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498 A meeting of the Executive Committee of the Federal Reserve B°ard was held in Washington on Saturday, February 10, 1934, at 11:00 a.m. PRESENT: Mr. Mr. Mr. Mr. Hamlin, Chairman Executive Committee Hiller Thomas Szymczak Mr. Morrill, Secretary Mr. Carpenter, Assistant Secretary Mr. Bethea, Assistant Secretary The Committee considered and acted upon the following matters: Telegram, sent on February 9, 1934, with the approval of four ileillbers of the Board, to 1,:r. Newton, Chairman of the Federal Reserve Beak of Atlanta, replying to a telegram of the same date from Yr. Clark, SecrA+ -- varY of the Atlanta bank, stating that the board of directors of the 441k, at its meeting on that date, voted to establish a rediscount rate (4 3% on rediscounts of eligible paper for member banks and advances to Illexilber banks under the provisions of sections 13 and 13(a) of the Federal lieserve Act, as amended, effective the first business day following that °a which approved by the Federal Reserve Board, and a rate of 3% 04 Gr._ '.flterament securities under repurchase agreements; also, that, subject to the approval of the Federal Reserve Board, the directors had 4k1thor ized the executive committee to fix a rate of not less than 04( 48 c°Unts for individuals, partnerships and corporations under the Provisi 011s of section 13 of the Federal Reserve Act, as amended by the A " or wY 21, 1939, and a rate of not less than 4% on advances to ihdivia Uals, partnerships and corporations secured by direct obligations or the r , -"ted States under the provisions of section 13 of the Federal Ree " cl .6 Act, as amended by ,:ection 403 of the Act of March 9, 1933. The re stated that the Board approved for the Federal Reserve Bank (ift VicV34 el' Atlanta the redi3count rate of 3%, effective February 10, 1934, and the rate of 3;; on Government securities under repurchase agreements. The rep,_ -LY stated also that the Board will act on the rates fixed by the E'ectitive committee of the Federal Reserve Bank of Atlanta, under authoritY of the board of directors, on advances to individuals, partnerships Or e°rPorations under section 13 of the Federal Reserve Act upon receipt clf advice of action by the executive committee. Approved. Telegraphic reply, sent on February 9, 1934, with the approval or '-4ve members of the Board, to a telegram dated February 8 from Er. '"u-L, Secretary of the Federal Reserve Bank of New York, stating that the b°ard of directors of the bank, at its meeting on that date, voted to 0_, zablish, subject to review and determination of the Federal Reserve toariti a rate of 3 1/2/0 for all advances to individuals, partnerships and corpo . r"loAs on the promissory notes of such individuals, partnerships or eorl,()r ations secured by direct obligations of the United States under the 131 ' Qvisions of section 13 of the Federal Reserve Act, effective immediately. The reply stated that the :2 - oard approves for the New York bank the rate of 3 1/2;.; fixed by he directors, effective February 8, 1934. Approved. IA connection with the above there was presented a letter dated 17 8, 1934, from Mr. Sproul, jecretary of the Federal Reserve Bank or liew Y°rki stating that, other than the establishment of the rate of 3 1/207, Oh - advances to individuals, partnerships or corporations, no change 8 roade the balik.171 the schedule of rates of discount and purchase in effect at Without objection, noted with approval. 5f)0 2/10/34 -3Telegram dated February 9, 1934, from Mr. Strater, Secretary Of the Federal Reserve Bank of Cleveland, advising that, at a meeting et the board of directors on that date, no change was made in the bank's elisting schedule of rates of discount and purchase. Without objection, noted with approval. Memorandum dated February 5, 1934, from Mr. Paulger, Chief of the sion of Examinations, recommending that he be authorized to •tegotiate with Ur. Burton P. Allen for his employment by the Board as a 441%1 reserve examiner, with salary at a rate not to exceed Q5,000 per e4111411, effective as of the date upon which he enters upon the performance °t his duties. The recommendation was approved by five members of the Board on February 9, 1934. Approved. In connection with the above there was presented a second nlexa°1‘alidulll, dated February 9, 1934, from Mr. Paulger stating that he had ne gotiated with Mr. Allen for his employment as a Federal reserve ' 4er and that Mr. Allen had agreed to accept the position, with atIla rY at the rate of :7;5,000 per Annum, effective as of the date upon hieh he enters upon the performance of his duties. Mr. Allen was appointed an examiner for all purposes of the Federal Reserve Act, as amended, and of all other acts of Congress pertaining to examinations made by, for, or under the direction of the Federal Reserve Board, and was designated a Federal reserve examiner, with salary at the rate of 05,000 Per annum; all effective as of the date upon Which he enters upon the performance of his duties. 11.e°10rendum dated February 6, 1934, from Mr. Paulger, Chief of 501 2/10/54 -4- the Division of Examinations, recommending that he be authorized to aegotiate with Mr. Gerald M. Conkling for his employment by the Board "all assistant Federal reserve examiner, with salary at a rate not to 14 " led 4,500 per annum, effective as of the date upon which he enters UPon the performance of his duties. The recammendation was approved by five members of the Board on February 8, 1934. Approved. In connection with the above there was presented a second inelli(Iranclum/ dated February 8, 1934, from La% Paulger stating that he had Ile gotiated with Mr. Conkling for his employment as an assistant PeOsral reserve examiner and that I:4r. Conkling had agreed to accept the Position, with salary at the rate of 94,500 per annum, effective Eta Of the date upon which he enters upon the performance of his duties. Mr. uonkling was appointed an examiner for all purposes of the Federal Reserve Act, as amended, and of all other acts of Uongress pertaining to examinations made by, for, or under the direction of the Federal Reserve Board, and was designated an assistant Federal reserve examiner, with salary at the rate of ,)4,500 per annum; all effective as of the date upon which he enters upon the performance of his duties. Memorandum dated February 6, 1934, from Mr. Paulger, Chief of the 47181°11 of Examinations, recommending that he be authorized to 4egetiate with Mr. Mortimer B. Daniels for his employment by the Board 48 44 assiatant Federal reserve examiner, with salary at a rate not to 6O0 Per annum, effective as of the date upon which he enters stled 415c41 the bY five performance of his duties. The recommendation was approved Members of the Board on February 9/ 1934 ' Approved. 502 11 2/10/34 -5In connection with the above there was presented a second Illeni011aildulli, dated February 9, 1934, from Mr. Paulger stating that he had Ilegotiated with Mr. Daniels for his employment as an assistant PeclerEti reserve examiner and that Mr. Daniels had agreed to accept the Position, with salary at the rate of ;3,600 per annum, effective Eta or the date upon which he enters upon the performance of his duties. Mr. Daniels was appointed an examiner for all purposes of the Federal Reserve Act, as amended, and of all other acts of Congress pertaining to examinations made by, for, or under the direction of the Federal Reserve Board, and was designated an assistant Federal reserve examiner, with salary at the rate of c.3,600 per annum; all effective as of the date upon which he enters upon the performance of his duties. Memorandum dated February 6, 1934, from Mr. Paulger, Chief of the Division of Examinations, recommending the appointment of Miss 41//rx. 0- Newcome as a stenographer-clerk in the division, with salary Ett the rate of a,440 per annum, effective as of the date upon which Eihe enters upon the performance of her duties. The recommendation was 41)1'0Ved by five members of the Board on February 8, 1934. Approved. Meraorandum dated February 6, 1934, from Er. Goldenweiser, 134eat°11 of the Division of Research and Statistics, recommending the teip°11117 appointment for a period of three months, of Mrs. E. Louise G"(111" as a clerk in the division, with salary at the rate of ,J,440 13" 44411m, effective as of the date upon which she enters upon the 13"t"lalice or her duties. The recomendation was approved by four 1141bers of the Board on February 9, 1934. Approved. 