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3690
A meeting
of the Federal Reserve Board was held in Washington
(311 Wednesday,
December 5, 19340 at 11:00 a. m.
PRESENT:
71r.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Eccles, Governor
Thomas, Vice Governor
Hamlin
Miller
James
Szymczak
O'Connor
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
It
40.es)
rn.
Wa,s
Morrill, Secretary
Bethea, Assistant Secretary
Carpenter, Assistant Secretary
Goldenweiser, Director of the Division
of Research and Statistics
Wyatt, General Counsel
Vest, Assistant Counsel
Wingfield, Assistant Counsel
Cherry, Assistant Counsel
agreed, in accordance with a recommendation made by Governor
that a
meeting of the Board be held each week on Wednesday at 11:00
There was presented a memorandum dated
November 13, 1934, from Mr.
4att to,
vice
Governor Thomas, which had been circulated previously among
the
4113
"
8 of the
Board, stating that, in accordance with the action
telte4
u•Y the Pt
-°ard on September 5,
4rprtn
1934, the legal division had prepared
ting a new
the
edition of the Federal Reserve Act, as amended, and
matte
44017e4 was being
submitted for determination of the procedure to be
In arranging
for printing. The memorandum concurred in Mr.
-.Let cie i
8.1-rie to have
CO pr
the new edition printed by the West Publishing
My b
, 1 ut suggested
that, for the Board's protection, it would be ad1144°I.e t anif
for competitive
bids and to obtain an estimate from the
-ert4Ilerit
Printing Office
as to the cost of printing the new edition.
3691
-2Mr. Thomas
stated that the reason for his suggestion that arrangeInetts be
made with the
West Publishing Company to print the new edition
°t the
Act was that it is the largest law book
publishing company in the
ec/14trY 2 and
he desired to
get the benefit of the company's suggestions
with rega
rd to Preparing
a digest and index of the Act.
After a discussion during which it was
Pointed out that the Board's present supply
of printed
copies of the Federal Reserve Act
is not sufficiently Large to permit a delay
in the
printing of a new edition until after
the close of the next
session of Congress,
Upon motion by Mr. Miller, the matter was
referred to Governor Eccles with power to
act.
Consideration was given to three Clayton Act applications on which
°f the Board
had indicated differences of opinion as to whether
the
Pel'zits
.
aPplled for should
be granted, and the following actions were
taket:
terab,„
APPlic+p4
same 7-.Lon of Mt.
C. R. Pratt, for permission to serve at the
krio
!
lit as a
director of The First National Bank ofMarion,
'law York, and
as a director of The First National Ban_
(4c0tt,
Wolcott, New York.
The
a letter Secretary was requested to address
to Mr. Case, Federal Reserve Agent
at the
Federal Reserve Bank of New York, in:
1"ing the Clayton Act permit of Mr.
Pratt
4/3r t
ransmittal to the applicant; stating
llat, in all
the circumstances, the Board has
granted the
permit,
but suggests that the
agent
endeavor, in cooperation with the apPf°Priate supervisory authorities, to
bring
aoout a
further strengthening in the conn and management
of The First National
,,nk of Marion and a
correction
of all of
wla matters
which were criticized by the ex"Iner; and requesting that, when the
agent
submits his
recommendation as a result of
3692
I
12/5/34
his annual review of the permit, he report
fully as to the progress made in effecting an
improvement in the management and condition
of The First National Bank
of Marion and a correction of the matters criticized by the examiner and as to the progress made by the
applicant in the curtailment of his indebtedness
to the banks involved. On
this matter Mr.
Miller voted "no".
The
the aPplication
of Mr. H. T. Lykes, for permission to serve at
Bailksame
time as a director and officer of The
First National
the r!L
I TamPa, Tampa, Florida, and as a director and officer of
pro_ "61n American
Bank of Thor City, Tampa, Florida, was apved, Mr.
Miller voting "no".
The
at tha.viu-leation of Mr.
E. P. Taliaferro, for permission to serve
Balak e same time as a director
and officer of The First National
the ,?f Tampa,
Tampa, Florida, and as a director and officer of
provntin American
Bank of Ybor City, Tampa, Florida, was ap';'4, !Ar.
Miller voting "no".
Governor
Eccles referred to the action taken at the meeting of the
toe
Q111 N(Ir7eMber 17,
1934, with regard to the employment of Mr. Daiger,
014
sU
ggeste
48 (If
the
fhct
close of
la()
the present arrangement with ?Ir. Daiger
be terminated
business on December 15.
He stated that while he had
recommendation to
make with regard to the employment of Mr. Daiger
41'1 r that date,
he desired to
submit to the Board for consideration the
41/4s4tbility of a
ppointing Mr. Daiger as a special assistant available
th
t°e
or b, members of the
Board and its staff for consultation, in the light
-‘4.8
spec
ialized e
t4e
xperience, on particular matters, such as legislarilatters _
,
el41t4
regulations of the Board, matters arising under the
Se'tes
theh
Ilxchange Act of
1934, cooperation of the Federal reserve banks in
(418111g
h
Program,
loans to
industry, etc. The Governor said that if
theLiger
were r
th
th
etained in ami such
capacity it would be his thought
e
would
follow
CUtrent developments in the press and elsewhere
l2/6/34
3693
-4flee to
matters pertaining to the Federal Reserve System and
11(3111d harldley with the
approval of the Governor, as occasion arose,
iliattel's that
might come under the general head of public relations.
