The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
i.0/1
04
A meeting of the Federal Reserve Board was held
in f{ashingou ,
0
turday, December 8, 1934, at 11;30 a. m.
PRESEVT:
Er. .ccles, Governor
Ir. Thomas, Vice Governor
Mr. Hamlin
Mr. Miller
Mr. James
Mr. Szymczak
Er. 1:orrill, Secretary
Yr. Bethea, Assistant Secretary
Er. Carpenter, Assistant Secretary
The Board
acted upon the following matters:
tRry,
r-emorandum dated December 5, 1934, from
Mr
Lr
orill, Secre-
recommending that the arrangement now in effect
J.
with Dr.
B.
Glenn as
examining physician for the Board be discontinued
tortho
reasons stated
in the memorandum, and that the Board
aPpl.°Ins
the rete
Iltion of Dr. E. G. Barr as
examining physician to
11144 PhYsical
ex
aminations of all new employees approved for employbY the L'oard, the
arrangement to be the same as that now in
"I'ect with
pr.
Glenn; it being understood that the
fee for each
111111Ettion. and
report to the Federal Reserve
Board, includin", if
detaii
be
report vith regard to the examination, will
0
Upon
submdssion of proper voucher.
Approved.
L:emo
randum dated
"
December 6, 1934, from 'Z..r. Paulger, Chief
the Divisi on
of Ex
aminations, reco/rudending the appointmen-c, of
Ett the rette
J-Ilemas as a file
clerk in the division, with salary
Of
cA,440 per
annum, effective as of the date upon
3745
12/8/31
-2which she
enters upon the performance of her duties
after having
Paz3sed a
satisfactory physical examination.
Approved.
Memorandum dated December 8, 1934, from
•
Secrestating that
the Board's Committee on District No. 1, Lr.
114111i1 and
Ll.r. James,
recommend approval of the appointment of Yr.
Osgood as
Assistant Federal Reserve Agent at the Federal Reserve
Bank of
Boston, with salary at the rate of
JJ0,000 per annum,
Slkeet to
the usual
requirement as to surety bond.
te'rY.
Approved.
Etr
lic
Telegram to Mr.
Sproul, Secretary of the Federal Reserve
Of
Lew. York,
reading as follows:
11,„
J-our
vieek
telegram December 7. hoard approves
extension for
Word
from
December 9 of employment of Mr. Frederick E.
wtth salary
at rate now in effect."
Approved.
Letter
the
to
dated December 7,
1934, approved by five members of
tOliolvt
fl
O'Connor, Comptroller of the Currency,
reading as
appli "Illel's is t
ransmittJd herewith for your considerati
:
iensr
chtla-etion:of
the 'Harvard
oper:tts,
Trust Company', Cambridge, d:as
a member
bank, for permission to establish and
a t
brano
. h at
"The
Belmont, Nassachusetts.
1
1°eated
(nal of
Belmont,
with a population of 21,748
bralich I'll the
, is
sa/re county as Cambridge
ofticA c4fice
and the proposed .
the cl Of the will be situated about ai miles from
the mar
harvard Trust Company. The
town is served by
"a ;
-rtient SaVing2 Bank (a mutual savings bank)
with deposi;,,
1,9311)-Z1J11(ttelY ,a,906,000.
It is understood that on June
'-' the
t
office
approved an application for the est!.blishen
''''rt
Ilational Bank of Belmont.
however, the Federal
3746
12/8/34.
-3userve Agent
at Boston has advised that apparently the oranizers have been
unable to raise the necessary capital and
that ,he bank
has not been organized.
.At the
present time the Harvard Trust Company is operatinrG tWO
branches, both of which are located within the city
113iMitS of
Cambridge, which has a population of 113,643. The
,°ard of Bank
Incorporation of Massachusetts has authorized
ii:Etttritcompany to establish and maintain a branch office
, ljassachusetts, and
the Federal Reserve Agent at
commends that the application submitted herewith be
app:erde.
the opinion
of the Board the condition of the trust
e°m1)11.nY is such
as to warrant the establishment of the branch
e
iw of the
*nbihe
circumstances and the recommendation of
Pieldeirrla
trnds that Reserve Agent, the Federal Reserve Board recomyou approve the
establish ntand operation o., a
c:l'ch at
Belmont, Lassachusetts, by the Harvard
Trust Company,
an
cl
hassachusetts,
on condition that:
te
4,. ,
establishment of a branch at Belmont.,
,...
r„assIChrsret:,
Harvard Trust Company, Cambridge, Yassachus?tts, if
it has not
lo
,
already done so, shall charge off or
therwise
eliminate,
all
estimated losses, as shown in the
°e
xport of e
xamination as of October 27, 1934, made by an
:
1,11-iner for the
Federal Reserve Bank of Boston.
dllm
l'he
attached files together with a
copy of the mm
eoranthe hoard's Division of
Examinations
are
transT*GhZila for
your information, and it will be appreciated
1)0
will return
these files when they have served your pure alld whe
e Rtieno
n You advise the
Board of your action on the appli-
Approved.
Rea
fl'eleCram t-
4.4-. Case, Federal
Reserve Agent at the Federal
5r.Irs 13alik of Lew
York, reading as follows:
n,
1Le m-,,.
4'1:4c/GA-J1111stin1 z, letter
December 1. Reference Board's
lc,'ilait d ,..°Craxas of
October 1, 1E:34, regarding issuance of
"Vrac
'
lievi '
v- 0 "111g Pers to First Securities Corporation of
Pirst
Deposit Company, both of Syracuse,
Ilehlri
"
f
Subdivision 3 following the letter
D in eachje
1.s1.41117,10,f7ams is
hereby amended to read 'To authorize
dn
tock--e,uY anY of
such banks of common and/or
preferre
approval of the Federal Reserve Agent EA
tolt%:1-7-cl-te:rive
and, if required y
oliTtroller
olf3ateofCuir:er:
U.
Approved.
3747
ti
12/8/34
-4Letter to Lr. 'i,00d, Federal
Reserve Agent at the Federal
43erve Bank
of St. Louis, re:1(1in:: as follows:
The Federal Reserve
Board has authorized the issuance
the TRUSTEES
UNDER TRUST AGREEEEid WITH REFERENCE To STOCK
FIRST NATIOI:AL BANK OF LOUISVILLE, KENTUCKY, A-.C.D
COPT)
OTHER
--ORATIONS, DATED JULY 1, 1925 (hereinafter referred to as
the
Trust), of a
general voting permit under the provisions
8eetion 5144, of the
Revised Statutes of the United States,
amended entitlinr, the Trust to
j,
vote, for all purposes,
tite 8tock which it
ons
or
controls
of 'The First National
lank of Lo
uisville', Louisville, Kentucky, 'Kentucky Title
BrITt C°111Pany', Louisville, Kentucky, 'The
First 141.tiona1
Nic
holasville',
acholasville,
Kentucky,
'LadisonSheil:n
National Bank
Trust Company of Richmond', Richmond,
telituckY, and 'Boyle
Bank and Trust Company', Danville, Kento'ekY, and has
authorized
the issuance of a similar pert
mi
teicThe
Pirst national
ational Bank of Louisville', Louisville, Lencon,Y,,entitling such bank to vote the stock which it owns or
tucrels of
'Kentucky Title Trust Company', Louisville, Kenvii)
!Y, 'The
First National Bank of Licholasville', hicholasCorap%,Xentucky, 'fladison-Southern National Bank Lz Trust
Tru-std-ohmond', Richmond, Kentucky, and 'Doyle Bank and
Pre,,c,.700
,mPanY', Danville,
vi
Kentucky, subject to the conditions
to ;
0:„"ed in the
inclosed letters, which you are requested
ro8100-1
:
1a
.rd to the
above mentioned holding company affiliates,
vicah LlvelY, with any
additional comments you may deem adview of
the circumstances involved. A copy of each
of ,;
11 :
I ;Letters is
inclosed for your files, and a copy of each
pecieraT
i 1.et
el,....b and of this letter, has been forwarded
t,
to the
land. '
Peserlie Agent at the Federal Reserve Lank of Cleveill,r
Cotober ?In the
information transmitted with your letter of
LeUi,, • 61
'123'1, it appears that 'First
Kentucky Company',
an
-.'U.3 PLCC '
IlLUCkY, is no longer a holding
company affiliate
the vot.(3rdinClY no
further consideration will Be given to
1.11. -nor •,_
-. ,.
_
"
-1
application
of that company.
