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3872 A meeting of the Federal Reserve Board was held in Vashington On Saturday, December 15, 1934, at 11:30 a. in. PRESENT: Mr. Mr. Mr. Mr. Mr. Eccles, Governor Thomas, Vice Governor Hamlin James Szymczak '!!r. Morrill, Secretary Mr. Bethea, Assistant Secretary Mr. Carpenter, Assistant Secretary The Board acted upon the following matters: Telegraphic reply, sent on December 14, 1934, with the ap11145.1 of five members of the Board, to a telegram of that date from Ik% New+ --on, Chairman of the Federal Reserve Bank of Atlanta, stating that„ 4ae board of directors of the bank, at its meeting on that date Ir°ted to establish a rediscount rate of 21% on rediscounts of eligible 134er for member banks and advances to member banks under the provi84418 of sections 13 and 13(a) of the Federal Reserve Act, as amended, effeeti -ve the first business day following that on which approved by the ? ederal Reserve Board, and a rate of 2% on Government securities 1.1114r repurchase agreement. The repay stated that the Board approved t°r the r -, .ederal Reserve Bank of Atlanta the rediscount rate of *1 etreetiv -- e December 15, 1954, and the rate of 21.10 on Government secur&ties Alrehased with an agreement to resell. Approved. Telegram dated December 14, 1934, approved by four members the 80 ard, to Mr. Sargent, Assistant Federal Reserve Agent at the Pederc Reserve Bank of San Francisco, reading as follows: or 3873 12/15/34 -2, f 'ZOUT letter December seventh. Board approves appointment n Permanent basis of M. W. Starbuck as examiner in Federal Re''17e Agent's department your bank, whose appointment on temporary 1, 0-4 vasls has been previously approved by Board. Since status (z).4 other examiners and assistant examiners listed in your letter : mains unchanged and their appointments have already been ape/?: :)ed by Board not necessary to submit their names for reapproval if/1 Year even though such has been practice in past. Board feels IVesirable, however, that old commission cards be canceled and 'Y cards issued your examiners and assistant examiners each year." Approved. Letter dated December 14, 1934, approved by four members of the }3 call) to mr. 0! Connor, Comptroller of the Currency, reading as Nlows. plica"There is transmitted herewith for your consideration an aption of the 'Newton Trust Company', Newton, Massachusetts, a atmwember bank, for permission to establish and operate a branch ati rt°112 Massachusetts. The Newton Trust Company is now operpZ" seven branch offices in the city of Newton, which has a Coilii2ti°n of approximately 65,000 and is located in Middlesex side"4 near the city of Boston. The Newton Trust Company is cone() 1:ed to be a well-managed bank and in a generally satisfactory ndltion. pzoo"The town of Weston, with a population of approximately ie „) is located in the same county as the city of Newton and com'woUt eight miles from the main office of the Newton Trust TrtrY. The town was formerly served by a branch of the Waltham etc ' ;iC°mPany which did not reopen following the banking holiday, liest;nee that time there have been no banking facilities in the • The Waltham National Bank advanced sufficient funds to t:4-cluidating Agent of the trust company to enable payment of cent of the liability to depositors, of whom many were re144d 50/4:r cent Porte have lived in Weston. Weston is approximately three tost° , , 11e-half miles from Waltham and the Federal Reserve Agent at that' 4. advises that it is in the natural trade territory of Waltham; 178.ltham National Bank is furnishing the town of Weston with 44 kelictillate banking facilities; and that, in his opinion, the establish.°1', 1,'fl the proposed branch would be an unprofitable venture. ized 41ne Board of Bank Incorporation of Massachusetts has authorNewton Trust Company to establish and maintain a branch is ofe.i.tt Weston, and Counsel for the Federal Reserve Bank of Boston lieu , ' 41e The ire T., opinion that the branch can be legally established. Dank Committee, however, after consideration of the appli- 3874 12A5/34 -3- "cation, voted to ..... decline to recommend that the application of the Newton Trust Company, Newton, Massachusetts, for permission to establish a branch office in the Town of Weston, Massachusetts, be approved, this committee being of the opinion that the Town of Weston is already adequately served by banking institutions in neighboring places, and that there is not sufficient need for banking services in Weston to justify the expense of establishing and maintaining a branch bank in the community.' In view of all of the circumstances, particularly the fact at the Waltham National Bank facilitated the distribution to 42„1,depositors of the Waltham Trust Company, which had a branch 8 444 Y,eston, and in view of the recommendation of the Federal ReRerve Agent and the Federal Reserve Bank Committee, the Federal ceosel've Board recommends that the application of the Newton Trust „mloany be not approved at this time. It has been observed that office has been urging the Waltham National Bank to strengthen :gital position, and it is believed, therefore, that, if the National Bank does not adequately strengthen its capital i.sition within a reasonable length of time, the application of the Newton Trust Company for permission to establish a branch at st°fl might appropriately be reconsidered. with "The attached file includes a letter dated November 261 19341 ren, "°mPaAying data from the Federal Reserve Agent at Boston, of examination of the subject trust company as of October ani ' 934, made by an examiner for the Federal Reserve Bankof Boston, a cofly of the memorandum prepared by the Board's Division of ;7nations. It will be appreciated if you will return this file Your it has served your purpose and when you advise the Board of r action on the application." Approved. th e Boa._ 4.04 Letter dated December 141 19341 approved by four members of to"The Chester National Bank Chester, New York, reading °WS: by t:This refers to the resolution adopted on March 21 19341 des.ge board of directors of your bank signifying the bank's hairtre to surrender its right to exercise trust powers which been