Full text of Minutes of the Board of Governors of the Federal Reserve System : Meeting Minutes, December 2, 1932, Volume 19, Part 2

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

A meeting of the Executive Comaittee of the Ji'ederal Reserve Board
'
-'-utr in i-a.Laington on Friday, December 2, 1952, at 11:15 a. IA.
PilL'SEIT.:

Mr.
Mr.
Lir.
Mr.

1.:agee, ?residing
Hamlin
1:iller
3- ies

3ecretary
I:r. I:cClelland, Assistant Secretary.
Reference was made to
the recommendation adopted at the Federal ReIre

--C,*ents, Conference on 17ovember 16, 1932, with ret;ard
to the policy
to b
-e f°3-1ewed by the Board
in granting permits under the provisions of
4Qt• 1,1 7,
Of the
Clayton Act, and to the work to be done by Counsel's office
--.11C information for submission to the Board in connection with
its. co
11'21-aeration of the
question.
After discussion, it was decided to make the
Matter a special order of business at a meeting of
the Board to be held on December 9,
1932.
111e CoMmittee then considered and acted upon the following natters:
ot ttle

Lettere dated November 23 and December 1, 1932, from the Secretary
Peclexbal Reserve Bank of New York, and telegram dated November 25,

443 *0111 the

._;'huirman of the _Federal Reserve Bank of Chicago, Noverber 30,

. ()ta the
*
Cha* ea of the Federal Reserve Bank of Boston and the
%Ql'ete,ry. or
the Federal Reserve Bank of
T:inneapolis, December 1, 1932, from.
the ChEtil*rla
114,
ekIrvie

Of

trot' the
tilet

the Federal Reserve Bank of San Francisco, and December 2,

'
,:he.irraan of
the Federal Re erve Bank of St. Louis, all ad:leetincs
of the boards of directors on the dates stated no

1)14,0:4:71'e Inade in the

oxistin- schedules of rates of discount arid

Without objection, noted with approval.
41 approved by four me:ibers of the Board on November 29, to a




12/2/32

-2-

461

letter dated
3Tover.:ber 21, 1932, from Senator Tames T. Davis recomending
roorabe Consideration of
the application of Mr. Robert R. Heiriegel of
Seraiiton, 7)ennsylvan ia
c/4' 74Zszaina ti ris

for the position of examiner in the 7oard's Division

The reply stated that LIT. Helriegelts application is on

rile 1314
there is no place in the Board's staff in which his services could
be
ut
Iltied
this time.
Approved.
Letter to the Chairman of the _.!ederal _Reserve Bank of Philadelphia,
413toved by
three nonbers of the Board on riovember 26, 1932, referring to
letter o

ovember 23, 19329 and his subsequent telephone conversation
Ilith the
Secretary
of the
In which he advised of further modification
°I" the
Board:
ehare-the-work plan subnitted In his letters of November 3 and 22,
1932) to
provide for a reduction in the working tine of each employee of
the )3'6•111z of
one-half day per month during the period in which the plan is in
°Deta.tion; for
the employment on a temporary basis of about twenty five new
01ee5; tilid
for the following deductions from the salaries of present
N)loyee2:

S
.2„

OverLj°
,Per annum or less - not more than 1.5,
v2,000 and not over .;5,000 per annum - not more
0
than 2.25;
ver 41.5,000 and up to :10,000 per annum - not more
taan 2.6,
910,000
'
per annum and over - not more than 3.25,')
7•11,e
letter
noted that these deductions will aggregate something less than
').000
Which it
is estim.ated iL the amount required to pay the salaries
(q" the
totiporilry.
ecaployees provided by the plan and that the executive
littee or
the 2ederal Reserve Dank of Philadelphia recommends that the
til,tereliqe be
absorbed by the Philadelphia bank, and stated that the
ciel'14111e4erve

Board offers no objection to the plan as recomended and




462
12/2/32

-3-

41)Pr°vea the salary adjustrents involved in the employment of additional
13"P1e

accordance with the plan.

The reply also requested that the Chair-

'15.11keel) the Board advised currently as to the number and salaries of the
till3c/l'arY employees employed by the bank, together with the actual amount of
tQe
acIlarY reductions under the plan and any effects of the Plan upon the
°I)extien of tne
Approved.
Fr. Hamlin stated that his position with regard to the above natter is the sane as When the
Plan submitted by Philadelphia was discussed at the
meeting on nave:tuber 23, and that he had approved the
letter above referred to merely as indicatirv7 the
action of the Board and not as expressing his personal
approval of the pl.
alToroved by four members of the Board on rovember 29, to a
liatte
da.ted lovember 23, 1932, from the Federal Reserve Agent at New York,

tecotz

that 2essrs. Tames i. Healey, Spencer Harsh, Yr., frank E.

1 011.tra
et

and Donald S. Strooble, employees of the Bank "Examinations Depart-

0
t the Federal Reserve Bank of Few York, be designated as assistant
'
leserve bank examiners.

(le

The reply stated that the Board approves

'1111atien as assistant federal reserve bank examiners of the employees
it being noted that no chance is to be made in their salaries at this

Ala-proved.
Lettcr to Deputy Governor Attebery of the federal .71e.serve Bank of
4

1112)

t1.1

aPProved by three members of the Board on. rovamber 29, 1932,

Ag

that, in accordance with the recommendation contained in his letter
1,17
erdber
the Board approves a change in the personnel classification
'
411 Of
the 1:1,emphis branch to Provide :or the new part time position of
4rv
in the Collateral and Custody and 7iscal Agency Department of




463
12/2/32

-4-

111e branch.

