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581 A meeting of the Federal Reserve Board was held in Washington on ledriesday, December 27, 1933, at 12:30 P. m. PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Mr. Black, Governor hanlin Miller Tames Thomas Szymczak O'Connor Morrill, Secretary Carpenter, Assistant Secretary Bethea, Assistant Secretary Paulger, Chief of the Division of Examinations Mr. Chamberlin, Federal Reserve Examiner Mr. Mr. Mr. Mr. There w as presented a memorandum dated December 23, 1933, from the Conlptroller of the Currency recommending that the application of "The Chase ti al Bank of the City of New York", New York, New York, for permission t° reduce its common capital stock from 148,000,000 to 4100,270,000 be )11°.7ed, subject to the following conditions set forth in the concluding 1341'4g.rsPh of the memorandum: "provided, no part of the released capital Or'447,730,000 is returned to shareholders but is directly used as a credit t° eliminate that amount of the least desirable assets in the bank; and 111()ceted to specific items, which assets, however, are to remain the prop- l'tY Or the bank as part of its capital funds, and are in no way to be retIrtled to shareholders; provided, there is transferred from the undivided 111'13tits account and/or surplus fund to a reserve for depreciation and loss 4e(31111t such amounts as will be necessary to have such reserve for depre1.04 and loss account at least equal the amount of doubtful, depreciated, ibaci cittt „ t rt"ess values, if any, remaining in the bank's assets after the appliof the above-mentioned '447,730,000 of released capital; provided, in 582 12/27/33 'Published -2 reports of condition and in reports of condition to the Comptrol- lel' of the Currency, the bank deducts the amount of the reserve for depree1 "1011 and loss account which is represented by doubtful or depreciated 141148e in its assets from the asset account containing the substandard asse# ve for which such reserves were created, and reports such asset accounts tiet, 'e., the then present book value of such asset accounts less the 1'3111te in the reserve account thereagainst; and provided, that before such -on in capitel shall have becocre effective, the bank's capital shall hoe been increased by the sale and issuance of50,000,000 of preferred at°ek to the Reconstruction Finance Corporation and/or others." There was Presented a memorandum dated December 27, 1933, from the Division of Exult "tions recommending that the application be approved. 11-1". Paulger stated that it would appear from the information contitTlecl in the Comptroller's memorandum that, with the corrections which were 41"e t°110zina. the last examination of the bank on February 24, 1933, and th61111111 ' °vement in conditions which has taken place since that examination, the released capital funds would be sufficient to eliminate any remaining tilleted losses and security depreciation and a large part of doubtful as- Mr. James stated that he ouestioned whether there is provision under the plat]. for a sufficient amount of preferred stock to effect a sati sfactory Irr'1111°verInt in the condition of the bank. °r At the suggestion of the Comptrol- the C urrency, Mr. F. G. Await, Deputy Comptroller of the Currency, p Polger, Chief National Bank Examiner, and Yr. R. Y. Hodgson, 583 )) 12/27/33 - 3- 488istant Chief National Bank Examiner, of the Comptroller's office, entered the 1100m, and the question raised by Mr. James was discussed briefly with thelli ' Mr. Folger stating that on the basis of an examination of The Chase ilati4laal Bank made by the New York Clearing House Association very recent- ly ' Et copy of which had been shown to members of the staff of the Comptrollert_ 8 office by Mr. Aldrich, Chairman of the bank, when he was in Washington 4 ri connection with the proposed reduction in stock, the amount of the 3ed reduction in the common capital stock of the bank would be more t118111 su fficient to take care of estimated losses and depreciation. During the discussion Mr. Miller left the room and at the conclusion tliereor, /4essrs. Await, Folger and Hodgson withdrew from the meeting. The Secretary was requested to advise the Comptroller of the Currency that, in accordance with his recommendation, the Federal Reserve Board approves the proposed reduction in the common capital stock of The Chase National Bank of the City of New York, New York, New York, pursuant to the plan referred to in his memorandum Of December 23, and subject to compliance with the conditions set forth in the concluding paragraph of the memorandum. There was then presented a letter dated December 27, 1933, from the a°11113tr°11er of the Currency referring to the Board's letter of December 23, 111111eh the Comptroller was advised that the three employees who had been led on the pay roll of the Federal Reserve Board as money counters in the 4deral Reserve Issue and Redemption Division and were assigned to the 14v ision of the Comatroller's office would be removed from the pay 1'011 of the Board as of the close of business on December 31, 1933, and Nell requested that the two money counters temporarily assigned to the 14411 )11/ision of the Comptroller's office be returned to the Federal 584 12/27/33 - 4 " 1144 Irve Issue and Redemption Division on January 2, 1934. The Comptroller's letter stated that the latter two employees will be returned to the FedReserve Issue and Redemption Division in accordance with the Board's letter, and requested that, for the reasons stated in his letter, the 131418ent arrangement with regard to the other three employees be continued 1111141 an opportunity is afforded to obtain an appropriation from Congress to tak care of the situation. Upon motion by Mr. James, and with the acquiescence of Mr. O'Connor, it was voted to retain Miss Janet Oliphant, Mrs. Mary White and Mrs. Irma Smoot on the Pay roll of the Board in the Federal Reserve Issue and Redemption Division until not later than the close of business on March 31, 1934, with the understanding that in the meantime the Comptroller will make arrangements to carry the three employees on his own pay roll. The Board then considered and acted on the following matters: Telegram to Mr. Curtiss, Federal Reserve Agent at Boston, stating that, ")Ject to the conditi ons prescribed in the telegram, the Board approves til'aaPPlication of the "Hadley Falls Trust Canpany", Holyoke, Massachusetts, to thership in the Federal Reserve System and for the appropriate amount or at -k °a in the Federal Reserve Bank of Boston. Approved. Telegram to Mr. Case, Federal Reserve Agent at New York, reading as Na0100: ko "Referring Dillistin's telegram December 26, 1933, regarding el..11.111t Vernon Trust Company, Mount Vernon, New York, Board grants nsion of tine to January 27, 1934, within which bank may canwith conditions of membership." Approved. 