granted to it by the Federal Reserve Board. bee4 491e Federal Reserve Board understands that your bank has the ' l Ischarged or otherwise properly relieved in accordance with haS ia17 of all of its duties as fiduciary. The Board, therefore, "lied a formal certificate to your bank certifying that it 3875 12/15/34 —4- no longer authorized to exercise any of the fiduciary powers covered by the provisions of section 11(k) of the Federal Reserve Act, as amended. This certificate is inclosed herewith. "In this connection, your attention is called to the fact 'at) under the provisions of section 11(k) of the Federal Reserve as amended, when such a certificate has been issued by the Fed ' Reserve Board to a national bank, such bank (1) shall no , ederal tonger be subject to the provisions of section 11(k) of the Federal R Act or the regulations of the Federal Reserve Board made Pursuant thereto, (2) shall be entitled to have returned to it any securities which it may have deposited with the State or similar authorities for the protection of private or court trusts, and (3) nail not exercise any of the powers covered by section 11(k) of the Federal Reserve Act except with the permission of the Federal B. Board." I Approved. Letter dated December 14, 1934, approved by four members of the Board, to"The First National Bank of Salamanca4 Salamanca, New York, l'e4ding as follows: th :This refers to the resolution adopted on July 10, 1934, by toe 'card of directors of your bank signifying the bank's desire er: its right to exercise trust powers which have been =to it by the Federal Reserve Board. grelr "The Federal Reserve Board understands that your bank has been harged or otherwise properly relieved in accordance with of all of its duties as fiduciary. The Board, therefore, hae ise issued a formal certificate to your bank certifying that it er,21° longer authorized to exercise any of the fiduciary powers -vered by the provisions of section 11(k) of the Federal Reserve Act) as amended. This certificate is inclosed herewith. that "In this connection, your attention is called to the fact se„, under the provisions of section 11(k) of the Federal Re— as amended, when such a certificate has been issued by.4‘ tT sha.,,,e Federal Reserve Board to a national bank, such bank (1) thell no longer be subject to the provisions of section 11(k) of Boar,Flederal Reserve Act or the regulations of the Federal Reserve tur,"' /lade pursuant thereto, (2) shall be entitled to have re— sta ed to it any securities which it may have deposited with the co,Le_ or similar authorities for the protection of private or trusts, and (3) shall not exercise any of the powers coy— Pe b' section 11(k) of the Federal Reserve Act except with the ml8sion of the Federal Reserve Board." Approved. 3876 12/15/34 -5- Letter dated December 14, 1934, approved by four members of the Boarel to Mr. OtConnor, Comptroller of the Currency, reading as fellows: "Receipt is acknowledged of your memorandum of December 10, ,934, in regard to the cap!tal reduction of 'The First National Bank and Trust Company of Saugerties', Saugerties, New York, which 8 ePproved by the Board on November 3, 1933, 6ubject, among other conditions, to the following: 'That adequate provision will be made, either in the articles of association of the bank or otherwise, to prevent the retirement of the preferred stock from resulting in a reduction in the ban'cts capital below an amount substantially equivalent to that called for in the plan of rehabilitation referred to above.' "You advise that the bank requests the removal of the fore0i condition; that your office believes the bank to be somewhat 4 eroapitalized, and that adequate protection will be furnished the depositors if the restriction imposed by the Board is removed and e bank permitted to retire its preferred stock out of earnings, Provided that its unimpaired capital accounts be maintained at not ess then =150,000. a "In accordance with your recommendation, the Board waives the 21.4'J-cation of its condition set forth above, with the understandthat your office will require the bank to maintain at all times atisfactory ratio of sound capital and surplus to deposit liabilItiesen 1 1 Approved. Letter dated December 14, 1934, approved by four members of the tottra 'to 11r. O'Connor, Comptroller of the Currency, reading as follows: Bo "In accordance with your recommendation, the Federal Reserve aPproves a reduction in the common capital stock of 'The tr ' 86 National Bank of Sault Ste. Marie', Sault Ste. 7ariel Michigan, rer t00,000 to 050,000, pursuant to a plan which provides that the tilld.74ed. capital, together with a portion of the bankts surplus and •ere-'''i'lded profits, shall be used to eliminate estimated losses agitiart3-ng approximately $105,400, as shown in the report of examOf a3 of October 31, 1934, all as set forth in your memorandum - eember 6, 1234." ' Approved. Letter dated December 14, 1934, approved by four members of the to ! , T .4J-. O'Connor, Comptroller of the Currency, reading as follows: 1300.12In accordance with your recommendation, the Federal Reserve aPProves a reduction in the common capital stock of 'The -8 National Bank of Heringtont, Herington, Kansas, from 11,50,000 3877 12/15/34 -6- "toft5,0001 pursuant to a plan which provides that the bank's capital 7nall be increased by :15,000 of preferred stock to be sold to the Renstruction Finance Corporation, and that the released capital shall _e used to oranduin of eliminate substandard assets, all as set forth in your mem,December 6, 1934." r Approved. Letter dated December 14, 1934, approved by four members of the °Itrd, to?Ty. e O'Connor, Comptroller of the Currency, reading as follows: B "In accordance with your recommendation, the Federal Reserve °d approves a reduction in the common capital stock of 'The First nal Bank of Walsenburgl, Valsenburg, Colorado, from ',60,000 to slxg(30) pursuant to a plan which provides that the bank's capital 4,-L be increased by the sale of $100,000 of preferred stock to the e.e!Mistruction Finance Corporation, and that the released capital all be used to eliminate substandard assets, all as set forth in ur me morandumof December 3, 1934. 