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391 • A. meeting of the Federal Reserve Board was held in hashington on Thursday, February 7, 1935, at 11:45 a. m. PRESENT: Er. lir. hr. Jr. Ids. Eccles, Governor Thomas, Vice Governor Hamlin Liner James hr. 1.orrill, Secretary bethea, Assistant Secretary The Board acted upon the following matters: Telegram to 1.r. Austin, Chairman of the Federal Reserve 1411* of Philadelphia, reading as follows: "/our letter February 4. Board approves appointment of Lr. Benjamin F. Lechling as member of Industrial Advisory Committee of Third Federal Reserve Distri ct for unexpired Portion of term of Yr. Richard D. -aood, resigned, it being understood that Ls.. Lechli ng is actively engaged in some industrial pursuit within the Third District." Approved. Telegram to Liz. McAdams, Assistant Federal Reserve Agent 8.t th e Federal Reserve Bank of Kansas City, reading as follows: "Re your letter February 2, 1935, Board crftends to Larch 1935, the time within which 'Nebraska State Bank of Valenne, Nebraska' may accomplish its membership in the System. ellee advise the bank accordingly. Your comments regarding voesible change in ownership and management of bank have been .1 :)ted and in event any such change is effected it is requested ,,aat before accepting payment for or issuing stock in Federal iLeser , Ire Lank to applicant, you submit to Board for approval ni ormation in connection with such changes together with YoUr recomm endation in the matter." Approved. Letter to Mr. Stevens, Chairman of the Federal Reserve Bank at chi ' c lgo, reading as follows: 392 2/7/35 -2- "Receipt is acknowledged of your letter of February 1, 1935, in -which you state that the i)oard's letter of January 29 with regard to the salaries of officers of your bank was submitted at the meeting of your executive committee on February 1 and that, at that meeting, a salary at the rate of v25,000 per annum 'vas approved for Er. H. P. Preston, Deputy Governor, for the year 1935. "I have been requested to advise you that the Federal Reserve Board approves the salary fixed for hr. Preston by Your executive committee for the current year." Approved. lemorandum dated January 30, 1935, from the Committee on Salaries and Expenditures, submitting a letter dated January 15 flIcxm Governor Norris of the Federal Reserve Bank of Philadelphia, Igilich requested certain changes in the personnel classification Plan of the bank. The memorandum stated that inasmuch as the salary 4 .11ges of a800-2500 for Examiner for Industrial Advisory Committee; 41320-1620 for Senior Clerk; ,s900-:)1260 for Intermediate Clerk; and 4132011620 for Senior Stenof;rapher, as recommended in Governor letter, appear not to be in conflict with the Board's positi 8 set forth in its letter of January 5, the Committee recomraeild.s that they be approved. The memorandum also stated that under date of January 3, 1935, the Board approved the appointment of Er. Zell ,. Penner as Chief Examiner in the Federal Reserve Agent's 4134-rtrient of the bank with salary at the rate of 5,496 per annum, e'Ild the Committee recommends that the position of Chief Examiner be %.Le Etia t aPpraited" position for the present, any change in the 41ary ef a person occupying an appraised position requiring approval 13 th6 DoPrd before it becomes effective; that in view of the 393 2/7/35 -3- statements contained in Governor "Terris' letter it mould appear that a salary of $5,004 per annum for the Executive Secretary of the Industrial Advisory Committee mould not be excessive, and the Cornittee recommends that the Federal reserve bank be advised that the Board is milling to approve a salary of ,di5,004 for la.. Loss, and to aPprove the designation of the position as "appraised", in"Inuch ass on the basis of the information furnished to the Board, the approval of a maximum salary of C;6,000 per annum for the positi°718 of Chief Examiner and Executive Secretary of the Industrial 441/18°rY Committee mould be in conflict with the Board's position 43 set forth in its letter of January 5, 1935; and that it would appear that the proposed salary of ‘,41,008 per annum to be paid to 14r. Bartholomew as Special Representative of the Liquidation Departof the bank, is not out of line with salaries paid by other bstic$ for similar positions and, in view of the statements contained 1:4 Governor Norris' letter, the Committee recommends that the bank be advised that the Board is milling to approve the salary of '4 l' 008 Per annum for 1.1r. Bartholomew, but that in keeping with the Principle s set forth in the Board's letter of January 5, it does 11°t 4PPrOve of an increase in the salary range for the position 3(100- 3780 to ,-,?3000-4050. Approved. Letter to Lr. Sargent, Assistant Federal Reserve Agent at the p " 'Oral Reserve Bank of San Francisco, reading as follows: 394 2/7/35 -4- "Receipt is acknowledged of your letter of January 25, 1935, with which was inclosed a copy of a letter from the State Security