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A meeting of the Federal Reserve Board was held in Washington ell Monday, December 10, 1934, at 4:00 p. m. PRESENT: Mr. Mr. Mr. Mr. Mr. Eccles, Governor Thomas, Vice Governor 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 °et°ber 18) 19, 22, 26, 25, 26, 29, and 60 (two meetings), and Eovember l' 14' 15 '16, and 17, 1964, were approved. The minutes of the meetings of the Executive Committee of the 441'6'1 Reserve Board held on October 20 and 31, and November 2, 3, 5, 6, 8 '10, and 13, 1934, were approved and the actions recorded therein were Itatiried 4nanimousiy, The Board then acted upon the following matters: Mem°randum dated December 5, 1934, from Mr. Wyatt, General Counreeo ending the appointment of Mr. John C. Baumann as an assistant e(111r1sel in the legal division, with salary at the rate of ,i5,000 per or effective as of the date upon which he enters upon the performance s diltie8 after passing a satisfactory physical examination. Approved. :::::: December 7, 1964, from Mr. Goldenweiser, bireetorM:7 : : : of Research and Statistics, transmitting the NiEriatiorl of Mrs. Helen Hassell as a stenographer in the division, ql'eetive as of the close of business on December 11, 1934. 3777 12/10/34 9 Accepted. Letter to "The National Bank of Lumberton", Lumberton, North Car--uala, reading as follows: yoli "The FedPral Reserve Board has given consideration to a 8, arid PPlication for permission to exercise fiduciary powers, grants you authority to act, when not in contravention of reee or locol law, as trustee, executor, administrator, re,T,: trav of stocks and bonds, guardian of estates, assignee, ti,--3-Yer) committee of estates of lunatics, or in any other -lrY a capacity in which State banks, trust companiesor uc' Other baili co 5 rporations 1-4hich come into competition with national No,: are permitted to act under the laws of the State of toTL Carolina, the exercise of all such rights to be subject tio he Pr°visions of the Federal Reserve Act and the regula"8.0f the Federal Reserve Board. fidu 7This letter will be your authority to exercise the covel arY powers granted by the Board. A formal certificate coursl eN such authorization will be forwarded to you in due Approved. Letter to mr. O'Connor, Comptroller of the Currency, reading 4 tcalowe. Reser:In accordance with your recommendation, the Federal Or 611:,e ,(3ar6 approves a reduction in the common capital stock fromderchanis National Bank of Thitehall', Vhitehall, New vide ' ll' . $100,000 -to 50,0001 pursuant to a plan which procorr8 that the released capital shall be used to eliminate a e8P°11 ding al1 amount of the least desirable assets in the bank, 48 set forth in your memorandum of November 28, 1934." Approved. NI Letter to 1-1r. O'Connor, Comptroller of the Currency, reading as 4tierv " 4ccordance with your recommendation, the Federal e "PhA i sd'LL approves a reduction in the common capital stock i4:7nchburg National Bank and Trust Company?, Tzrnchburg, Prolilr, from .1.1 000 000 to 600,000, pursuant to a plan which ' 14) th e8 that the released common capital shall be distributed eto c--uolders in the form of a dividend, all as set forth 3778 12/10/34 -5in Your memorandum of December - 193A." Approved. Letter to Mr. O'Connor, Comptroller of the Currency, reading as follows: to "In accordance with your recommendation, the Federal Reserve piard approves a reduction in the common stock of 7e capital 4st tor Nationa1 Bank of rhitefishT, Whitefish, Montana, from 5,000 °)°00, pursuant to a plan which provides that the bank's, shall be increased by the sale of 4..0,000 of preferred 4°,ek to the Reconstruction Finance Corporation and/or others, bXhat the released capital, together with a portion of the uneajsurplus and undivided profits, shall be used to eliminate Nov ',.81*actorY assets, all as set forth in your memorandum of smuer 27 19g4. " -, char "Although your memorandum does not state the total amount of ffs to be made, it is assumed that you will require at e eurit'6he limination of all estimated losses and lover grade seof j dePreciation as shorn in the report of examination as 11-1,Y 28, 1934.11 leet2 Approved. Letter to Mr. O'Connor, Comptroller of the Currency, reading as f011owa: 1934 ! ceiPt is acknowledged of your memorandum of November 50, st04r4-0:1 reference to the proposed reduction