The letter also requested that the agent advise whether or not

the 1340c will be reimbursed in whole or in part for the salary paid to the
Ilatc4i8n, and whether he is performing similar service far another employer
6414

ir

so the name of such employer.
Approved.
Letter to the Acting Comptroller of the currency, approved by four

tetbe%
48 Of

the Board on December 1, 1932, stating that in accordance with the
reor,
-4wendation contained in his letter of November 28, 1932, the Board

"
68 a salary at the rate of ,33,000 per annum for National Bank Examiner
1110448 C.
Patterson, assigned to the Eleventh Federal Reserve District.
Approved.
Telegraphic reply, approved by five members of the Board on Novendber

te,

29 to a telegram of that date from Deputy Governor Rounds of the
"
74- Reserve Bank of New York, requesting authority for a renewal for a
-Aod
crt 93 days from November 29, 1932, with interest at the rate of 5 1/2%
ealluthli and on the security of customers' secured and unsecured ineligible
tot
444"Miscellaneous securities with a margin of at least 25, of the
tlea
"
e made by the Federal Reserve
Bank of New York, in accordance with
0/1810ns of section 10(b) of the Federal Reserve Act, as amended, to
40,r4rstNational Bank, Bolivar, New York, in the amount of :40,000; Deputy
tIrttor

Rounds stating that the bank is unable to liquidate the loan at

141e tu„,

4nd requests renewal. The reply stated that the Board authorizes
the t
elle1741 C)
f the advance subject to the terms and conditions recomrendedi
Approved.
Telegraphic reply, approved by five members of the Board on November
to a telegram of that date from Assistant Deputy Governor Gidney

Or

the
l'ederal Reserve Bank of New York, requesting authority for a further



464

12/2/32
'civaalce) in

accordance with the provisions of section 10(b) of the Federal

ae8erve Act, as amended, to the Labor National Bank, Paterson, New Jersey,
the aMount of .,325,000, for a period of ninety days, with interest at the
$31‘ 5

1/
2 ,; per annum, and on the security of customers' secured notes

with
in of at least 25;3; Assistant Deputy Governor Gidney stating that
'
a dvance is in addition to th

two advances made to the meriber bank in

ce with authority granted in the Board's telerams of September 22
444
October 27, 1932, and that the advance is desired to meet the payment of
CIL118tInas club
deposits on December 1.

The reply stated that the Board

1141,0ves the
advance subject to the tenas and conditions recommended.
Approved.
Telegraphic reply, approved by five members of the Board on November
t° a letter dated November 26, and tele;rams dated November 28, 1932,
rl'°4rtlie Governor of the federal Reserve Bank of Philadelphia, recue ting
Et4t41.1tY for an advance in accordance with the ])rovisions of section 10(b)
Otthe ed.eraa.
Reserve Act, as amended, to the Commercial National Bank:,
Illi
tttcleiphia, Pennsylvania, in the amount of ,)125,000, for a 'period of 90
dEth
vlith interest at the rate of 5 1/2% per annum, and on the security of
,)u,,er in the amount of :)250,000, a large part of which consists
4°13_

secured collateral loans; Governor Norris stating that the advance
ed

to enable the bank to meet the anticipated withdrawal of Christ-

1\1
in the amount of approxinutely :)100,000, and to build up the
rezerves.
The reply stated that the Board authorizes the advance
kkb,
JeQt
-0 the terms and conditions recommended.'
Approved.
11\316@"aphic reply, approved by three members of the Board on November




• •

12/2/32

-6_

29
'1932, to a teleram of that date from Deputy Governor Rounds of the FedIleserve Dank of New York, requesting authority to purchase from the
?jahle.,
--"-1-1-1 National 'Dank, Deacon, New York, ;:40,000 of tax notes of the City
cll'eacen.

The renly stated that the Board authorizes the purchase with the

11114eIlat ilding that the notes neet all requirenents of Regulation E except

that th-e

a:mount offered exceeds 25; of the total outstanding warrants of the

4341'e llaality.
Approved.
to

Letter, approved by three members of the Board on November 25, 1932,
&C

Terre Haute .?iret National Bank, Terre Haute, Indiana, which is a
%/13„1.
u4adatieu of the Terre Haute National Bank and Trust Company and the
-A-een National Bank and Trust Company under the charter of the latter
tl'allamittinc a certificate of the authority of the consolidated
14.tit
11 --on to exercise the trust powers previously granted to the con1/14ex-it banics.
Approved.
Letter, approved by three members of the Board on November 25, 1932,

to
the
or

"-rt3t City National Bank, 71oresville, Texas, which is a consolidation
he

t
1Y
Lational Bank and the First National Bank, both of Floresville

'
44er 44e
.().
charter of the latter; transmitting a certificate of the authority
'c the
(2111.801idated institution to exercise the trust powers previously
*kt
e(1 tc) the City National Bank.
Approved.
Letter to Lr. A. IJalter Lukens, Cashier of the Sixth National Bank
11.ao
Pennsylvania, apdroved by four members of the Board on

kqv.
'Taber
qtt.eotor

1932, referring to the resolution adopted by the board of

a °I' the bank on :arch U, 1.9, signifying the desire of the bank



466

12h/32

to 8111'render its right to exercise trust porters, and stating that the Board
11(1"etands that the bank has never exercised its right to act in trust
Pti-eE3 and that the Board has, therefore, issued a forual certificate
to
the national bank certifying that it is no longer authorized to exercise
ally 0
,
4
the fiduciary powers enumerated in section 11(k) of the ,?ederal Re,
Act, Which certificate was inclosed with the letter. The letter also
'11ed attention
to the fact that the bank should not exercise any of the
11°"r2 entmerated in section 11(k) of the -Federal Reserve Act without first
4131111rillt,

for and obtaining from the Federal Reserve Board a new permit to

eZerei
such powers.