585 12/27/33 Telegraphic reply to a telegram dated December 26, 1933, from Yr. It°11, Federal Reserve Agent at Minneapolis; the reply readin as follows: "Retel twenty-sixth Board extends until January twentysixth time within which State Bank of Belle Plaine, Belle Plaine, Minnesota, may accomplish membership." Approved. Telegraphic reply to a telegram dated December 23, 1933, from I.:T. / 1 48h ) .dederal Reserve Agent at Dallas; the reply reading as follows: "Your wire December 23, Citizens State Bank & Trust Company/ -'00se Creek, Texas. Board approves application for fifteen shares of additional stock." Approved. Letter to Mr. O'Connor, Comptroller of the Currency, reading as follQws "In accordance with your recommendation, the Federal Reserve 2all approves a reduction in the common capital stock of 'The "rst National Bank of Stillwater', Stillwater, Oklahoma, from 1;125,000 to :,;50,000, pursuant to a plan which provides that the pank's capital shall be increased by the sale at par of 450,000 "lue preferred stock to the Reconstruction Finance Corporac-la''f41, and that the funds released by the reduction in common „Vtal stock shall be used to eliminate an equal amount of sub°t. ndard assets all as set forth in your memorandum of December 11) Approved. Letter to Mr. O'Connor, Comptroller of the Currency, readin..: as fol- Bo "In accordance with your recommendation the Federal Reserve Amard approves a reduction in the common capital stock of 'The trarlcan National Bank of Klamath Falls', Klamath Falls, Oregon, ''200,000 to 02,500, pursuant to a plan Which provides that the iA2 lank's capital shall be increased by the sale at par of cor''°0 par value preferred stock to the Reconstruction Finance rrico:„P°ration, and that the funds released by the reduction in cam- caPital stock shall be used, together with a portion of the 586 12/27/33 C "bank's surplus or undivided profits, to eliminate substandard assets in the amount of approximately 0.40,000, all as set forth in your letter of December 18, 1933." Approved. Letter to 1,:r. O'Connor, Comptroller of the Currency, reading as follaws: "Receipt is acknowledged of your memorandum of December 18, ..9331 with reference to Mr. Awalt's memorandum of November 22, 433 'recommendina. a reduction of ,25,000 in the common capital or 'Thefirst National Bank of Watervliet', Watervliet, :achigan. , In accordance with your recommendation, the Board agrees IL.lhet the requirement for a contribution of .22,300 from the shareders, which was a part of the plan upon which the Board's apti:roval dated December 7, 1933, was based, be amended to provide , (31 ' the elimination of only U0,000 of doubtful assets through ,i!urchase by the shareholders, all other provisions of the plan 7,s,,,set forth in the memoranda of November 22 and December 18, "4-3., respectively, to remain unchanged." Approved. 1011, •ve: Letter to 1r. O'Connor, Comptroller of the Currency, readinr , as fol- ic Beceipt is acknowledged of your memorandum of December 19, a" )3, with reference to the Board's letter of November 10, 1933, .,,r°nn',); 1) e reduction in the common capital of The Security Nace:Ilal Bank of Arkansas City, Arkansas City, Kansas, subject to 0,:168.in conditions as set forth in Mr. Awalt's memorandum of ..ober 20, 1933. Azi:Y01-1 advise that the absorption of the Union State Bank of 'Etnsas City by The SecurSecurityNational Bank of Arkansas City has been ro abandoned, which renders invalid the third condition set th in the Board's letter of November 10, 1933, relating to a 01.9.nidation loan to be made by the R. F. C. for the purpose of rectine the proposed absorption. let; In accordance with your recommendation, the Board amends its 3, of November 10, 1933, by eliminating the condition numbered lth the understanding that the other provisions of the plan 111 unchanged." 4 Approved. , to Mr. Hoxton, Federal Reserve Agent at Richmond, stating 587 12/27/33 - 7 - tIl vt the Board has considered the application of the "Bedford Corporation", Charleston, West Virginia, for a votiliu:, permit under authority of section 5144 of the Revised Statutes of the United States, as amended, entitling Such orgarliation to vote the stock which it owns or controls in "The ha Valley ]an', Charlesto n, West Virginia, and has authorized the isOf a limited permit to the applicant for the following purposes: "To elect directors of such bank at the annual meettna. of shareholders at any time prior to April 1, 1934, and to act at such meeting upon such matters of a routine nature as are ordinarily acted upon at the annual meeting of such bank." Approved. Letter to Mr. Newton, Federal Reserve Agent at Atlanta, reading as f'04014,8: , "The Board has considered the application for a voting permit i;nder authority of Section 5144 of the Revised Statutes of the illi ted States, as amended, entitlinf. 'Georgia Rail Road and BankConPany', Augusta, Georgia, to vote the stock which it owns ' A controls of the 'Georgia Railroad Bank and Trust Company', 4111-13ta, Georgia, and approves the application as filed subject the following condition: "Prior to the issuance of such voting permit Georgia Railroad Bank and Trust Company shall satisfy you that none of its loans exceeds the limits prescribed by the laws of the State of . Georgia. itr' This condition is prescribed because the Board is not fully °rrned as to the terms and status of a repurchase agreement with 8 .birst National Bank of Atlanta, under which Georgia Rail0;ad Bank and Trust Company may be liable to repurchase warrants aeoRichmond County, Georgia, which warrants, together with those it rgie Railroad Bank and Trust Company now owns, may be sufficient th arrl°unt and of such a character to constitute a violation of e State laws. the7 1°u are authorized to issue the inclosed voting permit to that-e°rEiti Rail Road and Banking Company when you are satisfied date lt has complied with the condition set forth above and to the permit as of the date of issuance. i Y°u are requested to advise the Board as soon as the permit rer s alled and to specify the date of its issuance. You are also '"ested to advise the proper State banking authority of the 588 12/27/33 - 8 - "issuance of the penult and to furnish him with such other information with respect thereto as may be of interest to him." Approved. Telerram to Mr. Peyton, Federal Reserve Agent at Minneapolis, StetinE that the Board has considered the application of the "Northwest 'alle01"Poration", Minneapolis, Minnesota, for a voting permit under autlority °t section 5144 of the Revised Statutes of the United States, as amended, entitling such organization to vote the stock which it owns or controls 111 the ci following banks: "Iowa 1 Moines National Bank & Trust Canny", Des Moines, Iowa "T First National Bank of Mason City", Mason City, Iowa "1,.e Third Northwestern National Bank of Minneapolis", Minneapolis, Minnesota icilend National Bank and Trust Company of Minneapolis", Minneapolis, Minnesota 'IT'ih "The 2entral National Bank of Minneapolis", Minneapolis, Minnesota 