t s own regulations not inconsistent with law or with the regulations of the Board, and such regulations s h a l l be binding upon
member and nonmember banks availing of i t s p r i v i l e g e s .
Pursuant
to the a u t h o r i t y thus conferred the (defendant) made i t s own regulations (Circular 477, September 2, 1930), r e a f f i r m i n g the regulations
adopted by the Board and supplementing them by others ****
The
regulations of the Board, reinforced by the defendant's c i r c u l a r ,
and assented to by the t r a n s m i t t i n g bank, are equivalent to an exp r e s s agreement that as between the defendant and the other banks
the r e l a t i o n engendered by the receipt of uncollected paper shall be
an agency and nothing more.11
; 581
- 9 -
X-7031
The e f f e c t of the regulation was the same as though
i t s provisions had been written on the face of the check, and
t h e r e f o r e when the maker thereof did not specify cash payment,
he agreed, as did the payee* that if the check were presented by
or through a Federal Reserve Bank, the check might be payable by
an exchange d r a f t drawn by the payee bank on i t s reserve deposit.
See 46 Banking Law Journal 865; Transcontinental Oil
Co. v. Federal Hesarve Bank; Minn. Supra.
The tremendous modern expansion of credit banking has
disclosed the inadequacy of the r u l e s of common law a f f e c t i n g
banks and c o l l e c t i o n .
A s t r i k i n g recognition of t h i s s i t u a t i o n
is found in the Bank Collection Act of 1931 (Act of General
Assembly of the State of Pennsylvania, 1931, No. 198), which
allows the c o l l e c t i n g bank to send the item d i r e c t l y to the payor
bank and accept a d r a f t or c r e d i t in payment.
The provisions of that act a r e not r e t r o a c t i v e , hence
not applicable to the present case.
We are of the opinion and so hold that the acceptance
by a Federal Reserve bank of an exchange d r a f t in payment of a
check drawn on a State bank and which i t holds f o r c o l l e c t i o n ,
does not c o n s t i t u t e negligence.
I t w i l l , t h e r e f o r e , be unnecessary
f o r us to pass upon the other points made by the defendant in i t s
A f f i d a v i t of Defense and under the heading of New Matter.
See Sec.
283 Brady on Bank checks p. 458, and 1929 Supplement p. 150, Sec.
283, and cases c i t e d .
Another problem has confronted the Court, that i s , whether
- 10 -
X-7031
an A f f i d a v i t of Defense i s reqiiirfcd irl an action of assumpsit which
is essentially
ex d e l i c t o ,
fn view of the f a c t t h a t t h i s matter
has not been c a l l e d to the a t t e n t i o n of the Court in t h e arguments
so ably made by counsel representing both p a r t i e s , the Court deems
i t s u f f i c i e n t to simply r e f e r to the following a u t h o r i t i e s :
Corry v.
Penna. B. R. 194 Pa. 516 Parry v. F i r s t National Bank of Lensford,
270 Pa. 556; Smith's Pennsylvania P r a c t i c e Act, page 267 Wilson v.
Adams Express Co;, 72 Pa. Sup; Ct; 384-387 (1919) Arrant's Pennsylvania P r a c t i c e Act of 1915, page 212; Stewart v. F i r s t Mortgage
Guaranty and Trust Co«i 24 Dist. 927; Marcus v. Bank, 12 Lackawanna,
266;' Cosgrov v. B. B., 16 Dist. Beports 161; 33 Co. Court 613;
Southern B. B. v. Hull, 46 Pa. Sup. Ct. 299; Cowan v. Nagel, 89 Pa.
Sup. Ct. 122; Coyle v. Schrull, 49 Pa. Sup. Ct. 385 - and the authori t i e s are generally to the e f f e c t that where the cause of action i s
of a mixed character containing elements of contract and of t o r t ,
an a f f i d a v i t of defense i s not required, although the action i s as sump**
sit.
The actions of assumpsit f o r which judgment may be taken f o r
want of an a f f i d a v i t of defense are limited to such as a r e on contract
alone, and do not include cases in which the cause of action i s exdelicto
The r u l e f o r judgment mast be discharged.
X-7033
FEDERAL
AD V I S 0 E I
583
C 0 tJ U C I L
1981
Officers:
Executive Committee I
——
——
•
—— — • Howard A* Loelj
—— —
»
•
Walter W. Smith Walter S. McLucas
George H. Prince Melvin A. Traylor
Walter W. Smith, President
Melvin A. Traylor, Vice President
Walter Lichtenstein, Secretary
EMBERS
District.
No. 1
Herbert K. H a l l e t t
Atlantic National Bank,
Boston, Massachusetts.
No. 2
Robert H. Treman
Tompkins County National Bank,
Ithaca, New York.
No. 3
Howard A. Loeb
Tradesmens National Bank & Trust Co.,
Philadelphia, Pa.
No. 4
J . A. House
Guardian Trust Company,
Cleveland, Ohio.
No. 5
John Poole
Federal .American National Bank,
Washington, D. C.
No. 6
John K. O t t l e y
F i r s t National Bank,
Atlanta, Ga.
No. 7
Melvin A* Traylor
F i r s t National Bank,
Chi cago, I l l i n o i s .
No. 8
Walter W. Smith
F i r s t National Bank,
St. Louis, Missouri.
No. 9
George H. Prince
F i r s t National Bank,
St. Paul, Minn.
No. 10
Walter S. McLucas
No. 11
J . H. Frost
Frost National Bank,
San .Antonio, Texas.
No. 12
Henry M. Robinson
Security-First National Bank,
Los Angeles, C a l i f o r n i a .
. Commerce Trust Company,
Kansas City, Missouri.
Address of Mr. L i c htenstein, 38 South Dearborn S t r e e t , Chicago, I l l i n o i s .
November 17, 1931.
584
COPY
X-7034
October 27, 1931
Federal lie serve Board
Mr. Smead
Topics for j o i n t conference of
Governors and P. H. Agents
The Board's l e t t e r X-S940 of August 11 requested each Federal reserve "bank
to advise the Federal Reserve Board, in advance of the next j o i n t conference of
Governors and Agents, of i t s t o t a l expense in handling s e c u r i t i e s of member
banks for safekeeping during the year 1930, or as close an estimate of such
expense as could be made.
The f i g u r e s furnished by the Federal reserve banks
are as follows:
Boston
Hew York
Philadelphia
Cleveland
Richmond
Atlanta
$12,486
138,000
50,000
*
4,000
#2,400
Chicago
$30,000
St. Louis
13,350
Minneapolis
39,380
Kansas City
25,000
Dallas
4,400
San Francisco
500
Total (11 banks)319,516
•Bank s t a t e s that i t seems impossible f a i r l y to estimate the expense
but t h a t i f the e n t i r e cost of the Custodies Function were taken,
p l u s considerable p o r t i o n s of the cost of P r o t e c t i o n , Registered
Mail, and Non-Cash Collection Functions, a s u b s t a n t i a l amount
would be arrived a t e a s i l y in excess of $100,000. However, i f
safekeeping f o r member banks were discontinued the p o s i t i v e savings would not exceed $1,000 per y e a r .
#Estimated savings i f the safekeeping function were discontinued.
An examination of the r e p l i e s to the Board's l e t t e r which are attached
hereto i n d i c a t e s that the f i g u r e s furnished by the several banks do not
represent in many instances costs of the same operations.
Some banks con-
fined t h e i r estimates to a portion of the cost of operating the S e c u r i t i e s
function, while others, in addition, included some of the expenses of the
Don-cash Collection, Registered Mail, F i l i n g , Accounting, Auditing, and
General Overhead f u n c t i o n s , under the theory that such expenses are an c u t -
— 2 -•
growth of the "banks' safekeeping oparationls*
X-7034
f o r example, the reserve banks
c l i p a l l the coupons on "bonds held in Safekeeping and then, a c t i n g on
i n s t r u c t i o n s from member "banks, send most of them out f o r c o l l e c t i o n .
This
adds m a t e r i a l l y to the expense of the Hon—cash Collection f u n c t i o n .
For the Board's information, t h e r e f o r e , there i s shown "below the cost of
operating the Vault Custody u n i t of the Securities function a t each Federal
reserve "bank.
These f i g u r e s , which were compiled from the semi-annual
functional expense r e p o r t s furnished the Board, represent the cost of r e c e i v ing, vaulting, coupon c u t t i n g and delivery of s e c u r i t i e s and the maintenance of
the immediate vault records t h e r e o f .
While these f i g u r e s are thought to "be a
reasonably s a t i s f a c t o r y measure of the cost of the safekeeping service, two
points should he "borne in mind,
( l ) They include the cost of handling
s e c u r i t i e s owned "by the "bank or held as c o l l a t e r a l f o r rediscounts, also sec u r i t i e s held in safekeeping f o r Government and other o f f i c i a l s .
These
s e c u r i t i e s are l a r g e l y Government obligations and consequently the cost of
handling them i s r e l a t i v e l y small.
(2) The f i g u r e s do not include any expenses
connected with t h i s service incurred elsewhere in the hank, f o r example, in
the Registered Mail, F i l i n g , Auditing and Non-cash u n i t s .
In case the Federal
reserve hanks discontinued the safekeeping service f o r member hanks there would
he some reduction in these costs although the reduction would no doubt be small
i f member banks continued to use the Federal reserve banks f o r c o l l e c t i n g
maturing s e c u r i t i e s and coupons.
Expense during 1930
Custody u n i t of the
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
a t each F. R. Bank (including branches) of the Vault
S e c u r i t i e s function
$15,598
Chicago
$23,385
124,218
S t . Louis
13,341
42,692
Minneapolis
11,583
21,672
Kansas City
10,651
8,589
Dallas
8,794
6,112
San Francisco
2.931
Total
289,566
- 3 £
X-7034
The amount of s e c u r i t i e s held in custody f o r the account of member "banks
"by each Federal reserve "bank may "be h e l p f u l to the Board in t h i s connection and
accordingly such amounts are given "below.
In a few instances the f i g u r e s , which
were taken from the most recent examination reports a v a i l a b l e , include c e r t a i n
s e c u r i t i e s held in safekeeping f o r Government, State and municipal o f f i c i a l s ,
nonmember p a r - r e m i t t i n g banks, e t c .
.Amount of s e c u r i t i e s held in safekeeping f o r member "banks, e t c . . "by each F.R.
Bank (including branches)
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
(11-15-30) $169,685,000 Chicago
(7-18-31) $224,141,000
( 4-11-31) 520,863,000 S t . Louis
(1-24-31)
44,936,000
(12- 6-30) 271,798,000 Minneapolis (2-17-31)
113,305,000
( 3 - 7-31) 164,477,000 Kansas City (6-30-31)
141,488,000
( 3-24-31)
47,258,000 Dallas
(1- 6-31)
29,765,000
(10- 4-30)
44,906,000 San Francisco(6- 6-31)
5.223.000
total
1,777,845,000
Deputy Governor Attebery of the S t . Louis bank s t a t e s that the following
appears upon each acknowledgement issued to member banks covering s e c u r i t i e s
l e f t for safekeeping;
"Theft, burglary and holdup insurance carried by the Federal
Reserve Bank of S t . Louis i s in a limited amount and covers
money and negotiable s e c u r i t i e s owned by the bank in addition to s e c u r i t i e s held f o r safekeeping. In the event of
l o s s , the amount recovered through insurance w i l l f i r s t be
applied against l o s s of Federal Reserve Bank property and
only the excess w i l l be available f o r pro r a t a d i s t r i b u t i o n
against l o s s e s of member banks. If a member bank d e s i r e s i n surance p r o t e c t i o n in addition to that outlined above, i t
must arrange the same d i r e c t with i t s own insurance companies."