4.8 la

Approved.

Z I to

Telegraphic reply, approved by Four members of the Board on November
letter dated November 23, and telegram dated November 26, 1932, from

4aa

istant

Federal Reserve Agent Fletcher at the Federal Reserve Bank of

°Iev
eland stating
that it is planned to reopen immediately the Hom National
11641k
idhion City, Pennsylvania, which closed on January 18, 1932, and
Ikee°11c1110.-'that .7ederal reserve bank stock be reissued to the bank if and
the

reopening is approved by the Comptroller of the Jurrency.

The reply
1*tecl that
the Board approves the issue of 36 shares of stock of the -Federal
"s"c3el'sre Bank
of
to the national bank if and when the Comtroller
:;leveland
the Ckrzency
authorizes the bank to reopen with capital of .;50,0J0 and
41-11'1)111 °I -A0,000.
Approved.
klbera

Lel;ter to the Federal Reserve iigent at Cleveland, approved by four
the -loard on November 28, replying to Assistant Federal Reserve

Zle+
4cher's letter of November 10, 1932, transmitting the application




12/2/32
°r the

467

-3-

l'armers and I:erchants Bark CoLpany, amithville, Ohio, for membership

in the 2ederal I:eserve System.

The reply stated that in view of the extended

on of the institution, its limited earninjf; power,
small volume of
deposits, aPParently limited opportunity for future development, and
the
reootoni
eralation of the executive committee of the Cleveland bank, the Board
11°e8110t feel
that it should annrove the admission of the bank to membership
"

tirr.

The reply also rer,uested that the agent suggest to the

ttPlaicant bank the
withdrawal of its application from furthr consideration,
1111th

event no adverse action thereon will be taken by the Board.
Approved.
Letter to the Tar1fl3r5 Bank of Clinch Valley, Tazewell, Virginia,

4111).rovpri
-" by four members of the Board on November 23, 1962, stating that the
11(k-rq
a)Dreved the bank's application for remberahip in the Federal
Ilezer7
e SYstera and
for 150 shares of the capital stock of the Federal Reserve
88alaOf

Ri

-4.ertrilond subject to certain conditions set 2orth in the letter.
Approved.

rkt

Letter to the Federal Reserve Agent at lanneapolis, approved b:

'i "bero

of the Board on rovmber 23, replying to Assistant Iltderal

A'eett

Bailey's letter of rovember 18, 1932, reporting that the 7irst
kit/orlaa Bank
of' Thief Edver Falls, :7innesota, has been continuously
cle.r ie]at
-11 its re:luired res(:rves for six months.

Of

The reply stated that

the information suhnitted, and in accordance with
the recorrenda-

tie

a:]ent's office, the Board will take no action in the matter at

141e title
other

than to forward a copy of lir. Bailey's letter to the Acting

the Currency for the information of his office. The reply
/%1
qtlev)ted that
the agent advise the Board, within a reasonable tine,




411(i8

/2/32

-9-

to whether the
bank has restored and is maintaining its recuired reserves.
Approved.
Letters to the federal Reserve Agent at lanneapolis, approved by
totlz
weinbers of the Board on November 23 and November 29, replying to
448istail4. 3
ederal Reserve Agent Bailey's letters of november 18, 1932, with
Nrther
zecard to the continuous reserve deficiencies of the First National
134112,,
Of
Montana.,
previously reT)orted to the 71oard on A.u.cust 26,
1932.
the 111r3t National lank of iwanville, Ilinnesota, and the First National
--Toley, ::innesota, previously reported on Augu t 15, 1932; and the
Citiz,
and :- ecurity National Bank of St. James, 1.1innesota, previously
NDorte-O
d Il
3eptember 19, 1932. The replies stated that, in accordance with
the r
ee°141-aendati ons of the agent's office, the Board will take no action
Vi
th rpr,
--15arcl to these deficiencies at this time other than to forward copies
ot
13111103os letters to the Acting Comptroller of the Currency for the
of

roozci

his office.

The replies also reluested that the agent con-

O0) the bard currently advised of any developnEnts in the reserve

8 Of

the banks.
Approved.