"
Your
tl'
et votil
wemorandum of 'Requirements incident to issuance
lslhe
itelillc.Pt:rtitl, as of
February 10, 1934, i/c1
.?1,:ud:dciL calr
ol:Nful.
evrever,
e charged off
502.
of
assets
in
considered
•
the
.
vlewof the Board's usual
fel. '
requirements, and in
enoe of
, k-thot
any unusual circumstances in this case, it is
'Illired to '110
subsidiary banks in question should not be reinak °nY charge-off of
doubtful assets.
at
resPect to
in , 5O0,Coo
capital adjustments, it has been noted
che cc,,,,
ef additional capital
was tentatively recommended
'- of !Lhe First
Lational Lank of Louisville, but the
3748
12/8/34
-5it•
information submitted indicates that the condition of the
institution apparently has improved to such extent that no
additional capital is needed at this time. For your confidential i
nformation, it has also been observed that the files
of the C
omptroller of the Currency contain a memorandum dated
APril 20, 1934,
in which the opinion was expressed that an
increase
in capital need not be urged against the wishes of
e bank.
.e waived. It appears, therefore, that this requirement may
n
"With reference to condition
numbered 3 set forth in
the inclosed
letters to the applicants, it is observed that
FuZmated loss of C6,000 in loans made by the Madisonn Eational Bank & Trust
Company of Richmond, Richmond,
1,
11'llekY, to Allen
Zaring
and
to
the J. 17. Zaring Grain and
&ill Comp,
was discussed in Mr. R. C. Gifford's letter to
1 under
date of April 30, 1934, in which he indicated that
di:1(palle in question were believed to be collectible and
—greed with the
opinion of the examiner. If you and the
eral Reserve
Agent at Cleveland agree that the examiner's
seassification of a portion of these loans as
loss was more
izlern than is justified by the circumstances you are authort,-- b0 ad
the applicants that the C;6,000 item referred
'
Vice1'b
excepted from the required eliminations.
car,„ With respect to
the stock of the Lightfoot Land Company/
corl
;
led at 60,000 in the
assets of the Kentucky Title Trust
°n February 10,
sto-ck
1934, it is understood that this
peal -as since been
entirely eliminated from the trust consets by charge
-offs and transfer to the Trust.
that Your
letter to the Board dated October 12,
1934/ stated
tiola !'„°
1,1 had not
received from Mr. S. A. Phillips the applicaCla
h he should file
pursuant to the provisions of the
pertZ
Antitrust Act. Prior to the issuance of the
voting
seat „' You
relatrat theshould receive assurances satisfactory to yourservice of Ir. Phillips, as well as any other
Aot, 11, 11.?.Ps falling within
the provisions of the Clayton
sUch
oe brought
into conformity with the requirements of
fo
'as soon as
possible, either through filing applicaothervisresand obtainin
c permits in appropriate cases, or
1114. .
elLthat as soon as you receive from the
P. company affiliates, respectively,
and 2, Tes of the
inaosed
agreements marked Exhibits 1
Exhibit-41u three
copies
of
the
Requests for Amendment marked
deci '
s 3 and 4,
execut
d
b
the
holding company affiliates
the Patsd therein,. e
In
a
maxiner satisfactory to counsel for
104'ederal
eat.
Reserve Bank
Ban of St. Louis, together with informain the llsfactOry
to you that the
other conditions contained
./3olosed
letters have been complied with, you advise
T
:t
3749
12/8/34
-6"the Bou.rd by
telec.ram to that effect. Upon receipt of such
advloe from you,
voting permits will be issued and mailed,dir
fectly
to the
applicants
and copies of such permits will be
iorwarded
to you and to the Federal Reserve Agent at
the
lederal
Reserve Bank of Cleveland. Two executed copies of
. 111bits 1, 2, 3 and 4 should be
forwarded to the board for
?..ts records
and the third executed copy of each exhibit should
e r
cetained
for the records of your office."
The letter to the trust and the agreement
inclosed therewith, mentioned in the above
letter
to Lai. Wood,
1-ead as follows:
t.
The Federal
Reserve Board has considered the appliar.7,
s n,of the
TRUSTEES UNDER TRUST AGREELL1:1 WITH REFERENCE TO
Iii4 OF THE
FIRST NATIONAL LANK OF LOUISVILLE, KENTUCKY,
f
I
'
QTBER CO
RPORATIO'a, DATED JULY 1, 1925 (hereinafter retlerred t° as the Trust), for a general voting permit
under
l
u?,Provisions of section 5144 of the
Revised Statutes of the
si
d States,
as amended, entitling the Trust to vote the
.11.d- - which it
owns or controls of its subsidiary member bsnirs,
i
herebY
the issuance of such a permit autheriz_g_the
Trust to vote
uct
the stock of 'The First National Lank
ziplalov,
Louisville', Louisville,
ilat.lasvillelLouis
Kentucky, 'Kentucky Title Trust
ville, Kentucky, 'The 2
- irst National Bad:of
, Nicholasville, Kentucky, 'Madison-Southern
EIZMal 13ank (S: Trust Company
of Richmond', Richmond, Kentucky,
the f °Yle Bank and
Trust
Company',
Danville, Kentucky, upon
niollowin
" Prior conditioLs:
to the issuance of the
general voting permit
aut
herein, the Trust shall execute and de,117er to the Federal
Reserve Agent at the Federal
e
'serve
Bank of St. Louis (hereinafter referred to
the F
as
ftedral
Reserve Agent) three copies
of
the
in:
cosed
agreement marked Exhibit 1, and The First Latlonal Bank
of Louisville shall execute and deliver
to the
Federal Reserve Agent three copies of the
Mreement
marked Exhibit 2, forwarded to said bank,
111 a letter
0
2.
bearinf, the same date as th'.s letter.
Frior to the
issuance of the general voting permit
.:1:tdtiized herein,
the Trust shall deliver to the
r
e or
_ I,(Jserve Agent three copies of the Request
4mwiament marked Exhibit 3,
inclosed herewith,
L culLed by
Ralph C. Gifford, Chairman, or Ernest S.
i'c-rice, Vice,
111° lrst 1C- Chairman, on behalf of the Trust, and
ational Dank of Louisville shall deliver
L the
Po
p
edoral Reserve Agent three
copies of the Reor
Amendment marked Exhibit 4, forwarded to
j
3750
-7H
,
sucn bank in a letter bearing the same date as this
letter, executed by Ralph C. Gifford, President, or
otuart H. Mann, Vice-President, on behalf of such
bank.
3. Prior
to tho issuance of the general voting permit
authorized herein, the Trust shall, and shall cause
each of its subsidiary banks to, charge off or other
lneeliminate from its assets, if it has not already
doe
(a) All estimated losses in loans and discounts,
(b) All depreciation in stocks and defaulted
securities,
(c) 411 depreciation in securities not of the
four highest grades as classified by a recognized investment service organization regularly engaged in the business of rating or
grading securities,
(d) All other losse
s,
shown by the reports of examinations of such holding compan—
y affiliates and banks as of February 10,
1934, made by examiners for the Feder
al Reserve Bank
of 6t. Louis
and by nviional bank examiners, or as
lown by the
latest available reports of examinations
it
Y the appropriate supervisory authorities.
4.
rior to the
issuance of the general voting permit
authorized herein, the Trust shall cause:
(a) Kentucky Title Trust Company, if it has not
already done so, to dispose of all of its
holdings of the capital stock of the Kentucky
Title Company;
(b)
Kentucky Title Trust Company, if it has not
already done so, to eliminate from its assets all loans, advances, and extensions of
credit to the Lightfoot Land Company aggregating 319,416.71, including the mortgages aggregating ,;;117,487.16 against
properties deeded to the Lightfoot Land
Company subject to such mortgages, as shown
on page 4ZZZ of the report of exami
nation as
of February 10, 1934, or to show the loans,
advances, or extensions of credit to the
Lightfoot Land Company aggregating $319,416.71,
flcluding the aforesaid mortgages aggregating
117,487.16, in its published statements
under the caption 'Other Real Estate' or
'Advances to Affiliated Real Estate Heidi
Company or some similar caption;
V
3751
12/8/34
"(c)
The First Rational Bank of Louisville, if it
has not already done so, to eliminate from
its assets all loans, advances, or extensions of credit to Lightfoot Land Company,
or to show- ouch loans, advances, or extensions of credit, in its published statements
under the caption 'Other Real Estate' or
'Advances to Affiliated Real Estate holding
It
Company' or some similar caption.
5. Prior
to the issuance of the general voting permit
authorized herein, the Trust shall cause each of its
subsidiary banks to charge off or otherwise eliminate
from its assets
an amount sufficient to reduce the
investment of
each such subsidiary bank in other real
estate, banking house and furniture and fixtures
to
an amount which shall
not exceed the respective current appraised values thereof as shown by an appraisal
4,
, sa
1.
tisfactory to the Federal Reserve Agent.
cos_ ? period
within which a voting permit may be obtained
Y
trioni_P-1-iance with the
above conditions is limited to four
extse:irr°m the date of this letter, unless application for an
Boord. °11 Of time is made to and granted
by the Federal Reserve
T
Hfl
securie eonnecticn with the elimination of depreciation in
.11
th
s requir ed
under condition numIer 3, such elimination,
e case of readily
marketable securities,e
may b based
current market
values of such securities. In determining
.'ault of
depreciation in securities to be eliminated
'
1'e above
conditions, the ameunt of net appreciation in
curities of the first
four grades may be deducted.
