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464 A meeting of the Federal Reserve Board was held in Washinton on P,4.3 February 15, 1935, at 11::30 a. m. PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Eccles, Governor Thomas, Vice Governor Hamlin Miller James Szymczak Mr. Morrill, Secretary Mr. Bethea, Assistant Secretary Mr. .Carpenter, Assistant Secretary The Board acted upon the following matters: Letter dated February 14, 1955, from Tr. Sproul, Secretary of the Federal Reserve Bank of New York, advising that, at the meeting of the board of directors on that date, no change was made in the bank's e"ing schedule of rates of discount and purchase. Without objection, noted with approval. Memorandum dated February 15, 1935, from Mr. Morrill recommend— it • that William Pinn be appointed as a messenger on the Board's staff **ith salax /lecer,_ at the rate of ::840 4 per annum, effective when he passes the 17 physical examination and reports for duty. Approved. Letter to Mr. Peyton, Chairman of the Federal Reserve Bank of Mi44 eaP°11s, reading as follows: of ;The Federal Reserve Doard has received your telegram ebruary 13, 1955, and approves the reappointment by the boa , "of directors of the Federal Reserve Bank of Minneapolis '01! Messrs. Sheldon V. Wood, John M. Bush, Albert L. Miller, , -Larence O. Follett, and. Harvey C. Jewett as members of the 4-ndustrial Advisory Committee for the Ninth Federal Reserve 465 2/15/F5 tTistrict, each for a term of one year from March 1, 1935. It is assumed that each of these gentlemen is still actively engaged in some industriel pursuit within the Ninth Federal Reserve District. "It will be appreciated if you, will advise whether Mr. Wood will continue as Chairman of the committee." Approved. Letter to Mr. Talsh, Chairman of the Federal Reserve Bank of 1)a11as, reading as follows: "The Federal Reserve Board has received your telegram of February 13, 1935, and approves the reappointment by the board of directors of the Federal Reserve Bank of Dallas of Messrs. T. M. Cullum, Lewis R. Ferguson, T. B. Marsh, Charles R. Moore, and Clarence Gusley as members of the Industrial Advisory Committee for the Eleventh Federal Reserve District, each for a term of one year from March 1, 1935. It is assumed that each of these gentlemen is still actively engaged in some industrial pursuit within the Eleventh Federal Reserve District. "It will be appreciated if you will advise whether Mr. 4°1181E7 will continue as Chairman of the committee." Approved. Letter to the "Freeborn County National Bank of Albert Lea", 41bert Lea) !Iinnesota, reading as follows: "This refers to the resolution adopted on October 9, 1934, by the board of directors of your bank signifying the ibank's desire to surrender its right to exercise trust powers which have been granted to it by the Federal Reserve Board. "The Board understands that your bank has been dischargeds Federal Reserve or otherwise properly relieved in accordance with the law of all of its duties as fiduciary. The Board, therefore, has issued a formal certificate to your bank certiiing that it is no longer authorited to exercise any of the powers covered by the provisions of section 11(k) of the Federal 'e Reserve Act, as amended. This certificate is inclosed herewith. this connection, your attention is called to the fact that seat) under Under the provisions of section 11(k) of the Federal Reb_rve Act, as amended, when such a certificate has been issued the Federal Reserve Board to a national bank, such bank (1) orra no longer be subject to the provisions of section 11(k) the Federal Reserve Act or the regulations of the Federal j 466 2/15/35 -3- "Reserve Board made pursuant thereto, (2) shall be entitled to have returned to it any securities which it may have deposited with the State or similar authorities for the protection of private or court trusts, and (3) shall not exercise any of the powers covered by section 11(k) of the Federal Reserve Act except with the nermission of the Federal Reserve Board." Approved. Telegram to Mr. Peyton, Federal Reserve Agent at the Federal Reserve Bank of Minneapolis, authorizing him to issue a limited voting permit to "The Midway National Corporation", St. Paul, Minnesota, entitling such organization to vote the stock which it owns or controls ill "The Trin Cities National Bank of St. Paul", St. Paul, Minnesota, f°r the purpose set forth in the telegram. Approved. Letter to Mr. Fletcher, Acting Federal Reserve Agent at the Pederal Reserve Bank of Cleveland, reading as