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953 A meeting of the Federal Reserve Board was held in Washington on April 19, 1935, at 11:30 a. m. PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Eccles, Governor Thomas, Vice Governor Hamlin Miller James Szymczak Mr. Morrill, Secretary Mr. Bethea, Assistant Secretary Mr. Carpenter, Assistant Secretary. The minutes of the meetings of the Federal Reserve Board held on Marct, " 22, 25, 27, 29, and April 1, 2, 4, 8 and 9, 1935, were approved. The Board then acted upon the following matters: Letter dated April 18, 1935, from Mr. Sproul, Secretary of the Fed eral Reserve Bank of New York, and telegrams dated April 18 from Mr. Mcki— Secretary of the Federal Reserve Bank of Kansas City, and Mr. 8044 e, Acting Assistant Federal Reserve Agent at the Federal Reserve Bank Of San -- Francisco, and April 19 from Mr. Wood, Chairman of the Federal Re— eery eBank of St. Louis, all advising that, at meetings of the boards of '"ors on the dates stated, no changes were made in the banks' existing schedules of rates or discount and purchase. Without objection, noted with approval. Memorandum dated April 15, 1935, from Mr. Morrill stating that 4ia2 elen Ramisch, whose employment as a stenographer in the office of the ' ecretary was ea-proved by the Board on April 5, failed to pass a satise(Icto 1.7 physical examination, and recommending the appointment of Miss 141.41. lne E. Benton as a stenographer in the Secretary's office, with at the rate of l'11620 per annum, effective as of the date upon _ 954 MWt5 -2- Ithich she enters upon the performance of her duties after having passed 4 sat isfactory physical examination. Approved. Telegram to Mr. Moore, Deputy Chairman of the Federal Reserve Bellk Of San Francisco, reading as follows: "Your telegram April 18. Board approves leave of absence for three months granted by your directors to Governor Calkins." Approved. Memorandum dated April 11, 1935, from the Division of Examinations, Ithich had been circianted among the members of the Board for their infor1°44)4, with regard to the unsatisfactory condition of the Bank of JamestOvin ) Jamestown, New York. Noted. Telegram dated April 18, 1935, approved by four members of the Bc)ara ) 60 Mr. Stevens, Federal Reserve Agent at the Federal Reserve Bank ' 14 ohicago, reading as follows: "Re Membership application Farmers State Bank, Alto, Mtc, agan. Board has noted the comments of your special ! cmmittee relative to admission to membership of banks with rPosits of less than .;4:100,000 4 and the suggestion that a unia'm policy in this respect be adopted for the System as a °10. Board has given the matter careful consideration and feels that in view of the many different and determining tors involved in various cases a definite and uniform policy sed solely upon the amount of a bank's deposits should not !.adepted at this time but that each application for member.p should be considered in the light of the existing circumbtances, including the need of a particular community for , a41=ing facilities and the possibility of an applicant's ' 11ceessful operation. On the basis of the information submitted with respect to the subject bank the Board would be inclined to illsPprove its application. Ho-ever, since your special committee '2as made a qualified recommendation in the case, the Board would be glad to have it reconsider the application and n r 955 4/19/35 -3ft submit a firm recommendation having in mind the general policy set forth in the Board's letter of September 11, 1935, (X-7581) and the views expressed herein." Approved. Letter dated April 18, 1935, approved by four members of the Board) to "The National Bank of Logan", Logan, Test Virginia, reading as follows: "The Federal Reserve Board has given consideration to Your application for permission to exercise limited fiduciary Powers, and grants you authority to act, when not in contravention of State or local la-71 as trustee under deeds of trust to secure debts, the exercise of such right to be subject to the provisions of the Federal Reserve Act and the regulations of the Federal Reserve Board. "This letter will be your authority to exercise the fiduciary powers granted by the Board. A formal certificate covering such authorization will be forwarded to you in due course.” Approved. Letter dated April 18, 1935, approved by four members of the to "The Valley National Bank of Phoenix", Phoenix, Arizona, readtrig as follows: "The Federal Reserve Board has given consideration to your aPnlication for permission to exercise fiduciary powers, and ants you authority to act, when not in contravention of : t4=te or local law, as trustee, executor, administrator, regisrar of stocks and bonds, guardian of estates, assignee, r*eoeiver, committee of estates of lunatics, or in any other fiduciary capacity in which State banks, trust companies or 103ther corporations which come into competition with national Aanks are permitted to act under the laws of the State of 'rizonal the exercise of all such rights to be subject to the of the Federal Reserve Act and the regulations of 'she Federal Reserve Board. "This letter will be your authority to exercise the fiduciary powers granted by the Board. A formal certificate coverirw, such authorization will be forwarded to you in due e°urse.fl r Approved. 