"It•
ls felt
the Jn
that particular attention si.louldri be_reventto
which-le,°bson co
tirecis been ncentration in the Kentucky Title Trust Con,.
repeatedly criticized in reports of examination.
the
-Le ns of that
bank to L. Jacobson
Sons, members of
1372t41.e°,138°11, family,
and their interests totaled approximately
;36 °° on
February 10, 1934, and indirect loans aggregate
Of th,T e The ex 'ner
reported this line as being in excess
Tru„tlegal limit. Although
representatives of the
13(41rd s'ated
during recent conferences with
members of the
cexitr ld its
staff that these lines do not
represent
a conof
credit to the Jacobson interests but
represent
Secured
individual and separate lines of credit adequa-_y
Y first
mortgages on real estate, it appears from the
lEtqe -'
examination as of February 10, 1934, that
certain
to be .e;‘,1:T111t8
represent loans to corporations which appear ,
4ppalie;zrest
r
,
of the
mi
and that other amounts
4e
1rabert
Y are direct Jacobson family
Obligations of L. Jacobson
tht ti of the
Sons and
lene
Jacobson family.The Board feels,
therefore,
'
nes
constitute an undue and unwarranted
144
3757c.
12/8/34
-9-
concentration of credit arising from a single source and that
-11€1 Xentucky Title
Trust Company should reduce the total line
111
substantial amounts. In addition, other
concentrations,
,
°;11-1s especially
mentioned,
past
due
loans,
and slow and doubtul assets in
the Kentucky Title Trust Company and in other
stIof the group,
should receive particular attention.
At the
time the voting permit applications were filed
1Boythe Trust
and by The First National bank of Louisville,
Ye Bank and
Trust Company, Danville, Kentucky, had not been
jd,matted to
membership in the Federal Reserve System and
erefore wau not
included in Exhibit A which lists the subeldiarY riemler
teziks of the applicant. The inclosed Request
or Am
l.
end
---ment
marked Exhibit 3 will bring Exhibit A of the
they n
application into conformity with the facts as
exist.
tilpermit
Vihen the
inclosed agreement marked Exhibit 1 and the
4
thequest
T„ for ..mendment marked
Exhibit 3 have been executed by
please forward 3 executed copies of each of such
BrZlts to
the Federal Reserve 21gent at the
Federal Reserve
P11- °f St. Louis, and advise him of the
action taken to conR4ewith the
other conditions stated herein. When such
Federal
collinr
i 13 .A erit is
!
satisfied that all of the conditions have been
ti1jwith, he will
advise the Board of the action taken
cotlis
matter, and, when all of such
conditions have been
TrIletTwith, the Board
wdll issue a voting permit to the
t
HI_
"AGREELENT
Board, 41 cons
ideration of the granting by the Federal iteserve
Of the, 1,11cler
authority of section 5144 of the Revised Statutes
tioxi 1-'
1 flited
States, as amended, and pursuant to an applicaunders?retofore filed
with the Federal Reserve Board by the
vote,
ecl'of a voting pe
t entitlin: the undersigned to
control°r all
purposes, each share of stock which it owns or
rePree,of
subs4 diary member banks, the
1.
undersigned hereby
%!,,ntuntlie
ertakes and agrees as follows:
undersifrned wdll cause each of its subsidiary
ijcink to raintain an
amount of paid-up and unimpaired
0..,13!al and
unimpaired surplus which, in the judgment
"'"e Federal
Reserve Board, will be adequate in rer aticn to its
total deposit liabilities, having due
eZ
- ard to the
general principle that a bank's cal:ital
t7„.surplus ordinarily
should not be less than onein:II of the
average amount of its aggregate deposit
titilities and, in
some circumstances, should be more
o2.Th'" one-tenth
of such amount;
w4Lthe
understmed will take all necessary action
-'
4'
4 11 its power to
prevent any of its subsidiary banks
3753
12/8/34
-10"and any other banks with which the
undersi:ned or
any of its subsidiaries is affiliated from
investing
trust funds held by them in the
certificates of the
undersir,Lned, or in capital stock, bonds, debentures
or other
obligations issued or guaranteed by the
undersigned or any of its subsidiaries or any other
organizations with which the
undersigned or any of
its
tt
subsidiaries is affiliated;
3. That
the undersigned will not make, and will take
all necessary
action within its power to prevent any
of its subsidiaries
and any other organizations with
which the undersigned or any of
its subsidiaries is
affiliv.ted from making, any loans or extensions of
credit to, or purchases of
securities under repurchase agreements from,
the undersigned or any of its
Ile
bsidiaries or
any other organizations with which
undersinned or any of its subsidiaries is affiliated, or any investments in,
or advances against,
securities of
the undersigned or any of its subsidiltrIee or any other
organizations with which the
undersigned
or any of its subsidiaries is affiliated,
eD:eept within the
same limitations and subject to the
saille conditions and
provisions as are applicable
under section
23A of the Federal Reserve Act to such
transactions involving member banks and their
affilit
o:1;
; except
o
that this paragraph shall not apply to
r extensions of
credit by any organization to
subsidiaries, or the purchase of securities
;sde2°.17%purchase
agreements by any organization from
lts oval s
ubsidiaries, or the investment by any organ
„
"f4_"41tion in the securities
of its own subsidiaries,
Gre such
r„c to thetransactions would not otherwise be sublimitations, conditions and provisions
ection 23A of the Federal
N,.
Reserve Act.
4hls a
greement is executed in triplicate.”
Z
r
The letter to
The First iational Bank
of
Louisville, Kentucky, and the agreement
inclosod
letter totherewith, mentioned in the above
Er. Wood, read as follows:
:
,e
irituck37e
1
,(
h
ii
oil
hoetrasltReserve
Of
Board has considered the applicaliational
Bank of Louisville', Louisville,
-)enerEti
.ere
er referred to as the Applicant),
for a
the R,,
T111E: Permit
Under the provisions of section 51144
entitii4-"-Lsed
Statutes of the United States, as amended,
(/°11troisi" the 4
Pplicant to vote the stock which it owns
. or., ,
Of it3
subsidiary member banks, and hereby authorizes
3754
12/8/34
-11-Hth .
j_e issuance
of such a permit authorizing the Applicanl to
17•0(.e the
stock of 'Kentucky Title Trust Company;
Louisville,
ntucky, 'The
First I:ational Lank of iTicholasville',
cholasville, Kentucky, 'Dadison-Southern
,
11s't Company of
Richmond', Richmond, Kentucky, and 'Boyle
and Trust
Company',
Danville, Kentucky, upon the follcw4.ng r co
nditions:
1.
Prior to the issuance
of the general voting permit
authorized herein, the Applicant shall execute and
deliver to the Federal Reserve Agent
at the Federal
Reserve isank of St. Louis (hereinafter
referred to
as the Federal
Reserve Agent) three copies of the
inclosed
agreement marked Exhibit 2, and the TRUSTEES
UnDER TRUST
AGRE-5.
REFEREIXE TC, STOCK OF THE
FIRST NATICIIAL BAIIK OF
LOUISVILLE, KELTUCKY, LD
OIRER C
ORPORATICI;S, DA5ED JULY 1, 1925 (hereinafter
r
eferred to as the Trust) shall
execute and deliver
to the
Federal Reserve Agent three copies of the
agreement marked Exhibit 1,
forwarded to the Trust,
in
a letter
It
bearing the same date as this letter.
2.
Prior to the
issuance of the general voting permit
authorized herein, the Applicant
shall deliver to
the
Federal Reserve Agent three
copies
of the Request for
Amendment marked Exhibit 4, inclosed heroexecuted by Ralph C. Gifford, President, or
A
t ii. Lanni Vice-President, on
behalf of the
Ppliz:;v:nd
the Trust shall deliver to the Federal
Agent three copies of the Request for
1.tailendmsnt marked Exhibit
3, forwarded to the Trust
111 a letter
bearing the sane date as this letter,
(Touted by Ralph
C. Gifford, Chairman, or Ernest S.
4rke, ViceChairman, on behalf of the Trust.
rarir to
the issuance of the
general voting permit
Butn10r1zed herein, the
Trust
and
The First I;ational
1rel of
Louisville shall, and shall cause each of
(3,,r
subsidiary banks to, charge off or
otherwise
J-lianate
done 30; from their assets, if they have not
already
4
(a)
(b)
All estimated
losses in loans and discounts,
A11
depreciation in stocks and defaulted
se
curities,
(c)
All
depreciatdon in securities not of the
four highest
grades as classified by a
recognized investment service
organization
regularly engaged in the business
of rating
or
(d) All ;.,rading securities,
other losses,
as chow?).
by the
reports of examinations of such holding
3755
1)
12/8/34
-12"company affiliates and banks as of February 10,
1934, made by examiners for the Federal Reserve Bank
of St. Louis and by national bank examiners, or as
shown by the latest available reports of examinatiLns
by the appropriate supervisory authorities.