41,1 First National Bank of Albert Lea", Albert Lea, Minnesota "frIal8t Q end American National Bank of Duluth", Duluth, Minnesota "The- ‘jecurit Natimal Bank and Trust Company of l'aribault", Faribault, lannesota The ,N\.orthwester n National Bank of Litchfield", Litchfield, Minnesota "The (I'tional Citizens Bank of Mankato", Mankato, Minnesota "The First National Bank of Red Wing", Red 'ding, Minnesota "Stoc7,,,Pire National Bank of St. Paul", St. Paul, Minnesota The :',Jlards National Bank of South St. Paul", South St. Paul, Minnesota tiThe 11,1-1‘ t National Bank of Winona", Winona, Minnesota The r,irst National Bank of Dillon", Dillon, Montana The L',1:eat Falls National Bank", Great Falls, Montana i'lltiory-rst National Bank of Kalispell", Kalispell, Montana em i Bank* and Trust Company", Helena, Montana ,The fi' r t National Bank of Fairbury", Fairbury, Nebraska " t -etstings National Bank of Hastings", Hastings, Nebraska hrn,°Q1(Vp.,„ ":"- L's National Bank of South Omaha", South Omaha, Nebraska Da :The °-te• National Bank & Trust Company of Bismarck", Bismarck, North Dakota ,The `G.4-1'st lsational Bank and Trust Company of Fargo", Fargo, North Dakota '1?1E lltton National Bank", Grafton, North Dakota "The3_ 48'tional Bank of Hillsboro", Hillsboro, North Dakota alnea River National Bank and Trust Company of Jamestown", Jamestown, "The North Dakota The Zrst National Bank of Mandan", Mandan, North Dakota erieen National Bank and Trust Company of Valley City", Valley City, "The North Dakota Citizens National Bank of Wahocton", Wahpeton, North Dakota 589 12/27/33 - 9 'The e• "The41rst National Bank of Aberdeen", Aberdeen, South Dakota First National Bank of Deadwood", Deadwood, South Dakota 116 1 National Bank of Huron", Huron, South Dakota "The First National Bank of Lead", Lead, South Dakota and Merchants National Bank of Millbank", Iiillbank, South 'akota 47 ' ,11 First National Bank of Mobridge", Eobridge, South Dakota 471-First National Bank of Philip", Philip, South Dakota First National Bank of Rapid City", Rapid City, South Dakota 4711: Redfield National Bank", Redfield, South Dakota SecuritY National Bank and Trust Company of Sioux Falls", Sioux Falls, 47 South :akota n "The ',,?tarlIercial National Bank of Sturgis", Sturgis, South Dakota "The irst Citizens National Bank", Zatertown, South Dakota 1111,1e ecurity National Bank of Cheney", Cheney, Washington -ational Bank of La Crosse", La Crosse, Tdsconsin ha s authorized the issuance of a limited permit to the applicant, sub- 4 n%:Parmers n,e ieet t () the following condition: vi "Prior to the issuance of such limited voting permit Northaest Bancorporation shall represent, undertake and agree that „certain schedule entitled 'Recapitulation -- Revised November 1933' submitted by Northwest Bancorporation to supplement Y of its application for a voting permit (hereinafter in 'ills agreement called the 'Schedule') shall be deemed to include the following provisions and that each of such provisions shall be fully observed: "(1) Prior to or coincidentally with the proposed capital stock reduction of each of the banks listed in the said Schedule and having membership in the Federal Reserve SYstem the capital stock of each of such banks shall be increased by the issuance of preferred stock in the amount indicated oeposite the name of such bank in the ,Schedule. '(2) :ach of such benks shall eliminate from its assets undesirable items in the amounts respectively indicated , in the Schedule. (3) No funds released through the nropesed reduction in capital stock shall be returned to the respective shareholders of such banks but such funds shall be used to "eliminate undesirable assets. (4) All assets eliminated shall remain the property of the , respective banks. -,k5) After consummation of the plans proposed in the e-che lule, each of such banks shall possess a capital structure, including common or common and preferred ea2")1ta1 stock, surplus and/or profits and reserves in the amounts respectively indicated in the Schedule." 590 12/27/33 -10 - and for the following purposes: "(1) To effect the recapitali'i.ation of the above named banks in accordance with certain representations made by Northwest Bancorporation in an agreement executed by it as a condition of the issuance of this permit and in substantial accordance with the Schedule entitled 'Recapitulation -- Revised November 27, 1933' submitted by Northwest Bancorporation to supplement Exhibit K of its application for a voting permit. "(2) To elect directors of the above named banks at their annual meetings in January, 1934, and to conduct thereat such business of a routine nature as is ordinarily conducted at the respective annual meetings of such banks. "(3) With respect to Midland National Bank and Trust ComPany of Minneapolis, Minneapolis, Minnesota and First and American National Bank of Duluth, Duluth, Minnesota, for the further purpose of amending the articles of association of each of such banks to provide for a change in the par value of its authorized capital stock to 100 per share." Approved. In connection with the above telegram there was also presented a letter to Mr. O'Connor, Comptroller of the Currency, reading as follows: "In accordance with your recommendation, the Federal Re"rya Board approves the proposed reductions in the common ctaPital stock of the forty-two national banks affiliated with ,he Northwest Bancorporation, a list of which is attached reto, ( the banks shown on the list are the same as the rtY-two national banks shown in the telegram referred to above Peyton, Federal Reserve Agent at Minneapolis, with reto the issuance of a limited voting permit to the Northel8t Bancorporaticn, Minneapolis, Minnesota.) pursuant to c ar.le of rehabilitation which provide for an increase in the ilaPl tal stock of the respective banks through the sale to the deconstruction Finance Corporation of preferred stock and/or cnentures and which also provide for the use of the released d7Pltal funds, together with funds available in the surplus, un4ridad profits and reserve accounts of each bank, in eliminating inde sirable assets and/or establishing reserves, all as set forth 1\4) Y°1-1 r memorandum of December 5, 1933 and the schedule revised \TIllber 27, 1933, attached thereto. In the case of the j Iowa-Des Moines National Bank and Trust Company, Des Moines, Iowa Minnesota Lea, Albert First National Bank, 391 12/27/33 "First National Bank and Trust Canpany, Fargo, North Dakota First National Bank, Hillsboro, North Dakota First National Bank, Mandan, North Dakota First National Bank, Aberdeen, South Dakota First National Bank, Lead, South Dakota Security National Bank and Trust Company, Sioux Falls, South Dakoi,a, it is noted that there will remain in such banks depreciation in.securities and/or losses sufficient to impair or entirely eliminate the common capital stock of each bank. It is assumed, however, that you have these conditions in mind and