503 2/10/3 -6Letter dated February 9, 1934, approved by five members of the Board, to Lr. Stevens, Federal Reserve Agent at the Federal Reserve 811111c er Chicago, reading as follows: "Receipt is acknowledged of your letter of January 18, 1934, inclosinG re-)orts of indebtedness of members of the staff of the Vederal reserve agent's department of the Federal Reserve bank of Chicago as of January 1, 1934. It is assumed that the information contained in the reports covering officers and employees in the auditing department of the bank is also being brought to the attention of your board of directors. "It is noted that no reduction has been made by Mr. B. K. Patterson in the indebtedness previously reported by him, and that C. L. Pitman reports, in addition to other indebtedness Previously reported in which a reduction of only ..:250 has been made, additional indebtedness in the amount of c:390 incurred since Uly 1, 1933, in connection with the purchase of an automobile, and :A00 owed to his mother since 1927. It is requested that you keeP the 'Board advised of the progress made by Messrs. Patterson and Pitman in the reduction of their indebtedness. "It is also noted that Er. Edward B. Ranck, an employee in Your statistical department, became a co-maker on December 28, 453, of a note given to the Personal Loan &Savings Bank, which ?eeame a member of the Federal Reserve System on November 17, J-933- While it appears from Er. Ranch's report that he did not feeeive the proceeds of this loan but that it was made for the enefit of a friend living outside of Chicago, the Board does not with favor upon a transaction of this character through which credit of an employee of a Federal reserve bank is used to Qetaih an advance from a member bank. "In this connection the Board's letter of April 29, 1933, stated that there should be a prompt report to the Federal 42' eserve Board of any indebtedness of the kind referred to in the et incurred by the agent or any me.aber of his staff after 31.14Y 1, 1933, and that such report should contain information „ 1,11111ar to that called for in the letter with respect to indebtedrose outstanding on that date. Accordingly, it is requested that extli arrange to report to the Board currently any indebtedness, inej-uding current bills for ordinary personal or household expenses, ane dured by members of your staff, and that you submit on July 1 be4 _0anuary 1 of each year a statement with respect to the progress por 1 e in the liquidation of the indebtedness previously reed Y l Approved. Letter dated February 8, 1934, approved by five members of the 50 t. 412/10/',14 -7- Board, to *2:ix.. Curtiss, Federal Reserve Agent at the Federal Reserve Batik of Boston, reading as follows: . "Reference is made to the analysis of the report of examinaion of the Gloucester Safe Deposit and Trust Company, Gloucester, bassachusetts, as of the close of business October 28, 1933. "The examiner reported that on Tuly 20, 1933, the bank transits interest department, amounting to i689,280, from the commercial department to the savings department in order to place these deposits on a time basis and allow them to draw interest, and that the transfer was made without notification to the depositors, but that as depositors come into the bank savings departtient books are issued to them. It is understood that the deposits 0.tra sferred represented demand deposits on which interest was 1 1°6111 paid with the understanding that only a limited number of ?hecks against the account could be drawn each month. From the 'formation submitted, it would appear that the funds so transferred u e demand deposits until the depositor has accepted the provisions that: (1) The pass book or other form of receipt evidencing such deposit mist be presented to the bank whenever a withdrawal is made, and (2) The depositor is required, or may at any time be required by the bank to give notice in writing of an intended Withdrawal not less than 30 days before a withdrawal is made. "Until the depositors have accepted such provisions the desits so transferred can not be considered as savings deposits ;:der the provisions of Re7ulation D regarding the maintenance of , serves or of Regulation regarding the payment of interest on uePosits. "It would appear, therefore that the bank has been, and at Prezenf 'may be paying interest on demand deposits, which is in liy-elation of the Danking Act of 1933, and that it has been impropertl_coraPuting reserves on these deposits. It will be appreciated, if You will advise the Board further as to the circumin this case and what steps have been taken to correct the r4aticer. t fli_ s examiner also reported a direct violation of the Massa:tatutes in that funds of the savings derartment were i'unds of the commercial department on deposit with thetc1 Reserve Bank. It will be appreciated if you will advise th : steps have been taken to eliminate this violation and whether 3aMe situation exists in the case or other State member banks. ot t ilas been noted that the bank contemplates a readjustment versi' capital structure through sale of preferred stock and conrtulds°11 or directors' guaranty and subordinated deposits to capital in ti„• and the Board would like to be advised as to the developments c onnection." hull Approved. 2/10/34 -8Letter dated February 9, 1934, approved by five members of the Bcard, to the "Bankers Commercial Trust Company", Little Rock, Arkansas, ' l ea(ilug as follows: "Effective if and when the Bankers Commercial Trust, Company, Little Rock, Arkansas, is converted into a national banking association and is authorized by the Comptroller of the Currency to commence business as the Commercial National Bank of Little Rock, the Federal Reserve Board approves the application filed by your bank on behalf of such national bank for perldission to act, when not in contravention of State or local law, as trustee, executor, administrator, registrar of stocks and bonds, guardian of estates, assignee, receiver, committee of estates of lunatics, or in any other fiduciary capacity in which State banks, trust companies or other corporations which came into competition with national banks are permitted to act 114der the laws of the State of Arkansas, the exercise of all such rights to be subject to the provisions of the Federal Reserve Act and the regulations of the Federal Reserve Board. "After the conversion of the Bankers Commercial "2rust Company into the Commercial National Bank of Little Rock becomes effective and the Comptroller of the Currency authorizes the national bank to comaence business, the board of directors of the latter bank should adopt a resolution ratifyingthe action taken on its behalf by your ank in making application for permission to exercise trust powers, and it is requested that a certified copy of the resolution so adopted be forwarded to the Federal Reserve Board for its records as soon as possible. When a copy of such resolution has been re(, eeived bY the Board, a formal certificate coveria;; the riht of the '?mIllercial National Bank of Little Rock to exercise trust powers will be forwarded to it." Approved. Letter dated February 9, 1934, approved by four members of the ZOard , to Ira-. O'Connor, Comptroller of the Currency, reading as follows: Bo "In accordance with your recommendation, the Federal 7eserve "cl approves a reduction in the common capital stock of 'The 1-Lantsville National Bank', Plantsville, Connecticut, from .50,000 n11,!5)°00, pursuant to a plan which provides that the bank's co shall be increased by the sale at par of ..25,000 par value stock, the proceeds of which shall be applied first toWard the he retirement of bills payable, and which also provides that the bee funds released by the reduction in common capital stock shall allused to eliminate substanaard assets and securities depreciation, as set forth in your memorandum of February 2, 1934." Approved. 