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Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority VJUD3ot&b Formr.R.131 REC’D in files section BOARD OF GOVERNORS or MAY 1 4 1940 ^ THE FEDERAL RESERVE SYSTEM OfficeCorrespondence To. F I I qb From. Mr. Sraead Date ____ May 15 a Subject l Under the present requirements of the Treasury, Federal Reserve banks have to obtain authority from the Secretary of the Treasury for the issuance of a license to State banks upon admittance to membership in the Federal Reserve System* Since formal admission to membership has to be delayed at times until telegraphic or other advice is received from the Treasury Department authorizing the Federal Reserve bank to issue the license, and since the granting of such authority appears to be largely a matter of form, I asked Under Secretary Bell whether there -was any objection on the part of the Treasury to giving the Federal Reserve banks blanket authority to issue licenses to existing State banks upon their admission to membership in the Federal Reserve System* I understand that this matter was referred to Treasury counsel. Shortly before his leaving the office far a few days, Mr. Bell asked Mr. Heffelfinger to tell me that the Department preferred not to make any changes at this time in existing procedure. Mr, Heffelfinger stated that Mr. Bell -tfiought this question might be reopened for consider ation at a later date. •jJr Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority J,Jl- 28 1939 Mr# M« J* F le m in g , President, Federal Reserve Bank of Cleveland, Cleveland, Ohio Dear Mr, Hosing# We have gene over the form of license enclosed with your letter of July 2 0 / and while we agree with you that the form is not exactly what we would suggest if a new one were now being prepared, we doubt whether, in all the circumstances, it would be worthwhile to raise any question with the Treasury Department about it at this time# It is assumed that the whole question of licenses will eame up for consideration within the next two or three years* ¥ery truly yours, (SignediChester Morrill Chester Morrill, Secretary. Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority YlMDaoozfe, irJ b z U d tA , x n JCENSE / / The of \ 193^ its office(s) in the following is hereby permitted to open on place(s) '¥ty "£ c . CL 6 0 V O . c/ 3 / rf & tont'cL f b , a , 6 o r e F S a n / £ e c / a ir ^ / c / c tf& b e c a m e , a O m e / t i d e r: ~ i? & s e r / < z and to perform its usual banking functions except: 1 (1) To the extent prohibited in the executive order of the President of the United States issued on March 10,1933, as amended by the proclamation of December 30,1933 and by the executive order of January 15, 1934 (an extract from which is printed hereon). \ (2) To the extent limited or prohibited by any executive order of the President or by regulations of the Secretary of the Treasury. * This license may be revoked in whole or in part by the Secretary of the Treasury at any time. Issued by direction of H. M orgenthau, J r., Secretary of the Treasury, Federal Reserve Bank of New York, By \ Date E xtract op M from arch E x e c u t iv e 10, 1933 E “ By (40 Stat. March 9, executive O rder as am ended b y x e c u t iv e op P O rder the P r e s id e n t r o c l a m a t io n op J anuary op the U D ecem ber of n it e d S tates, 30, 1933 and 15, 1934. virtue of the authority vested in me by Section 5 (b) of the Act of October 6, 1917 L. 411) as amended by the Act of March 9, 1933, and by Section 4 of the said Act of 1933, and by virtue of all other authority vested in me, I hereby issue the following order. * * * * * * * * “ Until further order, no individual, partnership, association, or corporation, including any banking institution, shall export or otherwise remove or permit to be withdrawn from the United States or any place subject to the jurisdiction thereof any gold coin, gold bullion, or gold certifi cates, except in accordance with regulations prescribed by or under license issued by the Secretary of the Treasury. “ No permission to any banking institution to perform any banking functions shall authorize such institution to pay out any gold coin, gold bullion or gold certificates except as authorized by the Secretary of the Treasury, nor to allow withdrawal of any currency for hoarding. Subdivision (b) of Section 5 of the Act of October 6, 1917, as amended and Section, 4 of the Act of March 9, 1933, prescribe a penalty of a fine of not more than $10,000 and/or an imprison ment for not more than ten years, for violation of the terms of the said sections. Os*. Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority U H P a o ta b IN FILES s s a r fHib 1 1Q39 m c 't> ^ New York form: ^ if 7 o -^- i ...... Same as Cleveland form except that wording of first paragraph ^ 7/av below signature reads: ^ / 6 o# f *•H Extract frcm Executive Order of the President of the United State®, issued on March 10, 1933/ as amended by proclamation of December 30, 1933 and executive -order of "January 15 # 193ta By virtue of the authority vested of August 6, 1917 (Uo STAT* L* 1*11) as 1933* and by Section l\ of the said Act of all authority vested in me I hereby in me by Section 5 (b) of the Act amended by the Act of March 9* of March 9» 1933# and by virtue authorize the executive order* wTJntil further ordey, (balance same as Cleveland form) Philadelphia form: Practically same as Cleveland, except that the words "issued by direction of H. Morganthau, Jr* w are omitted, and the form reads * (__________ ) Acting Secretary of the Treasury FEDERAL RESERVE BANK OF PHILADELPHIA By Governor The words ^amended as aforesaid” are omitted from the first line below the signature* The name of the Secretary of the Treasury is omitted at bottom of the form* Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority YJUP 3 0 0 2 b fr\A J A-l ^ . ■ l J~~ / C ^ y , < *-+ ? ^ J 0 j U Reproduced from the Unclassified / Declassified Holdings of the National Archives DECLASSIFIED Authority 3002b ✓ R o f e s e r v e B REC’D IN FILET N N AUG I Y a x k Cl e v e l a n d July 20, 1939 Mr. Ghester Morrill Care of Board of Governors of the Federal Reserve System Washington, D. C. Dear Mr. Morrill: You will find enclosed a copy of the form of license which this bank has been issuing since licenses have been required. ^ Our supply is very low and as the form, frankly, is a very poor one, I am wondering whether you would approach the proper source at the ^Treasury Department in the interest of procuring a new form of license. The form enclosed is in/accordance with the telegram of March 12. 1933/ over the name of W. H. Woodin, Secretary of the Treasury. I shall appreciate your early attention to this. Encl. FO?i FILES R. 7 K. Thoiapsaa WONf F E D E R A L R ESE R V E BA N K OF CLEVELAND :: L IC E N S E :: The_____________________________________________________________________________________ of_ j£>hereby permitted to open on_____________________________________________ _ 1934, its offices in the following places. and to perform its usual banking functions except: ( 1 ) — To the extent prohibited in the Executive Order of the President of the United States issued on March 10, 1933, as amended by the Proclamation of December 30, 1933 and by the Executive Order of January 15, 1934, (an extract from which is printed hereon) : ( 2 ) — To the extent limited or prohibited by any Executive Order of the President or by regulations of the Secretary of the Treasury. This license may be revoked in whole or in part by the Secretary of the Treasury at any time. Issued by direction of, H . M o r g e n t h a u ,Jr., S ecretary of the Treasury. FE D ER A L RESER VE B A N K OF C LE V E LA N D By ( Deputy Governor. Extract from Executive Order of the President of the United States, issued on March 10, 1933, amended as aforesaid: / “Until further order, no individual, partnership, association, or corporation, including any banking institution, shall export or otherwise remove or permit to be withdrawn from the United States or any place subject to the jurisdiction thereof any gold coin, gold bullion, or gold certificates, except in accordance with regulations prescribed by or under license issued by the Secretary of the Treasury. No permission to any banking institution to perform any banking functions shall authorize such institution to pay out any gold coin, gold bullion or gold certificates except as authorized by the Secretary of the Treasury, nor to allow withdrawal of any currency for hoarding.” Subdivision B of Section 5 of the Act of October 6, 1917, as amended, and Section 4 of the Act of March 9, 1933, prescribe a penalty of a fine of not more than $10,000 and/or an imprisonment for not more than ten years, for violation of the terms of the said sections. ' H . M O R G E N T H A U , Jr., S ecreta ry o f the Treasury. Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority February 8, 1939 Mr. Robert S* Parker, Vice President end General Counsel, Federal Reserve Bank of Atlanta, Atlanta, Geoegla* Dear Bob* My attention has been called to a decision rendered in November 1938 by the Supreme Court of Mississippi in the ease of Anthony v. Bank of Aiggins, 184 So. 626, holding that the President* s }rodeviation or March 6, 1955, declaring a bank holiday, was invalid* If you can do so without too much tffouble, I shall appre ciate it if you will find out and advise mo whether or not any e f f o r t is being made to take this case to the Supreme Court of the United States by way of appeal or writ of certiorari* I believe that the decision on this point is wrong and 1 dislike to see it stand unchallenged. Therefore, if the case ia to be taken to the Supreme Court of the United States, I am in clined to think that the matter should be brought to the attention of the Attorney General in order that he may consider the advis ability of filing a brief as aadcus curiae supporting the validity of the President*s action* Aaaurring you that any information which you can give ma regarding the status of this ease will be greatly appreciated, and with all best regards, 1 am Cordially yours. Walter Wyatt, Qeneral Counsel* Reproduced from the Unclassified / Declassified Holdings of the National Archives d ec la s si f ie d Authority VJMDSoo2fe, i _LOi*. . RSC’ D IN FILL.% Si'X;- •// n F C *?■ 9 1-139 ~ 2- Daaaafoar t8# 1998• M tl« B ra Invalidity o fvPra*i ■r« WJmV&0 mmmmwmX wtwuti Ar« ter Ckrk test's hf>l—t i t M tr&a| lm H i| tolibr. v 19S6f I barowith Baak » f y iig la i. 19# 8a. t t i ( H n * i9H )9 «hi«k w i ilasmaad l i d tr ti«h Im tk« Aaarlaaa BMktr far Ia*a»bar 18* 1938* brims ta yaar attoatiaa tba aaaa af Aatbaay H» M M u tlfia tba af«ramU«Hd aaaa,ma laitbtH to tii« plain tiff In k i» t m l* w w i by t M •! t m i « aartaln m lty* Aftar dafaalt is gayarnt by tl* ItfmAntt, sail roalty i m duly admrtlaad far aala by traataa «« Marab f # 1935, - and pariteMi by tba baak* la tbla atdt, taatltwtad u r t tte i aix yaara aftar tba lv« data of tba afaramatioaad itata, tba baak, •2alaii( batb lagal aad aqultabla fRwrthip, prayad far aitbar ft aaaaallatlm of tba dofoxidant* • alata and tba aoaflrmtlaa af its tltla , or far a aaaaad faraolaaura la tba avaat tba aala of Marail l t l9SSt abaald ba bald Invalid* Tba dafandaat iarwakod tba statuto af IM ta tliu aad fartbsr eaataadad tbat tba faraolaaura af Narab l ff 1883, ma Invalid baaaaaa (1) tba aala ma aada aftar tba baak bad raaal'vad natlaa af tba JYasidont*a Praalaaatiaa olasiag a ll banking lastltatlaaa aad proUbLtlai tba traaaaotlaa af aay baakiag baalnaas, aad (S) baaaaaa tba yrtas paid at tba aala ma iaadaqaata. Ia afflndag tba daaraa balav aaardlac tba baak paasaaaloa, tba aawrt bald tbat tba atatata af li*itatlaaa aaa aat a daftoaa ta tbs p la in tiff's prayar far aaaaallatlaa af tba dafaadant*a slain aad oaaflfm tlm af tltla la tba plain tiff. la dlapaalag af tba aantantim tbat tba aala ma lo n lid baaaaaa la violation af tba Praaldsnt’ a Praalaaatiaa of Marab l # 19I8# tba aaart aaldt "tba ||ran1aaa111 af tba J^raaldsnt ana iaaaad nadar abat ba aaaaoivad ta ba as aatboarity vaatad la bi» by virtao af tba pravlaiaaa af Saa* 8(b) af tba Aat af Caagraaa af Oatabar 8, 1917, 40 Sttt* 411* This ma daaa aador Saa. *(b) af tba Aat baaae aa tba "Trading VItb fea ftaaay Aat*, 1ini tod la Ita applioatloa ta tba parlad af tba Varld War. Soatioa 98# IT.S.C.A., tltla 1*, pp. 382,353. Tba firat praolaaatim, la . 2039, iaaaad oa Xarab <t DSSt waa fallaaad by his aaaand praalaaatiam, la* 2040, iaaoad aa Xarab l t 1958, aftar tba fmgraaa bad paaaad aa aat aa tbat data* balag Chap, 1, § 2, 48 8tat* 1, Soo* 95a, Tltla 12, tf*S.C.A.# p* 381, granting sucb antbarity, and approving wfest bad bam daaa by tba Praaidsat la tba praaiaaa* Reproduced from the Unclassified / Declassified Holdings of the National Archives DECLASSIFIED Authority V)ND3oo2fc, Mr* Wyatt - 2 "An historical not* is found on page 561, Title 12, U.S.C.A., as followst •As originally enacted by Act of October 6, 1917, c. 106, § 5 (b), 40 Stat. 415, this sec tion formed a part of the Trading With Bio Enemy Aot, whioh urns limited in its application to the Tfeorld War sad there fore was omitted from the Code, but printed as an appendix to Title 50 U.S.C.A. By Act of Mar. 9, 1933, c. 1, f 2, 48 Stat* 1, the section was made applicable to any war "or any other period of national emergency declared by the President," thus making it general and permanent legis lation.* "Thus it will be seen that although the banking institutions of the United States, out of a commendable spirit of co operation in a time of economic crisis, generally obeyed the Presidential Proclamation of March 6, 1955, there was no authority in law for the issuance of such a proclamation un til March 9, 1955* Vie ere of the opinion that even though a sale by a trustee on March 6, 1933, under foreclosure pro ceedings theretofore legally advertised should be considered as transacting banking business, the approval by the Con gress on March 9, 1953, of the President^ action in closing the banks would not have the retroactive effect of rendering illegal that which nad been legally done on March 6, 1935•" In conclusion, the court dismissed the defendant* s contention based on the inadequacy of the prica paid at the foreclosure sale by pointing out that, as a matter of fact, the bank paid all that the land was worth; and that mere inadequacy of price alone, unaccompanied by fraud or unfair advantage, would not suffice to warrant setting aside the sale. Respectfully, Jerome >v* Shay, Law Clerk. Keproauced from the Unclassified / Declassified Holdings of the National Archives ------- d e c la s si f ie d - *■' Authority f i Mr. Szyroczak , . 7 December 16, 1958 -MEMORANDUM TO THE MEMBERS OF THE BOARD ONLY FROM RONALD RANSOM C O N F I D E N T I A L Under date of the 9th I circulated a prelim inary draft on a matter that the Board had under discussion. invited. Comments of the Board members were This memorandum has now been redrafted with some of the suggestions incorporated. In the absence of additional suggestions, the Chairman contemplates submitting it at an early date. Sugges tions can either go to the Chairman or to me. A copy of the last draft is attached. rrom tne Unclassified / Declassified Holdings of the National d e c la s si f ie d Authority Rehabilitation of the American banking system, which has been brought about since the declaration of the bank holiday by Presidential proclamation on March 6, 1955, has been a notable achievement in which both the Congress and the Executive can justly take pride. The proclamation has remained in effect but, in view of national recovery and of the great improvement in the condition of our banks, I feel that it would be appropriate to remove the restrictions of the bank holiday. In considering the termination of the bank holiday, I would like to suggest that the Congress, through appropri ate committees or through a joint committee specially named for that purpose, should undertake a review of Federal banking statutes and a careful study of our banking system and of the agencies established by the Federal Government to super vise and regulate banking. Such a study will disclose what additional legislation may be desirable in order to strengthen still further the banking system, so that it will be as strongly fortified as possible to meet changing economic conditions and to meet adequately the credit needs of commerce, agricul ture and industry, while protecting the rights of bank deposi tors and the public interest. Keproauced from the Unclassified / Declassified Holdings of the National Archives declassified Authority VJHDaoozt, ^ REC' D IN FILES SECTION |w JAN 5 1939 7 Mr. Szymczak %S Q% 0^ ^ Baewbwr B, 1958 nvoiuinni 1 0 tie umbers or tn board oatx IKK aOM&D lUISO* COKri P U T lou «ilX recall that It «*• I At rtemtly thftt X draft ft briftf itftt«s«ttt on « diicuoioa. X ftttftoh tmr then nnd*r 4oaald«rfttloa * 9t*Um*a% which 9 N U to m to m w % tl>* thought that m * bftfor# uft dorlag thft toafmrme* tn qjiftfttloa* Tour oomm*at» mrm iaritftd* f o r f il e s A . M. Stone rceproaucea from the Unclassified / Declassified Holdings of the National Archives" DECLASSIFIED Authority WMD3002k Mr. Szymczak On March 6, 1955 a condition of national emergency required the proclamation of a bank holiday. National recovery, aided by important remedial banking legislation enacted by Congress, has improved the condition of American banks. There fore it seems appropriate at this time to consider whether the requirements imposed by the declaration of a bank holiday can now be removed. I think it desirable to suggest that the Congress, through appropriate committees or through a joint committee specially named for that purpose, should now undertake a careful study of the organic structure of the American banking system and of the agencies that have been established by the Federal Government to supervise and regulate banking. The banking system should at all times be able to withstand the impact of changing economic conditions. A study by the Congress will disclose what may be done towards strengthening the banking system and improving its supervision, so that our banks may meet adequately the credit needs of commerce, indus try and agriculture, while protecting the rights of bank depos itors and the public interest. Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED fu '1 Authority UHDaot&fc November 4 ,_.j .... Mr* Shay lip* Wyatt, General Counsel The American Banker for this date carries a story to the effect that the Supreme Court of Mississippi has held that the President* s Proclamation of March 6, 1933 declaring a banking holiday was without authority of law* Please watch for this opinion in the advance sheets and bring It to my attention when it is received. Very truly yours. falter Wyatt, General Counsel* WWicba SuiESWl. C%«$U.S OFRGfc, Dictated by. » # « ** * * ** * « * ftev&sti top.,« » » » • * • • » * » * » .* • Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority V)UD3oozfc H IV Hi,- COPY September 30, 1957 Schaller - Chicago I hereby* direct the Federal fieserve Bank of Chicago, Illinois, acting as agr designated agent, to issue a license in the form heretofore prescribed by me to trans act normal banking functions to the following named national bank, charter for which was issued today by the Comptroller of the Currency* The First National Bank of Highland Park, Highland Park, Illinois* The above bank 1a a conversion of The Highland Park State Bank, Highland Park, Illinois. 4 (Signed) Stephen B, Gibbons Acting Secretaiy of the Treasury. Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority BOARD O ‘ OF GDVERNDRS □ F THE ~ *< FEDERAL RESERVE SYSTEM ■p- J c L s W ASHINGTON ADDRESS August 25, 1936 OFFICIAL C O R R E S P O N D E N C E TO T H E BOARD Dear Sir: Recommendations to the Secretary of the Treasury with respect to the licensing of newly admitted State bank members of the Federal Re serve System have been submitted by some of the Federal Reserve banks over the signature of the Federal Reserve Agent or Assistant Federal Re serve Agent and t*y others over the signature of the President or a Vice President. In view of the fact that the Bank Examinations function has already been transferred from the Federal Reserve Agent’s supervision to that of the President at some of the Federal Reserve banks and as it is contemplated that similar action will soon be taken at the other Re serve banks, it is suggested that in the interest of uniformity all rec ommendations to the Secretary of the Treasury with respect to the licens ing of newly admitted State bank members be made hereafter over the signature of the President or a Vice President of the Federal Reserve bank. In so far as the licenses themselves are concerned, it is under stood that they are being signed by the President or a Vice President of the bank acting on behalf of the Secretary of the Treasury. Very truly yours, Chester Morrill, Secretaiy. TO ALL PRESIDENTS Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED w *■ Authority NMD 3 0 0 % X-9677 Reg. H-7 INTERPRETATION OF LAW OR REGULATION | (Copies to be sent to all Federal reserve banks) August 13, 1936. Mr. Hugh Leach, President, Federal Reserve Bank of Richmond, Richmond, Virginia. Dear Mr. Leach: This refers to the circular dated May 27, 1936, which you transmitted to the member banks in your district advising of the ad" mission to membership, on the date of the circular of the ________ Trust Company o f ____ , __________, _________ , and which also contained the statement that "in due course license will be issued by the Secretary of the Treasury as of the date of admission". The Board's records show that, after the date upon which the membership of the_________ Trust Company o f ______________ became effective, the Acting Secretary of the Treasury authorized the Federal Reserve bank to issue a license to such bank to transact business as a member of the Federal Reserve System, and it is understood that such license was issued as bf the date of the bank’s admission to mem bership. In the circumstances, it is suggested that in any future case involving similar facts it would be desirable to avoid in any statement released to the public any expression which indicates that the State bank was transacting business as a member bank prior to the date when the Secretary of the Treasury authorized the issuance of the license. In order to avoid any possible question being raised, Reproduced from the Unclassified / Declassified Holdings of the National Archives DECLASSIFIED Authority VlUDaoozc-, X-9677 Reg. H~7 it is also suggested that the Federal Reservo bank advise the Secre tary of the Treasury of the approval by the Board of an application of a State bank for admission to membership and submit its recommenda tion regarding the issuance of a license sufficiently far in advance of the effective date of membership to permit the Secretary of the Treasury to authorize the issuance of the license simultaneously with -• the entrance of the bank into the System. Very truly yours, (Signed) Chester Morrill Chester Morrill, Secretary. Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED r , Authority MUD3 0 0 2 6 , i FE D LH A L RESERVE I f »LEj ^ 7 ail I June 15,^1936. Governor Broderick Mr. Paulger Special question* raised by members of the official staffs of the Federal Reserve Banks of Minneapolis, Chicago and Cleveland, In accordance with your request of May 19, 1936, the special questions raised at conferences with you of the official staffs of the above banks have, wherever possible, been followed through to a definite conclusion and the action taken in connection with each is shown below. I* Ihether a member bank would be required to exhaust its V * paper eligible for borrowing under section 13 before < ^ ^ io b being granted accomodations under section 10-B. * (Raised by Chicago and Cleveland,) In view of the importance of the question and the fact that there ap pears to be uncertainty in the minds of officials of other Federal reserve banks regarding the matter, it was deemed advisable to submit the question to counsel for consideration and preparation of a letter which it is sug gested be sent to all Federal reserve banks. Counsel's memorandum on the subject, together with a draft of the proposed letter, which it will be noted requires action by the Board, are attached. $ / 1 J 2* Ihy it was necessary to continue to obtain periodic reports on foreign transactions. It was stated that ; i, / , the necessity for furnishing these reports is fre- 3 3 4r, / quently questioned, particularly by importers and exporters. (Baised by Mr. Dawes of Chicago.) Mr* Gardner, of the Board’s Division of Rgseareh and statistics, who has supervision over such reports, has considered the question and has prepared a memorandum thereon, which is attached for your information* lou will notice that the reports are made pursuant to an executive Order and Treasury regulations thereunder and are not, therefore, required by the Board although they are said to be extremely useful to the Board in following international movements of capital* Mr* Dawes directs partic ular attention 1n his question to the necessity for requiring the reports of importers, exporters, and industrial concerns. It appears that such reports are made only four times a year, which should not involve an undue amount of labor or trouble* The contents of Mr. flsr&itr's memorandum were explained informally by Mr. Koppang, of this SlflsliKf to Assistant Agent Xoung of Chicago who stated that Mr* Dawes n§£ apparently overlooked the fact that the reports were being made pursuant to an Executive Order and, furthermore, that in view of their value to the Board no further consideration need be given to their possible discontinuance. Mr. Young was requested to explain Reproduced from the Unclassified I Declassified Holdings of the National Archives dec la s si f ie d ^ Authority - 2 3062b - the matter to Mr, Dawes and to invite him to raise any further questions on the subject that he night have. Mr. Young suggested that the matter be dropped as he felt confident that the explanation regarding the need and use of the reports would satisfy Ifr. Dawes completely. 3. IShy the reserve banks could not have copies of newly issued regulations in their possession when the regu *Y **' lations are released to the Press by the Board of / // Governors, as it was embarrassing to the reserve banks when inquiries were received to have to advise the in i . S 2. quirers that the reserve banks had nothing official in their possession pertaining to the information sought. (Raised by Mr. Pett of Chicago.) The question here raised was submitted to Secretary’s office and Mr. Carpenter has investigated and prepared a memorandum thereon, which is attached. It is difficult, in the light of the information contained in Mr. Carpenter’s memorandum, to determine which of the regulations Mr. Pett had in mind. In an informal discussion Mr. Young stated that he believed Mr. Pett was probably thinking of Regulation U, which he recalled was not received by the Reserve banks until after it had been released by the Board to the Press. However, Mr. Carpenter has advised that Regulation U was sent to all Federal reserve banks by wire on May 25, 1936, and was not released to the Press until May 26, 1936. In any event, it is not be lieved there will be any further cause for complaint in this connecU on in view of Mr. Carpenter’s statement that, "X have discussed Mr. Pett’s comment with Mr. Thurston and he has agreed that in connection with future releases or amendments thereto no release should be made to the Press until copies are in the hands of the Federal reserve banks". Mr. Young promised to pass the above information on to Mr. Pett. Why the order requiring the licensing by the Secretary of the Treasury of banks admitted to the System had not been rescinded at least in the case of banks which had been operating on an unrestricted basis for many years. (Raised by Mr. Young of Chicago.) It is understood that the original purpose of the Executive Order requiring the licensing of member banks was to provide a means of effecting an orderly opening of sound banks which had been closed as a result of the President’s Proclamation causing the banking holiday. Nevertheless, under the regulations of the Secretary of the Treasury all State banks are re quired to obtain a license from the Secretary of the Treasury in connection with admission to membership and all newly organized national banks are also required to obtain such a license. In addition to providing for an Keproduced from the Unclassified / Declassified Holdings of the National Archives dec la s si f ie d Authority - 3 - orderly reopening, the object of requiring banks to be licensed was to give the Secretary of the Treasury control over the banks, with partic ular reference to foreign exchange transactions, the payment or exporta tion of gold coin, gold bullion, and gold certificates, and it is no doubt because of the latter activities that the order requiring the li censing of member banks has not been rescinded. It is understood that the Secretary of the Treasury has in no case refused to issue a license, upon the recoamendation of & Federal reserve bank, to State banks joining the System, and, while it would appear that the requirement is at present largely one of routine form, the matter of control, nevertheless, over the activities referred to may not be without significance. 1 do not feel that it would be proper for the Board or any of the Federal reserve banks to take the initiative in attempting to obtain a cancellation of the Exec utive Order at this time, and, in an informal discussion, Mr. Young stated that he was perfectly willing to drop the matter, that he had, as a matter of fact, raised the question only because he thought it a&y have been overlooked by the Secretary of the Treasury, and that there was little extra work or effort involved in forwarding the recommendations in connection with the few cases of banks joining the System. The question was also referred to Counsel’s office, and there is attached a memorandum dated May 28, 1936, which outlines the history and apparent purpose of the order, prepared by Mr. Cherry. 5. f Reasons for delays at the Board’s offices in acting upon applications for meHibership. This question, which was raised by the Federal Reserve Bank of Cleveland, is phrased as a general question. It is understood, however, that the question was raised in particular reference to the Geo. D. Harter Bank, Canton, Ohio, and, to a lesser degree, to the Savings Deposit Bank and Trust Company, Elyria, Ohio. Each of these cases presented unusual circumstances, particularly the Geo. D. Harter Bank, which presented a question of policy. The cases will be discussed more fully later. During the 11 months1 period July 1, 1935 to May 31, 1936 the Board has acted upon 56 applications for membership. Four of these cases were held for 50 days or more before approval. In each case unusual circumstances were presented; two were held for de termination of matters of policy, one was held in abeyance pending enact ment of legislation which would render it eligible; and one was held pending developments in a merger program. Reproduced from the Unclassified / Declassified Holdings of the N atio n alA rch ive^ ^ ^ ^ "*"™ d e c la s si f ie d ,4 _ - Authority V )M D 3o02t, - 4 - The following summary will show the average time between receipt and final action on the applications for membership received during the period# Average Ho. of Working Days in this Division Average Ho. of Working Days until Approval So. Average Ho, Calendar Days Elapsed 56 22.4 10. 17.3 4 70.5 31.1 54.8 52 18.7 8.4 14.5 All cases acted on 7-1-35 to 5-31-36 Special cases referred to above Other cases acted on 7-1-35 to 5-31-36 In cases of urgency or where there is reason for special consideration and treatment, the Board and the Staff have cooperated in endeavoring to expedite an application. In this connection it is noted that the applica tion of the Elyria Savings and Trust Company, Elyria, Ohio, was received on Monday, May 4, 1936, and approved Monday, May 11, 1956, one week later. The circumstances regarding the application of the two banks to which it is understood that the Federal Reserve Bank of Cleveland has specific reference were as follows: Geo. D. Harter Bank, Canton. Ohio Application received March 3, 1936 Application approved May 5, 1936 The long delay before approval of the application of Geo. D. Harter Bank was due to the determination of a question of policy regarding the condition of membership requiring the bank to show separately the bank's investment in banking house and other real estate carried in investments and loans. The same question was under consideration at the tine in connection with the request of the Union Trust Company of Maryland, Baltimore, for modification of a similar condition of membership. For the reasons set forth in the memorandum dated March 17, 1936, the Division recommended that such a condition be not prescribed in the case of the Geo. D. Harter Bank or in other similar cases, feel* ing that it is more properly a general condition to be handled through the call report than a question of a condition of membership in a partic ular case. The matter was discussed informally with Messrs. Broderick, McKee, Ransom and Morrill. The situation regarding the call report was com plicated by reason of the differences in opinion which had delayed the adoption by the Comptroller of the Currency, the F.D.I.C., and the Board, of a revised call report which would be substantially uniform for the three agencies and which would show such indirect ownership of banking house and other real estate. Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority VlUD - 5 Following the discussion referred to, the Division of Bank Operations was requested to suggest a method of showing the desired information in the Board*s form of call report regardless of whether the Comp troller’s form was revised accordingly, and the application of the Geo. D. Harter Bank and the request of the Union Trust Company of Maryland for modification of the condition were held in abeyance pending a study of such procedure. Mr. Fletcher was advised informally by telephone of the status of the bankfs application and the reason for its being held in abeyance. He was also advised that in case of urgency we would endeavor to have the application acted upon but that we would prefer to hold it until the question of policy was determined. It was suggested that if he thought it advisable he could inform the bank that the delay in act ing upon the application was not due to questions as to the financial condition of the bank but to a question of policy as to the method of treating certain accounts. Ur. Fletcher advised that the proposed procedure would be satisfactory. Following reference of the question to the Division of Bank Operations, it seemed impracticable to cover the situation at the time by modifica tion in the form of the Board's call report. Accordingly, the applica tion was taken out of suspense and resubmitted with the original recom mendation of the Division. At the same time the Division recommended that the condition of membership of the Union Trust Company of Maryland regarding publication of reports be canceled. The application of the Geo.D. Harter Bank for membership was thereupon promptly approved and the condition of membership applicable to the Union Trust Company of Maryland canceled. The Savings Deposit Bank and Trust Company, Elyria, Ohio Application received March 27, 1936 Application approved April 28, 1936 This bank was a reorganized bank, and, as frequently la true in such circumstances, the application presented some complications. The Division had to develop some additional information from Cleveland re garding the possibility of a merger of the applicant and another bank which we heard in Washington was under consideration but of which Mr. Fletcher had not been advised. The the had the file was held longer than usual in Counsel's office because of fact that, in addition to the usual review, Counsel's office to determine whether a corporation organized in connection with reorganization of the bank was a holding company affiliate. It is intended that the question of delay in acting on membership applications will be discussed informally with Mr. Fletcher of Cleveland at the first favorable opportunity. Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority yJMD3oQ2fa - 6. 6 The matter of uniform allocation of expenses on functional expense reports, (Raised by Minneapolis) You have indicated a desire to discuss this question with Mr. Smead and me. I shall be glad to do so at any time you may suggest. 7. The Board’s reason for permitting the renewal of an Interest-bearing certificate of deposit to be dated ^ as of the maturity of the original certificate if renewed within tela days after maturity of the original certificate, (Raised by Minneapolis.) This question, as you have indicated, has been disposed of through the action taken by the Board as outlined in a letter of May 18, 19S6, (X-9592). I shall, of course, be glad to discuss further with you any of the questions covered in this memorandum at any time. SUMMARY OF MEMORANDA ATTACHMENTS Dated May 25, 1956, by Mr. Vest regarding advances under .‘Section 10(b).$ Dated May 26, 1936, by Mr. Gardner regarding necessity for obtaining fcU t* 3 reports on foreign transactions. * Dated lay 21, 1936, by Mr. Carpenter regarding press releases on Regu-/^/*-^ lations. , f , Dated May 26, 1936, by Mr. Cherry regarding the continued licensing of ■<* banks. ,■ Dated June 16, 1936, By Mr. Koppang regarding telephone conversation (%jU 3 % ?> **•3 with Mr. Young of Chicago. Reproduced from the Unclassified I Declassified Holdings of the National Archives ~~ r DECLASSIFIED Authority VlUDaoozfc. Of T Kay 28, 1956 Division of Examinations Hr* Cherry, Assistant Counsel Licensing by the Secretary df the Treasury of banks admitted to membership In the Federal Reserve System* This refers to Hr. Koppang's memorandum, dated May 21, 1936, requesting this office to give consideration to the following question raised by Mr. Young, Assistant Federal Reserve Agent at the Federal Reserve Bank of Chicago, and advise as to whether there are aay steps which nay be properly taken in connection therewith at this time. The question is as follows* "Why the order requiring the licensing by the Secretary of the Treasury of banks admitted to the System had not been rescinded at least in the case of banks which had been operating on an unrestricted basis for many years. ■ Under the provisions of the proclamation of the President of March 6, 1955, declaring a bank holiday, it is provided, in part, as followst "Daring such holiday, excepting as hereinafter provided, no such banking institution or branch shall * * * pay out deposits, make loans or discounts, deal in foreign exchange, transfer credits from the United States to any place abroad, or transact any other banking business whatsoever. "Daring such holiday, the Secretary of the Treasury, with the approval of the President and under sach regulations as he may prescribe, is authorized and empowered (a) to permit any or all of sach banking institutions to perform any or all of the usual banking functions * * *." The proclamation of the President, dated March 9, 1955, continuing In force the bank holiday proclamation of March 6, 1955, provides that: "All the terms and provisions of said proclamation of March 6, 1955 and the regulations and orders issued thereunder are hereby eontimed in fall force and effect until further proclamation by the President." Reproduced from the Unclassified / Declassified Holdings of the National Archives d ec la s si f ie d _ ’ Authority Division of Examinations — 2 By virtue of this proclamation, which has not been revoked or rescinded, the proclamation of March 8, 1953, declaring a bank holiday and the regulations and orders issued thereunder are still in fall force and effect. In other words, the bank holiday is still legally in existence* Under the provisions of the executive order of the Presi dent, dated March 10, 1955, it Is provided thatt •The Secretary of the Treasury is authorized _ and empowered under such regulations as he aay pre scribe to permit any member bank of the Federal Re serve System and any other banking institution or ganized under the laws of the United States, to per form aay all of their usual banking functions, except as otherwise prohibited. or * * * * * * "All banks which are members of the Federal Re serve Systtrn, desiring to reopen for the performance of all usual and normal banking functions, except as otherwise prohibited, shall apply for a license there for to the Seormfcary of the Treasury. Such application shall be filed immediately through the Federal Reserve Banks. The Federal Reserve Bank shall then transmit such applications to the Secretary of the Treasury. Licenses will be Issued by the Federal Reserve Bazik upon approval of the Secretary of the Treasury. The Federal Reserve Banks are hereby designated as agents of the Secre tary of the Treasury for the receiving of application and the issuance of licenses in his behalf and upon his instruc tions." Section 4 of the Saergency Bank Act of March 9, 1955, pro vides, la pirt, as followsi "In order to provide for the aafer and more ef fective operation of the National Banking System and the Federal Resexre System, to preserve for the people the full benefits of the currency provided for by the Congress through the National Banking System and the Federal Reserve System and to relieve interstate com merce of the burdens and obstructions resulting from the receipt on an unsound or unsafe basis of deposits subject to withdrawal by check, during such emergency Reproduced from the Unclassified I Declassified Holdings of the National Archives dec la s si f ie d Authority Division of Examinations — 5 period aa the President of the United States by proclamation may prescribe, no member bank of the Federal Reserve System shall transact any banking business except to such extent and subject to such regulations, limitations and restrictions as may be prescribed by the Secretary of the Treasury, with the approval of the President*" A criminal penalty is provided for violation of this section of lav. Pursuant to the authority quoted above, the Secretary of the Treasury prescribed the following form of licenses "IiICEBSI "The______________ o f _____________________ is hereby permitted to open on _ _ _ _ _ _ _ _ _ 1983 Its offices in the following places and to perform Its usual banking functions excepts "(1) To the extent prohibited In the executive order of the President of the United States issued on March 10, 1933 (an extract from which is printed hereon): ”(£) To the extent limited or prohibited by any executive order of the President or by regulations of the Secretary of the Treasury* Reproduced from the Unclassified / Declassified Holdings of the National Archives DECLASSIFIED Authority HMD 3 0 0 2 ^ Division of Examinations — 4 "This license nay be revoked in whole or in part by the Secretary of the Treasury at any time* •Issued by direction of "W. H* Woodin, Secretary of the Treasury •Federal Reserve Bank of _ _ _ _ _ "By_________________________ Governor The extracts referred to in the license relate to the prohibi tion upon the export or removal from the United States of any gold coin, gold bullion, or gold certificates} the prohibition against the paying out of gold coin, gold bullion, or gold certificates; the withdrawal of any cur rency for hoarding; and to engaglxg in any transaction in foreign exchange* The above form of license has been amended in order to conform to subsequent proclamations and executive orders of the President relating primarily to the withdrawal of gold coin, gold bullion, and gold certifi cates and to engaging in transactions in foreign exchange. While It would seem that the original purpose of the license was a means of effectlig the orderly opening of sound banks which had been closed as ft result of the proclamation of the President, the Secretary of the Treasury nevertheless advised the Board thats "State bank upon admission to membership in Federal Reserve System must secure license from the Secretary of the Treasury to perform all usual and normal banking functions except as otherwise prohibited. Understand Federal Reserve Board only admitting to mem bership such banks able to operate without restriction* License will be Issued upon your recommendation* * The above quotation was contained in a telegram to all Federal Reserve Agents, dated May 24, 1955 (Trans* 1804, Counsel's Office File 460.5-X). It is not known when the Board received this advice from the Secretary of the Treasury as the Board's files and correspondence in con nection with this point appear to hare been lost* It is also understood that newly organised national banks and State banks conrertlng into national banks are also required to obtain a license from the Secretary of the Treasury before they may lawfully do business* Reproduced from the Unclassified / Declassified Holdings of the National Archives DECLASSIFIED Authority Division of Examinations — 5 It seems apparent from the foregoing that the object of a license was first, to effect the orderly reopening of banks which ware closed during the bank holiday, and second, to glre the Secre tary of the Treasury control over each banks with particular reference to foreign exchange transactions, the payixg oat or exportlig of gold coin, gold bullion, and gold certificates, and the withdrawal of cur rency for hoarding, and it is probably for this reason that the licens ing by the Secretary of the Treasury of banks admitted to the System has not been rescinded eren in the case of banks which had been operat ing on an unrestricted basis for many years* Control over the natters just referred to Is maintained under the right of the Secretary of the Treasury to revoke a license* Upon inquiry, I hare learned that the Secretary of the Treasury has in no ease refused to issue a license to a newly or ganised national bank or a State bank being admitted to membership in the Federal Reserve System upon recommendation of the Comptroller of the Currency or the Board* In the event it should be determined to take steps to re scind the order requiring the licensing by the Secretary of the Treasury of banks admitted to the System, it would seem appropriate to first take the matter up with the Secretary of the Treasury, and, if he is agreeable to the proposition, it is believed that he is the proper person to adrlse the President that the proper proclamations and executive orders should be modified accordingly* It is not believed that the Secretary of the Treasury has axgr interest in the normal banking activities of the banks of the nation, but his interest lies primarily In affecting an enforcement of the provisions of lew and the proclamations and executive orders of the President relating to the withdrawal of gold coin, gold bullion, and gold certificates, transactions in foreign exchange, and the withdrawal of currency for hoarding* Since the banks are no longer In possession of gold coin, gold bullion, and gold certificates as the result of the provisions of the Gold Reserve Act, and since there is little likelihood of cur rency being withdrawn for hoarding, and in view of the foreign ex change position of the United States, it may be that the Secretary of the Treasury tould be willing to recommend to the President that licenses be no longer required for banks being admitted to membership in the Federal Reserve System* Bote; If the Board decides to take this natter up with the Secretary of the Treasury, it is suggested that, before doing so formally, Alfred K* Cherry, a representative or representsAssistant Counsel* tlves of the Board discuss the _ _ _ _ _ _ _ _ matter informally with the appropriate person or persons in the Treasury Department in order to avoid any possible misunderstand ing as to the Board's position In the matter and In order to de termine whether or not there is any objection from the Treasury standpoint to terminating the licensing of member banks. B. X* W . Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority VlK D3002b rm F . R . 131 BOARD O F G OVERNORS OF THE COPY FED ER A L RESERV E SY STEM Office Correspondence To______ Mr. Wingfield Date___ Subject: From_____ Mr- Koppang 16— 852 Mr. Paulger has received a memorandum from Mr. Broderick in,which he refers to certain questions raised by officers of three of the Federal reserve banks in connection with recent conferences he held with the official staffs of such banks, and has requested that, if possible, the various questions raised be followed through to a definite conclusion. The following question was raised by Mr. Young at Chicago: "Why the order requiring the licensing by the Secretary of the Treasury of banks admitted to the System had not been rescinded at least in the case of banks which had been operating on an unrestricted basis for many years." It will be appreciated if you will give consideration to the question raised by Mr. Young and advise whether there are any steps which may properly be taken in connection therewith at this time. In handing Mr. Paulger a memorandum to Mr. Wyatt regarding another question raised, Mr. Broderick stated: "There is also attached a memorandum addressed to Mr. Wyatt with reference to one of the ques tions raised. I am not sendix^ it to him direct, believing it will be better to have all the questions cleared through you." Reproduced from the Unclassified I D< classified Holdings of the National Archives DECLASSIFIED Authority VlMPaoozfc Office Correspondence FEDERAL RESERVE BOARD 11, 19S5. fDate_October , Subject:Miners Bank and Trust Conqpany, To___ Eilea. The "Narrate!!" wire received today on this bank from Philadelphia stated "membership is to be effective October 14, 1935". I called Mr. Hill at t o Philadelphia and asked for an explanation of the reasons for this method of handling and whether the Federal Reserve Bank stock was actually being issued as of today. I was advised that the Secretary of the Treasury had not as yet licensed the bank as a member and for this reason, although the funds in payment of the stock had been received, the issuance of the stock would not be made until the Secretary's license had been obtained which he expected would be not later than October 14. 1 was told that the Federal Reserve Bank stock had not as yet been actually issued and that the funds received in payment thereof were being earried by the Reserve bank in suspense account. I explained to Mr. Hill that this procedure was a little unusual in view of the wording of the code word "Narratell" that bank "has today made required payment on account of sub scription to stock of this bank". Mr. Hill stated that he now recognized that the matter had not been handled correctly and that we should disregard the telegram, and that a subsequent "Narratell" wire would be sent the Board when the bank had been licensed and when payment for the Federal Reserve Bank stock had been accepted and the stock issued. eproduced from the Unclassified / Declassified Holdings of the National Archives DECLASSIFIED Authority FED E R A L R E S E R V E BANK O F CHICAGO . 230 SOUTH LASALLE S TREET J -f/ V OFFICE OF THE C H A I R M A N O F T H E B O A R D AND .Z October 4, 1935 FEDERAL R E S E R V E AGENT Federal Reserve Board Washington, D. 0. Gentlemens For your information, I am enclosing copy of a letter received today from Mr. Nicholas H. Noyes, Secretary and Treasurer of Eli Lilly and Company, Indianapolis, who is also a director in this bank. I recognize that his suggestion is not feasible, but it does bear greatly on the question which we have discussed so many times of coordination of the various a.ctivitie.fi,.in order that these important matters may be expedited. I have heretofore expressed to some of you the hope that the R* F. G. in its present activities relative to preferred stock partici pation in the various banks, would avail itself of the information which we have. We are, of course, familiar not only with the banlsbut with the management and with the communities, and if the R. F. C. sends a man in there, cold, to judge of its participation, as has been the case sometimes heretofore, I am afraid that mistakes may be made and at least information and assistance which we could have given them will not be taken into account, and this may result in sj^&e-s^rious delays, Very truly EMS HH ✓ Reproduced from the Unclassified / Declassified Holdings of the National Archives DECLASSIFIED Authority COPT ELI LILLY AND COMPANY INDIANAPOLIS, U.S.A. October 2, 1933 Dictated Sept.29th Mr. Eugene M. Stevens, Chairman Federal Reserve Bank of Chioago Chicago, Illinois Dear Mr. Stevens: There is a strong feeling here among some of our better bankers that the re-opening of closed banks and similar matters could be handled much better and more expeditiously if it were ex clusively under the direction and authority of the Federal Reserve Bank of the district in which the individual banks are located. The gentlemen with whom 1 talked seem to think that with the Comptroller of the Currency aad the R. F. C. etc. having a finger in the matter, political pressure at Washington is bound to be brought in a good many cases. It is also felt that Washington cannot be anywhere near as closely in touch with these local situations and does not know the strength of these local banks as the Federal Reserve Bank of the district or the Chairman of the Federal Reserve Bank of the district would. I am becoming a little concerned over the substantial number of banks which seem to be closing up now but which were opened last March or later as "safe* banks. I am sending this on to you simply as a pertinent comment of some of our more responsible bankers. If you think this criticism is sound perhaps some adjustment of the arrangement that has been prevailing will speed up the opening of such banks as can be put in condition promptly. With kind regards, I am Sincerely yours HHN:EJ HL (Signed) N. H. Noyes. Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority V)UD3oozfc ^ ks' A) L iA v Reproduced from the Unclassified / Declassified Holdings of the National Archives DECLASSIFIED Authority tiMDaoozfc L HES£RV£ BOARD Fill fficeCojresponu^nce Tn Mr. Morrill - Mr. Martin'_____ )ate August Subject: Fifom Fife ____ Mr. Leonard / //ir.^t. B. Williams, Federal Reserve Agent at Cleveland, telephoned for(^CUt XtIQN Gov- B l a c k today.-tQ..S3y that they had scheduled meetings beginning today, Tuesday, Mr. Hanr)iin-4^-> with representatives or the directors of all of the hanks Mr- James—. Mr»Mageel...which..were,.emergency eases, asking them to come into the reserre hank Mr. that the reserve bank might obtain first hand information as t y L r f m - i m i l M M * had changed since the date of examination. Mr. O'Conner. . 1 ^ --------Mr. Morrill Y. The directors of one bank with whom they had conferred had gone ■horns Bud were to report within a week how the #500,000 of necessary Mr. Paulger -V^C. Mr, Smead *^4® could be raised. This was a national bank and the emergency es.’include other national banks as well as State member banks. Mr, G/ojder>wjeher. Mr, \3 W H A S -.. .'T™.Jbc»..Williams stated that he did not want to take any firm position lease note - initial recommendations in these cases until every resource had been ex t d L hausted. Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority V)HD3002b Federal Reserve Board Washington, D. C. Mr. Morrill Gentlemens Thank you very much for yours of the eighteenth with reference to the license form which was prescribed by the Treasury Department. Of course, we followed that form in the actual issuance of the licenses here, but I have always felt, as I think you do, that the Treasury at that time did not consider this to be a definitive action and conferring of authority in any particular office. ^ am quite sure that if the Treasury had considered the relationships and the policy and procedure in the Federal Reserve banks, in this connection, to the extent of determining definitely where the authority should lie, they would probably have acted differently. Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority VlHD %fl02Cs> August 18, 1933 Mr* Eugene M* Stevens, Federal Reserve Agent, Federal Reserve Bank of Chicago, Chicago, Illinois* Bear Mr# Stevens: In connection with the queetion Which arose dur ing the meeting of the Federal Reserve Agents with respect to the procedure of the Treasury Department in cowaunieat ing with the Federal reserve banks in regard to the issuing of licenses to member banks to reopen, I have obtained a copy of the confidential circular addressed by the Secre tary of the Treasury to the Governors of all Federal Reserve Banks on March 12, from which you will note that the form of licenses to be issued provides for signature by the Governor of the Federal Reserve Bank. I think this will explain why the Treasury in most instances appears to have been coumunicating with the Governor o f each Federal Re serve Bank. Very truly yours, (Signed) Chester Morrill Secretary. Inclosure. CM-w Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority VlUP3ot)2fe, C H A I R M A N O F T H E B O A R D AND FEDERAL R E SE R V E AGENT Federal Reserve Board Washington, D. C. Gentlemen: Referring to your letter of July 11J asking for our Attorneyfs opinbn on the statute of the State of Michigan under which the Pinney State Bank of Gass City, Michigan, was reorganized> as well as several other banks - as I have already advised you, our Counsel, who was handling this matter, has been out of the city and only returned this week. I am enclos ing, herewith, copy of an opinion received from him today, which I trust will answer your inquiry. If there are further questions with respect R E C E iV E O OFFICE OF GEWEBAL OOtJlTSEL AUG#/61933 .A >M . C3 LL‘ — P.M. n a iT i^ . Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority HMD aotefc, (COPT) Mayer* Meyer, Austrian & Platt Continental Illinois Bank Bldg*, Chicago August 6, 1933 M* Mr* Eugene Stevens, Federal Kgserve Agent* Federal Reaerve Bank of Chicago, Chicago* Illinois* Dear Mr* Stevenst Wa aoknowladge receipt of /our 1attar of July 13# 1933# end osin a copy of a letter dated July 11, 1933# which you received from the Federal Reserve Board relating to the reorganisation of atata macaber banks located in the state of Wlohigan, under Michigan Public Act Ho# 8 of 1932 and Public Act of Michigan Ho* 32, cf 1933* The writer* who is laore or less familiar 4th thia subject, was away on thia vacation at the tins your letter was received and did not return until the first of this week, which accounts for the delay in answering it# We are of the opinion, as w# have prevlouely indicated to you, that the plan of reorganisation adopted by th« Michigan banking authorities complies with the applicable provisions of Act Ho* 8 of the Public Acts of Michigan for the year 1952 and Act Ho# 38 of the Public Acts of Michigan for the year 1933* Mr* 0*Brian, Attorney General of the State of Michigan and one of his assistant attorney generals, as well aa Mr* Levin, of counsel for the Detroit branch* have also given us their opinion that this reorganisation plan complied with the atatutory provisions* Acts similar to the Michigan Acte in question have ba m held to bo constitutional by the Kentucky Court of Appeals in the the ease of Dornut v* Dell* 243 ly*, 34y 52 tt* Sad 80S (1932) (followed by the same court in the ease of Milner v* Gibson, 61 S#w* (2nd) 272, decided June 6, 1933) and by the Supreme Court of Florida in McConville r* Fort Pieroc Bank and Trust Co*, 138 SO* 392 (1931)* the Florida statute was alao applied and approved by the Supreme Court of Florida in the case of Becker v* Arms , 141 So* 136f 80 A* L* K* 1480 (1932)* On the other hand, a somewhat similar Nebraska statute was held unconstitutional by a Federal District Court judge in the case of Aherns v* Hebraska State Bank Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority n m >3oo2fc ¥ J /) Jilt 2 4 1933 Hr* i l l 1la* ihitifijc Papo* Holyoko, ltaasaohuoatta* Boar Sin Ittfimftt lt nada to fmr lottor of July 17* 19314 In whiah you inouiro aa to tho ruloa govornlng aeaoaa to toft dopoalt boxoa aloaoA national tai Stott bonks* Tha Proaliontlal Proclamation of Marati 6 f 1933, doolorin* a iNtnk holiday, author!nod tho Soorotary of tho Troaaury to iaauo rogu« latlona paraittlng any tanking institution to porfor* any or all ofIto usual tanking funotiona. Pursuant to tbat authority • tho 3ooa4tory of tha Traaeury* undor data of Marah 6* 1933* i®*uod tho follow}** regulations* / •All hanking inatltutlona any allow their austonors froo aaaoas ta tha aafoty dopoalt toxaa and safoa rontod ta auah auatoaoro* * On larch 10, I933» tlio Proaldont isauod an Isooutlvo Ordor which authorlead tho Stato suporviaing authorltloa to proiirUa ragu- 1ation# govornlng tha oparationa of banka ohlah waro not nombora of tho Fodoral Ranorvo Syatan* aubjaot to oartaln llnitatlone not haro malarial * R eproduced from the U nclassified I D eclassified H oldings of the N ational A rchives D ECLA SSIFIED Authority ftr. n illm &>OZCs> Ihitiat — a Aoaoriingly* I f the bank to whleh you r*f#r !• * «aab*r or tlM £#4***1 a#pTi«*%!♦* iaauad os tij§ th« t^gmXatiMl Otharwiaa, tha StjMMi iflt* Mid tli# regulation*» 'if my« $gr tha $ i*t* aathoritiaa haviag •uparrUion of tauafc»c *r« control11^* Tary tmly y~mw»* |S!p*d1 MOTr™ ClMatar la rr lll. G HC /ead abora ia Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority VlUD 3002b Federal Reserve Board, lrashington, D. C. Gentlemen: Referring again to yours of July eleventh^asking for copy of attorney’s opinion witn"~respeci"’io ^reorganization of___ of the Public Acts'^F^MSHigaETToF’^die year 1933, and Act No. 8 of the Public Acts of Michigan for the year 1952, our attorney who has been handling this matter has been out of the city since the receipt of your letter. I at once referred the matter to our counsel’s office, and Mr. Carl Meyer advises me today that he would like to hold up the reply until the return of his associate, Mr. Dunn, within a few days. EMS FC (iV££Si,Z2 -;ir fc*03/il333d Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority V1HD3Q0ZC-, ” in, N o . 131 ence FEDERAL RESERVE BOARD D ate JUly 19, 1955. Subject: In accordance with the request contained in Mr* Ballantine's letter I handed to Mr. Harlan, Legislative Assistant to the Under Secretary of the Treasury,^on July 19, 1933, copies of telegrams (as^ per copies attached) which were sent to the various Federal reserve banks dtiring the banking crisis in March, 1933, and which were initialed by officials of the Treasury Department. Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority V1UD3Q0ZC-, Qatar fXtiflGB&i J'SUSEAL BESHKfE M&roh 6. X933. Toung Boston Eanahar Cleveland MoDcrogal Ctki<tt^£0 IwrilfaMi gUy Harrison Bov Yoxfe SoaQT Riohwoild Martin St. Louis McKinney H03RTi« Fhlladalphia Black Atlanta 0OOS3T Minneapolis vpm h$» lagr ?r»otd«»t*o proclamation authority ^ afcy^ffi,!T l&tioitt holiday, i w o t w r y of froaawxjr Ilas l M w d following rog*. mtUtml or *$©fS Stat* faf&ittg inatltatiaa may 8X6fOiiC lit uao&X fcestidiig f m o i l w s to m i l axtant aad m <8fj»t JfranclsOO shall fco ab*olut#ly mmwmxy to mast for fbod, faedtetiio, othar for ti» jjaysaBiit of m it situation shall pentlt tha noods of its oonamlty of U f o v for the nmmX sala*i»* and wages, mliof of distross, for aooossary w r s a t «c- panditarns for tha w ^ o s ® of maintaining sraaloyiasat, and for other similar essential i psxmmm tataMt to |tiiWiwttS pxwidad, I b w m i , 3*»t (1) 8*§i7 prasHjrtion or t v lanxisoessajy trllhdr&SEl of eojv ranoyj (a) Ho Stata hanking institution shall sstgeNP In any transaction nadar this *sgtaXat3M which l« In violation of Stato or Itdoral law or of jugr mp] nti.wi tssaad thsrsundarj (3) So national shall saeag* in m^r transaction loador this section uhieh is In violation of any I*edaral %m or of any of tha Oommoart ordar or rsgolatioo issued 1>y tha Ooarotroller (4) Ho gold or sold oartifioatss shall bo paid out* Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority YlNDaoozfe, flo-pm y 4BUm m m a s s s » m jm VO(& Zm "banking institution and its directors and officers will be held strictly accountable for faithful compliance with the spirit sn& pur pose as wa'll as the letter of this regulation*11 THfqSJQSB* Morrill. Initialed byi im Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority VlUDaoozfc. Ootar tm M sum IXSSSAli HSSESfl BOABD ElSEDKKK® March 7, 1933 tm m e Bottom iteaueshar Cleveland McDcrogal Chicago * * ... JL * ^ Martia lew Yoffc S S L imI St. limit Sorris Phlladalphia Atlaaata □eery Miaaeapolls fr&n*. l a i u City iiorfifcujty Saa JVaztciaoo 1C62. tJader Hi* authority conferred t^oa hSai by the President»s proclamation declaring a bank holiday the Secretary o f the fraaaory 1m aathorised tha M o ra l n « e m banka to aake sfuch transfers of oredits or foods fro» 9M Federal ro servo bvdc Ho aio th tr IM flfsl reserve bank or IhhIbk Gold Settlement fond, or otherwise, as the M o ra l Bseerve Board say the pnm i t , aad to engage ia each transactions a t hare been authorised and/or repaired bgr the following reeolution adopted today by the M o ra l Beeerve Boards Q jtJG fS WHHQtlS, oa the 6th day of Jiarali, 1933, the ratio of to ta l raaorvaa of tha M o ra l Bsaaxta Bank of Vow Toxic to Its deposit aad M o ra l reaerve not* lia b ilitie s eoafeined was approximately 26*6 par oeatf WHEUUS, on saoh data tha ratio of total reaorvas to deposit aad Federal resorva aota liabilities eowhlaad of aaoh of the other M o r a l reserve hanks was substantially ia excess of aadh ratio of tha M o r a l lieserve Bank of Vow Yoifcj and WHXBSAS, it ia desirable to equalise tha ratio of tha total reserves to dapoait aad M o r a l reserve note liabilities oosfelnod of the M a s a i reserve hanks ao far as ia consistent with existing conditions; 901 v CTffiXfOHS, BS If maovm by tha M o r a l Beserve Board, that, pursuant to tha power conferred upon it by subsection (b) Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority V)HD3oozfc, J2&S9& tm & m m vmrmQAT. . aof Section 11 of the federal Beserve Act and on the affirmative toto of five mmbmr* of tlso said Board, the federal Beserve Banks of Boston, Cleveland., Eichnond, Chicago, and St. Louis a n hrn^r required to rediscount not later than the close of hasiaoso on March 8, 1933, for the federal Beserve Bonk of too fork discounted paper of the federal Beserve Bank of Be* folk in the ananrnt oet oat below opposite the muses of tho M o r a l Beserve Baak* of Boston, Cleveland, Ueteoni, Chicago aad St. Lonla, respectively, provided, however, that If may of suoh banks shall purchase obligations of the United States Oovexiaasat aad/or bankers acceptances aad/or bills of exchange fz«a the federal Beserve Bank of Bo* Tosfc, any such M o r a l Beserve Baak shall ho relieved of tho recp&iranent to redisoooat for the federal Boeerve Baak of lew York disocmnted paper of the M o r a l Beserve Baak of Xev York to tho exteat of the mmm% of Uaitod States Government obligations aad/or haaksrs acceptances aod/or hills of exchange so purchased, federal Beserve Baak of Bostoa $30,000,000. federal 3®serve Baak of Clevelaad $S0f000,000* federal Besorvo Baak of Biohaoad $10,000,000. fsderal Besorvo Baak of (Meags $160,000,000. M o r a l Beserve Baak of it. & m i s $16,000,000. All of tho above rediscounts shall ho made at the rate of 3 1/2 per oeat per aaawa« Any federal reserve hank la authorised to soil obligations of the United States Oovensaent aad/or bankers11 acceptances aad/or Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority MUD 3002b Qppy P a ra n a a il p g e rm r a WASSXYCHEQ9I bill* of exchangs to aajr otter M « n a niervi basil: and oaoh M o r a l reserrs baaJt is ntteritiA is any ,raflk otic to purdaaso obligation* of Hit Uttitod Statos Qovonnoat and/or M o i f i 1 acoaptaaots aod/or M i l s of exchange fioai ottit fadaral rosorw banks. Any Jfsdo*al rosor*a bank aay nates sueit ferassfors foods through ths Qold Sottloasat tad, or othorwi«e, of credit *s shall ®f bo aocossaxy to aaray out tbs tmisactio&s roqpirod or aathorlsod bgr this resolution. uwyrosa. Morrill Initialed byt »Hf Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority VlUD3oozfc, Omar T&IXXWM ireraeBAT, BBSSiyi WASHBKJfOff March 11, 1932. Totmg - Beaton Harriaon H Me* Toxic lorrls • ' em limeher - Cleveland TRASS. 1621 Seay - Blcteond Black * Atlanta MdDcts^al fluff? Martin - St* tools Geexy - MiJmeapclis Hamilton - Kansas City MeUmugr — Calkins - San Francisco *!he Secretary of the treasury ins tracts the IfedsmX reserve tanks, until farther advised, to lover the standard of fitness on all forms of enrrsiicgr *&ieli they ara permitted to pay out tinder the regulation* of the Secretaxy of the freasnxy lamed pursuant to the Proclamation of the President of the United States* pmposes redea$>tlon. Only such currency as clearly cannot be used for farther be c&nceled ***<& forwarded to for She federal reserve baizes and their branches are also directed to exercise discretion In noogftjlng with denominational requests for eorrenqr, in the light of their reserve stocks in the various denominations* In making payments ef corrency, particularly in the larger denominations, the Federal reserve banks are also directed to keep in mind the President* 8 proclamation, the Szecntlve Order, and the aegulations of the Secretary of the ftreasnsy witk respect to hoarding* Shis telegram Is for the infom a t ion of the Federal reserve banks and branches and is not to be given publicity. m m uM Assistant Secretary of fxeasnxjr. Initialed by* W ffi MB JHB m 7SE m fSB 3BMM sic Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority VJMDaoozfc. Qatar 7KDX8JU* mcsMFBya w jm m w m March 6* 1933. Young, Boofcm 1—wlrviHi JuuLftTX OBf low Tork Jtorria, Philadelphia Ifenohor, Cleveland HcDtragal, Chicago imto*4 mpii^ oily 9187* Kebnond Martin, St. S**ia 2&Uae Bladk:, Atlanta Qe«xy, Minneapolis Calkin*, 8 m Stranda©o < 0B&MP aathorily ooaferood vpon his by Freeidentis pro fflwntloi bank idiqr, Seorotary of Treasury lias amthorired a ll IM* of*! x t i t m banka and a ll ofchor banking inatitatioa* to make change by Of ciirresifly and/or ©Ola of ▼artoaa out# foi* sos exactly eqnal anomi of currency and/or ooii of other towals&tlQAt but no gold or gold certificate* shall bo paid on* or-n w d ia m H w g change, iaxt ef fbaal ZMKlfttiau will bo trananitted to won latar. Pleaae a ▼too all ronnniig msuVBSiofts ia y o w autinct as soon &» possible. &01HXLL. In itia le d b y: mat Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority VlU Daoozb TKDXBALSSS8KVV W)Agf> WJjSSXBBSOl M a rc h Boitoa i 9 Basilton City ClrwlMid H&rrlwm Martin St. lawt* torit Phllad*lpMa QMqr UIbBbv ouiuJTni 'spoil *^y pr#®icta®t* 9 i m l n i t l o a declaring talk holiday, g***wtaiy Iffiffft^ ffrllnwl’vr aagr allow th«lr t Qnftt#. mwtmmr* f t M m ju * ** frmmiey *•* 4H.^f iNEttdtitiig .iSMilSSsSSflaB* «oo»m to th* aafftty deposit boxes lwv9rx.1i mtialid v > 1933* Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED f Authority UNDaoozfc. Cotflr m m sm w m mftAi. BX$X8f3 BOARD WASBI&GftDV Mandi 6, 1933. jfe&cher Cleveland Twang Boston McDomgal Chicago It&rtln St. I*»is SwtSk Horris Philadelphia ton Kansas Citgr i*L.f Qeexgr Miaaaapolia Atlanta Uader a&thority conferred upon hi* hjr FttflMatl'i Proclaaatloa declariag holiday, Secretary of* T*m Anmiy has the followlag TBgolatiftBii <faaia %11 baakiag iastitvtiom nay tBpom regat *t return iataot and fltiwkt reatrictioa all cash, shocks, aad other itaa» delivered for deposit or collection which were received after tha last closing of fcasiaess hoar* and have not fceea eatered on the hooka of fosh banking institution.* unquote. Morrill In itia le d hyt Itffll Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority SKbBEHXAll YJSSKEt&X* MBSXBVM wAmnmmx M a rc h i v 1933* Tmmg, Boston 2fe&o3se?t Cleveland MoSwagal, Chicago SUTfiflOllii wm m m Saagr, Martin St* Loui* jjbXIm b Iorri«, Philadelphia yifMjair Atlanta Oaexy, Minneapolis 0o3Jcin», Tranoisoo uiutr asiiooFSiy aoarexroa ana ay F n s m m * 1! pncitfttUOB d*£Xaj?ing Imnlr itollda/i SBcoNitazy ojf Yrsaflmfy regulation q^Bbfllt# City S*gtS; t#SS#B# WlwDI uOTMu pZwB w*flW9 VB v M B QD0 CUEB CUmMB* lasiisd following Way (MQtiSQAi IS BCMSOrdifflKW 00 WHp XVwKKuTS* u wflHl UB1 WPft States, pxvrldad tiiftt m g o M or gold certificate* sfcall be paid omt. MOKJtlXJL Initialed IT! *W Mi 1SSI m «v Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED r Authority t)U D 3oozfc Oonr piw«ei»Af. xmamnr* nn&iati m mm wM Marcto 6, 1933* Tonag, Boetoa dev® land Sarrleoa, Seay lfoQ9*ii{gaX I w fork Blaolc Sosv&a Philadelphia Basilton City Hartin it. Strait Dallas aooiy Minneapolis QaUdUoMi ft'&XUSifcOO trader antilority conferred upwi hi* hy President'• proclamation doolarinis; holiday Seoratary of SbPSMtiiy' b u l t m d fo* ibUofisg regulation quote Jvy iBititelin say aooetpt paynaats In fnn*» or any other foaa aoeaptable to It on a m ! or ia settlement of obligations payable *1 or to su*to institution. MGHEIUu Initialed lyt Wtt m i at Of Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority Qotflr fiaUSEBSI m m m m am m m t March 6, 1933. Yotmg Boston I&ncher Cleveland McSougal Chicago Hamilton Kansas City Harrison Sew York Seay •jM Martin St. I*mls McKinney Balias Uorris Philadelphia Blaok Atlanta Geery Minneapolis Calkins San Francisco tinder authority conferred upon him hy President*s proclama tion declaring bank holiday, Secretary of treasury has issued follow*Ing regulations Qpote. iny hanking institution may handle aad collect drafts or other documents in connection with the shipment, transporta tion or delivery of food or feed products, may pay out or permit the withdrawal of such amounts of currency as shall he necessary in the judgment of such hanking institution in connection with such shipment, transportation or delivery of food or feed products, and may perform such other hanking functions as may he essential to the shipment, transportation or delivery of food or feed products, provided, how ever, that no hanking institution shall pay our or pexsntt the with drawal of any gold or gold certificates. Hbd Quote. UG11RILL Initialed hyi WBW I’HH CM m r Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority YlKDaoozfe, flZB. fsauKiMi y g m tif. BS81KIB B0A2D Uarch 6, 1933. lOTiag Bottom B lack Atlanta Hamilton fiasas (Sity Harrison lew toxic UaTfcwy l ^riniiny Jfeneher Cleveland Martin St, touts 9MQT Hiobnond Qeexy Baa yraa oieoo. Horris Philadelphia under authority conferred open h*» hgr President*s proclaaation de claring tank holiday Secretaxy of ftmmxf has Issued following regulations t C£aote Deposits heretofore 2« 08iY»d hy any hanklag institation pursuant to a i N M K l or legislative authority providing for segregation aad far xopayasat without restriction nay to paid on dsroiwd, iny banking institu tion which m s lawfally engaged ia tha haoiaee* of notifiag deposits prior to March 6t 1933, aay m a t * special tmat accounts for the receipt of no* deposits i d « l shall he subject to vitfedxtfsal on donsad withont m j restriction or limitation and shall ho loept sepaxa.tely ia cash or on deposit la Jtederal Beserve Banks or iixteotod ia obligations of the united States* Moral reserve hanks nay opon special accounts oa their hooks for their meaiber hanks aad temporarily for noa member hanks sad aagr receive ia such special acoomts the prooeodo of new deposits received hgr each hanking institutions, In making deposits with the M o r a l reserve haak parsaaat to this regulation tie depositing haak shall ia the case of eadi deposit indicate to the federal reserve hank by synbol or othexvrise that the fnads so deposited represent non deposits nade under this regulation, Upon receipt of saak deposits snob federal reserve hank shall credit the same ia the special Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority U U D aotefe s k iiiejfiiiMni BCMPB31 WAS33S&30S amotm% mt the depositing bank fesvsla providod for and shall hold ths sase solsljr t*x r#paymm% lo sacb bank. M s s « & resesnre banka shall porndt His withdrawal of any part of all of such now dsposits bjr tlis dsposltlng ba$k without i f IrtcUfli provldsd that His depositing bask shall la #«# > sfdsr ST rsqoast for withdrawal indicate to His Itodoral reserve bank by ayabol or otherwise Hist snob withdrawal is to bs sods fins stxch special aooocuit| prvfioea lsowefsr to&t so osmriag uutiVwitffl nail pay ou* or permit ths withdrawal of mgr gold or gold aanrtiflcatas. MfWfSftarr< Initialed bgr* HIV jUB Sad qnots Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED f Authority t)KD3oozfc, Qatar IStiMQfcOI WJBBBMM3* 5 X S 89S!91 March 6, v m . Y om $ Barton IfaJM&O? Cleveland Harrison Mmr Toxfc U.'dDcnBtffH Haniltoa city tfartia St# Louis Itor^fw^y nan** 0*0X? Philadelphia Atlanta Minneapolis Undar authority o a t f t m d upon hi* % doeXaring ssgolatle&f Stan Frandso* President’s proclamation holiday deezotaxy of fraaoaay has isrood following *fhoi» settlement tar ehooks oharged lxgr dxa*«« institutions to ths drawers* aooounts on It* hook* on or M n March 4* 1923 is fiiMnploto, sottlasisnt aaay lw cossplstod shoro traeb settleneat doss not lawlars the payment of aw&ey or cuirsswy.* Kwinnxx Initialed byj HS8T Mi IBB IW JkCK at m Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority V1KD300ZC-, Qcmr TKXiBQJUI! ggttKSflne BOAHD WASHIW3TOH March 1933. Yomtg Bottoa Harxitoft lev Yofk Philadelphia Itoaehor Clotolaad Bldnmd B lack Atlanta Chicago Martin St. Louit goosy Ml3BB6#pOll# tteilltoa Xintt&c City HoKlanoy a m Fraacitco. T M t r tha authority conferred wpm hi* tgr the President*e piQelmtioA of Mardi 6f 1933, dM#lUPi8g a ‘ frfiwfo holiday fcfaf Secretary of thi Treasury hat iiftttd Hit following regulation* "Jny hanking institution nay deliver to tho peraon entitled thereto properly identified decwnentt and tecnritiet bold ^ safekeeping.* Morrill Initialed hy? AAS *«* scu& institution ffcr Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED I' Authority VlUDaoozfc Copy TKL80BAII gemtii. HESEHTE BOAH3) WMMSMWS March 6 t 1933. Toning Boston Harrison Kew Toifc Harris Philadelphia lutiiir Cleveland Atlanta Mclkragal Chicago Martin St. Louis W n f l m i mm MG&llIlfeSy Galkins, San Tranclseo. Seaar Bsnllton Oily SOOty MlBSiipoUfl Under this authority conferred npo» the Secretary of the Treasury by tta Presidents proclanation of March i 9 1933, declaring a tank holiday, 3mm art advised that any tank taring a Inaodi in a foreign country may deposit collateral in the United States to secure advances to rag 1 branch in a foreign ecnmt]qr» provided m i l transaction does not involve any transfer of credit fwsi the United States to * foreign oenatry and any tank taving a branch in an Insular possession of the United States aay deposit United States Qoverm&ent securities or other collateral for a similar purpose when raider the President* s proclaaation advances of local correocy in the insular possession any lawfully be nada. tfoodln Secretary of freasnsy. Initialed byi MB LHH Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority YlKDaoozfe. Qatar vjashibgidh March 7, 1933 loung • Boston Harrison - lew Toxic lorrii * Philadelphia Ifcneher - Cleveland ia * B 8. Seay - nn^iimi%i>i« Black - Atlanta. McOragal — Martin -> St, imuLs Qoezy «► Minneapolis Hanilton - Kansas City UoSioiMjr •» o&lkins «*■ 3an Tron&soo > u n asr fa e a n tn o r ity o o o T fifm vpoxi him oy fno r x t i i A i f t i 'i p ro clam atio n o f March 6, 1933, d e c la rin g a hank h o lid a y , th e S ee re ta q r o f th e Troa smry l i m od the- fo llo w in g re g u la tio n s s quo te hoove associ*» atlo m s and. o th e r a s s o c ia tio n s oxgaaiso d to p ro v id e an ad o q n ately so cared m edian o f t anpor a ry exchange, a r e hereby p e r a itte d to i s one c e r t i f i c a t e s a g a in s t sound a s s e ts o f banking i n s t i t u t i o n s , stush c e r t i f i c a t e s to bo d e liv e ra b le by each I n s titu tio n to i t e e r e d ito re and d e p o s ito rs on a p r o ra ta b a s is , p ro v id e d , howo f e r , that no such c e r t if i c a t e s shall bo issu e d b e fo re F rid a y , March 10, 1933, w ith o u t th e w m w m % o f th o S e c re ta ry o f th e freasn x y ad d ressed to th e c le a rin g honse o r o t t e r a s s o c ia tio n p ro p o sin g to l a m sftush c e r t i f ic a t e * , and f a r th e r p ro v id ed th a t this pexsd sa lo n any bo revoked in th e e v e n t th a t a n a tio n a l p la n to H oot th e e x is tin g w orgonqy i s proposed bgr th e S e c re ta ry of th o T reasury i f in h is o p in io n th o su ccess o f smalt p la n would bo in c o n s is te n t w ith th o o p e ra tio n o f th o oortifiante p la n iBMjaoto* Douglas A s s t. S e c re ta ry o f th o tre a s u ry I n itia le d byt JHB sac Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority QsaSL March 7, 1933 McEougal Chicago Hamilton Kansas Oily Seay Martin St. Louis McKinney Salims Slaiflc Atlanta Geery Minneapolis San fraaelseo Young Boston Jfeaeher Harriett Sew York fforris Philadelphia, Cleveland Under authority conferred upon hl» by president's proclamation delariag bank holiday Secretary of trasmcuey has Issued following regulation! £p3f» Any banking institution lawfully engaged in the business of acting as trustee, executor, administrator, registrar of stocks and beads, transfer agent, guardia© of estates, assignee, receiver, cosaAttee of estates of lunation, or in any other fiduciary capacity ®ay continue to transact such business in the normal and usual manner; provided that in the conduct of said business, except as may be permitted toy other regulations of the Secretary of the Treasury, sucfe banking institution shall not pay on* or permit the withdrawal of cola or currency nor withdraw any trust or fiduciary funds on deposit with any other department of the bank UOWILL Initialed by* WHS? JHD 50A T.TTR JPD CM m Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority VJUDaoozfa Onnr TSLS&HAM ygmmnpAY. H3SEKVK BOARD iASHHOTDI March ?, 1933, Chicago HMnllton Kansas C ity H arriso n lew York Marti* St. Louis I f tlla s jvoim* P h ila d e lp h ia Qeexy Mimumpolls Calkla* Sin Trancisce Yoaog Boatoa McDongaL ClOfOlaSd Hn&sr a u th o r ity e o a f tm A ^p o s him fcgr p x a s td a a t1s p ro clam atio n d e c la rin g baak h o lid a y S e c re ta ry o f T reasury h as iaaaad fo llo w in g re g u la tio n s sjjOOT* F ed eral *asatffa pangs a re atx tn o risea to oonanct la o ix noznaj. ana a a a a l o p e ra tio n s a a f i s c a l a g e n ts o f tb a U n ited S ta te s i a tra n a a a tia a a p e rta in in g ta th e exchange a f o b lig a tio n * a f th a TJaitad S ta te s , such aa a alrtag exchange a f d sa a sS a a tio a a , exchanging am pon f o r r e g is te r e d t o d s , aad T ice v e rs a , re c e iv in g re g is te r e d bonds f o r tr a n s f e r aad effect-* la g C .F .D . tr a a s a c tio n s . tJW*JO** Kamil. In itia le d by* JUS Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority tiM D aeozfc O w m ttxfatku mmm Wk am m mm mu™ soahd March S, 1933 Boston faachor Olovolaai MeScragal Oxle&go Hnliloi & B M I City SttSKpSiiWHB low folk Uartla St. U*&9 KtfinMQr Rtoftmpnd Komi PktLadolphla. Atlanta Ooos? Mis&Mpolii Svaaa* »o* unao? aeaukon^r cooxoira'oii Hfuwffli $t 19331 holiday, Sooiotajpy of SPBMKty ^Nfff following regulation* f jadui ogr v n m f S 4 i i i ,i pror iiwn»ioa or qpoSE *fhm posaleoioa grantod in Bsgulatio* ftafeor that deposits horotoforo nooiivd Igr aay banking iaotitattoa porwaaxit to a ^ m a n t i o* logiolatiyo authority providing for oogxtg&tloa aad w p p u t without NitiioUoa nay bo paid on demamd, iacludaa aogr bank Is which any pach dopoolto M t s boon rodoipooltod bjjr or mi behalf of tha receiving basic la acoordane® with such agrooaM&t oar logiolatiwo authority. • t U p f l Initialed byi «Hf MB iwt* JTwMp nm ok Ml Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority VlHD Pony TELEGRAM HSSKB72 BGABD WASHINGTON March 6, 1933. Young - Boston Harrison - Hew York Horrls - Philadelphia l*ancher - Cleveland TRANS HO, 15S7 Seay - Hichraond Black - Atlanta McDougal - Chicago Martin - St. Lcmis W ot your information. Geery - Minneapolis Hamilton - Kansas City McKinney - Balias Calkins - San i’rancisco Under authority conferred upon him by President's proclamation declaring hank holiday. Secretary of treasury has directed the Treasurer of the United States during the continuance of such hank holiday, unless otherwise directed, to observe the following instructions! *(1) Payments in gold in any fora will he made only under license issued by the Secretary of the Treasury* Shis does not prohibit the deposit of gold and the usual payment therefor* (2) Treasurer requested than gold Pay, as usual, all cheeks drawn on the of the United States, but not in gold. When you are authorised to ship paper currency, other certificates, in payment of checks. (3) Continue the usual currency transactions between the Treasury and the Federal Beserve Banks and branches. * McClelland Initialed byt JH23 AAB WSB BiU ww Reproduced from the Unclassified / Declassified Holdings of the National Archives DECLASSIFIED Authority Comr SStiBQBJIM m m iA L KSSEHVE BOAHD WASHIBG'JOI March 6, 1933. Young Boston Seay Oee*y Minneapolis Harrison Sew York BlaCk Atlanta Hamilton Kansas City Horris Philadelphia McBougal Chicago McKinney Dallas S&ncher Cleveland Martin St. Louis Calkins San francisco Under authority conferred upon M u by President’s proclamation de claring hank holiday Secretary of treasury has issued following regulation. Upon instructions of the Treasurer of the United States federal reserve hanks are authorised to transfer funds to other federal reserve hanks through the gold settlement fund for the account of the treasurer of the United States; to make payments to or receive payments from the Treasurer of the United States through the gold settlement fund and to make such entries in the Treasurer's general account on the hooks of the federal reserve hank as the treasurer of the United States may direct, transfers of gold and gold certificates and gold fund credits may he made between the Federal reserve banks and their respective Jtodsral reserve agents. Morrill. Initialed by* WHW Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority t)N D 3 o o z fa Qonr W M sm m m March 6, 1933* Tooag Boston Harrison law fork Horria Philadelphia Saay Bichnoad Allaata McZkragal Chicago Martin it* Z^uis Gaary Minneapolis Kansas City UcJCixmay Balias flaivif Saa Franclaoo Under authority conferred Fanchar daralajid vpm him hy Presidant*s proclamation declaring hank holiday Secretary of Treasury has aafhorissd federal assarts Board to adviss you that any Federal reserve hank or branch or agaaoy tharsof may purchase gold or gold certificates and pay thsrsfor any othar f o m of coin or eorrsaey either dirsctiy or through aay othar Itedszal rassn* bank or hrBnch or sgsnfly thsraof* unram.T. Initialed hjrc VSV JHD Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED I" 3 oozfc. Authority mQatar Kmmtm wmmai Harsh 7, 1933. C. M. Prioe, Scott A JUk, 134 S rotti L aS all* 8 * » • * , O d M c o , Illlaoli. iWHWWdpjbiis ywur ttltitfMEBut iJHjti&xjr ffn flflNI lwtilCfM|g tuMd iJi tlw F T fM & dn& tlon of Pywsidwiti sfiil "bxxilDBH nAldhn£ V l% m & o f %#T1W sSsiSswi iitibply tluwNi (Initialed) Tttnay^n A eeist&xtt 9ecEFet*ay o f th e f'Jpea.etMPy• JHDtU** Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority YJUP 3 o Q 2 b flapar TOmroAT. vrm meim BQABE WASHX1II$0* March 7t Totuag JtaiOllOl* Cleveland BhunrtLsns low Torfc Blade Atlttita Horrio Philadelphia fBASS 10* ...^ MoD&ttgal VTmim/ Tammam 01ty Martin St. M i KoKJtaiioy TkH a i OOOXy Mianaapells Son Tra&dooo authority conferred upon M » tgr P*o*t&o«t*o nuftrtla— tinii doalarine tenk Seorotajnr of 93WMjnQonr tee Im h b A following rogalationt <$90Z8 ill federal mwmm tanks a n authorised to m i i v t aaoh flra* oollootoro of internal rowoan*, collector* of oaotoao and otter «U»etor» of jmblio I M t for dopoeit to tte orodit of tte H n N m of tte flnltod State*. USPDSS. Morrill Ia itia le d Igrt WBV rai ACM Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority VlK Daoozb Iggpgjr fSDTOUU W &SfflTSBOABB WASHXBUIOI Tonne Boston SteMdiiHf CloTtlsBd McBongal rtstgn Hamilton Kansas City Hi&rrlson w w ivinK Soay TBfilssottd Martin St. Louis MoKHnaey m il* * Borrls Philadelphia Blade AUanlft Oeexy Minneapolis San franoiseo Trans. Under authority conferred upon him by Fresidnat1* proclamation declaring bank holiday Secretary of Treasury has issued following regulations Quote Uaoii federal reserve m y (i) available to its — KbbW which, in the jadsneat of the federal reserve bank, are coo$lying etrictly with the spirit and purpose as well as the letter of the regulations issued by the Secretaiy of the Treasosy pursuant to the 1*1*0sident* s proclamation a, T t%sa\v holiday, limited ja&oimts of frot*! and/or ffljrr^ fliy (other than gold or gold certificates) as shall be absolutely neeessaiy in order l» siabia sach nsafeer banks to exercise the restricted functions permitted by saat* regulation*, (2) extend to each suoh ssAer bank sueh limited anounts of dlsoomats, advancements aad accomodations as shall be absolutely necessary for the exercise of such restricted Amotions, aad (3) oaks transfers of credit on its books for such restricted purposes between, m e accounts ox such sensor bsbsks ana/or nomnenroer clearing Banjos wnicn. In the Judgement of the foderal reserve bank, are complying strictly with the spirit and propose as well as the letter of such regulations; Provide ed, however, That before granting any suisti discounts, advancements or a©- Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority y]UD a o o z b Qatar ffSUNRWM TOHZBAL 8883SHfB BOA&B to all Qoreraora * a eoanedationi or waking auch liaitad payment# of coin and/or currency, tba ffedaral reaerva bank shall first require tbe mender bank, (a) to infom tha J'Oder&l raaart® of tba aoxranta of ooin fliiy' iwfwy whioh it has an hand, (b) to inform the federal roaanra bank of tha oireomataaoee giving riae to tba need for additional ooin and/or cor* rancor, and (e) to deliver to tba federal raaenre bank in exchange for other forma of ooin and/or currency or for credit on it# books all gold and gold eertiflcataa hold by M b member bank in its own right." tJI^TIOTS Morrill* Initialed byi 9KV MB Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority VlUD 3 o Q 2 b Qatar i|ljryg|g|U JKSttUU* maywOT W kaujm fprn March 7, 1933, Young SkMKf CMmkqp aoiw h aidnond Ktnnpolli Harrison Sow tost: Atlaata Jorrie Philadelphia KoDoogaX diioofifo IIOXlSBOl' HumA sr Martin St. Louis OaXkins Son fraaoieoo Basilton CXevelaad fmiy fla ils Ttiiana n, MHMI4 Hw ♦ mmmmmmmim* M u r author!.oo& ftrad opon fcgjr Frootdoat* • proelawtlM d*oXjurUc teak holidojr SwaawilBiy o f ffeOMugr Im laotiod follawiJa* y jfililit ii <pofS *M ox«l roaoroo hanks, in tholr discretion, oro aa*> tiXftOrloSd to htfSdXO ifaOSfcS £■& (W Xltffftfll itSMI OrjUdUfeg Ottt Of tlMI TO1 striotod honkSa^g oporations ponolttod oarffcor tin tocbIo ttsmi of tlis Soo** ittMQr of tho ¥>000017 whoa it 000 reasonably l»o anticipated that fnads «ati»faotory to tho M » n l assotot Bask m i he provided for fit: pajBoot of M i l cheOko and oolXeotion Itens { Frevidodi howtor, that 00 «o!d or «>U ocrUfleatoa A iU to j*U oat t f tutica.* tnqpon MoRiU Initial** W t *® auk M *n l iw m Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority VlUD3QQ2fa TJHLBCMLIM WS3MBML BSSSBVE fjksszmfoK March 7, 1933, Tonne Boston Stancher Cleveland McDongal Chicago Hamilton Kansas City Harrison lev Tulle Seay Martin St. Lcmifl McKinney Balias Horrls Philadelphia Black Atlanta Oeexy Minneapolis Calkins San Francisco Trans * Mo • Undler authority conferred iapon him hy President9s proclamation declaring bank holiday Secretary of Treasury has Issued following regol&tiom QPOTB Sach ^federal reserve hank is authorized to settle through the gold settleaent fond with each other federal reserve hank fbr a l l transactions which are permitted nader the regulations of the Secretary of the ftreasosy* Morrill. Initialed hy* MB m IBB t.mt ms m Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority M D 3 0 0 2 b S tray wi— ^ m g t w re ypnyfl March 7t 1933* ta v m g Boston fSJkOh&T Cltvslaad Mdkragol Chicago Hamilton Kansas City Sarriion M m York Seay Martin St. Inmi« McKinney fforris Philadelphia Black Atlanta Geeiy Minneapolis Calkins San Franciseo ©eaas* Ho. ........ . Undar authority conferred upon hi» by President1* proclaaation declaring hank holiday Secretary of Treasury has issued following regulation* QPOTB All federal M m r t e Banks art authorised to continue their usual aad nomai functions pertaining to the handling tf collateral securing the deposit of the public moneys of the United States, as provided ia Treasuxy Circular 93 as aatnded and revised* W^pOfX* Morrill. Initialed hys AAB MM Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority yjU D aoozb X M M O i March 8« 1933. mm 3iOlMM>a& "SXjudc ** Jt&loata XoZtoagal - qhloogp Martia - 8%. Lcraio ** Bootoa Muttimm - tom Toaric l o r r u - nuiidiipiiti _ SfaUFClik 1808 QMxjr * Mianoopelio SMiltoa ** Xfcftoao cyHy liifr^wii^y *, ThilU « fhmMr+mm « yVftfl&ifflMI £ *lMHSfclC 9oovotoxy of tlm TXHMkwuQf’ oatliorisoo imy fo4o®nl snmmkpwi d*otloa vH^hdUk tli® ltaltmitiftm 4ff %JWP at lit &!