Bank, Brigham City, Utah, requesting permission for the retirement of 315,000 of its outstanding capital debentures, and a copy of your reply thereto. The board has given consideration to the bank's application, and, in view of the data contained in the correspondence submitted by you and in the latest report of examinatlon of the bank, is unwilling to approve the application at this time. "You are requested, therefore, to advise the bank that the Board has denied its application, with the understanding that, if desired, the matter may be reopened after the bank has been subject to another examination." Approved. Letter to Er. Fletcher, licting Federal Reserve Agent at the Federal Reserve Bank of Cleveland, reading as follows: "Reference is made to Lr. Evans' letter of January 30, 1935, regarding the action of The Home Banking Company, St. .11arys, Ohio, in purchasing for cash from the First National a'arik in St. Marys which was placed in voluntary liquidation °n January 25, 1935, its notes receivable amounting to 452,000 and the contemplated purchase from that bank for cash !tt market prices, of its securities investment account amountlng to approximately 0203,000. tha4 It has been noted from your letter of January 22, 1935, . all of the assets acquired, or to be acquired, by The ;_'°:me Banking Company in this connection, have been approved °Y the State Banking Department and by examinors for the Federal Reserve Bank of Cleveland and that the transactions in?lye only a purchase of assets which is being done to ' 11.°5.1tate the liquidation of the national bank. t , In view of your comments and the statement of 1.1r. Evans t"at The Home Banking Company is assuming no liability in the aransaetions, and that the general character of the bmik's eete has not, or will not be changed as a result thereof, j ct e Board will not regard the transaction s as outlined above 15.resulting in a violation of the general condition under 17111 ch the bank was admitted to membership." Approved. Letter to the governors of all Federal reserve banks, readeollows: 395 2/7/35 -.5.. "All of the Federal oserve banks have adopted personnel Classification plans which provide for the classification of employees into groups and grades and the fixing of a salary range for each non-official position in the bank, except positions designated as 'appraised'. The classification plan now in effect at each Federal Reserve bank follows, in a general vaY, the outline suggested by the committee on Classification of Personnel at Federal Reserve banks at their meeting in Chicago on April 8, 1929. "Az these plans hve now been in effect for approximately 5 years, it is felt desirable to have them thoroughly reviewed in the light of the experience gained in their operation, with the view of simplifying them and, if practicable, putting them on a more nearly uniform and comparable basis. For this purpose the Board desires to call a conference of senior officers representing all the Federal Reserve banks, who are familiar with the personnel classification plans. Prior to the calling of such a conference, however, it would be helpful if each bank would thoroughly review its own classification plan and work out in some detail any changes therein which it may have to suggest. "Among the suggestions which have been made for a revision of the personnel classification plans are the elimination of the group and grade classifications, and changes in the Present method of describing work performed and qualifications f?quired mith a view to bringing about a greater uniformity in 'ne Practice of the several Federal Reserve banks in this resPect. "The Board feels that, if practicable, such a conference should be held within the next two months, and following the receipt of replies from all Federal Reserve banks, including Mvioe as to the name of the officer of each berk who will attend !Ileh a conference, the Board will fix the date and place of 6110 meeting. In advising the Board of the name of your repro!entative, it will be appreciated if you will at the same time lndleate any specific questions with reference to the personnel classification plans which you would like to have considered at the conference." Approved. Letter to Lir. Wood, Chairman of the Federal Rcserve Bank cr St. Louis, reading as follows:, 'In am in receipt of your letters of January 23 and 28 regard to salaries of officers and employees of the Federal serve Bank of St. Louis. "I will be clad if you will advise the board of directors 396 2/V35 -6- "of the bank of the Board's appreciation of the conservative Policy which has been followed by the bank, as set forth in your letter of January 23 in regard to this matter, and that it is a source of satisfaction to the. Board to learn that the directors of the bank have given the subject their close at- Approved. Letter to La-. Yialsh, Federal Reserve Agent at the Federal Reserve Bank of Dallas, reading as follows: "Reference is made to your letter of January 21, 1935, regarding eliminations made by 'Mercantile :rational Bank at Dallas', Dallas, Texas, prior to the issuance of limited voting permits to 'Equitable Securities Company' and 1.,ercantile Rational hank at Dallas on January 7, 1935. 