in common capital 11111oh Zf 'The Coleridge National Bank', Coleridge, Nebraska, , 1 11 81_approved by the Board on June 11, 1934, pursuant to a e11 provided among other things for a contribution of 110:x local interests. agreed ?II advise that the Reconstruction Finance Corporation has bealk Purchase $30,000 of preferred stock of the subject able ' aej4rainating the previous condition that ;47,7,500 of unaccept8etS be Purchased by local interests for cash. its 1.x.111 accordance with your recommendation, the Board amends ccrit °11s approval by eliminating the requirement for a $7,500 tb - s 0 • —4.4 with the , understanding that the other provisions of Nina] . plan remain unchanged." Approved. 'letter to tlx. Nerton, Federal Rest)rve Agent at the Federal Of Atlanta, reading as follows: 3779 12/10/34 "This refers to your letter dated November E, 1954, ad1 5ressed to Mr. Paulger, regarding the filing of an application ? 1 17 the Palmer Investment Company, Chicago, Illinois, for a voting Permit authorizing it to vote the stock which it owns or controIs of The Palmer National Bank and Trust Company, Sarasota, Florida. "From your letter it appears that the Palmer Investment ComP eienY °wns 819 of the 1,000 outstanding shares of the capital 2ck of The Palmer National Bank and Trust Company. At the 1934, stockholders' meeting of the bank, 975 shares ,ere represented of which only 156 shares were owned by stocker than the investment company. The entire stock oelpeented at the meeting was voted for the directors now in e_ lee/ although the investment company did not have a permit 1; 1°111 the Federal Reserve Board to vote the stock which it awns, comresP°nse to an inquiry from the bank, Mr. Await, Deputy as rroller of the Currency, informed the bank that inasmuch board of directors had each received all of the haci„Present tha.0 were legally cast, and inasmuch as such directors or reeoh received the vote of all of the stockholders present direZesented who were aualified to vote, the %. election of oth, e ors was legal and it would be unnecessary to hold anelection. dated"Pu stated in your letter that you have received a letter Collt,°vember 2, 1954, from The Palmer National Bank and Trust which the bank stated that it construed Mr. Await's that ?lid the Federal Reserve Board's Regulation P as meaning a.ppjnolding company affiliate is not required to file an event je.ion . for a voting permit but must do so only in the the sub %wlehes to vote the stock which it owns or controls in 8 al,:rY member bank. In such letter, The Palmer National elelrust Company stated that it understood that it might clireet„ °,, (j t° aPPly for a voting permit and leave the election of the vo;" and other business coming before the shareholders to the hoie of the remaining cualified shares owned by others than °r not VIlg comPany affiliate, and asked to be advised whether Bo . his " would meet with the approval of the Federal Reserve the el.+ Your letter, you state that you are uncertain as to conipaZell.c to which you the .1-_ffiliate of a should go in insisting that a holding national bank apply for a permit to vote tz 17114_ the h(4, 4.01 it owns or controls of such bank in cases where do -Lflto: -°111PanY affiliate expresses a disinclination so to "h°ugh nothing .es contained in section 5144 of the Revised tileAv4 the United States as amended by section 19 of the Ret of 1 an 4-933 req u ires a holding company affiliate to -1-T-Lication I for'a permit authorizing it to vote the 3780 12/10/34 -5it owns or controls of either a national or State the Federal Reserve Board considers it an undesirable Practice for a bank to conduct elections of directors and 00t:raolls:ct other business at shareholders' meetings upon the small minority of the outstanding shares. It is undeerstood that the office of the Comptroller of the Currency neurs in this view. In this connection, attention is called j2.the fact that section 5144 of the Revised Statutes of the nited States provides that shares of a national bank controlled ;LanY holding company affiliate of such a bank 'shall not be te?ed u unless such holding company affiliate shall have first ohfled a voting permit', and in order to avoid a violation of Prohibition in the statute the shares of a national bank sue Yol,aciiihloglding company affiliate should not be voted until company has obtained a voting permit from