In h i s l e t t e r to the Board, Governor Calkins s t a t e d that he thought i t
would be h e l p f u l to the Federal reserve banks i f the Board would inform them
concerning the circumstances under which the loss r e f e r r e d to in Board's
l e t t e r X-6940-a was sustained
FEDERAL RESERVE BOARD
WASHINGTON
address official correspondence t o
the federal reserve board
X-7036
November 27, 1931.
SUBJECT: Date of closing of p o l l s and of mailing of "ballots
in e l e c t i o n s of Class A and Class B d i r e c t o r s .
Dear S i r :
In connection with the elections of Class A and Class
B d i r e c t o r s of Federal reserve "banks, the question has recently
"been raised whether the p o l l s should remain open f o r a period of
f i f t e e n days only, or whether the period should "be extended f o r
a s u f f i c i e n t number of days to allow f o r the transmission of the
"ballots through the mails and the date of closing the p o l l s fixed
accordingly.
Before expressing an opinion upon t h i s question, the
Federal Reserve Board wishes to secure information as to the
p r a c t i c e of each Federal reserve "bank; and you are requested,
t h e r e f o r e , to advise the Board what i s your present p r a c t i c e i n .
t h i s respect and whether t h i s p r a c t i c e has "been .consistently f o l lowed i n the p a s t .
In t h i s connection also please s t a t e whether
the l i s t s of candidates are mailed to a l l voting member "banks at
the same time, in which event they may reach the "banks on d i f f e r ent dates, or whether they are mailed at d i f f e r e n t times according
X-7036
to a schedule which w i l l cause them to "be received "by a l l voting
member 'banks on the same d a t e .
If i t i s your custom to send the
l i s t s of candidates to the voting member tanks "by r e g i s t e r e d
mail, return r e c e i p t s requested, or to use any other method of
obtaining information as to the dates upon which the l i s t s of
candidates are a c t u a l l y received by the banks, a statement as to
your p r a c t i c e in t h i s regard w i l l be appreciated.
After the information requested on t h i s subject has been
received from a l l Federal reserve banks, the Federal Reserve Board
w i l l give consideration to the matter with a view to securing a
uniformity of procedure on these p o i n t s , i f t h i s seems d e s i r a b l e .
The Board w i l l be glad to have any comments or suggestions which
you may care to submit i n t h i s connection.
By order of the Federal Reserve Board*
Very t r u l y yours,
Chester M o r r i l l ,
Secretary.
®) THE CHAIRMEN OF ALL FEDERAL RESERVE BANKS.
FEDERAL RESERVE BOARD
WASHINGTON
address official correspondence t o
the federal reserve board
X-7037
November 28, 1931.
SUBJECT:
Code Word t o cover Telegraphic Transactions i n
Treasury B i l l s .
Dear S i r :
In connection with telegraphic transactions i n
Government s e c u r i t i e s between Federal reserve banks, the
code word "HOXDABBER"- has been designated to cover a new
issue of Treasury B i l l s , dated November 30, 1931, and
maturing March 2, 1932.
This word should be inserted i n the Federal r e serve telegraph code book, following the supplemental code
word "NOXCtiBATOR" on Page 172.
Very t r u l y yours,
J . C. Noell,
Assistant Secretary.
TO GOVERNORS OF ALL F. R. BANKS >
BUDGET AND EXPENDITURES
To
X-7039
1932,
GENERAL
Budget
f o r year
Objects of Expenditure
Personal Services:
#
Expenditures &
commitments f o r
year to date
| Budget f o r
i one month
5,000.00 !$
416.67
I-
Nan-personal Services:
Supplies and Materials
Subsistence Expenses
Transportation Expenses
Communication Service
P r t g . ,Engr.,Bind.,Etc.
Heat & L i r h t
Rent - Building
Rent - Equipment
Repairs - Equipment
Equipment
Special & Miscellaneous
Total non-personal
S6TV1C6 S « • • • • • • •
Complete Total,
Remarks:
300.00
500.00
500.00
10,000.00
40,000.00
900.00
16,125.00
54.00
40.00
200.00
500.00
L
I
|
I
!
J
j
j
{
j
25.00
41.67
41.67
833.33
3,333.33
75.00
1,343.75
4.50
3.33
16.67
41.67
69,119.00 l 5,759.92 j
I
74,119.00 j
i
I
j
6,176.58 j
i
• I.
Balance a v a i l able f o r remainder of year
Estimated e x - j
penditures &
commitments
during remainder of year
BUDGET HID EXPENDITURES
To
X-7039
1932.
B A D MEMBERS
OR
Budget
f o r year
Objects of Expenditure
Balance a v a i l able f o r remainder of year
I Expenditures &
Budret- f o r i commitments f o r
one month I year to date
- T -
Personal Services:
Non-personal Services:
Supplies & Materials
Subsistence Expenses
Transportation Expenses
Communication Service
: P t g . , Engr., B i ndg., Eta.
Repairs - Equipment
Equipment
Special & Miscellaneous
Total non-personal
services........
Complete Total,
Remarks:
§120,020.00
i
1
i
i
i
i
i
i
i
§10,001.67
150 .00
1 ,000 .00
1 ,500 .00
1 ,000 .00
150 .00
50 .00
900 .00
100 .00
12 ,5C
83 .33
125 .00
83 .33
12 .50
4 .17
75 .00
8 .33
4,850.00
404.17
124,870.00
10,405.83
Estimated ex-1
penditures &
commitments
during remain-t
der of year
BUDG1JF MD EXPENDITURES
to
X-7039
1932.
COMBINED STATEMENT
T
i
Objects of Expenditure
Personal Services:
Ron-personal Services:
Supplies & Materials
Subsistence Expenses
Transportation Expenses
Communication Service
Prtg.,Engr.,Bind.,Etc.
Heat and Light
Rents - Building
Rents - Equipment
Repairs - Equipment
Equipment
Special & Miscellaneous
Budget
f o r year
Budget f o r
one month
$658,060.00
$54,858.53
5,850.00
50,900.00
21,250.00
17,450.00
45,150.00
900.00
16,125.00
54.00
735.00
7,450.00
2,395.00
487.50
j
j 4,241.67
I 1,770.83
' 1,454.17
5,595.85
75.00
1,345.75
4.50
61.25
|
620 . 83
199.58
Total non-personal
services
i
166,259.00 I 13,854.92
Complete Total,
l
824,519.00 j 68,695.25
Remarks:
T
Expenditures &
commitments f o r
year to date
Balance a v a i l able f o r remainder of year
Estimated ex- }
penditures & |
commitments |
during remain-!
der of year I
i
i
I
BUD13T MD EXPENDITURES
To.
1932.
X-7059
OrPICL' 0 r G:3.URAL C0U1TSEL
Budget
f o r year
Objects of Expenditure
i
!
1 Expenditures &
Budget for commitments f o r
year to date
one month
0 58,580.00 $ 3,215.00
Personal Services:
-
Non-personal Services:
Supplies & Materials
Subsistence Expenses
Transportation Expenses
Communication Service
Prtg.,Engr.,Bind.,Etc.
Repairs - Equipment
Equipment
Special & Miscellaneous
Total non-personal
services
,
|
|
Balance a v a i l j
able f o r remain- |
der of year
j
i
i
!
1
150.00
150.00
300.00
400.00
50.00
25.00
1,250,00
125.00
12.50
12.50
25.00
35.33
4.17
2.08
104.17
10.42
!
!
!
:
!
1
i
2,450.00
204.17
:
!
i
Complete Total
Remarks:
Estimated expendi tures &
commitments
,
during remainder of year
41,030 .00
3,419.17
,
!
I
1
j
1
i
i
!
i
!
BUDGET A D EXPENDITURES
N
To
X-7039
1932.
O^ICE 0? FISCAL AGENT
T
I
Budget
f o r year
Objects of Expenditure
Personal Services:
Non-personal Services:
Supplies & Materials
Communication Service
Prtg.,Engr.,Bind,,Etc.
Repairs - Equipment
Equipment
Special & Miscellaneous
Total non-personal
services
Complete Total,
Remarks:
I:
11,300.00
Budget f o r
one month
#
941.67
50.00
100.00
50.00
20.00
100.00
20.00
4.17
8.33
4.17
1.67
8.33
1.67
340.00
28.33
11,640.00
950.00
Expenditures &
commitments f o r
year to date
Balance a v a i l able f o r remainder of year
Estimated expenditures &
commitments
during- remainder of year
BUDGET AT EXPENDITURES
1D
To
1952.
X-7039
DIVISION OF BANK OPERATIONS
Objects of Expenditure
Personal Services:
|
|
4
Budget
f o r year
Budget f o r
one month
Expenditures &
commitments for
year to date
Estimated expenditures &
commitments
during remain-)
der of year
Balance a v a i l able f o r remainder of year
"}
$ 73,240.00 j$ 6,103.33
i
Non-personal Services:
Supplies & Materials
Subsistence Expenses
Transportation Expenses
Communication Service
Prtr.,Engr.,Bind.,etc.
Repairs - Equipment
Equipment
Special & Miscellaneous
Total non-personal
services
Complete Total,
Remarks:
1 ,500 .00
1 ,800 .00
750 .00
1 ,700 .00
1 ,100 .oo
150 .00
800 .00
150 .oo
j
{
J
j
|
J
j
j
125 .00
150 .00
62 .50
141 .67
91 .67
12 .50
66 .67
12 .50
7,950.00
662.50
82,190.00
6,765.83 |
BUDGET AID iSPZKDITURIlS
To
1932.
X—7039
DIVISION OF RESEARCH & STATISTICS
Budget
for year
Objects of Expenditure
Personal Services:
#122,400.00
Budget for
one month
i
$10,200.00
+
Eon-personal Services;
Supplies & Materials
Subsistence Expenses
Transportation Expenses
Communication Service
Prtg.,Enfr.,Bind.,etc.
Repairs - Equipment
Equipment
Special & Miscellaneous
Total non-personal
services
Complete Total,
Remarks:
1,100.00
250.00
500.00
2,600.00
750.00
150.00
2,500.00
750.00
91.67
20.85
41.67
216.67
62.50
12.50
208.33
62.50
8,600.00
716.67
131,000.00
10,916.67
Expenditures &
commitments f o r
year to date
Balance a v a i l able for remainder of year
Estimated expenditures &
commitments
during remainder of year
BUDGET AT EXP a m I TUBES
ID
To
1932.
X-7059
SECRETARY'S OFFICE
(Combined.)
T
Personal Services:
Expenditures &
Budget f o r | commitments f o r
one month | year to date
Budget
f o r year
Objects of Expenditure
I
I
$128,500.00 jf10,691.67
I
4Non-personal Services;
Supplies & Materials
Subsistence Expenses
Transportation Expenses
Communication Service
Prtp.,Engr.,Bind.,etc.
Repairs - Equipment
Equipment
Special & Miscellaneous
Total non-personal
services
Complete Total,
Remarks:
1,800.00
200.00
200.00
1,400.00
400.00
200.00
750.00
200.00
I
!
|!
|
!
150.00
16.67
16.67
116.67
33.33
16.67
62.50
16,67
5,150.00
429.17
153,450.00
11,120.83
| Estimated ex-1
penditures &
Balance a v a i l commitments j
during remain-)
able f o r remainder of year
der of year
|
|
i
|
|
{
J
BUDGET A D EXPENDITURES
N
To..
1932.
