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A meeting of the Federal Reserve Board was held in Washington °A Thursday, April 26, 1934, at 12:00 noon. PRESENT: Mr. LT. Mr. Er. Mr. Miller, i-residing Hamlin Tames Thomas Szymczak Mr. Morrill, Secretary Mr. Carpenter, Assistant Secretary Mr. Bethea, Assistant Secretary The minutes of the meeting of the Executive Committee of the eral Reserve Board held on April 19, 1934, were approved and the "ti°1ge recorded therein were ratified unanimously. The Board then considered and acted upon the following matters: Memorandum dated April 23, 1934, from Yr. Paulger, Chief of the ' -'81on of Examinations, recommending the appointment of Mr. John T. 11°Yac4 and his designation as an assistant Federal reserve examiner, Illth headquarters at Chicago, Illinois, and with salary at the rate of hinn Per annum, effective as of the date upon which he enters upon tile Performance of his duties. Mr. Boysen was appointed an examiner for all purposes of the Icederal Reserve Act, as amended, and of all other acts of Congress pertaining to examinations made by, for, or under the direction of the pederal Reserve Board, and was desinated as an assistant Federal reserve examiner, with salary at the rate of $1,500 per annum; all effective as of the date upon which he enters upon the performance of his duties after having passed a satisfactory physical examination. Memorandum dated April 24, 1934, from 1:x. Wyatt, General Counsel, —"hding the appointment of Miss Mabel Goepfert as a stenographer in the , ' &egal division, with salary at the rate of .2.,800 per annum, effective 4/26/34 -2- the date upon which she enters upon the performance of her duties rtsr having passed a satisfactory physical examination. Approved. 1:lemorandum dated April 24, 1934, from Mr. Wyatt, General Counsel, l'ee°1mMending that effective immediately Er. jilson L. Hooff and Liss dred ,iainwright, who have been serving as file clerks in the legal clivision, be designated as law clerks, with no change in salary. Approved. Letter dated April 24, 1934, approved by six members of the Board, Case, Federal Reserve Agent at the Federal Reserve Bank of New York, l'e"ing as follows: "The Federal Reserve Board has received your letters of 2,pri1 12, 1934, and April 1R, 1934, and, in accordance with your recommendation, approves the designation or Messrs. Anton R. Butziger, Parke R. Eimer, Everett A. MeMUnn, Linwood E. Morrell and George Roebelen, TnPloyees in the Bank Examinations Department, as assistant examiners the Federal Reserve Agent's department of your bank without change in compensation. Please advise effective dates." Approved. Letter dated April 25, 1934, to Mr. Stevens, Chairman of the Ped.„ ' ' 141 Reserve Bank of Chicago, prepared in accordance with the action tflk. ' 4 at the meeting on April 2'0, 1934, and approved by six members of the, 'clard, reading as follows: "We acknowledge the receipt of your letter of April 13 conveythe expressions of your directorate relative to the Board's action ill disapproving certain proposed salaries of officers of the Federal Reserve Bank of Chicago. "It would appear unnecessary to discuss the separate responsibilities of your board and this Board in regard to the fixation of salaries as the law clearly establishes such separate responsibilities. As the law places upon the Federal Reserve Board the responsibility or approving salaries this responsibility has been and will 4/26/3 4 -3- "be met by the Board." Approved. Letter dated April 25, 1934, approved by five members of the to Mr. Stevens, Federal Reserve Agent at the Federal Reserve Bank or Chicago, reading as follows: "Reference is made to your letter of April 9, 1934, in regard to the activities of B. J. ,obson, an employee of the Detroit Branch, which led to his dismissal. "Your letter has been brought to the attention of the l_oard and it has been suggested that the Federal Reserve Bank of Chicago might find it desirable and helpful to enlist the services of someone from outside of the bank with adequate experience and ability in such matters to look over the personnel situation in the Detroit Branch. This idea was discussed somewhat more fully with Deputy Governor Preston When he was in Washington a few days ago and it would be appreciated lf YOU will advise the Board as to your views concerning the suggestion after it has received your careful consideration." Approved. Letter dated April 25, 1934, approved by five members of the to Governor Schaller of the Federal Reserve Bank of Chicago, 141114 as follows: "Referring to your letter of April 10, the Board understands that the question of the continuation of contributory group life insurance by the Federal reserve banks has been given informal consideration by the Board of Trustees of the Retirement System and tnat certain members thereof have discussed it in some detail with tne insurance companies which have been writing this type of insurance for the Federal reserve banks. We have been informally advised that it does not appear practicable at this time to obtain a single group life insurance policy on a contributory basis to cover the eMPloyees-of all Federal reserve banks. "For your information, the Board has advised one Federal reserve bank that it would interpose no objection to the continuance c)f a contributory group life insurance contract under which it was Understood that the cost to the Federal reserve bank would be less than :100 for one year, and it is prepared to take similar action "to any other Federal reserve bank which may desire to enter into such a contract under which the Federal reserve bank would be called Upon to contribute nominal amounts only, if any. The Board feels, T" ) 4/26/34 -4- "however, that the situation should be reviewed and the matter brought to its attention in ample time for further Consideration before the expiration of any such new contracts if it is desired to continue them or any substitute in force." Approved. Letter dated April 24, 1934, approved by six members of the 11°"Tis to the board of directors of the "Hagerstown Trust Company", illgelrstown, Maryland, stating that, subject to the conditions prescribed &lithe letter, the Board approves the institution's application for member -411) in the Federal Reserve System and for the appropriate amount of 1114)* ta the Federal Reserve Bank of Richmond. Approved. Telegram dated April 24, 1934, approved by three members of the .114 'Lll, to Mr. Walsh, Federal Reserve Agent at the Federal Reserve Bank or nallas, reading as follows: "Refer your letter April 19 Board grants extension of time to"1444„), 25, 1934 within which 'McFarland Brothers' Bank', Logan, New Mexico, may accomplish its admission to membership." Approved. Telegram dated April 25, 1934, approved by six members of the to Mr. Stevens, Federal Reserve Agent at the Federal Reserve Bank or cilicao, referring to the application of the "Elk Rapids State Bank", 111"aPids, Michigan, for pernission to withdraw immediately from member61111) 14 the Federal Reserve System, and stating that the Board waives t4e 11811a1 requirement of six months' notice of intention to withdraw and tt ' accordingly, upon surrender of the Federal reserve bank stock issued t° the Elk Rapids State Bank, the Federal Reserve Bank of Chicago is 4/26/34 -5- " .:Ilorized to cancel such stock and make a refund thereon. Approved. Letter dated April 24, 1934, approved by six members of the Bc)ard, to Li*. 'ood, Federal Reserve Agent at the Federal Reserve Bank (3f St, Louis, reading as follows: "1 regret that the pressure of other matters has prevented an earlier reply to your letter of December 22, 1933, in which you Inclosed the forms of certain agreements previously entered into between the Jersey State Bank, Terseyville, Illinois, and certain Of its depositors and stockholders and referred to the Board's letter X-7598, dated September 21, 1933, with respect to the eligibility for admission to membership in the Federal Reserve System of a bank which has issued deferred certificates to depositors. Specifically, the forms of agreements inclosed in your letter are (1) bank segregation agreement containing forms of depositor's certificate elf interest, stockholder's certificate of interest, depositor's receipt and stockholder's receipt, (2) depositors' segregation agreement, and (3) stockholder's undertaking. "The Board's letter X-7598 referred to above involved a case where a bank issued deferred certificates to depositors representa definite obligation on the part of the issuing bank to pay the aMount of such certificates at some time, which liability of the bank must be included with other liabilities in determining whether the bank's capital stock was impaired within the meaning of Section 9 of the Federal Reserve