1. ,„ Although your memorandum provides only for the use of the re,.c7sed capital to eliminate substandard assets, it is assumed that 10L_Ir office will require the elimination at least of all estimated a:ses as classified by your examiner in the report of examination Of auly 26, 1334." Ar 4 Approved. Letter dated December 14, 1934, approved by four members of the 11°(11 t Fletcher, Acting Federal Reserve Agent at the Federal Revrve ejlk of Cleveland, reading as follows: the "Tllis refers to 7.1r. Evans' letter dated July 31, 1954, regarding poerlod within which the subsidiary member banks of BancOhioCortiai:, 1") Columbus, Ohio, are required to divorce their securities af-'r, BancOhio Securities Company. !,8 You know, BancOhio Corporation has applied to the Federal Re°ard for a permit to vote the stock of certain subsidiary nathe; 4- and State member banks under the provisions of section 5144 of lavised Statutes of the United States, applicable to holding coinof national banks, and under the provisions of section Stetio lle Federal Reserve Act, which makes such section of the Revised applicable to holding company affiliates of State member banks. st(Ic 0h Corporation owns all or substantially all of the shares of 411 of°1La number of member banks, and also owns all or substantially %II:611e shares of stock of BancOhio Securities Company, a corporagaged principally in the securities business. Accordingly, s--Lo Securities Company is an affiliate of the subsidiary member f BateOhio theoB Corporation within the meaning of section 2(b)(2) allking Act of 1933. In view of provisions of section 20 of 3878 12/15/34 -7- "the Banking Act of 1933 and of section 5144 (e)(3) of the Revised Statutes, hereafter described in more detail, the question has been presented by BancOhio Corporation as to whether the affiliation be!!esn BancOhio Securities Company and the subsidiary member banks of 'encOhio Corporation is required under the law to be terminated within ?ns Year after June 16, 1933, the date of the approval of the Banking Act of 1933, or within five years after the filing of an application I°r a voting permit by BancOhio Corporation. Year "Section 20 of the Banking Act of 1933 provides that after one from June 16, 1933, no member bank shall be affiliated, in any ller described in section 2(h) of said act, with any securities comPe .'T whereas section 514-4(e)(3) provides that every holding company aff i l ate in filing an application for a voting permit shall agree that J.+ ! 17 .11, within five years after the filing of such application, divest a4elf of its ownership, control, and interest in any securities company „. will cease participating in the management or direction of such cornforceand will not thereafter, during the period that the permit remains co_,acquire any further ownership, control, or interest in such 'PallY or participate in the management or direction thereof. uBancOhio Corporation has urged that section 5144(e)(3) is a spetaZ provision which creates an exception to the general provision confle section 20, and thus allows member banks who are affiliated company by virtue of common control by a holding comz-rtr a securities . Com '11ate, - 11 a five year period in which to divorce such securities P" affiliate. that:The agreement required by section 5144(e)(3), however, provides holding comnany affiliate shall divest itself of its ownerelli,4P1 control and interest in any securities company, and thus goes 13411rr than section 20 which merely requires a termination by a member 2(b) °! such an affiliation as falls within the provisions of section tlece of the Banking Act of 1933. A compliance with section 20 would not tirtssarilY result in a holding companyaffiliate divesting itself of all hoid?rest In' a securities company, but under section 5144(0(3), the withl ilig,,c , ,°111Pany affiliate must agree to divest itself of such interest -,,"-.4-17e Years from the filing of its application for a voting per111 1 4%411ZZ:1g: 514-4(e)(3) has a sphere of operation different from the Board believes that the two provisions are not Bazicorlf u:lict, and that the principle of statutory construction urged by 4eq 72 4 Corporation is inapplicable in interpreting the two sections. 41) , 1,3-1 the two sections were in conflict, it is believed that a correct vi's'io-tcation of that principle would lead to the conclusion that the prodeEtitns of section 20 should control; because in section ''0 Congress secti,sPecifically with the ,luestion of security affiliates, whereas in Dam, `41 5144 Congress dealt generally with the subject of holding cornH A hates. ecord' - ' re is 111gly, it is the opinion of the Federal Reserve Board that Of the aothing contained ,n section 5144(e)(3) of the Revised Statutes the United States which relieves a member bank from compliance with 44+1 t e ress mandate contained in section 20 of the Banking Act of 1933, ttltaed t in the case under consideration the one year provision conLI section 20 is applicable. 3879 12/15/34 -8- "It will be appreciated if you will advise BancOhio Corporation and its subsidiary member banks of the Board's ruling in this matter, 84:4 Inform the Board concerning the steps which are taken to comply with the provisions of section 20." Approved. Letter dated December 14, 1934, approved by four members of the to mr. Stevens, Federal Reserve Agent at the Federal Reserve Bank hicago) reading as follows: 7 The Federal Reserve Board has authorized the issuance to the 'American Holding Corporation', Chicago, Illinois of a general voting ItTrmit under the provisions of section 5144 of the Revised Statutes of 4._16 United States entitling such corporation to vote, for all purposes) ge stoc , lc which it owns or controls of the 'American National Bank and ust Comparw of Chicago', Chicago, Illinots, subject to the conditions Prescribed in the inclosed letter, which you are requested to forward to the American Holding Corporation, with any additional comments you s_y deem advisable in view of the circumstances involved. A copy of ' Ich letter is also inclosed for your files. nol "It is reauested that as soon as you receive from the American hibc1 41 21e Corporation three copies of the inclosed agreement