X-7039
DIVISION OF EXAMINATION
T
Objects of Expenditure
Personal Services:
Non-personal Services;
Supplies & Materials
Subsistence Expenses
Transportation Expenses
Communication Service
Prtg.,Engr.,Bind.,etc.
Repairs - Equipment
Equipment
Special & Miscellaneous
Total non-personal
services.
Complete Total
Remarks;
-t
T
T
Budget
f o r year
j Budget f o r
{ one month
4
| § 98,200.00 j# 8,183.53
500.00
47,000.00
17,500.00
150.00
400.00
50.00
300.00
500.00
41.67
3,916.67
1,458.33
12.50
33.33
4.17
25.00
41.67
+
66,400.00 |
5,533.33
164,600.00 j 13,716.67
T
^Estimated, ex- j
| penditures &
commitments
Expenditures & j Balance a v a i l commitments f o r j able f o r remainduring remain-}
year to date
der of year
J der of year
BUDGET A D EXPENDITURES
N
To
1932.
X-7039
DIVISION OF ISfUE A D REDEMPTION
N
I
T
Objects of Expenditure
Personal Services:
Non-personal Services;
Supplies & Materials
Communication Service
Prtg.,Engr.,Bind.,etc.
Repairs - Equipment
Equipment
Special & Miscellaneous
Total non-personal
services
Complete Total,
Remarks:
Budget
f o r year
Budget f o r
one month
$ 61,020.00 $ 5,085.00
300.00
100.00
250.00
50.00
650.00
50.00
25.00
8.33
20.83
4.17
54.17
4.17
1,400.00
116.67
62,420.00
5,201.67
1 Estimated ex-i
penditures &
commitments
Expenditures & j Balance a v a i l during remaincommitments for | able f o r remainder of year
year to date
i der of year
X-7040
Sttmifoafry of M i l
(H. R. 5060 - 72nd Congress, 1st Session.)
"To provide emergency financing f a c i l i t i e s f o r "banks and
other f i n a n c i a l i n s t i t u t i o n s , and f o r other purposes".
The b i l l (H. R, 5060) would create a corporation, with
c a p i t a l of $500,000,000, a l l subscribed by the United States of
America, and with authority to i s s u e , and to have outstanding
at any one time i n an amount aggregating not more than $1,500,000,000, i t s notes, debentures, bonds, or other such obligations.
The Corporation w i l l be known as the "Reconstruction Finance
Corporation." I t s Board of Directors w i l l consist of the Secretary
of the Treasury, the Governor of the Federal Reserve Board, and the
Farm Loan Commissioner, who s h a l l be members e x - o f f i c i o , and two
other persons appointed by the President, each f o r a term of f i v e
years, by and with the advice and consent of the Senate.
The Corporation w i l l be authorized to make loans, upon such
terms and conditions as i t may determine, to any bank, banker, savings bank, t r u s t company, clearing house or other a s s o c i a t i o n of
banking i n s t i t u t i o n s , building and loan association, insurance
company, or other f i n a n c i a l i n s t i t u t i o n in the United S t a t e s . All
such loans must be f u l l y and adequately secured i n such manner as
the Corporation s h a l l r e q u i r e , and they w i l l be made a t such i n t e r e s t or discount r a t e s as the Corporation may approve.
The Corporation may make loans at any time p r i o r to the expiration of one year from the date of enactment of the b i l l , but i t i s
provided t h a t the President may from time to time postpone such date
of expiration f o r such additional period or periods as he may deem
necessary, not to exceed two years from the date of the enactment
of the b i l l . The loans of the Corporation may be made f o r periods
not exceeding three years, with authority to grant extensions from
time to time up to f i v e years from the dates on which the loans were
o r i g i n a l l y made.
In a d d i t i o n , the b i l l provides t h a t , within the l i m i t a t i o n s r e f e r r e d t o , the Corporation may make loans to or aid i n the temporary
financing of steam r a i l r o a d s engaged i n i n t e r s t a t e commerce, when i n
the opinion of the Board of Directors of the Corporation such r a i l roads a r e unable to obtain funds upon reasonable terms through banking channels or from the general public and the corporation w i l l be
adequately secured.
The maturity of notes, debentures, bonds, or other such obligations of the Corporation cannot exceed f i v e years from t h e i r r e spective dates of i s s u e , and short term obligations, payable at
maturity without i n t e r e s t , may be sold on a discount b a s i s . The
obligations of the Corporation, which w i l l be exempt from a l l Federal,
s t a t e , municipal or local taxation, may be secured by a s s e t s of the
Corporation i n such manner as may be prescribed by i t s Board of
600
6
X-7040
- 8 D i r e c t o r s. Except with respect to r e a l property ormed by i t ,
the Corporation, including i t s f r a n c h i s e , c a p i t a l , r e s e r v e s ,
surplus and. income, w i l l also "be exempt from t a x a t i o n .
If the Corporation should be unable to pay upon demand, when
due, the p r i n c i p a l of, or i n t e r e s t on, i t s o b l i g a t i o n s , the Secretary of the Treasury i s required to pay the amount t h e r e o f , which
i s authorized to be appropriated out of any moneys i n the Treasury
not otherwise appropriated.
I t i s provided that the Federal reserve banks s h a l l have the
sane powers (1) to discount notes, d r a f t s , and b i l l s of exchange
secured by the obligations of the Corporation, (2) to make advances to member banks on t h e i r notes secured by such o b l i g a t i o n s ,
(3) to use a l l paper so acquired, and (4) to purchase and s e l l such
obligations, as they have with respect to bonds and notes of the
United S t a t e s . The r a t e at which any such discount or advance may
be made by any Federal reserve bank s h a l l be one per cent per annum
above i t s discount r a t e on 90-day commercial paper.
Loans obtained by national banks from the Corporation are excepted from the l i m i t a t i o n contained i n Section 5202 of the Revised
Statutes on the l i a b i l i t i e s of national banks.
The Federal reserve banks also are authorized and directed to
act as d e p o s i t a r i e s , custodians, and f i s c a l agents f o r the Corporat i o n , and the Treasury Department, the Comptroller of the Currency,
the Federal Reserve Board, the Federal reserve banks, and the I n t e r s t a t e Commerce Commission may make available to the Corporation i n
confidence r e p o r t s , records, or other information r e l a t i n g to the
f i n a n c i a l i n s t i t u t i o n s or r a i l r o a d s with which i t has, or contemp l a t e s having, transactions under the Act. These agencies also may,
through t h e i r examiners, make examinations of such i n s t i t u t i o n s or
r a i l r o a d s f o r the confidential use of the Corporation. In addition,
the Corporation may a v a i l i t s e l f of the services, f a c i l i t i e s , o f f i c e s ,
and employees of other branches of the Government s e r v i c e , with t h e i r
consent.
All moneys of the Corporation not otherwise employed may be
deposited with the Treasurer of the United S t a t e s , or i n any Federal
reserve bank, or may be used i n the purchase or redemption of the
Corporation's obligations. When designated f o r the purpose by the
Secretary of the Treasury, the Corporation i s required to act as a
depositary of public money, except r e c e i p t s from customs; and i t may
also be employed as a f i n a n c i a l agent of the Government. The o b l i gations of the Corporation w i l l be lawful investments, and may be
accepted as . s e c u r i t y , f o r a l l f i d u c i a r y , t r u s t and public funds the
investment or deposit of which i s under the authority or control of
the United States or any of i t s o f f i c e r s .
The b i l l contains various penalty provisions, p r o h i b i t s any
«. 3 —
X-7040
other organization from using the words "Reconstruction Finance
Corporation", and authorizes the use of the Secret Service i n
connection with possible v i o l a t i o n s of the criminal provisions
of the Act. The b i l l also contains provisions r e l a t i n g to the
appointment and compensation of i t s personnel, the adoption of
"by-laws, and the payment of i t s expenses. The Corporation i s
required annually to make a report of i t s operations to the
Congress as soon as p r a c t i c a b l e a f t e r the f i r s t day of January
i n each y e a r .
Upon the expiration of the period during which i t may make
loans, the Corporation i s required to proceed to l i q u i d a t e i t s
assets and wind up i t s a f f a i r s , and the b i l l prescribes the procedure to be followed i n connection with the retirement of i t s
c a p i t a l stock and the payment of i t s funds into the Treasury.
I f , at the expiration of ten years, the l i q u i d a t i o n of the Corp o r a t i o n ' s a s s e t s has not been completed, the duty of winding
up the Corporation's a f f a i r s w i l l be t r a n s f e r r e d to the Secretary
of the Treasury.
FEDERAL RESERVE BOARD
WASHINGTON
address official correspondence t o
the federal reserve board
X-7041
December 9, 1931.
SUBJECT:
Code words to cover telegraphic transactions
in Treasury C e r t i f i c a t e s of Indebtedness and
Treasury Notes.
Dear S i r :
In connection with telegraphic transactions in Government
s e c u r i t i e s between Federal reserve banks, the following code
words have been designated to cover new issues of Treasury
C e r t i f i c a t e s of Indebtedness and Treasury Notes:
"DOWHIP"
2 3/4$ Treasury c e r t i f i c a t e s of indebtedness,
Series TJ-1932, to be dated December 15, 1931,
due June 15, 1932.
"NOWHIRE" 3$ Treasury c e r t i f i c a t e s of indebtedness,
Series TS2-1932, to be dated December 15,
1931, due September 15, 1932,
"NOWHCJFF" 3 l / 4 $ Treasury notes, Series 1932, to be
dated December 15, 1931, due December 15, 1932.
The code words "HDIHIP" and "EOWHIRE" should he inserted
in the Federal reserve telegraph code book, following the supplemental code word "HOWHIITT" on page 172, While the code word
"HOWHUFF" should follow the code word "BDWHOUSB" on page 172.
Very t r u l y yours,
J . C. Noell,
Assistant Secretary.
TO GOVERNORS OF ALL F. R. BANKS.
P
Y
X-7043
K
JFA M C
C
December 2, 1931.
Mr. Fred P. Ressoner, Receiver,
Peoples National Bank,
Pulaski, IT. Y.
Dear Sir;
You have been telegraphed today as follows:
"Where pursuant to provisions of Uniform Bank
Collection Code or similar State law, Federal Reserve Bank,
or other agent c o l l e c t i n g bank e l e c t s within a reasonable
time to t r e a t as dishonored by nonpayment items which have
been charged against balances in your bank and remittance,
d r a f t f o r which has e i t h e r not been issued, o r , if issued, has
not been paid, you are authorized to surrender the o r i g i n a l
items involved to the forwarding bank as you found them without a f f i x i n g or canceling paid stamps or p e r f o r a t i o n s , provided
forwarding bank agrees to f u r n i s h you without cost p h o t o s t a t i c
copies of such items f o r your records. Where items to be r e turned were charged to depositors' accounts, but not stamped
or p e r f o r a t e d paid by bank, the following legend signed by
you a s Receiver of your bank or as Examiner in Charge, as the
case may be, should be placed thereon by rubber stamp, or
otherwise, before surrendering, quote, I c e r t i f y that the
books and records of t h i s bank evidence that t h i s item was
charged to the drawer r s account p r i o r to suspension. Unquote.
Do not reverse charges made to drawers' accounts. Where
electing banks desire items protested l o c a l l y you are authorized to have t h i s done as t h e i r agent and at t h e i r expense."
This telegram i s hereby confirmed.
Very t r u l y yours,
(Signed)
F. G. Await
F. S. A^ALT,
Deputy Comptroller.