that, whenever it becomes possible to do so, you will obtain such further corrections as may be practicable." Approved. There was also presented a letter to Er. Peyton, Federal Reserve Agent at Minneapolis, reading as follows: , "Reference is made to the application dated September 21, ; ' 1933 and subsequently amended, of the Northwest Bancorporation, : neePolis, Minnesota, for a voting permit wherein, among other t1, 14gs, there is proposed a reduction in common capital stock of Union Bank and Trust Campanyl Helena, Montana, from ,250,000 c° ,100,000 pursuant to a plan which provides that the bank's 1,111tel shall be increased by the sale at par of y100,000 par FZ4Ale Preferred stock or capital debentures to the Reconstruction ilinance Corporation and that the funds released by the reduction pr c°rnmon capital stock and funds from the bank's surplus, undivided ,2nt5 and/or reserves shall be used for the elimination of of assets or the establishment of reserves therefor. ti, Sirice it appears from the information submitted that the enmo-e amount of the funds made available by the reduction in cornthe capital is to be used to eliminate objectionable assets from o0;; uank or establish reserves therefor, and since the Board's ent to the reduction in capital is not required by law or the con : t las of membership applicable to the Bank, the Board offers , -" no ( or ;"3"tion to the reduction in capital in the amount indicated, 44d v° the issuance of preferred stock or capital notes, with the rstanding, of course, that your counsel has considered the : ctis 14 .i erld is satisfied as to its legal aspects, that such reduction capit,11 stock and t. ,7.e sale of preferred stock or flotes will not result in any change in the corporate eranne° of the bank which will affect its membership in the Fedthe ,'eserve System, and that the transaction has the approval of ' 4Perintendent of Banks for the State of Montana." Approved. 592 12/27/33 -12- Ii Telegram to Mr. Peyton, Federal Reserve Agent at. Minneapolis, "inE that the Board has considered the application of the "Northwest corporation" Minneapolis, Minnesota', for a voting permit under allthori4 uY of section 5144 of the Revised Statutes of the United States, as. ,-end, entitling such organization to vote the stock which it owns e'r e°ntrols in the following banking institutions: "The 1,, *The zIrst National Bank of Denison", Denison, Iowa tilthei Live Stock National Bank of Sioux City", Sioux City, Iowa %.24 F°Urth Northwestern National Bank of Minneapolis" Minneapolis, Minnesota e Fifth Northwestern National Bank of Minneapolis", Minneapolis, _innesota 114 4q11. "Irst National Bank of Appleton", A.ppleton, Minnesota Atte pir at National Bank of Belle Plaine", Belle Plaine, Minnesota 41443 Northwestern National Bank of Dawson", Dawson, Minnesota First National Bank of Farmington", Farmington, Minnesota "7C i ergus Falls National Bank and Trust Company", Fergus Falls, Minnesota 4T11,; "Th-e ?stings National Bank", Hastings, Minnesota nte 'irst National dank of Hawley", Hawley, Minnesota ltritY National Bank of Hopkins", Hopkins, Minnesota "The , First National Bank of Jordan", Jordan, Minnesota 414 First National Bank of Marshall", Marshall, Minnesota ,The First National Bank of Montgomery", Montgomery, :-innesota " INN First National Bank in Moorhead; Moorhead, Minnesota '1, 4 First National Bank of New Prague', New Prague, Minnesota //1148t National Bank in Two Harbors", Two Harbors, Minnesota nbea First National Bank of Waterville", ; - ;aterville, Minnesota ilallk and Trust Company of Anaconda", Anaconda,ontana 4The/r, "Tile kio ntinental National Bank of Harlowton", Harlowton, Liontana "The Continental National i3aLk of Lincoaff, Lincoln, Nebraska 411,raiij .nited States National Bank of Omaha", Omaha, Nebraska ; National Bank in Minot", Minot, North Dakota '14% V-rst National Bank of NapoleOn", Napoleon, North Dakota he ;&rirst National Bank of B- ritton", Britton, South Dakota St National Bank and Trust Company of Chamberlain", Chamberlain South Dakota Dakota South Rapids, rst . p %he National Bank in Dell Atpids", Dell 4111* Wrst National Bank of Groton", Groton, South Dakota "The p?rthINSstern National tank of Madisorf, Madison, South Dakota 'The st National Bank of BalOwin", Baldwin, Wisconsin ''The p at National Bank of Grantsburg", Grantsburg, 'ilisconsin rst National Bank of New Richmond", New Richmond, Viisconsin ' 593 12/27/36 a3 — 91,11 Yr, rSt rational sank of irst Natiolal Bank of :?rst National Bank of 411 'The '-irst National Bank of 11"th .:(estern National Prescott", Prescott, 7,isconsin Carson", Carson, North Dakota Garrison", Garrison, North Dakota 7napp", 'Than), i.sconsin Bank of :linneapolis", inneapolis, :annesota alid has authorized the issuance of a limited permit to the applicant, "bi'et to the following condition: "Prior to the issuance of such limited voting permit northwest Bancorporation shall represent, undertake and :!gree that a certein schedule entitled 'Recapitulation -November 27, 1933' submitted by Northwest Bancorrera"n to supplement 7xhibit K of its application for a voting (hereinafter in this agreement called the 'Schedule') flall be deemed to include the following provisions and that eaoh of such provisions shall be fully observed: (1) Each of the thirty-four member banks listed in the Schedule and rith respect to which the Schedule indicates a proposed issue of preferred stock and/or capital debentures but no reduction of common stock, shall eliminate from its assets undesirable assets in the amounts respectively indicated in the Schedule or shall establish reserves therefor. "(2) All assets eliminated by each such bank shall remain the property of the bank and Shall not be distributed to stockholders or otherwise released." t'ar the following purroses: "(1) To elect directors of the above named banks at theie'-': annual meetings in January, 194, and to conduct theree,t A„ such business of a routine nature as is ordinarily con"ucted at the respective annual meetings of such banks. (2) Except with respect to the four banks last above ," to effect the recaTiitalization of the above named banks ii;laceordance with certain representations made by Northwest or c„°,„1"Poratien in an agreement executed by it as a condition issuance of this permit and in substantial accordance ,0411 the Schedule entitled 'Recapitulation -- Revised Novem,7' 193', submitted by Northwest 3ancerporation to sql; -v-Lement xhibit K of its application for a voting permit". Approved. 