#-> of tiMi 9w&osal SMmmnpiW' Aot aaflL tl® if^ipitla%lo m booowo IfftttiiTif tiMfrrowador* (1) to arika txaaafowi of oredit mi ^^3p; Ipflft ’ ^j^KWISm^C^KK^^ &§ to 1onport f m a oaaaojrtc Iter foroigjat acMMrattt* pso*v£dod titot tha pWOOOdS tfenVOOf 03WI erodltod Oft Its book* ia dollars, (I) td aalOl tiaBofor# aad/or MOMMnftNlf1 OlOariag os* angr otlior fe*a aoaoptable to it oo. aceorasit #ft or 1st oettloaaat obligations *** $% 03f |ffit4 of$ $(§ rOOOlfS ^ J T*lfr*Tt0 1# dollars ffen* feroiga noim ■xinnrltiafIw (?) to oredSt oa it* iMM&ka to fsrslgi onswront aooonaio Uaitod States ewxyefteyr or gol.4 deposited *it& it* Bfclese *&m*wtM o r i m d ty the Secretary af tlio t*e*sosyf no mail t u M M t t f M shall isvolw tho export or paying out of *ay gold or silver ooia os* to aqr plaoe or eiixiinQyv tin transfer of oredit fron ^ tr «» inoroaoo ia tho total a m s t of g o H bold ly mfti JWloral roooxro iMOdc tntar oaxMrtc tir fozolga aoooaat. MOfiHILL, Xaitialod % t States Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority VJKD3oozb Otrar mn.'mKB&u WA3HBMQ1J Haxtih 11, 1932 Blaak * Atlanta Bafer year Mar^h 7th wire* Share would appear to he no objection to hank releasing receipts calling for ooiaraodities sold aad talcing In exchange documents ©ailing fair oDsmoditles of sane kind and substantially ^ same value or to sturyeadering warehouse receipts in substitution draft drawn on purchaser of oocaaoditles with shipping docuasnte attached* Uorrlll (3) Chester Morrill m a fm m /ts t Initialed by* 1BI ■s*Xfff of m JJH HE3IT Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority VlNDSoozfc. fflmy B23SHAL HS82SRVS SY8MI (Leased tfire Service) 24 W T 86 Beeeived at v.a&ingtonf D. 0* .Atlanta Qa llarch 7 1345 pea Morrill ..ashington At tbs request of Certain Atlanta Banks m aslsed yesterday whether or not a bank hplding receipts calling for oonsaodities ishioh have heen sold oould surrender such receipts to the pledgor otmer taking in exchange document s call In,- for oociaoditles of same kind said substantially equal in value. Banks uould appreciate regulation on this subject which would cover In addition the question of whether they would he permitted to surrender warehouse receipts and receive in substitution draft drawn on purchaser of cosaaodity with shipping documents at tailed* Blade 22Qp Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority VlUD3oozfc, COPT Murek 18, IMS. jjam Iw M B H P Ilf ^ The Soorotary of Stato. S w r Mr* Sm rw tm ryi Roooipt it aoknowXsdea* of ymr 1955 with r*f«r«no« to tito trsatp m t to W of ifarch 16, M o o d t d to g © M hold, undor earmark or *fchorwi»s, In this country by foreign. othttE* fOSPSSgB It is wjf 4 iWffit if tWLs wattor boon f discussed with Mr* Fola of year Dopart»s*t, aad that ho is fssilitf with tin* dsdfslAjpBteiits in ooonoetion therewith. Tho Troasury now has laate* oancidoration tho issuance of cor» tain orders or rogpal latlotis relating to goldi sod I saa advised that, before «oy aotion is tafeon thereon, they will bo further discussed with representatives of .your Department. Respectfully, (signed) EUGESE MEYEfi Governor Initial<4 ISQTi W* W#, O* M«, P# R» H«, il« H# B«, E« Il«£ G* R. J., C. S« H „ A* C. II* Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority MNDSoozfc. core iJapurtaaafc of State In reply refer to £A ;;lnreh 16, 1933 dear J1r» Ileyeri I set infomed that the Federal Pweeerire Board will proceed ia the near future to the fcumulating of decisions smd the m kiztg; of regulations gororaii^: the treatamt to be aooorded to gold tlmi saay be held, under eannark or otherwise, in this country by foreign central banks, foreign. ©aEd-official bank® of different varieties, and ordinary forel&i tasking Institutions* litnee these decisions iaay beeone Batters affecting the general relatione between this cosenaacnfc and foreign corernaer.ts, and siraee this ep&rteent is likely to be approached by foreign governments la regard to them, say 1 respectfully request# if it Is proper, that this D*{>artdeixt 'be lafomed in adranoe of the m in lines of decision to be taken ae th-t it joay k?e an opportunity to oonsider thoa* Sincerely yours, (signed) 7km Gordell Sull ikaaorSbSe i:.ugo»e i-Ssyer, Ckwemer, federal ;xeser*e Board# «a«shington, .P* C* Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED r Authority OOFT T £ I> M C a n m m i ISaahlngtoaa m ro h 10, 1933* Seay «* Hiolsaoad Young - Boston ILarrieon - llm York Borrifi - Philadelphia Fanoher * Cleveland TRAMS 1700 Geory * Ifianeapoli® Banditi * t e s City McKinney •> Dallas Calkins - B m F tn m im o Bl&ok - Atlanta UoBotagal - Chioago Hartin - St# Louis In reopens© to requests the .Board h&e ex ten d ed mtil M ro h ST the fiml date referred to in the Board* s wire of March 1 2 , i Trtme 1G31, \uhich therefore is assended to read m followsi QUOIE It Is requested that, you prepare m d forward to tl» Board soon a© pos sible after ,,arch 2 7 , 1933, as casnplete a list m can be xaado from inforsaation yov. are able to o b tain of the nazae* and addresses of all persons u!x> have withdrasm gold frcaa your bank or a raeciber hank In yoijr district sine© February 1» 1333, and who have not redeposited it iii a hank on or before .ferah 2 7 , 1933 SWJOTE It is suggested that you give such further publicity to this natter as in. your opinion may b© appropriate# Morrill In itia le d ■ b y i A * A * p .# Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority M D 3 o Q 2 b IELBGEAH RBBBTOB BOAHD itarofc IS, I M S Yo&og » B®#lswi BsrrlsoB «* M r Xark m Sfi^W ^1|ih4a Sssy mBistwsrtl Blsor * & U « n t m CfcldN^gO Qmtf «** iitinnsspoil1 rSUKMNHr m vJwVSNBHBflt J i f »1jb * « v * uO U Il v ljt lM **A*® iimitllton * Kwisss City laylftwufy m ^1?** ** n lH lTHK)<HOO T im roqussc w w i l T i B lit ta® Bosra's toxsgrsK or Iwii isnnNBi 8 xrm ns miotw jls ibew m ki. w r o s a a s ixmuupiisi huuxji a s i s r w jo s s s o ii that you prspar* sad l^rmrd to tlMi Board as soon as possible after l&urait IT, I M I f m M o i s t s a list as <**» be » d « frssi i»for»atioa you srs abla ta sfe’tsdu af t$Ns *w»4 m*^T*gftMn*iif of six jmhtsosss sbo Issnm altfeirana gold from your baak or s m w b o r bsak is your district si&oa l^sbnssry I# 193S# snd iiu> hacrs not rsdapasltad it ia a bank on or bofors liaroh 17, 198$ UWJtJQTE ton xasgr glvs swob pAXHitgr to this nsttsr as you ooasldar sj^proprlato iiorrUl Initialed %qti £• M# C. M* a. a* su G* B« J. ?. R. H* C • o• H • Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED r Authority COFt TBtiBGBAH FEDERAL RE8E3SVB BQAHD Washington JSaroh 9# 1933 lo m g - Boston Harrison * Ileif York Borris * Philadelphia itosiier - Cleveland TRASS SO* Seay - Riofa&ooad Black «* Atlanta iloDougal * Chicago Martin - St* I«ouis Geeiy * Minneapolis llaxailton * Kansas C ity HeKizmiy «* Dallas Calkins - San Frunoisoo Referring to Tran* 1677 and 1533 request contained therein applies to both gold coin and gold certificates* MoClellaxxt* Initialed by* B* M* M* Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority COFT TELEGaill FEMIAL RESERVE BOARD .A.. . waanlri&TPii March 8, 1933 You&ig * Boaton Hmriioa * H i York JNQiTaUi «* ITOAiflfA|> lltl Procter - Cleveland TRiHS BQ. 1668 Saay *» TUolamrMl Black • J&QUfNlgaJl •* f Uartin • St, Ionia Ia raaponae to inquiriaa riifti banka re Trans* to Pedaral faaawa VSTT# you are (1) O s w y ** TUthiimipoI 11 Hasdlton • City * i/BijyBS C a H d m • San R n M l M trm mwmetCL Federal adviaad tfcat there la no objection in|* ^ tixilAP <•nf>onyiy^f frcai nommwubwr banka in tlaif rnapaatilHi diiUrlfftsa) (2} obtoki&tx^g ^ 1 em^ tare {>9|flp(^iiag aithdraaala prior to F^bsruavy $m fluiaftittlsg data to Board It alMrali-^ ba ia£ra(pitafl aa bafcwaesi adtbdraanla bafiwna l^aibruary 1 and thoaa aftar Fabmany If (5) auggaatixig that pt&Holty ba gltaa to reqoaat la aaoh looality* Merrill TW<».4^i%a iv C* F» 0* 0. #m M# 1* JU H. J* ft* H* 1« K* K« Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority UUDaoozfc, co n T E L E G R A M FEDERAL RESERVE BQUtD March 8# 1935* Tsuag- Boston Harriso®. - M r Tork Sorrli * PluLuiSflpiuft ranonir** wJuvvwjaj«. THAIS. 3L677 Ssay • Rlchaood Bk o k * Atlanta MeDougal - Chicago aarxizi «• &%• ukiii Gssry - Mlnaaapolia Hamilton - Kansas City iftiliBMy * Dallas vaiiriiis <*■ oan jnraxtsisoo It la r«qu*«t*d that you prspar* and foaramrd to tbs Board a* sooa as possifclo aftsr Iteroh 13, 193$, as oanplste a H a t as oan b# ndls froai inform tiaa you ars ahls to obtain* of tha nans and addrasass of all porsoas who hara withdrawn gold froa your bank or a amabor fcaaik in your dlstrlcrt slxass f^braaipy 1# 1933* and who hast* ttflp y 3T ^C W 5p O ® ivttS L3 W rX X IA0 4 M B U KfXtl fjB PW M T W F ®H M rO Jl **& #J U P m 3* Initialsd hyt 0* M* A# A. B* w* iu w. s* n# c* Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority t)MD 3oozfc, Cow fm m B m mmm hssssto board M sm m to s March 10 1933 Ca m Bew foUc With reference to telegrams already received t>y this office giving m m * of basks making application please advise yoor opinion as to reasonable safety in granting licenses in accordance with Secretary of the Treasnrys telegrams f . H. WOOBIH Secretary of the freasiiry Send same telegram to followli^ - Black — Atlanta Geery — Minneapolis Reproduced from the Unclassified / Declassified Holdings of the National Archives DECLASSIFIED T Authority M D 3 o c « fa Oopst 380 Accounts aad Deposit* }£cp. loans. March 8, 1933. GSSST KIHHSJPOliIS Betel Mare h 7. Hegulatioa 8 psrmits the coapletton of settlement trans actions in. question. f .I . fOODIl Secretary of the T re a s u ry Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority t)M D3oozts. Qotar FSD&EUL HSSKHfl STSTSM (Leased fir# Service) 297gta Minneapolis Received at Washington, D. 0* mar 7 1003pm Hon Secty of tha Treasury Washington Minneapolis ant St Paul clearing House requests further Information regarding your regulation dated March 6 1933 1m order to complete settlement of checks charged hy drawee institution to tha drawer* account on lt*s hooks and for which drafts were issued on or before March 4 t 1933 and which drafts are drawn upon hanks other than the hank or originally forwarding such checks for collection and payment, would It he within the scope of tha above regulation referred to for hasks in Minneapolis and St Paul to clear such hank drafts among themselves where such settlement doea not involve tha payment of money or currency? Such arrangement would facilitate tha disposition of several hundred thousand items preriously forwarded for payment to other hanks and eliminate the necessity of charging hack to endorsers the amounts of such original items as wall as endless controversies Minneapolis 1030pm Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority UNDaoozfc, Ooiaar 1 fMAStmt DEPARTMENT Washington 1 otscbam Official Bualaast - GoveriBient Bate* March 8, 1933 Horrls federal Beserve Bask Philadelphia, Pennsylvania Betel seventh. Regulations do not permit settlement of character mentioned In your telegraau f. H. WOODIB Secretary of the freasury Initialed hys JPD iiaei Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority UUP 3 0 0 2 b flamy m m nm IEB8HAL HSSSRVX SYSTSM (Leased Wire Service) Received at Washington, B. C. 1c fa Philadelphia 1022a liar 7 Board Washn Where an American Bank has issued a letter of credit and the holder had drawn on It in a foreign country and the foreign hank requests remittance from the American issuing barite may it remit stop One of our “banks yesterday remitted by drawing on Its balance with a Canadian bank. Horris 1027am Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority Saa TEI&G3AK r o m HESEHVS BOARD WASHIHGfOH March 11 1933 HALE sai mircisco IKTSHPHSfAfKH OF SSOUIAflOI 1? AS EXFBESSSB 11 TOtm .MARCH 10 m m S M UORHXEL LS%cw Initialed liyt JJ1 CM SIS mm JP3) IS COHRSCf Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority m m m JfMKSAIa SBSSmfX STSTEM (Leased H r e Service) Received at Washington, B. C. y 11# San Francisco Mar 10-11 715am Morrill ffashn Keferring board y i n rafeer 1614. As ve interpret regulation therein it refers to tho passing of entries represented %y cheeks which a baiik adght hold t a a on itself received f*o» on* depositor for credit in M s account drown against the accomct of another depositor of the sane bank and it would not apply to the clearance of checkai between banks. Please confirm or correct our interpretation quickly Hale 1023m Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority tiNDSoozfc. Soar tnusuBr im m m m Washington Official Business - Q-ovenaaent Bates March 8, 1933 Black federal Beserve Bank Atlanta, Georgia. lour telegraa March el^ith with reference to segregated deposits. request Is apparently new covered by Regulation IS. W. H. WOODIS Secretary of the Treasury Initialed byt JPD This Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority Corasr fsmiH S’EIDSHAIt HSSSRVE STZST5M (Leased Wire Service) Heceived at Washington, 3. C. 28f mr Hash Atlanta 1233p Mar 8 Morrill Washington. On March third banks in Alabama were operating tinder Governor1® proclamation permitting restricted withdrawals of old deposits and the opening of new deposits in cash or the equivalent for unrestricted withdrawal. Oar Birmingham branch received on that day wire transfers from other federal Beserve Banks to First national of Binaiogham for payment in currency to designated persons firms or corporations. These transfers were largely for payroll purposes or in payment for cotton which had been purchased. We agreed to complete these transfers by placing proceeds In special account to be opened tap by Birmingham bank to meet withdrawals made by itfs own depositors from new accounts created by the deposit of these particular funds. On March fourth reserve bank began observing Georgia holiday and transaction has never been completed for that reason and because of President's proclamation. Customers of First National Bank for whose account transfers were intended are now insisting that they be allowed to open new accounts pursuant to prior understanding out of transferred funds and Birmingham bank wishes the amounts Reproduced from the Unclassified / Declassified Holdings of the National Archives DECLASSIFIED Authority M D 3 Q 0 2 fa v m m m a m a * hkseh?$ sistem (Leased fire Service) ..■3iteceived at Washington, D. C. which ire hold transferred to their credit ia special accoxtnt which will he available for sol© purpose of meetii^ withdrawals from new accounts so established. We think that this disposition could he given to the matter without violating either the spirit or the letter of president*s proclamation and regulations of the Secretary of the Treasury. advise as soon as possible. Black 143pm Please Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority MUD300ZC-, X£ii££&4ll Official Business - Government Bates March 10, 1933. Norris federal Reserve Bank, Philadelphia, Pa. Betel seventh. Regulation I permits transaction mentioned. CHESTER MORRILL Secretary to Board Initialed hys TCT.fi ME ttbt CM Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority y)MD3oozc=> JOPY T E F O E Philadelphia R A R A L l!l a V T 6p Mar 7 Board Washn In order to relieve the acute situation which apparently prevails in thia district in connection with shipment of food or feed products believe it essential that action be taken at once permitting transfers of proceeds of drafts by wire between Federal Reserve Districts for cash payiaent to shipper. Morris UU© 600pm Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority y)MD SB L B S H A M March 10, 1933. Geery federal Reserve Bank, Minneapolis, Minnesota.* Betel eighth Postmasters deposits are not included in transactions mentioned in regulation P. CHESTER MORRILL Secretary to Board. Initialed hy: ELS ins JJH CM Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority copy T E L EG H A F E D E R A L R E S E R V E SY8T 77bs Minneapolis Mar 8 244P Morrill Washington Referring trails 1564 are we authorized to accept deposits of cash from Postmasters Geery Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED >“ Authority M D a o o z fa Official Business - Government Rates March, 10, 1933. Honing, Federal Beserve Bank, Cleveland, Ohio. Betel eighth. It appears that regulation seven and G and I authorize the transfer of funds and credits requested in your idre. Chester Morx&ll, Secretary to the Board. Initialed hy: MS MHG JJH CM Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority COPY T E L E G R A M F E D S R A L R E S E R V E S|rS7iM 33dfa Cleveland 144p Mar 8 Marrill Washingtern Ve have request for wire transfer from Detroit Branch to our Cincinnati Branoh of currency accumulated in Detroit by chain store oredit to be to G^ioinnati member in segregated account* Also wire transfer tso m Philadelphia to us of currency for pay ment of drafts representing food and feed stuffs* Please request permission of Federal Reserve Board to consummate these trans actions* We desire to procure a blanket pezmlsslon from Federal Reserve Board to make transfers of credits or funds from or to this bank by other Federal Reserve Banks to facilitate member banks in functioning within existing restrictions of Secretary of the Treasury and State limitations * Fleming 152pm Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority »ND3ooafc> SL1ZI Official B u s t - Gorarnment Bates Uaroh 10, 1933. Tederal 1M « f i Bank, Bichnond, Virginia. Betel ei#itlu Begolation ten sews to permit a hank to discount a note to provide a costosisr with pajnroli fondt if feariks situation permits it aad if transaction coxnss within spirit! and parpoae of that regulation. Rsdisecants Tagr federal Beserre Bank are governed Tagr regulation <1 step As to transactions between hanks they are peradtted if within regulation ten* CH1STEB Secretary to Board* Initialed hyt ELS NEH m Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority T E L E G H A 15 COPY If E D E R A L 11 E 3 E R Y IS S Y S T £ II 3brhu Richiaond liar 0 53i5p Morrill Washington Je request interpretation of Board’s telegram ilarch 6 giving regulation of Secretary of Treasury relating to Exercise of Banking function to provide funds for payroll and other necessities. Gan banks discount a note far customer to provide f^ustoiaer with funds to cover payroll or other authorized expenditure; and, if so, can federal Reserve Bank rediscount such note to provide member bank with funds? Oan one bank pay to correspondent bank funds to enable correspondent bank to pay customer to meet payrolls or other authorized expenditure? Seay 5*5 7p Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority VlH Daoozb 2.2.ZI 1 I 1 J 2 2 A 11 O fficial Boslnati - Gorarisaant Bataa liareh 10, 1ISS. Y3PA<Ma4[^ Todorml Bsssrrs Bank, l a a i u City, Mlsiourl. Bstsl Answering question A ragolationa H and 1 seem to c o rs r till*'wad to p « m i t handling such d r a f ts In th * u s u a l m aanT s t op Answering g u s itlo n B r e g u la tio n a sea&s to eo?«r t h i s p s rm tttln g tr a n s f e r s o f o rs& lt »top Answsrlng gasstlon 6 regulations H and % s e ta to oovsrtsls* Answaorlng q u e stio n B r e g u la tio n 1 seens to cower t h i s stop fe a p p re c ia te your d i f f i c u l t i e s and a r e endeavoring to cooperate a s snob as p o ssib le * OHiKflyffiftlHOtiHTLL Secretary to Board. Initialed hy« xu mm JJM m Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED > Authority T E L E G R A M GOFY F E D E R A L Kansascity Mar 8 R E S E R V E S Y S T E M 1135am Board Washn We are receiving many inquiries from Banks, Livestock, Milling and Grain Associations for information as to hom settlements can be made for necessary transactions as follows: 1— Shipments of stocker and feeder cattle in addition to livestock for slaughter already authorized. drafts* 3— Drafts for produce and other foodstuffs. 2— Grain and flour In our opinion it is necessary for the orderly transaction of business that regulations be issued or clarified with reference to the following points in connection with the above transactions* A— Can we receive from member and nonmeraber banks drafts covering transaction listed above and if so how are they to be handled. B— If such drafts are drawn on interior points how can such banks make remittance in funds available to us* C— If drawn on banks in other Federal Reserve Districts will such banks be able to transfer funds to us through other Federals. D— If member banks draw on their reserve accounts in payment for such items how are they to replenish reserves unless they can obtain transfers of balances carried in other reserve centers. These are a few of the practical obstacles with which we are confronted in our attempt to comply with regulations already issued. Please rush reply. Hamilton. 118p Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority VlUDaoozfe, FEDERAL RESERVE KTMUIX NSW YOBS. SYSTEM - LEASED WIRE M*roh 2 9 , 198S Responding your l e t t e r March tw e n tie th T reasury a d v ise s as fo llo w s STOP Licensed banka a re a u th o ris e d t o tr a n s a o t b u sin e ss w ith u n lio en sed banks t o e x te n t n ecessary t o p erm it u n licen se d banks to perform such r e s t r i c t e d fuziotlons as a re a u th o riso d uzider emergency banking re g u la tio n s STOP Such r e g u la tio n s do n o t r e q u ir e lio e n se d bank t o in v e s tig a te t o determ ine i f a p a r t ic u la r tra n s a o tio n w ith u n lio en sed bank i s f tir a purpose a u th o ris e d w ith in lim ita tio n s o f suoh r e g u la tio n s STOP P o s s i b i l i t y i f any o f l i a b i l i t y o f lio e n se d bank i n any suoh o a s t t o d e p o s ito rs and c r e d ito r s o f u nlioensed bank depends tp o n v arying f a c to r s a s governed by g e n e ra l p r in c ip le s o f a p p lic a b le la ir r a th e r th a n Jby T reasury R eg u latio n s and lio e n se d bank m ast a c t on own r e s p o n s ib ility i n t h i s connection# MORRILL JTO 910 im JED CM Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority U U P 3 0 0 2 b FEDERAL RESERVE B A M of i m YORK COPY March 20. 1933* Federal Reserve Board, Washington, D. 0* Sirss The following questions are representative of those which have been asked of us by various licensed and unlicensed banks and by custon*era of such banks t 1* Do the an unlicensed bank, tor or of a similar funds to the credit bank? regulations of the Secretary of the Treasury permit -which is not in the hands of a receiver or conserva official of a State Banking Department, to withdraw of such unlicensed bank on the books of a licensed 2* Is the answer to the foregoing question affected by the existence of one or more of the following additional facts, and, if so, in what wayj (a) That the funds are to be transferred to the unlicensed bank* (b) That the funds are to be transferred to a third party. (c) That the unlicensed bank is a State member bank and has been authorized by the appropriate State authorities to permit withdrawals of 5% or less# <d) That tiie unlicensed bank is a nonmember and has been authorized by the appropriate State authorities to permit withdrawals up to a specified limitation. We believe that a substantial amount of the confusion which exists ■with respect to these matters might be eliminated by a ruling of the Secretary of the Treasury, and we should appreciate your attempting to obtain such a ruling or rulings. Very truly yours, (Signed) Herbert H. Kimball Herbert II. Kimball, Assistant Counsel* Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority U N D ao o zb '■V ->* / ifiLLI MMKiL BESSHTB T M«K«r WHt E STSfBC Kurch 29, 1933 H o tel MHrdh, tw a n ty -tM rd SEQP T reasury a d rla a a B ag u latlo n thirteen* j w M M jf-g poyaent osr w ithdraw al o f any t r u e t fund* cm d a p o a it w ith l a s t b i r dapartm aat o f W w hather or not meth d e p o s its a r t aaararad S90P fraaaw qr a d rla a a t h a t aaw re g u la tio n * a r a bow madar c o n s id e ra tio n w ith ra s p e o t to t r a a t fond* and a l t o H 8 « n d d e p o sit* 8fQf S reaaory a d v ise s that la th a eta# o f a rev o cab le t r u a t B a g u la tlo n th fcrteaa p e r a ita d e liv e ry o f a e m s ritle * h e ld by hank th ereu n d er i f otherw ise p e rm itte d . I n i t i a l e d hyi JT C tfh t GffiC CM JfC Reproduced from the Unclassified / Declassified Holdings of the National Archives DECLASSIFIED Authority VlMDaoozk S L S L tl OTERAX HESERVE SYSTEM (Lease d tire Service) Eeceived at Washington, D. 0* 67bfa Boston Mar 23 1125em Board Washxt B.qo-rt foriulln^/aa unlie.n,ed Hational ^ ln it8 tPnrt department revocable trusts tinder which they have been remitting specified sm s of money each month. The funds in the trust department are deposited in other departments of the bank and securities have been segregated to secure the deposits due to the different trusts. Is there any m y under regulation 13 whereby the bank ean pay out or permit withdrawal of coin or currency for the payment of such monthly remittances when the fiduciary funds are on deposit *dth other departments of the bank. In the case of revocable trusts may grant or withdraw certain of his securities held in trust department in order to obtain elsewhere funds to meet his necessities. Young 1144am Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED f Authority V)U^ _________________________ ... FO U N D E D B Y WI LLI AM W H I T I N G 1365 OITTOFt OP 0B?I£h'A.L onUFSBL W h i t i n g Pa p e r C o m p a n y , ,J ik 18 1933 M L . -4jM, _ HOLYOKE, M ASSA CHUSETTS ■ * ........ . 7 ............ July The Federal Reserve ^ 17,1 Bank, Washington, D . C . Dear S ir j- I wo iiId about what these safe deposit happens 1 ike boxes to in N a t i o n a l if a B a n k has conditions to have Thanking you in qu ire closed,and free access in t h is what and t he State one's to ru les Banks, right Y o u r s r e s p e c t f u 11 y , and under s a pe d e p o s i t connection* are b ox es. d e c l a s s if ie d Authority Hr. Eugeae X* Stevone, Federal Resort* Agsiit, Federal Roeerv* Beak of Chicago, Chicago, Illinois* &oar Mr* Steven* i Thi t M r i , «• jo * know, h a co nsidered r e c e n tly , i a , t h e c a e e o f th o Piitaoy S ta to Baafc o f Case C ity , M ichigan, aad l a se v e ra l o th e r in s ta n c e s , & p la n o f r o o rg a a is a tio a o f S ta to mem b er basks lo c a te d l a tho S ta to o f Miohigaa c a r r ie d o u t under th o p ro v isio a s o f Act So. 32 o f th o P u b lic Ast* o f Miohigaa fo r th o yoar 1933# *ad Act Mo. 8 o f tho Pafcllc Acts o f M ichigaa f o r tho yoar 1 9 3 2 . The * « tio n ta k e n by tho Board l a the*a eases has bean w ith tho uader~ sta n d in g t h a t y o ar counsel was s a t i s f i e d w ith tho lo g a l asp e c ts of ouch p la n o f r o o r g a a is a tio a , aad i t *111 he a p p re c ia te d i f yoa *111 forw ard to th o Board f o r i t o re c o rd s a copy o f any o p ia io a yo ar couos o l aay hav* ren d ered i a t h i s c o a a so tio a and w ith re fe re n c e to tho c o n s titu tlo n & l v a l i d i t y o f tho p ro v isio n s o f la v sh o w referred to* Very truly yours, Ohostor Morrill, Secretary. BMW/ead Reproduced from the Unclassified / Declassified Holdings of the National Archives DECLASSIFIED Authority VJMDSoozfe, F E D E R A L R E S E R V E B A N K O F C H IC A G O ‘ 2 3 0 OFFICE m S O « V W OF THE 1933 t'A S A L L E ST R E E T June 28, 1955 C H A I R M A N O F T H E B O A R D AND FEDERAL R ESERVE AGENT Hon* Eugene R. Black Governor, Federal Reserve Board Washington, D. C. Dear Governor: Referring to my telephone conversation with you yesterday morning, Mr. Talley of the Reconstruction Finance Corporation has been in Chicago for two or three days dividing his time between his office here and our offices. We had an opportunity to discuss with him the banking situation in this dis trict. Monday night he went to Grand Rapids, Michigan, with the Chief National Bank Examiner and Mr. Preston of this bank, to lend his authority to necessary participation of the R. F. C.in an agreed plan to reopen the Grand Rapids National Bank under a new charter. From there, we are advised he returned to Washington. f | | At Mr. Talley’s request, a conference was called here of the bankers from Battle Creek, Michigan, which Mr. Talley attended. In that city there were three licensed national banks, one of -which has already closed and the j other two are in a precarious condition. Mr. Talley proposed a plan for | these Battle Creek bankers to endeavor to raise sufficient capital to reorganise \ | the two banks yet open, one on the basis of 60 per cent release of deposits, I i- and the other on the basis of 70 per cent release of deposits, and the Battle | I Creek bankers are now endeavoring to proceed along these lines. We have other situations in Michigan, which is by far the most difficult in its banking situation in our district, in which reorganization of some character of licensed banks is imminently necessary to prevent their closing, On the other hand, we have plans under way for the reqming of a considerable number of closed banks in Michigan, and in both of these cases, the closing or the reorganization of licensed banks in Brittle Creek is having a serious reaction on the whole State. There is notably a situation in Wayne County, Michigan, of four or five suburban banks, with deposits of about $25,000,000, which are practically in the City of Detroit and in which something must be done at once to prevent j| their closing. This was discussed with Mr. Talley but nothing definite came ^ out of this discussion. The people understand that we have what amounts to a mandate from the President to keep licensed banks open 100 per cent. The Federal Reserve bank here is willing to go to the limit of its statutory powers in making loans to this end and the banks in Battle Creek have only survived so far by reason Reproduced from the Unclassified / Declassified Holdings of the National Archives DECLASSIFIED Authority V)KD 3oozc=> F E D E R A L R E S E R V E B A N K O F C H 1C A G C June 28, 1953 Hon, Eugene R. Black of large 10—b loans granted them by the Federal Reserve Bank of Chicago. The R. F. 0. interprets the law under which it operates to limit its loans to such as can be justified as sound and without risk, and in both of these agencies, therefore, it is necessary that they take marginal collateral on loans against frozen assets, and all the assets of the bank may be so pledged without giving sufficient liquidity to the bank to liquidate its entire deposits if necessary. Such banks as those mentioned have reached the limit of their borrowing capacity in these agencies and are still having withdrawals of deposits Notwithstanding assurances given the depositors of the complete ability of licensed banks to pay out in full, no way seems to have been devised to accomplish this in the extreme cases which are now arising. Owing to the legal limitations of the Federal Reserve banks and the R. F. C., a determina tion of methods and procedure to meet these situations must depend on a higher authority. as Without such determination, there appear to be three courses open, : f o I I oy/ s (1) After exhausting its borrowing powers from the Federal Reserve Bank and the R. F. C., the bank must undergo a reorganization which would result in the releasing of only a portion of its deposits and necessitate the raising of new capital to protect them. (2) In addition to the resources of the Federal Reserve banks and the R. F. C. as referred to, a resort to the new Home Loan Act, by vdiich we understand banks could sell outright tlieir urban mortgages to this agency, thereby creating additional liquidity and opening the way for obtaining sufficient local capital and preferred stock from the R. F. C. to reorganize the bank on a sound basis. (We think that this new agency might proceed aggressively in Michigan as the Farm Loan Agency is presently doing in Wis consin, which would be very helpful.) (o) The only other thing left seems to be to allow such banks to close after they have been licensed to open 100 per cent. It seems to us that the time has come when we must face this con dition squarely and determine upon the policy to be pursued; primaril.y, whether licensed banks should be allowed to reorganize on a percentage basis or other wise close, or whether governmental agencies may be coordinated to keep them open 100 per cent. We in the Federal Reserve banks cannot do this alone, and apparently it cannot be done in cooperation with the R. F. C. on account of its limitations. We have a few imminent situations in Michigan which, if not handled properly, give promise of starting another conflagration in that State. We are doing everything we can to avert such trouble, but we cannot do so alone and in the absence of any method by which the various governmental Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority tiUDaoozfc, F E D E R A L R E S E R V E B A N K O F C H ICAG C -5 - June 28, 1955 Hon. Eugene R. Black agencies in cooperation can meet the situation, serious trouble is before us and we are at loss to know what can be done to prevent it. Are we to lend our support and our services in working out reorgani zations of licensed banks which entail the waiver of part of the deposits thereof? Just how far does our responsibility in the Federal Reserve Bank SMS HH Copty to - Hon. Yfe.lter -J. Cuimnings Executive Assistant to the Secretary of the Treasury Washington, D. C. Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority Y lttD aeozb F E D E R A L R E S E R V E BAN KOF* CHICAGO JUN 28 1933 2 3 0 SO U TH LA SA LLE ST R E E T Y / J . ' June 26, 193$' .. OFFICE O F TH E ---- ■.. . .... C H A I R M A N O F T H E B O A R D AND FEDERAL RE SE R VE AGENT Hon. Eugene R. Black Governor, Federal Reserve Board Washington, D. C. Dear Governor: I veiy much appreciate your letter of the twenty-thirty/ relative to ny letter of June 20 to the President of the United States, cojy of which I sent you. I should like to say in this connection that your very active cooperation in our recent banking problems in this district is greatly appreciated. You have certainly given us eveiy support in what we are trying to do and with great promptness. We are particularly appreciative of your interest and helpfulness. Mr. Talley is here and we have had the opportunity to review some of these situations with him. We hope that his active participation will expedite the solution op^ertain ones of them which are imminent. Very EMS HH Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority V lU D 3002b June S3, 1933 Hr* Eugene Stevens, Chairman, Federal Reaerre Bank* Chisago, Illinois. Dear Mr# Stevena: I ha w copy of your letter o f June 20th [to the President of the United State a relative to the hanking situation in your district. The facts contained in your letter have been most carefully noted* I will discuss your letter with Secre tary Woodin and will aid la every way in ny power to the end that the situation disclosed in your letter t m he solved. I know of the act!Titles of the Chicago hank In connection with the situations described in your letter and I have en deavored actively to cooperate with your bank in solving some of those situations. I m pleased to advise that Governor Talley left yesterday afternoon to spend a day with your bank in dis cussing these Mfctert and my information is that, he will go to different points in Michigan in m e f f o r t to solve the situa tions at those points. There is at the present t t m very close cooperation between tha offices of the Secretary of the Treas ury, the Reconstruction Finance Corporation and the Federal Beserve Board in seekiag to aid in the proper solution of these questions. I writ© to express' m appreciation of what the Reserve Bank of Chicago has lone in connection with these mat ters and trust that with the continued cooperation of your bank we nay be able to do effective work in all of them# I note that your letter is written at the re quest of your Uceoutive COHiaittee and I wish you would express to t h « ray intense interest in the matters disclosed in the letter and in the position taken by your bank. With my regards, I m Sincerely yours, B-C Governor. Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority MUD 3ooz{-, F E D E R A L R E S E R V E B A N K O F CH 2 3 0 SO U T H LA SA LLE S T R E E T m s OFFICE O F TH E C H A I R M A N O F T H E B O A R D AND June 20, 1933 FEDERAL R ESERVE AGENT COPY The President of the United States ^Washington, D. C. Sir: I have been requested by the Executive Committee of the Beard of Directors of this bank to invite your attention to the desirability of devis ing some means by which the reopening of closed banks in the Seventh Federal Reserve District may be expedited. In this district, as of June 17, we have a total of 2,981 banks with deposits (based on last call report) of $4,014,000,000. Of this total, there are 1,157 banks unopened with deposits of $759,000,000. Of this latter amount, 867 are nonmember banks with deposits of $384,000,000 (some of which are open on a restricted basis under State laws)j 66 are State member banks with deposits of $118,000,000; and 224 are National banks with deposits of $257,000,000. Reorganization plans are in process of consummation for later opening of a considerable number of these banks, but present indications are that many of the closed banks will have to be liquidated. We have representatives from this office constantly with the Chief National Bank Examiner’s office in Chicago and working with the State Banking Commissioners In the various states in efforts to initiate and expedite the reorganization of banks and all such plans of reorganization are so formulated and agreed to here in conference with the officers and directors of the banks involved. Under present procedure in the case of National banks, these plans must be submitted to the Comptroller’s office in Washington for approval, and when approved there, all negotiations in connection with the consummation of the plans, including the necessary evidence of the conditions being met, are conducted by correspondence between Washington and the subject bank. Because of the great pressure on the Comptroller’s office In Washington, there have been necessarily substantial delays, sometimes running into weeks, in the review of the plans after their submission, and,later, further delays occasioned by the working out of their consummation by correspondence from Washington with the banks involved. Miuuuoea from the Unclassified / Declassified Holdings of the National Archives d e c la s si f ie d Authority NND 3 « > 2 k - 2- June 20, 1935 In order to expedite this process, we venture the suggestion that the Comptroller either give additional authority to his present representative here or otherwise send here an agent from his office with authority - (l) to expedite the Comptrollers approval of the reorganization plans,and (2) to cariy on the consummation of such plans direct from here instead of from Washington. It is frequently necessaiy to invoke the assistance of the Recon struction Finance Corporation in such reorganizations, either in its purchase of preferred stock or in granting loans. This also applies directly to emergency situations in banks which are open and have become subject to heavy withdrawals. All of such cases are subject to negotiations sometimes delicate in their ,character and of immediate urgency, and it is difficult to conduct such negotia tions on the ground, eveiy phase of which must be referred to the authorities in Washington. We therefore suggest the advisability of the Reconstruction Finance Corporation placing, with headquarters in Chicago, an authoritative represen tative to review these various situations in the local atmosphere, and whose recommendation for imperative and immediate action would have weight with the Board of the Corporation. It is obvious that no criticism of either the Comptroller1s office or the Reconstruction Finance Corporation is implied in these suggestions, as we are fully aware of the great pressure on their offices in Washington, and fully appreciative of their cooperation. The suggestions are made, rather, with the view of expediting the coordination of the several agencies involved to the end that such coordination may be more effective. It is the view of the Executive Committee of this bank that the adoption of these measures would be most helpful at this particular time and under these particular circumstances to expedite the release of a substantial portion of the three-quarters of a billion dollars of deposits still impounded in this district, and we respectfully submit our viejL^itfT'yfnir consideration. Most respe EMS HH Copies to - Hon. Hon. Hon. Hon. William H. Woodin, Secretaiy of the Treasury Eugene R. Black, Governor, Federal Reserve Board ' J. F. T. O’Connor, Comptroller of the Currency Jesse H. Jones, Chairman, Reconstruction Finance Corporation Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED r . Authority Jxm e 14, 1903. 12:15 pan* v y o 2 / M E M O R A N D U M G o v e rn o r Black: Mr* Delaney celled and advised that the City National Bank and Trust Company, ifcich pat on the 90-day notice this morning, has had very few people in the lobby, probably 7 or 8 at \ a time. Ifce Central Hational Beak and Trust Company, however, has *ad around 100 people in the lobby, end no progress seems to be made in reducing the number* $475,000. DaLaney has advanced this institution He states that there is a division of opinion among the directors of the institution as to whether they afcould put on the 90-day notice or continue asking payments* Mr. Delaney also says that it is the practice of the Battle Creek banks to keep open on Wednesday night from 6:30 to 8 o’clock* E*M.McClelland F cr £ t=5) U Reproduced from the Unclassified / Declassified Holdings of the National Archives DECLASSIFIED Authority HMD 3 o o a t , V 7:J y M E M O R A N D U M June 14, 1933* Governor Black: The City National Benk and Tius t Company. which lost #EOO,0OO i n deposita yesterday, has invoked the 90-day notice on savings deposits* Hr* Joses has been In touch with Mr* Green, its president, and discussed the organisation of a new hank with |800,000 first preferred subscribed by the R. F* C*, #800,000 second preferred, and #280,000 common subscribed locally* He also has communicated with the president of the Central national Bank and Trust Company, which lost #800,000 yesterday, but has not In* voked the savings clause* Be stated that this bank apparently was not aware of the real seriousness of tho situation and that he had suggested that its president get in touch immediately with Mr. Green with the idea of having both Institutions take similar reorganisation action during the day* Ur. Delaney, of Chicago, advises that he has advanced the City National Bank 1115,000 and the Cwitral National Bank and Trust Company #480,000 against their 10 (b) notes* When they opened this morning each had only between #40,000 and #60,000 on hand* He also said that he understood the R* F* C* has made a commitment of 1300,000 to the Central end #800,000 to the City. Reproduced from the Unclassified / Declassified Holdings of the National Archives d ec la s si f ie d Authority UNO 3 0 6 2 b June 14, 1933* v 7 5:30 p* a* M E M O R A N D U M In a conversation with Mr* Delaney, he stated tbat the Central National Bank gained #50,000 in coamerclal de posits and lost #536,000 on savings deposits and certificates of deposit, and that, while they think they have beaten the run, lt has practically cleaned out their cash. The Federal reserve bank let thea have #450,000 today, running their total Indebtedness to about #1,200,000* Delaney said that the Reconstruction Finance Corporation has made a commitment of #450,000 which they will authorise him to pay the first thing in the morning if the bank gets the collateral in the corporation* s hands to* night, which they are doing* He said he was also checking up to see what the Federal reserve bank could do for the** While he stated that he thought the present loans were well secured, he indicated that their additional borrowing capacity Is very United* Be said that the City Rational Bank and Trust Company lost about #43,000 on eoanercial deposltiTand, that with the notice on, they lost only #1,200 on savings* In response to your inquiry as to what was being dc^e toward reorganization, he said that the City National Bank and Trust Coopany has a nesting on which he has not attended, but that Mr* Green told him that he had #500,000 of stock promised. You then SSked him to have, first, Mr* Green and then the president of the Central National Bank and Trust Company call you* Mr* Green called at 5:50 p* a* and said that he did not think his bank lost anything today* Hie said they had two or three payrolls, Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED v '■* Authority y)ND but that they would get credit for then tomorrow* He stated that they had a meeting this afternoon and that his workers are out this evening and tomorrow morning, and that the money for reorganizing will be there in the morning* He said what he was working on was #250,000 common stock, #200^000 preferred from local interests, and #750,000 preferred from the Reconstruction Finance Corporation* " He also said that Mr* Jones called him and that Mr* Stoddard, who will he there tomorrow morning, wants to go over the matter of joint action, referring, I assume, to the suggestion that the new bank also take over one-half of the deposits of the Old-Merchants National Bank and Trust Company* After you had expressed to him your idea as to the value of such joint action, he said that he thought more money would be needed and you stated that you thought it would be desirable* He expressed the opinion that one party (referring to Mr* Kellogg) might be willing to renew his previous proposition, and asked you how much money you thought would be required for the joint proposition* You stated that you thought they should get all they could, and that in your opinion #500,000 or #750,000 more would make a clean bank* Mr* Green said that he thoughtMr* Stoddard and he could get at Mr* Kellogg in the morning* You suggested that sons* thing should be done as soon as possible and Mr* Green replied that Mr* Kellogg appeared to like Mr* Stoddard and that he would prefer to wait until the latter got in tomorrow morning* He said he thought he could call you before 12 ofclock* At 6:15 p* m* Mr* Evans of the Central National Bank and Trust Company called and stated that they lost #556,000 in savings and certificates of deposit* He said he thought their commercial figures Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority VlUD3oQ2C=. t & went off somewhat; alao that there bad been a transfer fr o m certificates of deposit over to conmercial deposits which, however, m e In the #536,000. included He said they bad about #175,000 cash and had arrange ments with the R. F* C. for #400,000 and9 In additlosit vers getting a loan fro® the Federal reserve bank of #100,000, and In response to am Inquiry whether they were doing any^lng about preferred stock, he said that they had not yet but that he would talk the matter over with the B. F* O* representative who will be there toaoxrov* He said that they were reopening at 6:30 and that after their olosing at 8:00 he would call you at the hotel and give you his fl|al figures for the day. Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority ViHDaoozfa .,cA'■ J J U/\t j . m tm C * m # 4 »* §*•»• A / a i»u Philadelphia, Pa. Cleveland, Ohio. Richmond, Va. Atlanta, Qa« Chicago, 111. St. Louis, Mo. Minneapolis, Minn. Ktaaaa City, Mo. Dallas, Tax* San Franoisco, Calif. Yfcat part $f fcajijnrtaeflt** talaeree *f SbuNfe 4U«t3t iaetroutlef lM ^ k l INka^iw tank* m t il ta^N or *M U «^ to t m m torn ataatfarg fitnaaii en la famui fsf fttUtil tlMp «rt pwwittadi t» ririeiiturtoiln fla naita! a%ajail&*d of out aev ftMMpaaftMP Ini ^NMWPVaA# ■>^wninim JtfSS&JSOfl matfcaai^i^ to■wMt~ Tl^MMNivjr 4fefeaha«*# uoaar swiivvajpy fCaa^laiMlie «** S^MflhMNK^t ^asayWB Jhmswt Ix m & m m # % 9 * Private tire. ** Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED r . Authority COPY Lj" Ju n e lkt 1933 PEYTON MINNEAPOLIS Relet June 10J re Peoples State Bank of Bloomer, Wisconsin STOP Under Executive Order March 10 banka not member* of Federal Reserve System are licensed for normal business by approprate authority in each State and ’ "member banks of Federal Reserve System are licensed for normal business by Secretary of the Treasury STOP Secretary of the Treasury has no authority to 1icen8e”?eoples"state Bank of Bloomer as of date when bank actually did open under license issued by Commissioner of Bake of Wisconsin STBP In order to avoid legal questions relating to banking transactions of State banks becoming a member the Federal Reserve System a license issued by Secretary of the Treasury is necessary STOP AMend license to Peoples State Bank of Bloomer, Wisconsin, to become effective concurrent with bank’s admission to Federal Reserve System which I understand is June 8, 1933f HI WOODIN AKC-hkb FEDERAL RESERVE SYSTEM - LEASED WIRE. Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority » U D 3 0 0 2 b / mmm Mm m-m 1 flMMNPV# Jb£WHtt# OoMr V * vwPrVftp# Xa eoimirtlrm ntHi.Hit ttQgatJjiii&OMi vtil43i Imw %mm w/A&t vsqt *% OunIc# lltfliAfflm, ttflUHl i» ISfiloMd iMMM&tll flOflt JTOW tMRKd'Aitttl■! licfmwittoa £0$gr af n 1u&i0nMi . 