C 0
P
X-7043-a
Y
Ptiti&UL R f i s W i . Bmt
OF RICHMOND
November 21, 1931
Federal Heserve Board,
Washington, D. C.
Attention:
Mr. Walter ffyatt, General Counsel.
Dear Mr. Wyatt:
I should have been much more prompt in replying to your l e t t e r of November 6th upon the subject of legal and p r a c t i c a l problems a r i s i n g under the Bank
Collection Code. My reason f o r delaying was t h a t when your l e t t e r was received we
had already w r i t t e n l e t t e r s to other Federal reserve banks asking them to l e t us
know what course they were following in handling such matters, and I thought i t
best to delay my reply to you u n t i l I could send you copies of t h e answers which we
received, knowing that you would be i n t e r e s t e d in having a complete p i c t u r e of what
the d i f f e r e n t Federal reserve banks were doing in t h i s matter.
We have not as yet received r e p l i e s from a l l banks and the recent developments will probably of necessity make the r e p l i e s which we have received of l i t t l e
interest.
At the same time that we wrote to the other banks I wrote to Mr. Await,
Deputy Comptroller, s t a t i n g in substance that I agreed with h i s o f f i c e in thinking
that the provisions concerning preferences in the Bank Collection Code could not
apply to national banks, although, of course, I would not commit myself to any
irrevocable admission of t h a t proposition. I also agreed with h i s o f f i c e in thinking that possession of the check was of no material consequence in any s u i t between
the p a r t i e s to i t , as possession could c o n s t i t u t e only a prima f a c i e evidence of
r i ^ i t , which could be rebutted by e i t h e r side, and the ultimate decision must
always depend upon the acts which were done and the a p p l i c a b i l i t y of the code to
such a c t s .
Since the Comptroller had o f f e r e d to have p h o t o s t a t i c copies made of a l l
checks at the expense of Federal reserve banks I requested Mr. Await as a t e n t a t i v e
course to allow a l l checks to be returned to us upon the agreement that we would
have the p h o t o s t a t i c copies made in our o f f i c e and r e t u r n the o r i g i n a l s to the
r e c e i v e r s . This suggestion was made, of course, only because many receivers are
operating in towns where p h o t o s t a t i c copies cannot be made at a l l or where the
charges by local photographers would be excessive, and since t h i s bank has machinery
f o r making p h o t o s t a t i c copies in i t s own o f f i c e , i t can make them a t very s l i g h t
expense. I also requested Mr. Await to consider t h i s proposition: That since the
possession of the check was, as a matter of law, not e s s e n t i a l , the receiver would
be as well off with a photostat as with the o r i g i n a l , but the business public were
in the habit of attaching much importance to actual possession of the instrument
and t h a t consequently the sending of a photostat to a commercial bank or a business
man would not be as s a t i s f a c t o r y as returning the o r i g i n a l , and I t h e r e f o r e asked
606
Mr. Walter Wyatt,
Federal Reserve Board.,
Washington, D. C.
X-7043-a
- 2 -
November 21, 1931
him to consider modifying h i s p o s i t i o n to the extent of allowing us to return the
photostats to the r e c e i v e r s f o r t h e i r f i l e s , surrendering the o r i g i n a l s to our
endorsers.
We have today received a telegram from the Comptroller's o f f i c e , which I
understand has "been sent to a l l Federal reserve "banks, s t a t i n g t h a t in f u t u r e the
o r i g i n a l checks will "be returned to the forwarding banks when the r e t u r n i s requested with reasonable diligence and p r o t e s t will be made if requested by the forwarding banks, but the forwarding banks w i l l be required to agree to have p h o t o s t a t i c
copies made at t h e i r own expense and to r e t u r n such p h o t o s t a t i c copies to the
receivers.
This arrangement i s n a t u r a l l y as s a t i s f a c t o r y to us as if the checks were
returned unconditionally, as the expense of making p h o t o s t a t i c copies in our own
plant f o r the use of the receivers i s too t r i v i a l to be of moment.
I t seems to me t h a t t h i s concession made by the Comptroller i s an exceedingly happy solution of the operating problems a r i s i n g out of the Bank Collection
Code. I have suggested to the o f f i c e r s of t h i s bank that in f u t u r e they either
immediately e l e c t to t r e a t as dishonored and demand the return of a l l checks in the
case of a f a i l u r e of a national bank, or, if they f e e l t h a t they should allow endorsers some opportunity of expressing t h e i r wishes, that on the f a i l u r e of any
national bank they n o t i f y endorsers that we will elect to t r e a t a s dishonored and
procure the return of a l l checks unless d e f i n i t e i n s t r u c t i o n s to the contrary are
received by us on a s p e c i f i e d date. Personally, I f e e l quite sure t h a t the adoption
of the l a t t e r course will mean t h a t very few, if any, i n s t r u c t i o n s w i l l be received
to prove claims, as nearly a l l endorsers w i l l e i t h e r do nothing or p r e f e r to have
the checks returned.
Referring p a r t i c u l a r l y to your suggestion as to the conference with
Counsel, i t seems to me when I received your l e t t e r that matters had not reached
a point a t which a conference would be desirable because there were too many
questions involved which could not be s e t t l e d by such a conference. I t now seems
to me that a conference i s unnecessary as claims of t h i s character against s t a t e
banks are of necessity so involved with local conditions that I do not believe a
uniform course of procedure could be successfully adopted. As f a r as national
banks are concerned I believe t h a t a l l operating d i f f i c u l t i e s w i l l be eliminated
by the new r u l i n g of the Comptroller's o f f i c e , and the only important questions
involved are those of pure law; that i s to say, whether or not the code i s valid
and applicable to a national bank. That question cannot be f i n a l l y s e t t l e d except in a s u i t by a holder against the drawer or an endorser, and when the
question i s so r a i s e d the f i n a l word would only be spoken by c e r t a i n august
gentlemen at the other end.of the avenue and any resolution of our conference upon
i t would probably not be very seriously regarded.
Very t r u l y yours,
(SIGNED) M. G. Wallace
Mr H
G
W
M. G. Wallace,
Counsel.
607
f e c i a l
reserve pqard
WASHINGTON
address official correspondence t o
the federal reserve board
X-7045
December 17, 1931.
SUBJECT:
Expense, Main Lines, Leased Wire System,
November, 1931.
Dear S i r :
Enclosed herewith you w i l l f i n d two mimeographed statements, X-7045-a and X-7045-!b, covering i n
d e t a i l operations of the main l i n e s , Leased Wire System,
during the month of November, 1931.
Please c r e d i t the amount payable by your "bank
i n the general account, Treasurer, U. S., on your "books,
and issue C/D Form 1, National Banks, f o r account of
wSalaries and Expenses, Federal Reserve Board, Special
Fund", Leased Wire System, sending duplicate C/D to the
Federal Reserve Board.
Very t r u l y yours,
Fiscal Agent.
Enclosures.
TO GOVERNORS OF ALL F. R. BANKS.
X-7045-a
REPORT SHOWING CLASSIFICATION A D NUMBER OF W R S TRANSMITTED OVER MAIN LINES
N
OD
OF THE FEDERAL RESERVE LEASED WIRE SYSTEM FOR THE M N H OF NOVEMBER, 1931.
OT
Business
reported
by banks
From
"Boston
New York
Philadelphia
Sleveland
Richmond
Atlanta
Chicago
S±_ Louis
Minneapolis
Kansas City
BaHas
San "Francisco
To t a l
Words sent by
New York chargeable to other
F. R. Banks ( l )
24,281
133,723
28,926
64,397
53,760
50,958
85 , 755
64,864
31,798
77,419
65,824
87.483
769,188
2,563
1,846
2,754
1,805
5,999
3,013
1,835
6,285
2,462
13,046
4,035
45,643
F-rB. Board business
Net Federal
reserve
bank
business
26,844
133,723
30,772
67.151
55,565
56,957
88,768
66,699
38,083
79,881
78,870
91,518
814,831
Percent of t o t a l
bank business (*)
3.30
16.4l
3-78
8.24
6.82
6.99
10.89
8.19
4.67
9.80
9.68
11.23
100.00
281,048
Treasury Department "business Incoming and Outgoing
Total words t r a n s m i t t e d over main l i n e s
(*)
These percentages used in c a l c u l a t i n g the pro r a t a share of leased wire expense as shown
on the accompanying statement (X-JOU^-h)•
(l)
Number of words sent by New York to other F. R. Banks f o r t h e i r s o l e b e n e f i t charged to
banks indicated in accordance with a c t i o n taken at Governors' Conference
November 2 - 4 , 1925.
1,095,879
92,088
1,187,967
X-7045--b
REPORT OF EXPENSE MAIN LINES
FEDERAL RESERVE LEASED WIRE SYSTEM, NOVEMBER, 1931,
Name of bank
Boston
Hew York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
JE&- Louis
Minneapolis
Kansas City
Dall-as
San Francisco
Federal Reserve Board
Total
(&)
(#)
(*)
(a)
(b)
Operators'
salaries
$260.00
1,134.15
225.00
306.66
225.00
270.00
3,599.20 (#)
200.00
200.00
278.50
251.00
380.00
—
$7,329.51
Operators «
overtime
$ -
—
5.00
-
1.50
-
-
$6.50
Wire
rental
$
Total
expenses
Pre r a t a
share of
total
expenses
f.
-
$260.00
$704.46
1,134.15
3,503.06
—
»
806.92
225.00
—
306.66
1,759.00
230.00 (&)
455.00
1,455-87
—
270.00
1,492.17
3,604.20
2,324.70
200.00
1,748.33
200.00
996.91
2,092.02
278.50
2,066.4o
252.50
380.00
2,397.28
15,574.93
15,574.93
$15,804.93
$23,140.94
$21,347.12
1.793.82(a)
$21,347.12
—
Credits
$260.00
1,134.15
225.00
306.66
455.00
270.00
3,604.20
200.00
200.00
278.50
252.50
380.00
—
$7,566.01
Payable to
Federal
Reserve
Board
$444.46
2,368.91
581.92
1,452.34
1,000.87
1,222.17
1,279.50 (*)
1,548.33
796.91
1,813.52
1,813.90
2,017.28
—*
$15,060.61
1.279.50 (b)
$13,781.11
Main l i n e r e n t a l , Richmond-Washington.
Includes s a l a r i e s of Washington o p e r a t o r s .
Credit.
Received $1,793*22 from Treasury Department covering business f o r the month of November, 1931Amount reimbursable to Chicago.
o
X-7046
STATE1 H T OT' ilTL^U CT ll'CmVIV.C.
3T
AlO I Till-TIITG
Federrl leserve Motes, Series 1928.
Fovernber 1 to 50, 1931.
j 10
Boston
L e York
Tw
Philadelphia
Cleveland
Atlanta
S t . Louis
Kansas CityDallas
San Francisco
58,000
156,000
60,000
38,000
34,000
10,000
150,000
486,000
841,000
f'20
52,000
84,000
24,000
42,000
18,000
18,000
10,000
10,000
10,000
17,000
291,000
55,000
f 100
81,000
sheets,
C;
9,000
9,000
f -„2.50 per 11,
Total
Sheets
Amount
70,000
240,000
102,000
90,000
62,000
9,000
10,000
27,000
231,000
t 6,475.00
22,200.00
9,435.00
8,325.00
5,735.00
832.50
925.00
2,497.50
21,367.50
841,000
(77,792.50
(77,792.50
FEDERAL RESERVE BOARD
WASHINGTON
address official correspondence t o
the federal reserve board
X-7047
December 21, 1931.
SUBJECT:
Holidays during January, 1932.