594 12/27/33 - 14 - Telegram to Ir. 2eyton, Federal Reserve Agent at Minneapolis, atating that the Board has considered the application of the -Northrest B4ne°111-oration", Minneapolis, Minnesota, for a voting permit under alltlicfti tY of section 5144 of the Revised jtatutes of the United States, anlelided entitling such organization to vote the stock which it owns Or co ritrois in "The North Viestern National Bank of Minneapolis", khze apolis, I.Iinnesota, and has authorized the issuance of a limited Pe l'rait to the applicant, subject to the following condition: "Prior to the issuance of the limited voting permit aforeNorthihest Bancorporation shall represent, undertake and ree that: (1) The institution resulting from the merger mi The North ';iestern National Bank of .1inneapolis,Minneapolis mi`1111.01- ota and The Minnesota Loan and Trust Comeany, Minneapolis, ainnesota shall have upon such merger or .ithin such time thereF ter as is satisfactory to the Federal Reserve Agent at the deral Reserve Bank of lanneauolis, caTital stock in the amount le not less than :10,000,000 and surplus in the amount of eot u ss than :,1,000,000 after making eliminations and/or setting 1reserves in the amount of approximately ::)2,700,000. (2) There be established a reserve of ,250,000 for the so-called c milY eace' liabilities incurred by The Minnesota Loan and Trust lat(114111Y. (3) None of the assets of either constituent bank will or er the merger be distributed or transferred to the stockholders rroeither bank or to the stockholders of the institution resultine ex,,111 the merger as a dividend or without adequate consideration mi' ;lelpt that Prior to the effective date of the merger The , 8°ta Loan and Trust Comeany may distribute by way of a dividc1 ' o- in kind to its shareholders or otherwise transfer approximately" liorZ°0 Parcels of real estate which as set forth in a letter of or Nhwest Bancorporation to the Federal :Reserve Board under date ervi °venter 29, 1133, represent a cost of aperoximately V50,000 Lot, art= not now carried as assets on the books of The Minnesota 'cal 'and Trust Company." 4 4 4 the 44 followin purpose: °ors "In order to ratify and confirm an agreement of merger or :,:infl°1idation between The North Western National Dank of :441 apolis and The Minnesota Loan and Trust Company, 11 , ""a, as heretofore submitted to the Cometroller of the 0111,1 -encY and approved by his office." 595 12/27/33 it - 15 L The telegram also requested that there be returned to the Board the uni834ed limited voting permit dated October 25, 1933, sent to the agent Ilith the Board's letter of that date. Atproved. Telegram to Mr. Peyton, Federal Reserve Agent at _inneapolis, at"Illfg that the Board has considered the application of the "Northwest kIllcorporation,,, Yiinnesota, for a voting permit under "th"itY of section 5144 of the Revised Statutes of the United -tates, 4a "lended, entitling such organization to vote the stock which it owns c)r controls in the "Spokane and :astern Trust Company", Spokane, ';,ashingto and "The Security National Bank of Cheney", Cheney, Washington, and has authorized, the issuance of a limited permit to the applicant, subject to the followinE condition: "Prior to the issuance of such limited permit, Korthviest Bancorporation shall represent, undertake and agree as follows: "(1) (a) Prior to its absorption by the Spokane and Trust Company, The Security National Bank of Cheney snail eliminate all assets classified as questionable and a cceptable aggregating :,78,696.75 as established by an exa • , 41ner for the State Banking Department of the State of ?shington as of July 15, 1933. (b) The Spokane and ;astern Trust Company shall assume the full deposit liability af The Security National 3_1nk of Cheney and shall purchase ,,,sufficient amount of acceptable assets of such bank to v'reet the liability assumed or shall provide for any deflcit in such assets in a manner satisfactory to the '1113ervisor of Banking of the State of - ashington and to the Reserve Agent at the Federal Reserve Bank of San . anciaco. The representations and agreements in (1) j 1,"(3ve shall be deemed to constitute provisions of the plan bc)r the absorption of The Security National Bank of Cheney Y the Spokane and .L]astern Trust Company and the establishrilallt of a branch of the Trust Company at Cheney as such plan 596 12/27/33 - 16 - "was submitted to the Federal Reserve Board prior to the Issuance of the limited voting permit aforesaid. "(2) The Spokane and Eastern Trust Company will (a) issue and sell at par capital debentures in the amount Of not less than $750,000; (b) reduce its present common °a-Pita' stock from '1,000,000 to ,',',500,000; (c) provide that none of the funds released through such reduction in eaDital stock shall be returned to shareholders but that such funds shall be used to eliminate undesirable assets; (a) eliminate from its assets not less than c;720,000 of undesirable assets to be selected under the direction of the Supervisor of Banking of the State of ';iashington and With the approval of the Federal Reserve Agent at the seederal Reserve Bank of San Francisco; (e) provide thet all assets eliminated pursuant to the adjustment of its capital structure referred to above shall remain the proPertY of Spokane and Eastern Trust Company; (f) possess Upon the consummation of the foregoing, common capital sto ck, capital debentures, surplus, undivided profits 21d/or reserves in the amount of not less than ';,1,400,000. 'sae representations and agreements in (2) above shall be °leer:led to constitute provisions of the plan for the recaPltalization of the Spokane and Eastern Trust Company . !8.euch plan was submitted to the Federal Reserve _Board Prior to the issuance of the limited voting permit aforesaid.9 titld ro r the following purposes: N . "(1) TO authorize the absorption of The Security c"lonal Bank of Cheney by the Spokane and Eastern Trust 2L1PanY and the establishment of a branch of the Spokane 7...” Eastern Trust Company at Cheney all in accordance ,', Y 1th the plan heretofore submitted to the Federal Reserve zeard N„,.. "(2) To authorize the liquidation of The Security 0nal Bank of Cheney after the consummation of the plan ', 01" its absorption by the Spokane and Eastern Trust Company retofore submitted to the Federal Reserve Board; 8 , "(3) To elect directors at the annual meetings of b'Llte/.1 banks in January 1934 and to conduct thereat such 4tTless of a routine nature as is ordinarily acted upon °Ie respective annual meetings of such banks; "(4) To authorize a reduction of (:;500,000 in the Dr Tr::ent comnion capital stock of the Spokane and Eastern eat.t ComPany and the issue and sale to the RFC of its ilielatal debentures in an amount of not less than 1-:,750,000 tha,"°rdance with the plan for the recapitalization of bank heretofore submitted to the Federal Reserve Board." 