marked ExRe I executed in a manner satisfactory to counsel for the Federal tl,!erve Bank of Chicago, together with information satisfactory to you t the other conditions contained in the inclosed letter have been r„!Plied with, you advise the Board by telegram of such fact. Upon of such advice from you, a voting permit till be issued and roar:led directly to the applicant, and a cow of such permit will be zejarded to you. Two executed copies of the above-mentioned agreearid 'marked Exhibit 1 should be forwarded to the Board for its records, reer,t1 .31e third executed copy of such agreement should be retained for the of your office. In vier of the fact that the above-mentioned applicant may not be e Prior to the next annual meeting of its subsidiary member bank, to j with-TPlYWith the conditions prescribed by the Board in connection he ins, issuance of a general voting permit, you are authorized to tit 7 ! . upon the request of the applicant, a limited voting permit ensuch applicant to vote the stock which it owns or controls of 4 the ,1 letce4usidiary member bank mentioned in the first paragraph of this 11;,!, for the following purposes only: To elect directors of such bank at the annual meeting of shareholders, or at any adjournments thereof, at any time Prior to April 1, 1035, and to act thereat upon such matters Of a routine nature as arr, ordinarily acted upon at the an;1 ' , 1' 11 meetings of such bank. tiolled40ur authority to issue such limited voting permit is condithe upon compliance, prior to the issuance of such permit, with .P1 or c iTditions set forth after the code word ANCILBAT, on pages G and ' 4), We Boarls)letter to all Federal Reserve Agents duted November (X "If YOU deem it advisable, 4.f You you may withhold advice of your 3880 12/15/34 -9"authority to issue a limited permit until you are satisfied that the applicant will not be in a position to comply with the Board's : 1 equirements in connection with a general voting permit prior to the annual meeting of its subsidiary member bank." Approved, together with a letter, also dated December 14, 1934, and approved by four members of the Board, to the American Holding Corporation, Chicago, Illinois, reading as follows: _ "The Federal Reserve Board has conside red the application of 17our c orporation for a general voting permit under the provisions ti,ection 5144 of the Revised Statute s of the United States eng it to vote the stock which it owns or controls of the ican National Bank and Trust Company of Chicago, Chicago , 411°181 and hereby authorizes the issuance of such a permit to corporation, upon the following conditions: Prior to the issuance of the general voting permit authorized herein, American Bolding Corporation shall execute and deliver to the Federal Reserve Agent, the official representative of the Federal Reserve Loard, at the Federal Reserve Bank of Chicago (hereinafter referred to as the Federal Reserve Agent) three copies of the inclosed agreement marked Exhibit 1. Ty. "II 41 Prior to the issuance of the general voting permit authorized herein, American Holding Corporation shall deliver to the Federal Reserve Agent three copies of Exhibit LI F.R.B. Form P-3, executed by American National Safe Deposit Company, Chicago, Illinois, and three copies of Exhibit N, F.R.B. Form executed by American Holding Corporation and consented to by American National Safe Deposit Company , both of which exhibits shall be in form satisfactory to counsel for the nr„. Federal Reserve Bank of Chicago. 41• Prior to the issuanc e of the general voting permit authorized herein, American Holding Corporation shall charge off or otherwise eliminate from its assets, and shall cause American National Bank and Trust Company of Chicago to charge off or otherwise eliminate from its assets, (1) all estimated losses in loans and discounts, (2) all depreciation in stocks and defaulted securities, (3) all depreciation in securities not of the four highest grades, as classified by a recognized investment service organization regularly engaged in the business of rating or grading securities, (4) all Other losses, all such charge-offs or eliminations to be based Upon the latest available reports of examination of such corporation and such bank by the appropriate supervisory authorities. Z 3881 1 ii 1415/34 -10- "The period within which a voting permit may be obtained by compliance with the above conditions is limited to four months from Fie date of letter, nnless application for an extension of time ls made to this and granted by the Federal Reserve Board. In connection with the requirements prescribed by the Board, it is understood, of course, that in any case where such require4ent8 have already been complied with, no further action rill be necesaarY in such respects except to advise the Federal Reserve Agent of the compliance. broa "It will be observed that the cgreements in Exhibit I contain d provisions. These provisions are so phrased in order to cover future as well as present subsidiaries and affiliates of your cor poration. "then the inclosed agreement marked Exhibit 1 has been executed 'l j o American Holding Corporation, please forward three executed acies thereof to the Federal Reserve Agent and advise him of the pli`1°/1 taken to comply with the other conditions stated herein. cli l the Federal Reserve Agent is satisfied that all of the conBo" -°ns stated herein have been complied with, he will advise the i; 1 c1 of the action taken in this matter, and, when all of such condta: mithave been complied with, the Board will issue a voting perto your corporation." The agreement referred to in the above letter read as follows: "AGREEMIT In consider • ation of the granting by the Federal Reserve Board, stz authority of section 5144 of the Revised Statutes of the United kli.,tL s, az amended, and pursuant to an application heretofore filed tat the Federal Reserve Board by the undersigned, of a voting pers ntitling the undersii;nr2 o vote, for all purposes, each share of : the :fc,k which it owns or controls of its subsidiary member bank, 11"alaersigned hereby represe nts, undertakes, and agrees as follows: 1. That the undersigned will not make, and will take all necessary