Dear S i r ;
On New Year's Day there w i l l "be n e i t h e r Gold Fund nor Fede r a l reserve note clearing, and the books of the Board w i l l be
closed.
In a d d i t i o n , the following Federal Reserve Banks and
Branches w i l l observe holidays during the month of January:
Friday
January 8
Hew Orleans
Anniversary of the B a t t l e
of New Orleans
Tuesday
January 19
Richmond
Charlotte
Atlanta
Birmingham
Nashville
Jacksonville
Louisville
Memphis
Dallas
El Paso
Houston
San .Antonio
Birthday of General
Robert E. Lee
Thursday
January 28
Havana Agency
Birthday of Jose Marti
On the dates indicated, the Banks a f f e c t e d w i l l not p a r t i c i p a t e in e i t h e r the Gold Fund qr the Federal reserve note c l e a r i n g .
Please include c r e d i t s f o r the o f f i c e s a f f e c t e d on each of the
holidays with your c r e d i t s in -|he Gold Fund clearing f o r the
following business day, and make no shipment of Federal Be serve
——
2
notes, f i t or u n f i t , f o r account of the Federal He serve Banks
of Richmond, Atlanta and Dallas, on January IS bhu
please n o t i f y "branches.
Very t r u l y yours,
J . C. IToell,
Assistant Secretary.
TO GOVERNORS OF ALL F.R.BANKS
FEDERAL RESERVE BOARD
WASHINGTON
address official correspondence t o
the federal reserve board
X-7051
December 30, 1931.
SUBJECT:
New Issue Treasury B i l l s .
Dear Sir;
In connection with telegraphic transactions in
Government s e c u r i t i e s between Federal reserve banks, the
code word "HOXDAIS" has been designated to cover a new
issue of Treasury B i l l s , dated December 30, 1931, and
maturing March 30, 1932,
This word should be inserted in the Federal r e serve telegraph code book, following the supplemental code
word "HOXDABBER" on Page 172.
Very t r u l y yours,
J . C. Hoell,
Assistant Secretary.
TO QOVMffiS OF ALL F. R. BANKS.-
X-7052
/CP-fl
FEDERAL RESERVE BOARD
COMMITTEE APPOIETiMTS EFFECTIVE JANUARY 2, 1932.
(The Governor i s e x - o f f i c i o a member of each Committee)
EXECUTIVE; ( F i r s t Quarter)
Mr. Meyer, Chairman
Mr. Hamlin
Mr. Miller
LAW:
Mr. Hamlin, Chairman
Mr. Miller
SXAMIITATI PITS:
Mr. Magee, Chairman
Mr. James
RESEARCH A D STATISTICS:
M
Mr. M i l l e r , Chairman
Mr. Hamlin
SALARIES AldD EXPENDITURES OF
FEDERAL RESERVE BAMS:
Mr. James, Chairman
Mr. Magee
DISTRICT COMMITTEES:
Boston:
Mr. Hamlin, Chairman
Mr. Miller
Hew York:
Mr. Hamlin, Chairman
Mr. James
Philadelphia:
Mr. Miller, Chairman
Mr. Hamlin
Cleveland:
Mr. Miller, Chairman
Mr. Hamlin
Richmond:
Mr. Hamlin, Chairman
Mr. Magee
Atlanta:
Mr. James, Chairman
Mr. Magee
Chicago:
Mr. Magee, Chairman
Mr. Miller
S t . Louis:
Mr. James, Chairman
Mr. Hamlin
Minneapolis:
Mr. Magee, Chairman
Mr. Miller
Kansas City:
Mr. Magee, Chairman
Mr. James
Dallas:
Mr. James, Chairman
Mr. Magee
San Francisco:
Mr. Miller, Chairman
Mr, James
X-705^01'
FEDERAL jfflSEBVE BOARD
INDIVIDUAL APPOINTMENTS TO DISTRICT COMMITTEES
EFFECT I'VE JANUARY 2, 1932
(The Governor i s e x - o f f i c i o a member of each Committee)
ME. HAMLIN:
Chairman:
Member:
Boston
New York
Richmond
Cleveland
St. Louis
Philadelphia
MR. MILLER:
Philadelphia
Cleveland
San Francisco
Boston
Chicago
Minneapolis
MR. JAMES:
Atlanta
St. Louis
Dallas
New York
Kansas City
San Francisco
MR. MAG-EE:
Chicago
Minneapolis
Kansas City
Ri chmond
Atlanta
Dallas
FEDERAL RESERVE BOARD
X-7054
WASHINGTON
address official correspondence t o
the federal reserve board
SUBJECT:
December 31, 1951,
ASSESSMENT FOR GENERAL EXPENSES OF THE FEDERAL
RESERVE BOARD JANUARY 1 TO JUNE 30, 1952.
Dear S i r :
Confirming t e l e g r a p h i c a d v i c e , t h e r e i s e n c l o s e d h e r e w i t h
copy of a r e s o l u t i o n adopted by t h e F e d e r a l Reserve Board l e v y i n g
an assessment upon t h e s e v e r a l F e d e r a l r e s e r v e "banks of an amount
equal to e i g h t hundred twenty-two t e n t h o u s a n d t h s of one per c e n t
(,000822) of t h e t o t a l p a i d - i n c a p i t a l stock and s u r p l u s of such
banks a t c l o s e of "business December 31, 1951, t o d e f r a y t h e e s t i mated g e n e r a l expenses of t h e Board from January 1 t o June 50* 1952*
and s p e c i f y i n g how such assessment s h a l l be p a i d .
Very t r u l y y o u r s ,
W. M. IMLAY
F i s c a l Agent.
Enclosure;
61?
X-7054-a
RESOLUTION Lirnrirr ArrEsriTEitT.
WHEREAS, u n d e r S e c t i o n 10 of t h e a c t approved December 25, 1915,
and known a s t h e F e d e r a l Reserve A c t , the F e d e r a l Reserve Board i s empowered t o l e v y s e m i - a n n u a l l y upon t h e F e d e r a l r e s e r v e "banks, i n p r o p o r t i o n t o t h e i r c a p i t a l s t o c k and s u r p l u s , an a s s e s s m e n t s u f f i c i e n t to pay
i t s e s t i m a t e d e x p e n s e s , including t h e s a l a r i e s of i t s members, a s s i s t a n t s ,
a t t o r n e y s , e x p e r t s and employees, f o r t h e h a l f year succeeding t h e l e v y i n g
of such a s s e s s m e n t , t o g e t h e r v / i t h any d e f i c i t c a r r i e d f o r w a r d from t h e
p r e c e d i n g h a l f y e a r ; and
WHEREAS, i t a p p e a r s from e s t i m a t e s submitted t o and c o n s i d e r e d by
t h e f e d e r a l Reserve Board t h a t i t i s n e c e s s a r y t h * t a fund equal t o e i g h t
hundred twenty-two t e n t h o u s a n d t h s of one p e r c e n t (.000822) of t h e t o t a l
p a i d - i n c a p i t a l stock a n i s u r p l u s of the f e d e r a l r e s e r v e banks be c r e a t e d
f o r t h e purpose h e r e i n b e f o r e d e s c r i b e d , e x c l u s i v e of t h e c o s t of e n g r a v i n g
and p r i n t i n g of F e d e r a l r e s e r v e n o t e s ;
NOW, THEREFORE, BE IT RESOLVED BY THE FEDERAL RESERVE BOARD, T h a t :
(1) There i s h e r e b y l e v i e d upon t h e s e v e r a l F e d e r a l r e s e r v e banks
an a s s e s s m e n t i n a n amount equal t o e i g h t hundred twenty-two t e n t h o u s a n d t h s
of one p e r c e n t ( ,000822) of t h e t o t a l p a i d - i n c a p i t a l and s u r p l u s of each
such bank a t t h e c l o s e of b u s i n e s s on December 51, 1931;
(2) Such a s s e s s m e n t s h a l l be p a i d by each f e d e r a l r e s e r v e bank i n
two equal i n s t a l l m e n t s on J a n u a r y 2, 1932, and March 1 , 1952, r e s p e c t i v e l y ;
by c r e d i t i n g t h e amount t h e r e o f on t h e books of t h e F e d e r a l r e s e r v e bank i n
t h e General Account of t h e T r e a s u r e r o f t h e U n i t e d S t a t e s , f o r c r e d i t t o t h e
f e d e r a l Reserve Board i n an account d e s i g n a t e d an I known a s ' S a l a r i e s and Exp e n s e s , f e d e r a l Reserve Board, S p e c i a l "^und;"
(5) For each such i n s t a l l m e n t of such a s s e s s m e n t , each F e d e r a l r e serve bank s h a l l i s s u e and send to t h e T r e a s u r e r or" t h e U n i t e d S t a t e s a
c e r t i f i c a t e of d e p o s i t e v i d e n c i n g s a i d d e p o s i t anc. t h e f a c t t h a t i t i s i n
payment of the a s s e s s m e n t l e v i e d by t h e F e d e r a l Reserve Board f o r i t s g e n e r a l
expenses and i s t o be c r e d i t e d t o t h e F e d e r a l Reserve Board i n an a c c o u n t
d e s i g n a t e d and known a s " S a l a r i e s and Expenses, F e d e r a l Reserve Board, S p e c i a l
Fund;" and
(4) A d u p l i c a t e copy of each such c e r t i f i c a t e of d e p o s i t , t o g e t h e r
w i t h a s t a t e m e n t showing t h e amount of the c a p i t a l and s u r p l u s of t h e F e d e r a l
r e s e r v e bank a t t h e c l o s e of bus: ness on December 31, 1931, s h a l l be s e n t to
t h e F e d e r a l Reserve Board on t h e d a t e of the payment of each i n s t a l l m e n t ,
FEDERAL RESERVE BOARD
WASHINGTON
address official correspondence t o
the federal reserve board
July 13, 1931.
B-U15.
SUBJECT:
Gold holdings of Federal Reserve Banks.
Bear S i r :
In following credit developments in the various
Federal reserve d i s t r i c t s , we f i n d i t desirable to have
promptly each week more d e t a i l e d information regarding
the composition of gold holdings of the Federal reserve
banks.
Accordingly, i t w i l l be appreciated i f , beginning
with July 22, you will discontinue code BIRR in your
weekly form 3^- telegram and wire instead the amount of
the bank's holdings of gold c e r t i f i c a t e s against code
BILL, of United States gold coin against code BOON and
of gold b u l l i o n and foreign gold coin against code BUFF.
Very t r u l y yours,
E. L. Smead, Chief,
Division of Bank Operations.
TO ALL FEDERAL RESERVE AGENTS*
619
FEDERAL RESERVE BOARD
WASHINGTON
address official correspondence t o
the federal reserve board
July 31, 1931
B-436
SUBJ3CT: Par l i s t
Dear Sirs
In p o s t i n g changes from the May 1930 supplement to the par l i s t , a clerk
in the t r a n s i t department of a Federal reserve bank i n s e r t e d the word "Closed"
a f t e r the name of a bank i n another d i s t r i c t which was shown in the monthly
supplement under the caption "Withdrawals" although, no indication of the
reason f o r withdrawal from the par l i s t was given in the supplement. The
Federal reserve bank in question subsequently received checks drawn on t h i s
bank, which checks, in accordance with a p r a c t i c e adopted some years ago, i t
returned to the banks from which they were received with the notation "Bank
reported c l o s e d . " The bank was, as a matter of f a c t , in actual operation at
the time but has since suspended.