597 12127/33 - 17 ipproved, together with a.letter to the Federal Reserve :!,gent at San Francisco, reading as follows: "Reference is made to your letter of October 18, 193, recommending approval of the Troposed absorption of 'The Security National Bank of Cheney', Cheney, \ashington, by he 'Spokane and -Jistern Trust Company', Spokane, ashing! cn, a member ban11. "The Board has reviewed the report of examination of the 8Pekane and Thstern Trust ComTpany made by a State bank examiner as of May 1, 1933; information submitted with your letters dated algust 3, 1933, and August 21, 1933, information submitted in connection with an ap:aication of the Northlest Bancorvoration, Minneapolis, :innesota, for a voting Dermit, and other data relative thereto, with particular 1.'eference to the general condition under which Spokane and ;astern Trust Company was admitted to membership in the -ederal Reserve System wherein it is provided that certain c o anges in the general character of its assets or broadening it§ functions should not be made without the approval of T7e Board. The Thard will interTose no objection to the °Desed absorrtion of The Security rational dank of Cheney the Spokane and Eastern Trust Company or to the establishof a branch of the trust comnany at Cheney in accordance "lththe plan heretofore submitted to the Board. t, "The Board has referred the matter to the Comptroller of e Currency and will advise you as soon as it is notified ether or not he approves of the establishment and operation 0; 'tile branch in question. In reviewing the information submitted, it is noted that a r co,"aPitalization of the Spokane and Eastern :rust Company is ea"temPlated involving a reduction of ',.,;500,000 in the common del) lital stock of the bank, the sale of 750,000 of capital eliel?Itures to the Reconstruction Finance Corporation and the ae rillnation of assets and/or the establishment of reserves 'I ' e'L'atine 020,000. aere "As the Board has not been furnished with a copy of any Bati elnent under which the absorption of The Security National If Cheney and establishment of the branch referred to abolci( are to be effected, your counsel should procure copies or seir'l relevant agreements Which may be made and satisfy himtaill that they are legally effective and that they do not con13Ta material provisions which are inconsistent with the Cs submitted to the Board." J 4 598 12/27/33 -18 - The follawin7 letter to the Comptroller of the Currency was also approved: "There is transmitted herewith for your consideration an aPplication of the Spokane and Eastern Trust Company, Spokane, aashington, for permission to absorb The Security National Bank of Cheney, Cheney, Washington, and establish a branch in the same location. "The Northwest Bancorporation, Minneapolis, r.innesota, owns and controls these banking institutions, both of which are members of the Federal Reserve System. It is proposed that the SPokane and Eastern Trust Company will assume the full deposit liability of The Security National Bank of Cheney, taking over a sufficient amount of assets of that institution to offset the liabilities assumed, and will thereafter operate a branch at Cheney which branch will exercise complete and general banking functions. "It is proposed that the absorption and establishment of a branch will be consummated in accordance with the provisions of the national banking laws and 'the amended banking law or code of the State of 7:ashington, passed by the last legislature.' "The plan of the :sorthwest Bancorporation for strengthenthe banking units under its control also contemplates the ' lecaPitalization of the Spokane and Eastern Trust Company, 2Pokane, [a.shinton, under a plan which provides for a reduction °r 500,000 in its cannon capital stock, the sale to the Reconstruction Finance Corporation of (:7750,000 of capital debentures alad the elimination of assets or establishment of reserves aegregating 0720,000. "An examination of The Security National Bank of Cheney was ad° bY•the State Banking Department of the State of Washington ! IreParatory to the proposed absorption and the attached files D°11tain a summary of the examiner's report and an analysis pre:,?ed bY an examiner for the Federal Reserve Bank of Can Francisco a report of examination of the Spokane and Eastern Trust r4DanY made by the State Bankini: Department as of Nay 1, 1933. "The Federal Reserve Agent and Executive Committee of the Fed eral Reserve Bank of San Francisco have recommended the pro1, (, 3sed absorption and establishment of a branch subject to ,`!111Pliance with the conditions imposed by the State Banking &a1,71,1artment which provide that all items classified as questionable Unacceptable must be eliminated. op "The Board is of the opinion that the establishment and 142:ation of the proposed branch, at the place and in the manner Re`taleated, is in accordance with the provision:7 of the Federal taamrve Act governing the establishment of branches by a State It is 1111,1 or bank, provided your approval thereof be given. '&erstood that the proposed absorption and the establishment 599 12/27/33 -19 - Of the branch referred to have been approved by the State banking authorities. In view of such approval and the apparently satisfactory condition which will exist in the Spokane and Eastern Trust Company and the proposed branch if the plan under consideration and the proposed recapitalization are consummated, and the favorable recommendation of the Federal Reserve Agent and Executive Committee of the Federal Reserve Bank of San Francisco, the Federal Reserve Board recommends that the application of the Spokane and astern Trust Company for permission to establish a branch at Cheney, Washington, be approved, subject to compliance by the Spokane and Eastern Trust Company, SPokane, Washington, and The Security National Bank of Cheney, Cheney, Washington, with the applicable provisions of the laws of the Ilnited States and of the State of Washington, and with the conditions imposed by the State Banking Department of the State of W ashington. ,L "In view of the emergency nature of the application it will ue appreciated if you will advise the Board at your earliest convenience whether or not you approve of the establishment and cPeration of the branch referred to." Memorandum dated December 21, 1933, from Mr. Vest, Assistant Couzsel, submitting statements regarding a number of rulings made t"elitlY by the Federal Reserve 3oard interpreting the Banking Act of 113 and also its correspondence with the Chairman of the Banking Code el5It1ittee of the American Bankers Association with respect to the 1116213431.8 of depositors' accounts for the purpose of determining whether Iletvice dharges should be assessed, and stating that these matters are belielred to be of general interest, and that it is recommended that the eteteMents and correspondence be published in the next issue of the Itede"1 Reserve Bulletin. Approved. Telegram to the governors of all Federal Reserve banks, .44g as follows: Board "In reply to telegram from a Federal Reserve bank, Ilas advised as follows: 'No charge to surplus should 600 12/27/33 ', tbe made account subscription to Federal '2eposit Insurance Corporation stock until bank is requested by Corporation to subscribe to such stock. When such subscription has been made amounts paid for such stock will be shown in published condition statements a,--ainst caption "Fed. 7ep. Ins. Corp. stock" inamediately preceding item "All other assets" and subscription to such stock immediately following item "Surplus" as follows: "Subscription for Fed. rep. Ins. Corp. stock: raid U neallel t • Approved. There were then presented the following applications for original or 10nal stock,or for the surrender of stock, of Federal reserve banks: kpw. izi-Ltions for 0IGINL Stock: Shares 4 !uchen National Bank, Metuchen, New Jersey licic>ver National Bank, Andover, New York 75 75 150 .0!.str1ct No. 3. National Bank in New Egypt, New Egypt, I;ew Jersey. 