506 1 2/1.0/34 -9Letter dated February 8, 1934, approved by five members of the /arcl, to Mr. O'Connor, Comptroller of the Currency, reading as follows: "The Federal Reserve Board approves a reduction in the common capital stock of the 'First National Bank of Hattiesburg', HattiesDurg, 7'4 4 4 4 fror:i '350,000 to )100,000, pursuant to a plan wnich provides that the bank's capital shall be increased by the sale at par of .500,000 par value preferred stock to the Reconstruction Finance Corporation, and that the funds released by the reduction in common capital stock shall be used to eliminate a eorrespondin,,, amount of substandard assets, all as set forth in Your letter of February 1, 1934." A:Jproved. Letter dated February 9, 1934, approved by five members of the Board ' t° Lr. O'Connor, ComDtroller of the Currency, reading, as follows: "In accordance with your recommendation, the Federal I-?eserve c)a A approves a reduction in the common capital stock of the 'ColaLaercial i,erchants National Bank and Trust Company of Peoria', Peoria, Illinois, from :2,000,000 to 4,500,000, pursuant to a 13}all which provides that the bank's capital shall be increased by lie sale at par of :',500,000 par value preferred stock to the Re! onstruction Finance Corporation, and that the funds released by reduction in common capital, toc,ether with a portion of the ank's surplus, undivided profits and reserves, shall be used to See, if the bank has not already done so, substandard assets, T3ourities depreciation, and depreciation in banking house and rniture and fixtures, in the amount of approximately ':1,220,653, 1-1- as set forth in your memorandum of January 31, 1934." Approved. Letter dated February 8, 1934, approved by five members of the I3oard ' to 1-‘r. O'Connor, Comptroller of the Currency, reading as follows: to s"In accordance with your recommendation, the Federal Reserve 0, approves a reduction in the common capital stock of the 'First 111 : 1°na1 Bank of Pana', Pana, Illinois, from 75,000 to .:;,25,000, illrsuant to a iplan which provides that the bank's capital shall be tIcrl'eased by the sale at par of 50,000 par value preferred stock v the Reconstruction Finance Corporation, and provides also that : b e funds released by the reduction in common capital stock shall ,used to eliminate a corresponditm amount of unsatisfactory assets 'a' that a voluntary contribution of approximately :6,400 shall be 507 2/10h1 -10- "raised locally, all as outlined in your memorandum to the Eioard dated Tanuary 25, 1934." Approved. Letter dated February 8, 1934, approved by five members of the 1144)4rd' to 1:-r. O'Connor, Comptroller of the Currency, reading; as follows: "In accordance with your recomendation, the Federal Reserve B(pard approves a reduction in the common capital stock of 'The First National Bank of Converse', Converse, Indiana, from .10,000 to 1 .0,000, pursuant to a plan which provides that the bank's capital shall be increased by :25,000 Class 'A' preferred stock to be sold to the Reconstruction Finance Corporation and 45,000 Class 'B' preferred stock to be sold locally, that the released caPital funds shall be used to eliminate substandard assets and securities depreciation, and that the bank's surplus shall be brought 11) to lawful requirements by local contribution, all as set forth in Your memorandum of January 30, 1934." Approved. Letter dated February 8, 1934, approved by five members of the to Li.. O'Connor, Comptroller of the Currency, reading as follows: "In accordance with your recommendation, the Federal Reserve Board approves a reduction in the common capital stock of 'The -jIrchants National Rank of Aurora', Aurora, Illinois, from :300,000 ' 150,000, pursuant to a plan which provides that the bank's vital shall be increased by the sale at par of :3250,000 par value ferred stock to the Reconstruction Finance Corporation from the 3,!°ceeds of which the preferred stock now outstanding in the amount 100,000 and held locally will be retired, and which also pros des that the funds released by the reduction in common capital shall be used to eliminate unsatisfactory assets and securitierd epreciation and to establish a surplus fund of '70,000, all Set forth in your memorandum of Tanuary 29, 1934." 1 Approved. Letter dated February 9, 1934, approved by five members of the t 11". O'Connor, Comptroller of the Currency, reading as follows: , "In accordance with your recommendation, the Federal Reserve toarA " approves a reduction in the canmon capital stock of 'The , st National Bank of 1:ontrose', Yontrose, Colorado, from :;,100,000 to , 50,o()0, pursuant to a plan which provides that the bank's 508 -11"oaPital shall be increased by the sale at par of 00,000 par value preferred stock to the Reconstruction Finance Corporation, and that the funds released by the reduction in common capital Shall be used to eliminate substandard assets, all as set forth in your memorandum of January 30, 1934.t1 Approved. Letter dated February 8, 1934, approved by five members of the 8°41'd, to /4r. O'Connor, Comptroller of the Currency, reading as follows: 'In accordance with your recommendation the Federal Reserve Board approves a reduction in the common capital stock of 'The irst National Bank in San Leandro', San Leandro, California, from U00,000 to 450,000 pursuant to a plan which provides that the bank's capital shall be increased by the sale at par of 00,000 Par value preferred stock to the Reconstruction Finance Corporation and that the funds released by the reduction in common capital stock shall be used to eliminate substandard assets in the amount of approximately 50,000, all as set forth in your letter of January 26, 1934." f Approved. Telegram dated February 8, 1934, approved by five members of the 8°ard) to Mr. Williams, Federal Reserve Agent at the Federal Re8"ve Bank of Cleveland, stating that the Board has considered the tftlication of the "Central United Company", Cleveland, Ohio, for a 14)tillZ Permit under authority of section 5144 of the Revised Statutes °I' the United States, as amended, entitling such organization to vote the stock which it owns or controls in the "Central National Bank of ellardon', Chardon, Ohio, and has authorized the issuance of a limited 1/eroait to the applicant, subject to the following conditions: "First. Prior to the issuance of the limited voting permit hereby authorized Applicant shall a:me that "(1) within such time as shall be fixed by the Federal Reserve Agent at the Federal Aeserve Bank of Cleveland, the Undersigned will cause Central National Bank of Chardon to Charge off or otnerwise eliminate, if it has not already done so, (a) estimated losses in loans and discounts, (b) de- 509 2/10/34 -12- "preciation in stocks and defaulted securities, (c) depreciation in securities not of the four highest grades as classified by an investment service organization regularly engaged in the business of rating or grading securities and (d) all other losses, such charge offs or eliminations to be based on a current examination or credit investigation and to be of such nature and extent and in accordance with such plan or plans, whether or not canine*, for an increase in the capital funds of such bank as shall be satisfactory to the Comptroller of the Currency and to the Federal lieserve ,gent at the Federal Reserve Bank of Cleveland. "(2) All assets of such subsidiary