4kber

Letter to the Federal Reserve Agent at iiinneapolis, approved by four

8 Of
4etlre

the Board on November 29, 1932, replying to Assistant Federal Re-

the ? ellt Bailey's letter of November 18, 1932, in vthich he reported that
:
st tiational Bank of Goodhue, ::innesota, has been continuously
1 i
eAt
4ttlted.
uliat
1%eQ

its required reserves for six and one-half months.
in

"V le,17

The reply

of the information sabmitted and in accordance with the

.1eliciti°2:1 of the agent's office, the Board will take no action in the
111.4ttl,
at
this tine other than to forward a copy of Mr. Bailey's letter to




'

12A/32

-10--

the
c6111.: Comptroller of the Currency for the information of his office.
The reply

also suggested that, if the agent has not already done so, he

e°1181aer the advisability of addressing a letter to the
directors of the
riati°1181 bank in accordance with section 11T(b) of :ler-Illation D, and requested
tbat h
e acivise the Board of his decision on this point and, within a
Nleo
tiue, as to whether the bank has restored and is maintainin its

reaulred
reserves.
Approved.
Reply, approved by three numbers of the
Board on Novamber 29, to a
letter
dated iToveriper 10, 1.9'62, from the 2ederal 'Reserve Agent at Boston,
1401
-,084
.."16

the

a copy of a letter received by him from the Bank Commissioner of

e or
:::ainewith reference to the Union Trust Campy ofrillsworth,
The reply stated that the Board is fully in accord with the agent's
Nre
et

elltations
to the Bank Commissioner and to the ban!: that further paYclividends by the member bank should be suspended, and re, uests that

the

continue to urge the conservation of earnings in order to strengthen

the

nosition.

The reply also reciuested that the agent arrane for an

ion

f the member trust company at as early a date as possible, to be
ktieipated in by a
representative from his office, a:al that in the neantine
b.
s4N0 the
loard advised of any developments.
Approved.
14e'

bera

l'etter to the
Act1n7 Comptroller of the c:tarrency, approved by five
Cie th

e Board on November 20, replying to his letter of October 26,

3
141leh

the

lIereh
tte Qtot.

he quoted an excerpt from a letter dated Segteriber 13, from

ants National Bank
in Plattsburg, New Yo, stating that the
(10 not 2eol that they can underwrite at this tine any stock increase




470

12/2/32
-11-

illaddition to the contribution and assistance heretol'ore given by them, and
tile/ anY attempt to offer stock for sale to the public in order to
cainply
"11 t

requirement contained in the Board's letter of Tune 16, 1931, grant-

the bank permission to exercise fiduciary powers, would have a
disturbing
ertect in the
coununitY,

The reply stated that the Board's letter of October

le
'1932, was prompted ancri; other things by the fact that in the national
114L1 e

ner's report of exanination of the national bank as of Ally 28,

1932
$ Ile

referred to the capital of the bank as being almost completely im-

and recommended an
assessment agairint the stockholders.
"v stated

the

The reply

that, as there are provisions in the rational Bank Act by which

4111Dtroller of the Currency may Obtain a correction of an impairment in

ee'Pltal of a bank, it is assumed the Acting Comptroller will take appropriIlte 4
"1°11 if and when the circumstances warrant. On November 23, 1932, a

1Ttt

"was also di-patched to the Federal Reserve Agent at
New York, inclosing
4%
c) the Acting Comptroller's letter of October 26, 1932, and of the
11c) rci,
8

the

'
leplYand rerluesting that the agent follow the progress of the affairs

1.-"chants National Bank closely and confer with the
Chief National Bank
-44,11irle
dvising the Board of any developments of importance.
Approved.
ab e.rz

tett-er to
the Federal Reserve Agent at Jleveland, approved by five
or

the Board on November 29, referring to Assitant Federal
Reserve
etrt

letter of October 11, 1932, with regard to the condition

thr,
411 or
141,01,111

4-11 Jails Banking Company, Chagrin Falls, Ohio, as shown by the
:zazination as of Tune 27, 1932.

The reply requested additional

tin
4.1z

with regard to certain matters referred to in the report, and
t
hat the
agent endeavor to obtain, for the information of the Board, a
.111 5tat
of condition of the Union-Cleveland Corporation, which mils




ej,
12/2/32

-12II

411 Of the
stock of the rember bank, and which in turn is avned by the Union
TrIlat CamPany Of Cleveland.
Approved.
Letter to the -ilederal i.eserve Agent at Cleveland, approved by four
rttett
8 Of the Board on November 28, 1932, referring to the analysis of
-DortOr

exanination as of .Ttine 4, 1932, of the Union Bank and Savings

COirap

Y1 Bellevue, Ohio, and requesting, in view of
the information disclosed
111

analySi3,

that the agent consider the advisability of discussing the

°°11clition of
the bank with the Superintendent of Banks of the State of Ohio,
"
1 11. tile
View of developing the pos ibility of obtaining a cash
contribution
e'l*CNEtranty from the directors to Drovide for
certain estinated losses and
411011
losses as
MY develop in assets classified as doubtful. The letter
kle°
ETLIGested that the agent discuss with the Superintendent of Banks the
(i4estiori of
the advisabilitr
°f the payment by the member bank of any
itilcier existing
conditions•
Approved.
ileizbera

Letter to the Loederal Reserve Agent at Atlanta, approved by four
Of

tttet3

the Board on November 28, 1932, referring to the hichly unsatis-

itjon of the Citizens State Bank, Marianna, Florida, as disclosed
'r thD
NezItta 1141Ysis of the report of exmuination as of Zruly 13, 1932, and to the
or tile

ecoMlendation that no action be taken with regard to the membership

h ba4k 1/ending another examination which will be made early next .L-ear
4t11-411tilne the natter will again be reviewed.