956 4A9/s5 -4Letter to Mr. O'Connor, Comptroller of the Currency, reading as Naows: "Receipt is acknowledged of your letter of April 10, 1933, with reference to the reduction of 40,000 in the ccalmon capital stock of 'The First National Bank of Longview', Longview, Washington, awl the issuance of $50,000 of preferred stock by that bank, which was approved by the Board on January 24, 1934, upon the condition, among others, that as the preferred stock is retired the common stock will be correspondingly increased. "You now advise that the bank desires to retire $25,000 of its preferred stock without increasing its common stock, and recommend, in vie“: of the satisfactory condition of the institution, that the Board waive the above mentioned condition. "In accordance with your recommendation, the Board amends its approval of January 24, 1954, of the plan of capital !eduction of The First National Bank of Longview, Longview, washington, by waiving the requirement that as the preferred stock is retired the common stock will be correspondingly i ncreased." Approved. Letter to Mr. Sargent, Assistant Federal Reserve Agent at the Peder ol Reserve Bank of San Francisco, reading as follows: "The Federal Reserve Board has considered the requests of ITr onsamerica Corporation'ISan Francisco, California, and'Transcrica Bank Holding Company',San Francisco, California, for -LImited voting permits under the provisions of Section 5144 cf the Revised Statutes of the United States, as amended, to entitle such coroorations to vote the stock which they own or control of First National Bank in Reno, Reno, Nevada, and has authorized the issuance by you of the limited voting permits requested, for the following purposes: At any time prior to July 1, 1955, to authorize the issuance by such bank of common and/or preferred stock in accordance with a plan or plans satisfactory to the Federal Reserve Agent at the Federal Reserve Bank of San Francisco and approved by the Comptroller of the Currency, and to make such anendments to the Articles of Association and/ or by-laws of such bank as shall be necessary for such purposes. 957 4/19/35 —5— "Please have the permits authorized herein prepared by counsel for the Federal Reserve Bank of San Francisco in the usual form. It will be appreciated if you will mail to the Board for its records, two executed copies of the permits issued by you under the authorization contained in this letter." Approved. Letter dated April 18, 1935, approved by four members of the 11 , to Mr. Rnlnh B. Cook, Vicksburg, Pennsylvania, reading as follows: "This refers to your letter of April 10, 1935, in which You suggest that member banks of the Federal Reserve System be Permitted to ray 3 per cent interest on deposits. "The Federal Reserve Board is required by law to limit by regulation the rate of interest which may be paid by member banks of the Federal Reserve System on time and savings deposits; and before the change in the maximum rate of interest which became effective February 1, 1935, the matter was carefully studied. As a result the Federal Reserve Board concluded that such maximum rate should be 21- per cent per annum compounded quarterly and the Board accordingly prescribed such maximum rate for member banks. In vier of its determination as a result of its study of the question that the maximum rate prescribed Should be 2 per cent per annum, the Board does not feel that the rate payable by member banks should now be increased. "Your letter appears to suggest that member banks in Pennsylvania should pay a State tax of four mills on deposits without charging the amount of such payment to the depositors' accounts. In the absence of more detailed information with respect to such tax, the Federal Reserve Board is unable to express any opinion as to whether member banks might lawfully absorb the amount of such tax for their customers but the Board Would not in any event have authority to require any member bank to absorb such tax." Approved. Memorandum dated April 4, 1935, from Mr. Wingfield, Assistant Coh n 8e1, submitting a copy