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628 A meeting of the Federal Reserve Board was held in 71ashinston °11 Friday, December 29, 1933, at 10:00 a. m. PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Black, Governor Hamlin Miller James Thomas Szymczak Mr. Eorrill, Secretary Mr. Carpenter, Assistant Secretary Mr. Bethea, Assistant Secretary The Board considered and acted upon the following matters: Letter dated December 28, 1933, from La'. Sproul, Secretary of the Federal Reserve Bank of New York, stating that, at a meeting of the bc)erd of directors on that date, no change was made in the bank's existschedule of rates of discount and purchase. Without objection, noted with approval. Reply on December 28, 1933, approved by six members of the Board, to '4 letter dated 7,ecember 19 from Mr. Logan, Deputy Governor and General 00111% .sel of the Federal Reserve Bank of Hew York, the reply reading as -" Naews: "In accordance with the recommendation contained in Your letter of December 19, 1933, the Board approves the , payment of a fee of ç2,500 to Davis, Polk, Wardwell with on connecti in services Gardiner & Reed for legal of March 4, problems arising out of the bank holiday by the approved been ly previous 1933, such fee having of New Bank Reserve Federal Board of Directors of the not indoes fee this that York, The Board understands 's Bickford of suit the clude services in connection with of Bank The York, Inc. v. Federal Reserve Bank of New endent of United Jtates, and J'eseph A. Broderick, Superint Banks of the State of New York." Approved. December 21, and a telegram Telegraphic reply to a letter dated 629 12/29/33 -2- dated December 27, 1933, respectivly, from Ir. Iewton, Federal Reserve iteent at Atlanta; the reply reading as follows: "Your letter December 21 and wire December 27. Board approves appointment of C.A. Whelchel'as Examiner in Federal Reserve Agent's department your bank at salary rate of 2700 per annum effective January 1, 1934." Approved. Telegraphic reply to a letter dated December 21, 1933, from r. Wo Q11 Federal Reserve Agent at St. Louis; the reply reading as follows: "Your letter twenty-first. Board approves appointment Ralph P. Jacoby as assistant examiner at salary rate of c)2400 per annum effective January 1, 1934. it ii observed that personnel classification schedule your department provides salary range Of c'2700 to •:16,000 for assistant examiners.': Approved. Letters to the followin7 examiners in the Board's Division of 4`Inl1nations, each letter stating that the Board authorizes and directs the examiner to perform during the year ending December 31, 1934, within the ,. -Limits of the continental United States, such travel as may be nece3a • his a17 in capacity as examiner for the Federal Reserve Board under 142-tr-ucion s from the Chief of the 1-,ivision of Examinations: Frank T. Drinnen L. A. A. Siems Edwin R. Millard Barker C. Bobb A. J. George M. Bingen Earl D. Buck Charles T. I:alone Robert W. Cooke Willis G. Brown W. D. Dougal Joseph H. Porter Y. T. Connell Stuart L. Brown Approved. Harvey J. Wishart Harold J. Newman Joseph A. Turnbull R. Wilson Oster Herbert H. Hagler Thomas P. Howard X. Fred English Fred W. Troup Andrew W. Lee W. T. Mann John C. Franzoni Charles A. Strahorn Carroll R. Highfield Thomas D. O'Donnell t= 630 12/29/33 _3_ Telegrams to the Federal Reserve Agents at the respective Federal reserve banks stating that, subject to the conditions prescribed in the irldividual telegrams, the Board approves the applications of the following State banking institutions for membership in the Federal Reserve System tIld for the appropriate amount of stock in the Federal reserve bank of the district in which the applicant is located: Applicant Bank Federal Reserve Bank "Springfield Safe Deposit and Trust Company", Springfield, Massachusetts, "Bank of Cattaraugus", Cattaraugus, New York. "Clearfield Trust Company", Clearfield, Pennsylvania. "The Real Estate Trust Company of Philadelphia", Philadelphia, Pennsylvania. "The Marengo Banking Company", Marengo, Ohio. "The Miami Deposit Bank Company", Yellow Springs, Ohio. "American State Bank", Milwaukee, Wisconsin. "Planters Bank and Trust Company", Hopkinsville, Kentucky. "The Yellowstone Bank", Laurel, Lontana. "The Bank of Aberdeen", Aberdeen, Idaho. "Bank of Newman", Newman, California. Boston New York Philadelphia Philadelphia Cleveland Cleveland Chicago St. Louis Minneapolis San Francisco San Francisco Approved. Telegram to Mr. Hoxton, Federal Reserve Agent at Richmond, stating tkt ) subject to the conditions prescribed in the telegram, the Board ap- 111'°Ires the application of "The Bank of Rainelle", Rainelle, *Zest Virginia, tox Ine mbership in the Federal Reserve System and for the appropriate amount or atock in the Federal Reserve Bank of Richmond. Approved, together with a telegram to Yr. Hoxton, Federal Reserve Agent at Richmond, stating that the Board has considered the application of "The Meadow River Lumber Company", Rainelle, West Virginia, for a voting