Act which provides that no State bank may be admitted to membership in the Federal leserve System unless it has an unimpaired capital. "The agreements now submitted by the Jersey State Bank appear to differ in certain material respects from the agreements examined ill connection with this earlier ruling of the Board. It appears that Under the agreements now submitted, a depositor in executing the d epositor's segregation agreement waived all claim to the specified Portion of his deposit and accepted in lieu thereof a certificate Qf interest evidencing an interest in certain assets set apart in trust for the benefit of the holders of such certificates and in snch recoveries from charged off assets and future net earnings of the bank as mny be received by a designated trustee, but has no elaim on any part of the bank's other assets so that even upon final dissolution of the bank the rights of holders of these depositors' certificates of interest would not be superior to the rights of the l'egistered owners of the capital stock of the bank as to such other "sets. If this is the correct interpretation of the agreements the Lk)ard's ruling in its letter X-7598 is inapplicable and these dePositors' certificates of interest do not represent liabilities of 1134 4/26/34 -6- "the bank which should be included in determining whether the bank's capital is impaired within the meaning of the above-mentioned Provision of Section 9 of the Federal 2eserve Act relating to eligibility for membership but merely represent contingent obligations payable out of the recoveries and net earnings referred to if and when such recoveries and net earnings are realized. The same conclusion is applicable to stockholders' certificates of interest in the form submitted by the Jersey State Bank. "In order that the Board may be assured of the correctness of its preliminary analysis of the documents submitted, it is requested Chat if the Jersey State Bank files an application for membership such application when forwarded to the Board be accompanied by the opinion of counsel for that bank on the question whether the certificates of interest are payable only out of the assigned assets and tae recoveries and net earnins referred to above or are payable out of any assets of the bank before any payment to stockholders in the event of dissolution." Approved. Letter dated April 2b, 1934, approved by six members of the 8°41'd, to ir. Case, Federal Reserve Agent at the Federal or eserve Bank York, reading as follows: "Reference is made to the analysis of the report of examination as of September 12, 1933, of the Federal Trust Company, Newark, New Jersey. "From the analysis it is observed that the institution continues to carry 55 shares of its own stock as side collateral to a loan of As500, and it is requested that, if you have not already done so, YOU call to the attention of the Federal Trust Company the provisions of its first condition of membership as well as the provisions of Section 9 of. the Federal Reserve Act regarding loans secured by the bank's own stock, and advise the Board when the disposition of such stock has been effected. "It is observed from the copy of a letter addressed to the Federal Trust Company by the Department of Banking and Insurance of the , tate of New 'Jersey, which was forwarded with the analysis, that a request was made by that office for the correction of certain statutory violations, and it will be appreciated if you will advise the Board as to the exact nature of such violations and as to the corrections effected. "The Board concurs in your recommendation thnt the Trust ComPaaY should eliminate the losses listed in the analysis and provide for such reserves against existing depreciation and assets classified as doubtful as would be desirable so that its reports and published statements will more nearly reflect the actual value of its 1135 4/26/34 -7- "assets. It has been observed that depreciation in securities in the four lower grades and depreciation in unrated securities have not been included in the classification of losses in the analysis, but, in view of the Board's usual requirements for admission of State banks to membership in the Federal Reserve System, it would seem desirable for depreciation in these securities also to be charged off or otherwise eliminated. The Board's views in this respect are more fully set forth in its letter of April 4, 1934, X-7848a. You are requested, if you have not already done so, to take this matter up with the member bank, but as a matter of cooperation, it is suggested that you consider the advisability of first discussing the matter with the State banking authorities. "It will be appreciated if you will advise the Board what action has been taken by the bank to eliminate undesirable assets and to effect corrections of other unsatisfactory features of the bank's condition as disclosed in the analysis referred to." Approved. Letter dated April 25, 1934, approved by five members of the 'cl) to Mr. Case, Federal Reserve Agent at the Federal Reserve Bank (It Ile"( York, reading as follows: "Reference is made to Yr. Dillistin's letter of April 4, 1934, arid the subsequent telephone conversation with him in regard to the Board's letter of December 11, 1933, and the information requested therein with respect to the indebtedness of Mr. T. S. Rippel and his affiliations. "Inasmuch as it is understood that one of your examiners will Participate in an examination of the Merchants and Newark Trust CamPanY of Newark, New Jersey, to be made within a short time by the Beaking Department of the State of New Jersey, and in accordance With the recOmmendation of your office, the Board will defer further consideration of the matter until such examination has been made. It is hoped that in the examination your examiner will be able to develop the desired information in regard to the financial status °f Mr. Rippel and his affiliations." Approved. Letter dated April 24, 1934, approved by four members of the )411c1) to Mr. Williams, Federal Reserve Agent at the Federal Reserve - of Cleveland, reading as follows: "Reference is made to the report of examination of The Farmers Bank and Savings Company, of Pomeroy, Ohio, as of February 19, 1934, 1136 1/26/34 -8- "and to Mr. Fletcher's letter of Larch 30 in regard to the excess loans to the Meigs Realty Company, an affiliate of the bank. From the information submitted, it appears that the loans were not excessive when made, but became excessive through reduction of surPlus last Fall and that the bank is endeavoring to reduce the line to legal limits by refinancing the loan on one of the properties through the Home Owners Loan Corporation. "It is observed that the Leigs Realty Company, which was organized for the purpose of holding some of the bank's other real estate, has no paid-in capital and that the liability of the company to the bank amounted to Q14,200.26, the amount at which the real estate is carried on the books of the company. In the circumstances, the properties held by the Realty Company are actually other real estate of the bank and the Board believes that they should be shown as such on the books of the bank in order that its published statements shall reflect the true condition of the bank's assets. It will be appreciated, therefore, if you will advise The Farmers Bank and Savings Company as to the attitude of the Board regarding this method of carrying other real estate and request that all of the bank's other real estate be shown as such. "From the information submitted, there is no evidence that the estimated losses have been eliminated from the bank's assets. The Board feels that a bank's published statements should reflect the true condition of the bank and that estimated losses as classified by the examiner should be promptly charged off or otherwise eliminated, and it will be appreciated if you will advise the Board what action has been taken by the bank in this respect. "If the losses as classified in the report of examination as Of February 19, 1934 have not already been cbarged off or otherwise eliminated, it is requested that you endeavor to obtain such action by the bank. In the interests of cooperation, it may be advisable to take this matter up first with the appropriate State authorities. "The examiner comments upon the inadequacy of the surety bonds covering officers and employees, and it is assumed that either you or the State Banking Department have brought this to the attention Of the bank and endeavored to obtain correction." Approved. Letter dated April 24, 1934, approved by six members of the to Hoxton, ll'ederal Reserve Agent at the Federal Reserve Bank c)rIlichmond, reading as follows: "On February 7, 1934, I:1r. Fry reported that the State-Planters Bank and Trust