of an opinion of the Supreme Court of the d e- States handed down on April 1, 1935, in the case of Doty v. Love, l'egard to the validity of a bank reorganization statute of the State of ?N. -esissinpi, and recommending that the opinion be published in the " _ 958 4/19/35 -6- llext issue of the Federal Reserve Bulletin. Approved. Letter dated April 18, 1935, approved by four members of the Board, t)rAr. Fletcher, Acting Federal Reserve Agent at the Federal Reserve Bank Of C leveland, reading as follows: "This refers to your letter of April 9, 1935 regarding certain questions presented to you by The Ohio-Merchants Trust Company, Massillon, Ohio, with respect to section 22(g) of the Federal Reserve Act. "It is understood that the trust company's officers and attorneys apparently were not satisfied with certain opinions Which you expressed in reply to these inquiries, and that you desire advice as to whether the Board concurs in your views on the questions. "As you know, the Federal Reserve Board is not specifically authorized to prescribe regulations under section 22(g) of the Federal Reserve Act, and it was pointed out on page 501 of the August 1933 Federal Reserve Bulletin that it was not believed aPpropriate for the Board to express an opinion as to who should be considered an 'executive officer' within the meaning of the section, since penalties of fine and imprisonment are provided for violations of the section and the determination of the question whether a part1Dular case should be prosecuted for violation is a matter entirely within the jurisdiction of the Department of Justice. "The same considerations apoly to other questions regarding the interpretation of section 22(g) and, therefore, it is not believed appropriate for the Board to express an opinion on the questions presented to you by The Ohio-Merchants Trust Comnany. Section 325(c) of the proposed Banking Act of 1935 (S. 1715, H.R. 5357), which is now pending in Congress, would give the Federal Reserve Board certain powers of regulation and enforcement under section 22(g), but until some such chrnge is made in 11 -, it is suggested that persons requesting interpretations the , of the section be advised of these facts and given such other information (Then relevant and not of a confidential nature) as MaY be available from sources such as the Board's letter of March 22, 1935 (X-9158) advising you of certain views of the DepartmPnt of Justice regarding the section." Approved. 959 Vl9A5 -7Letter dated April 18, 1935, approved by four members of the Board, to 118 mH. B. hams, Chapman-hams Company, Bethlehem, Pennsylvania, reading f011OWS: "Receipt is acknowledged of your letter of April 3 with further reference to applications of your clients for industrial loans from the Federal Reserve Bank of Philadelphia. "As was pointed out in our letter of April 1, while the Board is authorized to make regulations under which industrial advances may be granted by the Federal Reserve banks, it does not have authority to pass upon the applications from a credit standpoint. The Board from time to time does ask Federal Reserve banks to review applications for industrial loans filed with them; and we have ascertained upon inquiry that the Federal Reserve Bank of Philadelphia has reviewed the applications referred to in your letter and has had a representative in the field make an investigation in connection therewith. We are also advised that you have been invited to come to the Federal Reserve Bank of Philadelphia for the purpose of reviewing with the officers of the Bank the applications which you have on file with the Bank. "Although the question whether an industrial loan shall be made is one for the determination of the Federal Reserve Bank to which application is made, the Federal Reserve Board has endeavored in every way possible to encourage applications for such loans. It is the considered policy of the Federal Reserve banks to give sympathetic consideration to applications for such loans and to approve such applications whenever it is felt tr?at such approval may properly be given in view of the provisions of the law and of the credit aspects of the proposed 1°ans. We are confident that in any conference you may have with the Federal Reserve bank with regard to this matter you vrIll find its officers glad to review the matter with you thoroughly and to cooperate with you in every way possible." Approved. Letter dated April 18, 1935, approved by four members of the Board, to !, ' r- Peyton, Chairman of the Federal Reserve Bank of Minneapolis, reading 48 14°11017s"In your letter of April 9 you refer to the Board's letter of October 17, 1934, with regard to the salary of the Manager of 4/19/35 -8- "the Industrial Loan Department, and ask whether the Board would Offer any objections to your having employees of the bank make all industrial loan investigations, both for the Industrial Advisory Committee and the bank. "As you know, the Board is particularly anxious that no Procedure be followed which might be construed as indicating an attempt on the part of the bank to influence in any way the action which the Industrial Advisory Committee may take with regard to any application for an industrial loan, and wishes the Industrial Advisory Committee to be in a position to have such investigations made as it deems advisable. The investigations Should, of course, be made by persons who are satisfactory to toe Industrial Advisory Committee. . "If, however, the plan you proposed of having all investigations of industrial loan applications made by the investigating force set up directly under Deputy Governor Ziemer is eatis-Lactory to the Industrial Advisory Committee as well as your bank, the Board sees no objections to such a procedure. In fact, according to the Board's understanding, a similar plan is now in effect at a number of other Federal Reserve banks." Approved. Letter to Mr. Hoxton, Federal Reserve Agent at the Federal Reserve tailk Of Rich/gond, reading as follows: "Receipt is ackno-aed ed of Mr. Fry's letter of April 9, 1905 regarding the Clayton Act permit granted to Mr. J. V,ade ?11, Quinwood, West Virginia, to serve at the earn° time as 'irector and officer of The Winona National Bank, Winona; as rein-rector of Bank of Quinwood, Quinwood; and as director or 7eenbrier Valley Bank, Lewisbur,4, all of West Virginia, for t?e Period ending January 14, l936, which was forwarded to you with the request that it be released to Mr. Bell if you found that his alleged violation of section 22(g) of the Federal 4leserve Act resulted from inadvertence or from ignorance or misunderstanding of the law and if Mr. Bell should take steps to e3Prect the apparent violation within a reasonable time. "Mr. Fry inclosed a copy of a letter dated January 21, -L95 from Mr. Bell to Mr. George I. Neal, United States Attorney, Ilufltington, West Virginia, in which he stated that he -ould be .led to file with the directors of the national bank a list of 4.?ans which he miht have at other banks but that he did not wish to file the complete financial statement showing in detail assets as well as liabilities, which he understood the examiner I'eTaired. Mr. Bell stated further that, pending further advice 961 4/19/35 -9- "from the examiner, he had not qualified either ES director or Officer of the national bank. "Under the circumstances, you may feel it desirable to ascertain from the Chief National Bank Examiner what further advice, if any, has been given to Mr. Bell in this connection, because although the examiner may feel that a financial stateTent such as that described by Mr. Bell is necessary in connec'aon with the proper supervision of the national bank, it does n°t EDPear to be required by section 22(g). In this connection, It is assumed that you will ascertain and advise the Board when a.final disposition is made of the apparent criminal violation, either as a result of a prosecution or as a result of a final decision not to prosecute after the report required by section 22(g) has been filed, or otherwise. "Of course, if Mr. Bell is not serving as an officer, . director, or aaploycc of any bank organized or operating under the laws of the United States, neither section 8 nor section ?A of the Clayton Act is applicable. Under the circumstances, it is requested that you continue to hold the permit which has been forwarded to you, but it is assumed that you will keep Yourself informed as to whether Mr. Bell is serving as an officer or director of the national bank in order that appropriate steps may be taken in connection with his Clayton Act permit When necessary." Approved. Letter to Mr. Clark, Assistant Federal Reserve Agent at the FedReserve Bank of Atlanta, reeding as follows: "There are inclosed the original and copies of a Clayton Aet permit granted to Mr. D. B. Tarnell, Pembroke, Georgia, to ! i erve at the same time as director and officer of The Pembroke J.lational Bank, Pembroke, Georgia, and as director of The -,1 :laxton National Bank, Claxton, Georgia, for the period ending d. atuary 14, 19:551 for transmittal by you to the applicant and the banks involved and a copy for your files. "It is noted from F.R.B. Form 94b, item 18, that The Claxton National Bank contemplates going into voluntary liquidion to be succeeded by a new State bank. In the event the Plans are consummated, it will be necessary for Mr. Warnell to ?btain a new permit. Please