permit under authority of section 5144 of the Revised Statutes of the United States, as amended, entitling such organization to vote the stock which it owns or controls in "The Bank of Rainelle", *Ciest Virginia, and has authorized the issuance oC a 631 12/29/33 -4- limited permit to the applicant, subject to the following condition: "That prior to the issuance of the limited voting permit hereby authorized, there shall be furnished to you evidence satisfactory to you that The Bank of Rainelle, ilainelle, West Virginia, has accepted and/or satisfied the conditions of membership prescribed by the Federal Reserve Board in its telegram to you of this date so that such bank may properly be admitted to membership in the Federal Reserve System simultaneously with, or forthwith upon, the issuance of the voting permit hereby authorized." and for the following purposes: "To elect directors of such bank at the next annual meeting of shareholders, or at any adjournment thereof, held at any time prior to the granting by the Federal Reserve Board of a general permit entitling the grantee hereof to vote the shares of stock of sich bank which it owns or controls, or held at any time prior to the determination by the Federal Reserve Board that such general permit should be withheld, whichever shall occur first, and to act at such meeting, or at any such adjournment thereof, upon such matters of a routine nature as are ordinarily acted upon at the annual meeting of such bank." Telegrams dated December 28, 1933, to Er. Case, Federal Reserve 4geat at New York, and Er. Stevens, Federal Reserve Agent at Chicago, 41)131'°Ired by six members of the Board, referring to the applications of the "Xefferson Trust Company", Hoboken, New Tersey, and the "State Bank or Oubs”, Cuba, Illinois, respectively, and stating that the Board waives the usu 1 requirement of six months notice of intention to withdraw and th4t, accordingly, upon surrender of the Federal reserve bank stock issued to +, "fle Jefferson Trust Company and the State Bank of Cuba, the respective s ?ede, 4:al reserve banks are authorized to cancel such stock and make a 1'1"i-14d thereon. Approved. 632 12/29/33 -5- leply to a leter dated Deceliber 20, 1033, from Mr. Curtiss, Federal Reserve Agent at Boston; the reply reading as follows: "Receipt is acknowledged of your letter of December 20, 1933 transmitting the request of 'The New Britain Trust Company',Ilew Britain, Connecticut, for an extension of time to January 20, 1934 within which to comply with the conditions of membership. , "In view of the circumstances and your recommendation within time the 1934 20, January the Board extends until Which The New Britain Trust Company may accomplish its on an admission to membership. The application was based lapse of examination as of May 8, 1933, and in view of the can time since that date, this is the last extension which that since changes any for provide to be granted. In order pretime, a new condition numbered twenty-four has been of all scribed requiring the charge-off or elimination ies securit in ation depreci all of Other known losses and grades. except those in the higher "Inclosed are the original and two copies of a letter to Me New Britain Trust Company advising the bank of the new condition, and you are requested to forward the original to The New Britain Trust Company, retaining one copy for Bank CoLlYour files and forwarding the other to the State tion." informa missioner of Connecticut for his Approved. reading Letter to Mr. Case, Federal Reserve ..lent at Mew York, follows: m "Receipt is acknowledged of Er. Dillistin's telegra of request the that dated December 26, 1933, recammendin.; Conn., 'The Bridgeport-City Trust Company', Brida.eport, bank the which within for a thirty-day extension of time maY complete membership be granted. recommendation, "In view of the circumstances and the time within the the Board extends until February 2, 1934 ish accompl Which The Bridgeport-City Trust Company may based was its admission to membership. The application and in view on the credit investigation as of May 8, 1933, O1 the lapse of time since that date, condition numbered for the charge-off twenty-one has been amended to provide of all deor elimination of all other known losses and higher grades. the in those except preciation in securities Bridgeport"Inclosed are two copies of a letter to The on of extensi the of bank the City Trust Company advising to unable is it if that and time, the amended condition, 633 12/29/33 -6- "accomplish its membership by February 2, 1934 its subsequent admission must be on the basis of a new application and a files, current report of exailination. One copy is for your Bank State the and you are reuested to forward the other to Conaissioner of Connecticut for his information." Approved. cy, reading as Letter to Er. O'Connor, Comptroller of the Curren Vollows: "The Union Trust Company of Maryland, Baltimore, System Maryland, became a member of the Federal Reserve on December 18, 1933; and in accordance with