He
8a" that while in
the Treasury Department he had come in contact with
8°Tle or
Mr.
Daigerts work and was favorably impressed; that, since bec°14i4g
Governor of the
BoE.rd, 71r. Daiger at his request, had made a
critical
analysis of the
regulations of the Housing Administration which
Was very
satisfactory, and that, in discussing the matter of his continued
1111()Y1itent by
the Board
Mr. Daiger had advised that, while he would like
vx'3r
zuch to
continue his Service to
e
b cause of his interest in
thaerr::::
14illking
matters, there
would be
:nt to him, either financial
(4' °therwise, if the
Board should decide to discontinue his services and
tha't the Board ne,,,3
uu have no
hesitancy in that regard. Governor Eccles
%ithtlt
he
would have no
objection to trying an arrangement such as
hle,;ested for
a period
with the idea that its continuance would depend
1:111vilether or
not it
resulted in a harmonious relationship and a contriMr• Daiger
11
ustify his salary, and whether eventually
eld be
fitted
in:I:hp:It:0in in some division of the Board.
l
Stated
that he felt the Board should consider in connec•
tINeit)r of
the
bqc,
first, whether the Board desires to engage in
nd
referred to by Governor Eccles and second, whether Mr.
"'ois
the
1)1
man for
the position. He said
he had a high regard for Mr.
but that he had
a
firm conviction that sooner or later any acti1.4 the
riature of
1\trt,
Propaganda on the part of the Board, in the long
71°144 have n
adverse effect on
the Federal Reserve System and should
3694
12/5/34
—5—
)aot be engaged in.
Governor Eccles
said he was of the opinion that if the Federal Reserve *%rstem is
to occupy the
position in which it belongs, in the minds
Qt the
Puulic, the
Federal Reserve Board must adopt an aggressive attitude
tobritigthat about
and, if necessary occasionally, use the press to that
Re
referred to the
changing conditions in the banking field during
t4last two
or three years
and stated that he felt it was necessary that
thile attitude of the
persons connected with the Federal Reserve System
Change to meet
that situation and that, while he was strongly of
°Pilli°n that
the Federal Reserve
krt
System should not be operated as a
Nlitical system and
that the officers of the Federal reserve
84°111d not be
changed with each change in administration, it was
Nettio
- that
the
Qkz,
SYstem meet the changing demnnds of the times and dis-
the
resPcnsibilities resting upon it.
the detailed discussion which ensued,During
moved
thoriz:r
;h: Governor th tilicaets2h =rang:Iujent
as he sees
fit with Mr. Daiger with regard to
hic
continued employment.
At the conclusion of the dise
c=12
:
Szymczak's motion was
Nhkia,
Z
rn°11 Eccles
then stated that at his request Mr. Morrill had
,km
with a
list of the
8eeretv,ry
items which, according to the records in
N eu° t s °ffice, had been
pending in the hands of Board members or
ther.
floire:
:::
than a week without final action having been taken
-ceed wotaci
d appreciate
it if the members to whom items had been
Ny _
give at
ckilbe d.,
tention to the matters during the
coming week so that
"I-4°sec
'of or
brought up for consideration at the next
meeting.
3695
12/5/34
—6—
Mr. James
stated that, in connection with his consideration of
the question
of salaries at the Federal reserve banks for the
coming year,
he
felt it was
necessary that the Board's general policy should be de—
"Q at this
time.
He said that, while the Federal reserve banks,
°fe(purse, should be
operated economically and efficiently, if consi—
c11?.ration were
given only to efficiency and economy at the present time
theonly
recommendation he could make to the Board would be that the
Peliscl/liel. and some of the
salaries paid by the banks be reduced, but
that,i .ew
v1
of existing
circumstances, with all but one of the Federal
re8ellre
banks
their currenhaving
earnings during the current year sufficient to meet
t expenses and
dividend requirements, he felt that a policy
811(114141 11°t be adopted
which would result in increased unemployment or
4111%1
pUrchasing power, and
that his recommendation to the Board was
tllq it
consider the
question of future policy carefully and that, in
corh—c
tion
with
salaries for the coming year, it approve the recommends.—
the
boards of
directors of the respective Federal reserve banks
ecePt in
--alW ease when
the recommendation appears to be out of line.
'Tames' re
commendation was discussed and the members present ex—
general
agreement therewith. During the discussion, reference
'40 to the
the
retirement system of the Federal reserve banks and to
beliefj
tetted
available to
employees thereunder, and Governor Eccles sug0.
....A
it
mibe well to give
red4c4
consideration to the desirability
-'11g the
limits of
eligibility for special service retirement
ben"its
elow
twenty years
service and below the age of fifty—five.
*4
P''8"
12/5/34
3696
-7At the conclusion of the discussion,
Mr.
O'Connor moved that Mr. James be requested to
set forth
his views and recommendation with regard to
salaries at Federal reserve banks in a mem,ox:andum; that the memorandum be made part of the
!minutes of this meeting; and that the
recommendation
be accepted
as the policy of the Federal Reserve
Board.
Carried.
Secretary's note: The memorandum prepared by
74r. James in
accordance with the above motion
reads as
follows:
the pe;In giving
consideration to the salary lists proposed by
a nlat, era]. Reserve
Banks for the ensuing year, I recommend as
L,er of
policy for the Board ”let.
That because of the unemployment problem
and the
Adm
err°
Recove
Program no special
rt be inistration's Recovery
made at this time
toward
reducing either peror
salaries
"2nd.