Company, Richmond, Virginia, had charged off a total Qf 0.,488,922.00 since August 15, 1933, date of the latest examination, and that the bank was then engaged in a review of its loans 1137 4/26/34 -9- "as well as of its securities account, and that as 3oon as the review was completed a further charge-off of approximately 4,000,000 would be made. It will be appreciated if you will advise the 'Board What action has since been taken by the bank in respect to the elimination of undesirable assets. "The analysis of the report of examination was accompanied by a letter dated November 25, 1933, fram H. H. Augustine, Vice President of the bank, with reference to loans secured in whole or in Part by stock of the bank. Er. Augustine advised that since the examination one note of .,)7,100 secured by such collateral had been Paid, that 385 shares had been sold and the proceeds applied on anOther note, and that 325 shares held as collateral to still another line had been surrendered on payment of J0,000. Lir. Augustine also stated that the bank felt that most of such loans were secured other than by stock or the bank, but preferred to continue to hold the stock as additional collateral to the loans. "Member banks are prohibited from lending on their own stock, and any shares of such stock taken to prevent loss upon debts previously contracted in good faith are undesirable collateral to the bank's loans and should be disposed of at the first favorable opportunity. "Please keep the Board advised as to progress made by the bank in disposing of the shares of its own stock held as collateral." Approved. Letter dated Al)ril 24, 1934, approved by six members of the Board, to "Lc. Williams, Federal Reserve Agent at the Federal Reserve Bank of ele eland, reading as follows: "Reference is made to I.r. Fletcher's letter of April 7, 1934, transmitting the application of the First National Bank in laissillon, lassillon, Ohio, for permission to exercise fiduciary powers under the provisions of Section 11(k) of the Federal Reserve Act. "In accordance with the Board's usual practice, this applica-. . tion was referred to the Comptroller of the Currency for his recomMendation, and a reply has been received advising that inasmuch as the applicant bank, which has not been examined since its organization in Eay, 1933, is scheduled for an examination this week, the recommendation by the Comptroller's office will be withheld until the report of such examination has been received. In view of the foregoing, the Board will take no action on the pending application nntil the examination of the applicant bank has been completed and a report thereof is available, at which time it is presumed that you 1161LY wish to submit to the Board the bank's application for full fiuUciary powers in lieu of the pending application for permission to Elet only as registrar of stocks and bonds." Approved. 4/26/34 -10Letter dated April 25, 1934, approved by six members of the 11°eLl'd, to ir. O'Connor, Comptroller of the Currency, reading as follows: "In accordance with your recommendation, the Federal Reserve Board approves a reduction in the common capital stock of 'The Lambertville National Bank', Lambertville, New Jersey, from :J00,000 to c50,000, pursuant to a plan which provides that the bank's capital Shall be increased by 475,000 of class 'A' preferred stock to be sold to the Reconstruction Finance Corporation, and :25,000 of class 'B' preferred stock to be sold to local interests, and that the released capital, together with a portion of the bank's undivided profits and/or surplus shall be used to eliminate estimated losses and securities depreciation in the lower grades. "In conAdering the plan under which the proposed reduction in capital is to be effected it has been noted that, after the proposed eliminations are consummated, there will remain in the bank securities depreciation in the amount of approximately ,22,900 which will Impair the bank's capital to the extent of approximately 46,600. It is assumed, however, that you have this condition in mind and that wnenever it becomes feasible to do so you will require such further corrections as may be practicable." Approved. Letter dated April 23, 1934, approved by five members of the 441"ci, to r. O'Connor, Comptroller of the Currency, reading as follows: "In accordance with your recommendation, the Federal Reserve L°ard approves a reduction in the common capital stock of 'The Ldgar County National Bank of Paris', Paris, Illinois, from 0.00,000 tO 60,000 pursuant to a plan which provides that the bank's capital shall be increased by the sale of •90,000 of preferred stock to the Reconstruction Finance Corporation and that the released capital, together with a portion of the surplus and undivided profits, shall be used to eliminate unsatisfactory assets, all as set forth in your luemorandum of April 10, 1934. In this connection it is understood that R. N. Parrish, President and A. J. Parrish, Director, will Properly collateralize their obligations to the bank to the full extent of their ability. "The Board has observed that in recommending approval of the Proposed recapitalization the Acting Chief National Bank Examiner at Chicago based his recommendation, among other things, upon the underStanding that 'the management will be aw)mented satisfactorily'. Fere07er, the Board has noted that your examiners have severely criticized the management of the institution." Approved. 3F4 4/26/34 -11Letter dated April 25, 1934, approved by six members of the 13(38'r(1, to r. O'Connor, Comptroller of the Currency, reading as fol- lows: "In accordance with the recommendation of Acting Comptroller Awalt, the Federal Reserve Board approves a reduction in the common capital stock of 'The First National Bank of Stuart', .3tuart, Iowa, from 35,000 to !25,000, pursuant to a plan which provides that the bank's capital shall be increased by y25,000 of preferred stock to be sold to the econstruction Finance Corporation, and that the released capital, together with a portion of the bank's surplus and undivided profits accounts and a contribution of approximately '1. 149.500 to be made by local interests, shall be used to eliminate Unsatisfactory assets and securities depreciation in the amount of Awalt's memorandum aPproximately i,r35,0001 all as set forth in ef April 14, 1934." Approved. Letter dated April 24, 1934, approved by six members of the 13°411c1, to idr. Stevens, Federal Reserve Agent at the Federal Reserve Bank or Chleaco, reading as follows: "Receipt is acknoWledged of Lr. Young's letters of April 7 arid 17, 1934, with tnclosures, in regard to the plan of rehabilitation of the 'Wilmette State Bank',,Wilmette, Illinois. "In accordance with the recommendation contained in Lr. Young's letter of April 7, 1934 the Board amends its previous approval of tae proposed capital reduction to provide for the sale to the Reconstruction Finance Corporation of capital debentures in the amount °f 75,000 instead of $150,000 as originally proposed, with the Understanding that the other provisions of the plan remain unchanged. "It is noted that on the basis of the amended plan the bank . Will have a capital structure adequate to its deposits and will be free from all assets classified as doubtful and loss at the tine of the last examination." Approved. Letter dated April 23, 1934, approved by five members of the , to Er. O'Connor, Comptroller of the Currency, reading as follows: "Receipt is acknowledged of your memorandum of April 13, 1934, With reference to the proposed reduction in common capital stock of 4/26/34 -12- "The Citizens National Bank of Hope', Hope, Arkansas, from '250,000 to ,425,000, and sale of ?75,000 of preferred stock to the Reconstruction Finance Corporation, which was approved by the Board on December 20, 1933. "You advise that the Reconstruction 2inance Corporation has agreed to purchase but'.:50,000 of preferred stock of this bank, and recommend that the conditions previously imposed be amended to provide ror the issuance and sale of the reduced amount of preferred stock. "Since it appears that the bank at present is overcapitalized and that the released capital will be sufficient to eliminate all estimated losses and doubtful assets and a large portion of the slow items as classified by the examiner in his report of examination as of Larch 1, 1934, and since a comparison of the statements of condition as of November 29, 1933, and Earch 1, 1934, discloses an imProvement in the ban's general condition, the Board, in accordance With your recoiamendation, amends its previous approval to provide for the sale of ';50,000 of preferred stock instead of c:75,000 as originally planned, with the understanding that the full amount of tne released capital will be applied to the elimination of substandard