a condition of membership prescribed by the Federal Reserve Board, it relinquished its branch at Overlea, Maryland, outside of the corporate limits of Baltimore, which it had thereprotofore operated since 1928. However, in view of the d enacte nd Maryla of State visions of a statute of the ishDecember 15, 1933, specifically authorizing the establ any point at banks State of ment and operation of branches in the State, the ;nion Trust Company has requested pernd, while mission to operate the branch at Overlea, Maryla CommisBank The . System a member of the Federal Reserve ion the operat d approve sioner of the State of Maryland has his to ained of the branch at Overlea, having ascert ence and advantage satisfaction 'that the public conveni such branch at of would be promoted by the operation the Federal Reserve at Overlea'. The Federal Reserve Agent the Union Trust Company Bank of Richmond has recommended that be permitted to operate the Overlea branch. The bank advises tood that there is no other bank at Overlea, which is unders busia small having to be a large and prosperous comunity ness district of its own. information the "There is inclosed herewith for your y of Maryland, Compan report of examination of the 'union Trust by an exnminer 1933, made as of the close of business Tuly 11, the opinion of is Of the Federal Reserve Bank of Richmond. It and operation t the Federal Reserve Board that the establishmen nd, by the Union Trust Company of Maryland, Baltimore, Maryla d pointe ter Of a branch at Overlea, with the exception hereaf l Federa the ions of out, would be in accordance with the provis State a by branches Reserve Act governing the establishment of is given; and, with f thereo al approv Member bank provided your reason why the exception referred to, the Board knows of no ished. the branch should not be establ a member of the "As you know, a State bank which is branch established a e operat Federal Reserve System may not 634 12/29l63 -7- "after February 25, 1927 beyond the limits of the city in which the parent bank is situated except on the same terms and conditions and subject to the sane limitations and restrictions as are applicable to the establishment of branches by national banks, and, under paragraph (d) of Section 5155 of the Revised Statutes Of the United States, 'The aggregate capital of every national banking association and its branches shall at no time be less than the aggregate minimum capital required by law for the establishment of an equal number of national banking associations situated in the various places where such association and its branches are situated.' "The paid-in unimpaired capital stock of the Union Trust Company of Maryland is $2,500,000. It now has in Operation sixteen branches, one of which is located in Catonsville and the remaining fifteen in the city of Baltimore. If, in computing the amount of, capital required under the above-quoted provision of the law, one unit of capital is required for each branch located in Baltimore, the capital of the Union Trust Company is inadequate to Permit the operation of a branch at Overlea, but, if the branches in Baltimore are excluded in the computation, the capital of the Trust Company is sufficient for this purpose. "It is the view of the Federal Reserve Board that under Paragraph (d) of Section 5155 of the Revised Statutes, one Unit of capital is re-uired for each branch wherever located and for its head office. In this connection it will be observed that the law, in prescribing the amount of necessary capital, refers to the number of banks and does not refer to the nuraber of places in which such banks are located. L:oreover, it is believed that the intention of this particular provision of the statute was to require the same amount of capital for branch banks and for chain or group banks and, accordinpay, that each branch of a bmk, no matter where located, should be represented by the some amount of capital as would be required for the establishment of each national bank in a chain or group. "The Board is informed, however, that you have taken the position, in connection with national banks, that Paragraph (d) of Section 5155 is not to be construed in such a manner as to include branches within the city of the head office of a bank in determining the amount of its necessary capital. As stated, the Federal Reserve Board does not concur in this view in so far as State member banks are concerned. "The matter is submitted to you for your consideration 635 12/29/33 -8- "and it will be appreciated if you will advise the Board whether in the circumstances you approve of the establishment and operation of a branch of the Union Trust Company of Maryland, Baltimore, Laryland, at Overlea, Maryland. "The question regarding capital requirements under paragraph (d) of Section 5155, Revised Statutes, which ib above discussed, is also involved in connection with other applications for branches of State member banks which have been received by the Board and on which it is important that prompt action