That no general advances in salaries are
iUIti14_,-ed since
the Board and the banks have already fully
;;)flated
the emergency
cuts made in April, 1953, in conwith
governmental practice.
ft4d.
ad'That as a general rule approval be
raill
given to
the°r
Justments in salaries that may be
recommended
by
u.Lrectors of the
Reserve Banks.
Thi
811114
8 P°IiCY is
seemingly justified in that the Reserve
held s !ith the
exception of Kansas City - have apparently
The dejl.V.ent
earnings to cover current expenses and dividends.
lear:
TIITs at Kansas City is but a smpll amount
andle4ri!tilcia
serious reduction in surplus there.
Hstleh
Zte.dupY thesalarY recommendations as have so far been re443
from the Reserve Banks are in harmony
„c0Z
:ttetde:oic3r.
Mr. 4
ill" referred
to the recent death of Mr. W. R. Cole, who ras
one
3697
12/5/34
-8"he
Board's appointees
to the board of directors of the Louisville
1117"1°f the Federal
Reserve Bank of St. Louis, and stated that as Mr.
vill° is now a Class B director of the Federal Reserve Bank of
4441te, has
accepted the presidency of the Louisville and Nashville Railr°ati
'succeeding
Tir. Cole, and will move his residence to Louisville, Kentuck,'
thereby
making it necessary for him to resign as a Class B director
Ilttheltlanta bank,
and as L. Hill's service as a director of the Atlanta
belik,
4es been
very satisfacto
1304rd
ry, he would like to have authority from the
to
ascertain from Mr.
Hill whether he would be willing to accept apPoizitment by
the Federal
bratIch
Reserve Board as a director of the Louisville
or the
unexpired portion of the term of Mr. Cole.
At this point
Upon motion by Mr. O'Connor, the authority requested by Mr. James was granted,
With the understanding that if 7,1r. Hill
agrees to accept the appointment, Mr. James
Will submit the matter to the Board again so
that formal appointment may be made.
Mr. O'Connor left the meeting.
41444 1141% SzYmczak
or
reviewed the arrangements that have been made for the
at the Federal
Reserve Bank of Cleveland on December 11, 19340
l'el3resentati
of the
ttees
Federal reserve banks and industrial advisor
14
4.4
to the
which the question of procedure
at Federal reserve banks
4 vlit4
industrial loans will be discussed.
He also referred
411801,7°tter
addressed hY the Board to the chairmen of the industrial
Nteci
°mmittees
the 13.
tEtei,4
sm'llgtot
under date of
December A, submitting topics SUg—
c)al
'
d for
discussion at the meeting of the chairmen in
°4 December 181
and he requested that he be furnished with
3698
12/5/34
-9-
41117taler
to m t4ua ._
suggestions that the other members of the Board may have
with regard to
topics for the program of the meeting.
He then called
attention to the total amount of industrial loans
alP1)11°Ired kr the various
industrial advisory committees and by the Federal
rese,—
"e banks,
the amounts of advances made and commitments outstanding
48 of „
"°vember 28, 1934,
and the amounts of such loans authorized and
disbur
8ed by the
Reconstruction Finance Corporation, and stated that he
Withad
a
rranged
Mr. Smead to furnish the members of the Board and the
Pedaral
reserve banks each
week with copies of a summary statement of indillatrial
loans in
addition to the more detailed weekly statement now
beitg
Alrnished.
Mr.
Szymczak then stated that it is contemplated that at the
Meeting of
'
repr
esentatives of the Federal reserve banks and the industrial
kdris
ory
committees at
Cleveland a uniform procedure with regard to the
-44 Of
industrial loans will be worked out and that he desired to
recomm
eild to the B
oard that it authorize Mr. Smead, Chief of the Division
Of Bartk 0
Psrations,
after the uniform procedure is in operation, to send
L. s
rick of the division to any of the
Federal reserve banks
‘There
y
ricers c41411- be found to
be desirable to check with the operating ofthe banks and the
representatives of the industrial advisory
coIflrttttees
ell matters
Pertaining to the uniform procedure, and to the
i4alqstratiom of
section 13b generally.
Mr. Szymczak's
recommendation was approved.
Nate evallerri°r Eccles
stated that he understood that the Reconstruction
e
'Corporation
- was making a
study of proposed legislation which
3699
12A/34
-10w°144 Place the
entire activity with regard to industrial loans in the
Corporation, and that
he felt that if Congress should enact such legis414°4 the
Board should
interpose no objection thereto as the making of
4448 to industry
is not a proper function for the Federal reserve
banks.
The other members of the Board expressed agreement with Governor Eccles'
opinion.
11r* SzYmczak
referred to the letter addressed by the Board to the
Reserve Agent
at the Federal Reserve Bank of New York under
kte
°f
November 28,
1934, with regard to the maximum rate of interest
maY' be paid on
time and savings deposits by member banks located
New
1°11c urider a
regulation of the banking board of the State which
will tale
--e
terte.t4 effect on January 1, 1935, and called
specific attention to
Stat
te:::tB made in the letter. He said that the
Board has been
41
/
48ed tha
States of Wisconsin,
Vermont, and Indiana had taken or
"4 th nap
tereet the.e --r future take
action to reduce the maximum rate af inbe Paid IV State banks on time and savings
that the t
deposits;
Matter
of the
effect of the action taken in Wisconsin upon
44411-tUti4-1
1tere
,
4.
orisidere,
rates that may
be paid by banks of that State is being
h.