"4. Prior
to the issuance of the general voting permit
authorized herein, the Trust shall cause:
(a) Kentucky Title Trust Company, if it has not
already done so, to dispose of all of its
holdings of the capital stock of the Kentucky Title Company;
(b) Kentucky Title Trust Company, if it has not
already done so, to eliminate from its assets all loans, advances, and extensions
of credit to the Lightfoot Land Company
aggregating 3319,116.71, including the
mortgages aggregating ,„117,487.16 against
properties deeded to the Lightfoot Land
Company subject to such mortgages, as
shun on page 4ZZZ of the report of examination as of February 10, 1934, or to
show the loans, advances, or extensions of
credit to the Lightfoot Land Company aggregating v 319,416.71, including the aforesaid mortgages aggregating $117,487.16, in
its published statements under the caption
'Other Real Estate' or 'Advances to Affiliated Real Estate Holding Company' or some
similar caption;
(c) The FirA hational
Bank of Louisville, if it
has not already done so, to eliminate from
its assets all loans, advances, or e:-.tensions
of credit to Lightfoot Land Company, or to
show such loans, advances, or extensions of
credit, in its published statements under
the caption 'Other Real Estate' or 'Advances
to Affiliated Real Estate Holding Company'
b.or some similar caption.
?N.
°r to the issuance
of the general voting permit
authorized herein, the Applicant shall, and shall
caus° each of its subsidiary banks to, charge off or
(1/erwise eliminate from its assets an amount suf.1cient to
reduce the investment of each such bank
°ther
estate, banking house and furniture and
81x-tures real
4_ _
L'u an amount -which shall not exceed the reaP
llective current appraised values thereof as sho-ai by
Acelall
j
sraisal satisfactory to the Federal Reserve
3756
12/8/34
-13ihe period within which a
voting permit may be obtained
bY compliance with
the above conditions is limited to four
montas from
the date of this letter, unless application for
an extension
of time is made to and granted by the Federal
),
L,serve Board.
"In
connection with the elimination of depreciation in
”curities required
under condition number 3, such eliminalcn, in the
case of readily marketable securities, may be
a”
.ed upon
current market values of such securities. In
07:'ermining the amount
of depreciation in securities to be
0 lminated under
the above conditions, the amount of net ap4reci
4;
dedueZzcen in
securities of the first four grad -s may be
tf
is felt that
particular attention should be given
he Jacobson
concentration in the Kentucky
of
Trustepomaly,
which has been repeatedly criticized in reports
L
e anlin9"tion. Direct loans of that
bank to L. Jacobson (..c
t7
r3, members of
the Jacobson family, and their interests,
aPproximately
1,324,000 on February 10, 1934, and
tieot loans
aggregated ,)227,000. The examiner reported
as being in excess of
the bank's legal limit.
A1thoug re
Cent
presentatives of the Applicant stated during rethat conferences with members of the Board and its
staf.,
toe'tIthese lines do
not
represent
concentration
of
credit
ual "el Jacobson
interests but represent a number of indvid:
tiorta-nd seParate
lines of credit adequately secured by first
',
on real
esta-L,e, it appears from the report of 0X
as of
represo
February 10, 1934, that certain large amounts
of th
to corporations which appear to be
interests
dir e vacobson
family and Llat oer
other amounts apparently arc
jaccT,
obligations of L. Jacobson ,:: Sons and members of the
lirle:33°n family.
The Board feels, therefore, that these
credite°1-ictitute an undue
and unwarranted concentration of
Title Tarising from a
sincrle source and that the Kentucky
,
tiaa 8.Thr
,
ust Corapany should reduce the
total
line
in
subs-canPeciali-tults. In
addi-,:ion, other concentrations, loans esaeets
mentioned, past due loans, and slow and
bezka
doubtful
the Kentuck y
Title Trust Company and in other
"At!
he gr°uP, should receive particular attention.
by the
I, O
time the voting
Permit applications mere filed
13411Y, D rus and by the
Applicant,
Boyle Dank and Trust, UomShip
iii
'
'
,entucky, had not been admitted to memberFederal Reserve System and
therefore was not
b arlica !
-11 Exhibit A
kalsked
which lists the subsidiary member
t,he
ibitaPPlicant. The inclosed Request for Lmendment
tli4licat.zh
4 will bring
Exhibit A of the voting permit
c'Xit. 1°11 int0
conformity with the facts as they now
It
tO t
3757
12/8/34
-14%hen the inclosed agreement marked Exhibit 2 and the
for Amendment marked Exhibit 4 have been executed by
the
he APPlicant, please forward 3 executed copie
s of each of
such exhibits to
the Federal Reserve Agent at the Federal Reerve Bank of St. Louis, and advise him of the actio
n taken
° comply with the other conditions stated herein. -Cihen
Such Feder
al Reserve Agent Is satisfied that all of the condition have
0
been complied with, he will advise the Board
the. action
taken in this matter, and, when all of such
nlitlons have been compl
ied with, the Board will issue a
v"ing permit
to the Applicant."
Z
"AGREEMENT
In consi
deration of the granting by the Federal ReBoard, under authority of section 5144 of the Revisdt
atutes
of the United States, as amended, and pursu
an
ant to
BoaaPPlication heretofore filed with
the Federal Reserve
the Undersigne
d, of a voting permit entitling the
gned to vote, for all purpo
ses, each share of stock
s.li°Y
it 0Tins or controls of its subsidiary membe
the
r banks,
fo11ows:
dersigned hereby represents, undertakes and agrees as
"1.
That the undersTn
ed will maintain, and will cause
each of its
subsidiary banks to maintain, an amount
of Paid-up and unimpaired capital and unimpaired
surplus which, in the judgment of the Federal Reser
ve
Board, will be adequ
ate in relation to its total deposit liabi
lities, having due regard to the general
Principle that a bank's capital and surplus ordint1rilY should not be less than one-tenth of the
average
amount of its aggregate deposit liabilities
circumstances, should be more than onene.n:Lhino.f3:r1
11
2.
That the
undersigned will not invest, and will take
all
necessary action within its power to prevent any
of its
subsidiary banks and any other banks with
Which the
undersirned or any of its subsidiaries is
affiliated from investing, trust funds held
by it
or them
in Capital stock, bonds, debentures or other
obli
--gations issued or guaranteed by
the undersigned
4_1
: any of its subsidiari
es or any other organiza'ons with which
the undersigned or any of its sub!
ldiarios is affiliated
)
tip the
undersigned will not make, and will take
001 necessary action withi
n its power to prevent any
subsidiaries and any other organizations with
walch the
undersigned or any of its subsidiaries is
4friliated from
mal-lng, any loans or extensions of
serve
Zih
Z
3758
-15"credit to, or purchases of securities under repurchase agreements from, the undersigned or any of its
subsidiaries or any other organizations with -which
tne undersigned or any of its subsidiaries is affiliated, or any investments in, or advances a:,ainst,
securities of the undersigned or any of its subsidiaries or any other organizations with which the
undersigned or any of its subsidiaries is affiliated,
except within the same limitations and subject to the
sumo conditions and provisions as are applicable
Under section 23A of the Federal Reserve Act to such
transactions
involving member banks and their affiliates; except that this paragraph shall not apply to
loans or extensions of credit by any organization
to its own
subsidiaries, or the Purchase of securities under repurchase agreements by any organization
frem its own
subsidiaries, or the investment by any
or
ganization in the securities of its oven subsidiaries, where such transactions would not otherwise
b?
subject to the limitations, conditions and provi'
10ns of section 23A of the Federal Reserve Act.
r •
"is agreement is executed in triplicate."
The three letters quoted above
were approved.
14
connection with the above letters, consideration was
*)ilre" t° 4 niernor
andum dated hovember 22, 1934, from Lir. Owens,
441.1itellt
counsel, setting forth
the reasons for including paranumbered 1
and 3 in the agreements
referred to above.
Tel
ZraM to 1.1r.