'In view of the Board's letter of January 15, 1935 (X-0091), you have inquired whether or not the Mercantile Ilational Bank at Dallas should be permitted to transfer y31,272.75 (the amount of depreciation in Group 2 securities e liminated) 'from its deductible (unpublishable) reserve to its regular (publishable) reserve for contingencies, so that it maY get the benefit of including this amount in its capital funds as published in its future condition reports.' You stated that such depreciation in securities was not classilled as a loss at the latest examination and that the bank l'Jas extremely reluctant to include such depreciation in the eliminations made due to its nnxiety to conserve its capital fulldsuas much as possible. Az pointed out in the first paragraph of the Board's ?.etter of January 15, 1935 (X-9091), the Board still feels 'ellat the requirements as set forth in its letter of I:ovember ILO, 1534 (X-9018), are a desirable basis, as a general rule, uhieh limited voting permits should be granted. , .iowevor, the circumstances, the Board mill interpose no objection 0° the transfer of c31,272.75 from the bank's 'deductible' :valuation reserve to its reserve for contingencies, pro;'ded that you still consider such transfer satisfactory and n!irable and that the bank expressed a desire to make such ' wtjustments in its records." r 2 Approved. Letter to Li-. Case, Federal Reserve Agent at the Federal Lank of New York, reading as follows: 397 2/7/35 -7- "There are inclosed the original and copies of a Clayton Act permit granted to 1.1r. Otis A. Thompson, Norwich, New York, to serve at the same time as director and officer of The National Bank and Trust Company of Norwich, Norwich, New York, as director of The First National Bank in Sidney, Sidney, New York, and as director of The Sherburne National Bank, Sherburne, NOV( York, for the period ending January 14, 1936, for transmittal by you to the applicant and the banks involved, and a copy for your files. "In considering the application of Mr. Thompson it was noted that he had apparently violated Section 22 (g) of the Federal Reserve Act and that this apparent violation had been reported to the United States District Attorney at Syracuse. "The Board feels that, in connection with applications involving possible violations of law, even though of a technical nature, definite information should be obtained regarding the disposition which was made of such cases before permits under the provisions of the Clayton Act are issued. You are requested, therefore, to ascertain the status of the charges against la-. Thompson, if any, and in the event the case has been duly considered and closed without prosecution, you are authorized to release the inclosed permit to hr. Thompson and forward copies thereof to the banks involved, at the same time furnishing the Board with complete information with respect to the disposition of this matter in order that its records tay be complete. "In the event that the permit is sent to the applicant 'ald copies thereof to the banks involved, please advise them that the permit has been issued so as to expire at the close (3f January 14, 1936, as it is the purpose of the Board to 'ecarlend the enactment of legislation by the Congress at session clarifying and otherwise amending the provisions °f the Clayton Act relating to interlocking bank directorates." l Approved. Eta Letter to Lr. A. P. Giannini, Palm beach, Florida, reading follows: "The day following the receipt of your letter of January 24 in regard to the matter of your service as a consigliere :f Banco. d'America e d'Italia, Ulan, Italy, the Board reAe_ived a letter also dated January 24 from Is. S. G. Sargent, istant Federal Reserve Agent at the Federal Reserve Bank s San Francisco, in which he advised that you are no longer s°1*villg as an officer and director of the Bank of America, 6-11 Francisco, California (State losrar). In the circumstances, the Board has issued to you, and 7 2/7/35 _ o_ "there is transmitted herewith, a permit covering your services as a director of The National City Bank of New York, Levi York, New York, as a director and officer of the Bank of America National Trust and Savings Association, San Francisco, California, and as a consigliere of Banoa d'America e d'Italia, Lilian, Italy. "The inclosed permit has been issued so as to expire at the close of January 14, 1936, as it is the purpose of the Board to recommend the enactment of legislation by the Congress at this session clarifying and otherwise amending the provisions of the Clayton Act relating to interlocking bank directorates. 