follows: "This refers to your letter of June 21, 1934, with inclopures, regarding the proper classification for reserve Purposes of funds of the State of Ohio and of Franklin County, Ohio, deposited with the Fifth Avenue Savings Bank Company, Columbus, Ohio. We regret to find that your letter was inadvertently misplaced when received and that a reply thereto has not yet been made. ,. "It appears that subsequent to the examination of the fifth Avenue Savings Bank Comnany, as of May 12, 1934, the panl< obtained letters from the Assistant Treasurer of the Sate of Ohio and the Chief Deputy County Treasurer of Frankfl County stating that notice of thirty days and thirty-on e resnectively, would be given prior to the withdrawal of unde of the State of Ohio and of Franklin County, apparJntly , ' 4) the end that such deposits might thereafter be classified as.time deposits. However, counsel for your bank, in an .° Jinion dated June 71 1934, which you inclose, has expressed he view that the bank is not authorized under the applicable , vl'alrisions of State law to impose such restrictions as to ! ithdrawals with respect to the deposits in question, and that, 467 F/F,;5 -4- "therefore, such deposits cannot be classified as time deposits for reserve purposes. "nether the funds in question may lawfully be deposited as time deposits, subject to restrictions as to withdrawa l, is a euestion of State law. However, in the absence of court decisions or the opinion of the Attorney General for the State of Ohio regarding this question, the Board knows of no reason to differ from the conclusion reached by counsel for your bank that the deposits of the State of Ohio and of Franklin County, Ohio, which are here involved, cannot properly be Classified by the Fifth Avenue Savings Bank Company as time deposits for the purpose of computing reserves thereon. If the Attorney General for the State of Ohio should render an opinion with respect to this ouestion, further consideration of the matter would be necessary. "Irrespective of the authority of the bank to impose restrictions as to the withdrawal of the deposits in question, it does not appear that such deposits are payable only after written notice of intent to withdraw, and, as you know, in order for a deposit to constitute a 'time deposit, open account' or a 'time certificate of deposit' within the meaning of the Board's Regulation DI relating to reserves, it is necesearY that the notice before repayment of such deposits shall be in writing. '"It is noted that in the report of examination of the Fifth Avenue Savin7s Bank Company, as of May 12, 1934, the examiner has criticized a repurchase agreement entered into between that bank and its affiliate, the Ohio National Bank, On February 28, 1934, whereby the Ohio National Bank agrees te purchase for the account of the Fifth Avenue Savings Bank °Ilna47 United States Government bonds, certificates and notes, whenever the deposit balance of the latter bank exceeds ! 75,000. It is understood that under this agreement the Ohio N ational Bank agrees to repurchase the securities at par at Y time and guarantees to pay the Fifth Avenue Savings Bank ...°13PalAY interest at the rate of 2 per cent during the time the ' ecurities are held, irrespective of the coupon rate of the .!.ecurities, payable, however, on the dates the coupons are due. is understood also that at the time of the examination of .u_ne Fifth Avenue Savings Bank Comnany that bank had in its instment account United States Government bonds having a par 2/lue of t40,000 which were acrui_red under the above repurchase reement, and that this amount is in excess of 10% of the bank's Pita), a4 and surplus. Upon the basis of the facts stated, it 411?ears that the repurchase agreement involves a violation of e prohibition against the payment by a member bank, directly vr indirectly by any device whatsoever, of any interest on any r 7 468 2/15/35 -5- "deposit which is payable on demand and that such agreement also violates the provisions of section 23A of the Federal Reserve Act which impose restrictions upon the purchase by a member bank of securities under repurchase agreement from its affilietes. Accordingly, it is requested that you bring this matter to the attention of the Fifth Avenue Savings Bank Company and the Ohio National Bank in order that they maY take such action as may be necessary tr) conform hereafter to these orovioions of the law." Approved. Letter to Mr. Foxton, Federal Reserve Agent at the Federal Reserve Bank of Richmond, transmitting