The Board's letter stated

1114t 144a1114ell as the crop liquidating season is probably well advanced, the
ahotad arrange for
another examination at an early date, either in conj1411t10
11 vlith the State banking department or independently, and suggested




472

12/2/32

-13-

that, as
the directors of the bank are understcy)d to represent substantial
eial worth, they would be expected to Place the instite,tion in a more
a4tiefactory condition if it is to continue as a mother of the Systen.
Approved.
Letter to the Federal Reserve Agent at Chicago, approved by five
tierters
of the Board on P.ovember 23, 1932, replying to Assistant Federal
eaerve
Aeent "'bung's letter of ITovenber 2, 1932, advising that the agent's
11e1)11e8entative has been instructed to visit the banking department of the
2..tte

;ileconsin and. ascertain what steps have been, or will be, taken to

c'I'reet the
najor cr it icisi

reflected in a credit investigation of the

and i".erchants abate Bank of Seneca, r.iisconsin, as of October 10,
1%'2, and that
it is the intention of the agent, in the event that corrective
tort is
not taken within a reasonable time, to have a representative visit
aubject bank and request that it file notice of intention to withdraw
4°14
rl'erabership in the System.
the

The reply stated that it is assumed that, if

re -lresentative aiggests to the meMber bank that it file such
Ilc'ticei he
will carefully avoid giving any impression that the bank is reto r,ive
the notice, as the Board believes it is desirable that the
1414k be
tzi,t4

azeleiven

an opportunity to effect a voluntary withdrawal before proceed-

instituted
looking toward its expulsion from the System.
Approved.
4tter ilePlY, approved by four members of the Board on Yovember 23, to a
cited
°oPtember 6, 1932, from the Federal Reserve Agent at St. Louis,
1'411
tet;ard to
the reiaeval from the accounts of the Chouteau Trust Company,
7•:issourip of the •20,000 of first mortgage bonds held by that
41'Ititioll at
the tire it was admitted to membership in the Federal Reserve
tterri, tie
reply
rcluested, for the completion of the Board's records, that



47:3

12/2/32

-14-

the
a eat furnish all the details with regard to the manner in which the
'
Were removed, including the reason for the acceptance, in connection
"th the transaction, of a note of the directors in the amount of .2,900 in
°r cash and what plans the directors have naue for the payment of the
tiote if
it has not already been paid in full. The reply also
recuested that
thea'gent advise the Board as to the results of his conference with the vice
llre4itlent or
the trust comTany which was to have been held on October 15,
1932,

Approved.
Letter to the Acting Camp troller of the Currency, approved by four

441berz

Of the
Board on liovember 23, 1932, submitting for the consideration
or the A 4.
'
le41na Comptroller and for such action as he deems advisable in view
.tle circumstances involved, a recomrendation of the Acting Assistant
41 a serve A,ent at St. Louis that
the r'amptroller appoint a receiver
)'ecierea

1-e naniel National 73an::, Springfield, Ilissouri, in order that the
reserve bank stock issued to that bank may be canceled, it being

4114erat

°

that the national bank has been absorbed by another institution

11

q4Z /1,4.

exercised banking functions for more than sixty days, but that a
haa not been appointed and that the bank has not been placed in
4111cl't
1°- in accordance with the Provisions of the National Bank Act.
Approved.
RePlY to a le tter dated ,Jeptember 9, 1932r from the Federal IZeserve
4;t1
4/ at at
-. Lows
1 , with regard to the improvement made in certain criticized
telwa
referred to in the analysis of report of examination as of SUne 13,

I or

444e

Greenwood Bank and Trust Company, Greenwood,

is issippi.

ed advice from
the agent concerning any further corrections




The

4`

12/2/32

-15-

ioh maY
have been effected, and the present status of the proposed reorgani44tien of the bank.
Appr cued.
Letter to the federal .eserve Agent at Dallas, approved by four mmof the
Board on Irovenber 20, 1932, with reference to the analysis of
l*eDort ef
examination as of August 26, 1932, of the Lercantile Bank and Trust
0°44)1112-Y of Texas,
Dallas, Texas, which discloses that the nember bank, through
a
17411Y owned subsidiary, the T.Tercantile Securities Corporation, controls
baril:ing institutions in the State of Texas. The letter stated that
it an,
4-"e`11T) t1).;-t, at the time the 1:ercantile Bank and Trust Company was ad144-te
to membership in the Federal lieserve System, it held no
investment,
tth
directly or through an affiliate, in stocks of other banking institutiorta,
8-111 requested that the agent advise the Board in detail of all of
the
%'t in the
case, together with his reccurendation as to the action which
he
taken in the matter. The letter also suggested that the agent
With the bank commissioner of the State of Texas the
natter of the
13.alezlt Of
ai'I

e (is by the mnber bank and that he advise the Board as to

taken

or contemplated by the member bank toward the improvement

Itne
atisfactorY condition.
Approved.
b
44.,

Letter to the
j'ed.eral Reserve Agent at Dallas, approved by four
the Board on Decenber 1, 1932, with reference to the analysis of
or

or

/1111e.tion of the Dallas Rank and Trust Company, Dallas, Texas,

elaterthe_

v, 1932, which discloses that the institution crns sub-

41E111,,
eal of the eanital stock of the Dallas Title and Guaranty Company,
tatebt
ea
rrYing a ntunber of notes secured by the rprther bank's own stock.




475
12/2/32

-16-

411 13°ard's letter requested the agent to advise the merber institution that
the loans referred to should be eliminated from the accounts of the
nellas Title and
Guaranty Company or other collateral should be substituted
the stock within a reasonable tine.