assets and/or in augmenting the bank's surplus, undivided profits or reserves, and that the other provisions of the plan as set forth in your memorandum of December 1/, 1933, remain unchanged." Approved. Letter dated April 25, 1934, approved by six members of the 841lid, to Mr. O'Connor, Comptroller of the Currency, reading as follows: "In accordance with your recommendation, the Federal Reserve 8°ard approves a reduction in the common capital stock of 'The First ational Bank of Bemidji', Bemidji, Minnesota, from .;50,000 to 000, pursuant to a plan which provides that the bank's capital shall be increased by ..;350,000 Class 'A' preferred stock to be sold tO the Reconstruction Finance Corporation and .25,000 Class 'B' Preferred stock to be sold to local interests, and that the released eaPital shall be used to eliminate unsatisfactory assets, all as set r°rth in your memorandum of April 16, 1934." Approved. to Letter dated April 25, 1934, approved by six members of the Board, Lir 0' Connor, Comptroller of the Currency, reading as follows: "Receipt is acknowledged of your memorandum of April 17, 1934. th reference to the proposed reduction in the common capital of 'The --l'ellange National Bank of Atchison', Atchison, Kansas, from ',200,000 n 4/26/34 -13- "to 40°,000 and sale of .J25,000 of preferred stock to the Reconstruction Finance Corporation, which was approved by the Board on Xanuary 31, 1934. "You advise that a change in the plan is contemplated whereby Oily 0.0°,000 of preferred stock will be sold to the Reconstruction Plnance Corporation. "In accordance with your recommendation the Board approves the aaendment to the original plan as set forth in your memorandum of April 17, 1934, with the understanding that the other provisions of the plan as set forth in your memorandum of January 22, 1934, remain unchanged. "In this connection it is understood that your office will require the elimination of all estimated losses as classified by your examiner in his report as of February 19, 1934." Approved. Letter dated April 25, 1934, approved by six members of the tottrA to Mr. O'Connor, Comptroller of the Currency, reading as follows: "In accordance with Acting Comptroller Awalt's recommendation, the Federal Reserve Board approves a reduction in the common capital stock of 'The State National Bank of Houston', Houston, Texas, frboa 0600,000 to 4500,000, pursuant to a plan which provides that the bank's capital shall be increased by 500,0°0 of preferred stock to be sold to the Reconstruction Finance Corporation, and that the 1'Q-eased capital shall be used to eliminate or reduce undesirable assets, all as set forth in Mr. Awalt's letter of April 13, 1934." Approved. Letter dated April 25, 1934, approved by six members of the ds to Mr. O'Connor, Comptroller of the Currency, reading as follows: "In accordance with the recommendation of Acting Comptroller 4walt, ' the Federal Reserve Board approves a reduction in the common eaPital stock of 'The First National Bank of Kellogg', Kellogg, Idaho, from c50,000 to c;25,000, pursuant to a plan which provides that the bank's capital shall be increased by the sale of „25,000 Preferred stock to the Reconstruction Finance Corporation and that ;he released capital shall be used to eliminate or reduce unsatis"torY assets, all as set forth in Mr. Awalt's letter of April 14, 1934.'1 Approved. Telegram dated April 23, 1934, approved by five members of the 1142 4/26/34 -14- to Mr. Newton, Federal Reserve Agent at the Federal Reserve Bank "San Francisco, reading as follows: "As it appears from Agnew's opinion and documents forwarded With Jargent's letter April 13, that Pacific National Company not now holding company affiliate of First National Bank of Kent, Federal Reserve Board, in letter to Comptroller April 20, approved Proposed capital stock reduction by latter corporation without issuance voting permit to Pacific National Company." Approved. Letter dated April 25, 1934, approved by six members of the 13°Iltd) to Li'. Newton, Federal Reserve Agent at the Federal Reserve Bank Of San .rancisco, reading as follows: "Receipt is acknowledged of IA.. Sargent's letter of April 14, 1934, in which he explains the reasons for your conclusion that the California Group Corporation, Los Angeles, California, is not a holding company affiliate of California Bank, Los Angeles, California. In view of this explanation there appears to be no need of obtaining an agreement on 1. R. B. Form P-5 from California Group Corporation under the provisions of Section 9 of the Federal Reserve Act." Approved. Telegram to Mr. Newton, Federal Reserve Agent at the Federal Re4.6 Bank of San Francisco, stating that the Board has considered the ' 11E11 414.ication of the "Transamerica Corporation", San Francisco, California, '4 voting permit under the authority of section 5144 of the Revised 11°1 44tntes of the United States, as amended, entitling such organization to Vote the stock which it owns or controls in the following banks: "The First National Bank in Grass Valley", Grass Valley, California; "The Placerville National Bank", Placerville, California; "The Vallejo Commercial National Bank", Vallejo, California. 415kihaa authorized the issuance of a limited permit to the applicant, ie Ct to the following conditions: ,1 - -15"First. That applicant has fully carried out the agreement made by it as a condition of the issuance of the limited voting Permit authorized in the Board's ANCIGAR telegram to you of January 8, as amended by Board's telegrams of January 29, February 10 and March 9. "Second. Simultaneously with the issuance of the limited voting permit hereby authorized there shall be issued to Transamerica Bank Holding Company, San Francisco, California, the limited voting permit authorized in the Board's telegram of this date to the Federal Reserve Agent at the Federal Reserve Bank of San Francisco." elld tor the following purposes: "At any time prior to July 1, 1934, to act upon a proposal or proposals to effect the respective licuidation of such banks and to take such action as may be necessary thereto including the ratification of transactions heretofore consummated involving assumption of certain liabilities and purchase of certain assets of sUch banks respectively." teleCram also authorized the agent to have prepared by counsel for the Federal reserve bank, and to issue to the Transamerica Corporation, hitUited voting permit in accordance with the telegram. Approved. In connection with the above there was presented a second teleto M.r. Newton, Federal Reserve Agent at the Federal Reserve Bank or 411 Francisco, .stating that the Board has considered the application or thp, - "Transamerica Bank Holding Company", San Francisco, California, El voting permit under the authority of section 5144 of the Revised Stet t 4-es or the United States, as amended, entitling such organization to °ta the stock which it owns or controls in the following named banks: "The First National Bank in Grass Valley", Grass Valley, California; "The Placerville National Bank", Placerville, California; "The Vallejo Commercial National Bank", Vallejo, California. f111,1 uaa authorized the issuance of a limited permit to the applicant, JLI.4 tr, 412 /34 -16- 8111/ject to the following conditions: "First. That applicant has fully carried out the agreement made by it as a condition of the issuance of the limited voting Permit authorized in the Board's ANCIGAR telegram to you of January 8, as amended by Board's telegrams of January 29, February 10 and Larch 9. "Second. Simultaneously with the issuance of the limited voting periait hereby authorized there shall be issued to Transamerica Corporation, San Francisco, California, the limited voting, Permit authorized in the Board's telegram of this date to the Federal Reserve Agent at the Federal Reserve Bank of San Francisco." 