6- "rtbdlJli imhb % pb 3n h ^£ % 0& yiwtoBNtajr lo 8Nww®i3b3s tf* X« XftUogff. ▼ • y truly j w i i S # S. n » A | Sfll1N6P#88P* dtooSUwwsr#* ? Reproduced from the Unclassified / Declassified Holdings of the National Archives DECLASSIFIED Authority TELEGRAM FEDERAL RESERVE BOARD WASHINGTON m m xo, f f M & i - Chicago I0UE TBLSQittit. M1ILIH& T0& m ' ffMZ OOFT Of f fjiqmif ASBBBSS8B TESTSHBA.Y t. n w m w m m u e s sb s . i d o i h i , m a c k , m > j a m , heading AS FOLLOWS: (JB039I fe have Juat heea informed by 00? representatives, Messrs. Stoddard and Preston, that yqu tart *0ftln raoaaod leadership In the M i a | situation at Battle Orsek. Ws are gratified at your action is agftla assuming this leadership which ia so vital to ths interests of the oowamity which you have largely built aad which mesas so much to you. He urge now that under your leadership, you go forward with the plaa heretofore proposed by you, aa covered by your telephone conversation with Hr. Jones of laat fridar afcloh waa to the effe«t that a new national bank would be forced with $4,000,000 new «a4h capital, which new basic would assume the deposits ia full of the 014 Merchants National Basic and the City national Beale. S&e Reconstruction Finance Corporation, under this plan, would subscribe for $2,000,000 of preferred stodfc to bear dividends for the first five years at 5$ aad thereafter at and would lead yon for three years, at a low rate of interest, H ,790,000 with which to boy that amount of second preferred stock, the remaining $330,000, presenting comaon stodk, to he subscribed by you or other* there. la addition to tha abo**, the federal Reserve is prepared to gire the new bank its usual fall oredit aaomwdatieaa ead the Beconstruction Unanoe Corporation is pre pared, ia addition to such Beeerve Beak action, to furnish the new beak such support as it way aeed in order to properly serve the people of Battle Qreak aad fully protect the depositor of m e mew bank. He aow area that you assume the full leadership necessary aad have the people of Battle Oreek meet this maergeaey. *©u are a great philanthropist, aad it is doubtful if you ever will have another opportunity to be as helpful to your ftiends and neighbor* of life time. The president joins la this request aad went you, aad the people of Battle Creek aad ttiohlgan to know that it I* his puxpe** aad tha puvpcf* of his Adsdnlstratiaa aad of the agencies which we ra&reseat, to stead ia the meaner stated above, shoulder to shoulder with every ooeaaaity la th* Isdted States where similar emergencies may develop. the tanking situation throughout the country ia rapidly becoming well stabilised, aal another failure la &chlgaa, especially ia a City whose oiticons are able to avert it, would be extremely unfortunate. WKfXm. 1. H. 3IACK EMM/vmt Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority VlU Daoozb TELEGRAM FEDERAL RESERVE SYSTEM (L E A S E D W I R E S E R V IC E ) R E C E IV E D A T W A S H IN G T O N , D . C . 15—794 Y 9 V< .Z 118gb Chicago Jun 10 !226p Black Board Washn Understood from McKay you were sending us copies your wires to Mr Kellogg, which have not yet been received. to us here if we have such copies. Will be very helpful I have just been talking with Mr Cummings here who also would dike to be advised of the nature of the telegrams Stevens 1331p U 8 GOVERNMENTPRIXTOfeOFFICE: 1998 16—794 Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority VlMDaoozb F o r m N o . 181. Office Correspondence To Fmm FEDERAL RESERVE BOARD Date_____ _ Messrs. QJCQjonor^ Miller/Hamlin fk James Subject:. m* _______________ . _____ s/' 2—8496 tro rn m m m- vmbwjgtmm borefe, for i — / "" W m fl^YwmilHNI p i l V I | r w 1 M « 1 # W n H i M & k & im # v m & t m m Wt. Xr**tm « d t i o r « r tad®** &»**« the telephone tbat tiugr will endearor to do*® tfe* a**otiations for the organization of tha m m bank or«r thia ___ »ji-» __ .A IIMlBHMKBt* Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority COPY FEDERAL R^SERVTl BANK OF MIMIEAPOLIS June 10th, 1933 Mr. Chester Morrill, Secretary, Federal Reserve Board, Washington, D. C. Dear Mr. Morrill, I quote as follows from your wire of May 25th: ’’State bank upon admission to membership in Federal Reserve System must secure license from the Secretary of the Treasury to perform all usual aad normal banking functions except as otherwise prohibited.********** r• K 4 ,inon your recommendation.11 License w ill be iss>ueu up ^ Under date of June 10th Secretary Woodin wired Governor Geery as follows: "Having been advised by the Federal Reserve Bank of Minneapolis, Minn., that the following named bank has been admitted to membership in the Federal Reserve System and they recommend that a license be issued to the institution I hereby direct the Federal Feserve Bank of Minneapo lis, Minn,, acting as my designated agent, to issue a license in the form heretofore prescribed by me to transact normal banking business effectove Saturday, June 10, 1933* to the Peoples State Bank of Bloomer, Wisconsin.” The actual wording of the license mentioned in the above wires runs in part as follows: "Peoples State Bank, Bloomer, Wisconsin, is hereby permitted to open on the loth day of June 1933, its office in the following place Bicoiner, Wisconsin, and to perform its usual banking functions, ex cept: ************M It is a fact that this bank has been operation as a going institution since it was dischardge by Presidential proclamation and the consent of the Commissioner of Banks of the St^te of Wisconsin, directly following the termination of President Roosevelt’s bank holiday. Is it not an anachronism and might it not lead to possible difficulties to license this bank to open as of june 10, 1333> whereas it has actually been conducting business for a considerable previous period. Isn’t it possible that actual lawsuits might be satrted against the bank on the basis that the bank operated without permission up to June l©th? Wouldn’t it be possible to ^et a ruling from the Secretary of the Treasury which would change the wording on the license to read that the Peoples State Bank cf Bloomer, Wisconsin, was permitted to ppen eproduced from the Unclassified / Declassified Holdings of the National Archives ■* DECLASSIFIED Authority V)WD3oo2fe - ' Mr. Chester Morrill, Secretary, , Federal Reserve Board, June 10, 1933 (2) on that date when the bank actually did open? I am holding up the delivery of the license in this particular instance until I hear from you. I have written you trusting that you will give an immediate response, as the matter has come pp after you were closed in Washington with Saturday*s half holiday, but I wish you would vdre your response so that this license will not he unduly withheld. With best personal regards, J. N. Peyton Chairman of the Board. JNP;b Reproduced from the Unclassified / Declassified Holdings of the National Archives DECLASSIFIED Authority M D 3 0 0 2 b PATRONS ARE REQUESTED TO FAVOR THE COMPANY B Y CRITICISM AND SUGGESTION CONCERNING ITS SERVICE D O M E S T IC CABLE TELEGRAM FULL RATE DAY LETTER DEFERRED NIGHT NIGHT MESSAGE LETTER WEEK END NIGHT LETTER LETTER P atrons should check class of service desired; otherw ise message w ill be "'N. transm itted as a full-rate Z ' \ communication. ( N E W C O M B C A R L T O N . P R E S ID E N T CHECK J WESTERN UNION 12i l A ACCT’G IN F M N . T IM E FILED S J . C . W I L L E V E R , F IR S T V IC E -P R E S ID E N T / / r Send the following message, subject to the terms on back hereof, which are hereby agreed to tom 9§ m s . Hon* W. K* Kellogg, Battle Creek, Iftohigaa* Mjr dear Mr . Kelloggs Is are informed by our representatives, Messrs. Stoddard & Fniton, that fw doeldod not to assist ia the banking situation at Battle Croek* fhis It vory dietree ting aad m urge, ia the Intoroote of tho oeanwnitfr whloh you have largely built and which mean* eo auoh to you, that you reeoasider aad fttrnish that leadership whloh is so badly needed ia this crisis* the Reconstruction Finance Corporation is willing to go forward with tho plan heretofore propoaod by you m covered by your telephone conversation with Mr* Jones of last Friday* whloh wae to tha efftot that a now national bank would bo formed with #4*000,000 new oash capital, which now hank would ais\m the depoeits ia full of tho old Msrohants Xatioaal Bank aad the City Rational Bank, fho Hocongtruetioa Pinanoo Corporation would eubeoribo for $2*000*000 of Preferred Stock to hoar dividends for tho first five years at 8^ and there after at •%* Ala# tho Heeaastrwetiea Flaaaoo Corporation would lond you for three years it a rat©-ot^ intoroit #1*700,000 with whlfh to buy that aaount of Sooond Preferred 3teok* tho retaining #280,000 to ho subscribed by you or others them* In oddltloa to tho i W i i w* aro prepared to g i n tho new baak aay support that it m y need to properly serve t o people of Battla Creek aad to fully protoot its depositors, tad vory earnestly urge that you personally assume tho aooossary leadership tad got the people of Battlo Crook to swot this emergency. Tou are a grsat philanthropist aad it is doubtful if you will ever have another opportunity to bo as helpful to your neighbors aad friende of a lifetime* fho President joins in m s rofuost aad wit* you aad the people of Battlo Crook tad Miohigsa to Imamthat it is his purpooo aad tho purpose of his Admin istration inoludlag tho ageneioe whloh wo represent to staad shoulder to shoulder with every oessamity in tha United States wher* similar eatrgenoies nay develop* fho bankiag situation throughout tho country Is rapidly becoming well stabilised •ad another failure in Miohigsa, especially ia a oity whoso eitlseai aro ablo to avert it* would bo extreaoly unfortunate. The president suggests you call a meeting of those of your citizens most able to help and present the matter as a civic proposition. jj m,/»* woomv# Seoretary of tho Treasury* EUGESB It. BLACK, Oovora r of tho Federal Reserve Board. JESSl H* J0HE8, Chairmen* Rooonstruotion Fiaaaoo Cerporatiea# THE QUICKEST, SUREST AND SAFEST WAY TO SEND MONEY IS BY TELEGRAPH OR CABLE Reproduced from the Unclassified / Declassified Holdings of the National Archives DECLASSIFIED Authority ALL MESSAGES TAKEN A IS COMPANY ARE SUBJECT . ^ 4E FOLLOWING TERMS: T o guard against mistakes or delays, the sender of a message should order it repeated, that is, telegraphed back to the originating office for comparison. F or this, one-half the unrepeated message rate is charged in addition. Unless otherwise indicated on its face, this is an unrepeated message and paid for as such, in consideration whereof it is agreed between the sender of the message and this company as follows: 1. The com pany shall not be liable for mistakes or delays ih the transmission or delivery, or for non-delivery, of any message received for transmission at the unrepeated-message rate beyond the sum of five hundred dollars; nor for mistakes or delays in the transmission or delivery, or for non-delivery, o f any message received for transmission at the repeated-message rate beyond the sum of five thousand dollars, unless specially valued; nor in any case for delays arising from unavoidable interrup tion in the working of its lines; nor for errors in cipher or obscure messages. 2. In any event the com pany shall not be liable for damages for mistakes or delays in the transmission or delivery, or for the non-delivery, of any message, whether caused b y the negligence of its servants or otherwise, beyond the sum o f five thousand dollars, at which amount each message is deemed to be valued, unless a greater value is stated in writing b y the sender thereof at the time the message is tendered for transmission, and unless the repeated-message rate is paid or agreed to be paid, and an additional charge equal to one-tenth of one percent of the amount b y which such valuation shall exceed five thousand dollar;!. 3. The com pany is hereby made the agent of the sender, without liability, to forward this message over the lines of any other com pany when necessary to reach its destination. 4. Domestic messages and incoming cable messages will be delivered free within one-half mile of the com pany’s office in towns of 5,000 population or less, and within one mile of such office in other cities or towns. Beyond these limits the com pany does not undertake to make delivery, but will, without liability, at the sen der’s request, as his agent and at his expense, endeavor to contract for him for such delivery at a reasonable price. 5. N o responsibility attaches to this com pany concerning messages until the same are accepted at one of its transmitting offices; and if a message is sent to such office b y one of the com pany's messengers, he acts for that purpose as the agent of the sender. 6. The company will not be liable for damages or statutory penalties in any case where the claim is not presented in writing within sixty days after the message is filed with the com pany for transmission. 7. It is agreed that in any action by the company to recover the tolls for any message or messages the prompt and correct transmission and delivery thereof shall be presumed, subject to rebuttal by competent evidence. 8. Special terms governing the transmission of messages according to their classes, as enumerated below, ,shall apply to messages in each of such respective classes in addition to all the foregoing terms. 9. N o employee of the com pany is authorized to vary the foregoing. THE WESTERN UNION TELEGRAPH COMPANY IN C O R P O R A T E D N E W C O M B C A R L T O N , PRESIOCNT CLASSES OF SERVICE TELEGRAMS A full-rate expedited service. N IG H T MESSAGES Accepted up to 2:00 a . m . at reduced rates to be sent during the night and deliv ered not earlier than the morning of the ensuing business day. Night Messages may at the option of the Telegraph Company be mailed at des tination to the addressees, and the Company shall be deemed to have discharged its obligation in such cases with respect to delivery b y mailing such night messages at destination, postage prepaid. DAY LETTERS A deferred day service at rates lower than the standard telegram rates as fol lows: Ope and one-half times the standard night letter rate for the transmission o f 50 words or less and one-fifth of the initial rates for each additional 10 words or less. SPECIAL TERMS APPLYING TO DAY LETTERS: In further consideration of the reduced rate for this special D ay Letter service, the following special terms in addition to those enumerated above are hereby Esrccd to: A. D ay Letters m a y b e forwarded b y the Telegraph Company as a deferred service and the transmission and delivery of such D ay Letters is, in all respects, subordinate to the priority of transmission and delivery, of regular telegrams. B This D ay Letter is received subject to the express understanding and agree ment that the Company does not undertake that a D a y Letter shall be delivered on the day of its date absolutely, and at all events; but that the Com pany’s obliga tion in this respect is subject to the condition that there shall remain sufficient time for the transmission and delivery of such D ay Letter on the day of its date during regular office hours, subject to the priority of the transmission of regular telegrams under the conditions named above., N o employee of the Company is authorized to vary the foregoing. N IG H T LETTERS Accepted up to 2:00 a.m . fo r delivery on the morning of the ensuing business d a y, at rates still lower than standard night message rates, as follows: The stand ard telegram rate for 10 words shall be charged for the transmission of 50 words or less, and one-fifth of such standard telegram rate for 10 words shall be charged for each’ additional 10 words or less. SPECIAL TERMS APPLYING TO NIGHT LETTERS: In further consideration of the reduced rates for this special N ight Letter serv ice, the following special terms in addition to those enumerated above are hereby agreed to: Night Letters m ay at the option of the Telegraph Company be mailed at destination to the addressees, and the Com pany shall be deemed to have dis charged its obligation in such cases with respect to delivery b y mailing such Night Letters at destination, postage prepaid. N o employee of the Company is authorized to vary the foregoing. FULL RATE CABLES An expedited service throughout. C ode language permitted. DEFERRED HALF-RATE CABLES Subject to being deferred in favor of full rate messages for not exceeding 24 hours. Must be in plain language of country of origin or of destination, or in French. This service is in effect with most countries throughout the world. CABLE N IG H T LETTERS An overnight, low-rate, plain-language service. Delivery by mail beyond London will be made if a full mailing address is given and the words ‘ ‘Post’’ and ‘ ‘London” are written in the address. Minimum 20 or 25 words charged for. WEEK-END LETTERS A t still lower rates. Similar to Cable Night Letters except that they are accepted up to midnight Saturday for delivery M onday morning, if telegraphic delivery is selected. Minimum 20 or 25 words charged for. Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority VlKD3oQ2fa June 9, 1932 memorandum j o b . mr. milt, Deputy Comptroller, Treasury Building, Washington, D. C. There is an apparent lack of prog™**" ln-bgriv reorganizations in Michigan aad there are several reasons for this continued restriction of hank credits* 1. The hanks not licensed are generally in terrible shape* Commissioner Reichert is said to have stated that he has no hanks not licensed that even approximate solvency, and -generally speaking, the unlicensed national hanks are in the same catsugory. For the national hanks the paramount problem at present is to keep open many of the banks already licensed* 2. The cash reserves of a vast majority of the hanks in Michigan were on deposit with the Guardian National Bank or the First National Bank in Detroit, and as yet only 40$ of the balance in each of these banks has been released. Incidentally, the one thing that is logically possible and which will quiet political ballyhoo and public clamor is another distribution in each of the above banks, if necessary through the medium of a loan from the Reconstruction Finance Corporation. This is possible, to the knowledge of the writer, in the case of the Guardian National Bank as they are able now to retire their first loan from the Reconstruction Finance Corporation. 3. The Governor*s holiday in Michigan, which came Several weeks before March 4th, enabled local and state politicians to brew a myriad of verbal panaceas which, to the lay mind, made sense but which were, in the face of facts, practically Impracticable. As a natural result depositors in Michigan believe that all the unlicensed banks are in fair or good shape if the government, state or national, would allow them to open, and the bankers generally are glad to accept this premise, subject, of course, to the added condition that the government, by some magic, furnish the cash for the payment of deposits* 4* The bankers, because of the facts and conditions stated above, have hoped and believed that the politicians could pull the rabbit out of the hat and thereby trans form their mistakes of the past twenty years into acceptable assets, and the bankers, therefore, have "just sat” rather than to admit their errors and effect reorganization on some feasible plan. There has been enacted in Michigan a statute providing for the re organization of banks. It requires, in brief, that the bank publish for sixty days its plan of reorganization, during which time any objecting depositor can have recourse to a court of competent jurisdiction to file his complaint in regard to the proposed plan. The decision as to the equality and acceptability of the plan is then up to the court* If this plan is approved, assets equal to a stated percentage of the deposits are segregated in a trust fund to pay these automatically waived deposits* Michigan statutes have heretofore required state banks to segregate certain assets for the pro tection, first, of savings deposits, and in liquidation these assets are used to pay savings depositors in full. If the savings depositors are not paid in full they share ratably in the remaining assets with the commercial depositors. However, the present plan of reorganization gives no preference to the savings depositors, and herein lies one of the many reasons which cause unbiased attorneys to predict that this reorgan ization statute will not hold water. The present laws of Michigan do not provide for state banks to be capitalized by preferred stock, and because of the lack of availability of any capital many state banks are contemplating in their reorganization plans conversion into national banks. Reproduced from the Unclassified / Declassified Holdings of the National Archives DECLASSIFIED Authority Memorandum For Hr* -Await -2- 6/9/33 Gradually, and with, the add of the local branch of the Reconstruct ion Finance Corporation, the hanks, as well as the people of Michigan, are 'beginning to realize that they must do something themselves to "bring about the rehabilitation of their banks. Mr. F. T. fisher, Jr., local Reconstruction finance Corporation Agent, states that it has been only in the past two weeks that the agency has been contacted by bankers at large, and he states that in the majority of cases the demand is for a new national charter. It is the belief of the writer, as well as officials of the Detroit Agency of the Reconstruction Finance Corporation, that if any banks that are at pres ent licensed are allowed to fail the whole state of Michigan will again be thrown into a chaotic condition. (s) A. J. Mulroney A. J. Mulroney, Examiner. reproduced rrom the Unclassified / Declassified Holdings of the National Archives declassified Authority VJND S o o z t , Th* f o l l o w i n g banks in the larger cities in Michigan, although licensed, are in such condition that should any licensed hank he allowed to fail these hanks would, no doubt, have a hard time surviving: GRAND RAPIDS: The Old Kent Bank open unrestricted, member of Federal Reserve „ System, condition precarious, reserve deficient, $20,000,000.00 hank. BATTLE CHEEK: The hanks in this community are the Old Merchants National Bank, the Central National Bank, the City National Bank, and it is questionable whether any of these hanks would survive if the Old Merchants is allowed to fail. KALAMAZOO: First National Bank, precarious condition, making only fair progress, is borrowing from Reconstruction Finance Corporation. LANSING: No national or member banks open, however, there are three small state banks, two of which are open on unrestricted basis. PORT HURON: First National Bank, open on an unrestricted basis, heavily indebted to the Reconstruction Finance Corporation. They are trying at present to recapitalize. Would not be able to stand many more withdrawals. FLINT: Has Citizens Commercial and Savings Bazik, non-member, open without restrictions, making fairly satisfactory progress as their deposits have increased approximately 20$ since the holiday. Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority VlKDaoozfa i f//- F o r m 148Tb / / T E k lG R A M . / ---- j T FEDERAL* iRESERVE BOARD ji i t •'•n h Lj S W A SH IN G TO N June 8, 19 3 3 Newton - Atlanta In response to paragraph B of Trans 17 6 9 AP*il 13 you reported Hibernia Bank and Trust Company and Canal Bank and Trust Company of New Orleans as operating under restrictions but have not reported any change in the status of either bank although their successors, the Hibernia National Bank and the national Bank of Commerce, opened for business on Hay 22. Please wire present status of two non-licensed state bank members. SMKAD Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority June 7, 1933. 3:45 P.M. Mr. Preston advises that Mr. Kellogg lias definitely turned down the proposition of a fifty-fifty arrangement with the Reconstruction Finance Corporation on $4,000,000 of preferred stock. It appears that one of his grandsons and the head of the Kellogg foundation are now endeavoring to work out a counter-proposition along with Mr. Green, President of the City national Bank and Trust Company, whom Mr. Preston describes as “the other rich man in town11 and Mr. Kellogg*s partner. Mr. Preston states that Mr. Green, has just left him to go to k meeting with the\grandson and the foundation man, and so there is nothing definite to report fts to the counter-proposition which will he made. He \ said, however, that Ihe thought Mr. Kellogg would he willing to take$l,000,000 of preferred stock, with the Reconstruction finance Corporation, and a sugges tion apparently has "been made that the Reconstruction finance Corporation ad vance $1,500,000 on the hank buildings. Mr. Preston said that he understood Mr. Kellogg would not he willing to come in unless the hank got $4,000,000 in cash, hut that no suggestion had been made as to how the additional $500,000 might he raised. 5 P.M. Mr. Preston just called again and said that the following counterproposition is heing submitted to Mr. Jones for his consideration: Mr. Kellogg to take $1,000,000 of first preferred stock Reconstruction finance Corporation to take $1,000,000 of first preferred stock Reconstruction finance Corporation to make a loan of $2,500,000 on the two hank buildings and charged-out assets. The Old Merchants National Bank Building is carried on its hooks at $2,300,000 and the City National Bank Building is carried at $1,155,000. Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority VJMD&>02k - 2 We have -understood, that the charge-off8 would aggregate $3,300,000, the amount of the entire capital funds of the two old institutions. Mr. Preston could not give me any definite information as to the real value of the two bank "buildings • He said that Mr. Green, who is participating to the extent of $250,000 in Mr. Kellogg*s preferred stock, felt that this proposition was the "best that could he gotten, and Mr. Preston feels that unless the deal is closed approximately as submitted, the negotiations are ended# Qe pointed out that the counter-proposition contemplates $4,500,000 of new money, whereas previous propositions were based on $4,000,000, and indicated that this fact offered some leeway in consideration of the present proposal. He appears confident that although the proposal will not clean up the bank, it will save it, and says that when the public finds that Mr* Kellogg has put $1,000,000 into the institution and that the Reconstruction Finance Corporation is also a stock holder, the situation will settle dovrn. Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority VlUDaoozb \ F E D E R A L R E S E R V E B A N K O F C H IC A G O 2 3 0 OFFICE OF SO U T H LA SA LLE Far CIRCULAR'! S T R E E T THE C H A I R M A N O F T H E B O A R D AND June 7, 1955. FEDERAL R E SE R V E AGENT Federal Reserve Board, Washington, D. G. Mr, Miller— . w J p ' 1„ pleasenoS^initial and * Beturn to Secretary’s Office Gentlemens # Supplementing ngr report of^xesterdfi^ bn state member banks unlicensed in the State of Michigan, I am now enclosing a similar report on all state member banks unlicensed in Indiana, Wisconsin, Illinois, and Iowa. EMS FC You will note that Reproduced from the Unclassified / Declassified Holdings of the National Archives DECLASSIFIED Authority UUD 3oozfa Mr* Stevens June 6, 1938 Mr* Young I am giving you herewith information concerning all of •nr State member banks in Indian# whloh have not aa yet been lioensed* 8t* Joseph Valley Bank* Elkhart* Wi have conferred on several occasions w $ W o #1*1cers or the Viank, and our representative recently made an asset examination of tho institution* It appears that lt *111 be extremely difficult to raise eapltal whloh. In addition to tho problem of borrowed money and extremely high volume of undesirable assets, makes this situation a difficult one to handle. They recently submitted a plan to us whloh wo could not approve. Briefly, It provided for a waiver outright by depositors, the remaining 66% of deposits to be frosen and released pro rata as collections are mado from assets* At their request withdrawal papers have boon forwarded, and we feel their applloation will be filed within a few days* Dickinson Truat Coapaay, Blohatmd* Our examiner made an asset examination oiTtlie institution, wfoiok refloeted a muoh higher volume of criticised assets then that contained in the State examiner's report* We have today written Deputy Bank Commissioner Barr that the plan tentatively agreed upon a few days ago could act be approved due to the fact that our examiner indicates that approximately $280,000 cut of total assessment of #900*000 can be collected from stockholders* Plan as submitted by State Banking Department provides *for an assessment of #160,000 and reduction in Capital from #500,000 to #160,000 and a *0# Outright waiver of deposits* We have suggested to the State Banking Department that another conference be held and it may be possible that a reorganisation can be effected* Terre Haute Trust Company, Terre Haute. We hav* conferred cm several occasions witko^fioers, directors and depositor1s committee of subject bank, and have approved the plan for the organisation of a now bank, part of the eapltal to be furnished by the R. F. C*f the new bank to assume B0S& of the deposit liability* Depositor's coaselttee reports today that they arc confident that the necessary capital can be raised and that depositors• agreements can be secured* St* Joseph Loan & Trust Company, South Bend* withdrew from mmabersfcdp/effective March 3i, iSsi/ P* S. Bonk k Trust Ckagany# Rochester* from membership, effective iiwrck IMi# ' Voluntarily Voluntarily withdrew Reproduced from the Unclassified I Declassified Holdings of the National Archives ~~ DECLASSIFIED Authority V)MD3002b <I Jt *B* WISCOSSII Far— r« & M§r**>aati Stitt Baak*S*n**a* Ko pXaa aa y*i hat b**a a*r**d up*a for r* ^ j w l o * of ik* Iarfcliirfcion. fh* »tt*r wiXX b* t*fc*a vp witk th* 8tat* B«nklag D*p«rt**Bi vitfcia a f*w day** IUJM0IS Stat* Ex**utir* vi«*»pr*sld*i*% tf (tebft Cuba hat h* would tubalt « plan f*r if: th* baak oall*d * J m af*.«ail met *«a*id«ratiea withia a f *w 4ay«* Xt vill provide t m a 8Q$C w i w *f d*p®«it« and aa ft***««ft*at on th* capital* G*apl*t* d*tall* set ar*i labl*. II*- ftr* #eep*ratlaf with th* Stat* iftBldiig D*p«rtamt is r*gard t* tit* lavtltw ti«a* XOH l W* vill har* *a* of ©nr *aaxiA*r> ▼!*!% th* Stat* tekl&c pttiiM* t* **ffif*v vlth baolc&ag off1*1*1* a* t* r n r | u lt t t ia at tte f«U«wlag tu k i whl.lt *r« q < rttl> | aatw tk» prorlrion* *«•»«• m . u i i Cluurt*]* Oftk Fajriwrs Stat* mum# Chariton Stftt* Savin*. Baak# Fairfl*Xd Iowa Stat* Saving* Baak, Cltis*a* Saviaga Bank, 9ilWB Fairbask Fairbaak Stat* Saak, ♦ M*«h*ai**viXX* Truat * Savinga ,M*«haai*rrill* (*) R***at report ladl**t*« baak r*l«fti*d trm Scoat* FIX* XXX* |H «y jgyin^fiyi ffily two of th* *ttXl#*&**d — HltlT bft&k* la x«*ft vdXX b* abl* t * *ff**t ft r*ergaai»ati©a whioh thia off!** **a approv*. MMiWM C* S* Y< L <*/ & Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority VlHD3 0 0 % , F o r m N o . 131 OfficeCorrespondence FEDERAL RESERVE BOARD To ___ Governor Black, From FW June 6 . 1935. Subject: Mr« McClelland# 2— 8485 Mr. Preston just called and said that up to 11 o ’clock today the Old Merchants National Bank and Trust Company lost $32,000, as much as their entire losses yesterday. Three fairly large savings accounts amounting to $4,000, $5,000 and $7,000, respectively, have been closed out. Mr. Preston says that it looks as though the uncertainties attached to the negotiations last week are having an effect on the public. can last for more than two or three days. He does not see how the hank They had this morning $310,000 in cash, $250,000 available from the federal reserve hank loan and $63,000 in unused float at the federal, a total of slightly less than $625,000. Stoddard, the Reconstruction finance Corporation man, is in Grand Rapids today, hut has an engagement with Mr. Kellogg tomorrow. Green, President of the City National Bank and Trust Company, tells Preston that he understands from Stoddard that he has heen authorized to offer Mr. Kellogg the same class of stock as the Reconstruction finance Corporation is taking, and a period of five years in which to make payment. Although the proposition has not yet heen put up to Mr. Kellogg, Preston thinks he will go along on that hasis. He says Mr. Harris, of the Harris Trust and Savings Bank of Chicago, advised Mr. Kellogg to go ahead as a civic matter, and not as a business proposition. Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority V lU D aoozfc. F o r m N o . 131 AX tt* 4”+ 4 OrticeCorrespondence ^ FEDERAL RESERVE iw Junee.1933. In a telephone conversation this morning, Mr. Preston stated that his latest information from Battle Creek: is that the negotiations with Mr. Kellogg have gone over 'until Wednesday. He stated, however, that on yesterday the Old Merchants National Bank and Trust Company lost only $42,000, while the deposits at the ^Central National Bank and Trust Company increased about $35,000, and those of the City National Bank: and Trust Company about $19,000. He said he thought this quieting of the situation was due to the impression which has become prevalent in the city that the Government is taking care of the banking situation and there is nothing to worry about. He also stated that the federal reserve bank has not yet released any part of the proceeds of the $250,000 loan which has been approved, although it may be necessary to do so today. He seemed to feel that the situation would rock along for a few days. He also mentioned, in a confidential way, his feeling that the Recon struction finance Corporation should have a better man conducting negotia tions. He referred to the inability of the present representative to carry negotiations through after preliminary arrangements had been made with Mr. i Kellogg. I inquired of Mr. Preston how the City National Bank and Trust Company came into the picture and he stated that they were being brought into the consolidation in order to provide management for the new institution. Al though that institution, as well as the Central National Bank and Trust Company, is in a difficult position its management is regarded as the best of the three banks in Battle Creek. Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority Keproduced from the Unclassified I Declassified Holdings of the National Archives declassified Authority F E D E R A L R E S E R V E B A N K O F C H IC A G O f y i •’■"""cF [)/ O F F I C E O F TH E C HAI R MAN O F T H E B O A R D AND Mr. HamlinJ Nr. James S' ?,s ■»**** FEDERAL R ESE R V E AGENT Mr. Miller. * * * * * * * sj Federal Reserve Board wi Washington, D. C. Please fx is 'M H A iflr Refem to Gentlemens I enclose for jour files a report from our Mr. Pitman as to the condition of all the state member banks in Michigan (that part of which is in our district). Mr. Pitman, as you know, has bepn working at Lansing with the State B a n k i n g Commissioner on this matter for some weeks and every state member bank which is not yet licensed has been interviewed with results as shown in this report. Tou will note that a considerable number of them have adopted plans which have been initiated lay us and such plans are under way to consummation. You will note another substantial group that prefer to continue under a conservator until a better position can be established before reorganization is attempted^ also, a third group where prospects of reorganization seem to be remote. One contributing cause to this latter situation is that the banks are so small that when a substantial portion of their deposits are waived and put in a trust fund, the resulting deposits in the reorganized bank would not warrant the expense of conducting the institution. We are following these various cases, but it is probable that ultimately a substantial number of the banks in this group will have to go into liquidation or otherwise resign their membership in the Federal Reserve ^7 stem. EMS HH Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority V)NID3 0 0 2 k Juno 5 , 19S3 Ifoaorandm for Mr. 8tovoao Tram Hr. Pitanaa I aa giving yoa horooith iafcraatloa ooaooraiag all of th* otato Mabcr banka ia Miohigaa whioh havo not ao y«t boon liooaood. la aaowor to tho quoation involving tho aattor of lnitlativo 1 boliovo that oaa boot bo oxplainod by tho prooodaro followod ia tho iatorrloar of thooo inatltutiona. Tho Michigan Dopartaoat dooigoatod oao aaa who oat with so oa all iatorviowo rolativo to propoood roorgaaitatioa plana. la addition four Miohigaa ox~ oaiaoro w o aaaignod to givo aoolotaaoo ia aattora involving aonbor banko. Baoh day oao of thooo oxaaiaoro oallod tho group of banka whioh woro to bo iatorvioaod tho folloviag day* la viow of thlo faot, 1 ohould my that tho work wao ooopora* tivo throughout. Tho folloviag io a liot of tho baako* togothor with tho otatao at tho proooat tiao APRIAH STATS SdVXiQg BAB!, AD&IAB, MICHICUB Mo pa\d£oaiioiaTiiw'ii' yoiooon *a<U ia i W oaao of thlo inatitatioa. It io tho dooiro of tho offloort of tho b u k to offoot a roorgaaitatioa, bat 1 as iaollaod to qaootioa tho probability of oaoh a mom* It appoaro that it will bo oxtroaoly diffioalt to raioo oapital whioh ia additioa to tho problo* of borrowod m ummy nakos thio oltaatiott a diffioalt on* to haadlo. Poaaibly at a lator dato oao of tho roaaiaiag looal boako may bo ablo to tako ovor at loaot a portion of thio ia•titutioa, thoroby roloaoiag iom of tho dopooitoro* faado aow lapoundod* commebcial sayihqs a m , mam, michioah Publioaiioa io uador way lor 'IKo roorgaaitatioa of thio iaotitutioa aador a plaa v h i ^ will roloaoo m of tho dopooito to dopooitoro* LSIAWBE COTJlfTT SATISOS BUI, APBIAI, MICHIQAI_ Putlioaiioa io boiag mi do of a 'plaa w\A*h will roloaoo to dopooitoro. 60# of tho proooat dopooito COMMERCIAL k SAYIM&S BAMj ALBIQB, MICHIftH It 1* ikodooiro o£ iko aaaagonoat ofikia bank to roorgaalto bat thoy approoiato that it will bo diffioalt tor thoa to offoot any plaa uatil borrowod aoaoy, whioh io oqual to approxiaatoly ono-aixth of tho dopooit liability, hao boon liquid*tad. 1 oa adriood that tho ooaoorvator io aakiag ovory offort to aoooaplloh thio aad at tho oaao tlao arraago for oapital in ordor that dofiaito plaao aay bo adoptod. It mrald appoar to ao that a raorganitatioa aay bo offootod at a llttlo lator dato alpma trust & adriias bams, Aifaa# mcmm ia tkia inaianoo it appoara that anan&roly now groap of otookholdoro io aoooooary to oupplaat tho proooat ovnora. Tho prooidoat of tho haak* who io a aa^or otookholdor* adriooo that it io lapoooiblo for him to aoot aa aaaoaaaont. Thoroforo, aa attoapt io boiag aado to fiad oatoido oapital* Aa adriood that a aow ooaoorvator hao booa appolatod aad io working toward tho oad of a roorgaaitatioa at thio tlao* la thio Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority Mr. Stevens * 2 ease also borrowed money oreates a barrier. In view of the slse of this institu~ tion and the importance of It in northeastern Michigan, it is sgr opinion that eventually individuals of sufficient worth oan bo found to tako an interest in tho bank* ARMADA. STATE BjMt, ABMADA, MICHIQAI lo publioailon ia umiar way la ihis Instance, duo largely liquidity and tho problem of raising now oapital* Sons disoussion was had relative to tho merger of tho two but nothing dofinito has be«* determined at this time* It now capital and suffloiont liquidity oan bo provided for, bo had at this point* to an extremely low institutions at Amato, is wy opinion that if a reorganisation oan FARM ms STATS BABX, ABMADA, MICIIQAI Boeauso of iko exiromely M g k amouni of undesirable assets in tho oaso of this bank it is tho opinion of tha wrltor that tho only answor is reoeivorship* This appoars to bo appreciated by the management of the basic and unless suffloiont liquidity oan be provided to provide for a merger without injury to the Armada State Bank, I have no doubt but that liquidation will be the final result. BIS RAPIDS SAYIXOS BAIK, BIO RAPIDS, MICHISAK Reorganisation appears impossible, particularly at this tine* Representatives of the bank believe it inpossible to ralee new oapital and to ereate a liquidity suf ficient to reorganise without danger* Borrowed mon«y Is equal to approximately one-sixth of the deposit liability* BLAB CHARD STATE BAII, BLAB CHARD. MICHIQAI Reorganisation woul/Ve possible in tills instanee provided new oapital oould be had. However,the management of the bank doubts the advisability of continuing In business due to the United amount of business nhieh the bank night reasonably expect. On a reorganisation basis deposits would anount to only #120*000* The bank is to oontinue under conservator until definite plans oan be had whioh will satisfy looal people* CASS CITY STATI BABK, CASS CITT, jDCHOAI Ike oaskier, Mr. Anion, owns $£8,500 of tke present oapital of $40,000* Bo appears flnanoially unable to make assy reasonable payment toward an assessment and, there fore, it would appear impossible to expeet any asaistanee from present stockholders* Mr. Anton felt the best plan in this oase urns to oontinue on under conservator at least for a tin*. Ihlle borrowed money is not a problem# oash liquidity uas so low it appeared undesirable to attempt a merger of this bank with the other bank in Cass City referred to next below* Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED f Mr. Stevens Authority VlNDaotttfa - 9 PINBEY STAX* Bill, GAMT O MICHIGMUI Mans are far a reorganisatioa on the basis of a 60j£ release to depositors* Oash position of this bank is about 21£ with no borrowed money* While a merger of tho othsr bask with this institution nas diseussed, tho offioors of tho Plnnsy State Bask did not appear willing to inpair thoir own oash position by taking over tho frosen assots of thoir eempetltor bank. E lt o n c o m n s a j x m b m g, gha&loytk, michioai Borroiroi.money in ifeis ease is equal to aVeut 12% of tho doposit liability with a relatively high oash position to offsot* However* tho offioors of tho bank believe it advisable to eentlflne on undor oonsorvator in an attempt to eliminate thoso borrowings and to insnro a good sash position boforo opening on a^estrleted basis* 1 believe eventually this bank san bo reorganised, or porhaps consolidated with tho First National Bank at Charlotto. CHSSAXIia STAT I BAM, CHM AMUM, KICHIQAI Hans.are Wing published for riorganisaiion of this bask bat it appoars tho in stitution will withdraw froa membership and go on a rostrlotod basis* Sinoo borrowod asofly is equal to about 12£ of tho proposed doposlts and with a low liquidity at this tints this probably lo aboot all that oan bo oxpootod unloss tho bank woro to eontime undor oonsorvator for a rathor indofinlto period* Tho plan of reorganise* tlon sails for a 80* rotum to depositors* SIATl M AM K OF CBOSIKLL, CSQgmBLL, MICHH U H Wblioaiion i« undor way ^or iiio r«organi*ation of this bank on tho basis of a SOjC release* m v i s o i stats bab k , bavisom , m i c b k u i Tho ooosorraior, who' is also a largo stoekholder* has not as yot made his reeonmenda* tlons in this oaso* It is tho opinion of tho writer that reorganisation oan bo offooted ultimately but it will leave a rather United volums* Thiro is no borrowed mammy to interfere and limpidity is reasonably higpu The matter of oapital, hoeever, appears to be a definite problem to be solved# MOHROE CQWir RA8K, POEMS, MICHIQAI lorrowel monqjr is a probism sinoo squals #71,000 as oonpared to a deposit liability on the basis of a $0% reorganisation of #287,000* The oonsorvator doubted the bank's ability to reorganise slnse he believed oapital would be extremely diffioult to raise* Aside frsm this the frosen eondition of the bank would soma to be a barrier toward re organisation on an uurestrleted basis* It is the opinion of the writer that liquida tion will be the ultimate answer* Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority J- Mr. Stevens • 4 ILK RAPIDS STATB BAi k , blk rapids , michiqam The directors of the bank are extreaeiy anxious to reorgaalse thia institution. However, borrowed noaegr of #68,000 oreates a considerable barrier sinoe deposits on a reorganisatioa of would equal oaly #163,000* It was agreed that tha bank would eontlnae under oonsertator ia aa attempt to provide for greater liquidity, either through liquidation or refinancing* On tho basis of tho preseat condition of tho baak it appears doubtful whether or not a reorganiiation oaa bo effected. Qwmw QQmn satmm bjuhl, nix?, michioam Publioationia under nay fora reorganisation oa tho basis of a 60£ release. There appoara to bo nothing to intorforo with this reorganisation and it is be lieved tho bank wiXX bo ia a pooitiaa to reopen lato la Juno . UHIQg INDUSTRIAL TRUST k SAYINGS BASK, FLIBT, MXCHIdAl Plans are under way for reorganisation on the basis of a SpjC release aad aro boing published at thio tine* However, tho writer is rathor doubtful of tho ability of this bank to moot tho requirement* for lleeasiag* Tho groatoat difficulty appoara to bo that of relieving tho baak of liability for borrowed money and oraating a liquidity sufficient to »oot tho needs. tho conservator appoara confident ho oaa accomplish this, however* AilEBXCAS STATI BAXK* FRAH&iaanJIli, MXCHXQAI Plans aro being published. for "roorgani'ialioa oa tho baaia of a 50JC release* Thoao plans aro boing published ia aplto of a Xargo amount of borrowed money siaoe tho aanageawat appoar oonfidont that that problsa oaa bo net* However, tho writor la doubtful of tho ultimate outcome unleaa thia bank ia norgod with tho othor bank in Fraakeaattth, tha liquidity to bo furnished by tho Xattor baak* PRA1&EHMPTH SIATB BAIK, FRAMKlOflJTg, MICBIQAI Plana ara 'being pu^iiaaol for reorganisation on tho baaia of a 60% release. There appoara to bo noting to stand in tho way of thia reorganisation aiaoo borrowed aoaoy is not a serious problem and it appears that liquidity oaa bo provided* It is hoped tho two baaks ia Frankonauth oaa bo aergcd aad work la being done at this tine toward that end* OLD STATE BASI, FRM QWS, MICSIGABf Plans arebeing published for a reorganisation on a 60# reXoaso baaia* there appeared to be no question aa to the provision for liquidity. The major problem ia that of raising oapitaX* Tho aanagoaoxxt appoara oonfidont, howorer, that thia oaa be provided* AMERICAS HOME SECURITY BAKE, OBAHD RAPID8, MICHI3AI fhsre is iiitie doubi in ihe mind of ihe writer bui that thia baak wiXX bo purely a liquidation aattor. The analysis indioatee that onXy about ZOJt of tho general depoaits could be paid out ia a reorganisation and in addition to that feature is tho difficulty around borrowed mousy equal to about one-half of tho dsposlt liabil ity* The oonaervator oonours in this opinion although ho suggests operation under conservator for a tine to definitely determine that liquidation ia tho best proooduro* Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority VlMDSoozk Mr. SteYens * 6 QRASP RAPIDS SAVINGS BAUK, ORAMDKAPIDS, MICHIGAH A suggestion has been made by this bank to a committee representing business and Industry at Grand Bap ids that a new bank be formed to take over the acceptable por tions of both this bank and the Grand Bap ids Batlonal Bank. A meeting is to be held in the near future at Grand Rapids for a further discussion on this subject* In the opinion of the writer that suggestion represents the best oourse to be followed. The Grand Rapids Sarings Bank has suoh a high amount of preferred deposits and bor rowed money that, after proriding for these items It might be difficult to arrange for a release of 60$ of the remaining deposit liability, Management of bank appears to lean strongly toward a reorganisation plan but unless a decidedly high amount of liquidation can be had it appears problcraatleal whether or not that step is possible* HILLSDALE SAVINGS BANK, HILLSDALE, MICHIGAI Subject bank proposesto reorganise on ike basis of a 65$ release* Publication of plana to that end have not as yet been started slnoe it is also proposed that a mer ger of this bank with the First State Savings Bonk of Hillsdale, a non-member insti tution, be made. Examination to that end has been completed and the writer has recommended such a merger under the charter of the member bank. It is anticipated that plans will be adopted shortly* FIRST STATE BAM, HOLLAND, MICHIGAN Plans are being published forreorganisation on a 60% basis* However, it appears that subject bank will withdraw fro m the system and go on a restricted plan of re organisation, due to the high amount of borrowed money and low liquidity, which ap parently oazxnot be OToreomo* HOLLAND CITY STATE BABI, HQLLAHD, MI CHI GAB As in the oase of the First State Bank, Holland plans are being published for a 60$ release* This bank undoubtedly will find it necessary to withdraw from the system and go on a restrieted basis slnoe they also hare a serious problem in the matter of borrowed money and liquidity* FIRST STATE « SAVIKGS BABg, HOLLY, MICHIGAI there appears to be no opportunity here f o r reorganisation* Borrowed money in the amount of #300,000 is equal to about 36$ of the present deposit liability with a low liquidity figure and little apparent hope for liquidation* The conservator at this point appears to be decidedly weak and it Is possible a new appointment will be made* FIRST STATE A SAVINGS BAHK, HOWELL, MI CHIGAB it has been agreed that this hank must continue under conservator due to the faot that borrowed money is equal to approximately 26$ of the deposit liability, with a decidedly low liquidity figure* The writer is rather of the opinion that liquidi ties* will be the ultimate answer,*lthough there is a slight possibility tlmt reor* ganisatlon may be effected at a later date* /V x Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority Mr* Stoiroas * o g&OSYEIOR gAVIBOS BAMI# 40*miUM* MICHIOil Vank proWtijr oan roorgaaisod proiridod borrowod aoaoy of |67,000 oaa bo ollalaatod mad tho prooout ratio of liquidity aaiataiaod* At this tlao borrowod a m g r li o*ual to about ISfeC of dsposit liability. Tho roproouatativoo of tho baak agrood that ooatianaaoo andor oousormtor for a tlaio m o tho logioal plan* B A H OF EALAMA10Q, jULAMAZOO, MICHIflAB f i kaskooa agrood bytho roprosoaiaiiTOO.of tho Dopartaoat aad tho aaaagsaoat that roooivorshlp Is tho oaly oourso to ho pursuod la thlo oaso* FABMBBS A MBB0HABT8 STATS LAKKVIBB, M1CHX0AV loorgaalsatioa is posslblo ia this iadtanoo oa tko basis of a 60JC roloaoo proridod additioaal liquidity oaa ho prorldod* Howovor, tho aaaagsaoat of tho haak wao rory saphatio ia tho opiaioa that tho haak ooald aot bo aalataiaod oa aa uarostriotod basis. Bo doflaito otopo havo ao yot booa takoa* CITT STATE BABI, LOWELL, MICHI(*AB_ lorrowod aoaoy/wkiok totals |4if600 aad Is oqual to about 16J( of tho dopooit liability, togothor with low liquidity, appoaro to bar roorgaaisatioa ia thio iastaaoo for tho tiao boiag* Maaagsaoat of tho ooaouro ia. till# idoa aad agrooo that ooatianaaoo uador oonsortator io adrisablo uatiX suffioloat liquidation oam bo had* LUDIBQTOB STATE BABE, LUDIMOTOI, MICHIOAB flaaiTRr roorganiiaiioa oaa'.60jC rosirioiod baoio io aow uador uuy* Uadoubtodly thio iastltutioa will withdraw froaa asatiofhip ualoss it io poosiblo to ororooao foar ia tho tho aaaagaaoat of aa uarootriotod plaa of roorgaaisatioa* FUST STATI BABE, MILFORD* MICHIQAB thoroaro.aaaylogal pointsto ¥o 'loWaiaod ia tho oaso of this institution whisk has twioo booa roorgaaisod* Bothiag oaa bo dono until tho BaaM^g Dopartaoat la Miohigaa is satiofiod of tho stops aoooosary to bo takoa aad a dotoralaatloa of tho ’various depositors* rights* PEOPLES BABE, MAMCHBSflBU MICHIgAB Flaao aro ^olng publisiioi lor iko roorganlxatioa of subjoot iaotitutioa oa a roloaoo basil* (miMjaH. staTB SAVIIQ8 BABK. Ml BLABS* MICHIOAB w a s vsr MiatfTBietTWHHrrfr w w p A i i m a B "aa th* tuii «t * ruf n i M » . 