I t i s now claimed t h a t the return of the checks with the notation "Bank
reported closed" created a f e e l i n g of d i s t r u s t on the p a r t of c e r t a i n depositors and that the bank in consequence s u f f e r e d a very s u b s t a n t i a l withdrawal
of deposits f o r c i n g i t to go into l i q u i d a t i o n to avoid a ruinous s a c r i f i c e of
i t s assets, and suit has been brought against the Federal reserve bank f o r
punitive damages. The Federal reserve bank in question has since discontinued
the above method of handling such checks and i s now forwarding them through
the regular channels to the place of payment.
While t h e May 1930 supplement gave no indication of the reason why the
bank withdrew from the par l i s t , i t has occurred to the Board t h a t an error of
the same character as the above might be carried into a supplement in the
process of p r i n t i n g or otherwise. I t i s , of course, d e s i r a b l e to make the par
l i s t and the monthly supplements as u s e f u l as possible to the Federal reserve
banks and to member banks, but there i s some doubt as to whether the p u b l i cation of the reasons f o r removals from the par l i s t i s of s u f f i c i e n t value
to o f f s e t the r i s k assumed in the event of possible e r r o r . Accordingly, the
Board would appreciate your advice on the following questions:
1. Would i t not be advisable to omit from the monthly supplements a l l
statements as to the reason f o r withdrawals from par l i s t ?
2. Would not the monthly supplements be f u l l y as serviceable i f , instead
of l i s t i n g additions and withdrawals of individual banks, those c i t i e s and
towns were l i s t e d , the s t a t u s of which with respect to the par l i s t has been
a l t e r e d , such c i t i e s and towns to be shown in the supplement in exactly the
same form as they would be shown in the semi-annual par l i s t ?
4
«
- 2 -
3. In what form i s the information that appears in the par l i s t made
available to t r a n s i t c l e r k s , i . e . , do they use the par l i s t i t s e l f c o r r e c t ed up to date or do they have special l i s t s prepared for their use? If
special l i s t s are prepared the Board would l i k e to know what information
they contain, if any, in addition to the ire re f a c t that the banks are or
are not on the par l i s t .
4. What does your bank do with checks on member and nonmember banks
(a) in your d i s t r i c t , and (b) in other d i s t r i c t s , that have been reported
closed? If returned to the banks f r o m which received what reason do you
give f o r returning them?
5. If a f t e r a bank in your d i s t r i c t has withdrawn from the par l i s t
you receive (becks thereon before the supplement showing the withdrawal
i s published, what d i s p o s i t i o n do you make of such checks?
6. How does your bank v e r i f y advices of changes in the s t a t u s of banks
in your d i s t r i c t b e f o r e reporting them t o other Federal reserve banks and
to the Federal Reserve Board f o r inclusion in the par l i s t ?
7. Is the l i s t of s t a t e bank members, which is now printed at the end
of the par l i s t , together with the changes in s t a t e bank membership publ i s h e d i n the monthly supplements, of s u f f i c i e n t value in t h i s connection
to warrant i t s continued publication in the par l i s t ?
The Board w i l l appreciate receiving any suggestions you may care to
malrfi regarding the revision of the form of the par l i s t or of the supplements t h e r e t o .
Very truly yours,
E. M. McClelland,
Assistant Secretary.
ALL GOVERNORS
620
FEDERAL RESERVE BOARD
WASHINGTON
address official correspondence t o
the federal reserve board
August 1, 1931
B-U3S
SUBJECT: Preliminary c l a s s i f i c a t i o n of loans
and. investments of member b anks as
of June 30, 1931.
Dear S i r :
There i s enclosed herewith for your information a
copy of a memorandum and statement prepared for the
Board with respect to changes in the loan and i n v e s t ment account of member "banks during the past quarter
and the l a s t 2 years, as disclosed by the June 30 c a l l
r e p o r t s . The June 30 f i g u r e s as given i n the s t a t e ment are "based on the preliminary data furnished by the
Federal reserve agents in response to the Board's
l e t t e r B-382 of June 13.
The f i j u r e s shown in the enclosed statement will
"be published in the forthcoming August issue of the
Federal Reserve B u l l e t i n , "but in the meantime they are
given to you f o r your c o n f i d e n t i a l use.
Very truly yours,
E. L. Smead, Chief,
Division of Bank Operations.
Enclosure
TO ALL G-OVERl'IORS MD AGENTS*
FEDERAL RESERVE BOARD
WASHINGTON
address official correspondence t o
the federal reserve board
September 2, 193%.
B-456.
SUBJECT:
Functional Exoenses,
F i r s t Half, 1931.
Dear S i r :
There arc enclosed herewith
copies of the consolidated. Functional Expense
Exhibit f o r the h a l f year ending Juno 30, 1931.
A copy of the exhibit i s also being mailed
to the Governor of the bank.
Very tr uly yours,
E. L, Smead, Chief,
Division of Bank Operations.
Enclosure.
LETTER TO CHAIRMAN OF EACH FEDERAL RESERVE BAM*
FEDERAL RESERVE BOARD
WASHINGTON
August 14, 1931.
B-457.
address official correspondence t o
the federal reserve board
SUBJDCT:
Condition of member "banks
as of June 30, 1931•
Dear S i r :
For your information there ia enclosed herewith
a statement showing the resources and l i a b i l i t i e s of a l l
member banks i n each Federal reserve d i s t r i c t as of June
30i 1931« also a statement giving a c l a s s i f i c a t i o n of
loans, investments, deposits and borrowings of member
banks i n each d i s t r i c t on the same d a t e .
The Board's Member Bank Call Report (No. 5 2 )
giving d e t a i l e d figures by s t a t e s , c i t i e s and classes
of banks, which w i l l include the data shown in the enclosed statements, w i l l be ready for d i s t r i b u t i o n
early i n September.
Very t r u l y yours,
•?. 1 . Smead, Chief,
Division of Bank Operations.
Enclosure.
TO ALL GOTERNORS AND FEDERAL RESTIVE AGENTS*
i
633
FEDERAL RESERVE BOARD
WASHINGTON
address official correspondence t o
the federal reserve board
August 17, 1931.
B-458,
SUBJECT: Earnings and Expense Reports and
P r o f i t and Loss Statements.
Dear S i r :
In order to bring together in convenient form a l l
of the e x i s t i n g i n s t r u c t i o n s governing the preparation of
earnings and expense reports and p r o f i t and loss s t a t e ments furnished the Federal Reserve Board by the Federal
reserve banks and to clear up some doubtful points with
regard t h e r e t o , we have prepared the attached "Instructions Governing the Preparation of Earnings and Expense
Reports and P r o f i t and Loss Statements."
The i n s t r u c t i o n s are in t e n t a t i v e form and before submitting then to the Board, we s h a l l appreciate
any suggestions f o r changes therein which you or any
members of your s t a f f nay wish to make.
Very t r u l y yours,
E. L. Sraead, Chief,
Division of Bank Operations
TO ALL GOVERNORS*
•62! 3
FEDERAL RESERVE BOARD
WASHINGTON
address official correspondence t o
the federal reserve board
August 24, 1931.
3-Ub7.
SUBJECT: Reports of Condition of S t a t e
ranks and Trust Companies.
Dear S i r :
I t w i l l "be greatly appreciated if in accordance with your usual p r a c t i c e you will kindly f u r nish the Federal Reserve Board, a.s aoon as a v a i l a b l e ,
with a copy of the abstract of reports of condition
of s t a t e hanks and t r u s t companies in your s t a t e on
June 30, 1931. If no c a l l was issued as of June 30,
will you kindly advise the date of c a l l nearest
thereto and f u r n i s h the Board with a cooy of your
a b s t r a c t as of that date, if you have not already
done so.
In submitting the above-mentioned data i t
i s requested that the number of "oanks (exclusive of
branch banks) be s t a t e d , and that separate figures
be furnished for cratual savings banks providing there
are any such banks operating in your s t a t e .
A franked and addressed envelope, r e q u i r i n g
no postage, is enclosed f o r use in transmitting the
data requested.
Very t r u l y yours,
J . R. Van Fossen, Assistant Chief,
Division of Bank Operations.
Enclosure
TO STATE BAHIHG- DEPARTMENTS*
federal reserve board
WASHINGTON
address official correspondence t o
the federal reserve board
September 4, 1931*
B^-482*
SUBJECT:
Functional Expenses,
F i r s t Half, 1931.
Dear S i r :
In the Functional Expense exhibit f o r the
f i r s t half of 1931 forwarded to you with our l e t t e r
B-456 of September 2, the shipping charges incurred
by the Pittsburgh, and Birmingham branches on s h i p ments of currency and coin to and from member and
nonmember banks were erroneously shown under Issue
and Redemption of Federal Reserve Currency.
Accord-
ingly we have revised page 9 and are enclosing herewith
copies which may be s u b s t i t u t e d f o r the
corresponding page in the exhibits furnished you.
Very truly yours,
E. L. Sroead, Chief,
Division of Bank Operations.
Enclosures
TO CHAIRMUS OF AIL FEDERAL RESERVE BAMS*
federal reserve board
WASHINGTON
address official correspondence t o
the federal reserve board
September 10, 1931.
3-1490.
SUBJECT} Member Bank Call Report
f o r June 30, 1931*
Dear S i r :
W are forwarding to you under separate
e
cover
copies of the Board's Member Bank
Call Report Ho. 52, showing the condition of a l l
member banks on June 30, 1931.
Please forward
a copy to each member bank in your d i s t r i c t t h a t
has expressed a d e s i r e to receive copies of e n l l
r e p o r t s as issued.
Very tr uly yours,
E. L. Smead, Chief,
Division of Bank Operations.
TO ALL FEDERAL B3SEHVE AGOTTS*
FEDERAL RESERVE BOARD
WASHINGTON
address official correspondence t o
the federal reserve board
September l 5 , 1931•
B-U95.
SUBJECT:
Cell Condition Reports of
Member Banks
Dear S i r :
There are being forwarded to you today under
separate cover
copies of Porn 105. Kindly hold
the blank forms a t your "bank u n t i l r e c e i p t of t e l e graphic notice from the Board, whereupon three copies
should be mailed to each s t a t e bank and t r u s t company
member with the request that the forms be held ponding
r e c e i p t of a c a l l f o r condition r e p o r t s .
I t w i l l bo appreciated if you w i l l kindly
arrange to have the usual preliminary c l a s s i f i c a t i o n
of loans and investments of reserve c i t y and of country
banks in your d i s t r i c t wired t o the Board within three
weeks, if p r a c t i c a b l e , from the date designated for
the next c a l l r e p o r t . I t i s suggested t h a t before the
f i g u r e s are telegraphed they be compared with corresponding data f o r Juno 30 in order to make sure that
they are on the same b a s i s .
Very t r u l y yours,
E. M. McClelland,
Assistant Secretary.
TO ALL ZSIEBAL RESERVE AG5ITTS*
FEDERAL RESERVE BOARD
WASHINGTON
address official correspondence t o
the federal reserve board
October 5, 1931»
B-515.
SUBJECT:
Forms f o r use during 1932.
Dear S i r :
I t w i l l "be appreciated if you w i l l kindly advise t h e Board
a t your e a r l y convenience the number of copies of the forms l i s t e d
"below t h a t w i l l "be required by your bank (including branches, if
any) during t h e calendar year 1932.
Form
Title
34
Daily balance s h e e t . P l e a s e s t a t e t h e number
r e q u i r e d f o r t h e head o f f i c e and each branch
s e p a r a t e l y and a l s o give any s p e c i a l punching
t h a t may be d e s i r e d .