action within its power to prevent any of its subsidiaries and any other organizations with which the undersigned or any of its subsidiaries is affiliated from making, an,Y loans or extensions of credit to, or purchases of securities under repurchase agreements from, the undersigned °r an7 of its subsidiaries or any other organizations with Which the undersigned or any of its subsidiaries is affiliated, or any investments in, or advances against, securities of the undersigned or any of its subsidiaries or any Other organizations with which the undersigned or any of its subsidiaries is affiliated, except within the same limitations and subject to the same conditions and provisions as are applicable under section 23A of the Federal Reserve Act to such transactions involving member banks 3882 12/15/34 "and t'ieir affiliates; except that this paragraph shall not apply to loans or extensions of credit by any organization to its own subsidiaries, or the purchase of securities under repurchase agreements by any organization from its own subsidiaries, or the investment by any organization in the securities of its own subsidiaries, where such transactions would not Otherwise be subject to the limitations, conditions and prono. visions of section 23A of the Federal Reserve Act; That the undersigned will cause each of its subsidiary banks to maintain an amount of paid-up and unimpaired capital and unimpaired surplus which, in the judgment of the Federal Reserve Board, will be adequate in relation to its total deposit liabilities) having due regard to the general principle that a bank's capital and surplus ordinarily should not be less than one-tenth of the average amount of its aggregate deposit liabilities and, in some circumstances, should be more than one-tenth of such amount. "This agreement is executed in triplicate." Tel egram to Mr. Stevens, Federal Reserve Agent at the Federal Reser Ire t° th Nopm- —11- 73411k of Chicago, stating that the Board has given consideration .041cation of the "Continental Illinois National Bank and Trust 0f Chicago") Chicago, Illinois, for a voting permit under the ltY of section 5144 of the Revised Statutes of the United States, 13 4111 erided, entitling such organization to vote the stock which it owns t)11 e°Iltr Chift %;ittgo °is in the "Continental National Bank and Trust Company of , LI 'Chicago, Illinois, and has authorized the issuance of a limited mit to the applicant, subject to the following conditions: triN qter,i \-Li Prior to the issuance of the limited voting permit auherein, you shall satisfy yourself that the applicant has diZged off or otherwise eliminated (a) all losses in loans and (e) (b) all depreciation in stocks and defaulted securities, 48aU de preciation in securities not of the four highest grades regt`ilaseified by a recognized investment service organization 411(1 41 ;1Y engaged in the business of rating or grading securities, lort"4;all other losses, as shown by the latest available reexamination by a national bank examiner. 411.0„ 2) Prior to the issuance of the limited voting permit ed herein, "(1) the Federal Reserve Agent shall satisfy himself 3883 12/15/34 -12- "that each of the subsidiary banks of the applicant has charged off or otherwise eliminated, (a) all losses in loans and discounts, (b) all depreciation in stocks and defaulted securities, (c) all depreciation in securities not of the four highest grades as classified by a recognized investment service organization regularly engaged in the business of rating or grading securities and (d) all other losses; as shown by the latest available reports of examinations by the appropriate supervisory authorities, except that the charge-offs and eliminattons required by (b) and (c) above may be based upon current appraisals of marketable securities satisfactory to the Federal Reserve Agent; "(2) the Federal Reserve Agent shall satisfy himself that the applicant has substantially nerformed any agreement or agreements heretofore executed by it as a condition to the issuance of a limited voting permit by the Federal Reserve Board. "(3) the Federal Reserve Agent and the Executive Committee of the Federal reserve ban:: shall approve the issuance of such permit." at ter the following purposes: h "To elect directors of such bank at the annual meeting of share1°14ers, or at adjournments thereof, at any time prio-f.- to April 1935, and to act thereat upon such matters of a routine nature as are o rdinarily acted upon at the annual meetings of such tank." ft The, . Lieae,„ 6-am also authorized the agent to have prepared by counsel for ueral reserve bank, and to issue to the Continental Illinois Nattolial ''Ink and Trust Company of Chicago, a limited voting permit in acCe with the telegram when the conditions prescribed therein have 1)411 e°1.11Plied with; and stated that the permit authorized shall be drawn 8 8 to entitle Louis Eckstein, James R. Leaven, and D. R. McLennan, tees 'Or their successors as such, to vote the shares of stock which Ole coil or tinental Illinois National Bank and Trust Company of Chicago owns '"cktrol. of the Continental National Bank and Trust Company of Chicago. . 110411 Tel eGrall dated December 14, 1934, approved by four members of the to teqa Approved. "r• Walsh, Federal Reserve Agent at the Federal Reserve Bank of sta • t-Lng that the Board has given consideration to the application 3884 12/15/34 -13of the "Commercial National Bank in Shreveport", Shreveport, Louisiana, v°ting permit under the authority of section 5144 of the Revised 44tutes of the United States, as amended, entitling such organization to "e the stock which it owns or controls in the "Continental-American Bank and Trust Company", Shreveport, Louisiana, and has authorized the 188111111ce of a limited permit to the applicant, subject to the following conditions: "(1) Prior to the issuance of the limited voting permit authorized herein, you shall satisfy yourself that applicant has Zrged off or otherwise eliminated (a) all losses in loans and (j"nnts, (b) all depreciation in stocks and defaulted securities, LI all depreciation in securities not of the four highest grades c lassified by a recognized investment service organization ecegulc,riy