38 38 ict No. 4. -41.1aers National Bank of Conneautville, Conneautville, Pennsylvania 33 33 .1t3tl'ict No. 11. ,,mlational Bank in Canyon, Canyon, Texas ADDli kw. cations 32 Total ' 32 253 for ADDITIONAL Stock: Cerft 41 aanover Bank & Trust Company, Ilew York, New York. (Increase in capital through sale 911 , capital notes in amount of /ittzlit 0,000,000) or New York & Trust Company, f: leW York, New York. l ease in capital through sale °r caPital notes in amount of ti ' 1-)000,000) ijict No. 6. Trust & Savings Company, :aabama. at.crease in capital, partly offset bY decrease in surplus.) 3,000 600 3,600 180 180 Total 3,7E0 601 12/27/33 - 21 - AI? 4 lieations . for SURRENDER of Stock: Shares 'cLeher Falls National Bank, Brasher Falls, New York (Insolvent) 30 30 ict No. 3. et National Bank, New Freedom, PelinsYlvania (Being liquidated through conservator) 90 90 blatri et No. 4. C'attr I -a-. National Bank, Cambridge, Ohio tki0 e1ng liquidated through conservator) 443-tfiati0na1 Bank, Fostoria, Ohio (Insolvent) elWille National Bank, Greenville, Ohio The Being liquidated through conservator) raintsville National Bank, Paintsville, li!entucky (Voluntary liquidation, succeeded vY First National Bank of Paintsville) tts let No. 7. re National Bank, Henderson, Iora (I nsolvent) lotatriet 4rat 120 105 240 240 705 33 33 36 36 NO, 8. National Bank, Tamaroa, Illinois (I nsolvent) 1/1strict 104 Noe 9. -oat ational Bank, Rock Lake, North Dakota i, Let(Insolvent) National Bank, White Lake, South Dakota (1118 lvent) 23 30 Total 53 947 Approved. Thereupon the meeting adjourned. rirc) /101-AA— Secretary. 602 tgxetary's Memorandum for the Minutes of December 27 1933. Information having been received that the boards of directors or the Federal reserve banks were in session today for the purpose of aisaussing the matters referred to in the minutes of the meeting of tIlsBoard with representatives of the Federal reserve banks on December 4. ''Lag the consideration of these matters not having reached a conclu, 1441441 WaShington, Governor Black sent the following telegram to the G(Ivernors of all Federal reserve banks: d hold your board together tomorrow as matters I ha , oped to submit this afternoon cannot be concluded today, h,oped "Id matter under discussion by your board should be decided tomorrow in light of matters pending here today." There is attached hereto a memorandum dated December 27, 1933, 41441'essed to Governor Black by Mr. Newton D. Baker and Mr. Walter Wyatt ila re to their conference with the Attorney General on December 27, (tt,tiki 4A,Loh were present also Mr. Olinhant, General Counsel of the Treasury --A-traen4. u, and Mr. Holtzoff, of the Department of Justice. In addition, there iS attached a letter dated December 27 to Governor Black signed liewton D. Baker in resnonse to a request of the Board for catetIrichl °Pinions upon three questions referred to therein. 044-47 Secretary. 603 December 27, 1933. 11XMORANDU FOR GOVERNOR BLACK. Acting SecrePursuant to the arrangement made by you with Attorney tary of the Treasury Yorganthau, the undersigned called on the Attorney General this afternoon and in his office ccnf erred with the General, Mr. Oliphant, General Counsel of the Treasury Department, Mr. Holtzhoff of the Department of Justice, with regard to the Problem of transferring to the Government any profit which otherthe wise might accrue to the Federal reserve banks as a result of devallation sof the dollar. The entire situation Was fully discussed and the following Plan for a harmonious arrangement was suggested for submission to the Federal Reserve Boards 1. The Federal reserve banks and Federal reserve agents Will deliver to the Treasury the title to all geld which they now have in their possession and in the possession of the Treasury DePartment in the Gold Redemption Fund, the Gold Settlement Fund and _ Athe 4t; entsT Gold Fund and receive in return therefor an equal dollar ftlount of gold certificates. 2. Contemporaneously with the delivery of the gold, Fed- eral reserve banks will hand to the Treasurer of the United States it writing a statement to the effect that they are doubtful of their right to deliver their gold to the Treasury Department in return for 604 - 2- gold certificates and they are doing so with the distinct understand.that all such gold will be earmarked by the Treasury Department for the eole purpose of redeeming such gold ocrtificates and that title in the gold will revert to the Federal reserve banks and agents if this arre-tigetnent is not ratified by Congress. 3. The Treasurer will issue a receipt for the gold also re"gnizing and agreeing to the understanding under which it is deby the Federal reserve banks and agents and will undertake to eftr„,_ rk such gold and hold it in trust for the sole purpose of redeeming the gold certificates issued to the Federal reserve banks, with the underIstallcling that the title to such gold will automatically revert to the Pecleral reserve uanks and agents if this transaction is not ratified by eez;rees. 4. This status will be maintained until devaluation takes Pleee. 5. If the Federal reserve banks then desire, their gold ' 41cates will be redeemed in gold on the devalued basis and the Treet surer will continue to hold the remainder of the gold under earmark and Illth the understanding that the title thereto shall revert to the Fedtrig reservo ___ banks unless Congress ratifies the devaluation and the trkte, ler of the profit to the Treasury and also provides the Federal tl elerve banks with adequate protection ggainst any loss resulting from 4 rut 4re revaluation of the dollar. 