Peyton, Federal Reserve Agent at the
Reserve Bank
f Linneapolis, stating that the Board has
Zilicri
CrEtplas
consideration to the
application of the "Minnesota 1:ational
co
rPoratiorlit,
Duluth,
for a voting permit under the
4141;110rity of
zection
StEite
5144 of
the Revised Statutes of the United
Lannesota'
ejIle4ded, e
ntitling such organization to vote the stock
O
controls
hational hank
1/411th",
Luluth,
and has authorized the issuance of a
Llinnes°tai:
"Yfle
Linnes°ta
villich it
or
3759
12/8/34
-16liraited
Pernit to the a)plicant, subject to the following
conditions:
"Prior to the issuance of the limited voting 2ermit authorized herein,
"(1) the Federal Reserve Agent shall satisfy himself
that each of
the subsidiary banks of the applicant has
charged off or otherwise
eliminated, (a) all losses in
1°ans and
discounts, (b) all depreciation in stocks and
defaulted
n?t of thesecurities, (c) all depreciation in securities
four highest grades as classified by a recog/.11zed
investment service organization regularly engaged
in the
business of rating or grading securities and (d)
all other
losses; as shown by the latest available reports
.°J examinations
by the appropriate supervisory authories, except that the
charge-offs and eliminations required by (
b) and (c) above may be based upon current
praisal of marketable
%s
securities satisfactory to the
deral Reserve
tit \
k2) the Federal Reserve Agent shall
satisfy himself
Agent;h"
the
aPplicant has substantially performed any agreeT?llt or
agreements heretofore executed by it as a condi:u2a
c:a0;f a limited voting permit by the
e
Co, (3) the Federal Reserve Agent and the Executive
mittee of the Federal
reserve bank shall approve the
Ilan
"of such permit."
for
1:4r
ctrld
the f
011olving
purposes:
/rleeti"(1) T0 elect
directors of such bank at the annua1
,
Tnc of shareholders,
or
at
any
adjournments
thereof,
at
zia;h -1:141e prior
to April 1, 1935, and to act thereat
upon
Upoll 144tters of a
routine nature as are ordinarily acted
the annual neetin;s
of such bank.
(2) At
4 re
At any time prior
to April 1, 1935, to authorize
11. in the
an
common moital stock of such bank,
and to
b anl:
kniondments to
the articles of association
such
tiorla li
ssarY to give
effect
to
such
change
in
capitalizaith
4. .?f which
the
shall be substantially in accordance of
the r
Plan s ubmitted
by the bank to the Comptroller
he tel -11rrelleY under date of i;ovember 8,
1934."
erEtt,
41so
stated that since the information
,1011
submitted in
tl
Of h
.khe
1 the
aPplication for the
reduction in the capital
11110s°ta 4tional
Bank of Duluth, Linnesota, indicates
is
°P°2ed to liquidate
the Linnesota i:ational Corporation
3760
12/8/34
-174t
earlY
date, the agent is requested to advise the Board when
the Corp
oration has been liquidated and furnish information for
the 8c/ard'8 files as to
the manner of accomplishment of such
'
1°11. The telegram also
authorized the agent to have prePkrecl bY counsel
for the Federal reserve bank, and to issue to the
kialzieota
National Corporation, a limited voting permit in accordalic.. .
vath the
telegram when the conditions prescribed therein
halm
beell comPlied with.
Approved, together with a letter to Mr.
vsTm sr
a
omptroller of the Currency, reading
In
Reserve accordance with your recommendation, the Federal
Board
/Tek of 'The approves a reduction in the common capita
Minnesota National Bank of Duluth', Duluth:
2nasota, from
s$600,000 to $400,000, pursuant to a plan
Cr Provides that 0.00,000 of the released capital will
e
mi
edited to
surplus and/Or undivided profits and the re11C 1.00,000 "will be
distributed to the shareholders
hoi used to liquidate the Minnesota I:ational
Corporation, a
duzeliiXecm1Pany
affiliate, all as set forth in your mamorano.L u
ecember 4, 1934."
14eMor
andum dated
November 21, 1934, from Mr. DuBois, AsCounsel r
eferring to the Board's letter of June 6, 1934
(X..790
,
‘
I)
, to
the
governors of all Federal reserve banks requesting
etteh tov,
ciesire
::: to advise
the Board whether in his opinion it viould
vrota,
1 to
obtai.n an amendment to the
Federal Reserve Act
u
Qeilre
sPecifically authorize Federal reserve banks to
retc)r skfel-A
D141,_
'-eP4ng securities pledged by a
member bank to secure
4,
1 0 4 ''clIte3 and
stating that replies to the Board's inquiry
c)17 been
received from all of
the Federal reserve bm-114-s, and
3761
12/8/34
-18that the
pr
eponderance of opinion expressed is that such an amendZett i$
not
desirable. The memorandum reviewed briefly the replies
received from
the Federal reserve banks, and stated that,
in view
(If such replies, it is believed that the Board
is justified in
takiq 110 further
action in the matter at the present time.
It was decided that no action
would be taken on the matter at
this time.
Lielnorand
um dated November 30, 1934,
from Yr. Smead, Chief
ct the
Division.
of Bank Operations,
submitting a copy of form 105,
ccildition
report of State
member banks; recoending
mm
that the two
chttlagee
indicated thereon be
incorporated in the form to be used
at
the
time of
the next call
for condition reports; and stating
that the
addition of the
new item "Federal Intermediate Credit
44.4"
Sc
hedule G has
been made at the suggestion of the Farm
Cl*eclit
artalkiat Mrairlistration, which is desirous of obtaining data on the
cr
such
e
1411114.4
04
obligati
held by member banks; that the proposed
of the
vircrds "or with recourse to this
bank" in item
Schedule
has been
suggested in order to avoid confusion bet'lle
1 °f
"rediscounts", as shown
against that item, and "Acceptances
ether
banks and
bills of exchange or
kellt Ot
drafts sold with endorsethis
bank" as
shown against Liability item 24;
and that it
11/Iderstood
that the
it /no_
office of the Comptroller of the
Currency
8
414.1 ar
changes in the form
tl°114).
of report to be used by naThe
memorandum stated also that the Board has
qtlested b_
been
4' the
Farm Credit
Admini
tion to obtain a separate
°f
3762
12/8/34
-19Covering farm loans as of the next call date, and by the
'Federal H
°usi447 Ldministration to obtain a schedule on urban real
estate 1°44s; that it is understood that
the office of the Comptroller of
the Currency
and the Federal Deposit Insurance Corporah0
agreed to obtain such
schedules; and that it is recantthat the
Board also acquiesce in the requests of the Farm
Credit
4aIr1nistretion and the Federal Housing Administration. The
recorzlendation.8 were
approved by five members of the Board on De°ember 7, 1934,
Approved.
Letter dated
December 7, 1934, approved by five members of
th Boar
d to Ix.
'
Chester L. Bennett, Belmar, New Jersey,
reading
48 l'°1101,Ts.
he Co
ter
mptroller of the Currency has referred ycur letof
IZeser September 14,
1934, and inclosure, to the Iederal
;Te Board
for reply.
1:
)u advised
:
a ates
that you are the heir of one of the trust
%
b
el-No administered by the Fidelity
Union TrustCoT_
tutf;
) Ilevrark, New
Jersey,
and
you
complained
that this ins
CllaralLhas improperly
invested trust funds of the estate in
Codmortgage certificates of the Fidelity Union
t.
Title
lnstu_
tio4. Cage
Company, also of I:ewark, an affiliated
which ,ou
requested advice as to the proper authority
You dfur
complaint should be made, and it is assumed that
iirc advice
as to your rights in the premises.
Federall Fidelity
Union Trust Company is a member of thera
l
edeserve
System, and under
characzacrve
der the provisions of the
Act the
Board performs duties of a supervisory
tru el
;with respect
to that institution and other banks
4-.Yzte)11-'",°°14Panies which are members of the
Federal Reserve
avria
41°wevor, it is not
within
the
scope
of the Board's
i4 corlai
:
ulletiorls to
°Ile of r!'icri with advise as to the rights of the parties
it
transactions between a member bank and
8
e41140t customers, and the hoard regrets, therefore,
that
undertake to advise you
as to your rights in this
j
3763
12/8/34
-200
matter. Az you
know, the Fidelity Union Trust Company is
cl:lartered under the
laws of the State of New Jersey, and, in
ew of
the at this fact, the Board is having your letter brought to
tention of the Commissioner of
the Department of Bankid I
nsurance of that State for his information and
such
alspcIition as he deems
advisable.