44 with
the
‘
111 that 44
Federal Reserve Banks of
Chicago and Minneapolis;
thereto.
013141On will
be prepared by the
Board's counsel with regard
Re etated
also that
the Indiana authorities contemplate remaximum rate
that may be paid on
vette
time and savings deposits in
which
raises the question as
atioti would
to what effect the proposed
417140t
have on
Postal Savings deposits which it
be
is understood
147.
dePoeit
a: bank that
gm
) arld
pays interest at a rate less than
that a
e-ti:l'e
had been
received by the Board from the
t
Dar
"
3700
12/5/34
-111?ederal Reserve
Agent at the Federal Reserve Bank of Chicago suggesting
thatir the
Indiana commissioners were aware of the possibility of
the
13("Ireducing the
nxiinuin interest rate prescribed in Revintion Q to
2 1/2%) they
might adopt that
maximum also, but that the bank had not
44 4 could
suggest this to the Indiana authorities without
permission
*°111 the
Board. In this
connection :(1r. Szymczak presented a draft of a
Phie
rePly to the
telegram received from Mr. Stevens.
The proposed reply was
discussed and approved in the following
amended form:
4,
"Referring
December
ci.123°ard has no suggestion contained in your telegram De
objection, if you think it advisable
In_
stic
ulnstan ces, to your
c_ tutione
advising Commission for Financial
of
Indiana that Federal Reserve Board nowsunder
f
etrosideration and
expects to decide in near future question
cennrig a maximum
rate of interest of two and one-half per
.
i
Bavi
'
er annum which may
be
paid
by
member
banks
on
part
timea
of
l93
deposits
posits
that 4jf T0,50 effective on some date in the early
advise the Commission, however, please t
Co4tal::.s a
dvce is
given solely for the information of the
e
or
*°11 and request
that
it
be
oti-4re
not
b
disseminated
to
banks
eut be
held in strictest
confidence."
Mr. 8
.2zoliczak called
attention to the action taken at the meeting
t4Board
c114,
°11 SePtember
14, 1954, in declining to approve the in.4°4
the 1
en
„444:a4-1
report form 105 of State member
banks of a memoitem
Ei.t„ekatled
"Undeclared cumulative dividends on preferred
u t end op
OA ill
'most
recent dividend period,
and/or unpaid interest
e°nle
c
aPit
al
4-ql.
notes and
debentures to end of most recent interest
'
4)llot
411114
8eci by
uded in item 30
above", and he stated that he had been
ftt
4r* Srnead,
Chief of the
rac
Division of Bank Operations, that
ent car,
e
tEttio
or Bzr..4-'el'ence between
representatives of the National Asso494 Auditors
and C
ontrollers, representatives of the
3701
12/5/34
-12I4‘.°431.117, the
Federal Deposit Insurance Corporation, the Comptroller of
tile curre_ cyl
11
and the Federal Reserve Board, it was suggested by the conof one of
the large banks and generally agreed to by the other
rePresentatives that a footnote should be shown below the body of
the e°11dition
report providing for the reportinr: of the amount of "acclikaated
unpaid preferred
dividends and accrued unpaici. interest on
4.134'11
debentures". Mr. Szymczak said that he was bringing the matter
to+1,
""e at
tention of the
Board at this time because of the suggestion made
the
conference, although he
understood that the Comptroller of the
ClIrreri
-cY and
the Federal
Deposit Insurance Corporation propose to omit
the
item from
the form for
the forthcoming call for reports of condition
et1154litted to
them.
G°vernor
Eccles stated that the inclusion of the item is not a
1114tter ot
nterest to
t11„14k
depositors of member banks and that as some of
s
1144 wow
unable to
operate profitably at the present time and pro—
be unable
to meet accrued dividends on preferred stock or
ttrtel.
444
-eet Nov.graterltS n
-n capital notes and debentures, the inclusion of such
" the
°De_
report would be
notice to the public that the bank is
-'g at a 1,„
and might result in substantial harm without material
The other members
of the Board exeement with Governor Eccles'
Part:Z:lencelnZger
oto
111
b°11nection with
the above matter, reference was made to the form
Ilditio
4
report to be
k/ta or
used by State member banks in submitting recondition to
the Federal Reserve
Board following the next call
3702
12/5/54
-15-
tor
reports, and Mr.
Morrill stated that the proposed form is now being
eiretaat f
ed -or approval among the members of the Board, with a memorEttcbm,
zrom itko.
Smead which submits the requests of the Federal Housing
lidzilinistration and the
Farm Credit Administration that the Board request
each,
°tate
member bank in
submitting its report of condition to forward
8el)arat
e -c“edules
furnished by the Federal Housing Administration and
arrneredit A
dministration givini, certain information with regard to
reaa
estate
credits and agricultural
Ooverto
credits granted by the bank.
r Eccles s
uggested that in order to prevent an adverse reaction
oilthe
1114/t of the
State member banks it should be made clear in the
4tter .,.
Q0 the
banks
tererred
transmitting the report forms, that the two schedules
the p
to
beirte
not be a
regular requirement in future calls, but are
itelnded
in the
present call for a particular purpose.
The Secretary was requested
.h
t :o117_
range with Mr.