bank which may be charged Off or otherwise eliminated pursuant to the foregoing clause numbered (1) of this agreement shall remain the property of such bank and shall not be distributed to the shareholders of the undersigned or of such bank or otherwise released in any manner Whatsoever. "(3) The undersigned will cause such subsidiary bank to make such corrections as shall be requested by the Federal Reserve Agent at the Federal Reserve Bank of Cleveland in order to remove the cause of any criticism relating to any feature of its practices, policies, management or financial condition which has been made by the appropriate supervisory authorities. "Second. Simultaneously with the issuance of the limited voting Permit hereby authorized there shall be issued to ,Antral United National Bank of Cleveland, Cleveland, Ohio, the limited voting Permit authorized in the Board's telegram to you of this date." kid for the following purposes: "1. To elect directors of such bank at any meeting of its lai&reholders, or at any adjournment thereof, at any time prior to 1, 1934, and to act thereat upon such matters of a routine '‘u ' llre bank. as are ordinarily acted upon at the annual meeting of such "2. At any time prior to May 1, 1934, to act upon a proposal Proposals to authorize and effect an increase in the capital funds , - ,euch bank and to do all things necessary for such purpose pro:red that such proposal or proposals shall be in accordance with a '''1.1-114 or plans which shall be satisfactory to the appropriate super: ii s°rIr authorities and to the Federal Reserve Agent at the Federal serve Bank of Cleveland." or The tel the also authorized the agent to have prepared by counsel for Pederal reserve bank, and to issue to the Central United Company, 4 tiets voting permit in accordance with the telegram when the condiPrescribed therein have been complied with. Approved. 510 ) 2/10/34 -13In connection with the above there was presented a second tele- gtam dated February 8, 1934, approved by five members of the Board, to 4t4 Williams, Federal Reserve Agent at the Federal Reserve Bank of Cleveland, stating that the Board has considered the applicati on of the 'In_ untral United National Bank of Cleveland", Cleveland, Ohio, for a '7°tinE permit under authority of section 5144 of the Revised Statutes t ths United States, as amended, entitling such organization to vote the stock which it owns or controls in the "Central National Bank of Chetz ' cl°a", Chardon, Ohio, and has authorized the issuance of a limited 1:419:tilt to the applicant, subject to the following condition s: "First. Prior to the issuance of the limited voting permit hersbY authorized Applicant shall agree that "(1) Within such time as shall be fixed by the Federal Reserve Agent at the Federal Reserve Bank of Cleveland, the undersigned will cause Central National Bank of Chardon to charge off or otherwise eliminate, if it has not already done so, (a) estimated losses in loans and discounts, (b) depreciation in stocks and defaulted securitie s, (c) depreciation in, securities not Of the tour highest grades as classified by an investment service organization regularly engaged in the business of rating or grading securities and (d) all other losses, such charge offs O' eliminations to be based on a current examination or credit investigation and to be of such nature and extent and in accordance with such plan or plans, whether or not calling for an increase in the capital funds of such bank, as shall be satisfact017 to the Comptroller of the Currency and to the Federal Reserve Agent at the Federal Reserve Bank of Cleveland. "(2) All assets of such subsidiary bank which may be charged (Iff or otherwise eliminated pursuant to the foregoing clause !lumbered (1) of this agreement shall remain the property of such l°ank and shall not be distributed to the shareholders of the , dersigned or of such bank or otherwise released in any manner wnatsoever. 0 ,,"(3) The undersigned will cause such subsidiary bank to make -'cn corrections as shall be requested by the Federal Reserve &nt at the Federal Reserve Bank of Cleveland in order to remove 144? cause of any criticism relating to any feature of its prac4ces, policies management or financial condition which has been r4tcle by the appropriate supervisory authorities. Z 511 -14"(4) Within such time as shall be fixed by the Federal Reserve Agent at the Federal Reserve Bank of Cleveland and in any event prior to May 1, 1934, the undersigned will rehabilitate its own capital structure by means of voluntary contributions, issuance of con= stock and/or preferred stock, or otherwise, in such amount and in accordance with such plan or plans as shall be satisfactory to the appropriate supervisory authorities and the Federal Reserve Agent at the Federal Reserve Bank of Cleveland and will charge off or otherwise eliminate (a) estimated losses in loans and discounts, (b) depreciation in stocks and defaulted securities, (c) depreciation in securities not of the four highest grades as classified by an investment service organization regularly engaged in the business of rating or grading securities and (d) all other losses, such charge offs or eliminations to be based on a current examination or credit investigation and to be of such nature and extent and in accordance with such plan or plans for the rehabilitation of the undersigned as shall be satisfactory to the Comptroller of the Currency and to the Federal Reserve Agent at the Federal Reserve Bank of Cleveland. "(5) All assets of the undersigned which may be charged off or otherwise eliminated pursuant to the foregoinr, clause numbered (4) of this agreement shall remain the property of the undersigned and shall not be distributed to its shareholders or Otherwise released in any manner whatsoever. "(6) The undersigned will make such corrections as shall be requested by the Federal Reserve Agent at the Federal Reserve Bank of Cleveland in order to remove the cause of any criticism relating to any feature of its practices, policies, management or financial condition which has been made by the appropriate supervisory authorities. ta "Second. Simultaneously with the issuance of the limited vot0,! permit hereby authorized there shall be issued to Central United 4.;_panlr, Cleveland, Ohio, the limited voting permit authorized in 4ae Board's telegram to you of this date." tor the following purposes: "1- To elect directors of such bank at any meeting of its holders, or at any adjournment thereof, at any time prior to 44; .19341 and to act thereat upon such matters of a routine 13 1 : bank. as are ordinarily acted upon at the annual meeting of such or "2- At any time prior to May 1, 1934, to act upon a proposal timr°13"sle to authorize and effect an increase in the capital pro s ()f sUch bank and to do all things necessary for such purpose a jided that such proposal or proposals shall be in accordance with visoan or Plans which shall be satisfactory to the appropriate superli,e„ 17 authorities and to the Federal Reserve Agent at the Federal ' -Qerve Bank of Cleveland." 