0 A. copy of this letter and a copy of the inclosed permit are being sent to each of the banks involved, to the Assistant Federal Reserve Agent at the Federal Reserve Bank of San Franelse°, and to the Federal Reserve Agent at the Federal Reserve tank of New York, for their information and records." Approved. Letter to Li.. lioxton, Federal Reserve Agent at the Federal °serve Bank of Richmond, reading as follows: "There are inclosed the original and copies of Clayton ' Let Permits granted to 1:essrs. Lac. li. Beale and B. B. ForPortsmouth, Virginia, for permission under the provi8i°118 of the Clayton Act to serve at the same time as directors of American rational Bank of Portsmouth and as directors ,,,:ncl/or officer of Citizens Trust Company, both of Portsmouth, arginia, for the period ending January 14, 1936, for transby you to the applicant and the banks involved and a cc:TY for your files. "It appears that American National Dank of Portsmouth nd Citizens Trust Company are engaged largely in different 'YPee of business and do not compete substantially. It apPears also that Lessrs. Leale and Ferguson have been associated the directorate or management of both banks for approximately t!.fteen years, that there appears to be a close management af/(;iliation betmeen the two banks and that the Citizens Trust 02,111PanY is said to have been originally organized by interests h uhe American National Bank of Portsmouth for the purpose of business that the national bank was precluded by na,,?tal banking laws from handling. Therefore, in accordance 11 the policy set forth in the Board's letter of January 9, ' 5 -9082), the applictions have been approved. the permits mi are sent to the applicants and copies thereon ' pe reof to the banks involved, please advise them that the have been issued so as to expire at the close of 399 2/7/35 -9- "January 14, 1936, as it is the purpose of the Board to recommend the enactment of legislation by the Congress at this session clarifying and otherwise amending the provisions of the Clayton Act relating to interlocking bank directorates." Approved. The permits referred to in the above letter were as follows: Lr. ac. H. Beale, for permission to serve at the same time as a director of the American National Bank of Portsmouth, Portsmouth, Virginia, and as a director of the Citizens Trust Company, Portsmouth, Virginia, for the period ending January 14, 1936. L. B. B. Ferguson. for permission to serve at the same time as a director of the American 1:ationL1 Bank of Portsmouth, Portsmouth, Virginia, and as a director and officer of the Cltizens Trust Company, Portsmouth, Virginia, for •the period ending January 14, 1936. Letter to 1..r. hoxton, Federal Reserve Agent at the Federal Reaextlie Bank of Richmond, reading as follows: "Reference is made to your letter of January 9, 1935, sublutting additional information relative to the anplications of Messrs. Frank B. LalArence, Vernon A, Brooks, if. E. Dorin, and C. C. Hall, all of Portsmouth, Virginia, for permission under the provisions of the Clayton Act to serve at the same time as directors and/Or officers of American rational Bank of Portsmouth and Citizens Trust Company, both °f Portsmouth, Virginia, which were not approved by the Board as set forth in its letter of December 26, 1934, to you. "The Board has reconsidered these applications, and !ince tho banks involved are engaged largely in different :YPes of business and do not appear to compete substantially, has, in accordance with the policy sot forth in its letter .?! January 9, 1935, (x-9082), granted the permits to Messrs. -worence, Brooks, Bonin and hall for the period ending Jan14, 1936. There are inclosed the original and copies of I3. thepermits granted to these individuals for transmittal 1,,Y You to the applicants and the banks involved and copies or our files. "When the permits and copies thereof are sent to the a9Plicants and the banks involved, please advise them that 400 2/7/35 -10- "the permits have been issued so as to expire at the close of January 14, 1936, as it is the purpose of the Board to recommend the enactment of legislation by the Congress at this session clarifying and otherwise amending the provisions of the Clayton Act relating to interlocking bank directorates." Approved. The permits referred to in the above letter were as follovrs: LI'. Frank D. Lawrence, for permission to serve at the sure time as a director and officer of the American National Dank Of Portsmouth, Portsmouth, Virginia, and as a director of the Citizens Trust Company, Portsmouth, Virginia, for the Period ending January 14, 1936. Lr. Vernon A. Brooks, for permission to serve at the same time as a director of the American National Lank of Portsmouth, Portsmouth, Virginia, and as a director of the Citizens Trust Company, Portsmouth, Virginia, for the period ending January 14, 1936. ** U. E. Dorin, for permission to serve at the same time as a director of the American Lational Bank of Portsmouth, Portsmouth, Virginia, and as a director of the Citizens Trust Company, Portsmouth, Virginia, for the period ending January 34, 1936. 