should be had, and it will, therefore, be appreciated if you will advise of your decision in this matter at your earliest convenience." Approved. Letter to O'Connor, Comptroller of the Currency, reading °'s follows: "There is transmitted herewith for your consideration and recommendation an application of the 'Peoples Bank and to Trust Company', Seattle, Washington, for permission ng absorbi after establish a branch at Renton, Washington, ton. Washing Renton, 'The First National Bank of Renton', ton, owns "The Peoples Corporation, Seattle, Washing Trust and Bank the majority of the stock of the Peoples inwhich Renton, Company and The First National Bank of banks five of chain a stitutions are the remaining units of city the within located controlled by the Corporation, three into sly previou ed limits of Seattle having been convert Company. branches of the Peoples Bank and Trust assets of The First the "Under the proposed plan all of charged off assets and reNational Bank of Renton, including rred to the Peoples maining capital funds, will be transfe a branch will be neously Bank and Trust Company, and simulta d files contain attache The established at the same location. of the afeach of tion copies of the last reports of examina filiated banks. the State of Washington "The Supervisor of Banking of ion of The First has recommended the absorption and convers subject to conditions National Bank of Renton into a branch charge out or otherthat The First National Bnnk of Renton and that all wise eliminate certain nrocceptable assets rred to the undivided residue of capital funds be transfe and Trust Company. The Profits account of the Peoples Bank Committee of the Federal Federal Reserve Agent and Executive nded approval of the recomme have Reserve Bank of San Francisco 636 .3 12/29/3 -.9-. "application subject to compliance with the conditions imposed by the State Banking Department and providing that the capital account of the Peoples Bank and Trust Company is adjusted to a satisfactory ratio to deposits. "The proposed transactions have been approved by the State Banking Department of the State of Washington, and in view of tLe apparently satisfactory condition which will exist in the Peoples Bank and Trust Company, the satisfactory management, and the favorable recommendation of the Federal Reserve Agent and Executive Committee of the Federal Reserve Bank of San Francisco, and with the exception hereinafter referred to, the Federal Reserve Board knows of no reason why the application of the Peoples Bank and Trust Company for permission to establish a branch at Renton, Washington, should not be approved provided such permission is subject to the following conditions: "1. Prior to absorption The First National Bank of Renton, Renton, Washington, shall, if it has not already done so, charge off or otherwise eliminate unacceptable assets aggregating approximately 061,471.61 as required by the Supervisor of Banking of the State of Washington. !V . The Peoples Bank and Trust Company shall not acquire as a result of such absorption any corporate stocks which may not be lawfully purchased by a member bank. "3. The First National Bank of Renton shall transfer to the Peoples Bank and Trust Company all residue of capital funds, surplus and undivided profits together with all charged out or non-book assets. "4. The Peoples Bank and Trust Company shall increase its capital to 01,100,000 by the sale of 0500,000 of capital notes or debentures to the Reconstruction Finance Corporation. "Attention is called to the fact that the Peoples Bank and Trust Company now has three branches located in Seattia, Washington, and if, in computing the amount of capital required for the establishment of a branch under the provisions Of Section 5155 of the Revised Statutes of the United States, one unit of capital is required for each branch located in Seattle, the capital of the Peoples Bank and Trust Company is inadequate to permit the operation of a branch at Renton; but, if the branches in Seattle are excluded in the computation the capital of the Peoples Bank and Trust Company is sufficient for this purpose. The question of law involved in this matter 637 12/29/33 -10- "is discussed in detail in connection with the recuest of the Union Trust Company of Earyland, 13altimore, :aryland, for permission to operate a branch at Overlea, which is being submitted to you today. "It is understood that the banks involved desire to obtain a vote of their stockholders on the proposed absorption and other natters incidental thereto at the annual meeting of such stockholders on the ninth day of January, 1934, and it will therefore be appreciated if YOU will advise the Board in this case at your earliest convenience." Approved. Letter to Er. Curtiss, Federal Reserve i'igent at Boston, reading as follows: "This is to advise you that the Federal Reserve Board approves the application of the 'Depositors Trust Company', Augusta, L7.aine, for permission to exercise the fiduciary Powers authorized under its charter and