512 2/10/34 -15- The telegram also authorized the agent to have prepared by counsel tor the Federal reserve bank, and to issue to the Central United Nati(lhal Bank of Cleveland, a limited voting permit in accordance with the telegram when the conditions prescribed therein have been complied With. Approved. Telegram to Mr. Newton, Federal Reserve Agent at the Federal Reserve Bank Of San Francisco, reading as follows: "Please consider Board's telegram to you dated January 8, beginning 'UOTE ANCIGAR A. Transamerica Corporation UNQUOTE, as amended by Board's telegram dated January 29, further amended by ,adding in clause C (1) after words QUOTE the undersigned, if it aeas not already done so, will cause each of such subsidiary banks UNQUOTE the words QUOTE except Bank of America National Trust and ! livings Association UNQUOTE Please advise the applicant that the :',o41'd has authorized the issuance of this limited voting permit "Pon the condition that Bank of America National Trust and Savings Association will immediately, if it has not already done so, charge ?tf or otherwise eliminate at least one-half of all losses in t?ans and discounts, depreciation in stocks and defaulted securities and all other losses as set up in the report of examination le by S. C. Boise as of September 18, 1933, completed January 12, $ and the balance of such losses and depreciation not later 4 than ray 15, 1934, it being the Board's understanding that assures have been given on behalf of that bank by Messrs. Giannini op ,ClarY to Chief National Bank Examiner Folger that such charge or eliminations will be so made. Please consider similar '"li adment made in Board's teleL, ram to you dated January 8 beginning QUOTEt tlinaGAR vis_ A. Transamerica Bank Holding Company UNQUOTE and adto Itirsnsamerica Bank Holding Company that limited voting permit tn ie also issued on the understanding and condition referred aPove.” I Z Approved. Letter dated February 9, 1934, approved by five members of the ° Ill's Walsh, Federal Reserve Agent at the Federal Reserve Bank 3, ' lsading as follows: : r This is in reply to your letter of January 23rd in which sq.nest the Board to rule whether Commercial National Bank in 513 2/10/34 -16- "Shreveport, Shreveport, Louisiana, (herein called the 'Applicant') is a holding company affiliate of Continental-American Bank and Trust Company, also of Shreveport, within the definition of the term 'holding company affiliate' in the Banking Act of 1933. "Prom the data submitted to the Board in connection with the Applicant's application for a voting permit under Section 5144 of the Revised Statutes, as amended, it appears that ContinentalAmerican Bank and Trust Company has outstanding 7,000 shares of common capital stock of the par value of ::100 per share. It also aPPaars that under a certain agreement dated December 3, 1932, between The Commercial National Bank of Shreveport and the Applicant, all of the assets of the former bank were transferred to the latter in consideration of the latter's assumption of certain liabilities and that the assets so transferred included certain Shares of the stock of Continental-American Bank and Trust Company. This agreement expressly vested title to the assets transferred in the Applicant and save the Applicaat general power to deal with them. It also provided that if any of the assets transferred should be liquidated in an amount sufficient to indemnify the APplicant for the liability which it assumed, the residue of such assets should thereupon be returned to, or held for the account • ,a committee representing the stockholders of The Commercial National Bank of Shreveport. "In view of the foregoing provisions the right of the Applicant to vote shares of stock transferred to it by The Commercial .ttlational Bank of Shreveport and the control which Applicant is enled to exercise with respect to such shares depends upon the :!ner 1,1 1 in which such shares were held by The Commercial National rk °I of Shreveport prior to the execution of the agreement referred sLand, if such shares were held by The Commercial National Bank of 4-aveport as collateral security for loans made by it, the right he Applicant to vote such shares at this time can be deter• fled only with reference to the various pledge agreements or calerstandings between The Commercial National Bank of Shreveport its respective pledgors. "On page 3 of Exhibit G of the voting permit application it is stated that the Applicant 'owns' 9184- shares of the stock of g Crinsatal-American Bank and Trust Company. No explanation is a , ven. of this ownership or of the mlaner of its origin, but there 1,.t4pears to be no doubt that with respect to such shares Applicant ra control of the kind contemplated in the definition of a holdaffiliate in Section 2(c) of the Banking Act of 1933. • ? same page of the application it is also shown that Appliaolds amonL, the assets transferred to it under the aforesaid "Ment of December 3, 1932, 3681. other shares of stock of • co oftti t nent al-American Bank and Trust Company and that as of the date heldhe application, December 5, 1933, 3013-1/3 of such shares were as collateral security for obligations 'due and exigible'. T„ ;i7c letter dated Tanuary 23, 1934, addressed to you, Applicant 14aias that 90 of these shares have since been taken over by 4 Z 514 2/10/3g -17- "APplicant in satisfaction of one of such obligations. The exact terms under which the 3681. shares of stock were held by The Cammercial National Bank of Shreveport are unknown to the Board, but, in view of the general provisions of law regarding pledge agreements, it seems reasonable to assume that at least with respect to the shares of stock securing overdue loans the Applicant, as transferee, is either in a position in which it or its nominee can now vote such stock or in a position in which it can rightfully have the stock registered in its name or in that of its noMinee so that it can then dictate the manner in which it shall be voted. If it is in either position it would seem to have, with respect to such stock, control of the kind referred to in the statutory definition of a holding company affiliate. Accordingly, it aPpears to the Board that upon the basis of information contained in the voting permit application, Applicant controls a majority of the 7000 outstanding shares of stock of Continental4raeri0an Bank and Trust Company and is a holding company affiliate Of that bank. "The Board recognizes that the status of the Applicant as a h°1dinz company affiliate is to be determined in the light of all 4ateria1 circumstances existing at a given time. It also recognizes that it has not been informed of all of the circumstances here iznvolved, that certain stataments made in the documents submitted uo it are not fully explained, that some of the questions can be d jtermined only with reference to local law and that the informalon heretofore submitted may not accurately present the situation ! ,13 it exists at the present time. Therefore, if the Applicant c.tieagrees with the conclusion reached by the Board, please request lt to furnish to you such other facts and such explanations of : t atements already submitted as it deems relevant, and forward the _ame to the Board together with any comments which you or your unsel may wish to mske. Please also forward to the Board inrmati0n as to the circumstances under which the Applicant became ? Owner of the 910 shares of stock of Continental-American Bank valoi Trust Company referred to above. of the apparent probability that Applicant is a holdin company psnY affiliate of Continental-American Bank and Trust Company by reason of control of a majority of the shares of capital stock n.that bank arising from the facts discussed above, the Board has :1 s given consideration to the possibility that Applicant nay be Jding company affiliate within the definition in Section 2(c) or ° ti;e Banking Act of 1933 because of control in some other manner Of e election of a majority of the directors of the subsidiary r 4 Approved. Letter dated February 9, 1934, approved by five members of the to the Federal reserve agents at all Federal reserve banks, reading 515 2/10/34 as -18- follows: "This refers to and supplements the Board's letter of September 13, 1933 (x-7587), with regard to the establishment of out-of-town branches by State member banks. In addition to your recommendation and comments and a copy of the complete report of the most recent examination of the bank requested in that letter you are requested, When you submit to the Federal Reserve Board for transmission to the Comptroller of the Currency an application for the approval of the establishme nt and operation of an out-of-town branch by a State 9ember bank, to furnish the Board with (1) information