Smead, Chief of
sion of Bank
Operations, to carry out the
suggestion made by Governor Eccles.
trict
liaralin referred
to the recommendation of the Committee on Dis1 referred
'
to at the meeting on November 17, 1954, with ret0 t
he aPproval
et
of the appointment of
Mr. E. H. Osgood as an asetant pea
414 he a "
— al reserve
agent at the Federal Reserve Bank of Boston,
h4
tEtted that the C
'date
ommittee has made a further investigation and
rma.tod
be
that a
tkre 4
salary of ,12,000 per annum for Mr. Osgood would
wod
Ppropriate and
that, if tendered, Mr. Osgood would accept the
-4 at thai.
111W41
ealarY. Governor Eccles stated
that he had made an
wth rc„
--gard to Ur.
44tter
Osgood and that he would like to discuss the
1744 Mr.
Hamlin before
final action is taken.
3703
-14Mrs Miller reported
that Mr. Everett V. Meeks, consulting architect,
41111e to Washington
last week and discussed with him
Petition
the program of com„r
10 the
selection of the architect for the Board's
e
building. He
atilnated
, Mr. Miller
stated, that it will be about January 15, 1935, be
c0re the ,
1
,rogram for the
competition will be ready for submission to the
1:13e144
architects and that
he is actively at work in cooperation with
1 Abell
in
developing the details of the
program.
',leeksMr.
Miller added that
had eP°ken in
highly commendatory terms of Mr. Abell.
vis411 4114 Miller also
said that he had discussed with Mr.
Meeks the adarranging with the
successful architect to draw up the plans
atzlesPecitications for
the building with the
understanding that the enrilig and
inspection work would
perhaps be handled by the National
ervic
00
e and that he
had indicated to Mr. Meeks that
the Board would not
ng to
aPprove a fee
for the architect on that basis in
excess of
corinecti
--°11 with the
discussion of the Board's new building,
Ecei
th
°a
inquired whether
or not consideration had been given to
()Id McLean
4Ite r
Property at
Fifteenth and I Streets, N. IL, as a possible
:stli$
te
hi/tiding. He
said that the reason for his
inquiry was that
bekt
Strong
feeling cn the
part of certain officials of the Treasury
that
qok the
it would
be
undesirable for the Board to go so far away
e48147 as the
proposed site on Constitution Avenue.
4r1 Mill
et
er stated
that the McLean property had
been carefully contiNhhor 41 Pr°111PtINY
rejected because of the
undesirable location and
1°°c1 the high
11
cost of the
site, and the fact that it did not
Goverrio
3704
12/5
/34
5afford
sufficient
opportunitY for future expansion.
He said that it had
felt from
the beginning that a
site should be chosen which would perZit of
future
expansion of the building to provide for the housing of
the
personnel of any
organization which may result from the reorganization
Ilrld
beezi
centralization of the
present agencies of the Government havinL; to
dowith
banl:ing, and
that such an expansion would not be possible on the
'41,ean
property.
Governor Eccles stated that he felt that when a suitable
cl.P°211-Irlity is
afforded he and "r. iller should discuss
the
the matter with
Secretary of
the Treasury and
explain to him fully the reasons which
ra4ke the
proposed site
on Constitution Avenue a desirable one.
lace Gove
rnor Thos
ma referred to the death this morning ar
e°1111.1'e,
Chairman and
Federal Reserve Agent at the Federal Reserve Bank
""ttv, City,
and
the
inciuired as to whether any steps should be taken by
toard
pending the
of a successor to 7a-. 17cClure.
selection
taAenIt
d that
was
no
action need be
immediately as the duties e chair4111 '11c1
Pederal
reserve agent would
be carried on by the deputy chairman
411c148zistant
Federal reserve
agent, respectively. In this connection,
teeles
to
stated that he
hoped within the next week or ten days
h 144
"ellt to
mee4,
the Board
the ..luestion
Q.04
of policy to be adopted in conth
ter)
,
proposed l
egislation with r
regard to the selection e chair.11c1 Class C
'DPreokt
directors at Federal
reserve banks and that he would
e it if itly
qtr.
action on the matter could
be deferred until that
The
th
en acted upon the
following matters:
3705
t 12/5/34
-16-
Telegrams dated December 0,
1934, from 7r. Austin, Chair'mn of
Federal Reserve
Bank of Philadelphia, and
Tcod, Chairnan of the
l'ecieral Reserve Bank
of St. Louis, both advising that, at meetings of the
130L'.1sdc of
directors today, no
changes were made in the banks' existing
cehechaes of
rates of
discount and purchase.
the
Without objection, noted with approval.
'emorandum dated
December e l 1934, from 7r. Morrill, SecretarY,
ec.o
rtamending that
Iiss 7Tildred E. Foster and 7is
7. 7axine Morgan be apste
nographers in the office of the Secretary, each
with salary
of
e't the rate
560 per annum, effective as of
the respective dates
14P°4thich
they enter
PEtz
upon the performance of their duties after having
sell
satisfactory AYsical
exwninttions. The recommendation was ap11'°ve'll'Y five
memberof the Board on December 4,
1034.
Approved.
Mem
orandum
dated December 4,
1934, from 7r. 7orrill, Secretary,
'E thc.t
the
&zed •
Board's examining
physician, Dr. J. B. Glenn, has ad14
collteotion with
the physical examination of Charles R.