the laws of the State of Maine, provided that prior to the exercise of any Of these powers the board of directors of such bank shall adopt an appropriate resolution accepting the three condih tions given below and shall transmit to the Board, throug you, a copy of such resolution: held by it "1. Such bank shall not invest trust funds officers, in obligations of the bank's directors, employees or their affiliations or corporations affiliated with the bank. l Reserve "2. Except with the permission of the Federa of funds the Board, such bank shall not invest ns ipatio partic in various trusts held by the bank ties, securi in pools of mortgage bonds or other shall be invested and the funds of all such trusts ed, however, separately from each other; provid not object tD that the Federal Reserve Board will small amounts of trust the collective investment of the credit of funds where the cash balances to small to be invested certain trust estates are too bank owns no parseparately to advantage, if the which such collecticipation in the securities in no interest in tive investments are made and has ary. fiduci other then except as trustee or ted in deposi are bank "3. If trust funds held by such the in used ise otherw its banking department or 638 12/29/3 3 "conduct of its business, it shall deposit with its trust department security in the same manner and to the same extent as is required of national banks exercising fiduciary powers. "You are requested to advise the Depositors Trust Company of the Board's action." Approved. Letter to Er. Stevens, Federal Reserve Agent at Chicago, reading 48 follows: "Receipt is acknowledged of Mr. Youn;'s letter, dated December 11, 1933, and of your telegram of December 21, 1933, advising of the proposed reduction in common capital stock of the 'Bankers Trust Company', Des 1.:oines, Iowa, from :)1,000,000 to 250,000., and the sale of :650,000 par value Class 'A' preferred stock and ;;;100,000 par value Class 'B' preferred stock to the Reconstruction Finance Corporation and/or others, and recommending that such reduction in common capital stock and the sale of preferred stock be approved. "Since it appears from the information submitted that the entire amount of funds made available by the reduction In common capital stock is to be used to eliminate objectionable assets from the bank or to establish special reserves and increase surplus and undivided profits, and since the Board's consent to the reduction in capital is not required by law or the conditions of membership applicable to the bank, the Board offers no objection to the reduction in capital in the amount indicated or to the sale of preferred stock. The Board takes this position with the understanding, of course, that your counsel has considered the case and is satisfied as to its legal aspects, that such reduction in common capital stock and the sale of preferred stock will not result in any change in the corPorate existence of the bap% which will affect its membership in the l'ederal Reserve System, that the preferred stock shall be sold only to persons or concerns who have knowledge as to the present condition of the bank and the use to which the funds released by the capital reduction are to be applied, and that the transaction has the approval of the Superintendent of Banking of the State of Iowa." Approved. 639 12/29/33 Letter to Mr. O'Connor, Comptroller of the Currency, reading as follows: "In accordance with your recommendation, the Federal Reserve Board approves a reduction in the common capital stock of 'The First National Bank and Trust Company of Muskogee', Muskogee, Oklahoma, from 3500,000 to :300,000, pursuant to a plan which provides that the bank's capital shall be increased by the sale at par of .200,000 par value preferred stock to the Reconstruction Finance Corporation, and that the funds released by the reduction in common capital stock, together with approximately c>81,100 from the bank's surplus and undivided profits, shall be used to eliminate substandard assets and securities depreciation in the amount of approximately 0281,100, all as set forth in your memorandum of December 18, 1933." Approved. Letter to Mr. O'Connor, Comptroller of the Currency, reading as r°110ws: "In accordance with your recommendation, the Federal Reserve Board approves a reduction in the common capital stock of 'The First National Bank of Fontana', Fontana, California, from $50,000 to $25,000, pursuant to a plan Which provides that the bank's capital shall be increased by the sale at par of 025,000 par value preferred stock to the Reconstruction Finance Corporation, and that the funds released by the reduction in common capital stock, together With approximately 323,751 from the bank's surplus, undivided profits and/or reserves, shall be used to eliminate substandard assets and securities depreciation in the amount of approximately :48,751, all as set forth in your letter of December 26, 1933." Approved. Telegram to Mr. :eyton, Federal Reserve Agent at Minneapolis, stati that the Board has