the Board. termi Arl additional consideration is that it is impossible to deacti la nie when a question will arise which will require favorable b the holders of a certain percentage of the member bank's ferr Tiding shares, such as the auestion of the issuance of preare ef. , stock or the reduction of capital stock. Such questions „:_ten emergency matters requiring immediate action, and if, ledge such case, its holding company affiliate, with full kmowfoa of the law, has previously failed to file an application Presejring Permit and to comply with the usual requirements ing permed by the Board as conditions to the issuance of a votPermit fit, the delay necessarily involved in obtaining a voting sUbeid. r°m the Board may be a mtter of embarrassment to the 11 ,rY member bank. toard 1,1floe receiving your letter dated November 5, 1934, the ;as received a telegram dated November 13, 1934, from Mr. Resell, °ling, Assistant Federal Reserve Agent at the Federal the atZ Bank of Chicago, stating that he had been informed by would a few °1'ne7 for Mr. Palmer that the Palmer Investment Company 1i sr file an application for a voting permit within be apprrs- If ycru have not received such application, it will 44d the(tned f you will advise the holding company affiliate of the Board's attitude concerning the matter." whicfleInbr oUt4 Approved. --..um dated tthe ,, December 5, 19340 from Mr. Smead, Chief of IJIviaton. _ °f Bank thetoer Operations, stating that since October 17, 1934, dts weeki3„ 4 statement of condition of reporting member banks in Mlxv, 6 cities b kid ,o m /tIzere. "as shorn a nuMber of new items, including "Acceptances lal paper" held br such banks; that amounts reported against 381 12/10/34 that —6-caption represent acceptances and commercial paper bought in the °Pet market on1,7; that if a bank holds any of its own acceptances they a're included in "Other loans", and that attempts on the part of the heriCala Acceptance Council and the principal accepting banks to check ii41111ati°11 in their possession relating to the volume of acceptances clitstauding, etc., against the item "Acceptances and commercial paper" as in 81144 the Boats weekly statement have resulted in the finding of c°nsiderable d ifferences, largely due to the fact that a bank's own aceePtalices are included in "Other loans" and not in "Acceptances and celmlercial Paper". The memorandum stated also that, in order to avoid 811ch misunderstandings of the Board's reports, it is recommended that, beglm,4_ —44.4g with the statement for December 5, 1934, the caption "Accept44ce8 atd commercial paper" be changed to read "Acceptances and comerpaper boughtn Approved. Telegram dated December 8, 1934, approved by five members of the to M Or chic -r. Stevens, Federal Reserve Agent at the Federal Reserve Bank ag°, reading as follows: Reference 8a is made to our telegrams regarding order of :2i C iiesion of State of Wisconsin prescri?irg maximum Paid by. s etZf eytwo and one-half per cent whichmay be depoJr, to the mutual savings banks or trust companies Wisconsin banking statutes on time or of sect4 3ate after Jpn 1 1935. In view of provisions tazikr1 24 of Federal Reserve Act and of the order ofReserve the 11%,d1C°mmission, it is the opinion of the Federal scrib (vat the maxi rate of interest which has been pre' I, TPalizeLe' .1 3' the order of the Banking Commission will, after "PEtid . 113 1935, be the 1 imum rate authorized by law to Pon time or savings deposits by State banks or trust toam 12/10/64 -7- 3782 com4 m4„ organized under the laws of Vdsconsin within the ii-1-14ng of section 24 of the Federal Reserve Act. Accordingly, rate of Period such interest, accruing after that date and during the order is legally in effect, which a national bank ather member bank located in that State may lawfully pay on savings deposits may not exceed the rate of two and 6:21alf per cent per annum prescribed in such order of the b7"1-11-1g Commission. It is understood that you have already of°11ght the order of the Banking Commission to the attention da the Wisconsin member banks for their information and guiOel but it is believed desirable that notice of the Board's bail l with regard to the matter be given by you to all member Comm !in Your district located in Wisconsin. The order of the at euseion does not prevent a State bank from paying interest existi t rate as may