Full text of Minutes of the Board of Governors of the Federal Reserve System : Meeting Minutes, August 21, 1936, Volume 23, Part 4

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1564

A meeting of the Board of Govelmors of the Federal Reserve Systern was held in Washington on Friday, August 21, 1936, at 11:00 a. m.
PRESENT:

Mr.
Mr.
Mr.
Mr.
Mr.

Ransom, Vice Chairman
Broderick
Szymczak
McKee
Davis

Mr. Morrill, Secretary
Mr. Carpenter, Assistant Secretary
Consideration was given to each of the matters hereinafter referred to and the action stated with respect thereto was taken by the
Board:
The minutes of the meeting of the Board of Governors of the Federal Reserve System held on August 20, 1936, were approved unanimously.
Telegrams to Mr. Kimball, Secretary of the Federal Reserve
Bank of New York, Mr. Austin, Chairman of the Federal Reserve Bank of
Philadelphia, Mr. Strater, Secretary of the Federal Reserve Bank of
Cleveland, Mr. Young, Secretary of the Federal Reserve Bank of Chicago,
and Mr. Thomas, Chairman of the Federal Reserve Bank of Kansas City,
stating that the Board approves the establishment without change by
the New York bank on August 20, 1936, and by the Philadelphia, Cleveland, Chicago and Kansas City banks today, of the rates of discount
and purchase in their existing schedules.
Approved unanimously.
Letter to "The First National Bank of Henderson", Henderson,
Kentucky, reading as follows:
"The Board of Governors of the Federal Reserve System
has given consideration to your application for permission




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-2-

"to exercise fiduciary powers, and grants you authority to
act, when not in contravention of State or local law, as
trustee, executor, administrator, registrar of stocks and
bonds, guardian of estates, assignee, receiver, committee
of estates of lunatics, or in any other fiduciary capacity
in which State banks, trust companies or other corporations
which come into competition with national banks are permitted
to act under the laws of the State of Kentucky, the exercise
of all such rights to be subject to the provisions of the
Federal Reserve Act and the regulations of the Board of Governors of the Federal Reserve System.
"This letter will be your authority to exercise the
fiduciary powers granted by the Board pending the preparation of a formal certificate covering such authorization,
which will be forwarded to you in due course."
Approved unanimously.
Letter to Mr. Sargent, Assistant Federal Reserve Agent at the
Federal Reserve Bank of San Francisco, reading as follows:
"Reference is made to your letter of July 13, 1936,
Comtransmitting the request of the 'Peoples Bank and Trust
balthe
retire
to
pany', Seattle, Washington, for permission
ruction
Reconst
the
ance of its outstanding debentures held by
ion
Finance Corporation in the amount of t250,000. In connect
at
that
fact
with this request, you call attention to the
of
the time of the absorption of the Security National Bank
place,
that
Everett, and the establishment of a branch at
e
the Board imposed a condition that the bank agree to increas
less
not
the aggregate amount of its capital and surplus to
been comthan ;1 1,500,000 by July 1, 1936, which condition has
plied with.
various factors
"The Board has given consideration to the
and the
letter
involved in this case, as set forth in your
the bank's
with
accompanying correspondence, and is in sympathy
the apalso,
ates,
desire to retire the debentures. It appreci
of
the bank
on
conditi
parently marked improvement in the general
have
which
e,
and the strengthening of its capital structur
of the materbeen effected in recent years. However, in view
the
condition in
ial growth of the institution since the date
ng
continui
upward trend
question was prescribed, the apparently
such
of
condition
of its deposits, the fact that the purpose




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-5-

"was to require the bank to have an adequate capital and
surplus for the protection of its depositors and other creditors, and the fact that the last examination in which your
examiner participated was nearly a year ago, the Board feels
that action on the bank's application should be deferred until after the next examination, which you indicate will be
undertaken in September. At that time the Board will be
glad to reconsider the matter if the asset condition of the
bank and the adequacy of its capital structure are such that
you are willing to recommend that favorable action be taken
on the pending application."
Approved unanimously.
Letter to Mr. Thomas, Federal Reserve Agent at the Federal Reserve Bank of Kansas City, reading as follows:
"Reference is made to your letter of August 10, 1936,
advising of the purchase for”1000 on May 2, 1956, by the
'Lusk State Bank', Lusk, Wyoming, of a parcel of real estate
for a future banking site without submitting the matter to
the Board for consideration as required by membership condition numbered 8 applicable to the bank.
"From the information submitted it appears that the
property in question was purchased in order to provide the
bank with a better location if the anticipated development
of the town continues; that the transaction resulted in a
d
reduction of $7"5,000 in surplus and 42,000 in the undivide
the
by
carried
is
property
profits account; and that the
bank as a nonbook asset.
the
"In view of your recommendation and the fact that
improper
or
large
unduly
be
to
investment does not appear
numor otherwise violate the spirit or purpose of condition
bank
the
of
n
admissio
on
with
in
connecti
bered 8 prescribed
the
to membership, the Board will interpose no objection to
appropriate
transaction providing it has the approval of the
ion as
State supervisory authorities. The report of examinat
to
subject
of June 9, 1956, indicates that the property is
will eventua loan of e2,998.47, which it is assumed the bank
no
objection
e
interpos
will
The
Board
retire.
ally wish to
should
debank
the
when
such
and
loan
if
of
to the payment
cide to do so."




Approved unanimously.

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8/21/56




Thereupon the meeting adjourned.

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