en gaged in the business of rating or grading securities, of (d) all other losses, as shown by the latest available report e.)traillation by a national bank examiner. th ,I(2) Prior to the issuance of the limited voting permit authorized herein, "(1) the Federal Reserve Agent shnJ1 satleyhimself that c°°1-i of the subsidiary banks of the applicant has charged off c,T otherwise eliminated, (a) all losses in loans and discounts, kb) all depreciation in stocks and defaulted securities, (c) all depreciation in securities not of the four highest grades as classified by a recognized investment serVice organization regularly engaged in the business of rating or grading securities and (d) all Other losses; as shown by the latest available reports of examina.i tions by the appropriate supervisory authorities, except that the IZIrge-offs and eliminations required by (b) and (c) above may be sed upon current appraisals of marketable securities satisfactory to the Federal Reserve Agent; , "(2) the Federal Reserve Agent shan satisfy himself that the PilLieant has substantially performed any agreement or agreements heretofore executed by it as a condition to the issuance of a limIded voting permit by the Federal Reserve Board; "(3) the Federal Reserve Agent and the Executive Committee c)f the Federal reserve bank shall approve the issuance of such Permit t 71( \ u) Prior to the issuance of the limited voting permit auporrraized herein, applicant shall deliver to you Exhibit LI F.R.R. 111,2 -32 executed by North Shreveport Realty Corporation and heart.. Lae seal or such corporation, and Exhibit N2 F.R.B. Form P-42 tho fl 3885 4/15/34 -14- "executed by applicant and consented to by Columbia Compress and V :rehouse Company, North Shreveport Realty Corporation, Peacock 1:gical Company, Inc. end Continental Securities Corporation, Which exhibit shall bear the seals of applicant and the consenting Corporations, all of which exhibits shall be in form satisfactory to counsel for the Federal Reserve Bank of Dallas." to the following purposes: "To elect directors of such bank at the annual meeting of Shareholders, or at any adjournments thereof, at any time prior to April I, 1935, nnd to act thereat upon such matters of a routine nature as Of such bank.” are ordinarily acted upon at the annual meetings The telePrt. 0-em stated that the requirements in condition (3) referred to zi, -'°Ire are made because Exhibit L now on file executed by the North S/Ireveport Realty Corporation does not bear the seal of such corporation, Elzici because Exhibit N now on file does not bear the seals of the con8e/iting corporations. The telegram also authorized the agent to have PreP4red by counsel for the Federal reserve bank, and to issue to the Ntniereial National Bank in Shreveport, a limited voting permit in acc"ance with the telegram when the conditions prescribed therein have been complied With; and that the agent is authorized to amend the ttellaara form Of permit by adding after the name of the grantee the Iv°118 Or its nominee". Approved. Telegram dated December 14, 1934) approved by four members of the 13°4ra, to 71/... Sargent, Assistant Federal Reserve Agent at the FedReeerve Bozic of San Francisco, stating that the Board has given ecidertAion to the application of the "American Investment Cor1)141144") °Oen, Utah, for a voting permit under the authority of 3886 I 12115/34 -15- 8ection 0144 of the Revised Statutes of the United States, as amended, entitling such organization to vote the stock which it owns or con- trol, 4_ ' I 4a the "Commercial Security Bank", Ogden, Utah, and has au- thorized the issuance of a limited permit to the applicant, subject t0 the following conditions: 4.tki "(1) Prior to the issurnce of the limited voting permit authorized herein, "(1) the Federal Reserve Agent shall satisfy himself that each of the subsidiary banks of the applicant has charged off or otherwise eliminated, (a) all losses in loans and discounts, (b) all depreciation in stocks and defaulted securities, (c) all depreciation in securities not of the four highest Lrades as classified by a recognized investment service organization regularly engaged in the business of rating or grading securities and (d) all other losses; as Shown by the latest available reports of examinations by the appropriate supervisory authorities, except that the charge-offs and eliminations required by (b) and (c) above maY be based upon current appraisals of marketable securities satisfactory to the Federal Reserve Agent; "(2) the Federal Reserve Agent shall satisfy himself that the applicant has substantially oerformed any agreeor agreements heretofore executed by it as a condition to the issuance of a limited voting permit by the Federal Reserve Board; "(3) the Federal Reserve Agent and the Executive Committee of the Federal reserve bank shall approve the isuance of such permit. autu (2) Prior to the issuance of the limited voting permit p.T?"°rized herein, applicant shall deliver to you Exhibits L, tiv : BI Form P-3, executed by Idaho Bank and Trust Company, Heber p.xhilso ock Corporation, and Blackfoot Building Corporation, and cor lt 112 F.R.B. Form P-4, executed by American Investment RebP°ration and consented to by Idaho Bank and Trust Company, eller Livestock Corporation, and Blackfoot Building Corporation, for cf which exhibits shall be in form satisfactory to counsel the Federal Reserve Bank of San Francisco." tOr ..