be provided for in any contract 'now Object! and, accordingly, the Federal Reserve Board will not at wp payment of interest by a national bank in Wisconsin ace :rate greater than two and one-half per cent per a annum in cottrdance with the terms of and until the termination of any tioerct existing on the date on which such bank receives noMatte; r°4 You of the view of the Federal Reserve Board in this provi-gl Provided such rate is otherwise in conformity with the 80011::--ons of Regulation Q and the contract is terminated as abcv '8 possible under the terms thereof. The view expressed is ;Predicated upon the Board's understanding that the uola n has not in any case permitted a mutual savings bank itexaPPlication as orovided in the order to pay a dividend rate 11041 0 88 of two and one-half per cent Per annum. If the Com41714-11 81101ad permit one or more mutual savings banks to Pay eettercis at a Reserv and it higher rate a different question will be prewill be necessary in that event for the Federal rate !Board to give further consideration to the maximum wieconol..interest which may lawfully be paid by member banks in colasin7on time or savings deposits. Please request Illsailltli,lanking Department to advise you of any case in which savings bank may be permitted to'pay higher rate of znd8 and please notify the Board of any such case." l g2gr l ovd, together with a similar tele also dated December 81 1934, and approved by five members of the Board, t° Mr. Peyton, Federal Reserve Agent at tne Federal Reserve Bank of Minneapolis. Lett, f 111,z op ' 0 Mr. Hoxton, Federal Reserve Agent at the Federal ReRiehlnOnd, reading as follows: 3783 12/10/34 -8- "The Board has reconsidered the applications of Mr. Thomas B. Finan, Cumberland, Maryland, for permission under :e provisions of the Clayton Act to serve as director of First National Bank of Cumberland and as officer of the Ribeltr Trust Company, both of Cumberland, Maryland; Mr. 011!,A. McMullen, Cumberland, Maryland, to serve as director t :'Ile First National Bank of Cumberland, Chairman of Execuilve Committee of the Liberty Trust Company, both of Cumberpand, Maryland, and as director of the Fidelity Savings Bank, brostbure, 7-oaryland; Mr. H. A. Pitzer and Mr. Henry Shriver, 04. 11 of Gumberland, Maryland, to serve as director and/or %T.1 , -.?er of The First National Bank of Cumberland, Cumberland, land, and The First National Bank of Mount Savage, Mount it'ar, Maryland. Upon the basis of the information before with-tncludi, --g the additional facts and arguments submitted 7A sistant Federal Reserve Agent Fry's letters of November ' of ,L,and November 8, 1934, the Board feels that the issuance wit-Liraited permits to the applicants would be incompatible ,, the pu , blIc interest as set forth in its letter of October , to you. cf Th21z 7ever, it appears that a plan for the recapitalization is in- 'Irst National Bank of Cumberland, Cumberland, Maryland, /latic;gr"ess, that pursuant thereto, the Reconstruction Fi$200-0orperation has granted the bank a commitment to purchase sequZ' ' t° of preferred stock, that such commitment, unless sub!. extended, expires on December 51, 1934, that with Pr°1aPt ers th ction on the part of officers, directors and shareholde co nsummation of the proposed recapitalization program 51 Teible within the short time remaining before December or 4, that The First National Bank of Cumberland is in need Act 'e4 str engthening and that, without the issuance of Clayton to j oelllits to the above named individuals it will be difficult Propo!Plete the necessary formalities in connection with the tacilletd,reca pitalization. In view of these facts, in order to Nation the proposed recapitalization program of The First %dat-71 8ank of Cumberland and in accordance with the recomor Dec-on cf Assistant Federal Reserve Agent Fry in his letter to mesember 4, 1934, the Board has granted Clayton Act permits ever 6r8. rinan, Pitzer and Shriver effective, howMcMullen, ilic14°T,7 for the period ending January 8, 1935. There are tegbire,..' the originals and copies of the permits for transmitJ°11 to the applicants and the banks involved and co-lies 41: .1e relf,nles. When the permits are sent to the applicants you ' 4ere --s6ed to call their attention to the limited status he sx °4 10 a4lr aeArise them that the permits have been granted with I-c4tion that their services will be brought into conformths perm„. e -a-cs provisions of the Clayton Act at the expiration of on January 8, 1935. 