44a for the following purposes: "At any time prior to July 1, 1934, to act upon a proposal or Proposals to effect the respective liquidation of such banks and to take such action as may be necessary thereto including the ratiilcation of transactions heretofore consummated involving assumption Of certain liabilities and purchase of certain assets of such banks respecLively." The 4, "alegram also authorized the agent to have prepared by counsel for the Federal reserve bank, and to issue to the Transamerica Bank Holding C(1134-11Y, a limited voting permit in accordance with the telegram. Approved. Ylemorandum dated April 10, 1934, from the Board's Committees 04 b. ' lesearch and Statistics and on Salaries and Expenditures recommending Pls()'Pll of the budgets submitted by the Federal reserve agents at the N't °us Federal reserve banks covering the statistical and analytical l'411eti of the respective banks during the year 1934; the budgets for the , 4Welve banks aggregating c489,985. The recommendation was approved v o4 members of the Board on April 24, 1934. Approved. Limorandum dated April 23, 1934, from Er. Vest, Assistant Counl'ecommending that there be published in the next issue of the Federal 1145 4/26/34 -17- r'Elerve Bulletin statements, in the form attached to the memorandum, b led upon recent rulinff,s of the Federal Reserve Board on the following " 81thiects: "Obligations secured by real estate mortgages as 'securities' Under various sections of the Banking Act of 1933." "Allowance in consideration of payment of banker's acceptance before maturity as indirect payment of interest." "Corporate trustee under deed of trust as a holding company affiliate." "Federal savings and loan associations as banks within Section 19 of the Federal Reserve Act." "Payment of interest when the first day of the month falls on a Sunday or holiday." The recommendation 1924, was approved by four members of the Board on April 25, Approved. Letter dated April 24, 1934, approved by six members of the 13(411sd, to Mr. Case, JJ'ederal Reserve Agent at the Federal Reserve Bank or York, reading as fellows: "Your letter of April 18 to Er. L:artin in regard to the Board's letter of April 17, 1934, X-7864, has been brought to the attention Of the Board for its consideration. This letter as you will note was addressed to all j2'ederal Reserve Agents and it was contemplated by the Board that they would comply with its request in their capacity as its official representatives in the respective liederal reserve districts. No question as to the advisability of complying with the Board's request has come to its attention from any other district. "It was felt that the request of the Secret Service Division Of the Treasury Department was reasonable and that it was proper to comply not only as a matter of cooperation but also because any such practice of employees of State member banks which might involve violations of law is a direct concern of the Beard and of the Federal reserve agents. The Board does not share the view that the sending, out of an appropriate circular would cause any disturbance °f proper relations between member banks and Federal reserve banks. the Secret "It may be added that we were informally advised by of the Service that the matter had been brought to the attention of the request office of the Secretary of the Treasury and that the v26/34 -18- "Secret Service was made at the suggestion of that office. It is understood that the Comptroller of the Currency has already camPlied with the request by sending a circular to all national banks. "It will be appreciated if you will advise the Board when its request has been complied with by your office." Approved. Letter dated April 25, 1934, approved by six members of the to Governor Harrison of the Federal Reserve Bank of New York, l*"41hg as follows: "The Board is in receipt of a letter, a copy of which is inclosed, from Mr. J. Edgar Hoover, Director of the Division of Investigation, U. S. Department of Justice, stating that the -ivision 13 endeavoring to trace currency identified as part of the Lindbergh ransom money, and requesting that arrangements be made through the Federal Reserve Bank at New York City to notify Mr. F. X. Fay, SPecial Agent in Charge, Division of Investigation, U. S. Department of Justice, 370 Lexington Avenue, Roam 1403, New York City, telePhone Caledonia 5-8691, in the event currency is identified by the bank as part of the Lindbergh ransom money. You will note that Mr. lioover states that this request should in no way interfere with previous arrangements whereby the Federal Reserve Bank of New York should notify the New York City Police Department of the receipt or any such money. "The Board will appreciate it if you will make the necessary arrangements to have Mr. Fay notified promptly of any currency identified by your bank as part of the Lindbergh ransom." Approved. • Telegram to lliams, Federal Reserve Agent at the Federal "ve Bank of Cleveland, reading as follows: ap"Referring Mr. Fletcher's letter April 23 Board revokes proval application First National Bank in St. Marys, St. :arys, Chic), for .Vederal Reserve bank stock granted April 11 and approves adopted by aPPlication for 44 shares made pursuant to resolution Board or Directors held on April 21, 1934, effective if and when Comptroller of Currency authorizes bank to commence business." Approved. Letter dated 25, 1934, approved by six members of the 4/26/34 -19- to the Secretary of State, reading as follows: "During a recent examination of the branch at New Orleans of the Federal Reserve Bank of Atlanta by examiners of the Federal Reserve Board it was noted that the vault at the branch contained a compartment iaentified as 'Bin 38' which had been sealed by Captain H. M. Thatcher, :Tarter 1.:aster Corps, United btates Army, Finance Officer, New Orleans, Louisiana, and which was said to Contain the followin3.: One sealed box containing: Mexican pesos in currency 2,593,321 One locked Army field safe, containing: Bonos - 390 pesos and :j,904.96 U. S. Money .90 centavo Mexican silver coin 3,835.00 pesos Mexican gold coin 2,500.00 pesos Trust funds 164.41 mixed Trust funds "At the time of the examination there was outstanding a safekeeping receipt for the contents of 'Din 38', dated December 24, 1923, of which a copy is attached hereto. "In an effort to determine the responsibility for the contents Of the box and field safe the Federal reserve examiners addressed a oaMmunication on December 16, 1933, to the Finance Officer, Tarter Liaster Corps, United States Army, Army Supply Base, New Orleans, Louisiana, in which the statement was made that 'it was the underatanding that the Reserve Bank was in no way responsible for the contents of the safe and the box placed under the Army seal'. "The Federal reserve examiners report that in reply to this e?taMunication Captain John W. Llufrio, :Tarter Laster Corps, A-ent Finance Officer, New Orleans Quarter :,:aster Depot, New Orleans, Louisiana, on December 22, 1933, stated that the records of his office Checked with the inventory listed in the Federal reserve examiner's letter but that 'upon whom the responsibility for the contents of the safe and box rests, this office is unable to state'. The reply I'llrther indicated that the inventory and sealing of the box and safe at the branch had been done at the request of the Secretary of State, addressed to the Chief of Finance, the deposit in the brunch having been made by transfer from the United States Sub-Treasury at New Orleans on January 5, 1921, because of the discontinuance of the °trice of the Assistant Treasurer at New Orleans. It further apsars that the original deposit with the Sub-Treasury was made folrWing the evacuation in December, 1914, of the City of Vera Cruz QY the forces under General Funston. "As the branch at New Orleans of the Federal Reserve Bank of 4/26/34 -20- "Atlanta has not accepted responsibility for the contents of the box and safe described, as the Finance Officer at New Orleans of the 'far Department seems unable to state where the responsibility rests, and as the deposit appears to have been made at the request Of the Department of State, it will be appreciated if you will advise the Federal Reserve Board where the authority over the box and safe is vested and, if possible, what disposition should be made of them." Approved. Letter dated April 25, 1934, approved by six members of the ", to Lir. Johns, _Acting Governor of the Federal Reserve Bank of 46 ' itlarlta, reading as follows: "Reference is made to your letter of Larch 26 in which you stated that the Bank of Eadisonville, Tennessee, had a nonmember clearing balance with you amounting to .104,000, which represented nearly one-third of its deposits and that you questioned the proPriety of allowing non-member banks to build up large and excessive balances with the Federal reserve baak which have heretofore been carried with their correspondents. "While it is clear that the responsibility rests with a Federal reserve bank in case it establishes a clearing account for a non-member bank or trust company to require the maintenance of En adequate balance, the Board agrees with the position indicated by you and sees no reason why you should not take such steps as you find appropriate, without unnecessary hardship and inconvenience to the non-mamber bank, to bring about a reduction of the balance Inalntained with the Federal reserve bank to an amount which will not be excessively large in relation to the items in transit held for its account." Approved. Telegram to Mr. Johns, Acting Governor of the Federal Reserve kliit t ti r Atlanta, reading as follows: "'Your letter April 23. Board interposes no objection to lederal Reserve Bank of Atlanta making arrangements with Second Export-Import Bank of 4ashington, the details of which will be aploved by your executive committee, for the delivery of and payment tor 10,000,000 Cuban pesos to be coined for the Cuban Government et the Philadelphia Lint. Please forward to Board statement of details of transaction approved by your executive committee." Approved. 