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316 A meeting of the Federal Reserve Board was held in Washington on Thursday, January 31, 1935, at 11:30 a. m. PRESENT: Mr. Mr. Mr. Mr. Mr. 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: Memorandum dated January 28, 1935, from Mr. Smead, Chief of the D ivision of Bank Operations, recommending the appointment of Mrs. 4ther G. crews as a file clerk in the division, with salary at the l'ate of $1,440 per annum, effective February 4, 1935, subject to her 1°"sillg a satisfactory physical examination. Approved. Letter to Mr. Stevens, Federal Reserve Agent at the Federal ese rve Bank of Chicago, reading as follows: "Reference is made to your letter of January 18 re! arding the request contained in our letter of January .L5 that the necessary change in the personnel classification plan be submitted to provide for the position of ,pecial assistant in connection with work under the oecurities Exchange Act. by this is a new position not specifically covered the 'Lle personnel classification plan, the Board would prehave you furnish it with a new page covering this sition to be inserted in our copy of the plan. The eteP7rtment or unit for this position might be designated Securities Exchange' and the description of the duties f„"°111d conform to the work which Mr. English will be xioected to perform." r Approved. 31_7 -2Memorandum dated January 28, 1935, from the Committee on Salaries and Expenditures, submitting a letter dated January 7 from Mr. Helm, Deputy Governor and Cashier of the Federal Reserve Bank of 4ansas C. which requested approval of certain changes in the Personnel classification plan of the bank and the Denver Branch. The Memorandum stated that Mr. Helm's letter was mailed before the Fedelsal Reserve Bank of Kansas City received Governor Eccles' letter of jalluarY 5, 1935, stating the Board's position with reference to salary changes, and recommended that Mr. Helm be advised that in view of the Bc4Ird t s position as set forth in its letter of January 5, it has deferred action on the proposed changes in order that the bank may l'ec°nsider them in the light of that letter. Approved. Memorandum dated January 28, 1935, from the Committee on 411-ss and Expenditures, submitting a letter dated January 15 from Walsh, Chairman of the Federal Reserve Bank of Dallas, which restsd approval of certain changes in the personnel classification 1)144 of the bank and the San Antonio Branch. The memorandum stated that 4., e Proposed changes appear not to be in conflict with the Board's " 13 4-on as set forth in its letter of January 5, 1935, and accord- that the Committee recommends that they be approved. Approved. Memorandum dated January 22, 1935, from the Committee on aaaar. les and Expenditures, submitting a letter dated January 17 from ,8 gent) Assistant Federal Reserve Agent at the Federal Reserve " 318 -3Bank of San Francisco, which requested approval of a change in the Personnel classification plan of the bank to provide for a change from miner - Office and Field" to "Assistant Chief Examiner" in the title of a position in the Federal Reserve Agent's Department. The memorandum stated that the committee had reviewed the proposed change and recomMends that it be approved. Approved. Telegram to Mr. Peyton, Federal Reserve Agent at the Federal Reserve Bank of Minneapolis, reading as follows: "Your letter January 25 re appointment by Board of Mr. J- E. O'Connell as director your Helena branch for year 1935. Board waives during current year as to Helena branch provision of regulations referred to in Board's letter January 9, 1935 (X-9083), which requires that at least one director appointed by the Federal Reserve Board !hall reside outside of branch city. Board has no objection ,i() suspension of this requirement of by-laws Helena branch for year 1935." Approved. Letter to Mr. Case, Federal Reserve Agent at the Federal Reserve f New York, reading as follows: „1. "Consideration has been given to the request for a contained in your letter of January 21, 1935 as ' IDo whether section 32 of the Banking Act of 1933 would ,Pplicable to the service of Mr. John Vanneck as an 'loer and director of Equitable Holding Corporation and director of The Commercial National Bank and Trust mPlanY, both of New York, New York. th "The information furnished with your letter shows that the 'cluitable Holding Corporation was incorporated in 1927; asa't its assets, which consist of securities, represent wisets created through inheritance for the benefit of Mr. oZleok and other members of his family; that Mr. Vanneck '148 a majority of the stock of the corporation, the balance 319 1/31/35 -4- "being held by members of his family; that the corporation has no dealings whatsoever with the public and does not Participate in transactions involving the issue, underwriting or distribution of securities of its own, or others; and that changes in its portfolio of investments are made only when deemed prudent in order to keep its funds invested to good advantage. "The statistical information which has been furnished shows that purchases and sales of securities by the corporation amounted to the following percentages of its total assets in the years indicated: Purchases Year 1930 1931 1932 1933 1954 Average for period 86 48 22 37 26 44.2 Sales 84 46 21 38 24 42.9 "It appears that during each of the years 1930 to 1934, inclusive, the corporation incurred net losses from sales of securities, although during these years it realized a total gross income on all operations. t. "It further appears that, at the end of 1934, the securities in the corporation's portfolio had been held in the following percentages for the following periods: Held less than one year Held betT,een one and two years Held for two years or more 25 15 60 100 "On the basis of the foregoing information, the Board agrees With you and counsel for your bank that section 32 of tileBanking Act of 1933 is not applicable to the relationships e4erred to in the first paragraph of this letter." Approved. Letter to Mr. Curtiss, Federal Reserve Agent at the Federal ReBank of Boston, reading as follows: 320 —5— "Reference is made to the application of Mr. Myron F. Converse, Worcester, Massachusetts, for permission under the provisions of the Clayton Act to serve at the same time as a director and/or officer of Worcester County Trust Company, The Mechanics National Bank of Worcester and the Worcester Morris Plan Company—, all of