1p4 I 3784 12/1o/4 -9„ "Please keep the Board advised as to the progress made in reca pitalization program of The First uational Bank of Cumand; and upon the expiration of the Clayton Act permits on t:Z4arY 8, 1935, please advise the Board promptly as to the steps bY Messrs. Finan, McMullen, Pitzer and Shriver to bring their c re into conformity with the provisions of the layton lationships Act." re Zi Approved. Act permits referred to in the above letter were as follows: Mr• Thomas B. Finan, for permission to serve at the same time .11 „ 1,1 8 ,4' director of The First National Bank of Cumberland, CumberIllarYland, and as an officer of the Liberty Trust Company, erland, Maryland, for the period ending January 8, 1935. Mr, Ru as a j r " A- M lama -T'ectorcMullen, for permission to serve at the same time of The First National Bank of Cumberland, CumberLib 1and, as chairmen of the executive committee of the or ti.: -:,Trust Company, Cumberland, Maryland, and erldtt as a director od J Savings Bank, Frostburg, Maryland, for the pe g' January 8, 1955, Mr6 4. direct A* Pitzer, , for permission to serve at the same time as a er°r and officer of The First National Bank of Cumberland, IlarYland, and as a t&o director and officer of The First Period 'ank of ' Mount Savage, Mount Savage, Maryland, for the ending January 8 1935. 41% , for permission airect r Shriver, to serve at the same time as a -r and officer of TheFirst National Bank of Cumberland, no eriana 140unt i4 : 4arYland, and as a director of The First National Bank al414lay 8 , 19g, Mount Savage, Maryland, for the period ending tett ers dated December 8, 1954, approved by five members of the to 44.icants for permits under the Clayton Act, advising of 84)' 4 or their aP Plications as follows: dtreq • Boyd, for of permission to serve at the same time as a The farmers 00z14.411 National Bank of Deposit, Deposit, Trust colrakIt New Zector of The First National Bank and ttr, Walton, New York. 11014,a tot.e—crCassidY emission to serve at the same time as of tiew y The IFforp iretNational Bank and Trust Company of Walton, ark, and as a director of The First National Bank of ) New York. 3785 12/10/34 -10- Mr. p °fficerrancis S. Clarke, for permission to servo at the same time as an 1 of The First National Bank and Trust Company of ,Talton, slton, New York, and as an officer of The First National Bank in ldlleY, Sidney, New York. kr. E. r, 2°. Guild, for oermission to serve at the srlmetime asa et'or and officer of The First National Bank in Sidney, Sidney, (Y / and as a director and officer of The First National Bank inist CoLay,ny of 'j-alton, Walton, New York. 141'1Vjlj a lam J. Merwin, for permission to servo at the same time as cockZor and officer of The First National Bank of Hancock, Handiret 8414 '"ew York, as a. director of The First National Bank in Sidney, Trust eY/ New York, and as a director of The First National Bank and e°mPany of Walton, Walton, New York. al; dir"eenneth A. SiDrag,ue, for °emission to serve at the same time as Rose02tor Of The First National Bank & Trust Comnrny of Roscoe, 13atik—,/ New York, and as a director of The Livingston I.Lanor National tdvingston Manor, New York. 411• r‘-I- • U-t13 A' • Thompson, Carew. for °emission to serve at the same timeof as R. or and officer of The National Bank and Trust Compen,T ,Norwich, New Yor'- 9.nd as director of The First National 111 uneY, Sidney, New York. ?Az,. G clirect e° , r" r V- Treys, for permission to serve at the same time as a coe of The First National Bank & Trust Compeny of Roscoe, .,os1304 New 1 York) and as a director of The Livingston Manor National ' .Lavingston Manor New York. 14,, J. diree os)ellr Allison, for 0ermi ssion to serve at the same time as a 111c1 officer of The First National Bank of Cochranton, , Peansylvnnia 1 as a director of The First NationalBank iercels Storl boro ) Stonoboro, Pennsylwnia l and as a director of the °untY State Bank / Sandy Lake, Pennsylvania. R. Do -eet wn, for permission to serve at the same time as a Pper.. olflcer of the First National Bank in Sharon, Sharon, "9,11, 4 n Lake,; e = acl-iti rector of the Mercer County State Bank, AnDroved. 3786 Thereupon the meeting adjourned.
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