4/26/34 -21Letter dated April 24, 1934, approved by six members of the 13°E1rd, to Ls. Peyton, Chairman of the Federal Reserve Bank of L:inne413°11a, reading as follows: "The Board has reviewed the report of examination of the Federal Reserve Bank of lanneapolis made as at the close of business January 20, 1934, copies of which v:ere left with you and Governor Geery. "At the time of the examination as of 'arch 22, 1933, the examiner recommended that the account 'Other Real Estate -- Otherwise Acquired' be analyzed and the items distributed in accordance with the Board's manual of instructions governing the preparation of earnings and expense reports and profit and loss statements. At that time the examiner was advised that the recommendation would be adopted. In the report of examination as of January 20, 1934, the examiner again makes the same recommendation (page 22) and ti a Board Would appreciate advice as to whether the account has now been analyzed and proper distribution of all items made therein. "It is noted from page 20 of the report of examination that leaves of absence in excess of thirty days because of illness are aPProved by the executive commituee of your bank. The Board's letter of December b., 1932, X-7303, contemplated that all sick leave in excess of thirty days in a calendar year would be approved by the board of directors. "Attention has been called (page 20) to certain expenses incurred by the bank for engrossing and binding resolutions adopted by the board of directors upon the deaths of a director of the Helena Branch and of Counsel for the Head Office, and for flowers sent, which expenditures had not been referred to the Board. Mille no exception will be taken to the expenses above referred to, it is requested that in the future any expenditures of this nature be aUbmitted to the Board for approval in accordance with its letter of October 20, 1932, X-7276. "The report indicates (page 37) that on date of examination the bank was holding .509,818.89 in Suspense Account -- General, Banrepresenting the balance of a deposit made by the Northwest of affiliates of stock releasing of corporation for the purpose certain to secure indenture trust a under such corporation pledged Of its outstanding notes, thereby making such stock available for Pledge with the Reconstruction Finance Corporation as collateral. It appears that the trustees under the indenture desinated the to retire the Reserve Bank as disbursing agent with instructions for payment. presented when tion Bancorpora notes of the Northwest It will be appreciated if you will advise the Board as to the liability Present balance in this deposit and the extent of the of the agent disbursing as acting in incurred by the eserve Bank /Lind. o 4/26/34 -22- "It has been observed (page 64) that securities are being held in safekeeping ror receivers of various closed banks, and it will be appreciated if you will advise the Board as to the nature of such safeLeeping accounts. In this connection, the Board feels that, While there is no objection to retaininc the securities hell in safekeepikr, at the tire of suspension of a member bank until the receiver has had an opportunity to make other arrangements, new deposits of securities should not be accepted. In this connection reference is made to the Board's letter of October 19, 1933, which Was addressed to you on this same general subject. "The Board understands that the question of strengthening the Auditing Department of the bank was discussed with you by the examiner and an expression of your views as to this matter will be appreciated. "After the report and this letter have received the consideration of the Board of Directors of the Federal Reserve Bank, the Board would appreciate advice from you as to what action has been taken or will be taken on the matters discussed." Approved. Letter dated April 25, 1934, approved by six members of the 13(41LM, to Governor LcKinney of the iederal Reserve Bank of bane:3, readfollows: "Governor Black has asked me to acknoWLedge receipt of your letter of April 18 and to thank you for your comments upon the substitute bill to provide loans for working capital for commercial and industrial business. "As you suggest, it is the thought here that the matters which You mentioned can all be covered by the terms and conditions under Which loans may be made by the Federal reserve banks and the regulations of the Federal deserve Board, within the limits specifically Prescribed in the bill. If it should be enacted into law the Board Will be glad to have your suggestions as to the manner in which these and other matters should be dealt with in the regulations." Approved. Letter dated April 24, 1934, approved by six members of the .80fird, c)t to Mr. hoxiion, ;:ederal .eserve Lgent at the Federal Reserve Bank ichmond, reading as follows: "Receipt is acknowledged of your letter of April 6, 1934, with inclosure, in which you request to be advised whether a member bank 1151 4/26/34 -23- "May pay interest on a deposit received on April 2, 1934, for a Period beginning April 1, 1934, which was a Sunday. It is understood that Your inquiry relates to deposits which constitute time or savings deposits within the meaninr of the Board's Regulation Q. "You are advised that the Board will offer no objection to the payment of interest at a rate not in excess of that prescribed in Regulation q for a period beginning with the first day of any month, in any case in which such first day falls on a Sunday or legal holiday, on any time or savings deposit received on the first busineas day after such Sunday or holiday and ending when the dePosit is actually withdrawn or ceases to conform to the definition of a time or savings deposit as contained in the Board's Regulation Q, whichever shall first occur." Approved. Letter dated April 25, 1934, approved by six members of the I rclsto Mr. George R. Cooksey, Secretary of the Reconstruction Finance Corporation, reading as follows: "For your information you will find inclosed a copy of a resolution which it Elpears was adopted by the Rice County Bankers Association of Minnesota at a meeting held April 11, 1934, and which waS brought to Washington by Mr. H. O. Dilley, Cashier of the First National Bank of Northfield, Minnesota, who was accompanied by Er. Alex McKay, Vice President of that bank. In the memorandum attached to the resolution you will note a reference to the Reconstruction Finance Corporation. "As you are no doubt aware, the Board, acting pursuant to the Provisions of section 19 of the Federal Reserve Act as amended by section 11(b) of the Banking Act of 1933, has fixed a limit of 3;0 Upon the interest that may be paid by member banks of the Federal reserve system on time and savings deposits. The action of the Board W3 taken after a careful survey of banking practices throughout the country and the Board does not feel justified at this time in reclueing the maximum. However, there is nothing in the Board's regulations or in the considerations that led to its action that would Prevent any bank or group of banks from fixing lower rates and, in fact, many banks throw,;hout the country have done so as a matter of 30Und banking practice." Approved, together with a letter, also dated April 25, 1934, and approved by six members of the Board, to Mr. Peyton, Federal Reserve Agent at the Federal Reserve Bank of Minneapolis, reading as follows: 1...r:6211 4h6/34 -24- "Attached you will find a copy of a resolution which, it appears, was adopted by the Rice County Bankers Association at a meeting held April 11, 1934, and which was delivered to Mr. Martin for submission to the Federal Reserve Board by Yr. H. 0. Dilley, Cashier of the First National Bank of Northfield, Minnesota, who was accompanied by Mr. Alex McKay, vice president of the same bank. It was understood from Mr. Dilley that the real cause of the difficulty is that while some of the banks desire to reach an agreement upon a reduction to 21; in the maximum rate paid, others prefer to pay the maximum of 3'%. You, of course, are familiar with the considerations that led the Board to fix a limit of 3%. The Board does not feel justified at this time in reducing the limit. It is suggested that at some convenient Opportunity you get in touch with the leaders among the banks in this county and explain to them the Board's position in the matter. It may be in that connection that through