60% Reproduced from the Unclassified / Declassified Holdings of the National Archives DECLASSIFIED Authority UND 3 o o 2 t , Mr. Sterens - 7 fmms 8TATI BiSI, MOBTAGOI, MI CHI Laok of Yoluae,loir liquidity and substantial borrowings would appear to prohibit reorganisation of this institution. fhs State Department ar# attempting to merge this institution vitii tho neighboring non-member baak at Whitehall, which appears to bo tho Boot solution* KXCBAI0& 8AVIBG5 bAlX, MY. PLBA8ABT, MICHIQA* Plano for reofganiwition on the Well 'of a.#<# release arc mm being published. CIH Z T O STATS SAVXBgg BAH, MBff BALTIMORE, MICHIQAM Plane 'fir reorganisation onthe basis of "a Wjf release aro boiag published* OHSTEP STATE BAKK, OBSTEP, MICHI0A1 fiabjeet lnstitutloa could "bo.reorganised with ftall payment to depositors with tho levy of aa assessment of 100J* against stockholders. Management of tho baak strongly object to such aa assessment* Therefore, ao deflaite plans aro uader wsy ia this Instance* PIOEOI STATE BAIK, PlggQg, MIQBIOAI fkia appears io Vo.a.matter of liquidation duo to a high amount of uaaoooptablo assets, heavy borrowings aad a decidedly weak list of stockholders. PISCOHBIBG STATE HAIOt, PIHCQNNISO, MICHIGAB A large amount of higkly.undesirable assess together with low liquidity aad heavy borrowed money appears to preoludo ideas of roorgaaisatioa. Management aad directorato ia this instance appear to bo decidedly weak aad it appears doubtful whether or aot much aeeletanoe ean bo expected* RQMKO SAVINGS BABI, &QM80, MICHIgAI Sorrowed aoney and an extremely.low"cash liquidity appears to determine that operatloa under conservator for a time is desirable* A reorganisation ultimately appears possible* MACOMB COPBTY SAVIM S aLfI,RICBIOyP, MICHIGAB Sound assets.arc not of sufficient quantity to warrant roorgaaisatioa on a 60% basis. Heavy borrowed money aad extremely low each position create additional barriers* It is probable that liquidation will be the oaly solution* BASK OF SAGIKAW, SAGIHAPT, MICHIGAB PKim x w m i m n aunt, Manor. mxchx8ai ftxanimtion* W r e just keen ec^pleiedwhiekundoubtedly will fiaally determine that roorgaaisatioa is aot feasible ia the case of either baak* Heavy borrowings, extrmsely large aaouat of pledged assets and high degree of uaaeceptable assets would se«a to prohibit roorgaaisatioa plaas* Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority y)MD3o o z k Mr* ttevens - 8 ST. CHARLES STATE BAIK, ST. CHARLES, ILLIHQIS Borrowed money is to liability *»d it t h e r e f o r e i««t that reorganisation cannot h e oonsidered* Management in this instance doee not appear strong and there is a question of tho ability of tho stockholders to moot an assess ment with which to replace oapital* Operation under conservator n y show possibilities but the writer is of the opinion liquidation is the probable answer* FRUIT QR01TORS STATE BiMK* SAUGATUCK, MICHIQAI It was agreed tlmi ikis W k continue under conservator in liquidity sufficient to contemplate reorganisation* It is this is highly inprobable since borrowed money is equal to deposit liability at the present time with a decidedly low an attest to improve the opinion of the writer approximately 80% of cash position. FARMERS & MERCHANTS STATS BAH, SEBBITAIIQ, MICHIGA1 Plans are being published for reorganisaiion on a 86% release basis* SPARTA 8TAIBBAIK, SPARTA, MICHIQAI Plans arc being publiskedi’orreorganisation on a 60% release basis* TRAVERSE CITY STATE BANK, TRAVSRSB CITY* MICHIQAI fkiYe publioaiion is noi under nay ai ike moment ike plans are ail determined for reorganisation on a 50% release basis* Management of the bank determined it would be unwise to make publication before having capital definitely arranged for* An interview with the attorney on Thursday of last week revealed the fact that in ap proximately ten days #186,000 of the #200,000 capital had h e m definitely oo*mitted* UTICA STATE SAVINGS BASK, UTICA, MICHIQAI Borrowed money is not a problem in ikis instance* However, liquidity of the bank is extremely low and it has been deemed advisable to continue under conservator for the time being in an attssspt to improve that situation* Ifcnagcmest of the bank appeared to doubt very much that an assessment can be collected in this instance* However, they are to make further investigation and report at a later date* WASHING TOK SAVINGS BAIK, WA8HIHQT0I, MICHIQAI Because of tkekigk amouirb of unacceptable.assets in this bank and the low volume which would recult from a reorganisation it appears doubtful that reorganisation can be considered* In the opinion of the writer the bank ultimately will be placed in liquidation* WILLIAMSTQH STATE BAIK, WILLIAMSTOI, MICHIQAI Management of "ike.bank 'appeared raiker disinterested at the time of the interview and had no definite ideas regarding their own situation* If sufficient interest could be aroused and the liquidity improved somewhat reo: possible* CLPiQ c r r r m m j ^3 Deposits of tank Old Merchants N.B. & Trust Co, Battle Creek, Mich. $8 ,9 8 1 6 ,1 8 3 Present borrowings 1st im probable Value of ated Our equity unpledged Probable loss to opinin pledged assets needs lending ion collateral agency manage' ment *2 ,1 5 6 None ♦*,150 $3,0 0 0 $500 Poor 597 None 2 ,7 2 8 2 ,0 0 0 350 Fair 981 None 1.^87 1 ,2 0 0 300 Fair 600 1,6 0 0 2,0 0 0 325 Poor General Condition Weak from frozen loaaP Heal es.loans Central National Bank & Trust Co, Battle Creek " 11ty National Bank & Tr.Co. Battle Creek N First Natl* Tr* & Savings Bank, Port Huron II 7,0 6 6 2 ,l6U First Natl* Bank & Trust Co* Ann Arbor II 1,177 379 None 675 500 200 Fair Farmers & Mechanics Bank, Ann Arbor M 2,8^3 **83 None 1 ,2 0 0 900 250 Poor Hackley-Union Natl* Bank, Muskegon n 3 >2lH 797 None 1,180 1 ,2 0 0 250 Fair National Lumberman* s Bank, Muskegon N 3 291 None 1,550 1,0 0 0 250 Fair Guardian Bank of Dearborn, Dearborn H 2,376 557 None 750 1 ,5 0 0 15 0 Good Dearborn State Bank, Dearborn N 5,080 175 None 1,550 850 None Good Highland. Park State Bank, Highland Park N lU,78U 1,956 None 6 ,50 0 ^ ,000 1 ,0 0 0 Good first National Bank & Trust Co* Kalamazoo H 6,333 500 None 2 ,3 0 0 1,0 0 0 250 Fair Deposit see page Heavy with drawals Poor assets 50 2,750 1 ,5 0 0 600 Good Fixed assets Lincoln National Bank & Trust Co. Fort Wayne, Ind.. 8,288 920 See page deposits Lack of confidence Poor assets frozen Frozen Frozen local loans Frozen local loans Public funds « U ,26 2 15 8 Ho 1 ,7 0 0 1 ,5 0 0 200 Poor Poor assets Central National Bank & Tr. Co* Des Moines, Iowa 8 ,30 0 None None 2 ,1*00 None 15 0 Fair 21,000 Hone None 7,000 3,0 0 0 700 Fair Small cap ital City Banking structure weak Poor assets City Banking structure weak First-Merchants National Bank, LaFayette, Iowa-Des Moines National Bk:.& Tr. Co. ** n Reproduced from the Unclassified I Declassified Holdings of the National Archives ^ Other lia bili ties j ! ! > 1 0 W ft £ % 02 ro 8 N <P C/3 ■aS —< t art O i, Name of "bank Bsudkers Trust Co., Des Moines, Iowa Deposits $5,US3 Palmer-ijcerican Natl. Bank, Danville, 111. 1.8U9 Irst National Bank, Danville, 111# Third National Bank, Bockford, 111. \ \ 3 ,2 ^ 3,630 906 9I+ 2kl Hone 10 0 Hone Hone Hone 2 ,0 0 0 800 1,350 1,5 0 0 EstimOar ated opinion Prob- loss to on able lending manage** ment needs agency $1,0 0 0 $Uoo Poor 300 Poor Hoo 10 0 goo 200 Poor 1 ,5 0 0 0 0 6.38U Value of unpled ged assets $2 ,5 0 0 ft City national Bank, Clinton, Iowa Other Probable liabili- equity in pledged Present ties borrow collat ings eral Hone Hone gone 150 Poor 2 8 ,8 5 0 * Q a ? 5 " General Condition Poor assets City Banking structure weak Deposit see page poor assets Poor assets Poor assets Concentrations Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority I t a m N o . 131 OfficeCorrespondence ■“*“ FEDERAL RESERVE To________ Governor Black ____ F r o m __ ____1if.Jynt.t3 q«mer«-l Coungel*, Date.__ June 5t 1933* Subject: Surplus required for grant_____ of trust powers to proposed national bank a t Battle Greek*______ Michigan. ¥ *7 d . 2 If the proposed new national bank at Battle Creek desires ^ to have trust powers either at the time it opens for business or short ly thereafter, the negotiations regarding its capital structure should not be closed until it has been determined how much surplus it will be ^ necessary for the bank jko have in order to be eligible for trust powers and until such surplus has been provided for* Section ll(k) of the Federal Reserve Act provides that no permit ta exercise trust powers shall be granted by the Federal Reserve Board "to any national banking association having a capital a n d ‘surplus less than the capital and surplus required by State law of State banks* trust companies* and corporations exercising such powers*" The laws of Michigan require that when a bank or trust company in that State is organized it shall have a surplus of at least 20 percent of it8 capital* The provision of the Michigan laws, however, which authorizes the issuance of preferred stock in connection with the reorganization of State banks and trust companies is a very recent enactment; and the State authorities have not yet decided whether a newly organized Michigan bank must have a surplus equal to 20 percent of its preferred stock or whether it is sufficient if it has a surplus equal to 20 percent of its Common stocfc* • Reproduced from the Unclassified / Declassified Holdings of the National Archives DECLASSIFIED Authority U N D aocat, I" - 2 - At our suggestion Counsel for the Federal Reserve Bank of Chicago has been in communication with the State authorities in am effort to obtain an interpretation of the State law on this point but has not yet been able to obtain a definite ruling* Inasmuch as the purpose of Section ll(k) of the Federal Re serve Act is to put national banks on a basis of substantial equality with State banks exercising trust powers* the Board would be justified in adopting any reasonable interpretation of the requirements of the State law regarding surplus which is adopted by the State authorities and therefore, it is impossible to tell what the requirements would be until we can obtain a ruling from the State authorities* If a surplus is provided equal to 20 percent of the common stock plus 20 percent of the preferred stock there is no doubt that it will be sufficient to entitle the bank to trust powers# It is possible, however, that the State authorities will rule: (a) That a surplus equal to 20 percent of the common stock is sufficient} or (b) That it is not necessary to have any surplus in order to obtain trust powers* (The requirement of the State law as to surplus relates to the amount of surplus required in order to charter a new bank and it is conceivable that the State authorities might take the position that they have the right to grant trust powers to a bank already in existence even though its surplus has been dissipated Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority VlHP30Q2fc, - 3 - since it was organized* In this connection* however, it should be observed that the institution now under considera tion is an entirely new bank and that^ it were being organized, n under State law it would be required to have a surplus equal to 20 percent of its capital regardless of whether or not it had trust powers*) Every effort is being made to obtain a definite ruling from the State authorities through the Counsel for the Federal Reserve Bank of Chieagoyand the parties handling the negotiations should be impressed with the import ance of ascertaining what those requirements are and being prepared to meet those requirements before the negotiations are completed, if they desire the new bank to have trust powers* Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority DKD aoozfc r / f Form 1481) ( / ) T E I2E G M FEDERAL RESERVE BOARD W A SH IN G T O N imam 5. 19 3 3 Hewton - Atlanta fill appreciate It if you will arange if practicable to have yotr supplemental report for week ended May 31 requested in Tran* 1769 rea/cfe Board* s offlees by Wednesday* by telegraph If necessary. SMBAD JSE/fce IWP' F R ep rod uced from the U ncla ssified I D ecla ssified H o ld in g s o f th e N a tional A rchives DECLASSIFIED Authority HMDaoozfc FED ERA L RESERVE BOARD WASHINGTON x_ 7 4 4 9 ; " *V 7 6 June 3, 1933. SUBJECT: Mgf&t o f unlicensed, member banks to v o te in e le c t io n s o f C lass A and C lass B d ir e c t o r s . ) Dear S ir : There i s in c lo s e d h erew ith f o r your in form a tion a copy o f a l e t t e r which the Board i s a d d ressin g t o the F ederal Reserve Agent at the Federal Reserve Bank o f Richmond, w ith r e f e r ence to the q u e s tio n whether member banks which have not been lic e n s e d by the S e cre ta ry o f the Treasury to reopen f o r the p er formance o f usual banking fu n c tio n s are e n t i t l e d to nominate ca n d id ates f o r C lass A and C lass B d ir e c t o r s o f Federal re se rv e banks and to v o te in the e l e c t i o n o f such d i r e c t o r s . Very t r u ly y o u rs, Chester M o r r ill, S e c r e ta ry . In c lo s u r e . TO ALL FEDERAL RESERVE AGENTS EXCEPT RICHMOND. R ep rod uced from the U ncla ssified I D e cla ssified H o ld in g s o f th e N a tional A rch ive s DECLASSIFIED Authority VlH Daoozb X-7449a June 3, 1933. Mr. W. W. Hoxton, fe d e r a l Reserve .Agent, F ederal Reserve Bank o f Richmond, Ri chrao n d, Vi r g i ni a . ■Dear Mr. Hoxton: 'R e fe r e n c e i s made to your l e t t e r o f May 18, 1933, in q u ir in g whether member banks which have not been lic e n s e d by the S e c r e ^ ta r y o f the Treasury to reopen may p a r t ic ip a t e in e le c t io n s o f C lass A and C lass B d ir e c t o r s o f Federal re se rv e banks. Upon c o n s id e r a t io n o f t h is q u e s tio n , i t i s the o p in io n o f the Federal Reserve Board that member banks, which have not been l i censed by the S e cre ta ry o f the Treasury to reopen f o r the perform ance o f usual banking fu n c tio n s and which have not been p la ce d in l i q u i d a tio n or in the hands o f r e c e iv e r s or c o n s e rv a to r s or S tate o f f i c i a l s having s im ila r a u t h o r it y , are e n t it le d to nominate can d id ates f o r Class A and C lass B d ir e c t o r s o f F ederal r e se r v e banks and to v o te in the e l e c t i o n o f such d i r e c t o r s . The Board a ls o agrees w ith your view that banks in the hands o f co n se rv a to rs or o f S ta te o f f i c i a l s having sim i la r a u th o r ity are not e n t it le d to nominate can d id a tes f o r C lass A and C lass B d ir e c t o r s or t o vote in the e l e c t i o n o f such d ir e c t o r s . Very t r u ly y o u rs, C hester M o r r ill S e c r e ta ry R ep ro d u ce d from th e U ncla ssified I D e cla ssified H o ld in g s o f th e N a tio n a l A rch ive s DECLASSIFIED Authority tiH P ao o z fc F E D E R A L R E S E R V E BANK O F C H I C A G O 230 SOUTH LASALI-E STREET y 2 June 2 , 1955 OFFICE OF THE C H A I R M A N O F T H E B O A R D AND FEDERAL R ESE RVE AGENT Hon. Eugene R. B la ck G overnor, F ed era l E eserve Board W ashington, D# C. Dear Governors R e fe r r in g t o the B a tt le C reek, M ichigan, s it u a t io n , I th in k i t Xs on ly f a i r t o a d v is e y ou as t o the circu m stan ces tinder w hich we recommended l i c e n s e s f o r th e s e two banks. You w i l l r e c a l l th a t ou r b a s is f o r li c e n s i n g was s ta te d t o b e on th e l a s t exam iner1s r e p o r t . Both o f th ese banks were n a tio n a l banks and we t o o k th e exam inations o f the C o m p tro lle r1s departm ent, as we do n o t o r d in a r ily examine n a tio n a l banks o u r s e lv e s . The exam ination o f th e Old Merchants N a tio n a l Bank under d a te o f November 18, 1952, showed C a p ita l # 1 ,5 0 0 ,0 0 0 Surplus and U ndivided p f t s . 1 ,5 9 6 ,8 0 0 E stim ated L osses 288,100 D ou btfu l 421 ,60 0 T o t a l D e p re cia tio n on Bonds n o t c l a s s i f i e d above 578,650 In th e ca se o f th e C ity N a tio n a l Bank and T ru st Comparer, an exam ination o f November 4 showed C a p ita l | Surplus and U ndivided p f t s . E stim ated L osses D ou b tfu l T o ta l D e p r e c ia tio n on Bonds n o t c l a s s i f i e d above 6 0 0 ,0 0 0 556,100 59,500 184,600 199,850 You w i l l n o te in b o th o f th ese eases th a t a l l lo s s e s and a l l d o u b tfu l and t o t a l bond d e p r e c ia t io n t o th e markets would n o t have exhausted th e su rp lu s, and th a t in each c a s e th e c a p it a l s t o c k would have been l e f t unim paired w ith some su rplu s rem ain in g. We w ere, even s o , ra th e r h e s ita n t t o l i c e n s e th ese ban ks, bu t under th e form ula w hich was g iv e n ^ a ^ 'w ^ c o u ld not do o th e r w is e . Very truly EME! HH Fedejj&i R eserve Agent Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority VlUDaoozfc, 'o rm 1 18 b AM ■1 F E D E R A L R E S E R V E E |O A R D W A S H IN G X f^ ^ j ,.-V fAY % 9 1 /. DILLA1B - CHICAGO R eferrin g y ea r inquiry o f Mdy 2 2 , l t i s suggested t h a t whoa r« q a« st« 4 by a c o n se rv a to r to ap p ly th e old r e s o r t* balance of a aeab er bank i a h is charge to i t s ia d eb ted a esa , w hether o r n o t a s of sosm p rev io u s d a te , tho Fodoral re se rv e baak give e o a s id o ra tio a to the a d v is a b ility of aocordiag the baak tho saae t r e a t a e a t a s reg ard s i t s re se rv e b a la a o e , a s I f th e baak were i a tho haads o f a re c e iv e r# Sach a o tio a , i t i s assumed, would g iv e tho aeab er te a k , ia tho f i a a l s e ttle m e n t w ith tho c o n s e rv a to r, tho b o a o f it o f i t s rooerve b alaao e in re d u c tio n o f i t s iadobtedaess as of tho d a te s p e c ifie d w ith o u t ia aay way im pairing the p o s itio n of th e re se rv e baak w ith re fe re n c e to o o lle o tio a of th e iadobtodaoss* ir r e s p e c tiv e of whether o r a o t th e baak i s su bsequently p laced i a liq u id a tio a * Ia oases ia which i t i s proposed to apply re se rv e b alaaees a s o f d a te of tho ap p o in ti e a t ; »f e o a s e rv a to r, you aay wish to c o asid er a d v is a b ilit y of ta k ia g such sto p s a s nay be aeo essary to p re se rv e such r ig h t s a s re se rv e baak . aay h a te to i a t e r e s t accru ed a f t e r th a t d a te i f charge to re se rv e a s count has beoa M a te ria lly d elay ed apoa re q u e st o r apoa a g reeao at w ith ooaso rv a to r pending p o s s ib le re o rg a n is a tio n o r re s a a p tio a of b a s ia e ss by t:UB APfHUVAL baak o r to p re serv e r i g h t s of F ederal re se rv e baak to accrued ia te r o a ,fjjSj»* e ^ v;r.Hs>r< ia ev o at baak shoald be sab seq u eatly p e rm itte d to resaao b u sin ess o r should b e reorgaaised* R ep rod uced from the U ncla ssified I D ecla ssified H o ld in g s o f the N a tional A rchives DECLASSIFIED Authority NMD Soozfc, Aj £*>& A F o r m 148 b T ^ E O R A M FEDERAL RESERVE BOARD WASHINGTON t. « * C **$" Joiva# - A tlo slft mtrnxrtm jptror 19 ttiepni, it dtoee for the line heiiyr t«* ftiroid & aisorepcuiosr disoouated and m% appear f>**<*tia»fcle holding* of Mile thereon ae reported on bias’s bRXeaae sheet, fom >* la sane* where m m *** teak, at request of * waeervater m of a prior In order, hoeeirer, to fc*ej> reduction in ecom&Xe to mrnlng* <*ppXiee reserve aoaotmt to i&dehtediittsa of nee&er tesaic date. at a niaina&t it is attested th*t bo interest eoentede on past paper of b&»k» to hri&de of oom** motors he included .form 3*t. ICBRKLW i V 3 1 $ st7~ ELS/leh f i^ . tot s M .■// in e&rt&age on Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority V)MD3fl0zc=> mmm mm m mm mm, mm* VlttNI *flt*%*l!% P f tf*iBly^l $p $$ ftggfpiQgf %0 yffil %3$tt$ $£&$# lKl|$£i •$* •ftyffe<iwiA.g mt mut&mmekXM'.iAmdt 4m ^^9N^I98^^L man* m» WHkWiMf11 %&&£&$& R e p ro d u c e d fro m th e U n c la s s ifie d / D e c la s s ifie d H o ld in g s o f th e N a tio n a l A rc h iv e s D E C L A S S IF IE D Authority ^ I oiqumm QtM rpartttlotu TJitjr r i i j g t f t Tiijw> in x ishi % i f ftHP tMMfl&SF’' In fu ll "fynt j^yiNllNli 10 (fe) lo«a*t tbm ?t0*» j.ijfitiiii nit \qf Dm TTiitflanl 'Is. bi* la tte r 9 t I M S %© i t e i'M K*tidnr t t # T jiii i i it t irTiIrt \& w^Ti ^IMNR ^Ki^P pfc ^^fc^B^SIP ^Wfc.^MP' ▼«wWMIMp 1fl<ilt llib# Y’lJ& fljmy 1 18W t y WtfttM && tifc® jjwrtfcH® odLj®A UN®-"Ini £W»**OT w* UC9V \ I I ip In w3kTFwM(t^y ffwvmTmX mMPp^VW *&JfwWBw* sitiw^yv^siy jb«j| liwiiPTi^i a#y ipw khs. WKK%9&$ %b0n 1Qn ty fflT II vt wPi(PPfWWIt*-J^§' 3^#' wwPHgm* f n iM tv ^ j io (fe ) itfttan in o v t e r t # VQwVLltl j|HEPp;w«w' SMIiliHPWWPP ART * W wS®^ W mMafeMur' WPlJI® pPwviNliW^I' ^»^8fl|JHPw _ps^pppii«i?w *,if wpumi^ u^^runn&jiv»«av ©ip «w In iS S sw i < In A tM itilQ il t t v t l 'U s lt#iOA^ni#H<ni ?1wumw C#^jxw»ti<Hi m vi "fcaJe* t!i> r®*pcMB#ib ill tf 9 oa •• a * to S M m m U m t)m l*nAt»e ptmr* cf m m 4fflm*®'Um* ■• t»^-flrwt;j^J tti ^ 'git inn l i l t irtilA mm!^ niiflwill ill %ld^ Imu alm idr W «i |ar*9«R%d« I f i f «la«a^ hm iim itft into i&»# it 'waSS DECLASSIFIED Authority UND *$ * to o jn fiw kU omft In t&§ J&pot w a^ pptatloo tlutt Ha ftell ri ip tiillt 1tty *0 i>Uoo« upon \ha mmrm Uitai wrior yw lnllw #f O-gw-lQinl «#* not***!* 1%l* M i w v ^ ! l*wowort tli*t **** mitor *mk m iwailwt it ih* i»o*tt»tjruotlott niwKi Wp<arn%lwi &*t a y — fruwi might W Ami* •*•4 hmkt^ H M io**o **a will bo sa»4* U tfco flrrt Imtoooo % tfco tow ** boako, n»d tb*» tftfext* o»»r doUUr fur $#H*y % Hat CarpMfvitiovi npm wfc*W»«r oolletojrwl M i Whmii ’j?*OQaotrtt0tio& ywrm h*ok» «•** obi* t# obt«£m # lHHi pwBiwe alftht tw i oo»tm* jO*t* tbo pootlblUty tfc# *oo*rw« bwifl»* £P*ri*t»g *&• mmmmwf foodo to ttoo ;i»«6>n*% jfiialt4s«i SoffpocpotlAa by tho inrflliim #$ tho «ori>ari%tio«*» $oboat*MOO •• ponaittod uttAor tii« Uim «f tho tfe«m§ ottostetti to th* Agrioulturml ftollof «t. ?i»t, ko*«nftrt ill' * vtfM t vhiob ootaft b* l*ft for future tootsiiaotlott# tt» ln^ernue* tfeta& in tbo pinion of ®nr t i m t i n 1 » %h«t 0QM0thlA« nu t feo 6ono ;rtnfrUx % t&o a r n r M t t to fttwtn %h* l»opft*| opmi of vmty U 00&006 oMbor b»ak# mhS im th*ir thlo mm mm •ffi9tlV9l| bo aoocnpll**o4 by $itb»r ooo of tkt ♦»• pyood w o m § * gootod &&*?#, «l*<5 witk loot m l rifck; to tho baklog aituatloo of tfc* •ottfiljpy, %&a& If n*y af tJm pl*a« a#* i^b^Ijmi fWfr rm in til# f*M% jpoooI t+t or booo ^ djjwisS)h@ w 0M| and it lo foturod tibst tho p&9~ liuiwiMi of %niAc i#p<wrtl%* sou imfeAMnkdui' ■in.m w n •111 .1n» *11 HJHMUkttft iHHkMv la t*mt9 I I $s % i» ffftiilfltfi of ow iilm ty Uwit tho jwpMMrii 3m #L#»- IsSiOB will OlMM ittl|T bwrtt ^iloll CiMMrtt <P®Hfjr vMtoF VMI lMA90K#0 plo&f Httl »OI rtt 'Umi rl»k of foflNtiUNI MU|f oow^ flMrifeor bMrioi to wttl^ Afo« f)rai tho j%4taap*.l liooor^o f-yotwi^ votlMir tiwui to oiffu tho on^» R ep rod uced from the U ncla ssified I D e cla ssified H o ld in g s o f the N ational A rch ive s DECLASSIFIED r- ' Authority Y iU P a oozb p ,m m iru iii^4't%:^ ^||@ ys^uiia f(jjii| «.% U M I flMMI itfbMI & £ P N i t X y WRdfN&toStity jpH(Ri§ fUl ^lygy tm ."^tsil,!, te’ tllfi dfy Reproduced from the Unclassified / Declassified Holdings of the National Archives DECLASSIFIED Authority ^N D 3002b / Jloaoiv»£ a t .aahlja^tan, 10 A t l o o t s 0« « f g i & iJluok * / h*9hln %a& 8148 Ba °T O "r — / I m y SS ) 830 r nax*H U # 1953 Siaok * Atlnata, <l»o*$ia ./ (Confiaoitti&l) J«r tbo oo&fldontial iafonaatiaa of yotiroolf and your a®«*d of Dimetom m qmting below & letter whiah 1 t ’hmm $m% xooolvod f*aa tho JProsldimt of tbo M t * d ^toto* aad I bog to ospvoos tho )M»p» tbot In addition to othor mwttomUMm you will fern Hilo J*ttor 1* miad in tmmmittim to im ap~ plioatloSTo?Iwibor baoko ia yoar %»triot for poaaiosi a to ops© for ■ buataoss* f ..., ,s ....■■■.-.■‘a ... ■'■■■ rflg'. .. 1 ..... ; . k ^ I hopo also that la v l f t n stash applio&tloas, fam w ill ploaoo bo ®ood oaoo£i ia oaol* «&**« to odvloe ao opoolfioally, an roqywstad fcy tolograa yootordcgr, whstbor im you* opiaioa it ooold bo seasonably oafo im tbo oiroia»* •taaooa *fcr ibo to poralt tlm full opmlag of tbo «pplioa»t, imving in seiod tho pjroolRMitida of ttift SvooIAoat prohibiting tho pa&mits of mmmm by osar fe&afe for boarding purpoooa* In tho i»tor**t of oxpoUtion ssad in ordor mmbk* tho pronpt opoaiag of aa ®aay mmb®r banka aa poaaiblo, ploooo forward zptfklmtiom me xoooivad, lodiopting oaly yowr opinion m tbo to •poeiflo foootioa anteod abato* Biailar ro^u®»t baa boos saodo of tbo Co«^- trollor** Offioo with roapoot to Natianol followss Mxfcm. tho $t«§sidoiLt9a lottor R ep rod uced from the U ncla ssified I D ecla ssified H o ld in g s o f the N a tional A rchives DECLASSIFIED Authority t)KD 30026? / • ~ -Ws Z m Sm aotlat# w X w U o b to b# e iv a a to ih * oaooto o f nstsbor boa**, M t i e m l aad s ts to * on to o f aminos m a t r » o o ® ttiio tim » d m s tio o r s t r i o t o s t i * b a s is vouAd m u f t t a&jay b«»ko fwwa op o n ia# whioh could nad a t e i l l bo X0D porooiu opsaod i f I H iir a o s o ts *»ro asoooaabXy mlxm* m a fa ir f I an oomriaood t h a t tfeo D iro o to r* ~»f tii® te s ic , M otional lfc&- o r a l Hooorfo Usaks should t^&o a f a i r aad o $ a lt* b lo b a s is f o r Xoas m X uattoa* xmthor titan a fo ro a* X lquidK tioa t e s t s . I t i s aqr a© sire th » t fadoraX Ilossrve Bunks *ilX proe«©£ on f a i r and oquit&feXo b a s is i» rospoot to X&mm to tho aoxftor b&aka, tho purpoaa o f «Hl«h i s to p r o m M n m ty f o r s t a t s te a k * wfci«)i » n n o t aaaboro o f tb s i%&sr&l liooorvo ystenu Q oop& atioa oa tho p a r t o f mwtimr )msk» 1a t h i s r o - ®a*d i« OSOStttial* *H© oitisssaa oxpoots tto<* dirsotors to bo infallible* 4X1 w« o&a ask is tfeat thoy aso Inmost 9 aadt aador t&o oil1* ounataaoss, ffcirXy liberal Jud^ssnt* It is iaovtt&bXo tliat sons adst&feao «iiX bo *a»do* Xt Is iaorltablo ttm.% mm Xoooos nay bo fef tb® fedora! J¥ ssrfoj^ito ia-lonao- to tbolr raerabor basks* fTbo Goaatry approoiatos, h o w w r, th at tho t*ofcv» as«lajaaX Bmm&rm Mxk* a ro open* tin # oatiroXy tm dor fo d o re l X&* %ad tho rooaat sraorgtaey boafe a o t groratly oaXarigss t& oir pom rs to a d a p t th * lr fBoiXitieo to a JJntionnl onsrgsaiay* Thorofors th o rs i s a fo ry <%oflitlte o b lig a tio n oa &to fodor& l Q m m m m n t to rs la b n rs o tbo tuoXw Ro^ioaaX S ' s d s r S ^ i i o r i o ^ aanfes f o r Xosss® whi«k tboy m y hmOco oh Xcmao mtim uadbsr ' i\C\ R ep rod uced from the U ncla ssified I D ecla ssified H o ld in g s o f the N ational A rchives ~~ DECLASSIFIED Authority M D a o o zfc, m *1. 3 m m t fe e * lta to t o aa*ur« you th at X s im ll m k Vtm t© any of th* twalw >i»rtor8.1 Hmka for »uah laaa»«# I am «emfld»nt will it# obliggatlo** to tfe*M Fedar&l i&ftks sfcoulA tfcwi oamplon a r i » e # §%mnt ©u«h x tq u M t* Youra wry &ina*r<&ly yyoskUB D. r^ooat-swlt* v<* ??• %'oo4Lltt* Johns 5{15 I'M R ep rod uced from th e U ncla ssified I D e cla ssified H o ld in g s o f th e N a tio n a l A rch ive s DECLASSIFIED C ' Authority viU D aoozb May B o x t o A Caoo - Xow Tortc A ustin * P h ila d e lp h ia Iftl11 nil ** * Boston * Atlaata Sltwai - Chlo^o Payton - Mianoapolls If: 24, 1933* 10 , £ McClaro * Kansas City faith - Dallaa Bswtoa. •* Saa JVaaoiaoo ..^ TtAJS. • . 1804. for yoar lafornatton, tho offieo of tho jMsrotaery of Hi* fyoasary feao adyiaod as folio** in :rospoaso to am Inquiry W mi * fodoral yOSOJTOhimik to vfcothor a stato 1>ank shioh ter boon authorised V ttata tarihorlUos to porfon* any aad all of prohibited, aad whisk usual banking fwettoas* oaoopt as otinrvlw lator adaittod to ■•mbinhlp In tho Podoral Sosoyyo flysSott.i is roqulrod to oeoare a 11cans# awsShofisiaS' it to ooatlano frm lino Secretary pes^orwanBo of functions* •State baak apea adadsalon to aoabership 1m Fodoral HaieiTa Systoa mast seoare llooaso frm tho Soorotaary of treasury to petfoia all usual aad aoraal baaklag function* except as oth«r~ viao prohibited. Understand federal leoerre Board ealy adalttlag to mayorship saoh 'tonfci abla to operate without restriction* Llconso will bo issuod upon year rooowaoadatloau11 Morrill. R ep ro d u ce d from th e U ncla ssified I D e cla ssified H o ld in g s o f the N a tional A rch ive s DECLASSIFIED Authority •- F E D E R A L R E S E R V E ^ A N K O F CH IC AG O 230 SOUTH LASALLE STREET May T w en ty-fou r 19 33 F e d e ra l Reserve Board W ashington, D* C. A tte n tio n : Mr. S . R , C arpenter A s s is ta n t S ecreta ry Dear S i r : I am w r it in g t o acknowledge* w ith thanks, you r l e t t e r of May 22 jand th e accompanying e o p ie s o f in s t r u c t io n s is s u e d to ^ co n s e rv a to re o f n a t io n a l banks supplem entary t o th o s e con ta in ed in the pamphlet dated A p r il %* I n ote that th e C o m p tr o lle r 's o f f i e e s ta t e s that i t i s t h e ir p r a c t ic e t o send to each F e d e ra l Reserve bank c o p ie s o f a l l such in s t r u c t io n s . In o r d e r t o in s u re that th e y reach the p erson s in th e bank most con cern ed , I am a d d ressin g a re quest t o th e C o m p tr o lle r ^ o f f i c e th a t h e r e a ft e r th ese be ad d ressed t o th e bank to my a t t e n t io n , whereupon I w i l l d is t r ib u t e them. I a p p r e c ia te g r e a t ly s tr u c t io n s * su p p ly in g th ese m issin g in - Very t r u ly y o u rs , H. G. P e t t , Manager D iv is io n o f Research and S t a t i s t i c s R ep rod uced from the U ncla ssified I D e cla ssified H o ld in g s o f the N a tional A rch ive s DECLASSIFIED Authority VJMD3002fe, i i i?.j o ±-u i y j j j I ) F E D E R A L R E S E R V E B A N K O F CH sf vV 2 3 0 SOUTH LA S A L L E STREET MAY 24 1933 d/s* THE GOVERNOR ^v—is'''-i-LivV*iiiBOARD V 7 0. May 22, 1933. Hon. Eugene R. B la ck , G overnor, F ed era l R eserve Board, W ashington, D.C. Dear G overnor: The f o llo w in g i s an o u t lin e o f the B a tt le Creel* M ichigan s it u a t io n I d is c u s s e d w ith you during my r e c e n t v i s i t t o W ashington. OLD MERCHANTS NATIONAL BANK & TRUST COMPANY: L i a b i l i t y h ere • . . • • • • • • $ 9 0 6 ,6 5 0 . L i a b i l i t y R .F .C ....................................1 ,2 1 9 ,1 3 9 .7 2 ) D ep osits have d e c lin e d ap p roxim ately $ 1 ,8 1 6 ,0 0 0 s in c e December 31, 1932* An a s s e t exam ination made May 4 , 1933, in d ic a t e s th e bank has f r e e a s s e t s , in c lu d in g paper and r e a l e s t a t e m ortgages which a re c l a s s i f i e d as good and f a i r , a g a in s t which a lo a n v a lu e has been p la c e d o f # 1 ,6 4 6 ,0 0 0 . This d oes n ot in c lu d e bonds o f a book v a lu e o f $42 8,0 00. I f t h i s amount were made a v a ila b le i t s cash p o s i t i o n would bti ap p roxim ately $ 2 ,4 0 0 ,0 0 0 a g a in s t d e p o s it l i a b i l i t y o f ap p roxim ately $ 9 ,5 0 0 ,0 0 0 . A review o f th e a s s e t s in d ic a t e s estim a ted lo s s e s o f $ 2 ,7 2 1 ,0 0 0 a g a in s t a t o t a l c a p it a l s tr u c tu r e o f $ 2 ,7 8 5 ,0 0 0 . This does n ot tak e in t o c o n s id e r a t io n d o u b tfu l com m ercial loan s o f ap p roxim ately $518,000 bu t does in c lu d e $553,000, based on a p r o s p e c t iv e o f f e r o f $ 1 ,7 5 0 ,0 0 0 f o r bank b u ild in g . A lo s s o f 10% has been estim ated on r e a l e s ta te mortgage lo a n s , which i s c o n s id e r e d a v e ry l i b e r a l c l a s s i f i c a t i o n . R eal e s t a t e loa n s a re equ a l t o 39.2$ o f t o t a l lo a n s . Investm ent i n banking q u a rte r s re p re s e n ts a r a t i o o f 26.3% t o th e t o t a l d e p o s it s . 27*2$ o f the d e p o s it s a re demand and 72.8% a re tim e . A s s e ts p r e d ic a te d on r e a l e s t a t e r e p re s e n t a r a t i o o f 58.3% t o t o t a l d e p o s it s . CENTRAL NATIONAL BANK & TRUST COMPANY: L i a b i l i t y h ere . . . • .................. $ 5 9 7 ,0 0 0 . L i a b i l i t y R .F .C .................................... N othing. D ep osits have d e c lin e d ap p roxim ately $788,000 s in c e December 31, 1932* An a s s e t exam ination made May 4 , 1933, in d ic a t e s lo s s e s o f $839,511, w ith a t o t a l c a p it a l s tr u c tu r e o f $ 1 ,1 2 1 ,5 2 3 . This d oes n ot take in t o c o n s id e r a t io n d o u b tfu l com m ercial loa n s o f $77,659 o r bank b u ild in g and f i x t u r e s c a r r ie d a t $ 1 ,5 3 0 ,6 7 0 . A l o s s o f o n ly 10% has been estim ated / R ep ro d u ce d from the U ncla ssified / D e cla ssified H o ld in g s o f th e N atio n a l A rch ive s declassified Authority M D 3 o o z t , F e d e r a l , r e s e r v e b a n k o f c h ic a g c - 2 - Hon. Eugene R. B la ck , G overnor, F ed era l R eserve Board, W ashington, D.C. May 22, 1933. on r e a l e s ta te mortgage lo a n s , which i s con sid ered v e ry l i b e r a l . Based on the a s s e t exam ination th e s u b je c t bank has f r e e paper in c lu d in g r e a l e s ta te m ortgages o f $ 9 ,3 3 0 ,0 0 0 and f r e e bonds o f # 74 8,0 00. These as s e t s have been g iv e n a lo a n v a lu e o f $ 1 ,0 8 6 ,0 0 0 . I f t h i s amount were made a v a ila b le the bank would show cash o f ap p roxim ately $ 1 ,5 0 0 ,0 0 0 a g a in s t d e p o s it l i a b i l i t y o f $ 6 ,2 8 0 ,7 0 0 . The percen ta ge o f r e a l e s ta te m ortgage loa n s t o t o t a l lo a n s i s 7 2 .8 $ . Investm ent in banking q u a rters bears a r a t i o o f approxim ately 24% t o t o t a l d e p o s it s . 12.5$ o f th e de p o s it s a re re p re se n te d by demand and 8 7.5$ by tim e . A ssets p r e d ic a te d on r e a l e s ta te bear a r a t i o t o t o t a l d e p o s it s o f 7 0 .2 $ . CITY NATIONAL BANK & TRUST COMPANY: L i a b i l i t y h e r e ........................ . . $ R .F .C . l i a b i l i t y ............................... 5 4 0 ,1 4 2 . 42 5 ,8 2 8 .8 1 D ep osits have d e c lin e d ap p roxim ately $810,000 s in c e December 31, 1932. L osses d is c lo s e d i n our a s s e t exam ination o f May 4 , 1933, amount t o approxim ately $808,000 a g a in s t c a p i t a l s tr u c tu r e o f $ 1 ,0 3 2 ,0 0 0 . This d oes n ot take in t o c o n s id e r a t io n d o u b tfu l com m ercial loa n s o f $149,103 nor bank b u ild in g and f ix t u r e s c a r r ie d a t $ 1 ,1 6 8 ,7 3 3 . A lo s s o f o n ly 10$ has been estim ated on r e a l e s t a t e mortgage lo a n s , which i s c o n s id ered l i b e r a l . Based on our a s s e t exam ination th e bank has f r e e a s s e t s , in c lu d in g paper and r e a l e s t a t e mortgages (in c lu d in g f o r e c l o s u r e s ) , o f a f a c e v a lu e o f $51 0,0 00, c l a s s i f i e d as good and f a i r . A lo a n va lu e o f $310,000 has been g iv e n th ese a s s e t s . I f t h is amount were made a v a ila b le a t p resen t i t s t o t a l cash r e s o u rc e s would be ap p roxim ately $626,000 a g a in s t d e p o s it l i a b i l i t y o f ap p roxim ately $ 3 ,4 4 6 ,0 0 0 . The r e a l e s t a t e mortgage lo a n s b ear a r a t i o t o t o t a l loa n s o f approxim ately 4 9 .1 $ . Banking q u a rters r e p re s e n ts a r a t i o t o t o t a l d e p o s it s o f 3 0 .2 $ . Demand d e p o s it s r e p re s e n t 2 5.9$ o f t o t a l d e p o s it s and tim e d e p o s it s r e p re s e n t 7 4 .1 $ . A ssets p r e d ic a te d on r e a l e s ta te bear a r a t i o t o t o t a l d e p o s it s o f 7 6 .8 $ . The C it y N a tion a l Bank & T ru st Company was a f f i l i a t e d w ith th e Guardian D e t r o it Union Group o f D e t r o it and has s u ffe r e d through th a t c o n n e c tio n . R e c e n tly Chas. C. Greene, P r e s id e n t o f the bank purchased 56,000 shares o f th e bank* s s t o c k , which had p r e v io u s ly been owned by the Group. The purchase p r ic e was $25,000 and a p lan o f s e l l i n g t h is s to c k t o the p u b lic a t $10 p er share was con tem plated . The bank was g e t t in g a lon g w e ll w ith th e p la n and claim ed t o have prom ises o f s u b s c r ip tio n s in the amount o f approxim ately $125,0 00. R ep rod uced from th e U ncla ssified I D e cla ssified H o ld in g s o f th e N a tional A rch ive s DECLASSIFIED Authority HMD 300% , Hon. Eugene R. B la ck , G overnor, F ed era l Reserve B oard, W ashington, D.C. May £2, 1935. W hile they were w orking on t h is p la n the Old Merchants N ation al Bank & T ru st Company approached th e C ity N ation al Bank & T ru st Company w ith a p ro p o s a l t o merge. C en tral N ation al Bank & T ru st Company was ap p a ren tly n ot inform ed o f t h i s proposed m erger. The management o f th e two banks c o n s id e r in g the merger are f r ie n d ly but th e re appears t o be c o n s id e r a b le f e e l i n g between th e C en tral N ation al Bank and th e Old Merchants N ation al Bank. I n a ccord a n ce w ith you r re q u e s t I have endeavored t o g iv e you a b r i e f o u t lin e o f th e B a t t le Creek, M ichigan, s it u a t io n and i f th ere a re any fu r th e r d e t a i l s you d e s ir e I s h a ll be happy t o send them t o y ou . I a p p r e c ia te the c o u r t e s ie s extended t o me w h ile in Washington and s h a ll be p lea sed t o keep you p osted as t o any new u n fa v ora b le developm ents i n t h is t e r r i t o r y . Yours v e ry t r u l y , Deputy Governor R ep rod uced from the U ncla ssified I D e cla ssified H o ld in g s o f the N a tional A rch ive s DECLASSIFIED Authority M D a o o z t , UAY 221933 Kr. 1 *0* t#tt, laaacar* 8t*i*l#a of i#a#arah aad |tatiatiVa» r#d#ral Raaarva Baali #f Chicago, Chicag©, XHiaelt* Daar Sir i ' ^ th# raq«#»t contained ia your l#tt#r ofJlay_ JJt i f to - l#Ql#naadf th#r# ar# i M U n i h#r#witt* a#ir#ral of tlit iaatrt#ti#»a lftiud to ooaaarvatar# if nati#aal banka ¥y th* #ffi## of th# §oaftr#ii#r of th# Cmrr#a«y aa*?l*aantary t# th# 4at#I'lirll I m k$ ifIS* advlaad th a t i f i s th # p ra o tlo # of th # o ff! # # o f tli# Coa p t re l i a r o f Hi# C arr#aoy t # *#ad t # th # F #d #ra l r#a#rv » baaka oaplaa # f a l l *a#h ia a tr n o tio a a aad e ir o a la r a whioh aay b« o f ia t a r # # t t # th # a t but* i f f a r aay r#aao a y #a f a i l to o b ta in eap laa of any #wtii i a a t r a a t i e a a o r wiah t # o b tain a d d itio n a l o o p i# a , I a a •a ra th a t tha o fflo a o f th # Coaptro U # r w ill b# g lad to supply yoa w ith a a a f f i o i a a t a a a * #r ap#a r # q a # a t. fary traly yoart* (S ig n e d ) S* R- °a rP ^ e r I* ft. Oarpaatar juaiata&t $##r#tary fa # l# # a r # * R ep rod uced from the U ncla ssified / D ecla ssified H o ld in g s o f the N a tional A rch ive s DECLASSIFIED Authority N M D 3 o 0 2 k TELEGRAM )u> federal reserve system (LEASED WIRE SERVICE) 16_ 7g4 R E C E IV E D A T W A S H IN G T O N , D . C . 94 F Y A t l a n t a G e o r g i a 3 3 7 p Mas:. 1 . 9 _ M o r r ill W a s h in g t o n O ur d i s c o u n t d ep a rtm en t h a s b e e n h o ld in g n o t e s ban ks in C o n s e r v a to r s h ip a s a c c r u in g in t e r e s t th ir d to on th e tra n s 1748 d ir e c t s reop en u n t il C o m p tr o lle r is R e s e r v e B ank t o th is p roced u re as a p p ly th e con serv a tor reserve accou n t d a te con serv a tors o f banks in r e c e iv e r s h ip of to of to in of an d h a s b e e n sam e a s e a r n i n g s . Y o u r t e l e g r a m now d i r e c t i n g as o f e a r n in g a s s e t s su ch banks have been p la c e d a p p lic a tio n U S GOVERNMENT PRINTING OFFICE: cu rren t and r e d i s c o u n t s banks n ot p rocess on e bank t o o f A p r il lic e n s e d of liq u id a tio n , requ est b a n k ’ s i n d e b t e d n e s s m a k in g C u sto m h a s b e e n t o a p p o in tm e n t. I n cases accru e on in te r e s t R ep rod uced from the U ncla ssified / D e cla ssified H o ld in g s o f the N ational A rch ive s DECLASSIFIED Authority U M D 3062b TELEGRAM ( 2) FEDERAL RESERVE SYSTEM (LEASED WIRE SERVICE?) R E C E IV E D A T W A S H IN G T O N , D . C . 13— 7 9 4 o b lig a tio n s fo r d a ily but to a llo w p a r tia l o ffs e t b a la n c e s w ith r e s e r v e r e c e iv e r s h ip is a p p lic a b le e a r n i n g s w h ic h w i l l h a v e t o w ith con serv a tor. in bank. case of 445pm 16—794 r e c e iv e r in case c r e d it of c o n s e r v a t o r s h i p we a r e a d v ic e Johns V S 0OTERXMENT PRI*TWe OrFfCC 1939 p roced u re b e r e d u c e d w hen f i n a l W ill a p p r e c ia te ( If by g iv in g as a c c o u n tin g soon as p o s s ib le . s h a r in g is m ade mm R ep ro d u ce d from the U ncla ssified I D e cla ssified H o ld in g s o f the N a tional A rchives DECLASSIFIED Authority VlUD 3 o o z t , I” miiiiwy I A F '\\y Mli' F E D E R A L R E S E R V E BANK O F CHt 23 0 SOUTH STREET May E ighteen / » LASALLE 1 93 3 JFederal Reserve Board W ashington, D. C. A tte n tio n : Mr. S . M. M cClelland A s s ista n t S ecreta ry Dear Mr, M cC lelland: We have had a number o f in q u ir ie s which would in d ic a t e th at the C o m p tr o lle r's o f f i c e has is su e d in s t r u c t io n s t o c o n s e rv a to r s and r e g u la tio n s supplementary to th ose con ta in ed in the pam phlets, a number o f c o p ie s o f which you k in d ly su p p lied us s e v e r a l weeks a g o . I am wondering i f i t would be p o s s ib le f o r you to arrange t o have t h i s bank su p p lied w ith about a dozen c o p ie s o f any such a d d it io n a l in s t r u c t io n s , r e g u la tio n s , e t c . , as have been o r w i l l be issu ed in the fu t u r e . I f th ey are sent in ca re o f me, I w i l l see th at they reach the departments o f the bank most in t e r e s t e d . I t might be p o s s ib le th a t the C om p troller would undertake t o send th ese d i r e c t l y t o u s, so that you would not be t r o u b le d . I w i l l a p p r e cia te anything your o f f i c e can do t o see th a t we are s u p p lie d w ith m a teria l o f t h is kind emanat in g from the C o m p tro lle r’ s o f f i c e . Very t r u ly y o u rs , c r v .- H. G. P e t t , j& nager D iv is io n o f Research and S t a t i s t i c s HOP: FB / ep ro d u ce d from the U ncla ssified / D e cla ssified H o ld in g s o f the N a tional A rch ive s d e c l a s s if ie d Authority NND 3 oo 2 b AM FED ERA L R ESER V E BO A RD W A SH IN G TO N BLACK - AfL.\STA Hefere.;o© you r t e l e g r m April 28, Treasury Department a d v is e s th a t I t w i l l in t e r p o s e no o b je c t i o n t o agreement n o t t o fo r e * c l o s e u n t il O ctob er, 1934* p rov id ed (a ) th a t such agreement i s p e r m is s ib le under t h e a p p lic a b le la s * (b ) th a t th e agreement i s d u ly a u th o r! sted by th e board s o f d ir e c t o r s o f the banks aa be la g f o r the oa st in t e r e s t s o f a l l d e p o s it o r s and oth er c r e d it o r s o f such bwoka, and ( o ) th a t agreement Is approved by th e a p p ro p ria te s t a t e a u t h o r it ie s h a v ia c s u p e rv is io n o f such banks* M o r r ill V I d R e p rod uced from the U ncla ssified I D ecla ssified H o ld in g s o f the N ational A rch ive s DECLASSIFIED Authority ViND 3oozc=, H efereuoe jo u r telegram A p r il 2 8 , freasiary Department a d v is e * th a t i t w i l l In te r p o s e no o b je c t io n t o a&reemezit n o t t o f o r e c l o s e m t l l O e tcb e r, 1934# p rov id ed (a ) th a t suoh agreement i s p e r m is s ib le under tin© a p p lic a b le law , (b ) th a t th e ^raBraent i s d u ly a u th o rize d by Vm boards o f d i r e c t o r s o f tiJj^MinlEff as be lo g f o r the b e s t in t e r e s t s o f a l l d e p o s it o r s c r e d it o r s o f txtob. banka, and ( o ) th a t agreement i s ^ s r e v & ^ b y th e a p p ro p ria te S ta te a u t h o r it ie s haying stipervia *lif $ bsnjfcy. thrill R ep rod uced from the U ncla ssified I D ecla ssified H o ld in g s o f the N ational A rch ive s DECLASSIFIED Authority V)UD aoozfc, '/ / b a l l a n t in e MR- H A l / MR- HARLAN XMR. LOWMAN MR. H E F F E L F IN G E R MR- HEATH MR. KILBY MR- AW ALT MR. B A R T H O L O W MR. MORAN MISS O ’REILLY MR- B EL L MR- S C H O E N E M A N MR. B R O U G H T O N MR. STARK MR- B U R N E T MR. T H O M P S O N MR. C H A R E S T I V. M R. D O U G LAS R ep rod uced from the U ncla ssified I D ecla ssified H o ld in g s o f the N ational A rch ive s DECLASSIFIED n, Authority VlUDaoozfe, R ep rod uced from the U ncla ssified I D ecla ssified H o ld in g s o f th e N a tional A rch ive s DECLASSIFIED Authority VlU D aoozb U K ^ ^ jL J . ^ A,uJL) $° 2.0 R ep rod uced from the U ncla ssified I D ecla ssified H o ld in g s o f the N ational A rchives DECLASSIFIED Authority HMD 3 o ta t* 3 -r r Form 11Kb TELbGRA FEDERAL RESERVE BOARD WASHINGTON / MAY 5 Geery - M inneapolis Tour w ire 'day 2 . I f fe d e r a l r e s e r v e bank, a ft e r c o n s u lt a t io n w ith i t s co u n s e l and In 11 dat o f th e clroiM B tan oes o f a par t i c u l a r c a s e , c o n s id e r s I t a d v is a b le t o comply *vita re q u e s t o f c o n se rv a to r o f & n a tio n a l bciJc t o ch arge amount o f i t s r e d is cou n ts t o i t s r e s e r v e account as o f date o f appointm ent o f con s e r v a t o r and r e s e r v e account i s s u f f i c i e n t f o r th e p u rp ose. Board o f f e r s no o b je c t io n * In any even t* however, you may wish t o con s id e r a d v is a b ilit y o f ta k in g such step s as easy b e n ecessa ry t o p re se rv e such r ig h t s as reserv e bonJc rargr have t o in t e r e s t accrued a f t e r date o f appointm ent o f c o n s e r v a to r in a, c a s e in which charge t o r e s e r v e accou n t i s -m fceria lly d elayed a t req u est o f or upon agreement w ith co n s e rv a to r pending p o s s ib le r e o r ^ n i z a t i o n o r r e sumption o f b u sin e ss by bank o r t o p reserve e ig h t s o f fe d e r a l r e serv e ban* to acotraed in t e r e s t in event bank i s subsequ en tly per m itted t o resume b u sin e ss o r i s r e o r g a n is e d . fm AfWVAl, M o r r ill / !