regarding the number of branches which the member bank will have including the Proposed branch which is the subject of the application and where each such branch is located, together with the date of its establishment, (2) advice as to present banking facilities in the place in which the branch will be located, (3) advice of your judgment as to the opportunity for the successful operation of a branch at that Place by the member bank, (4) advice as to the scope of the functions 'lid the character of the business which will be performed by the ?ranch, (5) detailed information regarding the policy proposed to be followed with reference to supervision of the branch by the head office, (6%) advice as to whether the appropriate State authorities have approved the establishment of the branch and (7) a copy of an ?Pinion of the counsel for the Federal reserve bank as to whether branch would be established in conformity with requirements of Federal Reserve Act in view of the provisions of the State law, lbeludino therein a copy of the State law authorizing the establishOf branches or a reference thereto. It is understood of course, hat 4 in each case the Board will be furnished with any other detailed ' alformation with reference to the circumstances involved in the D ttrticular case which will be of assistance to the Board in advising ,:118 CoMptroller of the Currency of its views as to whether or not 'ae establishment and operation of the branch should be approved." Approved. Secretary's note: Pursuant to the action taken at the meeting on February 8, 1934, the following letter was addressed by the Governor to la.. E. G. Bennett, Director of the Federal Deposit Insurance Corporation, under date of February 9, 1934: ti_ "This refers to the draft of the proposed bill to amend Secb,n 12B of the Federal Reserve Act relating to the insurance of : 0 41,c_dep08its which was left with MB by the members of your Board on February 7, 1934, and which was discussed by us at that atirect?ra time. 1,..., "The proposed bill would extend the insurance of deposits i;T:r the Temporary Federal Deposit Insurance Fund until Tuly 1, ‘3 , and the permanent plan would not become effective until that 516 2/10/34 -19- "date. The bill also would authorize the issuance of obligations Of the Corporation with the approval of the Secretary of the Treasury guaranteed both as to interest and principal by the United States, and such obligations so guaranteed would be eligible for discount or Purchase by the Federal reserve banks. In addition, the bill contains certain other provisions of a detailed character. "The Federal ieserve Board has given careful consideration to the bill and feels that it is important that certain additional Provisions relating to this subject should be included therein. "It will be recalled that the Federal Reserve Board in November, 19331 after consideration, expressed the view that it would consider the proceeds of capital notes and debentures purchased by the Reconstruction Finance Corporation as capital funds of State banks and as Part of the unimpaired capital required of such banks for admission to membership in the Federal Reserve System. This action was taken after consideration of the suggestion that the successful operation of the Federal Deposit Insurance Corporation would be seriously hamPerea I, -Y a contrary ruling. In view of the doubt on the question, however, the Board stated that it would request Congress to clarify this situation by appropriate action; and it was understood that Your Corporation concurred in the suggestion that the law be so Mended. It is believed that the bill which you have presented for consideration should include a provision to clarify this question. "Subsection (e) of Section 12B of the Federal Reserve Act requires the Federal Reserve Board, in the case of a State member bank, °r the Comptroller of the Currency, in the case of a national bank, to certify upon the basis of a thorough examination of a bank apply'€ for Class A stock in the Federal Deposit Insurance Corporation Whether or not its assets are adequate to enable it to meet all of itts liabilities to depositors and other creditors as shown by the _.?°ks of the bank. In some instances, no doubt, banks will not be 7,41-igible to obtain Class A stock in the Federal Deposit Insurance iorporation if the holders of capital notes and debentures issued DY the bank are creditors within the meaning of this provision. these circumstances, it is believed that you will agree that this is, a question of importance affecting the accomplishment of the purn'ses of the Provisions of Section 1213 of the Federal Reserve Act It...D_Ld that it is highly desirable to exclude the holders of such cap;,leal.notes and debentures from the term 'creditors' within the anIng of the provision referred to above. the. "Ill many cases also banks have entered into agreements with r, lr depositors under which the depositors agreed to waive the afht to demand payment of a part of their deposit claims until ' de uer other claims against the bank should be satisfied in an ence:1°r to provide for the elimination of losses in the bank. In cerZain of these cases the bank issued to such depositors deferred amo_lficates under which the bank agreed to pay the depositors the unt of their deferred deposits before any distribution of assets (1r the bank to its stockholders, and in the event of the dissolution 517 2/10/34 -20- "of the bank the holders of the deferred certificates are entitled to share in the assets of the bank after claims of other depositors and other creditors have been provided for. If the owners of such subordinated deposits are considered as other creditors within the raeaning of subsection (e) above mentioned, many such banks may not be eligible to obtain Class A stock in the itederal Deposit Insurance Corporation. Accordingly, it is important that the owners of such suborClinated deposits should not be considered as other creditors within the meaning of that subsection and that the law should be amended so to provide. "It is also noted that the bill which has been prepared makes eligible for discount or purchase at a Federal reserve bank debentures of your Corporation which are guaranteed by the United States. In order that such debentures may be eligible not only for purchase but also as collateral security for advances to member banks by Federal reserve banks under the provisions of Section 13 of the Federal Reserve Act, it is suc7,ested that an appropriate change be made in the provisions of the bill to accomplish this purpose. "The Federal jeserve Board is of the view that the amendments above proposed should be adopted if the purposes of Section 125 of the Federal Reserve Act are to be properly effectuated and in order that national and State member bnnks of the Federal Reserve System now entitled to the benefits of insurance under the Temporary Fund IlaY become Class A stockholders of your Corporation. Accordingly, there have been incorporated in the draft of the bill which you left with me amendments designed to accomplish the purposes mentioned and a revision of the proposed bill with the amendments so incorporated is inclosed herewith. "You are advised that the Federal Reserve Board would favor the enactment of this bill with the amendments in question. "The provisions of subsection (y) of Section 125 of the Federal Reserve Act relating to the Temporary Federal Deposit Insurance Fund by their terms apply only to deposits of members of the d which have been made available since "'larch 10, 1933, for with;anal in the usual course of the banking business. There is apentlY no similar provision to be found in the law relating to the wl i Permanent plan for insurance of deposits; and, if deposits tIr eh have been subordinated to claims of other depositors and tone,r creditors are to be excluded from the phrase 'liabilities as d epositors and other creditors' in