the following amended Clayton Act Permit: Mr. J. F. Fleming, to serve at the same time as a director and officer of The Dominion National Dank of Bristol, Bristol, Virginia, and as a director of the Bristol Savings e: Loan Corporation, Bristol, Virginia, for the period ending January 14, 19F6. Aooraved. Letter to ir. Peyton, Federal Reserve Agent at the Federal Reserv e Bank of Minneapolis, stating that thr Docrd has reconsidered the ClaYton Act connection of 11r. P. T. Clemens and has issued a PerMit as follows: 14r. P. W. Clenenr, to serve at the same time as a director d officer of The Dakota National Bank of Fargo, Fargo, rrth Dakota, and as a director and officer of the Bank of oteele, Steele, North Dakota, for the period ending January 14, 1936. n Approved. Letter to Mr. McAdams, Assistant Federal Reserve Agent at the Pede_ "al Reserve Bank of Kansas City, stating that the Board has given eorist, "ration to the following application for a permit under the 469 2/15/35 -6-- ClaYton Act, and that, upon the basis of the inforration before it, feels that the issuance of the permit applied for would be incompatible with the Public interest: Mr. J. Renz Edwards, for nermission to serve nt the same time as n director of the Brotherhood State Bank, Kansas City, Kansas, and as a director of the Security National Bank of Kansas City, Kansas City, Kansas. The letter also reouested nr. McAdams to communicate to the 4Pl1cant the Board's nosition in the matter, and to advise the Board 17)11°17113tlY as to whether the applicant desires to submit any additional 4ta 'end, if not, as to what steps he proposes to take in order to c°mPlY with the Provisions of the Clayton Act. Approved. Letters to applicants for permits under the Clayton Act advis- esPectively of the issuance by the Board of permits as follows: Mr, W. rare' Tomnkins, to serve at the same time as n director nnd officer of the Dobbs Ferry Bank, Dobbs Ferry, New York, flald as a director of The First National Bank of Hastings-unonlludson, Hastin7s-upon-Hudson, Net, York, for the period ending Jenuarv la, 1936. Mrs DeVer C. Warner, to serve at the same time as a director .The First National Bank and Trust Company of Bridgeport, idgeport, Connecticut, and as a director and officer of the 4! ., ( rris Plan Bank of Bridgeport, Bridgeport, Connecticut, for e Period ending January 14, 1936. V 1111'• P4mund S. Wolfe, to serve at the same time as a director officer of The First National Bank and Trust Company of m dgeport, Bridgeport, Connecticut, and as a director of the c3rris Plan Bank of Bridgeport, Bridgeport, Connecticut for the neriod ending January 14, 1936. Mr. rp ,p,..4 * W. Friend, to serve at the same time as a director and c4lcer of the National Bank of America in Pittsburgh, Pittspl , irgh, Pennsylvania, and as a director and officer of The 4-rst National Bank at McKees Rocks, 7'.eicees Rocks, Pennsylvania, r 2/16/35 470 -7- for the period ending January 14, 1936. Mr. H. C. Winslov-, to serve at the same time as a director of the First National Bank of Meadville, Meadville, Pennsylvania, and as a director and officer of The Farmers National Bank of Conneautville, Conneautville, Pennsylvania, for the period ending January 14, 1936. Mr. M. L. Clark, to serve at the same time as a director and Officer of The Industrial Bank, Elizabeth City, North Carolina, and as a director of The First & Citizens National Bank of Elizabeth City, Elizabeth City, North Carolina, for the period ending January 14, 1936. Mr- C. B. ”orrisette, to serve at the same time as a director and officer of The Industrial Bank, Elizabeth City, North Carolina, and as a director of The First Er Citizens National Bank of Elizabeth City, Elizabeth City, North Carolina, for the Period ending Januar:7 14, 1936. /11'. W. F. Brenton, to serve at the same time as a director and Officer of the Brenton State Bank, Dallas Center, Iowa, as a d irector and officer of the Iowa-Des Moines National Bank & Trust Comnanv, Des Moines, Iowa, and as a director and officer of The First National Bank of Perry, Perry, Iowa, for the neriod ending January- 14, 1936 Mr. G. C. Kelly, to serve at the same time as a director and °fficer of the Brenton State Bank, Dallas Center, Iowa, as a D.rector and officer of The First National Bank of Perry, !:errY, Iowa, and as a director and officer of the Jefferson te Bank, Jefferson, Iowa, for the period ending January 14, 1936. Approved. Thereunon the meeting adjourned. 4P'10yed, Governor.
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