605 -.36. The Administration will seek to obtain action by Congress "fYing the devaluation of the dollar and the transfer of the profit l'esulting therefrom from the Federal reserve banks to the Treasury alulat the 60410 time making adequate provision to protect Federal re- "e banks against any loss which might result from any future in "(laee of the amount of gold in the dollars 7. Upon the enactment of such legislation, title to the °id in question will become absolute in the Treasury and the gold may be l'eleased from earmark and disposed of by the Treasury Department in 11111Y tanner authorized by law. Such legislation should also ratify the Itildertaking of the Treasury Department to redeem all gold certificates held by v the Federal reserve banks in gold at any time upon demand* 8. In the event of the next session of Congress 'adjourning Irith°11t having taken action ratifying any devaluation of the dollar or the "ti°21 of the Federal reserve banks in thus transferring title to their to the Federal Treasury, the title of the Government shall be detekt;ed as by condition subsequent and all of the gold transferred to the Glove_ 44.ment shall be transferred to the Federal reserve banks. We made no promises or committments with respect to this plan titclePt to submit it to the Federal Reserve Board for its consideration 41441 that Mr. Wyatt would confer further with Mr. Oliphant with respect to the details of the plan. The foregoing plan in our judgment mv be entered into by the m 410deral reserve banks in view of the fact that it is a transaction 606 llith the Government of the United States and is in our opinion wiser krt either a refusal of cooperation, couple4 with a protest in the Of direct action by the Government, or an open contest with the Tre - the ury Department which in our judgment might prove inimical to interests both of the public and of the Federal reserve banksp Respectfully submitted, Newton D. Baker 607 FEDERAL RESERVE BOARD WASHINGTON ItlIkt hAtpizt, -'1_44- COR 4441- RESPONDENCE TO RESERVE BOARD December 271 1953 Ron.orable Eugene R. Black, Governor, 17eder.a1 Reserve Board, 4Blangton, D. C. 4Y dear Governor Black: Wyatt has transmitted to me the reQuest of the Board th41. I express categorical opinions upon three questions. The questions 44°1 opinions are as follows: 1. Is the so-called Thomas Amendment constitutional? Any opinion 1113011 this question not addressed to the validity of a particular action t4411uncter the Thomas Amendment must necessarily be speculative. To the el°1ent that the act is c declaration of policy by Congress rnd merely ec'ntaits to the President the duty of determining the factual basis for the 0, WJacation of the policy, it would no doubt be held constitutional ele89t, as in a particular case, it might be found to impair some ' lIal ' aritY or right contained in the Constitution apart from the mere dole gatien of legislative power to the Executive. 2• Is subsection (n) of Section 11 of the Federal Reserve Act n--41ended by the Act of March 91 1933, constitutional? In view of the 41rel 'given to the third question, below, an opinion as to the general %titutionality of this subsection is unimportant. 4 ain 3• Does subsection (n) of Section 11 of the Federal Reserve Act "ded bY the Act of riarch 91 1933, apply to Federal reserve banks? 608 Honorable Eugene R. Black — 2 I am definitely of the opinion that the Act does not apply to Federal reserve banks. Subsection (n) of Section 11 of the Federal Reserve Act, as amended by the Act of March 9, 1933, is an amendment to the Federal Reserve Act included in Title I of an act "to provide relief in the existing national emergency in banking and for other purposes". Title cf this Act seeks to accomplish three purposes: (1) It ratifies anti— hoard4_ J-ag action taken by the President under the wartime Trading with the Enemy Act and extends the application of that Act to peacetime elneqcncies. (2) It amends the Federal Reserve Act by the addition Or the section here under consideration. (3) It authorizes the ?resident to impose restrictions of an emergency character upon bank— The language of subsection (n) is to the effect that, when the Secretary of the Treasury shall have formed the judgment that it 18 neCEISBary "to protect the currency system of the United States", he IlleY in his discretion require individunls and corporations "to pay 414 deliver to the Treasurer of the United States any or all gold C01.1,1 " gold bullion, and gold certificates owned by such individuPls * and corporations". Upon the receipt of such gold coin, gold 131111i°11, and gold certificates the Secretary of the, Treasury is directed to pay an equivalent amount of any other form of coin or coined or issued under the laws of the United States. From the reading of this language it is manifest that the thing which the 609 Ronorable Eur:ene R. Black 4cretary of the Treasury must first conclude is that action which he 1°"POSeS to take is necessary for the protection of the currency system. he has so concluded, the Secretary is authorized to require the deliverY to the Treasurer of three things, conjunctively stated, gold coin gold bullion and gold certificates, and to pay for them in "any Qthe form of coin or currency coined or issued under the laws of the United States". It is manifest that this section does not pretend to " the Secretary of the Treasury the right to demand gold coin or °id bulLion in exchange for gold certificates, since it expressly req111.T• .‘ • - 1111/1 to pay for any gold coin or gold bullion received by him byV. axtue of a demand made under this law in some other form of coin °r cur reneY. The section, therefore, is no authority for the Secretary ot +1, .'"e Treasury to demand the delivery of gold in exchange for gold et f. .eate5 To remove the gold basis required by law for more than 1*)It'Y Per cent of our currency could not reasonably be found by the ' e"arY of the Treasury to be necessary for the protection of the The ler;islative history of this section shows that it is 11 Part of , - egislation ratifying action previously taken by the President 1111(1er the Tradinr with the Enemy Let to prohibit hoarding and exporting Zolde section 4 of Title I states as its object "to provide for the 81*e.r tlnd more effective operation of the National Banking System and the pecerel Reserve System and to preserve for the people the full 44ti Of the currency provided for by the Congress through the Eefl.iona eng System and the Federal Reserve System". There is no- 174 lie the Act any suggestion that would authorize action which would 610 Honorable Eugene R. Black — 4 have the effect of withdrawing from the Federal Reserve System the go), Which it is under a legal obligation to have as the basis and 811Pport of the Federal reserve note circulation. It is to be remembered that when this legislation was enacted the Congress had before it the various provisions of the Federal Reserye Act which, in terms, require Federal reserve banks to have gold, these requirements were not repealed or modified. It would, there— e, seem clear that the purpose of subsection (n) was to authorize the ecretary of the Treasury to concentrate the gold of the country in the Titea. "urY only to the extent that other laws did not require the gold to be„ 4-.euerved intrust for definite legal purposes, as is the case in the 444111 reserve banks. These considerations, together with the language of sub— secti°4 (n), make it clear that no part of this Act was intended to ot . -''er either custody of or title to the gold owned or under the control qeral reserve banks. This last opinion is a modification of the opinion previous— e. to you and the Board. Respectfully yours, 4.1•••••arom......" Newton D. Baker.
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