-1 theai. .Lowing purposes: : Q141 0 elect directors of such bank at the annual meeting of to A "?lders, or at any adjournments thereof, at any time prior Pril 1, 1935, and to act thereat upon such matters of a 3887 12/15/34 -16- "routine nature as are ordinarily acted upon at the annual meetings of such bank." The telegram also authorized Mr. Sargent to have prepared by counsel tor the Federal reserve bank, and to issue to the American Investment col*Poration, a limited voting permit in accordance with the telegram th-e conditions prescribed therein have been complied with. Approved. Telegram dated December 14, 1934, approved by four members of the ''rg, to 71r. Sargent, Assistant Federal Reserve Agent at the el ' 41 Reserve Bank of San Francisco, stating that the Board has given ec4lelderation to the application of the "Union Bond & Mortgage Company", 15°11"41Dles, Washington, for a voting permit under the authority of %tical 5144 of the Revised Statutes of the United States, as amended, ettitii/Ig such organizat4on to vote the stock which it owns or controls the nFirst rational Bank in Port Angeles", Port Angeles, Tashington, 41111as a uthorized the issuance of a limited permit to the applicant, ect to the following conditions: "(1) Prior to the issuance of the limited voting permit ellthorized herein, the Federal Reserve Agent shall satisfy himself that ut each of the subsidiary banks of the applicant has charged Of or otherwise eliminated, (a) all losses in loans and dis(b) a all depreciation in stocks and defaulted securc)witE; ties, (e) all depreciation in securities not of the four highest grades as classified by a recognized investment service orregularly engaged in the business of rating or grad' 41C secur s and (d) all other losses; as shown by the latest 74Etilable reports of examinations by the appropriate supervisory ' uthorities, except that the charge-offs and eliminations recitlired by (b) and (c) above may be based upon current apl!eisals of marketable securities satisfactory to the Federal Reserve Agent; I T 3888 11 12/15/34 -17-"(2) the Federal Reserve Agent shall satisfy himself that the applicant has substantially performed any agreement or agreements heretofore executed by it as a condition to the issuance of a limited voting permit by the Federal Reserve Boa; "(3) te Federal Reserve Agent and the Executive Committee of the Federal reserve bank shall approve the issuance of such permit." alld for the following purposes: "To elect directors of such bank at the annual meeting of shareholders, or at any adjournments thereof, at any time prior to April 1, 1035, and to act thereat upon such matters of a routine nature as are ordinarily acted upon at the annunl meetings of such bank." II 71 te. egram also authorized Mr. Sargent to have prepared by counsel tc)r th e Federal reserve bank, and to issue to the Union Bond & Mortgage 00/4414 YP a limited voting permit in accordance with the telegram when he er-, .44cl1-tifpns prescribed therein have been complied with. Approved. the 13 Letter dated December 14, 1934, approved by four members of Qe*ticl$ t0 Mr. Mlliam M. Schuyler, Associate Editor, The American 441 'Book, New York, tlew York, reading as follows: 1.8s "There is transmitted herewith for publication in the 1934 of the American Year Book a paper which has been prepared ch8.4:! Board's Division of Research and Statistics outlining ye and developments in the Federal Reserve System during ' the Year 1934. eal,, "The Federal Reserve Board reserves the right to make Inmgeb found to be necessary after a verification of the thXY proof of the inclosed manuscript, and to introduce at eha tinle any new items, especially with respect to personnel 4ges.” c Approved. 3889 12/15/34 -18Letter dated December 14, 1934, approved by four members of the Board, to :4r. Austin, Federal Reserve Agent at the Federal Re- Selre Bank of Philadelphia, reading as follows: Ar "Reference is made to the application of Mr. William P. mstrong, Princeton, New Jersey, for permission under the proof the Clayton Act to serve at the same time as director and officer of Princeton Bank and Trust Company, Princeton, d el? Jersey, and as director of The Isbell National Bank of Talla4!ga, Talladega, Alabama, which was not approved by the Board for the reasons set forth in its letter of August 10, 1934, to Fed1 Reserve Agent Newton at Atlanta, a copy of which apparently y'as not sent to you and, therefore, is inclosed herewith. ti "In accordance with Section V (g) of Regulation L, additional onal facts and arguments were submitted through the office of the cantdu Federal Reserve Agent at Atlanta in letters from the appliand The Isbell National Ban'<. of Talladega in which it was stated that, although the applicant has not attended any of the meetings held by the directors of the Talladega bank ee his election as a director in January, 1934, he keeps in fh i with its affairs by means of telegrams and correspondence has agreed to meet with the directors three or four times a lnr. It was also stated that there is no other person in TalaXga who can quplify as director of The Isbell National Bank .it appears that, because of 71r. Armstrong's successful extanence, ability and associations, both banks regard his advice counsel as valuable. In the circumstances, the Board has apn„ved the application of Mr. Armstrong and there are inclosed the l; s :afinal and copies of the permit for transmittal by you to the 1JPJ-icant and the banks involved, and a copy for your files. res "The Board feels, however, that when a person accepts the tend°11sibility of the office of director of a bank, he should ata sufficient number of directors' meetings to enable him not btxj I keep in personal contact with the bank and its problems, also to participate in his capacity as a director in the deat such meetings of the policies of its board, and that t4 -Lf he is not in a position to discharge his responsibility the'his respect, he should not continue as a director; and when tor Permit is sent to the applicant it is suggested that you inhi of the Board's views in this regard and advise him that groirrmit has been granted with the expectation that he will im136,,i,e his attendance at directors' meetings of The Isbell National of Talladega, tor A COpy of this letter and a copy of the permit have been "ed to the Federal Reserve Agent at the Federal Reserve Bank g 3890 12/15/34 -19- "ct Atlanta with the request that when he submits his recommenda!ion as a result of his annual review of this permit, he report ta-I-Y as to whether Mr. Armstrong is satisfactorily discharging 'us duties as a director of The Isbell National Bank of Talladega." Approved. Letter dated December 14, 1934, approved by four members of t444rd, to 71r. Hoxton, Federal Reserve Agent at the Federal Re184nk of Richmond, inclosing the following Clayton Act permit rort smittal to the applicant, and suggesting that the agent ad718e the aPplicant that it is with the expectation that he will improve his attendance at directors' meetings of the Chester-Cambridge Bank and t Co mPanZir, Chester, Pennsylvania, that the permit has been granted: Ce B. Houston, 2nd, for permission to serve at the same time xi !