considered the application of the "Minnesota 114t1 --aJ- Corporation", Duluth, Minnesota, for a voting permit under United States, 44th°11tY of 'Section 5144 of the Revised Statutes of the ended, entitling such organization to vote the stock which it owns 64_0 12/29/33 -13- Or controls in "The Minnesota 7:ational Bank of Duluth", Duluth, :-inne.]ot, flcl has authorized the issuance of a limited permit to the a: licLnt, for th° lollowing purposes: "To elect directors of such bank at the annual meeting of shareholders, or at any adjournment thereof, at any time prior to April 1, 1934, and to act at such meeting, or at any adjournment thereof, upon such matters of a routine nature as are ordinarily acted upon at the annual meeting of such bank." Approved. Telegram to nr. Peyton, Federal Reserve Agent at Minneapolis, 8tatinS that the Board has considered the application of the "Bank [-liares e°1Toration", Minneapolis, Minnesota, for a voting permit under authority Section ',51,1,L of the Revised Statutes of the United States, as amended, such organization to vote the stock which it owns or controls the"1.:arquette National J7,m1; :inneapolis, Minnesota and the ":111a-r- cillette Trust Company", 1.inneaT)olis, Linnesota, and has authorized the 18sliance of a limitcJ rermit to the applicant, subject to the following ceri ditions: "(1) Prior to the issuance of such limited voting perait Marquette Trust Company shall have accepted and/or prescribed by the satisfied the conditions of membership Trust Marquette to letter Federal Reserve Board in its be properly may bank such Company of this date so that System Reserve Federal admitted to membership in the of simultaneously with, or forthwith upon, the issuance Prior (2) hereunder authorized the limited voting permit to issuance of such limited voting permit Marquette Exhibit L Building and Loan Association shall execute CorporaShares Bank Federal Reserve Board Form P-3 and Form Board Reserve tion shall execute Exhibit N Federal shall Association -4 and Marquette Building and Loan ) 1 and in form triplicate in all thereto, execute consent satisfactory to you." 4" for the following purposes: 641 12/29/33 -.14- "To elect directors of either or both of such banks at annual Lnetings of shareholders at any time prior to April 1, 1934, and to act at such meetings upon such matters of a routine nature as are ordinarily acted upon at the respective annual meetings of such banks." Approved. Telegram to Er. Newton, Federal Reserve Agent at San Francisco, stating that the Board has considered the application of the "Sebastopol Ilational Securities Campany", Sebastopol, California, for a voting penult lindor authority of Section 5144 of the P,evised :tatutes of the United l'3tat03, as amended, entitlin it owns or controls in "The such organization to vote the stock which ebastopol National Bank",. Sebastopol, California, and has authorized the issuance of a limited permit to the 1int,'subject to the following condition: 41) "Prior to the issuance of such permit applicant shall . agree (1) that so long as the undersigned continues to be . la holding company affiliate of's:member bank (a) no person .shall be elected or appointed as an officer or director of any subsidiary or affiliated member or nonmember bank of the undersigned who is unsatisfactory to the Federal Reserve Agent at the Federal Reserve Bank of San Francisco and (b) no officer or employee of any subsidiary or affiliated menber or nonmember bank of he undersigned and no officer or employee of the undersigned, as such, shall receive compensation at a rate which-, in the opinion of such agent, is unreasonable or improper in view of all the circumstances; (2) that within such time as may be fixed by the Federal Reserve Agent at the Federal Reserve Bank of San Francisco,. the undersigned will cause its subsidiary member and nonmember banks to charge off or otherwise eliminate, if they have not already dond so, all estimated losses in loans and discounts and in other assets, all depreciation on stocks and defaulted other than those securities, and all depreciation on securities inrecognized 's. by classified as in the four highest grades busithe in engaged regularly vestment service organization ness of rating and grading securities, in such amounts and of such character as may be satisfactory to the Federal Reserve Acent at the Federal Reserve Bank of San Francisco; and (3) that within 90 days from the date of the issuance of the G42 12/29/33 "limited voting permit aforesaid, (a) the capital funds of The Analy Savings Bank, Sebastopol, California, will be increased, pursuant to appropriate action, through contributions by stockholders, sale of preferred stock or otherwise, in such amount as may be satisfactory to the State supervisory authorities and to the Federal Reserve Agent at the Federal Reserve Bank of San Francisco, or (b) the undersigned will take or cause to be taken such action as may be necessary to effect the divorcement of The Analy Savings Bank, Sebastopol, California, from The Sebastopol National Bank, Sebastopol, California, so that thereafter neitipDr of said banks will be affiliated with the other in any manner described in Section 2 of the Banking Act of 1933." for the folicming purposes: "First, to elect directors of The Sebastopol National 2.