advise him to this effect and Inform him that prior to the opening of the new State bank he . , 111 Y, if he so desires, request permission by letter to serve 'Its institution; and that upon receipt of such request accompanied by F.R.B. Form 94a executed by the new State bank, 962 V19/35 -10- "consideration will be given to such request. This request Should, of course, be submitted to you and fomarded to the Board with your recommendation in the usual manner. "Please also advise Mr. Tarnell that the inclosed permit has been issued so as to expire at the close of January 14, 1936, as there is flow pending before the Congress proposed legislation for the purpose of clarifying and otherwise mending the Provisions of the Clayton Act relating to interlocking bank directorates." Approved. Letter to Mr. Peyton, Federal Reserve Agent at the Federal Reserve Of Minneanolis, reading-as follows: "Reference is made to your letter of April 12, 1935, submitting your reviev, and recommendation relative to the Clayton Act permit granted on May 26, 1934, to Miss Louise Muggli, Roscoe, Minnesota, to serve at the same time as director and officer of The First State Bank of Roscoe, Roscoe, Minnesota, and as director of The First National Bank of Cold Spring, Cold Spring, Minnesota. "The Board has noted the information submitted with your letter of April 12, 1935, and is willing to allow the permit heretofore granted to Miss Muggli to continue in effect." Approved. Letter to Ali.. Walsh, Federal Reserve Agent at the Federal Reserve telik Of Dallas, reading as follows: "Reference is made to your letter of April 9, 1935, inle.41°sing a copy of a letter dated April 8, 1955, from :Ir. eake Ayres, president of The First National Bank of GatesGatesville, Texas, relative to the Clayton Act applica610n of Mr. Morton Scott of Gatesville to serve as director °f The Gatesville National Bank and as director of The First lictional Bank of Gatesville, both of Gatesville, Texas, which ts t17)Plication was not approved by the Board as indicated in its -Letter of March 5, 1935, to you. "The Board has reconsidered the application of Mr. Scott hut still feels that the issuance of the permit applied for ,v!°111d be incompatible with the public interest since the uanks involved appear to be engaged in the same class or elasses of business and so located as to be in a position to 963 4/i9/35 -11- "compete substantially, and the facts set forth in Mr. Ayres' letter of April 8, 1935, to Assistant Federal Reserve Agent Hall, do not appear to be sufficient to warrant the issuance of the permit. Please inform the applicant accordingly and advise the Board promptly as to what steps Mr. Ayres proposes to take in order to comply with the provisions of the Clayton Act.fl Approved. Letters dated April 18, 1935, approved by four members of the to applicants for Clayton Act permits advising respectively of the 42118/Ice of permits by the Board as follows: Mr. Albert G. Stone, to serve at the same time as director and officer of The Tompkins County National Bank of Ithaca, Ithaca, New York, and as a director of the Ithaca Trust Company, Ithaca, New York, for the period ending January 14, 1936. 11r. Robert H. Treman, to serve at the same time as a director and officer of The Tompkins County National Bank of Ithaca, New York, and as a director and officer of the Ithaca Trust Trust Company, Ithaca, New York, for the period ending January 14, 1936. Mr. Arthur Peter, to serve at the same time as a director and ficer of The 'Washington Loan and Trust Company, Washington, . C., and as a director of the Potomac Joint Stock Land Bank of Alexandria, Washington, D. C., for the period ending January 14, 1936. r Approved. Letters to applicants for Clayton Act permits advising respectively °r the issuance of permits by the Board as follov.s: George S. Moore, to serve at the same time as an officer of The National City Bank of New York, New York, New York, as an °facer of the City Bank Farmers Trust Company, New York, New .,(3r1c, and as a director of the First National Bank in Palm Beach, 1-a1m Beach, Florida, for the period ending January 14, 1936. !!r. A. C. Garland, to serve at the same time as a director of The reoples National Bank of Lemasters, Lemasters, Pennsylvania, and an employee of the Potomac Joint Stock Land Bank of Alexandria, shington, D. C., for the period ending January 14, 1936. p 964 4/19/35 -12Mr. Francis J. Kane, to serve at the same time as e director of The National Capital Bank of Washington, Washington, D. C., and aS a director of The East Washington Savings Bank, Washington, D. C., for the period ending January 14, 1936. Mr. J. Warren Andrevs, to serve at the same time as an officer of The