You have
Of
suggested that the provisions of section 11(k)
4_ the Federal
Reserve Act are applicable to the circumstances
t
-its
417°111" in your case. However, your
attention is called to
fact that
section 11(k) of the Federal Reserve Act by
ter
4
applicable only to the loaning of trust funds by
bank to its directors, officers or
employees and
ill -rd
aPplicable to any such transactions
involving
State
_
ctitutions which are
members of the Federal Reserve System."
n
Dec 4Pproved, together with a letter, also dated
ember 7:
:L.Iii:e Board, 1934, and approved by five members of
to L. Case, Federal Reserve
Agent at
'fie Federal
Reserve Bank of New York, reading as
follows:
0
”There
Bela letter,is inclosed herewith for your in
inclformation atzopy
with
inclosure, which Kr. Chester L. Benne
rell tr$ New Jersey,c
_
addressed to the Comptroller of the ur
tr itl under
date of
the
has referred September 14, 1934, and which the Compto the Board, together with a copy of
self
attel;-explanatory reply of this office
thereto. Your d
Ofis called to
the fact that the Board has
P .1_ 'lett
-- Ole co .that his
letter will be brought to the =ion
(Ince of
mmissioner of the Department of
Banking and Insurquested the State of New Jersey
si
and you are accordingly reorwt. 0 bring
that letter to the
attention of the Commisoi!Or such d
isposition as he deems advisable. Trust
Colaparl " has
been observed
exelzillY,
that the Fidelity Union
1 ,t
referred to in
the
inclosed
correspondence,
vs
last
t
°4 January 22,
1934. It is accordingly requested
::zaiT.11:::ut::v:xnot.
already done so, you arrange for another
alldre—
'
34 of this
trust company at your early convenience
Iderat.the time of ner for the Federal Reserve Bank of L
New
such ex s'nation to give
the
l°n to any
particular
contransactions
I tiolv, th"ed
of the kind referred to in
corre
t
spondence. In this connection, as you
4,Unds bire Board
di
sapproves of the investment of trust
`'elbss 0 ,
bank in
ttio .10ere
mebrPo
obligations of the bank's direcor e
mployees or their affiliations or corDraet• Ile
affiliated
l s to
'
Dr
with the bnrk, and it is the
Board's
'
-es°ribe for trust
companies and banks exercising
3764
12/8/34
-21-
rust powers
applying for admission to membership in the
Federal Reserve System the following
condition, among others:
'Such bank shall not, after the date of its
admission to
membership, invest trust funds held by it in obligaticnz
of the bank's
directors, officers, employees or their affiliations
or corporations affiliated with the bnrir.'
"a
Ihe investment by a banking institution of funds it
1.01d5 in trust
in assets of the bank or its affiliated interests c
onstitutes self dealing which violates the fundaental principles of
trusteeship and may result in the bank
xe!,
1!ring heavy liabilities. In this connection, the stateprinciples of trust institutions which was incorporated
comaZtlierkers Code of Fair Competition has the following
'It is a
fundamental principle that a trustee should not
anY personal financial interest, direct or indirect,
411 the
trust
of which it investments, bought for or sold to the trusts
.& itself is trustee, and that it should not purchase
any securities or other property from any of
?s trusts.
Accordingly, it follows that a trust institu2:°11 should not buy for or sell to
its estates or trusts
:?-Y securities
or other property in which it, or its afiliate, has any
personal financial interest, and should
fnot
or purchase for itself, or its affiliate, any securities
Property from its estates or trusts.'
It
brj
Zea4?cluested, if you have not already done so, to
the
th.
:::ai
nn
y,this matter to the attention of
t 0 0d1ity lijj
,i
I iirust Company and, after the next examinaadvise the Board what correction
vhi:)111114de of any practices of the kind referred to above
IllaY have been
heretofore followed by the trust company.
Letter
%
to Ars Case,
Federal Reserve Agent at the Federal
.erve z
L
sid.
eitt
44k of New York,
statin- that the Board has given conto
the followinpapplication for a permit under the
lt,
:
011 4"
'eald that,
upon the basis of the information before
lietirs in the
ent's opinion that the issuance of the
Plated.
for would
permitl_
bgincompatible with the
public interest. The
"
So
requested the agent to
communicate to the applicant
tile Board'
Protiptiy a Position in the
matter, and to advise the Board
8 to
whether the applicant
desires to submit any
3765
12/E/
1
44
-22ad
al data,
dition'
and, if net, as to what steps he proposes to take
41 order to
comply with the provisions of the Clayton Act:
Xr.
Charles E. Hulbert, for permission to serve at the sarB
tlIne as a director and
officer of The First National Bank
Domnsville, Downsville, New York, as a director and.of.??I' of The First
National Bank and Trust Company of Walton,
"L°11, New York, and as a director and officer of
The First
ational Bank in
Sidney, Sidney, New York.
4
Approved.
Re8erve
Letter to Lr.
Case, Federal Reserve Agent at the Federal
Bank of New
York, reading as follows:
"There are
ri
inclosed the original and copies of a Clayto_
y
Permit granted to Mr. William H. Peters,
icsrk, to
Roscoe, iiew
serve at the same time as director and
officer of
yhs
Livingston hanor National
Bank, Livingston Manor, New
Rork, The
First National Bank & Trust Company of
Roscoe,
York, and Sullivan County Trust Company, Montiliew York,
for transmittal by you to Mr. Peters and
e lnks, and a
copy for your files.
40t
In co
nsidering the application of Er. Peters, it was
theell.tha.t his borrowings
and those of his interests from
erijll'ingston Ianor and
Roscoe banks were subjected to
froml
!
ism by the ex 'ners
of those two institutions, but
nton furnished by you it appears that his
t
indebdi 46t.T
/.0)Z
vingzton Manor.11
bank
has
since
been
paid
.
1
d
the
suased
collateral placed with the Roscoe bank as additional
110?ort for
his loans in that
institution. However, it does
the IPPear that any
action
has
been taken with respect
to
endorsement
or th°an of the
applicant's brother, bearing his
saia .Eti loan
o4 Bennett-Davis, Inc.,
in which the applicant is
100,48 ° be i
nterested, at the Roscoe bank. Both of these
orre severely
criticized by the examiner.
tion th4 Fanting this permit
the Board took into consideraletter e
4nformation
and
recommendations
submitted with your
vhiehi?f
October 29, 1934,
concerning the application in
of kr.-; is
indicated that an improvement in the condition
s
ill
Peter,tloans has been effected, that his assistance
deairttjanagement of the
Livingston Manor bank is considered
at thie
'
s.bY the
controlling
interests of that institution
ilrl
attme, and that
after
a review of all of the factors
41. this
case you now recommend that the permit be
3766
-23"In view,
however, of the past history of Lr. Peters'
b?rrovings from The Livingston idanor National Bank
and The
First
Rational Benk & Trust Company of Roscoe, and the fact
criticisms in connection therouith have not been
, the Board has granted the permit only for
the
period ending
December
31,
1935.
When
the
permit
is
sent
the
applicant it is suggested that you call his attention
1,! the limited status of
the permit and advise him that if
desires
date.the B to continue his services with the banks after that
!
oard mill give consideration to a new application
EI:zbmltted in
accordance with the Beard's Regulation L proded it is
acconoanied by full information with respect to
subsequent improvement in the condition and management_
,,,,th!.
1banks involved nrd as to the nature
and extent of tne
011 has been made of
the credit facilities of the
51114'
13
:
1 applicant, his family and interests and a
showapplicant's service to the banks involved would
au be Incompatible with
the public interest. It is also
etpasted that you
keep in touch with this situation and
in
aUt:")r
tie orities cooperation with the appropriate supervisory
to effect such further
corrections in the condicriZ and
management of the banks involved and those matters
icized by the
ex 'ner as appear necessary or desirable."
L
n
Approved.
Letter 4_
vo itir.
Case, Federal Reserve Agent at the Federal
f New York,
reading as follows:
ict
Th?re arO
inclosed the original and copies of a Clayton
to Permit
granted to Lr. George I. Treyz, Roscoe, 1:ew York,
Piorriet11:4:11:eliinn
e time as director and officer of The
O
Trust Company of Roscoe, Roscoe,,_Lew
tionoas director
and officer of The Livingston L:anor 140.- f
The-; Bank, L
or, New York, and as director of
New
Nat ivingston
New
Bank
and
Trust Company of Walton, Walton,
bslike
'ylrct°rk, for t
ransmittal by you to the applicant and the
ni.414 a Copy
for your files.
ticla
granting this permit the
Board took into consideralArti;er e
information and reconmendation contained
of
in your
applicant,
serviA
October
4;Te with the 29, 1934, with respect to the
b -s involved. It was
the
ter
noted that you did
T,:,!Your
to 11
7
e'Lait be origjflal reco endatien to the effect that
denied with respect to the applicant's
11r. Tr ''irst
services
National Bank and Trust Company of Walton, as
4sctioeYz had
advised
you that he expected to sever his cont
that
bank after January 1, 1935. However, in
3767
12/8/34
-24order to avoid any unnecessary embarrassment to ix. Ireyz
`'Ild to prevent any misunderstanding in the commnities which
Cht prove detrimental to the best interests of the 1,:nks
1/.11/01ved, the Board has granted the permit to cover iis servicesitto the three banks.
.
