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F E D E R A L RESERVE BOARD WASHINGTON J a n u a r y 13, 1921. x 3021 SUBJECT: Investment by N a t i o n a l Banks i n Stock of I n t e r n a t i o n a l Financial Corporations. Dear S i r : P u r s u a n t t o the l a s t paragraph of the B o a r d ' s c i r c u l a r l e t t e r X-3002 of December 24, 1920, the Board, has had p r e p a r e d F e d e r a l Reserve Board Form 173 f o r use by n a t i o n a l banks i n maki n g a p p l i c a t i o n f o r p e r m i s s i o n t o i n v e s t i n t h e s t o c k of i n t e r n a t i o n a l banking or o t h e r i n t e r n a t i o n a l f i n a n c i a l c o r p o r a t i o n s . I am f o r w a r d i n g a number of t h e s e forms under s e p a r a t e c o v e r . The forms a r e s u i t a b l e f o r use i n making a p p l i c a t i o n to purchase s t o c k e i t h e r i n c o r p o r a t i o n s organized under S e c t i o n 2 5 ( a ) of the F e d e r a l Reserve Act or i n c o r p o r a t i o n s organized under S t a t e law and o p e r a t i n g under an agreement w i t h the Board p u r s u a n t t o S e c t i o n 25 of the Act. A n a t i o n a l bank d e s i r o u s of making a p p l i c a t i o n should b e f u r n i s h e d w i t h two copies of Form 173 w i t h i n s t r u c t i o n s t o send one copy d i r e c t l y t o the F e d e r a l Reserve Agent of the d i s t r i c t i n which the n a t i o n a l bank i s l o c a t e d and t o r e t a i n the o t h e r copy f o r i t s f i l e s . In case you d e s i r e t o have a copy f o r your own f i l e s , t h e n a t i o n a l bank may be f u r n i s h e d w i t h t h r e e c o p i e s and i n s t r u e ted to forward two of t h e s e c o p i e s t o you. In f i l l i n g out t h e s e a p p l i c a t i o n s n a t i o n a l banks should be p a r t i c u l a r l y c a r e f u l t o s t a t e a c c u r a t e l y the t i t l e of t h e i n t e r n a t i o n a l f i n a n c i a l c o r p o r a t i o n and t o f i l l out p r o p e r l y the space which shows under what laws the c o r p o r a t i o n i s organized. You w i l l n o t e t h a t on the back of the a p p l i c a t i o n form p r o v i s i o n i s made f o r the recommendation of the F e d e r a l H e s e r v e Agent. In making your recommendation, due c o n s i d e r a t i o n should be given t o the f i n a n c i a l c o n d i t i o n and g e n e r a l management of the a p p l y i n g bank. The a p p l i c a t i o n w i t h your recommendation n o t e d t h e r e on should be forwarded without d e l a y t o the Board f o r i t s c o n s i d e r a t i o n and f i n a l a c t i o n . In the c a s e of an Edge c o r p o r a t i o n which i s i n the p r o c e s s of o r g a n i z a t i o n , the Board has r u l e d t h a t w h i l e i t w i l l c o n s i d e r an a p p l i c a t i o n a f t e r approval of the c o r p o r a t e t i t l e the Board w i l l approve the a p p l i c a t i o n only upon the c o n d i t i o n t h a t the a p p l y i n g bank s h a l l n o t be a u t h o r i z e d t o pay out any money on i t s s t o c k sub- X-3021 -2- s c r i p t i o n u n t i l the c o r p o r a t i o n i n which the n a t i o n a l "bank d e s i r e s t o i n v e s t s h a l l have "been d u l y i n c o r p o r a t e d and s h a l l have r e c e i v e d f r o m the Board a p r e l i m i n a r y p e r m i t t o e x e r c i s e such of the powers c o n f e r r e d upon i t by S e c t i o n 2 5 ( a ) as a r e i n c i d e n t a l and p r e l i m i n a r y t o i t s o r g a n i z a t i o n . Upon the B o a r d ' s approval of an a p p l i c a t i o n s u b j e c t t o t h i s c o n d i t i o n , a n a t i o n a l t a n k may make payment on i t s s t o c k s u b s c r i p t i o n as r e q u i r e d by the Act &s soon as the a r t i c l e s of a s s o c i a t i o n and o r g a n i z a t i o n c e r t i f i c a t e of the c o r p o r a t i o n have been f i l e d w i t h and approved by the Board and the Board "has i s s u e d a p r e l i m i n a r y p e r m i t p u r s u a n t t o the p r o v i s i o n s of the Act. Very t r u l y y o u r s , Gove To a l l chairmen of F e d e r a l Reserve Banks. r n o r .
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