the exercise of Your good offices you will be able to assist them in reconciling their conrlicting viewpoints." Letter dated April 24, 1934, approved by four members of the to Mr. J. E. Standby, Vice President of The city National Dank, / 3 4 urne, Texas, reading as follows: "Your letter of March 19, 1934, addressed to the Comptroller Of the Currency, has.been referred to the Federal Reserve Board for reply. You request to be advised whether it is permissible to allow checks to be drawn against savings accounts before interest Paying dates and also whether it is permissible to handle in the savings department an account for another bank on which interest is paid but against which no checks are drawn before interest paydates. "With respect to your first question, it is noted that you refer to the drawing of checks against savings accounts. One of the requirements of a savings deposit, as the term is defined in Section V of the Federal Reserve Board's Regulation 0,, is that the pass book or other form of receipt evidencing such deposit must be presented to the bank whenever a withdrawal is made. The drawing of checks against an account in the usual sense does not constitute a compliance with this requirement, and, unless the accounts in question are deposits of funds with respect to which the pass book or other form of receipt evidencing such deposits must be presented to the bank whenever a withdrawal is made and are deposits which otherwise comply with the requirements of savings deposits as defined in subsection (a) of Section V of the Board's Regulation qs it is believed that interest may not lawfully be paid thereon. "If, however, the presentation of the pass book or other form Of receipt is required upon the withdrawal of funds from such accounts r.NDw on' 4/26/34 -25- "and such accounts otherwise conform to the definition of savings deposits which is contained in the regulation, there is no provision in the law or in the Board's regulation which would prohibit the Withdrawal of funds from such accounts prior to the dates upon which interest is customarily paid by the bank thereon, provided that the Withdrawal of such funds is made in accordance with the provisions Of Section VI of Regulation g and that the interest paid is not in excess of the rate prescribed in such regulation. "With respect to your second question, it is understood that You wish to be advised whether funds received from another bank may properly be regarded as savins deposits within the meaning of the In the opinion of the Federal Reserve Board, Board's Regulation funds of another bank deposited in your bank would not constitute a deposit consisting of funds accumulated for bona fide thrift purposes and may not, therefore, be considered savings deposits within the meaning of the definition set forth in Regulation Q." Approved. Letter dated April 25, 1934, approved by six members of the Board, Reserve Agent at the Federal Reserve Bank of t014r. Curtiss, .vederal 130ston, reading as follows: "The Federal Reserve Board has given consideration to the apPlication of Arthur G. Shattuck under Section 32 of the Banking Act Of 1933 for a permit to serve at the same time as a dealer in securities in his individual capacity and as a director of the Indian iiead Rational Bank, Nashua, New iiampshire. "Fran the information contained in the application of Mr. Shattuck, it appears that he is not an 'officer, director, or manager of any corporation, partnership, or unincorporated association' engaged in the business of purchasing, selling or negotiating securities. After the application was filed, a ruling was published in the Federal Reserve Bulletin for December 1933, at page 770, Pointin out that Section 32 is not applicable to an individual who is not an officer, director or manager of an organization of the kinds described in that section. "Accordingly, it appears that Section 32 is inapplicable to the relationship described in the application, and it will be appreciated if you will advise Er. Shattuck accordingly." Approved. Letter dated April 23, 1934, approved by six members of the 1(3t11"(1) to Lx. Case, Federal Reserve Agent at the Federal Reserve Bank or Nevi York, reading as follows: 1154 -26"Receipt is acknowledged of your letter of April 16, 1D34, in which you inclosed a proposed form of letter to be used by you in obtaining the information which the :hoard's letter of Larch 12, 1934 (X-7820) stated would be necessary in order to enable it to determine whether or not so-called 'investment trusts' involved in Pending applications under Section 32 of the Banking Act of 1933 are organizations of the kind referred to in that section, and thus enable the Board to determine whether permits are in fact required in those cases. The form of letter which you inclose includes a quotation from the body of the Board's letter of Larch 12, 1934 (X-7820) and asks that the information therein described be furnished to you in duplicate. "The Board feels that the procedure that you propose is proper and has no objection to your writing letters in the form which you inclose. "You will note that the Board's letter of Larch 12, 1934 (X-7820) Points out that in addition to the information specifically described, the Board will be glad to have any further information or comments Which you feel should be furnished. In addition, the Board would be [lad to have, in each case, the opinion of counsel for your bank Upon the question." Approved. Letter dated April 24, 1934, approved by six members of the 13°Ekrd, t ia". Case, xederal _Reserve Agent at the Federal Reserve Bank of York, reading as follows: "Receipt is acknowledged of your letter of April 20, 1934, with further reference to the request of Mr. Philip Lehman for a hearing before the Federal Reserve Board in regard to his application for a Permit under section 32 of the Banking Act of 1933, together with inclosure, consisting of a letter from Mr. Edwin Gibbs of the firm Of Lehman Brothers. "As you state in the last paragraph of your letter, since Er. Lehman has not requested a further appointment for a hearing it Would appear that he is not interested in pursuing the matter further. The Board, therefore, will consider the matter as closed." Approved. Letter dated April 25, 1934, approved by six members of the to Er. Stevens, lederal Reserve Agent at the Federal Reserve Bank (4 Chicago, reading as follows: 4/26/ -27- "The Federal Reserve Board has under consideration the applications of C. Roy -cCanna, G. A. Uebele, S. M. leinardy, Fred W. New, Tames H. Murphy, George A. Hamer and T. L. I.:cCarthy under Section 32 of the Banking Act of 1933 for permits to serve the sconsin, and the Burlington Bank of Burlington, Burlington, Burlington, ';:isconsin. ,ompany, Mortgage Investment the business of the 99-a, Form "In answer to :Jiestion 2 of to be as follows: stated is Copany Investment Burlington Mortgage he dealer purchases Loaning money and issuing bonds. Bonds are then estate. first mortgages on Wisconsin real mortgages as colissued under Trust Deed, with these public. lateral, and these bonds sold to the "From the information submitted, the Board is unable to ascertain whether or not the 'bonds' issued against the mortgage notes constitute 'securities' within the meaning of Section 32. In its letter of April 16, 1934 (X-7866), the Board described the infor'nation which would be necessary to enable it to determine whether particular bonds or participating certificates are to be considered as securities, within the meaning of the section. "It will be appreciated if you will obtain the information referred to in the letter of April 16, 1934, and forward such information to the Board together with your comments." Approved. Telegram dated April 23, 1934, approved by six members of the 11(le`rd t0 Mr. s Sargent, Assistant Federal Reserve Agent at the Federal -- ra Bank of San Francisco, reading as follows: "Your wire of February 23. It appears that principles stated in the Board's letter April 13, 1934. X-7860, with respect to brokerage firms . re applicable in instant case; and that so long as 13. H. Securities Company confines its activities in respect to securities merely to acting as agent in placing with a dealer orders received from others for purchase and sale of securities belonging to others, it will not be engaged primarily in the business of purchasing, selling, or negotiating securities within the meaning of Section 32 and that directors of the Company need not obtain perlnits in order to serve as directors of a member bank. Board does not have sufficient information to enable it to determine whether Stich transaction would constitute violation of any other provisions Of law." Approved. 