The letter also re-uested that the

keel) the Board advised as to the progress made by the trust company ill
the el.
-41raination of the shares of its own stock, as well as on the sasestion
°e e
L)tate banking authorities with regard to the elimination by the member
on frau its savings department of loans collateraled by bank stock
'
44ich
11
'13 assumed, however, is not the stock of the subject bank.
Approved.
Letter, approved by four menbers of the Board on Tovamber 30, 1932,
11314'. I
urence

Baltimore, naryland, inclosins a Clayton

ct

-vering his service as a director of the 1Tational 7.7arine Bank and
0-_
A-vector of
the Colonial Trust Conuany, both of Baltimore, naryland.
Approved.
Nyt
wor,

Letter to I:1r. P. C. Hale, San Francisco,
California, inclo ins a

1`'t Pelnit covering his service as a director and officer of the
of A,
-,L3erica National Trust and Savings Association of San Francisco, as
etel,
Qlacl officer of the Bank of America of San Francisco, and as a
Of

the First National Bank of San Jose, California.
Approved.

Letter to the Federal Reserve Agent at San Francisco, approved by
-1'113era of the Board on November 30, 1932, inclosins letters, also
1‘4(11'e(1 bY five
ktio443.
members of the Board on November 30, to the Bank of America
Truzt and Savings Association and to the Bank of America, both of
California, which constitute the Board's formal notification




12/2t62
or its action, pursuant

-17-

476

to the provisions of section 3 of the Clayton Act

1)eltaittin. all
present and future officers and employees of each of the two
belik8 named (who are not directors, officers or employees of any other bank
or tzlIst
company) to
serve the other institution named. The letter stated
tilt
•
this nethod of procedure was adopted by the Board when it became
apparent
Assistant 7ecleral Reserve Agent Sargent's letter of July 22, 1932, that
rt
WI
"
, of interlocking officers and employees had become very large as
th zesu,
it of resolutions recently passed by the two banks, and it was felt

t4e

1444"888ary to re ,uire a separate application on behalf of each officer and
e411)1°:fiee concerned, or even to require them all to sigl one application,
in
•

the fact that precisely the same question is involved in each case.

le

ttor also stated that, unless the agent has Gam reason for believing
•tae
t4t
Procedure outlined is undesirable, he is authorized to deliver the

14'1.'sect

letters to the respective banks.
Approved.

Letter to the ;'ederal Reserve Agent at Philadelphia, approved by
'°111'1Is• Inb el'3 of the "Thard on rovember 23, 1932, stating that the Board has
14"(lered the Clayton Act application
of 1 r. 41111m1'.47. Bodine, Villanova.,
1)14Lalve
'
llia, for permission to serve as a director of the 2irst Lational
4111z c3). ?Iiiladelphia and of the Provident Trust Company of Philadelphia, and
ki
41)Pear,r,
that the available information is not sufficient to malp it
Ac)
411)1e to
e2tilaate accurately the extent of the competition existinr,
•tvleen.

the
Institutions, it will be appreciated if the agent will fur-

0e

detailed

.information regardin,7 their )zisiness,
together with a
ztat
rc)§tttil) eraellt of the reasons for the conclusion that it would not be inth

Public




interest to grant i_r. Bodine's application.
Approved.

477

12/2132

-18TelearaPhic reply, approved by four mnbers of the 13oard on Novenber

281 1932, to a -telegram dated November 23, 1962, from the Governor of the
kieral Reserve
Bank of San Francisco inquiring whether a Federal reserve bank
4117

aiscount eligible paper for a regional agricultural credit corporation.

711e rePlY sta.ted that, in view of the
provisions of section 201(e) of the
s--1-1eY -:elief and Construction Act of 1932, it is the Beard's opinion
that
re3,0171.0 b.anks
may legally rediscount eligible

paper

for regional

4?"4-1,C11.1.-tural credit corporations, but,
ina.mauch as such corporations are

klthorized to rediscount
eligible paper also with the Reconstruction 7inance
r+,
vwl*Doration and Federal
intermediate credit banks, it is ass MO d that, before
te(Itteting Feder
t

reserve banks to rediscount their Paper, they will consult

-)
,Lecon.struction

Corporation and will also utilize their

kltil°zitY to
rediscount with 'Federal intermediate credit banks. The reply
e.14° stated
that in the event it should becore desirable for the Yederal re4et‘'e bard.%
to rediscount paper for regional agricultural credit corporations,
tilete are a
flwnber of questions to be considered with a view of obtaining
1.1ell14-1:111'ormity of -policy and procedure among the Federal reserve banks in
sucj. paper for rediscount.
Approved.
lelegrata to the governors of all Federal reserve banks, approved by
icellibet3 of the Board on Novanber 28, 1932, referring to the Provisions
Ate or

G and to the Act of jUly 21, 1932, which reduced the niaxinum
itterest that may be charged on loans secured by veterans' adjusted

e

Ntot.:03:ett1f1catez; from 4 1/2":, to 3 1/2% per annum, and advising that the
te

er General of the United ;-tates les ruled that interest accrued on
J.111v- 01




1932, on loans made prior to that date, as well as on loans

12/2/32

-19-

Ikcle 0
n that date or thereafter, may not exceed 3 1/2 per annum. The
t
e--,Xerl also called attention to the provisions of the Adjusted Compensation
41.t that a
note is not eligible for redemption unless accompanied by an
"tik7it of an officer of the lending bank that it has not ma'ie or collected
°ratteranted to make or collect uny charges except interest as allowed by
1°1 and
stated that if any notes secured by veteranst adjusted service certiI'le tee and
representing loans made prior to July 21, 1932, are presented at
resrve banks for rediscount, it would be advisable before discounting
aleh note.-3
to obtain not only the usual affidavit with regard to the amount
or
lliterest charged, but also specific advice that the lendin-,
, bank has not
ellecl or
collected or attempted to charge or collect interest thereon
l't1111C, on Or
subse.luent to July 21, 1932, at a rate in excess of 3 1/2
Der attiza.