Since the permit has boon granted with the understandon the part of
the Board that Mr. rireyz intends to sever
cls re
lationships with The First National tank a-d Trust
tranY o
alton, please advise the Board as to action
ss;:
,
11 BY Jr. Treyz in connection with the severance of his
sh '''es to that bank after the next annual meeting of the
_areholders in order that the Board's records may be coml
pete
in this
case."
Approved.
Letter to Mr.
Fletcher, Assistant Federal Reserve Agent at
ederal
Reserve Bank of Cleveland, inclosing the following
ClEtt°11 4et
permit for transmittal to the applicant, and requestilk; that th
agent review the case on July 1, 1935, and report in
cleteil as to
the progress
made by the applicant, his family, and
th
eir
interests, in
bEttka,
eliminatin their lines of credit from the
the
p
arid 48 to the method by
-daich such eliminations have been
si‘f°eted, and
that at the same
time the agent submit his recom/nerldati
°h as to
whether, in his opinion, consideration should be
to t
-he re
vocation of the permitt
c
14r,
Lamberton, for Permission to serve, at the s_r
time
i
110.director and
officer
of
Lamberton
The
Lational
d
of
Ji
0f4,1
O
Franklin, Pennsylvania, as a director at7uon, pi
e
ce:
h02irst 1;ational Bank
of Cochranton, Cochranton,
or
CleZ%,ac
t:
lt
Er la
antr= of the Federal Reserve
Approved.
etter t
ekt
0 fir.
Fletcher, Assistant Federal Reserve Agent
t40 ecier
41
serve Bank of
Cleveland, reading as follovm:
3768
12/8/34
-25"here are inclosed the original and copies of a C_;layton
Act Permit granted to D:r. Robert Lamberton, Franklin, .,?nnsYlvania, to serve at the same time as director and officer
or The
Lamberton 1.;ational Bank of Franklin, Franklin, and as
d
irector and officer
of The First National Dank of CochranCochranton, both of Pennsylvania, for transmittal by
Y°11 to the
applicant and the banks, and a copy for your
riles,
"In the
consideration of this ajplication it was noted
Lamberton, as vice president and director of these
4114's for many
years, undoubtedly shares responsibility for
Ie large c
oncentration of loans made by these banks to the
,
allberten family and their interests and for the
indicated
of the
banks' credit facilities for speculation in sec
les, all as
more fully set forth in the Board's letter to
,:
r 4
1 c°1
,
1_cerning the Clayton Act application of 1r. hess
Although the applicant and 1„r. Chess Lamberton
ti arentlY share
responsibility for the above stated condi1,1:
11s, it ms
s noted that the
obligations of the applicant
1, Z
) mor
severely criticized than were those of Er. Chess
in17.0.7t°11, and that
apparently the former is more financially
-Lved than
the latter.
per,4,4 stated in its letter relative to the Clayton Act
th.0"L, granted
to Er. Chess Lamberton, the Board feels that
41siticized
concentration of loans to the Lamberton
14
7
Z
1
and 4-1
-aeir inter)sts and the apparent undue use of the
vhoil credit
facilities for speculation in securities are
the 20r.
unwarrante d and represent conditions
of a kind which
arid itlyr°ss intended
to correct by the Banking Act of 1933;
been very reluctant to grant a
permit in this
thathas given
consideration,
to your su:geshowever,
a limited
order i_
peTrait be granted to the applicant in
-° "Did auy unnecessary misunderstanding in the
111141ities
com:
whic h or the bailie,
prove
detrimental
to
the
best
interests
40,
has granted a permit to continue in
„Irever,
effect,
Lrle pe,:,( -Y until
the close of December 31, 1934. Lhen
cE111 :"
411
ls sent to
the applicant it is
vi ys-Ls att
that you
on to the
him
limited
status
of
the
permit
suggestedand
that
tha
entit it has
been granted with
th the expectation
illto_ co
-, sex'
pration, he will bring his relationships
^b,,,,ZZtKi%Irti71-11.:eprovisions
the Clayton Act by
as
officer
and
director of one of
*
8 involved.
"e advise
h.es t
the applicant that, in the event 14 0.submit
1ed777.,
further facts or arguments in connection
e°nzicti,e_Iltien, the loard
will be glad to give them careful
be
ilowever,
any
additional facts or arguments
e submitted
to you on or
before December 20, 1.do
Z2
i
t
3769
12/8/34
-26. "Please keep the Board informed of the action taken in
this matter."
Approved.
Letter dated December 7, 1934, approved by five members of
the
8131
Board, to L.
Newton, Federal Reserve Agent at the Federal ReBank of
Atlanta, reading as follows;
.
"There are inclosed the original and copies of Clayton
teit Permits
granted to the following individuals to serve
Bp:lots:V:1d in the capacities indicated in their reAlfred I. du Pont
F. C. Schwalbe
Henry W. Dew
William Hardin Goodman
B. S. Weathers
Willard Hamilton
W. A. Macduff
George J. Avent.
-Ln the
consideration of these applications it was
from the
report of ex 'nation of The Florida National
Qr Jacksonville as
of June 11, 1934, that the stock cerc
ates ef such bank evidence by endorsement thereon
and
capitali
:J a pro rata
beneficial interest in the $15,000
pilr
, ef the
uti1011
Florida National Company (organized for the
Pose
er holding
certain assets of The Florida National
aii °t Jac
ksonville) apparently in violation of Section
18 .pc)f United States Revised Statutes as
mended by Section
tio°-,the
Banking Act of 1933. While it is understood sett i .Ls being
taken to comply with this provision of the law
19346 lifted that the
ex "nor in his report as of June 11,
Bteb.. expressed
the opinion that as yet the proper legal
autil" 4ad not
been taken but that the stockholders would
statTle the steps
necessary to effect compliance with the
for .w4 uPca
receipt of a general voting permit, application
qtleat.;ch has been
made. In the circumstances, you are recopiee 'withhold
delivery of the inclosed permits and
proper wlereof
until you have satisfied yourself that a,
11111ted nliance with the
provisions of Section 5139
110 Bani,
-;
'
a es Revised Statutes as amended by
Section 18 of
You ar -411g Act of
1933 has been effected, at which time
44d
eoe.authorited to release the permits to the applicants
thereof to the banks involved.
?lease
advise the Board of your action in this matter
toted
t!1T
12/8/34
3770
-27-
11
and as to
the disposition of the permits.
'lin considering the application of Mr. du Pont, it was
noted that he
failed to attend any of the twenty-three meeti5
held by the directors of The Florida National Bank of
ksonville durinr, the past two years and also failed to
(1"
4end any of the seventeen meetings held by the directors
01 The
Florida National Bank and Trust Company at Miami
-g the same period.
It has also been noted that during
he past
two years the record of attendance of Liessrs.
chwalbe, Dew, Goodman,
Weathers and Hamilton at directors'
meetings
Some
of
the
banks served by them has been unsatisfact°
01
12y.
ez:atiuln e
ranting these permits, the Board took into considapparent fact that Kr. du Pont is a man of conde;21 i
in the communities served by the bas,
that
enat his financial responsibility
and broad business experi4..
"are considered
to be of value to the banks and that his
yeunattendance at directors' meetings during the past Lvio
hiara has been
occasioned by his recent serious illness and
s in il
abity to he;
hear; that Messrs. Dew', Goodman and Hamilton
we
jreported
to keep in touch with the affairs of the berks
4
°Il
ived; and
that Messrs. Schwalbe, Dew, Goodman, 'Weathers
ton have expressed
record
an intention to improve their
oI
attendance at directors' meetings in the future.
bili+ Ile Board feels that when a person accepts the responsia sug of the
041 ficient office of director of a bank he should attend
number of directors' meetings to enable him not
prot'Ito keep 4
-n Personal contact with the bank and its
rectorl!' out also to
participate in his capacity as a diof ita 11 the determination at such meetings of the policies
char:i'_°ard, and that,
if he is not in a position to dis0044;Ids re
sponsibility in this regard, he should not
Uessrelle "a. director. ';Jhen the permits are
sent to
torl, it du
Pont, Schwalbe, Dew, GoodmaL, Weathers and Hamilviews 4 iS suggested that you inform them of the
Board's
besil ;
171 the
matter and advise them that the permits have
thed4ZZ::dant
eh the expectation that they will improve
at directors' meetings.
Ihe
tiola as
Board requests
that when you submit your recommendaZ.:eport
,
p!,result of
your annual review of these permits you
L)ew, Go;`
,14LY as to the
attendance of Messrs. du Pont, Schwalbe,
"4'1144,
Weathers and Hamilton at directors' meetings."
t
%
he
Approved.
C4A04
Aot
,
t,
Peruuts referred to in the above letter
4.ovir31
were as
3771
12/8/34
-2811r. Alfred I.
duPont, for permission to serve at the same
time as a director and officer of The Florida National Bank
of
andJacksonvillo, Jacksonville, Florida, and as a director
officer of The Florida National Bank and Trust Company
at Mi
Liani, Florida.