First National Bank of Montgomery, Montgomery, Alabama, and as a director of the City Bank of Tuskegee, Tuskegee, Alabama, for the period ending January 14, 1936. Mr, Alfred L. Staples, to serve at the same time as a director of The American National Bank & Trust Company of Mobile, Mobile, Alabama, and as a director of the Merchants and Marine Bank of Pascagoula, Pascagoula, Mississippi, for the period ending January 14, 1956. Mr. Chas. Collins, to serve at the same time as a director of The First National Bank of Lacon, Lacon, Illinois, and as a director and officer of the State Bank of Speer, Speer, Illinois, foI' the period ending January 14, 1936. Mr. D. C. Moore, to serve at the same time as a director and officer of the Waynetown State Bank, Waynetorm, Indiana, and as a director of The Citizens National Bank of Crawfordsville, Crawfordsville, Indiana, for the period ending January 14, 1936. Mr. Harry M. Myers, to serve at the same time as a director of TI:le First National Bank of Lapeer, Lapeer, Michigan, as a director of the First State Savings Bank, Gladwin, Michigan, and as a director of the State Bank of Standish, Standish, "ilohigan, for the period ending January 14, 1936. MI% B. V. Moore, to serve at the same time as an officer of he First National Bank and Trust Company of Minneapolis, nneapolis, Minnesota, and as a director and officer of the .1nneapolis Trust-Joint Stock Land Bank, Minneapolis, Minnesota, -or the period ending January 14, 1936. 7 Mr „. L. E. Wakefield, to serve at the same time as a director and ficer of the First National Bank and Trust Company of 1111eapolis, Minneapolis, Minnesota, and as a director of the lnIleapolis Trust-Joint Stock Land Bank, Minneapolis, Minnesota, or the period ending Janinry 14, 1936. I Mr. A. McC. Washburn, to serve at the same time as a director : 11.1d officer of the First National Bank and Trust Company of 41nneapolis, Minneapolis, Minnesota, and as a director of the ' P1 rIneapolis Trust-Joint Stock Land Bank, MinneapolislMinnesota, 'Or the period ending January 14, 1936. 965 4/19/35 D. Husbands, to serve at the same time as an officer of The Fifth Northwestern National Bank of Minneapolis, Minneapolis, Minnesota, and as an officer of the Northwestern National Bank and Trust Company of Minneapolis, Minnea-olis, Minnesota, for the period ending January 14, 1936. Mr 'J. Mr. Robert W. Webb, to serve at the same time as a director and officer of the First National Bank and Trust Company of Minneapolis, Minneapolis, Minnesota, and as a director of the Minneanolis Trust-Joint Stock Land Bank, Minneapolis, Minnesota, for the period ending January 14, 1936. Mr. E. C. Japhet, to serve at the same time as a director of The Harrisburg National Bank of Houston, Houston, Texas, and as an employee of The State National Bank of Houston, Houston, Texas, for the period ending January 14, 1936. Mr. James H. Simms, to serve at the same time as a director and officer of The First National Bank of New Boston, New Boston, Texas, and as a director of the First National Bank at De Kalb, De Kalb, Texas, for the period ending January 14, 1936. Mr. F. C. Frisbie, to serve at the same time as an officer of The Anglo California National Bank of San Francisco, San Francisco) California, and as a director and officer of the First National Bank in Yreka, Yreka, California, for the period ending January 14, 1936. Mr* J. r. Maxwell, to serve at the same time as a director of the Seattle Branch of the Federal Reserve Bank of San Francisco, and as a director and officer of The National Bank of Commerce Of Seattle Seattle, Washington, for the period ending January 14, 1936. Approved. There were then presented the following applications for changes st_ uck of Federal reserve banks: A e tions for ADDITIONAL Stock: The rct No. 2 i!lrst National Bank of Poughkeepsie, °Iighkeepsie, New York. 13)tict No. 6. T.lean Bank & Trust Company, Nev- Orleans, ' 4)1zisiana. Shares 135 900 Total 135 900 1,035 9CM 4/19/35 -14- 4.114SPAIsms for SURREIDIM of Stock: 111§Itl.qt No. 7. National-ge7;17-O-f Flint, Flint, Michigan. 'kW:1:1gt No 8 1411We11-ITItTtompany, St. Louis, Missouri. klseissippi Valley Trust Company, St. Louis, NorMissouri. thwestern Trust Company, St. Louis, M issouri. 111111.112.1 No. 9 The First National Bank of Makoti, Makoti, North Dakota. First National Bank of Groton, Groton, South Dakota. 'he Redfield National Bank, Redfield, South Dakota. ' Ile First National Bank of Albany, Albany, M issouri. %Jose National Bank, San Jose, California. Shares 180 30 600 285 48 77 143 24 24 381 Total Thereupon the meeting adjourned. 915 18 Approved. Ap131...ov. 180 381 1,643
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