Norris,
E'csigned to
the Governor's
ele.e Pted f
office, that, while he would be
2 4E311ra-floc bY
,41,ere, °r '
life insurance companies, his premium would
"ed 1570
over the
' Q4411111',, ..,
premium for ordinary life insurance; that
11,z
11.Idie:Q.,
,clvised over
the telephone that a number of examinations
ed tli
"li ztz
-e
recurrence constantly of
zhor;i1,,
albumin, the laboratory
4 readi ,
c4441,. .
1.1 of one
-"I'Lti-C1h A
plus; that he reports thatmicroscopic
., kkoes
a
lk)t*/'te, zv_
11°t indicate
•
kidney breakdown; that otherwise
szi4,,
L.-Ls-Lactory
1.*
,r—
condition; and that he would be an acceptany
insurance company
at the higher premium.
The
3706
12/5/34
-17ineftrarduin stated
also that, inasmuch as Norris is contributing to the
414.1.Service Retirement
Fund and will not become a member of the Retiremerit SYstem of the
Federal Reserve Banks, it is recommended that the
reP(Irt of the
examining physician be accepted as satisfactory.
alletts
Approved, Mr. Miller voting '110.
Telegram
to Governor Hamilton of the Federal Reserve Bank
of
4-Wip reading
as follows:
teleZeMbers of Board have learned with deep regret from
deatIT-m received by Governor Eccles from W. T. Kemper o
very
Yesterday of Mr. McClure. They will appreciate
it
mezberl if You will express their sincere sympathy to the
of the
family and his associates at the bank."
Approved.
Te
legram dated
December 4, 1934, approved by five members of the
to
11rFletcher, Assistant Federal Reserve Agent at the Federal
ile8erve Bank
of
Cleveland, ref
errin--g to the application of "The Chagrin
414 411king Co.
pu Chagrin Falls,
Ohio,
permission to withdraw
irtnediate4
m
membership
embership in the Federal Reserve System, and stating
'that the
Board
waives the usual
requirement of six months' notice of
intention to
withdraw
e ccordingly, upon surrender of the
Pecieral
reserve
bank Stock
edethias:
to The Chagrin Falls Banking Co., the
zhAer
:
148"ve Bank of
Cleveland is authorized to cancel such stock and
refutd
thereon.
Lett
130ttrd
Approved.
'dated
December 41 1934, approved by five members of the
to 4r.
u'Connor, C
omptroller of the Currency, reading as follows:
3707
-18serv "In
accordance with your recommendation, the Federal Rethe 4.
13cerd approves a reduction in the common
capital stock of
4,.... irst Camden
National Bank and Trust Company,, Camden, New
t4lbe7) from q 500
000 t d"750/000/ ,
pursuant to a plan which pro'uee
' bankt
I. '
ak, _ that the
°'
s capital shall be increased by the sale of
'
000,000
preferred stock to the Reconstruction Finance Corporation
alla that
the
released capital shall be used to eliminate unsatis1/4,Q017
1934.n
assets, all as
set forth in your letter of November 26,
Approved.
Telegram
dated December 4,
80
1934, approved by five members of the
.to mr. Roxt _ n,
0 Federal
kicht
Reserve Agent at the Federal Reserve Bank of
°1144
stating that the
Board has given consideration to the application
the ti
Wi
tor vot lliazson Mining &
Manufacturing Company", Williamson, West Virginia,
44,11
permit under
the authority of section 5144 of the Revised
tea of
the United
'kte
States, as amended, entitling such organization to
-c stock
which it owns
or controls in "The First National Bank of
lateolo
)
ralliamson, West Virginia,
and has authorized the issuance of
u
Permit to
the
applicant, subject to the following conditions:
hereiZric'r to
the issuance
of the limited voting permit authorized
the
each
Federal Reserve Agent shall satisfyhimself thaor
02f
"(1)
the
subsidiary
(b) trwise
bans of the applicant has charged off
eliminated, (a) all losses in loans and discounts,
qlaciePreciation
in stocks and defaulted securities, )
as eiteelation
in securities
not of the four highest.
des
ied by a
it4s z'of
recognized investment service organization
engaged in the
business of rating or grading se
4ble 4
,
11 (d) all
!
other losses; as shown by the latestiavailkithori t of exa
ndnations by the appropriate supervisory
Taired
or
that the
mres,
(b)except
A
A rIlirket 1,, and (c) above charge-offs and eliminations 7may be based upon current appraisals
ak'J.e
securities
satisfactory
to the Federal Reserve
ti(2‘
that th.,1 J the
Federal Reserve
Agent shall satisfy agreement
himself
aPPlicant has
substantinlly performed any
rwa:V
3708
12/5/34
-19"or
agreements heretofore executed by it as a Conto the issuance of a limited
voting permit by
the Federal
Reserve Board;
"(5) the Federal Reserve Agent and the
Executive
Committee of
the Federal reserve bank shall approve the
issuance of such permit."
414 tor the_
f011owingpurposes:
"To elect
directors of such bank at the annual meeting
l?rn_ shar
eholders, or at any
_ior to
thereof, at any te
adjournmentstime
April 1, 19352 and to act
a
thereat
°r
upon such matters
routine nature as are
meeti-ngs
ordinarily
acted
upon at the annual
of such
bank."
The
ti
egrela also authorized
the agent to have prepared by counsel
t°v the
Federal
reserve bank, and to issue to the Williamson
&haw
!Lining
to.ebr acturing Company,
a limited voting permit in accordance with the
4m when the
conditions prescribed therein have been complied with.
Approved.