/Ir s F. C.
Schyalbe, for permission to serve at the sane time
8
;8 an
officer of The Florida National Bank of
Jacksonville,
;aeksenville, Florida, as a director and officer of the
Beach, Bank & Trust Company at Daytona Beach, Daytona
Florida, and as a director of The Florida National
'ank and Trust
Company at Miami, Miami, Florida.
ir
'Henry W.
Dew, for permission to serve at the sane time
a director
of The Florida National Bank of Jacksonville,
Taeksonville, Florida, as a
director of the Florida Bank &
arlIst C°211Pany at Daytona Beach, Daytona Beach, Florida,
and
1_8 a d
irector of The Florida National
Bank at St. Petersuurg$ St.
Petersburg,
Florida.
-**
H
sttme t. -ardin
Goodman, for permission to serve at the
Jaou
as an officer of The
Florida National Bank of
enville, J
Plcr%
acksonville,
Florida,
as a director of The
piorl-a 1;ational
Bank at St. Petersburg, St. Petersburg,
arid as!
Or
a director of the Florida Bank at Orlando,
lant:
rid
I4r. D.
as
Weathers, for permission to serve at the same time
40;carect
or
and officer of The Florida National
Bank of
0.1:nville, J
Of The acksonville, Florida, and as a director and
Florida National Bank and Trust Company at
bilami, Florida.
111111
'
a.me
-ard H milton,
for permission to serve at the same
ville, ja director of
The Florida National Bank of Jacksonor the pleksonville,
Florida, and as a director and officer
erida Bank at
Orlando, Orlando, Florida.
Ify
• A. ye.
"4 dir
eduff, for permission to
serve at the same time
tiackson
or of The
Florida National Bank of Jacksonville,
Title -.;;""-e, F
d Trustlorida, and as a director and officer of The
Company of Florida, Jacksonville, Florida.
1
2r. Geor,
qIne ae 6De J. Avant,
for permission to serve at the same
or 40
,a director and
officer of The Florida National Bank
the 4
3c!tville $
Jacksonville, Florida,
J4
and as a director of
eksonina
!
°11v
leille br
h of the Federal Reserve Bank of Atlanta,
$
l
I
3772
-29Letter dated December 7,
1934$ approved by five members of
the
Board, to Mr.
McAdams, Assistant Federal Reserve Agent at the
Psderal
Reserve Bank of Kansas City, reading
as follows:
uThere are inclosed the original and copies of
the Clayton Act
permits granted to Lessrs. T. B. Townsend, Jr., C. B.
H. J. Darrow and li. E. Callaway, to serve at the same
'
4xl0 as
directors and/or officers of The First National Bank
Of
Montrose, Montrose, Colorado, and The
First National Bank
of Olathe,
Olathe, Colorado, for transmittal by you to the
41)1)13-cants and the banks involved, and
copies for your files.
th„:tin the consideration of these
applications it was noted
140-: -che
report of ex 'nation of The First National Bank of
01,1"!°80 as of May
7, 1934, indicated that the certificates
in suock
of this bank
carry with them a pro rata ownership
yi .11E)
.
stock of the Selig
Investment Company, apparently in
lat::atic)n of Section 5139 of the
United States Revised Statt,as s
T?.:''
e to .mended. In your letter of October 16, 1934, relathis matter you
stated that you had been advised by
t5.1Pirst N
ational Bank of Montrose that steps were being
e
effect a compliance with the statute and that
receipt
upon
the 7
1 ' of definite
information that the relationship between
you alik and the Selig
Investment Company had been terminated:
WJ
advise the Board.
the LoAlthough this information has not as
yet been received,
questeArd has approved the applications; however, you are reyou ha;et.!
withhold delivery of the permits and copies until
seetio_
_Qtetermined that compliance with the provisions of
"le/Idelld,5h139 of the United States Revised Statutes, as
reloa
as been
effected, whereupon you are authorized to
the bashe Permits to
the applicants and copies thereof to
i
nvolved.
Inatter ea8e advise the
Board of the action taken in this
and as to the
disposition of the permits."
Thee,
Approved.
'
s aYton.A.o.4_
I,
tolioive
permits referred to in the
above letter were
T. B.
Lite as
Townsend,
llottro a director Jr.$ for permission to serve at the same
and officer of The First National Bank of
°r These,
Montrose,
Colorado, and as a director and officer
Pirst
National Bank of Olathe, Olathe, Colorado.
C. B
•
Akard
'for permission to serve at the same time as
3773
12/8/34
-30-
a director
and officer of The First National Bank of Montrose,
Montrose, Colorado, and as a director and officer of The First
national Bank of Olathe, Olathe, Colorado.
•"J.
Darrow, for permission to serve at the same time
7,.!
director and officer of The First National Bnillc of Olathe,
c;U
'athe,
Colorado, and
d as a director of The First National Bank
f
Montrose, Montrose, Colorado.
Ilr e N. ,
JJ. Callaway, for permission to serve at the Bare time
Its a director
and officer of The First National Bank of Mont?'s?,
Lontrose,
Colorado, and as a director of The First
mation 1
Bank of Olathe, Olathe, Colorado.
Letter dated
December 7, 1934, approved by five members of
the board
'to Mr. Walsh, Federal
Reserve Agent at the Federal Re4 /1'7e Bank of
Dallas, inclosing the following Clayton Act permit
ror tr
szsmittal to the
applicant; suggesting that, when the permit
is ee
nt to
the
aPplicant, the agent advise him that it has been
*144ted With the
expectation that he will attend regularly the diMeetings of the First rational Bank in Conroe, Texas; and
re
questiliz that
the
193
and
directors
41e4c14tions
agent
review the permit not later than June 1,
that he
report fully as to the applicant's attendance at
m
—estings when the agent submits his review and recom-
11r. II
ae a'W, Woodson,
Ivaco
for permission to serve at the same t:2
:me
director and
officer of The First National Bank ofdaco,
i
.director
of
the
First
ratio
nal
Bank
n
Ce11401,e)ectoto:
:
1 c1T:Xa:
Approved.
ot th
Nltin
Letters dated
December 7, 1934, approved by five members
Board,
to a
pplicants for permits under the Clayton Act, adOf
aPProval of their
applications as f'011OWS2
3774
12/8/3,1
-31-r.
:1;arle, for permission to serve at the same time as
lirector and officer of the Finance Company of
Pennsylvania,
t
lPF1i, Pennsylvania, and as a director of he Market
root
:ational Bank of Philadelphia, Philadelphia, Pennsylvania.
t
:
ir Ralph VI.
Hollenbeck, for permission to serve at the same
me as a director or The First National
Bank and Trust CornSpringfield, Springfield, Ohio, and
as a director and
"leer of The
First Morris Plan Industrial Bank, Springfield,
Ohio.
p
of
R. Chambers, for
permission to serve at the same time
director of
The
First
National Bank of Marion, Marion,
:orth C
arolina, and as a director of the Marion Industrial
4ank,
Larion, North Carolina.
"L. i:,organ, for
permission to serve at the same time
dlrector and
officer
of The First National Bank of,,,
f
'o'lt°11,
Larion, ITorth Carolina, and as a director
and o_l_ ccr
1110 1,Larion
Industrial Bank, Lorion, North Carolina.
za.reetrLeal, for permission to serve at the
sane time as
and officer of The
First National Bank of Marion,
duct°1
'
.1 Lorth Carolina,
and as a director of the 'Marion Inrl
°1k, Marion,
North Carolina.
Lr.
4 dir,
f YanceY, for permission to serve at the
same time as
Caroir'''
. °r of The First National Bank of Marion, Marion, North
triallta
'and as a
director and officer of the VArion Indus-, Larion,
North Carolina.
4 4 (1* -118"Loser,
for permission to serve at the same time
and aerector
l
of the Floyd County
Bank, NevrAlbany, Indiana,
417 Alta
director and officer of The *Union
National Bank of
any, i-ely
Albany,
Indiana.
11.1.
4LfietePh Gerald
Sellwood, for permission to serve at the
as a
T. --Lnnesota director of The First National Bmak of Ely,
Ito
as a director of the Commercial
State
Bank4110°Il
of
l, Linnesota,
and as a director of The City National
Duluth,
Duluth, Minnesota.
14r. A• j)4
,
414 Et.
n
roe, c.Lrect-o son, for
Permission to serve at the same time
and officer of the First
National Bank in Con:
13°4(1 S°11
131
1.0es Texas, as a
director
and
officer
of the Guaranty
or thet--e Lar-k,
Citizens Torball, Texas, and as a director and officer
State Bank, Hempstead, Texas.
Approved.
@FedFRASER