$0V P' GBV/ sad l/V tr;« •» / myfmsrz j i t / at-pf'OVPUnH f(&!*!* new snHiai-fHt am il FI ;/{/ PY K e p ro a u ce d from the U ncla ssified / D ecla ssifie d H o ld in g s o f the N a tio n a l A rch ive s d e c l a s s if ie d Authority Ur. Kane a d v is e s me th a t the Com ptroll e r o f the Currency h?s issu ed no gen e r a l in s t r u c t io n s on t h i s s u b je c t but in th ose c^ses where a con serv ator has asked them t o do s o , they have a u th orized the co n s e rv a to r t o requ est the F ederal r e s e r v e bprnk t o charge r e d is c o u n ts a g a in st the re se rv e balance r s o f the date o f th e appointment o f the con servator* R ep rod uced from the U ncla ssified I D ecla ssified H o ld in g s o f th e N a tional A rchives DECLASSIFIED Authority VlKDaoozfc, t\ TELEGRAM FEDERAL RESERVE SYSTEM (LEASED WIRE SERVICE) R E C E IV E D A T W A S H IN G T O N , D . C . M i n n e a p o l i s M a y_2 1 150am B oa rd Washn The c o m p t r o lle r r e p r e s e n tin g of th e C u rren cy has a u th o r iz e d b a n k s w h ic h v a r io u s ow e u s and w h ic h h a v e r e s e r v e con serv a tors b a la n c e s nr - s u ffic ie n t to r e d is c o u n ts C o n se rv a to r. we h a v e b e e n s o w o u ld cover to th e b o r r o w in g reserve T h is a ccou n t as o f w o u ld n e c e s s i t a t e a c c r u in g a p p r e c ia te on t h e s e 112p re q u e st us th e d a te fro m to of our r e b a tin g r e d is c o u n ts , in s tr u c tio n s G eerv V S eOVBRNMBNT PRIFTING OFFICE 3833 to ch arge a p p o in t m e n t in te r e s t and b e f o r e th e b o a r d . a ll of w h ic h d o in g R ep rod uced from the U ncla ssified I D ecla ssified H o ld in g s o f th e N a tional A rchives DECLASSIFIED Authority D U D aot& c, i0 fO’ TELEGRAM FEDERAL RESERVE SYSTEM (L E A S E D W I R E S E R V IC E ) R E C E IV E D A T W A S H IN G T O N 16— 794 F Y ot A tla n ta G e o r g ia 317p A p r il 28 M o r r ill W a s h in g t o n A^Large M e r c a n t i l e banks th a t to C ity , E s ta b lis h m e n t am ong w h ic h a r e r e o p e n b u t now o p e r a t i n g r e g u la tio n to t h e y w o u ld n o t th e ir p la n n e d lo a n s to on r e s t r i c t e d p r io r ex ten d agreed fo r e c lo s e to th is w ith s a id c e r ta in O ctob er i s . in d e b te d tw o m em ber s t a t e M e r c a n tile c o lla te r a l to banks n ot p e r m ittin g 1933. P r io r a greem en t n o t to V a r io u s lic e n s e d b a s is under T reasu ry n u m b er £7 an d o t h e r r e g u l a t i o n s T h ese^ ban k s h e r e - t o - f o r e th a t i n N e w o r le a n s to lim ite d o p e r a tio n s E s ta b lis h m e n t s ta n d in g a s s e c u r ity em ergen cy ba n k s had fo r e c lo s e u n til O cto b e r 1934, m% t is regarded m en t t h a t as im p o r ta n t fo r m a l agreem en t V. 8» eOTOLNMKOT PRINTING OFFICfii 1933 b oth to to e ffe c t b a n k s and t o th a t M e r c a n tile no f o r e c l o s u r e of E s ta b lis h c o lla te r a l R ep rod uced from the U ncla ssified I D ecla ssified H o ld in g s o f the N ational A rch ive s DECLASSIFIED Authority VlMD3oozfc. TELEGRAM FEDERAL RESERVE SYSTEM (LEASED WIRE SERVICE) R E C E IV E D A T W A S H IN G T O N , D . C . w ill be u n d e rta k e n b een asked as to p r io r pow er o f ag reem en t w h ile s till w o u ld n o t v io la tio n is s u e d be in to th ese of and iL w o u ld a p p r e c ia te I n my o p i n i o n any o f th e m a t t e r w o u ld B a n k in g D e p a r t m e n t . B anks, y ou r o b ta in in g sam e. 518pm S6—794 a t m ost an d r u l i n g has b a n k s t o m ake t h i s t h e m a k in g o f a g r e e m e n t p r o c la m a tio n s h ow ever, B la c k tr. 8. COTnMVKMT PRINTING OFFICB: t933 in to , tw o m em ber s t a t e u n lic e n s e d . t h e r e u n d e r an d t h a t by S ta te 1 9 3 4 b e now e n t e r e d o r r e g u la tio n s be one f o r w is h r u lin g c o n s id e r a tio n fro m T r e a s u r y R ep rod uced from the U ncla ssified I D ecla ssified H o ld in g s o f the N a tional A rchives DECLASSIFIED Authority V1KD 3 0 0 2 b FEDERAL R E S E R V E BOARD W A SH IN G T O N A pril 24., 1933 B a ile y - M in n eap olis Your telegram * Twelve c o p ie s volume 1 in s t r u c t io n s to H atl rs&l Bank C on serva tors s a ile d to you ton ig h t* M SJ; ........................... - M cC lella n d .«■ a: " R e p rod uced from the U ncla ssified I D ecla ssified H o ld in g s o f the N a tional A rchives DECLASSIFIED Authority V lU D 3oozt=. f TELEGRAM FEDERAL RESERVE SYSTEM (LEASED W IRE SERVICE) R E C E IV E D A T W A S H IN G T O N , D . C . 275gn M in n e a p o lis A pl 2 4 . 33 0p m B o a rd W ashn DC P le a s ® m a i l t o u s t o d a y t w e l v e c o p i e s v o lu m e o n e o f i n s t r u c t i o n s t o N a t i o n a l B an k C o n s e r v a t o r s . http://fraser.stlouisfed.org/ V. S. GOVERNMENT PRINTING OFjTCE: 1033 Federal Reserve Bank of St. Louis B a ile y 4 5 5p 16— 794 R e p rod uced from the U ncla ssified I D e cla ssified H o ld in g s o f the N a tional A rchives " C d e c l a s s if ie d Authority M D & x a t s , FEDERAL RESERVE BO ARD WASHINGTON ADDRESS OFFICIAL CORRESPONDENCE T O THE FEDERAL RESERVE BOARD A p r i l 2d , 1933 x- ?//- / / Dear S ir : In c o n firm a tio n o f th e telegram s e n t you tod a y , th ere i s in c lo s e d h erew ith a oo-pyj p f th e E x e cu tiv e Order is s u e d b y th e P r e s id e n t _ TT r e la t in g t o f o r e ig n exchange and the earmarking and ex p o r t o f g o ld c o in o r b u l l i o n o r currency* Very t r u ly y o u rs , C h ester M o r r ill, S e c r e ta ry (I n c lo s u r e ) 'v To the Chairmen o f a l l F e d e ra l re s e r v e banks R ep rod uced from the U ncla ssified I D e cla ssified H o ld in g s o f the N a tional A rchives DECLASSIFIED Authority VlU D aoozb 118 b ) TELEGRA FEDERAL RESERVE B O A R D WASHINGTON A p r il 2 0 , 1933 C u rtis s - B oston Case - Hew l o r k A ustin - P h ila d e lp h ia W illiam s - C levelaad Hoxton * Richmond Uewton - Atlanta Stevens - Chicago Wood - St* L ou is B a ile y - M inneapolis McClmre - Kansas C ity Welsh - D a lla s Mewtoa - San F ra n cisco rms so th e f o llo w in g E xecu tive O rder has today b e e s issu e d by / m the P re s id e n t o f the U nited State#* (See a tta ch e d ) Quote Unquote M o r r ill I ;c • i R ep rod uced from the U ncla ssified I D e cla ssified H o ld in g s o f th e N a tional A rchives DECLASSIFIED Authority M D a o o z fa EXECUTIVE OHDER R e la tin g to f o r e ig n Exchange and th e Earmarking and Export o f G old Coin or B u llio n or Currency By v ir t u e o f the a u t h o r it y v e s te d in me by S e c tio n 5 (h ) o f the A ct o f O ctober 6 , 1917, as amended hy S e c tio n 2 o f th e A ct o f March 9 , 1933, e n t i t l e d ”An A ct t o p r o v id e r e l i e f i n the- e x is t in g n a tio n a l emergency in "banking, and f o r oth er p u r p o s e s ,” in w hich amendatory A ct Congress d e c la r e d th a t a s e r io u s emergency e x i s t s , X, I’r a n k lin D» R o o s e v e lt , P re sid e n t o f the U nited S ta tes o f A m erica, do d e c la r e th at s a id n a tio n a l emergency s t i l l con tin u es to e x is t and pursuant to s a id s e c t io n and by v ir t u e o f a l l oth er a u t h o r it y v e s te d in me, do hereby is s u e the fo llo w in g e x e c u tiv e o r d e r : 1. U n t il fu r th e r o r d e r , the earmarking f p r f o r e ig n accou n t and th e export o f g o ld c o in , g o ld b u l l i o n or g o ld c e r t i f i c a t e s from the United S ta tes or any p la c e s u b je c t to th e j u r i s d i c t i o n th e r e o f a re h ereby p r o h ib it e d , excep t that th e S ecreta ry o f the T reasu ry, i n h is d i s c r e t i o n and s u b je c t t o such r e g u la tio n s as he may p r e s c r ib e , may is s u e lic e n s e s a u th o r iz in g the exp ort o f g o ld c o in and b u l l i o n (a ) earmarked or h e ld in t r u s t f o r a r e c o g n iz e d f o r e ig n government or f o r e ig n c e n t r a l bank or th e Bank f o r In te r n a tio n a l S ettlem en ts, ( b ) im ported f o r re e x p o rt or g o ld in rea son a b le amounts f o r u su a l tra d e requirem ents o f r e f in e r s im p ortin g g o ld b e a rin g m a te r ia ls under agreement t o exp ort g o ld , ( c ) a c t u a lly r e q u ir e d f o r the f u lfilm e n t o f any c o n tr a c t en tered in t o p r i o r to the date o f t h is o r d e r , by an a p p lic a n t who in o b ed ien ce to the R ep rod uced from th e U ncla ssified I D e cla ssified H o ld in g s o f th e N a tional A rchives DECLASSIFIED Authority E x ecu tiv e Order o f A p r il 5, 1933 has d e liv e r e d g o ld c o in , g o ld ■bullion or g o ld c e r t i f i c a t e s , and (d ) w ith the ap p roval o f the P r e s id e n t, f o r tr a n s a c tio n s w hich he may deem n ecessa ry t o promote the p u b lic i n t e r e s t . 2. U n til fu r th e r o r d e r , the S ecreta ry o f the Treasury i s a u th o r iz e d , through any agency that he may d e s ig n a te , to in v e s t ig a t e , r e g u la t e , or p r o h i b i t , under such r u le s and regu la t io n s as he may p r e s c r ib e , by means o f lic e n s e s or o th e rw ise , any tr a n s a c tio n s i n f o r e ig n exchange, tr a n s fe r s o f c r e d it from any "banking i n s t i t u t i o n w ith in th e U nited S ta tes or any p la c e s u b je c t to the j u r i s d i c t i o n t h e r e o f to any f o r e ig n branch or o f f i c e o f such banking i n s t i t u t i o n or to any f o r e ig n bank or banker, and th e exp ort or w ithdraw al o f cu rren cy from the U nited S ta tes or any p la c e s u b je c t to the j u r i s d i c t i o n o f th e U nited S t a t e s , by any in d iv id u a l, p a r tn e r s h ip , a s s o c ia t io n , or corp ora t io n w ith in th e U nited S ta tes or any p la c e s u b je c t to the j u r i s d i c t i o n t h e r e o f; and the S ecreta ry o f the Treasury may r e q u ir e any in d iv id u a l, p a r tn e r s h ip , a s s o c ia t io n , or corp ora t io n engaged in any tr a n s a c tio n r e fe r r e d to h e r e in to fu r n is h under o a th , com plete in fo rm a tio n r e l a t i v e t h e r e t o , in c lu d in g the p r o d u ctio n o f any books o f a cco u n t, c o n t r a c t s , l e t t e r s or oth er p a p e rs, in con n e ctio n th e re w ith in the cu stod y or c o n t r o l o f such in d iv id u a l, p a r tn e r s h ip , a s s o c ia t io n , or c o r p o r a tio n e it h e r b e fo r e or a f t e r such t r a n s a c tio n i s com pleted . 3. The p r o v is io n s r e l a t i n g to f o r e ig n exchange tr a n s a c tio n s con ta in ed in the E x ecu tiv e Order o f March 10, 1933, s h a ll remain in f u l l f o r c e and e f f e c t excep t as amended or sup plem ented hy t h is ord er and "by r e g u la tio n s is s u e d hereunder. R e p rod uced from the U ncla ssified I D e cla ssified H o ld in g s o f th e N a tional A rch ive s DECLASSIFIED I Authority VlUD a m t , 4. A p p lic a n ts who have g o ld c o in , g o ld b u l l i o n or g o ld c e r t i f i c a t e s in t h e ir p o s s e s s io n , or who in obed ien ce t o the E x ecu tiv e Order o f A p r il 5 , 1933 have d e liv e r e d g o ld c o in , g o ld b u llio n or g o ld c e r t i f i c a t e s s h a ll be e n t it le d to lic e n s e s as p ro v id e d in S e c tio n 8 o f s a id E xecu tive Order f o r amounts not exceed in g th e eq u iv a len t o f such c o in , b u llio n or c e r t i f i c a te s h e ld or d e liv e r e d . The S ecreta ry may in M s d i s c r e t i o n is s u e or d e c lin e to is s u e any oth er lic e n s e s under s a id E x ecu tiv e O rder, which s h a ll in a l l oth er r e s p e c t s remain in f u l l f o r c e and e f f e c t . 5. Whoever w i l l f u l l y v i o l a t e s any p r o v is io n o f t h is E x ecu tiv e Order or o f any r u l e , r e g u la tio n or lic e n s e is s u e d thereunder may be fin e d n ot more than $ 1 0 ,0 0 0 , o r , i f a n a tu ra l p e r s o n , may be im prisoned f o r not more than ten y e a r s , or b o th ; and any o f f i c e r , d i r e c t o r , or agent o f any c o r p o r a t io n who know ingly p a r t ic ip a t e s in any such v i o l a t i o n may be punished by a l i k e f i n e , im prisonm ent, or b o th . This ord er may be m o d ifie d or revoked a t any tim e. THE WHITE HOUSE A p r il 20, 1933. FRANKLIN D. KOOSEVELT R e p rod uced from the U ncla ssified I D e cla ssified H o ld in g s o f th e N atio n a l A rch ive s d e c l a s s if ie d t* Authority VWD3002fe / u Mmwtimm m*mm Qh'tffc t e r H m - Tmnt - ••'»**«* - i»* %*•& ^msHn - n*rri» * VilUiAt * &Mk4h«r * I ext«m - SMilo* ~ fBAlB %X*ivwlm& Mlk&z. * M&uttft s»tonring wmimA •&•*! haakm Itm Teak, a*i to f?ti$S* W&%mpa Wswkltom %*mmm <* i*v*a - itotttm <* §i* l*mi* - 0#***# - friitaB«pc»U« Ma®!**** * “ fl% * IMlMMtir * * ^tOldli* * tea ?***»«&*<* ::.sajr * Mt&moaA Z^L. ", mmrnqmayfattg sfettMmft Wimrn^Tm^m hmtm m imlirnrnt •»& $&*&P*§§t* T*Mwm*Mtos& **lv**»c»* *•&»* lkmeto«iiig» of te*afe* ym%w* $Mm&* 4i*tvt«l# || R e p rod uced from the U ncla ssified / D e cla ssified H o ld in g s o f the N a tional A rch ive s DECLASSIFIED Authority VlMDaoozfc AL R E S E R V E BANK O F C H I C A G O 230 SOUTH LASALLE STREET A p r il 1 5 , 1955 IF T H E J f O A R D AND R ES ER VE AGENT F ed era l Reserve Board W ashington, D* C. Mr* C h ester M o r r ill, Gentlemen: A ft e r a telep h on e c o n v e r s a tio n w ith Mr* J e s se Jones today and on h is req u est f o r more in fo rm a tio n , X have w ritten him as p er copy e n c lo s e d , which I t^ in k w i l l be o f in t e r e s t -u o .' o4- C op ies sen t t o Messrs* Meyer, Hamlin, M ille r , James, H a rrison , Wyatt F a u lg e r, and Smead Reproduced from the Unclassified / Declassified Holdings of the National Archives DECLASSIFIED Authority UNDBOOZfc Apr13, S0BJ£C?t 19&3 &oaiitt£ *itu#tioa. J**m Mr# Jonoo Corof XttMiltiyoUflB Fiaaaeo Corporation S*»hlagten» &* C« Doar Mr* Joaoo* ilgam* Hofarrtag to o»r toXo$»fcoao ooavorootioa t«4*?f are* oC course, fooiXior with the boakiag situation in tho stot* of &icltig«n. ltoeont proporod fajjf no »ho« *« (89 Ot®tO 1 of M i r bftafco in Jftielt%«a - X54 (0 $ n a tio n a l; total 'dopcraito $i»3$»OOQ*O0d Bonk* Xiconoed to Op<ft ~ dO £*po»it* #£41*000*000 Boako la hftficU ef C m m m td ti Sack* unojxmod P«rc*at*got ~ ft ~ i7 Iftuftor $9$. * 11 ?ostaoo9ooo 42*000*000 Doposito 14-1/2# Tho ahovo figtsroi laoXmlo th« two U r|i boaKo Is Detroit no* ia tiio bond* o f am M m tan hat do not tocXudo tho ao* Hoticas! 8*nfc oi J>«troit* I f th* too Xorgo bonk* «lth 4opooit# o f $&6£#000#QQO ho ollaiaatod fro® tho pioti»ro9 tbo porooatogo* weald oho* St$ aaabo? o f hoako opoaod* aad $8% Is d tp eilti thoroof« fh io oo*g*rod *lth tho root oiv our d istrict of 84£ o f aoikor hoako opoaod with 9l£ o f tttaX dopooito* tim thin ia a itrlldng pdotaro of tho rool position i© fctisto of aichigaa outairio of Botrolt* Aa you kaow9 ta* aorat&riti* ia MichigBXt otortod on fafcntaagr aad aaat of thoao baaka haw* boon eloaod alsioo tbat tiao* la tho aoaatia* 9 tho fdMLieltr of tho Xwfcroit aitaetioa and tLo agitation th*ro ha* boon roflaotod &XX ov*r th* estate* Thor# ari* numerous potato in th* ot*te wboro oithor no or tn*ufficiont baaidfig facilities *r» ia o*ia?.*noo *itb roaultiag unoapXayaaat aad aaroat, particularly ia the taduatrial c«at»ra9 «XX of ohieh ooaatitutoe * aoaaoiag oita&tloa not oaly ia Uiehlga» but9by oxoapXo* olaowh&ro if aaothor conflagratioa ahoulct atart ia tgichi^aa* Tho u a m t ia aiao a ftoaooo to th# btMUio ^hioh htnro boon opcao<l« Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED :: Authority tiH D aooafc Ur*,Joooo Jonoft* April *&c lb$ Comal**toner ~mr* Xh*mi coulc Th® Oovoraor tho Bonking vorki*^- with tba logioloioro oinoo oorly in fobru&xy on no* bonsiiijs lo&i&l&tion to aoot thio oittuttloa, dad finally » bill m s poeaod on Moroh 21* 1&25, dooignod to offoot a blanket plon under »hi$h « largo ouab^r of tank* be oponod at oaeo* Bo do not beliovo this 1* doairfcblo du« to o&ryin* condition** in yfcrlcue boako and coawmltleo, *is& thoro aro t**my feature* of tho propoood £laa abtcJi do sot aoot with our apprwml* d«»tv«r, tho roorgonisation of tho bank* in Michigan ha* goaoroiljr b o m limiting the outcoiao of this la^ia*-* latioa. *o ha*o hod mattfoitft ooafoi'onoo* with u w Stato aaihoritioo *nd other* ia'&lohi&oa and aloo *ith tho f'rooomy and tb* FodaraJl iioaorro Board ia Steohington* X think it io the view of all of u* that thl*s plan doo* not Sftvt tlio dooirod rooolt* to roeogaiso tho iaporativo aoeoooiV of roloaoiti" thooo frooon dopooita oo for oo aogr bo dono un«3#r *njr sound plan* fee etweetv# that tho tioo baa aaao ohon noaotfcing oonotruotiv© ohould bo uadortaiiott on tho port of tho various govonuaontoX authorities In conjunction* to thio tad} in vioo of oil thooo circu»ot&nctfw, i &«££<*at tho doairobilitjr of on abroach froo th« atondpoiat of r*org«ni*otion of tho banking otraotmro in Kichigoa, rathor th*n of «»eh indivimifcl iywik, and *ltfc tho initiative of gororaaoatal autboritios* ymr I o%»ggt»t, thorofara* thet your carport tion dooignato a r&proaoatativ© *booo roooaoondfctio&K i?onXd bonro o coapollin^ influonoo cith board, that tho CoKptreXlor* a Reorganisation fctfp&rtoont do*ig»at«? a &i«ilar repratonU U v O | tbot fcbo Federal Koo#r?o %ont in Chic^o noao a r«;>r*s#fti*tivo tlailarly ipallfiod* oad tbot thaoo oon prooood to Miohi^aa to oit in flth tbo ^toto Ooaoiooioaor of Bunking fcm'! «, grou^ bo >rwf«r*d to ox£»aino oot upoa#in ®oo*diafctloaf tbt otote ro<tair«aonts &*^ »X#o b« pr#|>nr«-d to ot^r on tho job for ooao woobo if aoooooox^* »u mn Thi& groap nould incltsdo thorois^hly fo»ili«r *ith tho ^tiolo bftn^irig oit^otlon ond roquiroaonto in t>«& btato &nd h»v^ at ito eoafiu&nci tbs eoafidotttiol roporto of all b&nko ood thoir noodo* Xt should prooood fr014 tho conoidorotion of tho noodo of tm>. v^rioao oooteomltioo for banking f&ciliti«o# giving firot ettontion to the? points in t ^ ^u.to, tiiorooftor taking up tho oooilor ooaonnltioo* Xt should oJtpior* hank^tg oittu^tion in « giv^. toisa 4md thoroupoa dotoraine froa ito joint kaowlodgo fi^urea of tho h^nko ia ito pooooooioa w-h&t ohould bo dono* Xhio iai^ht bo In tb# n«tur« of 6 roorgonlootioa of o oort&in bonk or b&nka, consolidation or th^ oUrting of o non bonk out of tfto oxioting banks• int^rotftoii froa %tw Thvrmpim, R ep rod uced from the U ncla ssified / D e cla ssified H o ld in g s o f the N a tio n a l A rch ive s declassified Authority DND3002C, Ur* Joaao April IS* XiSS that aitjr afcoiild bo aaXXad ia to ant with tha group* tho altufttlaa w i w d i tai * >Xaa «ot up lonll n « t tho appro**! of tho givoi aad *kich aigbt iaauaoroaa m m iaveln tho participation of tha 8# F# C* la tho purobaao of proforrod atoak* Tho roproaaixtatlvaa of tho altar Ia quoatloa would bo told that if tbagr wouXd g« back tad do tteaa and oo, tho I, F, €* would da oortala thing* wad tho bonk or beakarst could thoroapaa bo apoaad. t b U woaXd gl#a tho aoomalt? osattblng dofiaiW to work on# 1 hollow* that aaao «Mb plaa, la which tha iaitiativo novo takoa If thaao joint matborlti**, would toad to aXaar tho actuation at oaoo aad aa thoao baaka novo baiag gradaaXSy *m& oplodlly oatobXiohod In tfco Y*rlouo faiwwiltitii tbo aaiftXo of tho vholo bteto «oaXd iaaodlatoly bo otr*angth*n#d. " I tbtotc that whoa thAa job »*a finiahod, wa would all of t*# h*wo a feaakiag ftrueturo ia tho aoat oaaoailal potato Is, tho Stuto which arn&tf ae*t the oooda. I think that bf raooaa of th# daXtye «M t&o X&#k of co<?r^ta&tiaa tfcn# far, it to oaaaatial that tha initiative* bo t#fc«r* hy th»«# in «mtborl%r in thio partlatuLor iaataaaa* Tho aopitfell»ati<w* of tha taaftbor baK&* in tha tfiAfco whica ara sot ll#o»ood to opoa 1 ft #$proxla*toly $1**000,000, with aurplna *nd profits of opproxiafttoXr 1 X1 ,000,000. ¥h* awtaaubor boak# ga*a**lljr of aaeXler «!«•» 8aao boako coald not rwopea at ail aad athera would .not nood to h&wo thair praaoat oapital falJy raatorod, aa tfiat 17 gaoaa it thet 000,000 of »«v aapitallaatlofi fttfttiohad bgr tho t« F* C» would pat is fern t souad bo&klng Hinibtr* ia &t*t* of ilebX^im n««d'ad* fool thot It wiXd bo eb a«ro offootiv* ond atu«h m e ^ o r ia ita opomtioa thon if th* oatboritioo wdtod for t^o initiotifo oi* tlse T®ri«ttc ocnmaiiti«« la golaf to tea oo ladlirid^aX boaba* mvt m %h* %*lm X aa oaaXaalaf* aa on cduu^XOf a aoaoroitdua of £baoo b«F aitioo ia IHol^coai ia vblob tbo boak* Xiatod &r* aot op«a oa aooouat of tboir ooaditioa* fbaro aro anagr othor olttifttloas of i«j>ort*nc* vrbieb aood attontimi. md X boXiovo that iJtM» aaapovatl^n of the wrio’jtfi lat»r«?*t» lavoivod aouXd bo iHaiaad to tbo adva&tago of oaali of tboa, I tsuat tbia raigoiUoe vlXX bawo yoar aoaaidor&tioa» Vo bavo atodlod tbia aattor iatoanivoljr for ooao tiao &nd la agr opialoa tb ii aooao to bo tho boot oat* foxy truly <mrof Chtiri&i XICS HH R ep rod uced from the U ncla ssified / D e cla ssified H o ld in g s o f the N a tio n a l A rchives DECLASSIFIED f * Authority VlWD3oozfc 3 7 ./ ■ / FEDERAL RESERVE B O A R D W A S H IN G T O N fasohe;-? - y ^ ^ oi/sv-itm Your w ire A pril. 1 3 • Board sees no o b je c t io n t o a p p lic a t io n o f o ld re e e rv q b a la n ce o f S ta te member bank, in hands o f co n s e rv a to r t o r e d u c tio n o f i t s b ill© payable t o your bsnic under circu m sta n ces s ts t e d in you r telegram and w itii understanding th a t s p e c ia l a ccou n ts w ith your ban* in sfhicii a re d e p o site d p roceed s o f e p e o ia l t r u s t de p o s it s r e c e iv e d by co n se rv a to r or amounts made a v a ila b le f o r withdrawa l w i l l n o t be in aoy way a f f e c t e d . S u r e s t you c o n s u lt your Counsel ab t o any l e g a l q u e s tio n s which roey be in v olved # 23a t n l s con n ection see s u b d iv is io n 2 o f B oa rd ’ s 'IRANS 1753 and see a ls o THAliS 1735 re r e se rv e requirem ents o f member b&nfcc in hands o f c o n s e r v a to r s . For •> •fSjwfn*'. • > / 4 If St VOU ‘j FulLE ' •> - : R ep rod uced from the U ncla ssified / D ecla ssified H o ld in g s o f the N ational A rchives DECLASSIFIED Authority VJNDSflOzt, u jn r 1:S;v 1/ F o r m 1 (8)) TELEGRAM FEDERAL RESERVE B O A R D W A S H IN G T O N A p ril 15» 1 9 8 3 ; r: Seay - Hichaond McDougal - Chicago M artin - S t . Louis Geery - M inneapolis Yotmg - Boston H arriso n - Mew York N o rris - P h ila d e lp h ia Fancher - C leveland THAI©# / / #7 3 (X, Hamilton - Kansas City McKinney - Dali**? •' k Galkina - 3m ?ma*is*9 mu,. In response to a a in q u iry from a F ad a ra l re s e rv e bank, th e / T*|/VM tre a s u r y Department lias advised a s fo llo w s; ' 3 "Inasmuch a s c o n se rv a to rs a re a u th o riz e d to renew pledged n o te s w ith th e eonaent o f th e p le d g e e s, th e T reasury w ill n o t o b je c t to a c c e p tin g renew al n o te s h eld a s c o l l a t e r a l s e c u r ity a g a in s t war lo a n d e p o s it a c c o u n ts, provided such renew als a re f o r a p e rio d n o t exceeding t h i r t y daya w hich, X u n d erstan d , i a th e l l a i t o f a u th o r ity g ran ted to co n serv ato rs* As you w il l note by r e f e r ence to th e c o l l a t e r a l s e c u r ity p ro v is io n s o f C ir c u la r No* 9 2 , th e approval and v a lu a tio n o f s e c u r i t i e s I s committed t o th e s e v e ra l F ed eral re s e rv e banks* The T reasu ry p r e f e r s , th e r e f o r e , to leav e th e m a tte r la r g e ly to th e d is c r e tio n o f th e v a rio u s F e d e ra l re se rv e banks aa th ey a re I n a b e t t e r p o s itio n to d e te ra in e th e d e s i r a b i l i t y o f t h i s procedure in any given case* I f renew al n o te s a re n o t accep ted i t presum ably would be n e c e s sa ry , In o rd e r to p r o te c t th e i n t e r e s t s o f th e U nited S t a t e s , to proceed to c o lle c t m aturing item s d ir e c t from th e makers o r in d o rsers* Tikis procedure would throw some a d d itio n a l work upon the F ed eral re se rv e bank and may n o t be d e s ira b le under p re se n t co n d itio n s* Pending f i n a l d e te rm in a tio n a s to w hether a d e p o s ita ry bank l a to be reopened o r liq u id a te d , I m in c lin e d to the op in io n th a t a l l i n t e r e s t s would be b e t t e r served by ac c e p tin g renew al n o te s upon a t h i r t y day b a s is , a s in d ic a te d above* The i n t e r e a t due from th eae n o tea should be c o lle c te d i n a l l e a se s and ' ..w u“lf[QP" * 'account o jJ tS e d»po»ft.tary SRC/aew bank a a ^ p a y p u i t a g a in s t .J h e war lo an d e p o s it R ep rod uced from the U ncla ssified / D ecla ssified H o ld in g s o f the N a tional A rchives ~ r DECLASSIFIED Authority VlM D3oozb R ep rod uced from the U ncla ssified I D ecla ssified H o ld in g s o f the N ational A rchives DECLASSIFIED '■* ' Authority NM D3oo2fc P orm l l s b TELEGRAM FEDERAL RESERVE BOARD W A S H IN G T O N April 33 , 1933, B lack A tla n ta Ratal 8 t r e a s u r y a d v is e s a s fo llo w * i Quota* Inasmuch a s co n s e rv a to r s a re a u th o rise d t o renew p led ged nb%es w ith th e oonsent o f th e p le d g e e s , th e T reasury w i l l n ot o b je c t t o a c c e p t in g renewal n o te s h eld ae c o l l a t e r a l s e c u r it y a g a in s t ear lorn d e p o s it a o o o u n ts, p rovid ed suoh renew als are f o r a p e rio d n ot e x c e e d in g t h i r t y days walch* X understand* ia the .lim it o f a u t h o r it y granted t o con serv a tors* As yon w i l l n o te by r e fe r e n c e t o the c o l l a t e r a l s e c u r it y p r o v is io n s o f C ir c u la r So* 92* th e ap p roval and v a lu a tio n o f s e c u r i t i e s is ooramitted t o th e s e v e r a l F ederal r e s e r v e banks. The Treasury p r e f e r * , t h e r e f o r e , t o le a v t th e m atter l a r g e l y t o th e d i s c r e t i o n o f th e v a r io u s fe d e r a l r e s e r v e banks as th ey are In a b e t t e r p o e it io n t o d eterm ine th e d e s i r a b i l i t y o f t h i s proced u re in any g iv e n ease* I f renewal n o te s a r e n ot a cce p te d i t presum ably Id be n eoessary* in o rd e r t o p r o te c t th e in t e r e s t s o f th e United S ta tes* t o p roceed t o c o l l e c t m aturing item s d i r e c t from th e makers o r in d o r s e r s . T P s p roced u re would throw some a d d it io n a l ?*ork upon th e Federal re s e r v e bank and may n ot be d e s ir a b le under p resen t c o n d itio n s * Pending fln il d e te rm in a tio n a s t o whether a d e p o s it a r y bank i s t o be reopened o r liq u id a t e d * I am In c lin e d to th e o p in io n th a t a l l I n t e r e s t s would be b e t t e r served by a c c e p tin g renewal n o tr s upon a t h i r t y day b a s i s , as In d ica te d above. ''T h e in t e r e s t due from th e s e n o te s should be c o l l e c t e d in a l l c a s e s and a p p lie d b y th e Federal r e s e r v e bank a s a payment agr In st th e w tr lo a n d e p o s it accou n t o f the d e p o s it a r y bank. Unquote. MOHRILL /«n ornc V O IS l;r *.«» (**■#«»«* initial liie copy • i'J$+ vc u fsiyri ^Ek R ep rod uced from the U ncla ssified I D ecla ssified H o ld in g s o f the N a tional A rch ive s DECLASSIFIED Authority M D 3 o o a t, TELEGRAM m b FEDERAL RESERVE SYSTEM (LEASED WIRE SERVICE) f h C le v e la n d 5 2 5 p a o l IB received a t Washington, p. c. B oa rd W ashn. Is it p e r m is s ib le of sta te to to bank a t s ta b le to o ld r e d u c tio n assu re A ll in in of a p p ly hands o f o ld fu n d s are p r o te c te d con serv a tors b a la n c e c o n s e r v a t o r u n d e r O h io p a y a b le of sta te o f ban k s w ith r e t e n t i o n se g re g a te d reserve m em ber b a n k co n s e rv a to r under a u th o r ity paym ent o f b a la n c e b a la n c e s b a la n c e bank t o of b ills requ est s u p e r in te n d e n t bank? th is m em ber b a n k n ow sta tu te th is fo r r e m a in in g of a ll p a y a b le s p e c ia l accou n t F an ch er reserve w ith c o lla te r a l b y s t a t e m em ber in c lu d in ^ ^ e s tr ic te d b y 100 p e r c e n t of th is p o r tio n of in or cash bank. v « QonsNMrarr n u n n m ofticb : i m 16—794 R ep ro d u ce d from the U ncla ssified / D e cla ssified H o ld in g s o f th e N a tional A rch ive s DECLASSIFIED C •„ . Authority viH Paoozfc borrowings o f U n licen sed Member Bank& Prom f e d e r a l R eserve Banks and Claims ) f F ed eral Reserve Banks A gain st Closed Banks. SUBJECT: V Dear S ir : There i s a tta ch ed h e r e t o , f o r your c o n f id e n t ia l in fo r m a tio n , a copy o f a memorandum, to g e th e r w ith a copy o f the statem ent r e fe r r e d to th e r e in , prepared under date o f A p r il 8 , 1933, "by Mr. Smead, C h ief o f the D iv is io n o f Bank O perations o f the F ed era l Reserve B oard, w ith r e gard t o the amount o f borrow ings from f e d e r a l r e s e r v e hanks, as o f March .31, 1933, by member banks not lic e n s e d by th e S e cre ta ry o f the Treasury t o reop en , and the amount o f claim s o f F ed era l re s e r v e banks, on March 38, 1933, a g a in s t c lo s e d banks. TTery t r u ly y o u rs , Chester M o r r i l l , S e c r e ta r y . In c lo s u r e s . to a il m m m m & v m im m of ah. f . r* m m . R ep rod uced from the U ncla ssified I D ecla ssified H o ld in g s o f th e N ational A rchives DECLASSIFIED w' Authority UMDSoozfe, X -7410-a FEDERAL HESERVE BOARD O F F I C E C O R R E S P O N D E N C E Date A p r il 8 , 1935 To_____ F ed eral R eserve Board Subj e c t __________ ________________________ From ___________________________________________ _ Mr. Smead A ttach ed i s a statem ent showing the amount o f borrow ings from the F ed era l r e s e r v e banks, as o f March 31, o f member banks not lic e n s e d to reopen by the S e cre ta ry o f the Treasury but which as o f th at d ate had n ot been p la c e d in p r o c e s s o f liq u id a t io n . I t w i l l be n oted from t h is statem ent that 892 o f such banks were in d eb ted t o th e F e d e ra l r e s e r v e banks in an a g g reg a te amount o f $ 1 2 4 ,752,000 o f which $ 4 8 ,26 4,000 was on re d is c o u n te d e l i g i b l e p a p er, $ 6 7 ,82 8,000 on advances under S e c tio n 13 o f the A ct and $ 8 ,6 5 9 ,0 0 0 on advances under S e c tio n 10~b, As o f March 28, the l a s t date f o r which fig u r e s a re a v a ila b le , the F ed era l r e s e r v e banks a ls o r e p o rte d $ 2 7 ,73 8,000 o f claim s a g a in s t c lo s e d ban ks. The amount o f su«h claim s r e p o rte d by each F ed eral r e s e r v e bank: was as f o llo w s : B oston New York P h ila d e lp h ia C levelan d Richmond A tla n ta $462,000 3 ,9 1 7 ,0 0 0 4 ,2 4 3 ,0 0 0 269,000 6 ,7 1 0 ,0 0 0 4 ,9 8 7 ,0 0 0 Chicago S t . Louis M inneapolis Kansas C ity D a lla s San F ra n cisco $887,000 894,000 1 ,7 7 7 ,0 0 0 1 ,0 6 0 ,0 0 0 855,000 1 ,6 7 7 ,0 0 0 borrowings from federal reserve bank of member banks not licensed t o 6p w b y the secretary of THE TREASURY, BUT ^HICH HAVE NOT BEEN PLACED IN LIQUIDATION. (F ig u re s as of March 31, 1933) F ed eral R eserve Bank Number of hanks T ota l Boston New York P h ila d e lp h ia 38 119 27 $7,701,893.06 21,898,78-1.13 24,231,022.16 $3,759,3^3.58 , 5>33M52.>+5 20,5U2,273.93 15,228,930*91 7,923,424.36 8,595,^1.50 9,923,367.13 4,972,472.89 103 C levelan d Richmond A tla n ta S3 4l 201 Chicago St * Louis M in n eap olis T ota l 8, 1933. 18 651 812.33 1 1 ,91)6,832.1+3 5,305,563.7s 1,892,772.96 — 1 5 1 582.01 27 37 7,191,986.^9 , 3,751,078.73 2,55^,183.12 ul+2,600.01 1+75,221.59 3,85U,683.37 1^5,529.75 2,209,710.1+2 892 124,751,591.57 1+8,2$+, 150.65 69 DIVISION OF BANK OPERATIONS, ASEIL 10,135,758-6U 3 160 51 9 1*8 $ , , + , 17,565,507.^ , , 1 ,658,960.80 1 ,1+36,117.61 50 1 669 720.62 519 367.91 10,759.82 , ^ , 37 Kansas C ity D a lla s San F ra n cisco 11,046,650.80 , , 2,977.699.62 Indebtedness to F ed eral R eserve Bank R ediscou n ted Advances under e lig ib le paper S e c tio n 13 588 129.76 £>7,828,040.33 Advances under S e c tio n 10-b $782,000.00 3,813,905.82 21+5,157.38 --- 1 ,058,178.51 910,892.16 — — 783,120.00 — 1,066,146.72 8,659,400,59 R ep rod uced from the U ncla ssified I D ecla ssified H o ld in g s o f the N a tional A rch ive s DECLASSIFIED Authority VlMDSoozfc l933. TELEGRAM 13 AM II 41 'ERAL- RESE RVE BOARD L ^ leased wire service W ASH IN G TO N APR mrttrn O m m * 9 m 1M TRANs / ^ 2-9454 1 ^ 1^31 Ifestoft. m*rn»a* tomtom ~ a i m M - Gbit*** * * * • St* *•«*«! fail** - rnmmmmUm - *mwm* H t f * 1* ^ - • » » « * § « • M%*9 In o rd e r that Board may f o llo w c l o s e l y a l l changes in s ta tu s o f banks, p le a s e m a il as soon a s p r a c t ic a b le statem ents showing (A) Name and lo c a t io n , a ls o t o t a l d e p o s its a s o f l a s t c a l l f o r c o n d it io n r e p o r t s , o f each nonmember s ta te bank, t r u s t company, s to c k savings bank, mutual sa v in g s bank and p r iv a t e bank under s ta te s u p e r v is io n i n you r d i s t r i c t * lis t This should be p rep a red a s o f A p r il 12, 1933, the date o f you r supplem ental l i s t o f banks a u th o r iz e d t o reopen, and the banks should be grouped a s f o llo w s : ( l ) Opera tin g w ith out r e s t r i c t i o n s o th e r than th ose a p p lic a b le t o a l l banking i n s t i t u t i o n s under Executive Order o f March 10, 1933* (2) Operating under r e s tr ic tio n s in ad d i t i o n to those a p p lic a b le to a l l banking i n s t i t u t i o n s un d er E xecu tive o r d e r o f March 10, 1933, whether such a d d it io n a l r e s t r i c t i o n s were imposed by State banking depart ment® o r by ban ks1 boards o f d i r e c t o r s , and whether such banks a re i n charge o f State banking departm ents, o f c o n s e rv a to rs o r s im ila r o f f i c i a l s , o r o f banks* boards o f d ire cto rS | (3) Not in clu d e d e it h e r i n group 1 o r group 2 b u t not p la c e d i n p r o ce s s o f l iq u id a t io n or in r e c e iv e r s h ip . (B) Name and l o c a t io n o f each s ta te bank and t r u s t company member w hich, a s o f A p r i l 12, 1933* had not been lic e n s e d by S ecreta ry o f Treasury to resume f u l l banking o p e r a t io n s , grouped a s fo llo w s : (1) O p e r a t i c under r e s t r i c t i o n s i n a d d it io n to th ose a p p lic a b le t o a l l banking in s t i t u t i o n s under E x ecu tiv e O rder o f March 10, 1933» (2) Not in c lu d e d i n group 1 but n ot p la c e d in p r o c e s s o f liq u id a t io n o r in r e c e iv e r s h ip . (C) Name and lo c a t io n e*ch p r iv a t e bank not under s t a t e s u p e rv is io n but R ep rod uced from the U ncla ssified I D ecla ssified H o ld in g s o f th e N ational A rch ive s d e c l a s s if ie d -4 w4 Authority r TELEGRAM FEDERAL. RESERVE BOARD LEASED W IR E SERVICE W A S H IN G T O N mm 2-9454 , p, 2 included, in your printed l i s t s o f banks authorised to reopen, as well as o f any other in s titu tio n included therein which would not "be included in abstract of condition reports o f sta te banks. (D) Uame and loca tio n o f each nonmember sta te bank, trust company, stock savings bank, mutual savings bank and p riv a te bank under state supervision which suspended, went into liq u id a tio n , or was absorbed by another bank during the period March 1 to 12, 1933, together with the date and manner in which the bank went out o f existence. Please also mail a sup clement to l i s t s A and B above as o f each Wednesday beginning .April 19, 1933, in order to enable Board to keep o rig in a l l i s t up to date. Ho corresponding data need be submitted covering national banks. In lie u o f telegraphic and mail reports o f bank suspensions heretofore furnished please wire Board as soon as p ra ctica b le name and lo ca tio n o f each bank which, during period March 13 to April 12 ( l ) suspended or went into liq u id a tion a fte r resuming f u l l banking operations, code SAVE, (2 ) suspended or went into liq u id a tion a fte r resuming operations on a r e s tr ic te d basis or without having resumed any banking operations, code S1RV, (3) was placed on a r e stricte d basis a fte r having resumed f u l l banking operations, code SIMM. Please also wire corresponding data currently h ereafter. Reports on form St. 63S6- a should continue to be submitted monthly covering a l l bank consolida tion s, absorptions and mergers, and on form St. 6386- c covering new banks, successions and conversions. R ep rod uced from the U ncla ssified I D ecla ssified H o ld in g s o f th e N a tional A rchives DECLASSIFIED Authority DUD 3 0 0 2 b ieJ TELEGRAM F E D E R A L RESERVE BOARD LEASED W IR E SERVICE W A S H IN G T O N seHfijirrows 2-9454 aPO - 3 - Pending r e c e ip t and t a b u la tio n o f th e s e d a ta , s t a t i s t i c s o f bank suspensions w i l l n ot be p u b lis h e d by B oard, and i t i s su g g ested t h is p o l i c y be a ls o fo llo w e d a t you r bank. MORRILL R ep rod uced from the U ncla ssified I D e cla ssified H o ld in g s o f th e N a tio n a l A rchives DECLASSIFIED Authority DUD 3oozfc, •V, F o r m 118 If TELEGRAM FEDERAL RESERVE BOARD WASHINGTON Cleric 3an F r a n c is c o . Tour w ire A p r il 11# I f Oregon s t a t e member beak in q u e s tia a has been c lo s e d o r r e t i r e d t o d is c o n tin u e m r m l banking f u n c t i o n by Superintendent o f Bstoka taider a u th o r ity o f p r o v is io n * o f S t a t e law* i t would appear tfcet i t s s ta tu e , f o r purposes o f you r q u e s tio n , ia s im ila r t o th a t o f baak in bands of r e c e iv e r o r c o n s e rv a to r and ^fso.Board f e e l e tb a t F ed era l re se rv e bank i e n ot a u th orised t o d isco u n t f o r o r t o m k e advances t o auch benk« Board not a d v leed o f ^ r e v is io n s o f s ta tu te i a q u e s tio n , however* and cannot ex p ress d e f i n i t e o p lh io n a s t h i s qu estion * c o u n s e l aa t o s ta tu e o f bank* I t i s sufpge s te d you c o n s u lt your Bvea I t F ed eral re e e rv e bank baa r e q u is it e le g a l a u th o rity * how ever, qu est io n whether e r e d it should be exten d ed t o any member bank i s one f o r e x e r o ia e o f d is c r e t io n o f F ed eral r e s e r v e bank and as in d ic a t e d ia Trane* 1753 ia t o be determ ined in the l i g h t o f a l l the eiraymetafloe© in th e eaae* I IK \-\tmc inltiejtilecm li v^-* 4i=ucw raw^ R ep rod uced from the U ncla ssified I D e cla ssified H o ld in g s o f the N a tional A rchives DECLASSIFIED r Authority tlW D aoozb TO MR. MOHBIIJii The n otes r e fe r r e d t o in the a tta ch ed telegram , d ated > ril 8 , 1933i from Governor B la ck o f the F ed eral Reserve Bank o f A tla n ta , are p le d g e d a g a in st war lo a n d e p o s it a ccou n ts under th e p r o v is io n s o f Treasury C ir c u la r No. 92, a cop y o f w hich i s a tta ch e d . * as c o n s e r v a to r s a re a u th o riz e d t o renew p le d g e d a o t e s w ith the con sen t o f th e p le d g e e s , the Treasury w i l l n ot ob j e c t t o a c c e p tin g renewal n o te s h e ld as c o l l a t e r a l s e c u r it y a g a in st war lo a n d e p o s it a cco u n ts, p r o v id e d such renew als are f o r a p e r io d not e x ce e d in g t h i r t y days w hich , I understand, i s the l i m i t o f a u t h o r it y gran ted t o con serv a tors* As you w i l l n ote b y r e fe r e n c e t o the c o l l a t e r a l s e c u r it y p r o v is io n s o f C ir c u la r Ho. 92, the approval and v a lu a t io n o f s e c u r i t i e s i s committed t o the s e v e ra l f e d e r a l re se rv e banks. The Treasury p r e f e r s , t h e r e fo r e , t o le a v e the m atter la r g e ly t o the d is c r e t io n o f the v a r io u s f e d e r a l re se rv e banks as th ey are in a b e t t e r p o s i t i o n to determ ine the d e s i r a b i l i t y o f t h is proced u re i n any g iv e n c a s e . I f renewal n o te s are not a cce p te d i t presum ably would be n e ce s sa ry , in o rd er t o p r o t e c t th e in t e r e s t s o f the U nited S t a t e s , t o p r o ce e d t o c o l l e c t m aturing item s d ir e c t from th e makers o r in d o r s e r s . T h is procedu re would throw some a d d it io n a l work upon the f e d e r a l re s e r v e bank and may not be d e s ir a b le under p r e se n t con d it io n s * Pending f i n a l d eterm in a tion as t o whether a d e p o s ita r y bank i s t o be reopened o r liq u id a t e d , I am in c lin e d t o the o p in io n th at a l l in t e r e s t s would be b e t t e r served b y a c c e p tin g renewal n o te s upon a t h i r t y day b a s is , as in d ic a t e d above. vThe in t e r e s t due from th ese n o te s should be c o l l e c t e d in a l l ca s e s and a p p lie d b y the f e d e r a l re se rv e bank as a payment a g a in st the war lo a n d e p o s it account o f the d e p o s ita r y bank. * A s s is ta n t S ecreta ry o f th e Treasury. (e n c lo s u r e s ) R ep rod uced from the U ncla ssified I D ecla ssified H o ld in g s o f the N a tional A rch ive s DECLASSIFIED i” Authority VlUD3oozfc TELEGRAM ^ i I (/1 FEDERAL RESERVE SYSTEM (LEASED WIRE SERVICE) R 215gb E / C B I V ^TOE OF lft_794 S a n f r a n c i s c o A p l 11 1147am received a t Washington, 1\ B _ $33_ - - - *■ M. B oa rd — «*=• P. M. ---------nr,.— r— W ashn R e fe r r in g o u r w ir e 7 t h / an d y o u r s 1 0 t h ./ S t a t e m em ber b a n k s h a v e b e e n d i r e c t e d to d is c o n tin u e in sta tu s oregon w h ic h lik e of in th e fo r con serv a tor con serv a tor in to of s u p e r in te n d e n t a p p o in t m e n t in liq u id a tio n us a p p lic a t io n con serv eto c o n s is te n t hands of te le g r a m In a s m u c h a s is sta tu s has b e e n a p p o in te d #17 5 8 s h o u ld c o n s e r v a tio n fro m a p p ly . it is la w a r e o ffic ia l sta te th o se b e c a u s e m a n a g em en t i s or oregon of th e fo r r e s tr ic te d a ssets. u n lic e n s e d oregon i d e n t i c a l w ith fe e lin g by la w N e v e r th e le s s i d e n t i c a l w ith d is c o u n t its That O reg on co n serv a tor. an d / fo r su ch ban ks u n d er th e r e c e iv e r . e ffe c t several S u p e r v is o r y a u t h o r it y o f ban ks. has b een a p p o in te d m em ber ban k * w n ic n banks t h e s e m em ber b a n k s We h a v e b e f o r e sta te to is d oes n o t p r o v id e sta tu s by S ta te n o rm a l b a n k in g f u n c t i o n s s im ila r sta tu te In a s m u c h a s th a t banks is our to be It m ig h t m ake o u r p o s i t i o n R ep rod uced from the U ncla ssified I D e cla ssified H o ld in g s o f th e N a tional A rchives DECLASSIFIED Authority VJND3 0 0 2 C, TELEGRAM FEDERAL RESERVE SYSTEM (LEASED WIRE SERVICE) la_ 794 R E C E IV E D A T W A S H IN G T O N , D . C . c le a r e r to m any c a s e s m e r e ly sta te sta te of ch an ged w h ere th e o ffic e r fro m bank t i t l e of r e m a in s u n c h a n g e d . b a n k in g f u n c t i o n d iffe r e n t con serv a tors is g iv e n p r e s id e n t th e ch arge to o ffic ia l T h e re fo r e id e n tic a l are of crea ted a r e s tr ic te d c o n s e r v a to r w h ereas of if it le g a lly a s im ila r ly th e sta tu s does n ot tr e a tm e n t m e r e ly b e c a u s e th e of in th e of the title in bank has been an o r e g o n r e s tr ic te d bank r e s tr ic tio n se e m l o g i c a l title th e to upon a ffo r d o fficia l in ch arge j .1 4 f not id en tica l. P lease reply. C lerk 306p tr. a , eorauftfSO T p r i n t e d o f f i c j : ires Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED r Authority \W> 3 0 0 2 b APRl 01933 Hr* Albert C* Schott, 1983 Saplanade A▼•xk» t Sea Orleane, Louisiana. Dear 16*. Schott: A Tour latter of March 90 addreaaed to tha Secretary of the Treaeory was referred to this office for rep^y. While tho fed eral m e m basics operate under the euperriaion of tho Federal Beeerre Board they are owned entirely by their asnber banks and not by the federal Qowaraasnt and tha extent to tfiidh they aay proparly diaoount paper or aake loans within their le&d authority is a ittar primarily for the exercise of tha jaAgaent of tha boardofdirectore and easeutive offioara of aaeh federal reserve bank* TheBoard understands that tha offioara and directors of the Federal Beserve Bask of Atlanta and its branch at Use Orleans ara thoroughly faailiar vith tha eituation of tha banks in Haw Orleans and have given that eitoation dose and sympathetic attention* Tha Board* therefore, fsala oonfidant that tha Federal Bsserve Bank of Atlanta a i H cooperate to the fullest poaaible extent frcn tha all of standpoint of tha beat intereate of/its member banka in sorting APPROVAL a aound eolation of tho Hew Orleans situation* ____ OOMtMIETHta MBimN® Tory truly yours, Ui Milier APRl 0 1 9 3 3 b V ^ CM-w r Lf pleas? *r■*;£1We copy \ you approve zfnl relutn S«ctsl3fv!s Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority VJKD 3 oozc=> TELEGRAM 4 FED ERA L RESERV E BOARD W A S H IN G T O N calkin#*- am mseisco Tour wire April ?« In view of fact that member banka in bands of conservators or other State officials having similar authority are In status similar to that of banks In hands of reoeivers or banks otherwise closed by supervisory authorities, Board is of opinion as stated in Trans. 1751 that Federal reserve banks are not authorised to dlsoount for or to make advancee to such banks* Unlicensed member banks operating under Regulation 27 are still in charge of their own directors and officers and hscie not been taken over by supervisory authorities either for liquidation or conserva tion of assets. Their status is essentially different from banks In hands of conservators and Board feels that Federal reserve banks are not legally prohibited from extending credit to such banks to extent authorised by Treasury Regulations. Tou suggest that Trans. 175® prohibits Federal reserve banks to lend to unlicensed members In States where conservators may be appointed under the law* but your attention Is called to fact loans are prohibited by Trans. 