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X-7357 March 12, 1933 Curtiss - Boston Case - STew York Austin - P h i l a d e l p h i a DeCnnrp— Cleveland. TEAilS. 1638 Eoxton - Hichaond Newton - Atlanta Stevens - Chicago Wood - St. Louis B a i l e y - Minneapolis McClure - Kansas City Walsh - Dallas Newton - San j?r.~ncisco In cases where you receive an a p p l i c a t i o n f o r member- ship from an e l i g i b l e State bank or t r u s t company the c o n d i t i o n and management of which are not subject to s u b s t a n t i a l c r i t i c i s m and you f e e l that the Board would be f u l l y j u s t i f i e d in admitting such i n s t i t u t i o n to membership, Board w i l l upon t e l e g r a p h i c advice from you of e s s e n t i a l f a c t s involved in case give prompt consideration thereto and advise you of i t s a c t i o n thereon. In such cases your advice should contain a statement of (A) the amount of applicant bank's c a p i t a l stock, (B) surplus, (C) undivided p r o f i t s , (D) roservos f o r l o s s e s , d e p r e c i a t i o n or other c o n t i n g e n c i e s , (28) aggregate amount of d e p o s i t s , (3P) l i a b i l i t y to Reconstruction Finance Corporation, (G) other borrowings, (H) t o t a l resources, ( I ) date ef l a s t examination and by what a u t h o r i t y . On b a s i s of report of such examination (J) amount and character of a s s e t s c l a s s i f i e d as slow, (K) doubtful, (L) l o s s e s , (M) amount of d e p r e c i a t i o n in investments i n f i r s t four grades of s e c u r i t i e s as c l a s s i f i e d by a recognized investment s e r v i c e , (N) amount of d e p r e c i a t i o n in other s e c u r i t i e s including stocks and d e f a u l t e d bonds, (0) any undue concentrations of a s s e t s , and (P) l i q u i d i t y . Also advise (Q,) t# what extent and i n what manner any of such items have been e l i m i n a t e d , and f u r n i s h (B) b r i e f summary of examiners comment on condition and management of bank, and (S) concise statement of your own opinion of bank and i t s management. X-7357 2 In your wire s e t out information r e q u e s t e d o p p o s i t e r e s p e c t i v e symbols used above. Each such telegram should b e g i n with the code word QUOTE A2TCH0EIST UNQUOTE meaning QUOTE We have a p p l i c a t i o n blank bank (use A.B.A. t r a n s i t number) f o r membership i n the Federal Reserve System, the c o n d i t i o n and management of which are not s u b j e c t to s u b s t a n t i a l c r i t i c i s m and we f e e l t h a t the Board would be f u l l y j u s t i f i e d i n a d m i t t i n g such i n s t i t u t i o n t o membership. I concur i n recommendation of e x e c u t i v e committee of t h i s bank t h a t such a c t i o n be taken by the Board UNQUOTE. Such t e l e g r a p h i c a d v i c e should i n c l u d e advice t h a t your counsel has approved form of a p p l i c a t i o n and has executed c e r t i f i c a t e of counsel u s u a l l y accompanying membership a p p l i c a t i o n s and be accompanied by a statement from him as to what powers, i f any, other than usual commercial banking powers the i n s t i t u t i o n i s authorized to e x e r c i s e under i t s charter or S t a t e law, and a statement from you as to whicH of powers, i f any, are b e i n g e x e r c i s e d . such unusual Your a d v i c e should a l s o i n c l u d e the s p e c i a l c o n d i t i o n s of membership i f any which i n the o p i n i o n of y o u r s e l f and e x e c u t i v e committee of your bank should be p r e s c r i b e d i n a d d i t i o n to those cont a i n e d i n Trans 1619. In c a s e of banks e x e r c i s i n g t r u s t powers, f u r n i s h con- c i s e statement regarding c o n d i t i o n and management of t r u s t department. word of telegram r e s t a t e A.B.A. t r a n s i t number of bank. As l a s t In a c t i n g upon ap- p l i c a t i o n s under such circumstances the Board w i l l n e c e s s a r i l y r e l y to an unusuall y l a r g e e x t e n t upon your recommendation and that of e x e c u t i v e committee of your bank. Accordingly, the most c a r e f u l c o n s i d e r a t i o n should be g i v e n t o whether er not c o n d i t i o n of i n s t i t u t i o n i n v o l v e d i s such as to warrant i t s admission to 8 0 > -fc'7357 -3- membership. In t h i s connection i t may be noted that the Board does not f e e l usual standards f o r admission to membership should be r e l a x e d i n t h e s e c a s e s . I t i s understood of course that i n any such case you w i l l forward to Board as soon as p o s s i b l e bank's a p p l i c a t i o n and a l l of papers u s u a l l y accompanying such an a p p l i c a t i o n . In a d v i s i n g you by wire of approval of any a p p l i c a t i o n submitted through t e l e g r a p h i c advices from yeu, Board w i l l use i n such wire word QUOTE MCHORIVET UNQUOTE f o l l o w i n g name of bank involved. Such word w i l l mean QUOTE A p p l i c a t i o n of such bank f o r membership has been approved by Board subject t o f i r s t 14 conditions s e t f o r t h i n Trans 1619 and s p e c i a l conditions s t a t e d h e r e a f t e r . P l e a s e a d v i s e such bank of Board's approval and conditions of membership prescribed, together with explanation thereof contained i n Board's wire Trans 1619. Letter containing d e t a i l e d advice regard- ing such approval w i l l be forwarded bank through you as soon as p o s s i b l e , When you have r e c e i v e d c e r t i f i e d copy of r e s o l u t i o n of board of d i r e c t o r s of such bank accepting c o n d i t i o n s of membership prescribed by Board together with advice of compliance with any s p e c i a l conditions t o be complied with p r i o r to admission to membership, the Federal r e s e r v e bank i s authorized upon payment therefor to i s s u e appropriate amount of Federal r e s e r v e bank s t o c k and to accept required r e s e r v e s . P l e a s e a d v i s e Board date upon which membership ef bank becomes e f f e c t i v e and amount of Federal r e s e r v e bank s t o c k i s s u e d to i t , forwarding copy of r e s o l u t i o n a c c e p t i n g conditions of membership and a d v i s i n g of compliance w i t h any conditions t o be complied with prior to admission.UNQUOTE Morrill. X-7357 March 12, 1933 BUSS. J 6 3 0 _ Information requested In Trans 1628 should include in each case after respective symbol advice as to ( I ) any affiliation, u d subsidiaries of bank and (D) Branches, if any, located outside of corporate limits of city in which hank is located and date of establishment of each such branch. Information requested in Trans 1628 with reference to (Juote chat powers, if any, other than commercial tanking powers Unquote are held or exercised by bank is intended to develop whether bank is authorized to exercise and the extent to which it has exercised any powers such as trust powers, surety, title Insurance, sale of mortgage securities with or without guarantee or recourse or other broad powers not coming within usual meaning of term banking powers. Morrill.
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