subsection (e) of Section 125 visab ove suggested, your Corporation may wish to consider the ad/, 3ilitY of includin,l, in the proposed bill a provision which wo,, 131"' exclude from insured deposit liabilities under the permanent hor dePosits which have not been made available by Class A stocktheciers of the Corporation since :arch 10, 1033, for withdrawal in .1 usual course of the banking business." The revision of the proposed bill mentioned in the above letter reads as follows: 518 2/10/34 -21tIA Bill "To amend Section 12B of the Federal Reserve Act so as to extend for one year the temporary plan for deposit insurance, permit a further period of preparation for initiating the permanent plan, and for other purposes. "De it enacted by the Senate and House of Representatives of the United States of America in Con7ess assembled, That Section 12B of the Federal Reserve Act is amended -"(1) by striking out 'July 1, 1934' wherever it appears in subsections (e), (1), and (y), and inserting in lieu thereof 'July 1, 19351 ; "(2) by striking out 'June lb, 1934' where it appears in the last sentence of the third paragraph of subsection (y), and inserting in lieu thereof 'December 15, 1934'; "(3) by strikinr: out 'June 30, 1934' where it appears in the f s s tt iris gentelice of the fifth paragraph of subsection (y), and inin lieu thereof 'June 30, 1935'; "(4) by addiryi: after the first clause of the second sentence in Daraeraph rive or subsection (y) the following: 'and the provisions Of such subsection (1) relating to the appointment of the Corr:oration as Receiver shall be applicable to the members of the Temporary Federal Deposit Insurance iund.', , "and by striking out the initial words 'and the' in the second Clause of the second sentence of paragraph five of subsection (3') and inserting in lieu thereof the word 'The'; "(5) by adding to paragraph six of subsection (y) the following: e t'The Corporation shall prescribe 1)7 regulations the manner of exer, 1 e of the right of termination of membership in the Fund on July 1, 1, and may require members of the Fund to give thirty days' notice l°1 'to July 1, 1934, of election as a condition to withdrawal. Which withdraw from the Fund on July 1, 1934, shall be entitled toe refund of their proportionate share of any estimated balance in the Fund .11 on the same basis as if the Fund had terminated under existlaw.'. "(6) by addins at the end of subsection (o) tne following new Paragraph: r "'6uch of the obligations authorized to be issued under this 4°2ction as the Corporation, with the approval of the Secretary uethe Treasury, may determine, shall be fully and unconditionally anda:anteed both as to interest and principal by the United ,3tates e 211c4 guaranty shall be expressed on the face thereof. In the ventthat the Corporation shall be unable to pay upon demand, when other he Principal of or interest on notes, debentures, bonds, or such obliations :3tate5 issued by it, and guaranteed by the United under this paragraph, the Secretary of the Treasury shall 0 13% 0 , a.aotuit thereof, which is hereby authorized to be appropriated therou any moneys in the Treasury not otherwise appropriated, and Tre , Pon to the extent of the amounts so paid the Secretary of the ury shall Succeed to all the rights of the holders of such 51_9 2/10/64 -22- "notes, debentures, bonds, or other obligations. The Secretary of the Treasury, in his discretion, is authorized to purchase any obligations of the Corporation to be issued under this subsection Which are guaranteed by the United States under this paragraph, and for such purpose the Secretary of the Treasury is authorized to use as a public-debt transaction the proceeds from the sale of snY securities hereafter issued under the second Liberty bond act, as amended, and the purposes for which securities may be issued under the second Liberty bond act, as amended, are extended to include anY purchases of the Corporation's obligations under this paragraph. The Secretary of the Treasury, may, at any time, sell any of the °bligations of the Corporation acquired by him under this paragraph. All redemptions, purchases, and sales by the Secretary of the Treasury Of the obligations of the Corporation shall be treated as public-debt transactions of the United States. The Secretary of the Treasury, at the request of the Federal Deposit Insurance Corporation, is authorized to market for the Corporation such of its notes, debentures, bonds, and other such obligations as are guaranteed by the 'United States under this paragraph, using therefor all the facilities of the Treasury Department now authorized by law for the m arketing of obligations of the United States. The proceeds of the °blieations of the Corporation so marketed shall be deposited in the same manner as proceeds derived from the sale of obligations or the United States, and the amount thereof shall be credited to the Corporation on the books of the Treasury.' 9(7) by inserting after the first sentence of subsection (p) the following new sentence: y such obligations which are guaranteed by the United States ITcler the second paragraph of subsection (o) shall be exempt from such taxation (except surtaxes, estate, inheritance, and gift taxes),, "(8) by inserting between the third and fourth sentences of Section (e) the following: to "'For the purpose of such certification, the phrase "liability depositors and other creditors" shall not include liabilities °4 eapital notes or debentures legally issued and outstanding, has1113011 other obligations of the bank, payable only after provision been made for the full satisfaction of all claims of depositors T151 other creditors except claims upon such capital notes, such "'Dentures and such other obligations.' ee "Sec. 2. The first paragraph of Section 9 of the Federal ReAct as amended, (U.S.C. Title 12, Sec. 321), is amended by , -u-Lne after the second sentence thereof a new sentence to read rcilows: 2 "'For the purposes of membership of any such bank, the terms "es 1.1„,-Pit11-" and "capital stock" shall include the amount of outstand13-'3 eaPital notes and debentures legally issued by the applying and purchased by the Reconstruction Finance Corporation.' "3. (a) The first sentence of the eighth paragraph of Secti Se of the Federal Reserve Act, as amended, is further dc n alnet '" by inserting before the comma after the words 'Section 13(a) 5°0 2/10/34 -23- "of this Act' a comma and the following: 'or by the deposit or Pledge of obligations of the Federal Deposit Insurance Corporation Which are guaranteed both as to principal and interest by the United States'. "(b) Paragraph (b) of Section 14 of the Federal Reserve 4-et, as amended, is further amended by inserting before the comma after the words 'bonds and notes of the United States' a comna and the following: 'obligations of the Federal Deposit Insurance Corporation which are guaranteed both as to principal and interest by the United States'." In connection with the above matter there was presented a second letter, dated February 10, 1934, to Er. Bennett, reading as follows: "This refers to the Federal Reserve Board's letter of February 9) 1934, with regard to the bill proposed by your Corporation to amend Section 12B of the Federal Reserve ,et, in which you were advised that the Board would favor the enactment of the bill as revised so as to incorporate certain amendments suggested by the Board. "It is understood from your conversation with Governor Black on this subject following receipt by you of the letter referred to that your Coruoration is agreeable to all of the amendments sugested by the Federal Reserve Board and will include them in the .111 Co be recannended to Congress, except the amendment contained Pararaph (0) of Section 1 of the bill, as inclosed with the 44)erd's letter, which would insert between the third and fourth entences of subsection (e) of Section 1213 of the Federal Reserve .zct the following: "'For the purpose of such certification, the phrase "liability to depositors and other creditors" shall not include liabilities upon capital notes or debentures legally issued and outstanding, or upon other obligations of the bank, payable only after provision has been made for the full satisfaction of all claims of depositors and other creditors except claims upon such capital notes, such debentures and such other obligations.' "It is further understood that your Corporation has no objec; 10?fl 1 to the enactment of such an amendment but feels that it would be desirable to propose it for enactment by Congress at this It is also understood, however, that the Federal Deposit Tel7urance Corporation, if the insurance of deposits under the 0-11111)°rarY Federal Leposit Insurance iund shall be extended until . 