1156 4/26/34 -28Letter dated April 25, 1934, approved by six members of the 13°Etrd, to Mx. Curtiss, ltderal Reserve Agent at the Federal Reserve Bank at Boston, reading as follows: "Reference is made to your letter dated February 14, 1934, in Which you request that your recommendation be withdrawn in connection With the application of Li'. Julius G. Day for a permit under the Clayton Act, covering his service at the same time as director of The Birmingham National Bank, Derby, Connecticut, and of The New Haven Bank, National Banking Association, New Haven, Connecticut, and as trustee of the Home Trust Company, Derby, Connecticut. "Our files show that on May 2, 1919, the Board approved an application from Mr. Day for permission to serve at the sane time as a director of the two national banks named in his recent application, as indicated also by your reply to question numbered 2 on Form 94b submitted with the latter application. Your letter stated, however, that you have been advised that, for reasons indicated in the letter, some of Mr. Day's associates in the banks feel that his retirement from the directorate might be beneficial. Please advise ,iWhether i,r. Day has resigned as a director of the banks named in his recent application, and if not whether, in your opinion, the Board should give consideration to the revocation of the permit Day. If you feel that action should be Previously issued to taken by the Board to revoke the permit, it is requested that you submit a full statement of the facts upon which your opinion is based." Approved. Letters dated April 23, 1934, approved by six members of the to applicants for permits under the Clayton Act, advising of apl Eti- of their applications as follows: 10x. Vim. O. Grauel, for permission to serve at the same time as an officer of The Lierchants National Bank of Indianapolis, Indianapolis, Indiana, and as a director of the Brightwood State Bank, Indianapolis, Indiana. Mr. Grover C. Helm, for permission to serve at the same time as a director of the Peoples Bank of Bloomington, Bloomington, Illinois, and as a director and officer of The First National Bank of Mackinaw, Mackinaw, Illinois. MI% Henry Borgamiller, Jr., for permission to serve at the same ttms as a director of The First National Bank of Nurphysboro, Murphysboro, Illinois, and as a director of the Murphysboro Savings Bank, Murphysboro, Illinois. 157 4/26/34 -29- MT. A. E. Carter, for permission to serve at the same time as a director and officer of The First National Bank of Murphysboro, Murphysboro, Illinois, and as a director and officer of the Murphysboro Savings Bank, Murphysboro, Illinois. Miss Viola Gallagher, for permission to serve at the same time CS an employee of The First National Bank of Murphysboro, Murphysboro, Illinois, and as an employee of the Eurphysboro Savings Bank, Murphysboro, Illinois. Mr. Fred B. Herbert, for Permission to serve at the same time as a director and officer of The First National Bank of Lurphysboro, Murphysboro, Illinois, and as a director and officer of the Murphysboro Savings Bank, Murphysboro, Illinois. R. J. Hodge, for permission to serve at the same time as an officer of The First National Bank of Murphysboro, Murphysboro, Illinois, and as an officer of the Murphysboro Savings Bank, Murphysboro, Illinois. li-r• Mr. W. King, for permission to serve at the sane time as an officer of The First National Bank of Murphysboro, Eurphysboro, Illinois, and as an officer of the Murphysboro Savings Bank, Lairphysboro, Illinois. Blanche Martin, for permission to serve at the same time as an employee of The First National Bank of Murphysboro, Murphysbcro, Illinois, and as an employee of the Murphysboro Savings Bank, Murphysboro, Illinois. Miss la% ClLrence Palisch, for permission to serve at the sane time as an employee of The First National Bank of Murphysboro, Murphysboro, Illinois, and as an employee of the Murphysboro Savings Bank, Murphysboro, Illinois. Approved. Letter dated April 24, 1934, approved by four members of the 13°41'd, to an applicant for a permit under the Clayton Act, advising of 131Moval of her application as follows: 1;Irs. Jane W. Dutton, for permission to serve at the sane time Trust Company CS a director and officer of The National Bank and officer director a Of Sycamore, Sycamore, Illinois, and as Of the Virgil State Bank, Virgil, Illinois. Approved. 1158 4/26/34 -30Letter dated April 24, 1934, approved by six members of the &lard, to an applicant for a permit under the Clayton Act, advising or aPproval of his application as follows: Ur. Henry T. Schuler, for permission to serve at the same time as an officer of the Bank of New York and Trust Company, New York, New York, and as a director of The First National Bank of Bellmore, Bellmore, New York. Approved. Letter dated April 25, 1934, approved by five members of the 80ard, to an applicant for a permit under the Clayton Act, advising of 4PProval of his application as follows: Mr. F. W. Hitzaman, for permission to serve at the same time as an officer of the Fort Wayne National Bank, Fort Wayne, Indiana, and as a director of the Old-First National Bank in Bluffton, Bluffton, Indiana. Approved. Letters dated April 25, 1934, approved by six members of the 1146ard, to applicants for permits under the Clayton Act, advising of %royal of their applications as follows: Mr. C. L. Cobb, for permission to serve at the same time as a director and officer of The Peoples National Bank of Rock Hill, Rock Hill, South Carolina, and as a director of the Charlotte branch of the Federal Reserve Bank of Richmond, Charlotte, North Carolina. time 14r. Arthur A. Bentley, for permission to serve at the same Fulton, Bank, State Fulton as a director and officer of the Illinois, and as a director of The City National Bank of Clinton, Clinton, Iowa. Approved. Act, advisLetters to applicants for permits under the Clayton 14g follows: `11 approval of their applications as 1159 -31- 4/26/34 Mr. Thomas L. Evans, for permission to serve at the same time as a director and officer of the Farmers Savings Bank, Beaman, Iowa, and as a director of The First National Bank of Gladbrook, Gladbrook, Iowa. Mr. E. S. Xernegan, for permission to serve at the same time as a director of The Northern California National Bank of Redding, Redding, California, as a director of the Bank of Tehama County, Red Bluff, California, and as a director of the First National Bank in Bakersfield, Bakersfield, California. Ur. E. C. Frisbie, for permission to serve at the same time as a director and officer of The Northern California National Bank of Redding, Redding, California, and as a director and officer of The First National Bank in Yreka, Yreka, California. Approved. There were then presented the following applications for orig14.41 or additional stock, or for the surrender of stock, of Federal reserve banks: Ah -Lications for ORIGINAL Stock: 4. "ts Caii7/71aThational Bank of Latrobe, Latrobe, Pennsylvania Shares 116 116 66 66 P,:t:ieZ..,qat No. 5. Southern National Bank of Orangeburg, °raneeburg, South Carolina 44.tat National Bank at East St. Louis, Xast St. Louis, Illinois ' 46 National Deposit Bank in Owensboro, Owensboro, Kentucky t National Bank at Antlers, Antlers, Oklahoma 150 114 264 51 51 117kat 1--ict No, 12. National Bank in Tonasket, Toaasket, Washington l'at A 14 36 Total 36 533 150 150 for ADDITIONAL Stock: TZEI1Z-121L11. -;yel'a County Trust Company, tlew York, New York 1160 4/26/34 -32- 41 4121L2ILLaILL2r ADDITIONAL Stock: (Continued) lrst National Bank in Phillips, Phillips, Wisconsin District Tc). 11. The First 'National Bank Douglas, Arizona The First National Bank Port Neches, Texas The First National Bank Waco, Texas The First National Bank Weslaco, Texas Shares 12 12 of Douglas, 21 of Port Neches, 12 of Waco, 30 of ':ieslaco, 9 Total 72 234 15 15 aP„It.Elpt No. 2. Tette Bank of Brooklyn in New York, New York, N. Y. 390 390 ,gLI: .1.ct No. 3. the ocean City National Bank, Ocean City, New Jersey 120 120 22,41sp.tions for SURRENDER of Stock: D istrict 1,70. 1. The :ilton National Bank, Wilton, New Hampshire e First National Bank of Lit. Healthy, Mt. Healthy, Ohio The .-1,aulding National Bank, Paulding, Ohio ' 4e First National Bank Trust Co. of Ford City, Ford City, Pennsylvania 7i. 1,11.2t No. 5. First National Bank of Granville at eZford, Oxford, Worth Carolina 75 48 120 249 240 240 108 108 18 18 biR+ No. 7. -e First National Bank of Viyandotte, WYandotte, 1:Aichigan No, 9. 4e First National Bank of Holland, Rollanu, lAnnesota 1161 -33.0.41....cations for SURRENDER of Stock: (Continued) Dist me First National Bank of Lockhart, Lockhart, Texas Tile Lockhart National Bank, Lockhart, Texas District No. 12. The First National Bank of Hardwick, California Shares 150 150 300 21 Total 21 1,461 Approved. Thereupon the meeting adjourned. pProved: Chairman, Executive Committee.
@FedFRASER