F. R. A- 5
E
Daily statement of Federal reserve agent
Semi-annual f u n c t i o n a l expense report
38
C l a s s i f i c a t i o n of discounted and purchased
b i l l s h e l d at the end of the month
95
Monthly report of earnings
96
Monthly report of current expenses
A
C l a s s i f i c a t i o n of Personnel
Please show s e p a r a t e l y the number of copies of each form,
except form 34, required i f i t i s revised and the number i f not
revised.
LSTTISt TO
Very t r u l y yours,
J . ~i. Van Fossen, A s s i s t a n t Chief,
Division of Bank Operations.
ALL FEDERAL UNSERVE AG-E1ITS*
FEDERAL RESERVE BOARD
WASHINGTON
address official correspondence t o
the federal reserve board
November 4, 1931.
B-5U1.
SUBJECT: Preliminary c l a s s i f i c a t i o n of loans
and investments of member "banks as
of September 29, 1931.
Dear Sir:
There i s enclosed, herewith for your information
a copy of a memorandum and statement prepared for the
Board with respect to changes in the loan and investment
account of member banks during the past quarter and the
l a s t E years, as disclosed by the September 29 c a l l r e p o r t s . The September 29 f igures are based on the p r e liminary data furnished by the Federal reserve agents
in response to the Board's l e t t e r B-^j? of September l 6 .
The f i g u r e s shown in the enclosed statement
w i l l be published in the forthcoming November issue of
the Federal Reserve B u l l e t i n , but in the meantime they
are given to you for your confidential use.
Very t r u l y yours,
E. L. Smead, Chief,
Division of Bank Operations.
Enclosure.
TO ALL GOVERNORS A D AG31TTS*
M
6 3 1
FEDERAL RESERVE BOARD
WASHINGTON
address official correspondence t o
the federal reserve board
November 20, 1931.
B-567.
SUBJECT:
Condition of member "banks
as of September 29, 1931•
Dear S i r :
For your information there i s enclosed h e r e with a statement showing the resources and l i a b i l i t i e s
of a l l member "banks in each Federal reserve d i s t r i c t
as of September 29, 1931, also a statement giving a
c l a s s i f i c a t i o n of loans, investments, deposits and
"borrowings of member "banks in each d i s t r i c t on the
same date.
The Board's Member Bank Call Report (No. 53)
giving d e t a i l e d f i g u r e s "by s t a t e s , c i t i e s and c l a s s e s
of "banks, which w i l l include the data shown in the
enclosed statements, w i l l "be ready f o r d i s t r i b u t i o n
about the middle of December.
Very t r u l y yours,
E. L. Smead., Chief,
Division of Bank Operations.
Enclosure.
TO
ALL GOVERNORS AND FEDERAL RESERVE AGENTS*
FEDERAL RESERVE BOARD
WASHINGTON
address official correspondence t o
the federal reserve board
November 24, 1931•
B-572.
SUBJECT:
1932 Budget f o r S t a t i s t i c a l
and Analytical Work.
Dear S i r :
I t will "be appreciated i f , in accordance with
the usual custom, you will kindly submit to the Board
f o r approval a budget f o r the S t a t i s t i c a l and Analytical
Function of your tank (including tranches, if any), f o r
the year 1932.
The "budget should be prepared in accor-
dance with the attached form and submitted to the
Federal Reserve Board as soon as practicable a f t e r
January 1, 1932.
Very tr uly yours,
Chester Morrill,
Secretary.
Enclosure
TO ALL FEDERAL RESERVE AGENTS*
B-572a
FEEiSRAL RESERVE B N OF
AK
(Including branches)
Proposed, "budget f o r the S t a t i s t i c a l and Analytical function (as defined
in the Manual of I n s t r u c t i o n s covering functional expense reports
form E)
(All f i g u r e s to be shown to the nearest d o l l a r , cents omitted)
BUDGET
for
1931
EXPENSES
during
1931
SUBSET
for
1932
ADMINISTRATION:
Salaries - o f f i c e r s
Salaries - employees
Traveling expenses
P r i n t i n g & stationery & other supplies
Telephone and telegraph
All other*
TOTAL
STATISTICAL:
Salaries - employees
Traveling expenses
Printing & stationery & other supplies
Telephone and telegraph
Postage
All other*
TOTAL
M N H Y LETTER:
OTL
P r i n t i n g and stationery
Postage
TOTAL
LIBRARY:
Salaries - employees
Traveling expenses
Printing & stationery & other supplies
Telephone and telegraph
News service - subscriptions to
periodicals, etc.
Books
All other*
TOTAL
G A D TOTAL
RN
MM R N A
E OAD:
Number of copies of monthly l e t t e r p r i n t e d , December 1931
Receipts from monthly l e t t e r s sold:
Estimated,
• C l a s s i f y , if in excess of $100.
Year 1931
Year 1932
$
$
Do not deduct from
expenses
«
1
634
FEDERAL RESERVE BOARD
WASHINGTON
address official correspondence t o
the federal reserve board
November 24, 1931.
B-573.
SUBJECT:
Salaries of employees of
Federal reserve "banks.
/
Dear S i r :
Will you kindly f u r n i s h the Board as early in
January as p r a c t i c a b l e with a statement showing the name
of each employee of your "bank and i t s branches ( i f any)
on January 1, 1932, and the salary paid to each as of
January 1, 1931 and January 1, 1932.
The l i s t should he
prepared in accordance with the sample form attached
hereto in order to f a c i l i t a t e checking with the approved
personnel c l a s s i f i c a t i o n plan f o r your "bank on f i l e with
the Federal Reserve Board.
As in the past the schedules should cover a l l
employees on the "bank's payroll including those whose
s a l a r i e s are reimbursed to the "bank in whole or in port
from notary f e e s , c a f e t e r i a r e c e i p t s , e t c .
Very t r u l y yours,
Chester Morrill,
Secretary.
Enclosure
TO CHAIRMAN
OF EACH FEDERAL RESERVE B N *
AK
I
AND ITS
EMPLOYEES OP THE FEDERAL RESERVE BAH OF
635
BRANCHES (IF ANY) O JANUARY 1, 1932
H
Name of employee
Classification
symbol
T i t l e of job
Salary
range
Salary < Jan. 1
nn
1931*
1932
NOTE: Employees should "bo l i s t e d by functions or departments and the -positions
or jobs arranged in the same order as they appear in the personnel c l a s s i f i c a t i o n -plan. Form A. on f i l e with the Federal Reserve Board. The t o t a l
number of employees including employees whose s a l a r i e s are reimbursed to
the bank in whole or in part and the t o t a l s a l a r i e s paid should be shown
f o r each function or department. Extra help or temporary employees should
be l i s t e d with the regular employees of the bank and designated by the
l e t t e r "T" a f t e r the c l a s s i f i c a t i o n symbol. In case of employees on a
per diem or hourly b a s i s the estimated t o t a l annual compensation should
also be shown.
*If h i r e d during 1931. please show the i n i t i a l s a l a r y .
B-573a
FEDERAL RESERVE BOARD
WASHINGTON
address official correspondence t o
the federal reserve board
November 24, 1931•
B-574.
SUBJECTr
Salaries of o f f i c e r s of
Federal reserve banks.
Dear S i r :
In accordance with the usual p r a c t i c e a statement showing
the 1932 salary provided "by your Board of Directors at i t s f i r s t
meeting in January f o r each o f f i c e r of your tank and branches, if
any, subject to the approval of the Federal Reserve Board, should
be forwarded to the Board as early in January as p r a c t i c a b l e .
Please l i s t the o f f i c e r s and t h e i r s a l a r i e s in the manner i n d i cated in the attached form.
In case the bank's counsel i s not
an o f f i c e r of the bank h i s annual r e t a i n e r f e e and any additional
compensation for c l e r k h i r e should be shown separately.
Very truly yours,
Chester Morrill,
Secretary,
Enclosure.
TO CHAIRMAN
OF EACH FEDERAL RESERVE BANK*
* .
637
OFFICERS1 SALARIES FOR 1932 AT THE FEDERAL RESERVE BAM OF
A D ITS BRANCHES, IF ANY, AS PROVIDED BY THE BOARD OF DIRECTORS
M
SUBJECT TO APPROVAL BY THE FEDERAL RESERVE BOARD
Name
Title
Departments or
functions supervised ( Form A
classification)
Total,
Annua] Salary
1932, for
Dec. 31, approval of
1931 F.R. Board
officers
B-574a
FEDERAL RESERVE BOARD
WASHINGTON
address official correspondence t o
the federal reserve board
November 24, 1931*
B-575SUBJECT: 1932 Budget f o r Federal reserve bank
Dear S i r :
In accordance with the usual practice a statement of the
budget approved f o r the head o f f i c e and each of i t s "branches, if
any, f o r the calendar year 1932 should be forwarded to the
Federal Reserve Board as soon a f t e r January 1 as p r a c t i c a b l e .
The budget statement as submitted to the Board should
be prepared in accordance with the sample form attached hereto
and should show t o t a l s f o r each separate u n i t (department,
f u n c t i o n , d i v i s i o n , section or expense u n i t ) f o r which separate
f i g u r e s are shown in the budget approved by the bank's budget
committee.
Very t r u l y yours,
Chester Morrill,
Secretary.
Enclosure
TO CHAIRMAN OF EACH FEDERAL RESERVE BAM*
639
FEDERAL RESERVE BOARD
WASHINGTON
address official correspondence t o
the federal reserve board
SUBJECT:
i
November 24, 1931*
B-576.
Closing of Books on December 31, 1931«
Dear S i r :
I t will be appreciated if the resolution of your Board of
Directors r e l a t i n g to the payment of the semi-annual dividend and requests
f o r authority to make the usual end of year charges f o r reserves, e t c . ,
are mailed in time to reach the Board not l a t e r than December 10, 1931•
The dividend r e s o l u t i o n should he accompanied, with the following i n f o r mation:
1. Estimated gross earnings, current expenses, additions
to and proposed deductions from current net earnings,
and net earnings available f o r surplus and f r a n c h i s e
tax f o r the calendar year 1931.
2. Estimate of the net loss which the Federal reserve "bank
i s l i k e l y to sustain on the indebtedness as of November
30 of (a) suspended banks, and (b) other banks.
The general procedure followed in the past with reference to
c h a r g e - o f f s , depreciation and other reserves, t r a n s f e r s to surplus account
and payment of f r a n c h i s e tax will be followed at the end of t h i s year.
TO CHAIRMAN OF
Very t r u l y yours,
Chester Morrill,
Secretary.
EACH FEDERAL RESERVE BANK*
FEDERAL RESERVE BOARD
WASHINGTON
address official correspondence t o
the federal reserve board
December 11, 1931B-597.
SUBJECT:
Forms for use during 1932.
Dear S i r :
There are "being forwarded to you today under
separate cover a supply of the following forms f o r use
during 1932:
Form
Form
Form
Form
38,
95.
96,
A,
copies
copies
copies
copies
A supply of Form 3% will be mailed within a
week or ten days.
Very t r u l y yours,
E. L. Smead, Chief,
Division of Bank Operations.
TO GOVERNORS OF ALL F. R. BASKS*
641
FEDERAL RESERVE BOARD
WASHINGTON
address official correspondence t o
the federal reserve board
December 12, 1931.
b - 5 9 8 .
j
j
SUBJECT: Reports of Condition of State
Banks and Trust Companies.