-m1: at the annual meeting of shareholders, or at any adjournment thereof, at any time prior to April 1, 1934, and to act at such meeting, or at any adjournment thereof, upon such matters of a routine hature as are ordinarily acted Upon at the annual meeting of such bank. Second, to take such action as may be necessary to authorize an increase in the capital funds of The Analy Savings Bank, Sebastopol, California, or to effect the divorcement of The Analy Savings Bank, Sebastopol, California, from The Sebastopol National Bank so that thereafter neither of said banks will be affiliated with the other in any manner described in Section 2 of the Banking Act of 1933." Approved. Telegriphic reply to a letter dated December 27, 1035, from 11-. Governor of the Federal Reserve Bank of Boston; the re -_)- ly reading "Referring your letter December 27 to Mr. Hamlin, Board agrees that reserve of 0300,000 should be set aside by your bank to cover possible losses on rediscounts and accordingly approves of your bank setting aside a reserve in that amount at end of year." Lpproved. Telegraphic reply on December 23, 1933, approved by six members or tho Doc, to a telegram dated December 27 from Mr. Sailer, Deputy 0f th Federal Reserve Bank of New York; the reply reading as •-• 643 -16- • "Refer your December 27 wire. If net earnings of bank remaining after making provision for all other authorized reserves and charge-offs and accrued dividends are sufficient for purpose, Board approves your bank setting aside self-insurance reserve at end of year in an amount equal to earnings on United States securities in which fund is invested plus profit of ,)11,000 on sale of securities in which fund was invested." Approved. Telegraphic reply to a letter dated December 27, 1933, from Mr. 11°4ton, Chairman of the Federal Reserve Bank of Richmond; the reply readas follows: "In accordance with request contained in your Decether 27 letter Board authorizes your bank to increase its reserve for losses on discounted bills at end of year by .;187,400." Approved. Reply on December 28, 1933, approved by six members of the Board, '40 a letter dated December 19 from Senator Charles L. McNary; the reply 1164(1111g as follows: "Receipt is acknowledged of your letter of Hovamber 19, 1933, With which you inclosed a letter dated December 13, from Yr. Blaine B. Coles, Vice President of the Security Savings and Trust Company, Portland, Oregon, suggesting that the number of members on the board of directors of the Portland branch of the Federal Reserve Bank of San Francisco be increased from five to seven, and that la'. C. C. Colt, Vice President of the First National Bank of Portland, be appointed on the branch board. Mr. Coles' letter is returned herewith. "Section 3 of the Federal Reserve Act, which deals with branches of Federal reserve banks, provides in part as follows: 'Such branches, subject to such rules and regulations as the Federal Reserve Board may prescribe, shall be operated under the supervision of a board of directors to consist of not more than seven nor less than three directors, of wham a majority of one shall be appointed by the Federal reserve bank of the district, and the remaining direcinrs by the Federal Reserve Board.' It will be noted from this provision of the law that while the 644 12/29/33 -117- "board of directors of a branch may consist of seven members, it may also consist of as few as three. "Accordingly, the Federal Reserve Board has ruled that the board of directors of a branch of a Federal reserve bank shall consist either of seven members or of five members, as may be determined by the board of directors of the parent Federal reserve bank, subject to the approval of the Federal Reserve Board. This ruling is based on the position that the budness conducted by some of the branches of Federal reserve banks may not require a board of directors consisting of the maximum number of seven members, and on the opinion of the Board that it should be left to the board of directors of the parent Federal reserve bank to determine, subject to the approval of the Federal Reserve Board, the number of members on the board of directors Of each of its branches. "Pursuant to the Board's ruling in this matter, the board of directors of the Federal Reserve Bank of San Francisco has determined that the board of directors of each of its Ave branches, located at Los Angeles, Salt Lake City, Portland, Seattle, and Spokane, shall consist of five members, and the Federal Reserve Board has not been advised by the Federal Reserve Bank of any desire on its part for an increase in the number on the board of directors of the Portland branch to the maximum of seven permitted by the provision of law above referred to. "Mr. Coles' comments