11 1935, in accordance with the proposed bill, will recommend or Y or loin with the Federal Reserve Board in recommending the enactment or `he amend-lent in question upon the convening of the next session a se°nCress, with a view to obtaining such an amendment to the law etrtIfficient time before the permanent plan of insurance becomes 130re”lve so that the certification of member banks to your Corrnl°11 'nay be made on the basis proposed in the amendment; and, --.7er, that if it should become evident that the insurance of LI 521_ 2/10/34 -24- "deposits under the temporary plan will not be extended beyond 3.111Y 1, 1934, that your Corporation will join with the Federal Reserve Board in recammending to Congress the enactment of an amendment of this kind as soon as possible. "On the basis of the above understanding of the position of Your Corporation on this question, the Federal Reserve Board offers no objection to the omission from the proposed bill, as inclosed With its letter of February 9, 1934, of the amendment contained in .Paragraph (8) of the first section thereof. It will be appreciated lf You will address a letter to the Board confirming the Board's UnderstandinL; in this matter." Approved. Letter dated February 9, 1934, approved by five members of the 8141rd, to the Secretary of the Treasury, reading as follows: "In accordance with the request of the Secretary of the Treasury under date of February 24, 1933, that a special inquiry be instituted by the examiners of the Federal Reserve Board with the view to determining whether the proper procedure is followed each of the Federal reserve banks and their branches in conWith the issue, exchange and redemption of Government securities, there is transmitted herewith a copy of a special lcamination by Assistant Federal Reserve Examiner Charles T. Malone, dated December 30, 1933, covering the Fiscal Agency DeArtment of the Federal Reserve Bank of Cleeland. "This is the last of this series of special examinations, rePorts of this kind relating to the other eleven Federal reserve bellke having been transmitted to your office heretofore." Approved. Letter dated February 9, 1934, approved by five members of the 81541-, "1 to Lir. Newton, Federal Reserve Agent at the Federal Reserve Bank Or Atlani. reading as follows: e_ "There are inclosed one copy each of the reports of special I nialations of the Fiscal Agency operations of the Federal Reserve of Atlanta and its New Orleans Branch, made in connection with Izov l'egular examination of your bank as at the close of business colinsr 18, 1933, The Board desires that the detailed information in these reports be brouzht to the attention of the board or lrectors of your bank and that the Board be advised of any actio , ' 4 which may be taken in connection therewith. orie:Particular attention is directed to that portion of the New ' Ilhe Branch report (pages 24 and 26) relating to dealings in 522 2/10/34 -25-- "Government securities by the managing director of the branch, acting on behalf of a client. The question has arisen whether such transactions, if handled at all by Lr. Walker, should not be entirely divorced from the branch operations and conducted through outside channels in the same manner as if they were not handled by the managing director. "The Board would like to have your comments on the question of excessive aar loan designations of Government depositaries which 18 cammented upon (page 27) by the examiner; also in regard to the Practice of placing in the collateral account allotments of GovernMeat securities when they are paid for by War loan credit, regardless of whether such allotments were made on subscriptions for customers of a bank or for its own account. It is understood that this matter is now receiving consideration by the bank's counsel and the officers in charge of the Fiscal Agency Department (pages 21-22). "The Board will also appreciate advice as to whether the recommendations of its examiner (pages 35-37 in the Head office report and pages 31-32 of the branch report), in regard to audit!Ile and operating procedure have been adopted. These matters were uiscussed with the General Auditor as regards both the Head office !nd the New Orleans Branch, and with the managing director of the New Orleans Branch as regards that Branch." Approved. Letter dated February 9, 1934, approved by five members of the . 3411'1, to Governor Calkins of the Federal Reserve rank of San Francisco, "Chairman of the Governors' Conference, reading as follows: "It appears from a review of the reports of examinations of Federal reserve banks and from other information available to ! le Board that the banks do not have a uniform policy with reto the absorption of expenses of collection of paper of Closed banks and that in same: instances the expenses absorbed have ae recumUlated to very large amounts. The practices of the Federal 18e banks vary also with respect to the basis upon which intereat 18 charged in the case of closed banks. For these reasons it ee/I suggested that the subject might well be considered by the ernors at their next conference, with a view to determining the of working out a more nearly uniform policy in these ati e noatters and it will be appreciated if you will give considerto this suggestion." „ the Approved. tottra Letters dated February 8, 1934, approved by five members of the 'to aPPlicants for permits under the Clayton Act, advising of ap- 2/10/34 -26- l'eNt'al of their applications as follows: MI'. T. Cooke Wilson, for permission to serve at the same time as a director of The American National Bank of Beaumont, Beaumont, Texas, and as a director of the Houston branch, Federal Reserve Bank of Lallas, Houston, Texas. R. M. Farrar, for permission to serve at the same time as a director and officer of The Union National Bank of Houston, Houston, Texas, and as a director of the Houston branch, Federal Reserve Bnnk of Dallas, Houston, Texas. Approved. There were then presented the following applications for original t'ack, or for the surrender of stock, of Federal reserve banks: A 14 ,, 4-J-cations for Shares ORIGINAL Stock: 4:41.1.11 N° 3 8ettileliZitEroinal Bank, Bethlehem, I-ennsylvania 300 trict No. 7. National Bank of Grundy Center, GrUndY Center, Iowa 36 300 36 b ndt N co. 10. National Bank of Grand Island, arand Island, Nebraska 68 Total 68 404 li cations for SURRENDER of Stock: ilret National Bank, Secaucus, New Jersey e National Exchange Bank ad Trust Co. °r New York, Brooklyn, New York 'District No. 5' eh" ilie National Bank, . ellerrYville, North Carolina nistriet _ u 7. Pirt4 iZl tt : East Peoria, Illinois Council Bluffs, Iowa National Bank, Hillsdale, Michigan ;1 et at National Bank/ Manistee, Michigan National , Shullsburg, Wisconsin tT 90 1 200 1,290 41•11100102.0.0•11..11..-41.1MY 90 90 36 222 84 72 60 474 524 2/10/34 -27- 4 14 . tion2 for SURRENDER of Stock: (Continued plstrict No, 10. First lational Bank, Eaton, Colorado 4rEit National Bank, Aurora, Nebraska Shares 39 60 Total 99 1,953 Approved. Thereupon the meeting adjourned. t. 0CI Secretary. • --------__ Chairman, Executive Committee.
@FedFRASER