Dear S i r :
I t w i l l be greatly appreciated i f , in accordance with
your usual p r a c t i c e , you w i l l kindly furnish the Federal Reserve
Board with a copy of the abstract of condition reports of s t a t e
banks and t r u s t companies in your s t a t e on September 29, 1931If no c a l l was issued as of September 29, will you. kindly advise
the date of c a l l nearest thereto and furnish the Board with a
copy of your abstract as of that date.
In submitting the above-mentioned data i t is requested
that the number of banks (exclusive of branch banks) be s t a t e d ,
and that separate f i g u r e s be furnished f o r mutual savings
banks providing there are any such banks operating in your
state.
A franked and addressed envelope, requiring no postage,
i s enclosed f o r use in transmitting the data requested.
Very t r u l y yours,
E. L. Smead, Chief,
Division of Bank Operations.
Enclosure.
TO SELECTED STATE BAHING- DEPARTMENTS *
FEDERAL RESERVE BOARD
WASHINGTON
ADDRESS pFFlCIAL CORRESPONDENCE TO
THE FEDERAL RESERVE BOARD
December l 6 , 1931.
B-599-
SUBJECT:
Form F.R.A.-5, Daily Statement
of Federal Reserve Agent.
Dear S i r :
There are being forwarded to you today
under separate cover, by r e g i s t e r e d mail,
copies of the 1931 edition of form F.R.A.-5,
Daily Statement of Federal Reserve Agent, f o r use
in 1932.
Very tr uly yours,
E. L. Smead, Chief,
Division of Bank Operations.
TO ALL FEDERAL RESERVE AGENTS*
FEDERAL RESERVE BOARD
WASHINGTON
address official correspondence t o
the federal reserve board
December l 4 , 1931.
B-601.
SUBJECT:
Member Bank Call Report
for September 29, 1931.
Dear Sir:
We are forwarding to you under separate
cover
copies of the Board's Member Bank
Call Report Ho. 53» showing the condition of a l l
member banks on September 29, 1931.
Please f o r -
ward a copy to each member bank in your d i s t r i c t
that has expressed a desire to receive copies of
c a l l reports as issued.
Very tfruly yours.
E. L. Smead, Chief,
Division of Bank Operations.
TO ALL FEDERAL RESERVE AGENTS*
644
I
I
FEDERAL RESERVE BOARD
WASHINGTON
address official correspondence t o
the federal reserve board
B-605
December 28, 1931.
SUBJECT:
Summary Statement of Federal Reserve
Bank Personnel.
Dear Sir;
in accordance with the usual p r a c t i c e ,
please
f u r n i s h the Board
with a summary statement showing the number and s a l a r i e s of the o f f i cers and employees of your bank (including branches, if any) as of
December 31, 1931, and January 1, 1932; made out in accordance with
the form attached h e r e t o .
The f i g u r e s f o r December 31, 1931, which
should not include any changes in e i t h e r the number or s a l a r i e s of
o f f i c e r s or employees that become e f f e c t i v e on January 1, 1932, w i l l
be published in the Board's 1931 annual report and should be comparable
with corresponding f i g u r e s published on pages 289-291 of the Board's
1930 annual r e p o r t .
The f i g u r e s f o r January 1, 1932, should represent
the number and annual s a l a r i e s of employees a f t e r a l l changes e f f e c t i v e
as of January 1 have been made, and the number and annual s a l a r i e s of
o f f i c e r s as submitted to the Board for i t s approval.
Very t r u l y yours,
Enclosure
LETTER TO ALL CHAIRMEN*
Chester Morrill,
Secretary.
645
I
33—605—'3,
FEDERAL RESERVE BAM OF
(including "branches)
Number
Jan. 1
1932
j
j
Annual Salaries
Dec. 31
1931 ;
Jan. 1
1932
!
i
Officers:
Chairman and Federal Reserve Agent
Governor
Other o f f i c e r s
Employees "by departments:'
Banking department
Federal Reserve .Agent*s department'
Auditing Department
Fiscal .Agency Department
i
j
i
»
i
i
|
i
1
1
:
i
I
s
i
i
;
1
t
!
i
!
!
i
!
!
i
,
Total
Employees whose s a l a r i e s are
reimbursed to bank:
Fiscal Agency department
Other employees*
i
i
:
!
i
i
:|
i
Grand Total
!
Temporary employees (not to be
included above)
'
1
;
;
!
i
!
!
•Subdivide by functions and u n i t s on separate sheet
Dec. 31
1931
f
FEDERAL RESERVE BOARD
WASHINGTON
address official correspondence t o
the federal reserve board
December 21, 1931•
B-606.
SUBJECT:
Reports of Earnings, Expenses,
Dividends, and Franchise Tax.
Payments f o r 1931.
Dear S i r :
In order t h a t the Board may have information regarding the
f i n a n c i a l r e s u l t s of operations of Federal reserve banks during the
present calendar year as soon as p r a c t i c a b l e a f t e r January 1, i t i s
requested t h a t the following data be telegraphed or mailed to the
Board in time to reach Washington Monday morning, January 4, 1932,
(Code)
EABL
EDGE
ESPY
ETCH
EACH
EASY
EDIT
EVER
EARN
ELBA
ENID
-
EAST EYRE EMET EVEN CAPP CEDE -
Earnings from discounted b i l l s . . . . $
Earnings from purchased b i l l s
Earnings from U. S. s e c u r i t i e s . . . .
Other earnings (items 4-8 on Form 95) •
Gross earnings
=========
=========
Cost of Federal Reserve Currency . . .
Other current expenses
TotaLcurrent expenses
mmmmm—mm.
Current net earnings
$
Additions to Current net earnings . .
Deductions from Current net earnings
Net a d d i t i o n s to or deductions
from current net earnings
Net earnings a v a i l a b l e f o r dividends,
f r a n c h i s e tax, and surplus
Dividends paid
Paid to Government as f r a n c h i s e tax
Transferred to surplus account . «
Total ( t o agree with item EAST)
Subscribed c a p i t a l January 1, 1932
Surplus January 1, 1932
I t i s also requested that the regular monthly r e p o r t s of
earnings and expenses on forms 95 and 96 he accompanied with a
statement showing in d e t a i l a l l addition's to and deductions from
current net earnings during the year with separate f i g u r e s f o r
each "branch, if any, and that in addition to the regular balance
sheet, form
f o r the l a s t day of the year representing the cond i t i o n of the bank a f t e r f i n a l closing of the books, a form 3^ be
submitted showing the condition of the bank a t close of business
but p r i o r to the making of any adjusting, closing or other e n t r i e s
not regularly made at the end of each month.
Very t r u l y yours,
E. L. Smead, Chief,
Division of Bank Operations.
TO GOVERNORS OF ALL FEDERAL RESERVE BAMS*
I
mc f i
FEDERAL RESERVE BOARD
WASHINGTON
address official correspondence t o
the federal reserve board
December l 6 , 1931.
B-O07•
SUBJECT:
Data for 1931 Annual Report of
the Federal Reserve Board.
Dear Sir:
Will you kindly f u r n i s h us with the following
data f o r use in the Board's forthcoming annual report:
1.
C l a s s i f i c a t i o n of U. S. s e c u r i t i e s held "by
your bank ( l ) under repurchase agreement
and (2) in investment account, as a t
close of business December 31. 1931, g i v ing the kind of s e c u r i t i e s , i n t e r e s t r a t e ,
maturity data, and par value. The t o t a l
only need be shown f o r s e c u r i t i e s bought
through the Open Market Policy Committee
and held in Special Investment Account.
2.
Statement showing the number of member
banks in each State (or part of State in
the d i s t r i c t ) accommodated through the
discount of paper during the calendar
year 1931.
Very tr uly yours,
E. L. Smead, Chief,
Division of Bank Operations.
TO GOVERNORS OF ALL FEDERAL RESERVE BASKS EXCEPT H W YORK*
E
FEDERAL RESERVE BOARD
WASHINGTON
address official correspondence t o
the federal reserve board
December 1J, 1931B-610.
SUBJECT:
Daily Condensed Condition Report
of Federal Reserve Banks.
Dear Sir:
Under separate cover we are forwarding a supply of
revised form "Condensed statement of condition of Federal
reserve bank", for use in wiring your condition f i g u r e s
to the Federal Reserve Board beginning, Thursday, December 24, 1931.
The amount of currency and coin received and paid
out, items MUSE and MOTE,should also be wired in your
Form 34 telegrams f o r Wednesdays and for the l a s t day
of each month.
Very truly yours,
E. L. Smead, Chief,
Division of Bank Operations
TO GOVERNORS OF ALL FEDERAL RESERVE B Z E S
A T C*
FEDERAL RESERVE BOARD
WASHINGTON
address official correspondence t o
the federal reserve board
December 21, 1931«
B-612.
SUBJECT:
Earnings, Expenses and Dividends
Reports of State Bank Members*
Dear S i r :
There are being forwarded to you today
under separate cover
copies of form 10J
to be used by State bank members in submitting
t h e i r r e p o r t s of earnings, expenses and d i v i dend payments f o r the six months ending December 31, I93I.
Very t r u l y yours,
Chester M o r r i l l ,
Secretary.
TO ALL FEDERAL RESERVE AG-EFTS*
FEDERAL RESERVE BOARD
WASHINGTON
address official correspondence t o
the federal reserve board
December 24, 1931<
B-619.
SUBJECT:
Call Condition Reports of Member Banks.
Dear S i r :
There are being forwarded to you today under separate cover
copies of Form 105 to be used by State bank members in submitting t h e i r
condition r e p o r t s as of the next c a l l d a t e .
Xindly hold the blanks at
your bank u n t i l you are advised by the Board to for?/ard them to the State
bank members, whereupon please mail three copies to each such bank with
the request that they be held pending r e c e i p t of a c a l l f o r condition
reports.
Please advise State bank members that p a i d - i n subscriptions to the
gold notes of the National Credit Corporation should be included in loans
and discounts on the face of the r e p o r t , and in " a l l other l o a n s , " item 8
of Schedule E; that indebtedness to the National Credit Association on
t h e i r own borrowings should be reported as b i l l s payable against item 25
on the face of the r e p o r t , and against item 1 - c of Schedule H; and that
t h e i r pro r a t a l i a b i l i t y on such borrowings by other members of the local
National Credit Association should be included with "other l i a b i l i t i e s "
and shown in Schedule 17 against the caption "Pro r a t a l i a b i l i t y on other
banks' borrowings through local Credit Association," with a per contra
item in "other a s s e t s " on the face of the report and in Schedule M,
s
652
I
-
2
-
I t w i l l be appreciated if you w i l l kindly arrange to have the usual
preliminary c l a s s i f i c a t i o n of loans and investments of reserve c i t y and
of country banks in your d i s t r i c t wired to the Board within three weeks,
if p r a c t i c a b l e , from the date of next c a l l report*
I t i s suggested that
the f i g u r e s be compared with corresponding data f o r the preceding c a l l
before they are telegraphed to the Board, in order that any obvious d i s crepancies may be detected and promptly reconciled.
Very truly yours,
Chester Morrill,
Secretary.
TO ALL FEDERAL RESERVE AGENTS*
FEDERAL RESERVE BOARD
WASHINGTON
address official correspondence t o
the federal reserve board
B-620
December 28, 1921.
SUBJECT:
Organization c h a r t .
Dear S i r :
I t w i l l be appreciated if you w i l l kindly
f u r n i s h the Board with two copies of an organization
chart f o r your banlc and for each of i t s branches, if
any, showing as of January 1, 1932, the name and
t i t l e of each o f f i c e r and the departments cr functions
supervised.
Very t r u l y yours,
Chester Morrill,
Secretary.
LETTER T ALL CHAIRMEN*
O
@FedFRASER