Of
Telegram dated
December 4, 1934, approved by five members of the
to mr
Peyton, Federal
kiaulea
Reserve Agent at the Federal Reserve Bank
11011
8,
reading as
follows:
thor1"141stel
December 1
Stock
00rp04, issuance of ANCIGAR telegram dated November 50 (aulimited voting permit to First Bank
warder' -4)n) Mi
nneapolis, Minn.) is hereby amended by inserting
State rote or its
successor unquote after quote Benson County
where 614K,
Minmewaukan, North Dakota unquote in both places
elleh name is
mentioned in telegram."
Approved.
Letter
dated December
4, 1934, approved by five members of the
•
Curtiss, Federal
Reserve Agent at the Federal Reserve Bank
reading 88
toMz
which
nThi .
8 18
ill
f011OWS:
reply to your
ur letter of November 16th with
Mx.e it
a
Themse
copy
-'„ :
of
a letter dated November 15t1i
ta
41,r. D ng Ymolad C. Dexter, vice-president and cashier of
National
el
'inquires Bank of Boston, Boston, Massachusetts.
whether, in view of the provisions of
3709
12/5/34
—208(a) of the Securities
Exchange Act of 1934, a
bank which is
a member of the Federal Reserve System may,
as agent,
lend to a broker or dealer on registered
for the
collateral
account of a nonmember institution.
view of the provisions of
section 19 of the
Federaal Reserve
Act, as E_mended, which prohibit a member
-'rPoratfrom acting
as a medium or agent of any nonbanking
ion,
partnership,
association, business trust,
or
individual in making loans on
securities to brokers
dealers,
it is assumed that in referring to a
ember
'non—
ins
nonmember titution', lr. Dexter is referring only to a
bank.
oection 8(a) of the
it "
Securities Exchange Act makes
unlawful for a
rticrial
broker or dealer who is a member of a
securities exchange or who transacts a business
bcir:rurities through the
medium of any such member to
;'/I in the
ordinary
dealer
course
of business as a broker or
me4
) on
registered, non—exempted securities
ur
from a non—
.rescribank which has not filed an agreement in the form
bed by the
Board.
"
Int
he CaSe to
Boardt..
which Mr. Dexter refers, it is the
oni
,44-- opinion
that
the
borrowing is permitted if and
it .„7,
. f the n
onmember bank has filed such an agreement.
ll nonmember
br—ue
bank has not filed the agreement the
Thoexeroor
dealer may not
borrow directly from such bank.
dealtyision of
section
8(a)
which permits a broker or
Reser
;") borrow
'through'
a
member
bank of the Federal
the boe SYstem
should not be construed to mean that, if
the bril
g°win is
effected
which
or dealer may through a member bank as agent,
borrow from a nonmember bank
'41-Lion's not
filed the agreement, for such an
interpre—
what itwould permit
the broker or dealer to do indirectly
trzc
:
clear
Bcardts c4re r the law forbids him to do directly.
equested to advise T4r. Dexter of the
Clusion
in this matter."
Znd
Approved.
Telerft,
the to
'am dated
December 4, 1934, approved by five members of
ard
'to the
Peder
reserve agents at all Federal reserve banks,
"f°110w8:
19;85
:
411e ZYttextends
for the period until December
4
granted by its telegram of June 23, 1934,
3710
12/5/34
-21"Trans. 2015,
subject to the terms, conditions and instructions
contained in that telegram, provided, however, that
' leIllber banks
exercising privilege granted by permit as extended are
not required to furnish information concerning
under
Under permit referred to in Trans. 2015 and in
Board,,.,
Shallletters X-7963 and X-8007, unless and until Board
make further
requirements in this connection. Each
;iederal
reserve agent will be expected to advise Board not
1:ter than
November 1, 1935, whether in his opinion there
allY reason why
there should not be a further extension
Permit. Please
advise all member banks in your district
°ncerning this
extension of the permit."
Approved.
Letter dated
December 4, 1934, approved by five members of
I'lle8°6 d, to7.1ir.
Robert lia:mpton,
President of The Second National
13 1
EL44, T
itusville,
Pennsylvania, reading as follows:
"Reference
in whi
is made to your letter of November 13, 1934,
tatiki,,ch You ask
whether the provisions of section 32 of the
-"g Act of 1933
are applicable to directors and officers
ec"I,olir bank who are
company, also directors and officers of The Second
an affiliate of your bank.
roil Y°u state
that the Company is engaged in holding a portcome%°1
:common
stocks in the expectation of selling them at
como„,'"utiure time,
distributing the proceeds and dissolving the
t
been"
You also state that
the Company is not and never has
or ,engaged
primarily in the business of purchasing, selling
;
chaegotiating securities.
Although it appears that occasional
letter
been made in the portfolio, it is assumed from your
that
ity
X77
- such changes
't
represent a negligible degree of activtirel:; i;
t tj
I
ler's
eioe
.ct, since you state that 'the Company is enHA,
primart
'
)
; You know,
section 32 refers to corporations 'engaged
gotiat.'Y in the
business
of purchasing, selling, or nein yoi,fig
securities' and, in view of the above statements
plicac
)
1 1:tter,
would seem that that section io not ap
e sic)
;
the
directors and officrs
officers to whom you refer.
r
Approved.