• director and officer of The Kimball National Bank of Kimball, elnivall, West Virginia, as a director and officer of The First etsark National Bank of Northfork, Northfork, West Virginia, and c,a director of the Chester-Cambridge Bank and Trust Company, uester, Pennsylvania. Approved, together with a letter, also dated December 14, 1934, and approved by four members of the Board, to Mr. Austin, Federal Reserve Agent at the Federal Reserve Bank of Philadelphia, inclosing a copy of the permit referred to above, and requesting that, when the agent submits his recommendation as a result of his annual review of the permit, he report fully as to the applicant's attendance at directors' meetings of the Chester-Cambridge Bank and Trust Company, Chester, Pennsylvania. Letter the 8°4rd aez, dated December 14, 1934, approved by four members of to Mr. Stevens, Federal Reserve Agent at the Federal Re- 844k of Chicago, -141111littni the inclosing the following Clayton Act permit for to the applicant; stating that, in all the circumstances, 451" has granted the permit; suggesting that, when the permit is 3891 12/15/34 -20- se4t to the applicant, the agent advise him that it is with the expectatilthat he will improve his attendance at directors' meetings of The krst National Bank of Gowrie, Iowa, that the permit has been granted; elldrsquesting that, when the agent submits his recommendation as a of his annual review of the permit, he report fully as to the apPlicantis attendance at directors' meetings: A • F. Daughenbaugh, for permission to serve at the same Lme as a director of The First National Bank of Gowrie, Gowrie, , clva, and as a director and officer of the Somers Savings Bank, Somers, Iowa. 4 I Approved. 11 Letter dated December 14, 1934, approved by four members of thelloard, to Mr. Walsh, Federal Reserve Agent at the Federal Reserve ktat of Dallas, inclosing the following Clayton Act permit for trans41 to the applicant; suggesting that the agent advise the applicant tht/t the per 11°I'e his has been granted with the expectation that he will in- attendance at directors' meetings of The First National Bank '514' 441EY, Texas; and requesting that, when the agent submits his reeclluielltation as a NA result of his annual review of the permit, he report 48 to the applicant's attendance at directors' meetings: P. Leslie, for permission to serve at the same time as ata ector of The First National Bank of Bailey, Bailey, Texas, Texaas a director and officer of the Bonham State Bank, Bonham, Approved. Letter dated December 14, 1934, approved by four members of 130,9.1,a, to r. aash, Federal Reserve Agent at the Federal Reserve 3892 12/15/34 Bank of -21-- Dallas, reading as follows: • "There are inclosed the original and copies of a Clayton Act Permit granted to Mr. L. N. Wilemon, Midlothian, Texas, to serve at the same time as director of First State Bank, laypearl, Texas, and as director and officer of 'The First National Bank of Midlo thian', Midlothian, Texas, for transmittal by you to the applicant and the banks involved, and a copy for your files. "In the consideration of this application, it was noted tl-at ,1!r. Wilemon apparently had violated Section 22 (g) of the Federal tAieserve Act through having an overdraft of'.48.52 in The First -ational Bank of Midlothian, as disclosed in the report of examination of that bank as of May 14, 1954, and that the alleged Iviolation was reported to the United States District Attorney on v?7.711ther 9, 1934. The Board feels that in all cases involving lc-Lations of law, even though of a technical nature and inv°17ing small amounts, definite information should be obtained the proper authorities regarding the disposition which was from_ L!. cle of such cases before permits under the provisions of the lilayton Act are issued. You are requested, therefore, to ascertain the status of the charges, if any, against Mr. Wilemon; and on the event the case has been duly considered and closed withProsecution, you are authorized to release the permit to the Plicant and to forward copies thereof to the banks involved, at er same time furnishing the Board with complete information conrning the disposition made of the matter. also noted that, although "r. Wilemon attended all the 24 held by the directors of The First National 11Mcf Midlothian, he attended only 5 of the 24 meetings held le directors of First State Bank during the past 2 years. Board of feels that a director should have a satisfactory record ; Ificharging his duties and responsibilities by participating 'ue leterminatIon of the policies of a bank which he is serve including attendance at directors' meetings; and, in the event Permit is sent to Mr. Wilemon, it is suggested that you advise ' te that it is with the expectation that he will improve his at: ID lance at directors' meetings of the First State Bank that the Permit has been granted. tQ b It was further noted that the applicant, although reported pre ? capable, is said to lack force and to be dominated by th,sident Dees, who is reported to be financially involved and o0r! obligations, together with those of his connections, were eet7.14cred by the examiner to be an unjustified and hazardous conopelfation of credit. It is suggested that you endeavor, in coWith the appropriate supervisory authorities, to effect to *provement in the management and other matters with respect ite First National Bank of Midlothian which have been criticized 3893 12/15/s4 -22"17 the examiner. 'The Board requests that, when you submit your recommendation as a result of your annonl review of this permit, you report fully "to M. Wilemonts attendance at directors' meetings and as to the Progress made in effecting an improvement in those matters with ImiasPect to The First National Bank of Midlothian which were subact to criticism by the examiner." Approved. Thereupon the meeting adjourned. 'ee5r---ar6z.c kJ:2 Secretary. 'red: Governor.
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