175® only to those banks actually in hands of conservators or to such conservators* MORIILL §0V> ieysr. !rr« Hsmlin.L^T. Mr.. James „ U i Millar. m initial fiis cow tfe.SecfstitVs Olitnitt* Reproduced from the Unclassified / Declassified Holdings of the National Archives DECLASSIFIED Authority U N D aoozfc TREASURY DEPARTMENT i. WASHINGTON Co m p t r o l l e r o f t h e C u r r e n c y April 10, 1933 ADDRESS REPLY TO ‘ COMPTROLLER OF THE CURRENCY’ CIRCULAR LETTER NO. 1 To Conservators of National Banks: Chapter II Sec. 263' CORRESPONDENCE WITH COMPTROLLER. When addressing this office each communication of a Conservator should be confined to one subject, or asset, or claim. In handling the large volume of correspondence, both telegrams and mail, the work can be simplified and greatly expedited by refraining from referring to more than one subject in a single communication. The communications should contain a complete statement of the facts in order to enable this office to pass intelli gently upon the question or problem presented. It has been observed that a great many of the letters submitted by conservators merely state the question, without giving any facts as to the names of debtors or creditors as the case may be, the amounts involved, character and value of the security or property, or other facts which this office must have before it in order to form any conclusion as to the propriety of granting the request, following the recommendation or otherwise instructing the Conservator. The subject-matter of each communication should be briefly mentioned at the beginning of the letter at the right of the address and' just below it. An example follows: "Comptroller of the Currency, Washington, D. C. Dear Sir: RE: Preferred Claim A. B. Company (or request for offset, Employment of attorney, Payment salaries of em ployees, etc., or whatever may be the subject of the communication.)'' In case a letter requires immediate action or reply the Conservator should indicate at the beginning of the caption of his letter that a reply by telegram is necessary, using the words "TELEGRAPHIC REPLY REQUESTED",but unless it is abso lutely necessary that a telegraphic reply be made, the Conservator should not so indicate. All matters should, if possible, be referred to the office by letter in sufficient time to permit replies by mail. F. G. AWALT, Acting Comptroller. Reproduced from the Unclassified I Declassified Holdings of the National Archives ~ r DECLASSIFIED Authority t)N D 3 o o z b TREASURY DEPARTMENT WASHINGTON Co m p t r o l l e r o f t h e C u r r e n c y May 9, 1933 ADDRESS REPLY TO •COMPTROLLER OF THE CURRENCY" CIRCULAR LETTER NO. CR £ To Conservators of National Banks: Chapter II Sec. £59. EMPLOYEES FIDELITY BONDS. You are directed to forward immediately to this office full information regarding the fidelity bonds carried by you upon your employees, advising whether or not you have examined the bonds Carried by the bank previous to your appointment and have convinced yourself that the bonds ade* quately protect the Conservator, and whether you have had the nec essary changes made by affixing riders extending the coverage to you as Conservator in accordance with Chapter II, Section 259 of Regulation I, Instructions to National Bank Conservators, bearing date of April 4, 1933. In Case individual bonds are being carried on your employees you will furnish this office with a complete list of all employees, designating the aulount of the bond and tho company issu ing the same in each instance where bonded. If employees are covered by a bankers blanket bond, you will advise the amount of the bond, the company of issue and the names of employees that it covers. The names of all employees not covered by a banker*s blanket bond should be furnished in a separate list with informa tion as to their respective duties. If the banker's blahket bond contains coverage other than tile fidelity of employees, the nature and amount of such coverage should be stated. In either case, furnish this Office with the A&te of the expiration of each and every bond. J. E. FOUTS Supervising Conservator Reproduced from the Unclassified / Declassified Holdings of the National Archives DECLASSIFIED -r Authority TREASURY DEPARTMENT WASHINGTON Co m p t r o l l e r o f t h e C u r r e n c y ADDRESS REPLY TO “ COMPTROLLER OF THE CURRENCY" ,, M Q .y Q Qrvr? X »00 CIRCULAR LETTER NO. CR 5 To Conservators of National Banks: Chapter IV Sec. 406. FEDERAL CHECK AND' SAFE DEPOSIT RENTAL TAXES. This letter is addressed to all Conservators in order that they may be fully advised as to the proper handling of, and accounting for, the check and safe deposit box rental taxes provided for in the Revenue Act of 1932, which became effective on June 21, 1932* It should be said that the United States Government as a matter of law is entitled to no priority of payment with respect to any claim which it may have against a National Bank in the hands of a Conservator, on account of the taxes herein discussed which accrued prior to the Conservator’s appointment, except as such claim may be entitlsd to the protection of security deposited by the bank with the proper officer of the United States to secure government deposits and/or collections made by the bank as an agent of the United States. Cases in which it would seem that the giving of security by the bank to the United States Government would cover collections made by the bank of either check or safe deposit box rental taxes, should be submitted to this office in complete detail with a copy of the appropriate contract between the bank and the United States Government or one of its officers, as the case may • be. Instructions hereinafter set out are not intended to apply to situations into which the question of security enters. This office has not been able to find any authority for the abatement of the Federal check tax with respect to a Conservator’s checks on other banks or his transfers of funds in other banks on orders other than checks. This applies to all three of the Con servator’s accounts with the Federal Reserve Bank, namely: the bank’s old reserve account, Conservator’s special account for segregated funds and Conservator’s general account, as well as to whatever depository account or accounts the Conservator may have opened or may hereafter open with licensed member banks#' m Reproduced from the Unclassified / Declassified Holdings of the National Archives DECLASSIFIED Authority UU Daooafc. -2i The Conservator should offer no objection to the charging of 24 check tax on all checks or transfer transactions that he may have in these various accounts, and should submit to the collection of the tax by the Federal Reserve Bank or his depository bank or banks in the manner heretofore established. (a) The Conservator should in every instance debit to all segregated accounts on his books from month to month, the 2t check tax in accordance with the Government’s regulations, and promptly remit the .funds so accumulated to the Collector of Internal Revenue for his district, in the manner previously established and v/ith the use of such forms as may be prescribed under Government regulations. All such tax as may not have been debited to segregated accounts prior to the Conservator’s appointment should likewise be debited to the respective accounts and remitted to the Collector. (b) If the Conservator has not already done so he should forthwith, except where paragraph (d) applies, debit to all restricted accounts on his books such Federal check tax as had accrued and had not been so debited at the date of his appointment. The total of these debits should be set up as a Conservator’s credit entry in the account of the Collector of Internal Revenue on &is books with appro priate symbol and description. This credit will then become an ordinary liability of the bank in favor of the Collector of Internal Revenue. Such credit can not be paid in priority to other ordinary liabilities of the bank, but, of course, should be included in any ratable distribution that may be authorized. (c) The Conservator should in conformity with existing regu lations, and on such forms as may be prescribed therefor, report to the Collector of Internal Revenue, with respect to all check taxes as he may accrue on his books by debiting restricted deposit accounts • and contra credit entry in the account of the Collector of Internal Revenue, as provided for in paragraph (b), and he should in a separate affidavit securely attached to the report form, certify that he has been appointed Conservator of the bank, reciting the date of his appointment and stating that the credit carried to the account of the Collector of Internal Revenue is only an ordinary liability of the bank, which must be treated in the same manner as all other such . ordinary liabilities without immediate cash remittance other than such ratable distribution as may be authorized. (d) In cases where it is necessary for the Conservator to collect the check tax on items charged to accounts overdrawn, such collection must be made in cash and promptly remitted to the Collector of Internal Revenue as a trusteed fund. In cases where the debit of check tax by the Conservator to an old account will create an over draft, such part of the tax debit as may be provided for by the Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority existing balance should be carried into the account of the Collector of Internal Revenue. That part of the tax which, if debited, would create an overdraft in the depositor’s account, must be collected by the Conservator in cash and remitted to the Collector of Internal Revenue in the manner heretofore established. If the Conservator is unable to make such a collection in cash, he should promptly advise the Collector of Internal Revenue of that fact, giving him the amount due and the name and address of the depositor* (e) The instructions above given with regard to debits to accounts and contra credit to the Collector, apply in all cases ex cept where the tax due from a given depositor exceeds $50.*00. In cases such as this the Conservator should attempt to collect the full amount of the tax now due in cash and if successful, remit the collection to the Collector in due course. If not successful, the Conservator should promptly advise the Collector of Internal Revenue of the amount of un collected tax with the name and address of the depositor, in order that the Collector may proceed directly against the depositor. (f) The Conservator is obligated to collect and to remit to the Collector of Internal Revenue the 10^ tax on all safe deposit box rentals which have accrued since June 21, 1932, and which have not been collected and remitted, or which may hereafter accrue. This tax can in no instance be charged to the accounts of depositors, but must be collected in cash. The Conservator should be careful not to permit any safe deposit box renter to surrender the keys for his box and to remove the contents therefrom until full payment has been made by him for accrued rental due to the bank, as well as the full amount accrued and unpaid with respect to the 10$ tax. (g) Conservators are advised that where prior to their appointment the banks now in their charge attempted to remit to Collec tors of Internal Revenue with either their officer’s checks or drafts on other banks, such officers’ checks or drafts are only ordinary liabilities of their banks and must be handled in the same manner as all such liabilities, without any priority in favor of the United States Yours very truly, F. G. Await, Acting Comptroller. Reproduced from the Unclassified / Declassified Holdings of the National Archives DECLASSIFIED Authority V lU D 3Q 02t, TREASURY DEPARTMENT WASHINGTON May 11, 1933 CIRCULAR LETTER NO. CR 4 MEMORAMDIJM FOR CONSERVATORS IN REGARD TO PREFERRED CLAIMS To All Conservators of National Banks: Conservators are not authorized to make payment of any claim asserted to be entitled to preference, not to commit themselves to a recognition of such claim as a preferred one, until a full statement of the facts relative to such claim has been submitted to the Comptroller and a specific ruling made thereon by this office. However, it is thought that the following memorandum may be useful in enabling con servators to properly consider such claims. The scope of this memorandum is limited to a discussion of claims asserted to be entitled to preference in payment over other claims of a general nature against the assets of a national bank coming into the hands of a conservator. There must immediately be excluded from consideration under this class of claims the following items: (a) Claims based upon new accounts created by segregation of a percentage of old accounts or by new deposits of cash or its equivalent, which are treated fully in Section 301, Instruc tions to National Bank Conservators, April 4, 1933. (b) Officersf checks or drafts purchased with funds from such segregated accounts or with cash subsequent to such segre gation of new accounts. (c) Deposits of public funds secured by pledge of bank assets. Claims based upon secured deposits (c) are not, by reason of their character, entitled to preference, but in some cases it may be to the interest of the bank that pledged assets be redeemed. Each case of this class must be governed by specific instructions to the conserva tor from the Comptroller, which will be given at the request of the conservator. Section 203 of the Bank Conservation Act of March 9, 1933, containsNthe following provision: "During the time that such conserva tor remains in the possession of such bank, the rights of all parties with respect thereto shall, subject to the other provisions of this title, be the same as if a receiver had been appointed therefor." Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority tlU D aoozfc, - 2- Thus by statute the rights of persons asserting preferences against the assets in the hands of conservators are governed by the same statutory provisions and the same judicial decisions that would apply in case the bank were insolvent and in the hands of a receiver# The experience of this office has been sufficient to indicate that conservators will have increasing difficulties with so-called preferred claims unless a clear understanding is had of the information necessary to enable this office to advise in regard to such claims and the reasons why all the facts surrounding the claim must be accurately obtained by conservators and transmitted to this cffice* In the consideration of asserted preferred claims, the conservator should direct his inquiry to the facts as they existed at the time the bank ceased to do an unrestricted banking business. With the exceptions of the priorities established by U.S.R.S. 5236 (Title 12, U.S.C.A., Sec. 1134), which provides for any deficiency in redeeming the circulating notes of a national bank and the expenses of such redemption, and those established by Title 26, U.S*C.A., Sec, 109 (37 Stat. 733), and Title 19, U.S^C.A., Sec, 198 (36 Stat, 965), which deal with certain certified checks accepted by Collectors of Internal Revenue of the United States and Collectors of Customs, for internal taxes, public dues and duties on imports, there is no such thing, in the.technical sense, as a preferred claim against the assets in the hands of conservators. All persons v;ho were creditors of the bank at the time of the appointment of the conservator must participate in the ratable distribution of the assets provided by "The National Bank Act" unless a reorganization is ef fected, Except for the priorities above mentioned, the only method open to the United States or a state or its political subdivisions (where security was not lawfully taken by the public depositor) or an individual to avoid ratable distribution is to make affirmative proof of the three essentials of a claim entitled to preferential treatment, namely: (1) That tho relation between the bank and the depositor is that of trustee and beneficiary, (2) That the assets of the bank were augmented by the transaction. (3) That the funds arising from the transactions are traceable into the hands of the conservator. All doubts are to be resolved against any asserted preferred claim (Schuyler v, Littlefield, 232 U.S. 707). This‘well settled Federal rule is controlling to the exclusion of all state statutes and decisions because all questions relative to claims asserted against the assets of national banks in the hands of conservators or receivers are governed exclusively by the rules of law provided in the acts of Congress and the decisions of the Federal courts in connection therewith. For discussion of the legal principles applicable to so-called preferred claims, see Empire State Surety Company v. Carroll County 194 Fed. 593; Beard v. Independent District, 88 Fed. 375; Larabee Flour Mills v* First National Bank, 13 Fad. (2nd) 330, certiorari Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority -3- denied 273 U.S. 727; Mechanics & Metals NaUonal Bank v. Buchanan, 12 Fed. (2nd) 891, certiorari denied 273 U.S. 715; Blakey v. Brinson, 286 U.S. 254; Cook County National Bank v. United States, 107 U.S. 445; First National Bank v. SeIdon, 120 Fed. 212; r>avis v. Elmira Savings Bank, 161 U.S. 275; Easton v. Iowa, 188 U.S. 220. Preferred daims asserted against the bank must be proved to the satisfaction of the Comptroller of the Currency or adjudicated in a court of competent jurisdiction. U.S.R.S. 5236 (U.S*C.A. Title 12, Sec. 194). All claims asserted against the conservator are general claims unless the claimant can affirmatively prove all of the three essentials stated above. Conserva tors are without authority to make any payments or to deliver any property in respect to claims of this nature, without specific instructions from the Comptroller of the Currency. Where a claimant seeks to avoid ratable distri bution, the full facts necessary to enable the Comptroller to determine the status of the claim and to issue the necessary instructions should be forwarded by the conservator in his first letter on the subject. To prove the first essential to a preferred claim, that of a trust relationship, there must be a showing that the bank received an identifiable thing in trust for the claimant. A trust relationship cannot be predicated upon a pre-existing credit balance in the bank. Blakey v. Brinson, supra. Accordingly, in forwarding preferred claims, the conservator should definitely identify the property received by the bank, such as cash, securities, or checks on other banks, which is alleged to be held in trust. Even though a trust relationship appears, the liability is general only, unless augmentation and tracing appear for all or part of the money or other property received in trust* Ellerbe v. Studebaker Corp., 21 Fed. (2nd) 993: "In ordinary cases, of course, the roceipt by the collecting bank of a check drawn against the account of one of its depositors does not bring anything into the bank, and cannot be said to augment in any way assets passing into the hands of the Receiver* It is a mere shifting of credits. Larabee Mills v. First National Bank (C.C.A. 8th) 13 Fed. (2nd) 330; American Can Co. v. Williams (C.C.A. 2nd) 178 Fed. 429; North Carolina Corp. Com. v. Merchants & Farmers Bank, 137 N.C. 697, 50 S.E. 308." 9 Where the property alleged to have been transferred to the bank in trust consists of cash, it may be traceable to the cash on hand in the bank, and the conservator in such cases should furnish, in fbrv/arding the claim, a tabulation of the amount of coin and currency, exclusive of cash items, in the !»ank at the close of business on the day preceding the delivery of the cash to the bank and the total cash in the bank at the close of each day’s business from that day on, to and including the date of the conservator’s appointment, making a clear distinction between actual cash of all forms and cash items. If the cash on hand at any time during this period was 3©ss than the alleged trust fund, dissipation and a general claim to the extent of the dissipation follows. Where the alleged trust property consists of securities, the Con servator must ascertain and report the disposition made thereof and advise Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority -4 - fully as to what the bank received as proceeds: whether cash, a check on the ■bank, or a check on another bank* In every case where the trust property or its proceeds consisted of a check on another hank it is essential that the* item be traced to the correspondent, if any, to which it was sent and that a transcript of the correspondent bank’s account be obtained from its books beginning with the date of credit and running to the present time and forwarded to the Comptroller in order that he can ascertain whether or not partial dissipation occurred through a low balance thereafter or a complete dissipa tion occurred through a subsequent overdraft* The transcript should show the daily balances in the account during the period mentioned, and each credit, including items involved, should be clearly identified. The conservator should also advise as to the amount of cash or the sound value of collateral returned to him by such correspondent, also with regard to any present debt of his bank to such correspondent and the sound value .of any collateral still pledged for such debt, if any* If the alleged trust fund was created by the giving of a check on another bank in the same town which was cleared directly with such bank, rathep than through a local clearing house, the balance, either in favor of or against the conservator’s bank on the date of clearing and the manner in which such balance was paid should be reported. Care should be taken to ex plain fully whether a favorqble balance was collected in cash or in a draft on a third bank which was forwarded to a correspondent bank for credit. If the latter, full particulars should be furnished as set out in the paragraph next above. If the check was on another bank in the same town and was cleared through a clearing house or through a Federal Reserve bank or one of its "branches, the net balance in the clearing for or against the conservator’s bank, on the date of clearing, is all that need be considered. Full particu lars with regard to the settlement of this net balance should be given as above directed. Where this methcd of clearing was followed, no attention need be given to the respective dsbit or credit balances between the various member banks that participated in the joint clearing. It is possible that certain preferred claims will be presented to the conservator predicated upon deposits with the bank prior to his appoint ment, based upon an alleged or actual agency agreement between the bank and its depositors which mighx have a bearing upon the subject. In order that preferred claims of this particular nature may be intelligently considered, if and as they arise, the conservator is requested to send to this office at once a sample of each and every pass-book of his bank which was in use at the date of his appointment, together with samples of all signature cards and de posit tickets then in use. Probably more preferred claims arise from items received by a bank for collection and remittance than from transactions of any other nature. When an item is sent to a bank for collection and remittance, the bank re ceives the item as agent, and, having collected the funds, it holds them as agent and is bound to remit seme according to instructions. .American Can Co. v. Williams, supra. In cases of this nature, the first prerequisite exists and the allowance* of the claim depends upon the second arJi third, prerequisites: namely, augmentation and tracing, as hereinbefore set out. Where a bank Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority - 5 - receives an item for collection and credit there is a distinction between its receiving the item for collection and remittance. A copy of the collection letter or memorandum should be submitted to this office in connection with any preferred claim in either of these classes along with other pertinent data. Another class of preferred claims which often arise are those based upon unpaid officers' checks or drafts on correspondent banks for the transfer of funds. In instances such as this, the customer merely purchases the bank's credit and accepts an evidence of its indebtedness. As a general proposition, regardless of vihether such officers * checks or drafts were purchased with cash or by debit to a pre-existing credit balance, they are not entitled to prefer ence. Unpaid officers' checks and drafts held by Collectors of Internal Rev enue, given in remittance for Federal check taxes, are not entitled to prior ity. All claims of this character that may be asserted against a conservator should be promptly rejected without the formality of communicati on with this office for specific instructions. In developing the facts relating to preferential claims, it may be found that the various funds are traceable into the cash on hand at the date of the conservator's appointment. Such claims, providing all three elements of preference can be established, would then become payable in full if the cash on hand at the date of the conservator's appointment should be equal to or should exceed the total of all such claims. It may be found, however, that the total of cash coming into the hands of the conservator at the date of his appointment was less than the total of all claims entitled to participate in a preferred distribution. For instance, three valid preferences for $1,000.00 each, totaling $3,000.00, might be traced into the conservator's original cash; but that cash may have amounted to only $1,500.00. If a condition such as this should develop each preferred claim would be entitled to $500.00 of the cash on a pro rata basis and the balance would be an ordinary claim. It should be understood that, in capes where a partial preference can be estab lished and traced, the claimants will be entitled to payments in cash of such partial amounts, subject to any rights of others to pro rate, and will then have only ordinary claims for the balance. In the event a suit is filed in a state court to establish a pre ferred claim, the conservator is instructed to have his attorney take the nec essary steps for the removal of such suit to the Federal Court. Authorities applicable to the right of removal include the following: Studebaker Corp. v. First National Bank, 10 Fed. (2nd) 590, Title 28, U.S.C.A. Sec. 41 (1), (16), U.S.R.S. Sec. 563 (1), (15). A copy of any complaint filed in either state or Federal court against the conservator on a preferred claim should be promptly forwarded to this office for information and possible suggestions. The conservator is not to refer preferred claims to his attorney unless and until suit ia'connection therewith is filed. The legal unit of this office is familiar with the cases on this subject, and its assistance in such matters is available on request. While this memorandum has been prepared with the idea of completely covering questions of preference which will be presented to the conservators, there probably will be cases which cannot be analyzed on the basis of the Reproduced from the Unclassified I Declassified Holdings of the National Archives ~ r DECLASSIFIED Authority V lU D & x a b - 6- principles and instructions above laid dcwn. Unusual cases of this character should of course be promptly reported to this office for consideration and specific instructions. In conclusion, it is again stated that no conservator should pay any preferred claim or commit himself to the payment of any such claim without the specific approval of this office* F. G. AWALT, Acting Comptroller. Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority TREASURY DEPARTMENT W ASHINGTON Co m p t r o l l e r o f t h e C u r r e n c y May 19, 1933 ADDRESS REPLY TO "COMPTROLLER OF THE CURRENCY’ CIRCULAR LETTER NO. CR 5 To Conservators of National Banks: Chapter II Sec. 259. EMPLOYEES’ FIDELITY BONDS. All bonds covering the fidelity of employees sha.ll “be kept in full force with standard recognized indemnity companies, except where cancellations or reduc tions may, upon proper recommendation to this office, he authorized. Under no circumstances will personal bonds be accepted as proper coverage. All premiums due on employees1 fidelity "bonds shall he paid out of the Conservator's depository account. Bonds in force before the Conservator’s appointment must have riders attached extend ing the coverage to the Conservator, in accordance with Chapter II, Section 259, Regulation I, Instructions to National Bank Conservators hearing date of April 4, 1933. If proper riders cannot be obtained, old bonds are to be cancelled and new bonds taken out in favor of the Conservator. How ever, old bonds are to be kept in force to the full amount of cover age until new bonds are issued and in the hands of the Conservator. All employees shall be bonded except those holding menial positions. If there is any doubt as to whether or not an employee should be bonded or as to the amount of coverage, details should be submitted to this office with the Conservator1s recommendation, and he will be instructed. J. S3,* EOUTS Supervising Conservator Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority HMD300ZC=> TREASURY DEPARTMENT COMPTROLLER OF THE CURRENCY WASHINGTON, D. C. May 12, 1933 To Conservators of National Banks: Regulation No* 2 (Instructions to National Bank Conservators Volume 1 issued April 4th, 1933, being Regulation No. 1) The Treasurer of the United States will continue the redemption of circulating notes of national banks for which conservators have been appointed which are presented to him for payment in accordance with law, charging the ex penditures so made to the five per cent (5fo) redemption fund of the bank, and notes in replacement of those redeemed will be issued and forwarded to the con servator# During the period of conservatorship, there will thus be no withdraw al of national bank notes from circulation, and such notes may be reissued by the conservator in the same manner as any other kind of currency in the usual course of business. When notices are received from the Treasurer requiring payments in reimbursement of the redemption fund, the conservator should remit therefor through the Federal Reserve Bank of the District in which his bank is located, such remittance to be by draft upon the conservator’s general account with the Federal Reserve Bank. In instances where new currency, in replacement of circulating notes redeemed, has been received since the appointment of the conservator or was on hand at the time of his appointment, and is now held intact in the form in which received from this office, the conservator is authorized to place such currency in his vaults and to employ the same in the normal course of the administration of his conservatorship. In instances where requests for remittance to replenish the five per cent (536) redemption fund have been received and such remittances have not been made, the conservator should immediately remit in the manner above indicated, although the currency may not have actually been received at the time of such remittance. New currency for which proper remittance has been received will be promptly issued and forwarded by this office to all conservators. The annual assessment made by the Treasury against national banking associations to reimburse the Treasury for the expense incurred in connection with the redemption of circulating notes of such associations should be paid by conservators upon receipt of notice of the amount thereof. This regulation applies only to the issuance of notes in replacement of those redeemed by the Treasurer of the United States prior or subsequent to the date of the commencement of the conservatorship. Approved: A. A. BALLANTINE Acting Secretary of the Treasury J. F. T. 0 rCONNOR Comptroller Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority tiN D a o o a t, CR BJ TREASURY DEPARTMENT WASHINGTON Co m p t r o l l e r o f t h e C u r r e n c y ADDRESS REPLY TO • COMPTROLLER OF THE CURRENCY” REGULATION III INSTRUCTIONS TO NATIONAL BANK CONSERVATORS May 11, 1955 Sec. 1. REORGANIZATION EXPENSE. Conservators will be per mitted to pay their own necessary and reasonable expenses, Where the "bank owns no automobile, 5 cents per mile will be allowed for use of the Conservator^ automobile or a rented automobile. In addition they may pay for necessary postage and printing incident to communicating with depositors and shareholders with relation to the plan for reorganization. Expenses incurred by former officers, directors, and other interested parties cannot be paid by Conservators. Attorneysf fees and expenses incurred by reorganization commit tees must be paid by such committees out of funds raised by them. Con servators will not be permitted to pay these items out of the funds of their banks. Sec. 2. SAFE DEPOSIT BOXES. Sec. 261, page 6 of Instructions to National Bank Conservators, Volume 1, relating to Safe deposit boxes, reads in part as follows: "When any papers or property are removed or withdrawn from the boxes, signed statements should be procured from the renters to the effect that the contents removed, as well as the contents left in the box, if any, constitute all of the property and the papers deposited therein. Where any contents are removed, a signed statement and receipt should be pro cured releasing the bank and the Conservator from all liability.” The instructions conveyed by the portion of the Section referred to which has above been quoted, are hereby amended as follows: So long as they do not wish to remove all of the contents of their safe deposit boxes, patrons of the bank may be permitted, within the Conservator’s discretion, to have free access to their boxes in such a manner and under such regulations as ?/ere in force before the appointment of tha Conservator. Whatever system was established by the bank to make sure that only authorized persons should have access to the safe deposit boxes, should, of course, be continued. Reproduced from the Unclassified / Declassified Holdings of the National Archives DECLASSIFIED T Authority HM t>3oo2fa Sec. 2 (continued) Instructions to Nat *1. Bank Conservators May 11, 1933 In the event that any patron should, desire to remove all securi ties and other papers from his safe deposit box, he should be required before being permitted to do so, to pay all arrears of box rent, and to pay in addition thereto whatever safe deposit box rental tax may have accrued and remain unpaid under provisions of the Revenue Act of 1932, which became effective on June 21, 1932, He should also be required at the time he removes all securities and other papers from his box, to sur render any and all keys that he may have therefor and to execute a receipt and a release to the Conservator and to the bank in form as follows: "Doeville, Texas, May 1933 "Received from Joe Doe, Conservator of the First National Bank of Doeville. all contents of safe deposit box No._______ , heretofore rented by me, which contents have been examined by me on this date, and found to be full, complete and intact, I hereby certify that I am en titled to t.'ie return and custody of said contents of said safe deposit box; that Feld contents are not a part of the effects of the First National Bank of Doeville. that they were not pledged or otherwise placed with the bank in any manner that might entitle the bank to a lien thereon or an interest therein, and in consideration of their surrender to me, I do hereby release the said First National Bank of Doeville and the said Conservator thereof, from all liability in connection with the said personal effects," F. G. AWALT Acting Comptroller Approved: W. H, WOODIN Secretary of the Treasury Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority VlUD 3 0 0 2 b APR J , - ,4 : t;.,: , Honorable W lllla a I . Woodln, S e c re ta ry o f th e ffreaso ry , W ashington, ©. Ot 0 t-'1 My d e a r Mr. S e c r e ta r y > Reference I s made to yomr l e t t e r o f ll&rch 2 2 , JL 933/ * oeived by th e Board on Marsh 27# In whioh you su g g est th a t Fader* a l re s e rv e banks aooept f o r s a fe keeping fnnds In th o hands o f con s e r v a to r s o f n a tio n a l banks ap p o in ted p n rsn an t t o th o p ro v isio n s of fleetlo n 2 0 5 ®f th o Aot of Haroh $ . 1933* th o I n s t m o tio n s r e c e n tly p re sc rib e d by tho Com ptroller o f th o Carr one? fo r c o n se rv a to rs o f n a tio n a l hanks w ith yonr ap p ro v a l p ro fld o f o r th o dopoolt o f fnnds of c o n se rv a to rs under o e rt a l n Berae and c o n d itio n s In accounts w ith F e d s ra l r e s a r v s banks* Tho s e c tio n s o f th o ln s lr u o tlo n s w ith re g a rd to aooounta w ith Fedo r a l re s e rv e banks woro proparod by th e o fflo o of tho C o n t r o lle r o f t h e Currency w ith th e a s s is ta n c e o f o eabers o f th e B oard’s s t a f f and r e p r e s e n ta tiv e s of Fedafltal ro so n re banka and o o n s iS e ra tlo a o f th a t a i n s and c o n d itio n s of tlia sa s a o tlo n s had eosnsnsed p r io r to th o r o o a lp t of your l e t t e r , f h s F e d e ra l Reserve Board lass advised th e F ed eral re s e rv e Banks t h a t i t o o n sld ers i t d e s ir a b le t h a t th ey oooperate I n t h i s m atter by opening and M ain tain in g a o e o m ts f o r Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority H o n o ra b le U l i l lia ia H . * o o d in - M o n n a to n 2 l a ao o o rd u tM i w i t h t h e H r * * t a d oond I t Io n s o f t h i in s t r u c t io n * and th e re I s In e lo e e d h e re w ith f o r y o u r In fo rm a tio n * oopy o f th e B o a rd 's l e t t e r t o th e f e d e r a l re s e rv e hank* on t h l e e u b je o t a co p y o f th e ln e lo e o re t h e r e w it h . te ry t r u l y y o u rs . E u g e n e M e ye r G o ve rn o r. la o lo e u re e , GBV/sad ^ For ATPflOMfc G«. « e y sr..™ ~ 3 Kr. J Mr. James . Mr, Miller, A3? li» «BC5 •**»* A KKl 0 1933 Plesse initial liie copy , if you spprcve and retucB tary*sOrnoe. Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority VlUDSoozfc. -t *■ F o r m 148 b FEDERAL RESERyE ~?0 ( BOARD WASHINGTON April 10, 1933 f 1 P.tt - C h l e ^ ¥j f i j / Your 30 oopiea Coaptroller1** instructions to conservators of national bmki forwarded tonight* McClelland E. M. McCLELLAr fsf v » a ®5 FuILE 2— 9454 « , Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED ■* Authority TELEG RAM ------------------ H l o , FEDERAL RESERVE SYSTEM (LEASED W IRE SERVICE) R E C E IV E D A T W A S H IN G T O N , D . C . I j —784 233gb Chicago April 10 2,55p McClelland Washn Would appr#exslate your obtaining and sending us as soon as possible 30 copies comptrollers pamphlet instructions to conservators of national hanks pett 413p U S GOTKRNUEOT rRINTXNG OFFICE: 16—794 Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority V)MD3oozfc, F o rm 148l> TEL FEDERAL FtftSERVE BOARD W A S H IN G T O N April 3 . 19' Tfortfaiagton - K m w t& City /// ^ / $ i Xour telegram* Instructions to conservators being sailed today< McClelland M . Mc SRC/fsf 1L Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority ttM D aoozfc TELEG RAM FEDERAL RESERVE SYSTEM (LEASED WIRE SERVICE) R E C E IV E D A T W A S H IN G T O N , D . C . lft—794 101f fa Atlanta Ge 1247p Apr 8 _ RECEIVED O m O E OF OOUFSEL g <1933 Pla --- ----- a,m.-2. ^ Morrill NUMBER y ------- ---------------_ Washington Certain banks in conservatorship are asking permission to renew notes pled g e d as security for war loan deposit accounts and held by us as custodian f or Treasury. U nder recently issued instructions to conservators, they are authorized to renew pledged notes with consent of pledgees, collecting interest in all cases and remitting same to pledgees. We do not think that we are authorised to give such consent in respect of notes pledged for war loan deposits and there would be no occasion f o r interest collected on such renewals to be forwarded, nor could we give Treasury credit for interest remitted, except in reduction of deposits. - Please ascertain as soon as possible if Treasury would be willing authorize us Digitized forto FRASER http://fraser.stlouisfed.org/ v. s. cothoohw* wanna*wwci: Federal Reserve Bank of St. Louis to consent to renewals and also as to what disposition 10—794 nsproaucea from the Unclassified / Declassified Holdings of the National Archives d e c la s si f ie d Authority TELEG RAM FEDERAL RESERVE SYSTEM Sheet 2 (LEASED WIRE SERVICE) R E C E IV E D A T W A S H IN G T O N , D . C 111—794 should be made of interest If remitted Bla ck 15 8 pm o. 8. w n u n n r printing omoi: ran Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority M D 3 o o z f a TELEG RAM FEDERAL RESERVE SYSTEM (LEASED WIRE SERVICE) R E C E IV E D A T W A S H IN G T O N , D . C . 140gea KasCity a£l .g^ 18055 Morrill Washn B0 t e l l e r s printed instructions to conservators 25 copies of comptrollers P U. 8. 60VHHNMKNT PRINTING OFFICII: 1933 Worthington 113p 16---794 . C s Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority TELEG RAM FEDERAL RESERVE SYSTEM 4 (LEASED WIRE SERVICE) R E C E IV E D A T W A S H IN G T O N , D . C . 160 gb Sanfrancisco Apl 7 956am B oa rd " l?ashn Your telegram sixth number 1758 paragraph three prohibits borrowing by unlicensed members in those states (California for instance) where laws specifically provide for conservator but would allow borrowing by unlicensed state bank members in states (Washington for instance) where similar restricted performance of banking may be conducted by officers without formality of appointing conservator. Discrimination ! seems to apply to form of management rather than form of banking service. Is this correct. 9 . S. OOTBBKMSMT PRINTING OFFICE: IMS i Calkins 122p D omoaR E6?C&EENEI&VALEnotmsEL Reproduced from the Unclassified / Declassified Holdings of the National Archives DECLASSIFIED T Authority Federal Reserve Board, Washington, D. C. Gentlemen: In connection with the licensing of banks to reopen and our recommendation thereon to the Secretary of the Treasury,we have had a good many problems involving state member banks and the divergent views of the State Banking Commissioners on what constitutes necessary qualifi cations and corrections for such opening. As you are aware, the situation in Michigan is the major one with which we have to deal with respect to state banks, and also the most menacing one. As the representative of the Secretary of the Treasury in recommending to him banks for reopening, I have been in frequent communication with Mr. Douglas, the Assistant Secretary of the Treasury, by telephone and otherwise, and am enclosing copy of a letter which I have sent to him today in which I think you may be interested and on which X should very much appreciate any reactions which you may have from the standpoint of the Federal Reserve Board. This situation, particularly in Michigan, is engaging very much of our attention, and great pressure is being brought to bear upon us from all sources by reason of the menacing situation in that state. I find it difficult sometimes to correlate the views of the Banking Commissioner with those of the Secretary of the Treasury and the Federal Reserve Sfystem, including our own institution as well as the Board at Washington, and I am very desirous of correlating, as far as possible, the activities of the state departments in reopening banks in such a way that they will meet, in general, the qualifications which are being imposed, and properly so, by the Treasury, the Federal Reserve Board, and in line with what is being done by the Comptroller in national banks. We cannot, of course, in will do in the future regarding of these reopened banks, and we commitment in that respect. On any ease make a commitment as to what we the status of Federal reserve membership have steadfastly refused to make any such the other hand we have, of course, been in Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority FEDERAL RESERVE BANK OF CH iCAGO - To: Federal Reserve Board, Washington, D. G. 2 - April 6, 1933. position where we are constantly having to propose to banks the basis of reorganization on which we will be prepared to reecrajnend to the Secretary of the Treasury that a license be issued, always with the statement that the final authority rests with him. Very truly y M S FC ’ederal Reserve Agent Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority tlM DSoozfc. April e, m s . Hon. Jsmes H. Douglas, Assistant Seoretary of tho Treasury, Washington, D. C. Deer Mr. Douglass Referring to our conversation yesterday relative to the situation in Michigan* As I advised you, Mr. Relohert, tho Commissioner of Bankiag, telephoned me yesterday morning with a modification of his plan whioh was, in offoot, that tho proposed preferred stook to bo substituted for doposits ia banks would have ao par vain** By this meeas ho was endeavorlag to meet our objection that tho unacceptable assots In roorgaaisatioa must bo taken out of tho bank's structure, and his suggestion was that thoy might bo sot up at a nominal value, and on tho ether sldo tho proforrod stook having no par value might bo sot up at a similar nominal value. Ho have had a niaabor of oonforonoos horo about this wholo situation in Michigan, and Mr. fleichert telephoned mo again this morning asking our reaction as to his latost amostdod plan* I told him that this smeadmeat did aot, in our opinion, ohango tho essoaee of tho plaaj that asldo from tho proteetloa to depositors which suoh * waiTor afforded, a publlahod statsmoat of tho bank would not bo an honest ono from tho standpoint of tho oonmoa stoekholders, as it would not show the liability ahoad of the oonoa stook to tho proforrod stook) that It did not mako mush dlffereaee whether tho liability was shown mi tho basis of par or a nominal amount, * oortala major portion of It was at loast a contingent liability on tho part of tho oosnoa stoekholders, and that suoh a liability, even if ooatlngont, would, la offoot, sorro as an impairment of tho oapltal stook. I question tho praotloo of having a proforrod stook of no par value followed fcy common stook of a stated par value. I further stated to Mr# Reichert that we were still of the opinion that any blanket plan to opea a large amber of banks at onoe was Impracticable t for instance, that suoh a plan as he proposed would, In numerous oases, let out present stockholders wtio are able to make contributions if called upon to do so. X told him that our understanding of the plan of appointment of conservators Reproduced from the Unclassified / Declassified Holdings of the National Archives DECLASSIFIED Authority . 2 . fo* Hon. Jn«i H. Douglas* Assistant Secretary of tho Treasury, Washington, D. C. April 6, 1955. was that la eaoh oase tho conservator would attempt to reorganise and restore tho hank la accordance with conditions and possibilities existing la hit own oomnunlty • I stated to him that out of our praotleo and that of our own m u wh aro working with tho Reorganisation Department of tho Vatlonal Systen, wo woro proceeding generally upon tho following lines t 1. Is a first requisite, orory offort should ho made to obtain additional oapital from tho stoekholdere# directors# and otou tho offioors of tho institutions, sad othor voluntary contributors prior to tho assessment routo whloh night follow thereafter* llo have had a considerable noasuro of siloooss in opsniag about 50 banks ia this distrlot in tho last 2 wooks by substantial and voluntary oapital oontributlons of this sort, even In oasos whoro It had horotoforo boon said to bo inposslblo to obtain suoh oapital, 2. Only aftor all suoh noaas have boon exhausted, should a waiver of a portion of doposlts bo requested fron tho depositors, and tho oonbinod onouat of oorrootioa thus obtainod fron stookholdors and depositors should bo suffioiont to pul tho baak la an entirely oloaa position* S. Aftor tho establishment of suoh waiver on tho part of dopooitors or oolnoidont with It, any aooossary subsorlptlons to tho oapital stook funds from tho depositors should bo paid by the* out of tho doposlts available In tho rooponod banki this provision to noaa that tho oapital structure would bo la good assots rather than against undesirable assets as proposed in his plan* 4. X suggested further a warning against the issuanee of too nueh preferred stook whloh night be a bar to an eventual reorganisation of the bank or consolidation or merger* 5. The condition of the bank to bo rooponod under those provisions should not only present a oloaa ploture as to the value of its assets, but also a satisfactory liquidity and assets of a type available for borrowing purposes in ease of extraordinary demand. 