Approved.
aelllY, approved by three members of the Board on Fovember 33, 1952,

to

letter dated ravember 25, 1932, from the Governor of the 2ederal
Reserve
0
"fork, advising that the board of directors of the bank, at its
fl
14Z on
Fovember 23, indicated that it is not in favor of acceding to the
te

rITew

the Ileichsbank, transmitted through the Bank for International
4ttlelint ,

for a reduction to 4 1/2:; per annum in the interest rate on a

te,17aa, ror
a
'741'4 eZpires

further three months Period, of the credit to the Reichsbank
On DeceMber 5, 1952, and that, accordingly, it was voted, sub-

let to
the
1)111
'
, to
14 the

aimroval of the Board, to authorize the officers of the rew York
e.x.1.4n0 .,,or
the renewal of the unpaid balance of its Participation

erealt 2or
a

not exceeding three months from DeceMber 5, 1932,
period

otheIlhztntially the sant terms and conditions as now exist, provided all
'pants in the credit agree to do likewise.



Governor Harrison

479
-20ala0

atated that the Reichsbank will probably be in a position to repay at
least v1
,000,000 to each of the participants in the credit on December 5,
1932.
that the directors have indicated that they might
favor a reduction of
th.e
Interest rate if and when the iReichsbank should make a substantial repay_
aeht, ,
el. the Principal amount of the
credit; and. that in connection with the
'
ILL of the credit it is pronosed to advise the Bank for International
4tti
einents that, without prejudicing its right to full
payment of the credit
e't the
next roatu.rity after December 5, 1932, the Federal Reserve Bank of New
York. ,
17111 expect the Reichsbank to mike a substantial repayment, perhaps 25-,2
°1 1)11111,,.
—1Pal amount, on the next maturity after December 5, 1932. The reply
tateci
viitkt the Roard will interpose no objection to the action contemplated
bY
—rectors of the New York ban:: or to the proposed advice to the Bank
fol,
L'lOrial .3etticrwnts with regard to the repayment on the first
date after December 5, of a substantial portion of the
credit.

teD1.1.

The

requested that governor Harrison forward to the Board for its records

r
til

t

his communication to the Bank for International Gettlements, and

he nil
—4718e the Roard if and when the arranr,ements ior the renewal are
leted.

Approved.
booe

Letter to Senator Reed Smoot, approved by four members of the Board

t1,444

1: replying to his letter of Noverber 22, 1932, with which he

kittod

the request of Er. Stuart

Loughborough, Berkeley, California,

°ITaLltior,

as to the correctness of statea;nts contained in the speech
Nreea
Man LicFa.dden before the House of Representatives on Tune 10, 2.932,

tated that no material designed for the purpose of answering
1441:-Q.Liadden's remarks has been prepared, but that the Board is for-




480

12/2/32

-21Copies of the last three annual reports of the Board which contain

leh material
that may be of interest to :_r.
1
Loughborough.

The reply also
•

eealed a
ttention to the survey of the operation of the national and Federal
ze8erve banking systems which
was conducted pursuant to Senate Resolution 7o.
71,
844 81-1 Cgested that Senator Smoot nay desire to send to Tir. Loughborough
Ei8et
Of the Printed copies of the hearings, together with the report
of the
eto
-onzaittee on Banking and Currency which it submitted to the Senate in
ectioil
With the so-called Glass Bill.
Approved.
Circula.r letter to the chairmen and governors or: all Federal reserve
1)13:11c8' transmitting a copy of a letter dated
rovember 15, 1952, and inclosure,
Icta the (II,
-,Lier of the Bureau of Agricultural Economics of the
Department of
`1111'e, describing in detail the grading and inspection work now conc1.11ete4
the Bureau of Agricultural :conomics.
Approved.
Letter to the Federal reserve agents and governors
of all Federal
approved by four meribers of the Board on Kovember 25, 1932,
rereren e

to the action taken by the Governors' and Federal reserve

4exitst

eon
ferences, followinr, a request by the Acting Comp loller of the
ktte,
Nti'Lel?'for the Payment of an increased fee for copies of reports of

e4141 141ti°11 of national banks, in voting that a fee of )
,z 10.00 be paid for
itt
'
,
Ile

811eh

eP

t

furnished to Federal reserve banks until December 31, 1933.

ettez stated that, upon
consideration of this matter, the Board has
*to a
4:
b4. 15-