3711
-22Two
letters to Mr. Case, Federal Reserve Agent at the Federal Re-
8erve Bank of New
York, stating that the Board has given consideration
to the
-°11°wing applications for permits under the Clayton Act, and
p
t
11Pcn the basis
of the information before it, feels that the isof
the permits applied for would be incompatible with the public
illterest
* Each letter
also requested the agent to communicate to the
'
411t the
Board is position in the matter, and to advise the Board
Prolapt4
as to
whether the applicant desires to submit any additional
data, and 4
-1-f not, as to
what steps he proposes to take in order to
e°Itil)4 with the
provisions of the Clayton Act.
41% Rose°
as s
e S. Bush, for permission to serve at the sa77.. time
1r4ar, direct
ct
and officer of The First National ed
Marion,
' Ne
York, and as a director of the Vayne aunty Trust
47 Paln7ra, New
41/
York.
Mr* Arthur
48a direct • Crone, for permission to serve at thesame time
pieirig'?ctor and
officer of The Plainfield Trust Company,
13340-141, New
Jersey, and as a director and officer o The
'ad National
Bank, Plainfield, New Jersey.
04w
Of
Approved.
Letters to
applicants for permits under the Clayton Act, advising
PProvEti of th
eir a
pplications as follows:
4r. V. J.
as a A4_ alchaelson,
for permission to serve at the same time
takel7ector and
officer
of The First National Bank of MoseSta
e :%e Lake,
Minnesot
director and officer of the
nd as
cf Mahtowa,
Mahtowa, Minnesota.
A.
diree+ Schultz,
for permission to serve at the same time
Moo
asnd
se u°
_ officer of The First National Bank of MooseLake,
11111.t ;
w c"417Ialitowata
, Minneso,
and as a director of the State Bank of
$ -
) Minnesota.
Approved.
3712
There were then
presented the following applications for
Changes
in stock
of Federal reserve banks:
A
lications for
ADDTTIONAL Stock:
Shares
District No.
3.
The First
National Bank and Trust Company
of
Bethlehem, Bethelem,
Pennsylvania
180
180
District No.
Citizens Bank5.
and Trust
,
Compalv)
IheConcord, North Carolina
First
9
National Bank of 70unt,
r
%Wit Airy,
4ne
naryland
2
Washington County
National Bank of
1711liamsport, W
illiamsport, al
and
-land
1
, Citizens la
Gastonia.,
Gastonia,
'he
Peoples 1:1:-IhriZrItirciain
1
ford, National Bank of Bedford,
TheBedford,
Virginia
30
National Bank of
Buena
Vista,
Vista,
Virginia
-4erican
6
711
National Bank and
Trust company or
eDanville,
Danville, Virginia
LPirst
6
National Bank of
exington,
Lexington,
e
Virginia
Central
6
National
Bank of Buckhannon,
TheNekhannon,
West Virginia
?irst
30
National
Bank of Kenovu,
enova, West
Virginia
tistrict No,
Ilkers Tr-vt7.
`-dn
bes ,1 4c 4 L('
°111P Y,
4an
'g4
,ries, Iowa
..Blissfield State
15
The
Bank,
FIrst
ich
nigan
50
National Bank
of 7.1ari nette,
Llarinette,
54.
Wisconsin
6
51
fict No
• 9.
/1cock
National
T4F,141e°ek,
Bank,
4.rst tlinnesota
Natiora
6
Thhe?.
e
lBank andTru,
e,
t Company of
narquette, 7ichigan
.14 st
The e .ktional
150
CIty) min Bank of Pine
,
0.
city,
ne,,ota
rs
12
°°k) National Bank in
Chinook,
l'Iontana
3713
12/5/34
1)1Tslt_icons for
ADDITIONAL Stock:
.cl.et No.
9.
First
National Bank in
Pukwana,
Pukwanal South
Dakota
'4'andon
National Bank,
TheCrandon, Wisconsin
First
National Bank of
Washburn,
Washburn,
Wisconsin
District No.
10.
The
Liberty
Bank of Oklahoma City,
Oklahoma National
City, Oklahoma
,,,r1ct
The AngloNo. 12.
California National Bank of
San
l'rancisco, San
"e_krst
Francisco, California
National Bank of
McMinnville,
%elannVille p
158,Se.r1
Oregon
National Bank,
rasadena,
California
lications for
SURRENDER
of Stock:
The
OzoneOzone
Park
National Bank of
Park, New
New York,
York
11,,istrict No.
t B
3.
"esranch Bank
and
C Trust ompany,
Williamsport,
Pennsylvania
bistrict
The
No. S.
Pirst
p. (le.k
National Bank of
lrst NRill, West
Oak Hill,
ational
Vireinia
k
mont WeBank in Fairmont,
ir,
st
Pirst
Virginia
National
!,7„
Bank of Midland,
aryland
kstrict
The
No. 7.
Citizens
IDecatur, National
of Decatur,
Illinois Bamc
11,t11.et No.
8.
iz'st
National
1°I'Yliler,
Bank of BrayMery
Missouri
1,),Ifetz'ict
No. 9.
'411Pirst
NaCetotional
Bank of
Princeton,
nesota
Shares
9
15
9
205
12
12
4).7
ect,
.
3
12
Total
37
577
125
195
150
150
36
120
17
TZ
80
84
41
41
34
34
3714
12/5/34
-25for SURRENDER of
Stock:
Continued
Shares
The B4yder
National sink,
%der, Texas
75
rict No.
12.
e Pirst
Central
National Bank of Calexico,
Cal co,
California
56
Total.
Approved.
Thereupon the meeting adjourned.
-4e.
)
,Otil
Secretary.
4PPrO'red
75
56
788
@FedFRASER