with regard to the appointment of Er. Colt as a director of the Portland branch are being brought to the attention of the members of the Federal Reserve Board, and of the Chairman of the board of directors of the Federal Reserve Bank of San Francisco." Approved, together with a similar letter dated December 28, 1933, to Senator Frederick Steiwer in reply to his letter of December 18, 1933. Telegram to the Federal reserve agents at all Federal reserve 4440 reading as follows: "Numerous applications under provisions of Clayton Act and Section 32 of Banking Act are now pending before Federal Reserve Board. Board will consider and act upon all such applications as rapidly as possible, but in view of large number of applications recently received there will be many upon which it will not be possible to act prior to January 1, 1934, the effective date of Section 8A of the Clayton Act and of Section 32 of BankIng Board does not feel that it may properly grant a permit In any case until it has first given adequate consideration to the application and determined that the granting of a permit would not be incommatible with the public interest. However, in 645 12/29/33 -18- "any case in which an application has been filed with the Board or with the Federal reserve agent covering a relationship of a kind as to which Board is authorized to issue a permit, Board will take no action with a view to the discontinuance of such relationship pending action by the Board upon the application, and you may so advise any applicant who may incuire of you regarding his status." Approved. Letter to Mr. Henry Swan, Vice President of the United States Ilational Bank of Denver, Colorado, reading as follows: "There is inclosed herewith a permit issued by the Federal Reserve Board under the authority of Section 8 of the Clayton Act, approved October 15, 1914, as amended, covering your service as officer and director of The United States National Bank Of Denver, Denver, Colorado, and as director of the Denver Branch, Federal Reserve Bank of Kansas City, Denver, Colorado. The permit does not cover your service as officer and director of the Bankers Trust Company, Denver, Colorado, as it is understood that the trust compnny is in liquidation and has transacted no regular banking business since 1923 and therefore does not fall within the provisions of Section 8 of the Clayton Act, and that it makes no loans secured by stock or bond collateral and therefore does not fall within the provisions of Section 8A. In the event this understanding is not correct, it is requested that you advise the Federal Reserve Agent at Kansas City accordingly in order that the question of issuing a permit covering your service with the trust company may be considered. "Your attention is called to the fact that any permit issued by the Board under the authority of Section 8 of the Clayton Act may be revoked by the Board whenever it finds, after reasonable notice and opportunity to be heard, that the public interest requires its revocation. of the banks "A copy of this letter is being sent to each records." and involved for its information Approved. Letter to an applicant for a permit under the Clayton Act, ad- -e of approval of his application as follows: Mr. 21. L. Humphrey, for permission director of the Pittsburgh branch, land, Pittsburgh, Pennsylvania, as Company of Pittsburgh, Pittsburgh, to serve at the same time as Federal Reserve Bank of Clevedirector of The Union Trust Pennsylvania, and as director 646 12/29/33 -19- of the First National Bank at Pittsburgh, Pittsburgh, Pennsylvania. Approved. There were then presented the following applications for ortillal stock, or for the surrender of stock, of Federal reserve banks: 4Z1laat,ions for ORIGINAL Stock: D istrict No. 1. Pirst National Bank in Pepperell, , Pepperell, Massachusetts alentpelier National Bank, Montpelier, Vermont District No. 2. Ceatral National Dank of Washingtonville, Washingtouville, New York bistrict No. 10. Pliekers National Bank in Omaha, Omaha, Nebraska Shares 36 75 111 36 36 132 Total 132 279 4. 1...laations for SURRENDER of Stock: 141.1 : 1 11L21t.j1l. 411st National Bank in Washingtonville, Washingtonville, New York (Being liquidated through conservator) 39 39 bist et National Bank, Columbus, New Tersey 4L,( Iasolvent) 38 (41-1:ellocken National Bank & Trust Company, D4 Iiiiladelphia, Pennsylvania (Insolvent) 1°11 National Bank, Scranton, Pennsylvania (Being liquidated through conservator) °Iltlaelier National Bank, Montpelier, Ohio (Being liquidated through conservator) c on National Bank, Tackson, Georgia Being liquidated through conservator) 156 510 704 45 45 60 60 480 480 Di National Bank in East St. Louis, Illinois (Being liquidated through conservator) 8t 647 12/29/33 hZpl1cations for _SURRENDER of Stock: (Continued) District First National Bank, Glenvil, Nebraska (Insolvent) Shares 22 Total 22 1,350 Approved. Thereupon the meeting adjourned. iy-)01.11,JILp Secretar y. %roved: Governor.
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