Palment of the fee of :,;10.00 for each report of examination of

btlraz
114

until June 30, 1933, after which date the present practice

*0() for each report should be resurEd in the absence of further




iL

-22'
eeticia in the laeantime by the 2edera1 Reserve
Board.
Approved.
Letter to the Chairman of the Tederal Reserve Agents' Conference,
ovccl by
four members of the Board on November 29, 1932, statinc, that the
-°L.i Given further consideration to the proposed j'ederal Reserve System
e'4111bit at the Century of Prozress Exposition in Chicago in 1933, and for
the l'e480n3 indicated at the joint meeting of the Board with the Governors
;,ecier _
al reserve agents on November 16, 1952, has reached the conclusion
tlet
ezhibit such as suggested by the comittee appointed by the Board to
411c)rt an
System participation in the ex-position should not be approved; that
the
feels that a less expensive exhibit consisting merely of charts and
iltelleAttre

louldnot be desirable; that, accordini0,y, the Board is of the

that all plans for particiation in the Century of rrogxess 'Exposition
4c311-1(1 be abandoned; and that it has, therefore, discontinued the committee
411Doilited by
it.On rovember 29, 1032, there were also dispatched, vith
4DDroval of four members of the Board, a letter to LTr.
H. G. rett,
oi" the Committee appointed by the Board, advising of the Board's
444e1atie of
1

his service and personal interest in the work of the

ttee
14 developing a plan and arriving at an estimate of the cost of
l eeerve System exhibit, and letters to the other 7edera1 reserve
14c1051ne a
co-yy of the letter addressed 1-,o the Chairman of the Ired11"er/re A''ents' Conference.
Approved.
dated December 1, 19, frora Ir. Wyatt, General Counsel,
that the Board authorize a subscriPtion to the Congressional
t4 ,
e iorporation Trust Corapany covering pending legislation during
3eseion of the 72nd Congress relating to banking and currency, at



12/2/32

-23-

008t or
.:;10.0

for the session.
Approved.

1,:emorand.um•dated 1Tovember 30, 1932, from Er. Srnead, Chief of the
14.91eion of
Bank Operations, reconriending approval by the Board of the
revlsecl condition report form 105 attached to the memorandum.; most of the
3 in the form having
been Trade necessary by the Board's recent ruling
that
'" cer
tificates of deposit payable to other banks within thirty days are
clek
clePosits uithin the meaning of section 19 of the federal Reserve
_Act.
Approved.
.4, 1932

RePorts of Standing Comittee dated November 25, 29, 'December 1 and

'recornalending approval of the following changes in stock at :Federal
r7e banks:
iOn

;"'Ji-on for ORIGIEAL Stock:
tio. 11.
National Bank in Whitney, Texas.

Shares
18

18

bil)112.4tions for AlliITIONAL Stock:
et no.

01,1

6tat,,

Ab

?renont I
(Increase in
1.11131.11s)
_
0
(1,1-44una1
-3ank, Hinsdale, Illinois.
'Lux' use in
E.;ar„)lus)

2
17

t cations for SURRENDER of
Stock:
,iettr
o,
- .. ITos
111

147 Tradesmens Bank
(31.:112 COntle

Trust Company, row
(Insolvent)
(10-tional Bank, Lakeport, Y. H.
suinlus)
et
Ctielito

notional
Bank of Philadelphia,
'441118:71Vetilia. (Decrease in surplus)
iobA
let No. 4.
(1.11;ati.61-a-a. aank, Pittsburcji,
Pa.
-/°1vullt)
'




510
12

522

300

300

1,260

1,260

483

12/2/32

-24-or SURRITDER of Stock: (Cont'd)

8

Shares

C--1.776-17-cliants National :lank, Bel Air, Ild.
(Decrease
in surplus)
Cazalina rational Bank, Charleston, S. C.
(Decrease in
surolus)

57
420

,411,8triet Lo. 7.
-4.8t
3ank and Trust Corapany, '3araboo,
:118consin. (Decrease in surplus)
15
.1,4 (D ITational Bank, Chicago, Illinois.
ecrease in surplus)
120
t Irationa
Bank, liorthboro, Iowa. (Insolvent)
32
1.0. 8.
Iret 1rati0na1-T3ank, Vincennes, Indiana. (Insolvent) 150
.L
N,Buriet No. 9.
;
1;47111 llatienal Bank, Jacimon, :•inn. (Insolvent)
26
national Bank,
Egan, South Dakota. (Insolvent)
18
ITational
liational. Bank, Wendell, I:inn. (Insolvent)
35
Bank, Plaza,
North Dakota. (Insolvent) 30
);fationai Bank, van Hook,
North Dakota.
t(.-u1soivent)
21
178-tiallal Bank, Letcher, S. Dakota.
(Insolvent)
25
1

10
cilltet,Fa-tio.nalsaank, Wynona, Okla. (V.L. terminal)
a 'ational Bank, Peetz, Colorado.
(Insolvent)

477

•

167

150

155

18

1.3

36

36
Total

36
3,103

-let 1;0,
ci'ltY
11 the National Bank, Floresville, Texas. (Cons.
()11
Pirst Fational Bank and City National
P
loresville, Texas.)

Or

Ayoroved.
liel)01-t
vvto,,
iea.

Standin; Committee dated November 16, 1932, reconriending

e'r the following Clayton Act applications:
eta ciillr• Sara osteohenson, for permission to serve at the sate
time
1.04tL
'
L eetor of the 1irst National Bank (9.h Trust Company, Helena,
'kW),
-qQ.
4 9 a
.director and officer of the First ::ational Bank, Great
,l0ntana, and as director of the liontana ITational Bank,
es '1:ontana
aa di'• Charles A. Stone, for neimission to serve at the sane tir:e
vector of
the President and Directors of The I anhattan Company,
80st
, rev/ _York, and as director of the First National Bank of
*4-1 Boston, Lassachusetts.




"2/2/32

484
-25-

Er. Vernon G. Owen, for permission to serve at the same tine
director of the Liberty Yational Bank of Washington, D. C., and
8 director of the Bank of Commerce and Savings of 1aahin,t7ton, D. C.

a8

Approved.

Thereupon the neeting adjourned.

44Zovea




airman, Executive Comiitt,