6. That banks whloh were ismtedlately opened after the noratorlun aro supposed to have retained the eonfidenee of the oousnxnities) that banks opining at this late date and with the knowledge of the publio that substantial oorrootlons had b o m necessary In order to so open must regain the eonfidenee of their ooflnualtles* This would involve, among other things, the question of the memagweirt whloh had allowed the bank to get in suoh condition, while perhaps in competitor banks the bank’s nanagsmeat had been suoh that its affairs allowed It to open at once. We are emphasising particularly at this late date that banks whloh Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority - 3 Ion, <****• *• BougXaa# Saaratary of th# Traasury# £shlagt4a» B* C. April 6, 1993. opaa now must (i?» us reasonable assurance that they oan oontinue as going institutions with tha aoafldeaaa of tha ooassunity* a» wa do not oonceiva that wa should allow hanks to opaa whioh probably result la withdrawals amouuting to liquidations neither do wa oonoeive that wa in tha Federal reserve banks should ba aallad upon to s*ka loans to suah banka whiah were praatlaally for liquidating purposes • It la apparent that unlaas tha opanlng haiikr is sat up la assets aad aaaageaaat in a manner to lasura full oonfidense of tha aosnoitjri thara might ha steady withdrawals frm suah bank to ha deposited la tha eospatltor bank whlah opened originally without erltieian. X as giving you our idaas sosiaahat at length baaausa of your expressed interest• Xa tha praaaat situation thara ara aaw elaaaats aad new fomulaa of solransy lavolvlag tha Treasury Department, tha Federal Reserve Board, tha CoapfcroXlar# aad tha various stata authorities* It eeaas daalrabla that sona sat of principles way ha adoptad whlah wiXl ha aoaaptahXa to thaaa various bodies, aad oaa of our *oat sarlous problens Is to adjust stata haak raorgaalsa~ tions aa relatively tha sane prlaalpXaa whlah tha Comptroller nay ha uslag la tha reorgaaisatioa of aatianaX baaka. As far aa X know, ao dafinlta lastruatloas as to fuadaaaataX prlaalpXaa af reorganlfatloa have ansastad fra* his offisa, hut X thlak tha prlaalpXaa whlah X have outXiaad ara balag pratty gaaaraXXy followed la national haak reorgaalsatioae la this distriet, sosia elasticity having to ha glvaa la Individual aasas. X should Xika vary naah to hava your views on our aoaaaptloaa of thaaa aattars aad whether wa ara at wariaaaa with what you aad tha Goaptroller ara trying to do# la order that wa aay faal that wa ara guiding aot oaXy tha atata aanbar banks, hut tha Baaking Coaslasloners la thalr treatment of nonaaabar baaka aXoag proper lines. X should aXao vary mush appraalata aay suggestions whioh you aay hava frost tha staadpolat of your position aa a licensing authority* Vary truXy yours# IMS PC Fadaral laaarva Agent Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority HUD 3 0 0 2 k '■•V RAM FEDERAL RESERVE B O A R D H WASHINGTON A p r il 6. W 3 / Harrison - Hew York Morris - i>hilad©lphia Fancher - Cleveland Ssfigr \ * Kichiaond Blask - Atlanta lo w s - Boston^ Tran^l / 7 S Y Boafd lias rsplied as follows MoDougal Martin Geery Hamilton Mo&inney Calkins * - Chicago St» U>uis Minneapolis Kansas City Dallas ■.ft* to inqulri s received from a Federal reserve hank with regard to a Stats member bank in the hands ^ f a conservator* (1) 'lore fast that conservator or other Stat© official having similar authority has been appointed for Btate member hank pursu ant to executive order of March 18 does not make it necessary that hank surrender its stock in Federal reserve hank unless and ugtll hank should toe placed in receivership or liquidation or its membership ter minated in manner provided hy Federal Reserve Act. (2) Balanss with Federal reserve hank to oredit of bank in hands of oonssrvator or Stats offioial having similar authority may he withdrawn subject to tha provisions of the Federal %ssrvs Act and the Board*s R gal&tion 13* hat it is assumed that Federal reserve hank will not permit withdrawal I. - _ ^ « U .»~d «. M W _ » of any indebtedness of bank to Federal reserve hank. (5) U ..™. Federal reserve hanks are not authorised to disoomit for or to make advances ^Thanks in hands of conservators or to such conservators, guest ions raised had specific reference only to State member hank in hands of conservator hat conclusions stated are applicable also to national hanks in hands of conservators and to such conservators* In connection with conclusion 4■',;V Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority VlUD 3oozb «m l* 8 b TELEGRAM FEDERAL RESERVE BOARD WASHINGTON A ll Governors - -2 - 80. a abova9 mi appliad to nations* banks* attention is oallad to emotion 402 of instructions of Comptroller of Curraney to conservators of national banksBGard Has also a.&tad in reply to an inquiry of a Fadaral reserve bank that quastion wfcatlier Fadaral reserve bank should axtand oredlt to. unlloanaad Stata member bank wftioh is operating undar Treasury regulation Ho. 27 is one for t&e determination of Fadaral reserve bank in the light of all the oiroumstanees of the easaf and in this connection the Board called attention to interpretation $0 . 12 defimii%* tha extent of bunking functions waioh unlicensed Jtate member basics may oarry on in operating undar Regulation 27 ®«d alio to telegram from iaoretary of Treasury of Maroh 22 ra duties of Federal reserve banks in this connection. ?40RfULfc Reproduced from the Unclassified I Declassified Holdings of the National Archives ~ - TREASURY DEPARTMENT O F F IC E O F T H E U N D E R S E C R E T A R Y To ................ ........ ■ ^o ■ S en io r Legal A ssistan t to th e U n d er S ecretary. DECLASSIFIED Authority VlND3oozfa Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority VlUDSOOZta /3DEBAL HUSfSOTS 3T3TSM - LS/IS8D M B S April 6, 1933 imr.T. ATUM A Ratal April fourth STOP Consldar issua by Foataaatar of monay prdara payabla 1ft foreign countries to aaat bona fida aataring obligation of remitter or to defray foneral espenaas of parent of remitter liTin# ia foreign country per missible radar existing regulations and Sxecutive Order of March tenth* Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority TELEGRAM FEDERAL RESERVE SYSTEM (LEASED WIRE SERVICE) R E C E IV E D A T W A S H IN G T O N , D . C . RECEIVED OFFTOE nr ' E49p April 6 APH 6 Morrill ' *' 1933_ k,m. MUMIfiR Washn On the fourth instant we wired Ballantine assistant secretary as follows. * Do present regulations prohibit issue by Postmasters of money order® payable in foreign countries to meet maturing obligations of remitter or defray funeral expenses of parents of remitter in a foreign country1*. Hare not had reply, can you obtain this information for us# http://fraser.stlouisfed.org/ V. 8. SOVBBNMEKT PUKTBre OFFICE: 1933 Federal Reserve Bank of St. Louis Bell 358pm 16—.704 Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority far approval SOVi WByftFjo Mr. TELEGRAM Mr. James. FEDERAL RESERVE B O A R D WASHINGTON APR \ era*me tars# ‘^fcpMlgPI'*tvampjlumwh»w»ut* j Mr. inin— Totr letter Sterol* 2 2 , jre 53-4* Qalstion 1. See treasury H e g u l a ^ ^ ^ i ^ w issued starch 28. Question 2. Mere fact that conservator or o t h ^ W t 1 veincl ha*la$ similar authority has been appointed for State member bank pursuant to executive order of «arch 18 does not make it neoeesary that hank surrender its etoefc In federal reserve hank unless and until bank should be placed in re ceivership or llfuidation or its membership terminated in maimer provided by federal Reserve Act. Question 3 . Balance with Federal reserve bank to eredit of bahk in hands of conservator or State official having similar authority may be withdrawn subject to the provisions of the federal Beeerve Aot and the Board* s Regulation D, but it is assumed that federal reserve bank will not permit with drawal in an amount which will exceed the attsunt of suoh balance in exoess of any indebtedness of bank to Federal reserve bank* question I* Federal reserve talks are not authorised to discount for or to sake advances to banks in hands of conservators or to each conservators, question 5* See Treasury Regulation 80* 30. enaction 7 . Limit on withdrawals prescribed by Regulation 2? is five per cent. Interpretation no* 12 defines extent of banking functions which un licensed state member bank may carry on in operating under Regulation 80. 27* See also telegram from Secretary of Treasury of Waroh 22 re duties of federal reserve banks in this oonneotion. Question whether federal reserve bank shoild extend credit to unlicensed State member bank shleti is operating under Begu~ lation So. 27 is one for determination of federal reserve bank in the light of all the circumstances of the case. Question 4 and Question 8 answered In Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority U K D aoozfe, Si C O P Y TELEGRAM. Federal Ressr've Board Washington \.Anr* April 4, 1933. JOHNS - ATLANTA. lour letter March 29 regarding proposed rsnevval^jaf_ to First National Bank of Fort Myers, Florida. Action by Fed eral Reserve Board not required ypon advances made inia?qpfd^nce -'With section 10(b) of Federal Reserve Act as amended by Act of March 9, 1933. See our Trans, l6ll. In view ..of status of bank ... -rr~ ..■immmnwnwn in hands of conservator and pending determination of question whether it will be liquidated or reorganized unrestricted basis, the question naturally arises whether obli gations of the bank should be reve wed or should be carried past due. This matter was discussed at conference here on March 27 and 28, which your counsel, Mr. Parker, attended, and it is sug gested that you consult with him with reference to this matter. MORRILL GBV sad __ ______ APPP__ __ AT EXECUTIVE COMMITTEE MEETING APE 4 1933. Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority i F orm M sb TELEGRAM A FEDERAL RESERV E BOARD WASHINGTON APR T0Un**B<>et0n MoDougal- Harrleon-Bew fork M&rtia-St. Louia Sorria-Pblladalpbia Oaary-Miimaapolia flaa©liar~01aTaland Hamilton-Kaoeaa City Saay-Biohm ond KaKlaaay-Dailaa Blaak-Atlaata Calklna-San PTaaalaoo Trana. So. M W * / JoA Stafarriaf Board*a lattar of April 1 lnatraatlona to oonaarvatora of aatisaal toax&s hava baaa approval toy Ooaptrollar of Otsrraxiay and Saoratary of fraaaary aad it ia andaratood tfcat Ooaptrollar*a offlaa will mix you ooaplata ooplaa of laatruotlftaa aa approvad aa aoon aa tHay ©an ba printad. laatruationa aa approvad oontala aao~ tlona ralatin? to Bank'a Old Raaarva Aaooa&t, Conaanratara* Spaalal Aooonitt, Conaanratora» Oanaral Aaooaat, Conaarvatora* Dapoaltary Aaaoant aad Aaaiataata to Ooaaarvatora in tba fora la whioh tfeoaa aaotlo&a vara lnoloat d witfc Board1a lattar of April lat» 1 $$$$* M orrill V* :"f 1' Ap;1 * *' OBV/ofno r «./ IM *r i 1\%'<*< Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority L± April 3, 1933 Chicago, 111. St. Louie, Mo, Minneapolis, Minn. Kansas City, Mo. Dallas, Tax. San Francisco, Calif* Boston, Mass. New York, N. Y* Philadelphia, Pa. Cleveland, Ohio. Biob&ond, Va. Atlanta, Ga. Menfcer baiiks which have been granted Federal licenses to reopen are not permitted to take advantage of any State Stabilization Act providing for limitation of withdrawals or otherwise to operate on restricted basis STOP You are authorized and directed to advise any member bank which has been granted a license to reopen that unless it reopens to the full extent permitted by such license it will be necessary for me to revoke its license STOP If it fails to reopen to the full extent permitted by its license after being thus advised by you, you are authorized and directed to revoke the license heretofore granted to it STOP Regulation thirty covers cases where conservators or other appropriate officials have taken possession and control of bahk. WOODIN {Initialed} A. A. B. J. H. D. EMERGENCY BANKING ACT Private tin* JTCifht Reproduced from the Unclassified / Declassified Holdings of the National Archives dec la s si f ie d * -l4 Authority JSBwnnkWOBl *** WWw JKMfK m m rim * Fliliadoiphl* B m rim * * Q l» w *X m & B l M k * Atlanta HMDaoozt. lu rU ft - 0t* M i thufity <* ,54lKfisn|wJki® H e l t o n • Stoat*** City fifclft<MM*y «» OftDtitt* » /rmoclaoo over commercial wires It In **«®*#to*l that pipM^t of M I X # for to&eftron* **at/lsjr SlUttl ipowm hhi *aak6 an repre*«r.tat1*o* of aoorwtory of f r m m r y In ***MOOtt*fli O&ttl TOOOWt tMnflt&SX OMMFjgafeOy INI $ OfOr|MM*Mlll$$ Jloototofe l(jf ___ .._..,.. . -■■: ■„... ' -".'~S'''V ■•'■' •■’■• ' • TwNBinuy XJojMfcrtiaoftt a* to *h®tb#r, nsnt to what axtaafc, i t w ill Y*l»totr*o V ilia hi wTPwwdt fa* fiot* ont*<of«»iiookat iHBtimd VH y w iP (*w ^ asoaii»o* WPW*s^'*rHP #fWwlMi •» OFWPBIUWiWP |M9 > ab ^OhW FWP «lth «9«ei«l aonrie#* rwa«j*f*d for frm m ry 8*m rtm at $ tiring ora#;re«®«y* Ha£l*llasi&» Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority 7V 3 P» 5 '5 H ip: T o w c * lottos H*rriapn - Wtm IMwi|r • Bidunsd Blrnfc * ADMk Tom fcorrit - M k d i l p M * funobcr • OliH&Aiid J iL L mZ 2 Vmpmw KftBongftl - Ctiloftfo m m t • ii* M i Ckwry - vinn**ioIl* i M l l l o f t - K am m 01 %9 U d L iw m y • SiiUt O tlklfti • iiM ri»M lifl9 h*ld outer dismal Dmt* awtef tele whidhh*» sot teta U a n n l to op«i l«r t N nl ai y of TrwuKury, iioulA !• o » m « d m « | d l t m o U d M i l s oft telMMi lhMl, for* Jllt pmm** of ll^uldatlM, «fa»a and until «&<£* teak has b « « pl*o»4 la pa|*r should, *« la tba p*ftt t» laolud** la *&alaa »Q00mai ataw* VwiiE,* of font 3fc. Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority VlMDaoozCp April 3, 1933, b i l l - aoiten Batrrltt* - Sa« fork im y - 0*ofjr - tttnaoopoli* Hladte * *%iont* Kerri • * Fhllftdolphla ftmdhor - ;lowland U & to x & l m Ohlcfi«o Martin - it. Uroio f'aniltof* * Xiimmmi Citjr SieKiimey - Sfclloo tKAiiS I/ ^ 7 . ri**Mi w i n BowMi *• of MMfe 3** for m m h *r fciako m% Ueo»«o4 lo eptft ) a lk l n « * lass fii»al«i» Of j»ap«r hoi* uador W am m Uaf of f f m m t y ba% *r w hiA fe*«onot iM M tt plm w& i* proooooof Hiotdotloai, as fbllooot lodioom ifttod •UdlU ?«*»ort ooio Mitef * < tv< a ito o ovuuUr **«%ioa 13, o e »d o¥*i% ostdadtonooo «*£•* M a U m I M * «odotM m * P b m m vivo *1*®«m«i»r of «&*i teaki lodobtod to rooef*o teako« isovoii 31* Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority Federal Eeserre Sfcrataa - Leased fir# April X# 1933 Dunlap Minneapolis Bets! ite^Jwsnlgr el^tSijSEGP Treasury advises tmlieensed member teak cannot issue drafts la payment «f Iftmd ebarfss Initialed by: JfC-hKb (m e DWB JGH JHD CM JTC firm psar w i t redaction Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED f~ Authority M W )3 0 0 2 b (COPT) M«nnpoli« liar 28 436 p Board «•» lh>Jt’ %t PIease advise i f unlicensed banks can issu e draft* in payment of fiv e per cent r e d i t i o n fund charge a. national Bank redonation agsooy apparently requesting payment ftrom them. Draft# not being paid by correspondent basics. Dunlop 610 p Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority FEDERAL RESERVE BOARD WASHINGTON ADDRESS OFFICIAL. CORRESPONDENCE TO THE FEDERAL. RESERVE BOARD X-7598 April 1, 1933. SUBJECT: Regulations of Comptroller of the Currency re Conservators, $ 0 ® Dear Sir: The Comptroller of the Currency has prepared instructions to be issued to conservators of national banks appointed pursuant to the provisions of the National Bank Conservation Act (Title II of the Act of March 9, 1953), and there are inclosed herewith copies of the “ I y * ■/<• sections relating to Bank’s Old Reserve Account, ConservatorTs /. ; Special .Accountr Conservator's General Account, Conservator’s Deposit ary Account, and Assistants to Conservators, These sections were pre pared by the Comptroller's office with the assistance of members of the Board's staff and the following representatives of Federal reserve banks: Mr. John S. Sinclair, Counsel to the Federal Reserve Bank of Philadelphia Mr. H. F. Strater, Cashier of the Federal Reserve Bcnk of Cleveland Mr, J.S.Walden, Jr., Controller of the Federal Reserve Bank of Richmond Mr. Robert S. Parker, Counsel to the Federal Reserve Bank of Atlanta Mr. Charles B.Dunn, of Counsel to the Federal Reserve Bank of Chicago. Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority V lU D Soozb ■s' X-7398 - 2 - The sections of the instructions inclosed herewith have been approved by the Comptroller of the Currency; but it is neces sary that the instructions be approved both by the Comptroller of the Currency and by the Secretary of the Treasury, out of the city and will not return until Monday. The latter is We will advise you promptly by wire as soon as the complete instructions have been " finally approved: and the Comptroller of the Currency will furnish ““Trrimi, m u _ _ ^you with complete copies of these instructions and request you to handle accounts for conservators of national banks in accordance with the terms and conditions thereof. The Board considers it desirable that the Federal reserve banks cooperate in this matter by opening and maintaining accounts for conservators in accordance with the terms and conditions of the sections inclosed herewith. Very truly yours, Chester Morrill, Secretary, Inclosure TO GOVERNORS OF ALL FEDERAL RESERVE BAMS. - unclassified / Declassified Holdings of the N a t i o ^ h ^ T DECLASSIFIED Authority DMD30026, (Circular letter to Governors of all Itoderal Bf»*erve Banka) SUBJ2CT: Regulations of Comptroller of the Currency re Conservators* Saar Sir: Tha Coaptaoller of tha Currency haa prepared Instructions to be Issued to conservatora of oat tonal banks appointed pursuant to tha provis&ons of the XatlonaX Bank Conservation Act (Title II of the let of March 9, 1933)* and there are inclosed herewith copies of the sections relating to Bank*a Old Reserve Account, Conser vator's Special Account, Conservator*s General Account, Conee*vator’s Dsposltary Account, and Assistants to Conservators* These sections were prepared by the Comptroller9s office with the assistance of Members of the Board's staff and the following repre sentatives of federal reserve bankas Mr. John S. Sinclair, Counsel to the federal Reserve Bank of Philadelphia Mr. 9. 7. Strater, Mr. J.3. Walden, Cashier of the federal Bewrve Bank of Cleveland Jr,9 Controller of the Tsderal fteeerv* Bank of Richmond Mr. Robert 3. Parker, Counsel to the fsderal Reserve Bank of Atlanta Mr. Charles B. Sana,of Counsel to the fsderal Reserve Bank of Chicago. Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority NMD 3 o o z fe Circular lottor to Oovoraora ©f all Baaka - 2 fko aoctioaa of tho in*tructions iaoloood horowith havo boon approvod Igr tho Goaptrollor of tho Currancy; bat It It aacao* w y that tho laatraotlona bo appro rod both by tho Coaptroller of tho Omrroaoy aad tgr tho Saoratary of tho Troaaury* fho Xattor io out of tho city aad will aot rotura until Monday. to will advlao you promptly ty wlro ao oooa aa tho oomploto iaatruotiona haro booa finally approvods aad tho Gotvptxollor of tho Corroaoy will furaiah , you with oonpXoto ooploa of thoaa instructions aad roqpaat you to haadla accounts for oonsarvators of aatloaaX banks ia aooordaaoo with tho t«ma aad ooadltioaa thoroof* fho Board ooaaidora It daatrabXo that tho Hadoral roaorro baaka eooporato ia thio awttor by opoaii^ aad nalatalalim aooouata for ooaaorvatora la aooordaaoo with tho toraa aad ooadltioaa of tho aootloaa iacloasd harovith. fory truly yours, Ohoatar IKorrllXi Soorotary. Indosur# G B V /sad APR Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED r Authority V lH P a c o z t, . / V V (X - 7396 CERTAIN SECTIONS OF INSTRUCTIONS OF THE COMPTROLLER OF THE CURRENCY TO CONSERVATORS OF NATIONAL BANKS* 402 Bank's Old Reserve Account. - The conservator should make no remittances or transfers for credit to bank’s old reserve account and should draw no drafts whatever against such old account. The Federal reserve bank may be requested to make transfers to the conservator’s special account, de-scribed below, of funds which have been credited to the bank’s old reserve account but which the conservator has definitely determined to represent segregated deposits and which should have been credited to a special account in the Federal reserve bank. Where the bank in the hands of a conservator is not indebted to the- Federal re serve bank or where the old reserve balance exceeds the amount of the indebtedness to the Federal reserve bank, the Federal reserve N bank may be requested to make transfers of -such excess amount to the conservator’s general account, described belpw, with the authoriza* tion of the Comptroller of the Currency. These transfers to the conservator’s special account or general account may not be made by drafts or checks drawn by the conservator, but must be made with the consent of the Federal reserve bank under special arrangements agreed to by it» FDWfloQMinapnra DECLASSIFIED Authority tlH P ao c g fe eyrrswP7vT>yw- «• 2 **• X-7396 403 Conservator’s Special Account, If the conservator has been authorised to accept new deposits which are not subject to any limitation as to payment or withdrawal, to be segregated as provided in section 206 of the Bank Conservation Act, the 'funds received pursuant to such authority nay be deposited in the Federal reserve bank of the district in which such bank is ^ located in a special account in the name of the conservator which account may be styled substantially as follows: H ____ ________________________ Conservator's Special Account (Bank and address) • (Conservator) ” The conservator may deposit with the Federal reserve bank in this account cash, Government checks, checks and other cash items which the Federal reserve bank can collect at par. The Federal reserve bank may receive and handle all cash items deposited in this account subject to the terms and conditions of Regulation J of the Federal Reserve Board and of such bankys current circular regarding the collection of cash items.. The Federal reserve bank will not be expected to give credit for such checks and other cash items in accordance with its published time schedules which are#used in giving credit to member banks, Jbut may increase the time of credit availability in such time schedules by a number of days estimated to be suffi- Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority X-7596 - 3cient to obtain mail advice of non-paynent of such items. The conservator, however, should bear in mind that all such items are received by the Federal reserve bunk subject to final pay ment and that withdrawals of deposits represented by such checks and other cash items should not be permitted by the conservator until sufficient tioe has elapsed to permit of the collection of .'Such items in accordance with the foregoing provisions. The con servator may be held accountable for any loss resulting from the payment of such deposits in violation of these instructions. The conservator may accept maturing notes, drafts, Govern ment obligations and other non-cash items for collection and fox credit when collected to the special segregated accounts of deposit ors, The Federal reserve bank may receive and handle such non-cash items for collection and credit on its books to the conservator’s special account, in accordance with its non-cash collection cir cular* The conservator will be advised of sueh credit in each instance and should not permit any withdrawals of deposits repre sented by such non-cash items until he has received such advice* All deposits by the conservator in the conservator’s special account at the Federal reserve bank and all non-cash items sent to the Jederal reserve bank for collection and credit of the conservator’s special account should be marked so as to indicate clearly to the Federal reserve bank that such items are for the Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority X-7396 - 4 credit of such special accounts* All items sent to the Federal reserve hank by the conser vator for credit to this account, whether cash items or non-cash items, should he indorsed,. "Pay to the Order of the Federal Reserve Bank of^___ ____________ for credit to Conservator’s special account (Bank and address) B y _____________________ __________ (Conservator) All prior indorsements guaranteed.” The conservator may draw drafts against this special account at the Federal reserve hank (a) in payment of chocks or drafts drawn by depositors against such special segregated deposits when presented to him by other banking institutions; (b) in order to provide himself with cash with which to pay such deposits;. or (c) to provide de positors in such segregated accounts with drafts for exchange purposes. All drafts against such account should be signed by the con servator and otherwise identified in such manner as to show clear ly the account to which they should be charged. If the bank Vtrhich is' in conservatorship accepted new de posits withdrawable without restriction pursuant to agreement or under State legislation, gubernatorial proclamation or Presidential proclamation and opened and maintained a special account with the Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority y)MD S f lo z k - 5 - X-7396 Federal reserve "bank, representing such new deposits, the Federal reserve hank should be requested to transfer the balance now carried in such special account to the Conservators Special Account at the Federal reserve bank. 404. Conservators General Account. Funds received by the conservator in connection with M s conservatorship from any source other than from special segregated "deposits referred to above may be deposited in the Federal reserve bank of the district in which such bank is located in a general account in the name of the conservator which account may be styled substantially as follows: 11 Conservator’s General Account (Bank and address) (Conservator) ,f Any collections made by the conservator upon the unpledged assets of the bank while in conservatorship may be deposited in this general account. The conservator may deposit with the Federal reserve bank in this account cash, Government checks, checks and other cash items which the Federal reserve bank can collect at par. The Federal reserve bank may receive and handle all cash items deposited in this account subject to the terms and conditions of Regulation J of the Federal Reserve Board and of such bank’s current circular regarding the collection of cash items. Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority - 6- 3002b X-7396 The Federal reserve "bank will not be expected to give credit for such checks and other cash items in accordance with its published time schedules which are used in giving credit to member banks, but may increase the time of credit availability in such time schedules by a number of days estimated to be sufficient to obtain mail advice of non-payment of such items* The conservator, however, should „ bear in mind that all such items are received by the Federal reserve bank subject to final payment. The conservator may deposit in such general account maturing notes, drafts, Government obligations and other non-cash items for collection and for credit when collected. The Federal reserve bank may receive and handle such non-cash items for collection and credit on its books to the conservator*s general account, in accordance with its non-cash collection circular, and the conservator will be advised of such credit in each instance. All deposits by the conservator in the Conservator*s Gen eral Account at the Federal reserve bank and all non-cash items sent to the Federal reserve bank for collection and credit of the Con servator* s General Account should be marked so as to indicate clear ly to the Federal reserve bank that such items are for the credit of such general account. All items sent to the FSderal reserve bank by the conser vator for credit to this account, 7/he ther cash items or non-cash items, Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority V)UD3 0 0 2 6 , - 7 - X-7396 should be indorsed, ,fPay to the Order of the Federal Reserve Bank of _______________ for credit to Conservator1s General Account (Bank and address) By __ __________________ (Conservator) All prior indorsements guaranteed,n The conservator may withdraw funds from this general account only when and as authorized by the Comptroller of the Currency. All drafts against such account should be signed by the con servator and otherwise identified in such manner as to show clearly the account to which they should be charged. Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority YlUD3oQ2fe, - 8— 405. X—7396 Conservator’s De-positary Account.. In addition to a Special Account and General Account maintained with the Federal reserve bank, the conservator may open an account with a national or State member bank, licensed to reopen by the Secretary of the Treasury, which account is referred to herein as the ''Conservator’s De positary Account,” This account may be utilized for the following purposes: (a) As an account in which to maintain funds for current operating purposes, including salaries, supplies, and other items of expense.. (b) For the collection, for the account and at the instance of deposit ors,. of checks and other cash items drawn on nonpar banks which will not be accepted by the Federal reserve bank as well as any noncash items which the Federal reserve bank will not handle... Such collections will be undertaken by the depositary at the instance of the conservator, but for the account and as agent of the owners or holders of such items. When and as the conservator may receive actual payment of such items, the proceeds may,, with the acquiescence or upon the direction of the depositors, be placed in special segregated accounts to the credit of the depositors and then transferred to the conservator’s special account with the Federal reserve bank. (c) For deposit therein of collections effected by the conservator from assets of the bank and for the deposit of cash and of checks or other items belonging to the bank. (d) For collection, at the instance and for the account of others, of checks or other items, whether cash or noncash, left or placed with the conservator for that purpose. The conservator shall make transfers from time to time from the depositary account to the conservator’s general account with the Federal re serve bank described on page ____ t o f these instructions, of such excess of collected funds as will not be needed in this account for current operating purposes. Withdrawals from this account may be made by the conservator for any purpose authorized herein. Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority VlKDaoozfe X-7396 Chapter Y ASSISTANTS TO CONSERVATORS. The Conservator may appoint a competent person or persons to serve as his assistant or assistants. An assistant to a con servator shall halve the right to sign in the name and on "behalf of the conservator checks drawn on any account mentioned herein, ^to the extent and under the circumstances herein authorized, as well as to perform such other purely ministerial duties and functions of a routine nature and not involving the exercise of discretion, as the conservator may from time to time delegate and authorize. The name »f any such assistant shall upon appointment be promptly certified to the Comptroller of the Currency and to the Federal reserve bank and the conservator*s depositary bank. When notifying the Federal reserve bank and depositary bank of the appointment of any such assistant, the conservator shall furnish them respectively with a specimen signature of such assistant. Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority X-73&6 CERTAIN SECTIONS OF INSTRUCTIONS OF iBE COMPTROLLER OF THE CURRENCY TO CONSERVATORS OF NATIONAL BANKS. 356 Renewal of Bills Receivable Conservators are authorized, when, in their discretion, they may deem it advisable, to rener or extend maturing paper held unpledged by the banks in their charge fcr not exceeding thirty days from and after maturity. In cases of s >eh renewal or extension, care should be exercised to see that no pa ties liable thereon are discharged. Makers and indorsers should sj^n and indorse the renewal notes and tho same should otherwise be of tbs tenor of the original obligations except as to dates and maturit ie and extensions (a) and (b) and except also in the case,of renewals that princ ,pal of such obligations may be reduced that additional collateral or security may be obtained. No renewal or extension can be granted without the payment of interest due on the renewed lor extended obligation and/or prepaid upon a discount basis on such Ibligation; but no collateral is to be released except with the consett of this office. Notes or other evidepces of debt pledged for the payment of the bankrs obligations may, wJen sent to conservators in trust for the purpose, be renewed or extended upon such terms and under such con ditions as are hereinbefore set out in respect of unpledged notes and upon such further terms and clbnditions not inconsistent herewith as may be agreed upon by the pladgee. Before renewing or extending any such pledge note, conservators must secure the written consent of the pledgee to such renewal or extension, unless such consent is given at the time the notes are forwamed to conservators for the purpose of re- Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority V)UD3oozfa X-7396 newal or extension ip. whole or iii part or for collection, Conservai/ors are authorized and empowered to forv/ard renewal notes and extended notes to the pledgees entitled thereto, and the in dorsement by the c Dnservator of such notes made in the name and on be half of the pledgJr bank shall bind the latter and its assets to the same extent as, abt to no greater extent than, the pledgor bank was bound on and by The original obligation. Payments made on account of principal and/o/ interest on pledged paper should be forwarded to the pledgees entitljsd thereto^ 40S Bank's Old Reserve Account^ The conservator should make no remittances or transfers for credit to bank’s old reserve account and should draw no drafts whatever against such old account. The Federal reserve bank may be requested to make transfers to the conservator’s special account, de scribed below, of funds which have been credited to the bank’s old reserve account but which the conservator has definitely determined to represent segregated deposits and which should have been credited to a special account in the Federal reserve bank. V/liere the bank in the hands of a conservator is not indebted to the Federal re serve bank or where the old reserve balance exceeds the amount of the indebtedness to the Federal reserve bank, the Federal reserve bank may be requested to make transfers of such excess amount to the conservator’s general account, described below, with the authoriza tion of the Comptroller of the Currency* These transfers to the conservator’s special account or general account may not be made by drafts or checks drawn by the conservator, but must be made with the consent of the Federal reserve bank under special arrangements agreed to by it. Reproduced from the Unclassified I Declassified H oldings of the National Archives ~~ ■f DECLASSIFIED Authority t)UD 3oozfe, X-7396 ^ 403 Conservator’s Special Account. If the conservator has boen authorized to accept new deposits which are not subject to any 3-imitation as to payment or withdrawal, to be segregated as provided in section 206 of the Bank Conservation Act, the funds received pursuant to such authority may be deposited in the Federal reserve bank of the district in which such bank is located in a special account in the name of the conservator which account may be styled substantially as follows: ir __ ___ _________ _________ Conservator’s Special Account (Bank and address) (Conservator) M The conservator may deposit with the Federal reserve bank in this account cash, Government checks, checks end other cash items which the Federal reserve bank can collect at par. The Federal reserve bank may receive and handle all cash items deposited in this account subject to the terms and conditions of Regulation J of the Federal Reserve Board and of such bank’s current circular regarding the collection of cash items. The Federal reserve bank will not be expected to give credit for such checks and other cash items in accordance with its published time schedules which are used in giving credit to member banks, but may increase the tine of credit availability in such time schedules by a number of days estimated to be suffi- Reproduced from the Unclassified I Declassified H oldings of the National Archives DECLASSIFIED Authority VlKD 3 0 0 2 b <7 v'! X-7596 - M - cient to obtain mail advice of non-payment of such items. The conservator, however, should bear in mind that all such items are received by the Federal reserve bank subject to final pay ment and that withdrawals of deposits represented by such checks and other cash items should not be permitted by the conservator until sufficient tine has elapsed to permit of the collection of s\fch items in accordance with the foregoing provisions. The con servator may be held accountable for any loss resulting from the payment of such deposits in violation of these instructions. The conservator may aceept maturing notes, drafts, Govern ment obligations and other non-cash items for collection and for credit when collected to the special segregated accounts of deposit ors, The Federal reserve bank may receive and handle such non-cash items for collection and credit on its books to the conservator’s special account, in accordance with its non-cash collection cir cular. The conservator will be advised of such credit in each instance and should not permit any withdrawals of deposits repre sented by such non-cash items until he has received such advice. All deposits by the conservator in the conservator’s special account at the Federal reserve bank and all non-cash items sent to the lederal reserve bank for collection and credit of the conservator’s special account should be marked so as to indicate clearly to the Federal reserve bank that such items are for the Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority U M D 3oozb X-7396 - J f - credit of such spocial accounts. All items sent to the federal reserve bank by the conser vator for credit to this account, whether cash items or non-cash items, shpuld be indorsed, "Pay to the Order of the Federal Reserve Bank of _____ ________ for credit to Conservator’s special account (Bank and address) B y ____________________ __________ (Conservator) All prior indorsements guaranteed.” The conservator may draw drafts against this special account' at the Federal reserve bank (a) in payment of chocks or drafts drawn by depositors against such spocial segregated deposits when presented to him by other banking institutions; (b) in order to provide himself J?• with cash with which to pay such deposit-slw^ or (c) to provide de positors in such segregated accounts with drafts for exchange pur poses. All drafts against such account should be signed by the con servator and otherwise identified in such manner as to show clear ly the account to which they should be charged. If the bank Y/hich is in conservatorship accepted new de posits withdrawable without restriction pursuant to agreement or under State legislation, gubernatorial proclamation or Presidential proclamation and opened and maintained a special account with the Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority M D a o o z fe Vi -/ - X-7396 Federal reserve "bank, representing such new deposits, the Federal reserve bank should be requested to transfer the balance now carried in such special account to the Conservator’s Special Account at the Federal reserve bank. 404. Conservator’s General Account. Funds received by the conservator in connection with M e conservatorship from any source other than from special segregated deposits referred to above may be deposited in the Federal reserve bank of the district in which such bank is located in a general account in the name of the conservator which account may be styled substantially as follows: ” _______________________ Conservator’s General Account (Bank and address) (Conservator) " Any collections made by the conservator upon the unpledged assets of the bank while in conservatorship may be deposited in this general account. The conservator may deposit with the Federal reserve bank in this account cash, Government checks, checks and other cash items which the Federal reserve bank can collect at par. The Federal reserve bank may receive and handle all cash items deposited in this account subject to the terms and conditions of Regulation J of the Federal Reserve Board and of such bank’s current circular regarding the collection of cash items. Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority YlNDaoozfe, i - X-7396 The Federal reserve tank will not be expected to give credit for such checks and other cash items in accordance with its published time schedules which are used in giving credit to member banks, but may increase the time of credit availability in such time schedules by a number of days estimated to be sufficient to obtain mail ad vice of non-payment of such items. The conservator, however, should bear in mind that all such items are received by the Federal reserve bank subject to final payment. The conservator may deposit in such general accoimt maturing notes, drafts, Government obligations and other non-cash items for collection and for credit when collected. The Federal reserve bank may receive and handle such non-cash items for collection and credit on its books to the conservators general account, in accordance with its non-cash collection circular, and the conservator will be advised of such credit in each instance. All deposits by the conservator in the Conservator’s Gen eral Account at the Federal reserve bank and all non-cash items sent to the Federal reserve bank for collection and credit of the Con servators General Account should be marked so as to indicate clear ly to the Federal reserve bank that such items are for the credit of such general account. All items sent to the Federal reserve bank by the conser vator for credit to this account, whether cash items or non-cash items, Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED r Authority tlM D 3oozfc -Jf- X-7396 should he indorsed, "Pay to the Order of the Federal Keserve Bank of _____________ „ for credit to Conservators General Account (Bank and address) B y __________________________ (Conservator) All prior indorsements guaranteed.n The conservator may withdraw funds from this general account only when and as authorized by the Comptroller of the Currency. A H drafts against such account should he signed hy the con servator and otherwise identified in such manner as to show clearly the account to which they should he charged. Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority VlKD Soozfa - 0 405. X-7396 Conservator’s De-positafry Account. In addition to a Special Account and General Acco-unt maintained with the Federal reserve bank, the conservator may open an account with a national or State member bank, licensed to reopen by the Secretary of the Treasury, which account is referred to herein as the nConserva,tor’s De positary Acrcount.fl This account may be utilized for the following purposes: (a) As an account in which to maintain funds for current operating purposes, including salaries, supplies, and other items of expense. (b) For the collection, for the account and at the instance of deposit ors, of checks and other cash items drawn on nonpar banks which will not be accepted by the Federal reserve bank as well as any non cash items which the Federal reserve bank will not handle. Such collections will be undertaken by the depositary at the instance of the conservator, but for the account and as agent of the owners or holders of such items. When and as the conservator may receive actual payment of such items, the proceeds may, with the acquiescence or upon the direction of the depositors, be placed in special segregated accounts to the credit of the depositors and then transferred to the conservator’s special account with the Federal reserve bank. (c) For deposit therein of collections effected by the conservator from assets of the bank and for the deposit of cash and of checks or other items belonging to the bank. (d) For collection, at the instance and for the account of others, of checks or other items, whether cash or noncash, left or placed Y/ith the conservator for that purpose. The conservator shall make transfers from time to time from the depositary account to the conservator’s general account with the Federal re serve bank described on page ____ of these instructions, of such excess of collected funds as will not be needed in this account for current operating purposes. Withdrawals from this account may be made by the conservator for any purpose authorized herein. Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority VlMDaoozfa X-7396 Chapter V ASSISTANTS TO CONSERVATORS. The Conservator may appoint a competent person or persons to serve as his assistant or assistants. An assistant to a con servator shall have the right to sign in the name and on "behalf \ of the conservator checks drawn on any account mentioned herein, ^ to the extent and under the circumstances herein authorized, as well as to perform such other purely ministerial duties and functions of a routine nature and not involving the exercise of discretion, as the conservator may from time to time delegate and authorize. The name of any such assistant shall upon appointment be promptly certified to the Comptroller of the Currency and to the Federal reserve hank and the conservators depositary hank. When notifying the Federal reserve bank and depositary bank of the appointment of any such assistant, the conservator shall furnish them respectively with a specimen signature of such assistant. Reproduced from the Unclassified I Declassified Holdings of the National Archives DECLASSIFIED Authority CERTAIN SECTIONS OF INSTRUCTIONS OF THE CONTROLLER OF THE CURRENCY TO CONSERVATORS OF Na TI L BANKS. / 3 4 £ Renewal o f B i l l s R e so lva ble * Com eenrators a re a u th o r is e d , when, i n t h e i r d i s c r e t i o n , th e y m y doom i t a d v is a b le , t o renoo o r ex te nd s tu r ln * ; paper h e ld x m » pledged by the banks i n t h e i r eh*rge f o r n o t excee ding t h i r t y day* t r a m and a f t e r m a tu rity * la « m s o f such re n e w a l o r * ? te n s i< m , oaro sh o u ld bs < -# r o is e d t o soo t h a t n o p a r t ie s l i a b l e th e re o n aro disch a rge d * Rakers and in d o rs o rs s h o u ld * i g » sod in d o rs s the renew* e l n o te s and th o samo sh o u ld o th e rw is e ho o f the te n o r o f th e o r i g i n a l o b lig a t io n s exoe pt as t o d atos m d a t u r i t l e s &nd e>. oept a la o i n th o oaso o f re n e rc d s and e x te n s io n s ( a ) t h a t p r i n c i p a l o f e w h o b lig a t io n s ■ay bo re du ce d and ( b ) t h a t a d d it io n a l e O U a t e r a l o r s e c u r i t y m y |g£ obt&ined* ho re ne w al o r « endion oan bo g ra n te d w ith ou t the pay e n t o f i n t r o o t duo on th o renewed o r o. tojoedod o b li g a t i o n a n d /or prep%|g£ upon s d is c o u n t b a s is on suoh o b li g a t i o n ! bu t no c o l l a t o r * ! is t o i * re le a s e d #3coopt w i t h th o con sen t o f t h is o ff ic e * hotos o r o rh r e vid e n ce s o f d«?bt pledget f o r th e payraent o f th o b «n k fs o b lig a t io n s m y * when s e n t t o eor<.sonrators i n t r u s t f o r th o p u rp o s e , bo ronowod o r extended upon suah ton&s &nd under ouch son* d i t i o n s a a a re ho ro r b e o r © s e t out i n re a p c t o f u n p le d g d n o to s and upon auoh fu rtls o r tersss and c o n d itio n s n o t in c o n s is t e n t here^ i U i as m y bo agreed upon by the p le d g e o . B e fo re re n e w in g o r e x te n d in g any such pledgee n o t e , c o n s e rv a to rs ...;u*t seoure th© w r i t t e n consent of the ple dgee to such renew al o r ^ t e n s i o n , u n le s s such consent la g iv o f e if t Reproduced from the Unclassified I Declassified Holdings of the National Archives ~ f DECLASSIFIED Authority the time the notes ere forwarded t o oe&senmtors fo r the purpose o f re* / newml or • tension in whole or in jmrt or fo r ool lection * Conservators ere authorised end e^powere^'to forward renewal notes end erfcexided. notes to the pledgeee e n title d thereto* end the in* d rsement ty the conservator o f suoh notes in the name and on he* h a lf o f the pledger bank sh a ll hind the ^ t t e r #nd i t s assets t o the sens extent as, hut t o no greater e teaft than* the pledger bank wee bound on an by the origin a l obligation* P ayou ts ^mde on account o f p rin cipal and/or in terest on pied@/d paper should be forwarde pledgees e n title d thereto* to the / 4 $% Reproduced from the Unclassified I Declassified Holdings o f the National Archives DECLASSIFIED > Authority nm > a o o z b t-f j I./ >- Ptederal Reserve System - laaaod W tr# A p ril 1# . 1933 Dunlop M in n e a p o lis H o t e l M arch tw e n ty © i$ it h 3T0SP T r e a s u ry a d v is e e u n lic e n s e d im m b & r bank oannot ia au e rtra fta I n payment o f f i v e p e r o a n t redeirf>tion fu nd chargee HORHtlX J T C -h k b (TL- ¥ ■