1ZI's C. C. Hall, for permission to serve at the same time as 3._ director of the American National bank of Portsmouth, ortsmouth, Virginia, and as a director of the Citizens rust Company, Portsmouth, Virginia, for the period ending January 14, 1936. Letter to Lr. Case, Federal Reserve Agent at the Federal 4080 , Bank of New York, stating that the Board has reconsidered the folio'? jng Clayton Act applications and has granted permits for the Period ending January 14, 19361 Lr. harry 0. Coughlan, for permission to serve at the same _ 401 2/7/35 -11- time as a director and officer of The First National Bank. of inatley, Nutley, New Jersey, and as a director of the Lank of Nutley, Nutley, New Jersey, for the period ending January 14, 1939. Larior. L. Lewis, for pernission to serve at the same time as a director and officer of The First :ationa.1 Bank of NutLew Jersey, and as a director of the Bank of Lutley, New Jersey, for the period ending January 14, 1936. Approved. Letter to Lr. Peyton, Federal heserve Ar;ent at the Federal Res °rye Lank of LinneaDo14 2, transraittinE the following Clayton ..ct Perr''it and requesting that prior to the release of the permit he satistY himself that the applicant is not an officer, director or ernPloYoe of any nonbanking corporation or a member of a partnership nlakes loans on the security of stool., or bond collateral within the e _ inp lation of section SA of the Clayton Act: 1.-r• Carlton L. ,lorder, for permission to serve at the same as a director and officer of The First i.ational Lank of Da::ota., and as a director of the 1700(1, Dead-.7ood, ' iTa ank of Spearfish, Spearfish, south Dakota, for the period ending January 14, 1936. Approved. Letters to applicants for permits under the Clayton Act ng of approval of their applications as follows: Henry L. handle, for permission to serve at the same time director of the Clinton Trust Company, New York, ,iew elcrk, and as a director of the Gloster National Bank and Trust iiiParlY, Closter, New Jersey. for the period ending January 14, 1936. e.r.3 I,r e -h. A. Lanney, for permission to serve at the same time as !._director and officer of the Ossining Trust Company, Ossining, ' ew York, as a directer and officer of The First National Bank 402 2/7/35 of Croton on Hudson, Croton on Hudson, New York, and as a director of The First National Bank of liastings-upon-Hudson, hastings-upon-hudson, Now York, for the period ending January 14, 1936. Li. Charles A. Turner, for permission to servo at the same time as a director of The Delauure County National Bank of Chester, Chester, Pennsylvania, and as a director of The Ridley Park National Bank, Ridley Park, Pennsylvania, for the Period ending January 14, 1936. Ir. Henry A. McKee, for permission to serve at the same time as a director and officer of The Eational Capital Lank of uashington, Washington, D. C., and as a director and officer of The East Washington Savings Bank of Washington, Washington, B. G., for the period ending January 14, 1936. Ir. Julian B. Baird, for permission to serve at the same time as a director of The First National Bank of Saint Paul, St. .(1111, Minnesota, and as a director of the Grand Avenue State =:St. Paul, Minnesota, for the period ending Janutlry 14, Ir, M. J. Croue, for permission to serve at the same time as an amployee of the Northwestern National Bank and Trust CoinParty of Minneapolis, Minneapolis, Linnesota, and as a director The First National Bank of Breckenridge, Breckenridge, luznnesota, for the period ending January 14, 1936. " L E. C. Hickman, for permission to serve at the same time as a director of The First National Bank of Windsor, Windsor, 9,01orado, and as a director and officer of The First National bank in Boulder, Boulder, Colorado, for the period ending January 14, 1036. Lr•F. L. Merchant, for permission to serve at the same time Ile a director of the Westport Avenue Bank, Kansas City, lasuri, and as a director of The Stock Yards National Bank of ,ansas City, Kansas City, Missouri, for the period ending uanuory 14, 10,36. r 'L. P. Atmar, for permission to serve at the same time as director and officer of The First National Bank in Groveton, 'zj'cveton, Texas, as a director and officer of the Trinity 2_;ate tank, Trinity, Texas, and as a director and officer of " le Citizens State Bank of Corrigan, Corrigan, Texas, for the Period ending January 14, 1936. Lre C. B. Deahl, for permission to serve at the same time as 403 2/7/35 -13- a director and officer of The First National Bank in ",ellington, Wellington, Texas, and as a director and officer of The First State Bank, Panhandle, Texas, for the period ending January 14, 1955. Li.. J. G. Nisbett, for pernission to serve at the same time as a director and officer of The First State Balk, Dodsonville, lexas, and as a director and officer of The First National Bank in liellington, Wellington, Texas, for the period ending January 14, 1936. Approved. Thereupon the meeting adjourned. APPrOved: Governor.
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