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1121 A meeting of the Board of Governors of the Federal Reserve SYstem r'as held in Vashington on Tuesday, August 10, 1937, at 11:30 a, ais PRESENT: Mr. Mr. Mr. Mr. Eccles, Chairman Szymczak McKee Davis Mr. Mr. Mr. Mr. Morrill, Secretary Bethea, Assistant Secretary Carponter, Assistant Secretary Clayton, Assistant to the Chairman C°n sideration was given to each of the matters hereinafter l'efel 'red to and the action stated with respect thereto was taken by the Board: Pederai The Recelai : rv System held on August 9, 1937, were approved unani- 1104s1y. 11 / 44k of utes of the meeting of the Board of Governors of the T elegram to Mr. Sargent, Secretary of the Federal Reserve &all F rancisco, stating that the Board approves the establish- 14elit Itrithc)ut change by the bank today of the rates of discount and in its existing schedule. Approved unanimously. . 11c1 There was submitted a recommendation from Messrs. Spurney °I)Pang that Mrs. Katie V. Taylor, who had been selected in tecol.,c1 e'llee with the authority granted by the Board on July 12, 1937, `'ticl a 4° had Passed a satisfactory physical examination, be appointed Or so chEtr17c)raan 0 in the Board's new building, with salary at the rate Per hour, effective as of August 10, 197. 1122 8/10/37 -2Approved unanimously. Letter to Mr. Gidney, Vice President of the Federal Reserve Bar Of New York, reading as follows: , "Reference is made to your letter of July 23, 1- 9 7, and Mr. Paulger's reply of July WI regarding e application of the Hudson Trust Company, Union Nev, Jersey, for membership in the system, linlch is pending at your bank. "In view of the circumstances the Board concurs in your position that you continue to hold the a crlication in abeyance pending composition of the Dlfferences between the trust company and the Federal eposit Insurance Corporation. In this connection it is sufrgested that, since You have participated with the Federal Deposit In471rance Corporation in the last two examinations of fle trust company, as of June 16, 197,6, and February f0 '19Z7, it might be advisable for you to defer h'ther examination of the trust company until you .re reason to believe that the differences between cue trust company and the Federal Deposit Insurance c°rPoration have been composed or are capable of f°111Position on a program which you would feel justitI ' lled in recommending to the Board for incorporation in e conditions of membership." P Approved unanimously. Letter to Mr. Young, Vice President of the Federal Reserve Of Chi cdgo, reading as follows: "Receipt is acknowledged of your letter of -tst3 in which you referred to the Board's letter 0;1g.82, advised that the Metropolitan Trust Company ha ' Illectgo, Ithich is primarily a trust company and fo :110 deposit liabilities, has requested blanks king an application for membership, and re- Ille' queFted advice ,hether, assuming that the trust i 1123 8/10/37 -3Tt„ " mPanY is in good condition, you can consider an application of such character. "There has been no change in the Board's position regardin T g such applications since the Board publicly announced in uulY 19.4 (X-7952) that it would give consideration to appliions for membership from trust companies which did subno commercial banking business. Since that time the Doard has approved the application for membership of a bf,4 ” company which confines its activities to fiduciary 4 8'ness and does no deposit banking business. Accordingly, ' " c.'a mere fact that a trust company engages primarily in fiduiel,arY activities and has no deposit liability is no reason 4Y You should not consider its application for membership." T Approved unanimously. or xew Letter to Mr. Gidney, Vice President of the Federal Reserve Bank I0rk, reading as follows: I "Reference is made to your letter of July 19, 1937, , 1,:!"-ative to the proposed transaction whereby the 'Bank of es„ -Y Nutley, New Jersey, will purchase the assets and trellMe the liabilities of The Franklin National Bank of also of Nutley, New Jersey. ftlet has noted your opinion that in view of the at both banks have the sae hat m general type of assets : 0 t1(1 are doing the same kind of business the transaction not involve any change in the general character of asset ex' set8 of the Bank of Nutley or broadening in the functions beercised by such bank within the meaning of condition numIlj:d 5 under which the bank was admitted to membership. t1„:,11e ci rcumstances the Board likewise does not regard the co-"action as coming within the scope of the aforementioned islicition and the approval of the Board to the transaction 1*. erefore, not required. Bara, It is noted that after the proposed transaction the th-tq °I) Nutley will have a relatively low capital ratio and a result of the acquisition of the assets of the illalcnal bank the investment of the bank in fixed assets "her real estate will exceed its capital structure. PIZeht,circumstances the Board does not regard with favor or wflich provide for withdrawal of substantial amounts you'aPital in cash. It is understood, however, that while wit uld greatly prefer that the transaction be accomplished bu the proposed cash payment to the minority stockholder You are satisfied that it can not be accomplished 1124 8/10/37 -4-tt„ anY other basis and that in view of all of the circum! c ancas, it is advisable that the transaction be effected. u iS assumed, moreover, that the management of the bank will devote its unremitting efforts to strengthening the caPita] structure and disposing of its other real estate. "It is noted also that among the assets of The FrankNational Bank of Nutley are certain securities and corata stocks which member banks are prohibited from pur„asing under the provisions of sections 5136 and 5201 of j'aetRevised Statutes of the United States and the Comptrols regulation governing the purchase of investment setli ,ritias. It is suggested that you advise the member bank t such securities and stocks should be disposed of prior u the conclusion of the transaction or as soon thereafter as practicable." i r Approved unanimously. Letter to Mr. Fenner, Chief Examiner, Federal Reserve Bank of elPhia, reading as follows: "In accordance with the recommendation contained in Y°11r letter of August 3, 1937, and pursuant to the authority !:ented to the Board of Governors by Section 9 of the Fedl'al Reserve Act, as amended, the Board extends to September 1' 1937 the time within which The Pennsylvania Company for p: s ances on Lives and Granting Annuities, Philadelphia, " : 0 1) shall file end publish the reports of its affiliates ' Forms 220 and 220e, respectively, as of June 30, 1937. is orm 105b (Schedule '01 ), to which you also refer, tota Part of the bank's condition report. The law does be„emPower the Board to extend the time within which State members may submit their condition reports. It would er) however, that all of the information called for by ceDinle' 0 ' can be supplied from the bank's records ex-il:he figures of capital, surplus, and undivided profits Et , e e affiliate. If the capital figures of the affiliate orfi available as of Tune 30, 1937, the latest available - 40tEures may the d. may be shown in Schedule '0', with a note giving r, to which they relate and the reason why later -'eUres are not available." ser Approved unanimously. Thereupon the meeting adjourned.
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