Worcester, Massachusetts. "In considering this application it was noted that The Mechanics National Bank of Worcester and Worcester County Trust Company appear to be in substantial competition. However, it vlas also noted that Mr. Converse had been urged to serve the Worcester County Trust Company by the State Bank Commissioner and others interested in the welfare of the rehabilitated in— stitution, that you feel that his services will be of great benefit in adjusting and stabilizing the banking situation in Worcester and that Mr. Converse consented to serve subject to T-s ability to obtain a Clayton Act permit as he did not feel that he should sever suddenly his relations with the Mechanics National Bank which he has served for many years. "In view of your recommendation, the extraordinary cir— cumstances existing and the Board's policy as set forth in its letter of January 9, 1935, (X-9082), the Board has granted the Permit for the -period ending January 14, 1936. The original 20pies of the permit are inclosed for transmittal by you to Converse and the banks involved, and a copy for your files. a ,„"When the permit and copies thereof are sent to the ,,,113-13-cant and the banks involved, please advise them that the iirmit has been issued so as to expire at the close of January en :.4936, as it is the purpose of the Board to recommend the of 2ument of legislation by the Congress amending the provisions the Clayton Act relating to interlocking bank directorates." r Approved. The____, Clayton Act permit referred to in the above letter was as Naows. Mr." as 'Yron F. Converse, for permission to serve at the same time masa director of the Worcester County Trust Company, Worcester, pors"husetts, as a director of The Mechanics National Bank of offe iester, Worcester, Massachusetts, and as a director and chu cer of The Worcester Morris Plan Company, Worcester, Massa— setts, for the period ending January 14, 1936. 4e Letter to Mr. Curtiss, Federal Reserve Agent at the Federal link of Boston, reading as follows: tvr Mr. j e Board has given consideration to the applicction of Weeks, Middlebury, Vermont, for permission under 321 1/31/35 -6- "the provisions of the Clayton Act to serve at the same time RS director and officer of Addison County Trust Company, Middlebury, Vermont, and as director of The National Bank of Middlebury, Middlebury, Vermont, and Brandon National Bank, Brandon, Vermont. On the basis of the information before it, the Board feels that the issuance of the permit applied for would be incompatible with the public interest. You are requested to .V7ise the applicant of the Board's position in the matter un-1-es8 there are pertinent facts which were not submitted with the 8PPlieation and which you feel should be given consideration. If you deem it desirable or necessary, you are authorized to inform Mr. Weeks that the Board's action upon his application was based largely upon the fact that the two Middlebury banks 1-1.e engaged in the same class or classes of business and are so ;)cated as to be in a position to compete substantially. In '.ris connection, reference is made to the Board's letter of January 9, 1955, (X-9082). "You are authorized also to inform Mr. Weeks that, if he 8° desires, he may amend his application by letter to exclude .!!erefrom one of the two Middlebury banks, and that upon receipt 'Zvsuch amendment, accompanied by appropriate evidence of the el! ranee of his 4.-faLled from the connection with the bank which is to be exapplication, the Board will give consideration lvieuch amended application. The amendment, and any additional si,tormation submitted by the applicant in connection therewith, t;;'.. 1 d be transmitted to you, of course, and should be forwarded n: Board with your recommendation. Week Please ascertain and advise the Board as to whether Mr. 8 wishes to submit an amendment to his application and, if trot !as to what steps he proposes to take in order to comply " „4"n the provisions of the Clayton Act." i Approved. Letter to Mr. Curtiss, Federal Reserve Agent at the Federal Re' lank of Boston, reading as follows: R with in eference 1 is made to your letter of January 9, 1935, Sept --e ' °64res, concerning the Clayton Act permit granted ember 14, 1934, to Mr. Cummings C. Chesney, Pittsfield, aehlasetts, to serve at the same time as director of The offi(!ultural National Bank of Pittsfield, as director and Plez-gr °f The Berkshire Trust Company and Berkshire Morris wh1ch-1, °111PanY of Pittsfield, all of Pittsfield, Massachusetts, °f th04-nit was issued with the understanding on the part Of a i eueral Reserve Board that it should be considered as eMerp:m13°rarY character and that as soon as the existing tae :.:1:1,1°Y s ituation in Pittsfield had passed and Mr. Chesney biltk ' u _-Le to sever his connection with either the national Qr the trust company without injury to the interests of Ag4 322 " 3131135 -7- "either of the banks, their depositors or the community, such action would be taken by him. "It is noted from your letter of January 9, 1935, with inclosures, that Mr. Arthur Guy, former Commissioner of Banks of the Commonwealth of Massachusetts, and Mr. Pierce, the present Commissioner of Banks, are of the opinion that the emergency situation in Pittsfield still exists and that Mr. Chesney should continue as president of The Berkshire Trust C°/11PanY. It is also noted from the letter of Mr. Connor, President of The Agricultural National Bank of Pittsfield, dated December 201 1934, that he feels that rather than sever his connection as a director of The Agricultural National Bank, Mr: Chesney would decline to serve as president of The BerkShire Trust Company. "In all the circumstances, and in accordance with your recommendation the Board is willing at this time to allow the permit granted to Mr. Chesney on September 141 19341 to ?cntinue in effect with the understanding that, as indicated 1 1311 the Board's letter of September 141 19341 to you, it shall c°nsidered as of a temporary character and that as soon as the existing emergency situation is passed and Mr. Chesney is '41.1-e to sever his connection with either the national bank or company without injury to the interest of either of the trust beehanks, , their depositors or the community, such action will 'taken by him Please advise Mr. Chesney and the banks accordin "The Board requests that you review this case not later th) an1 i, December 151 19351 and advise what action is contemplated , .,Tr. Chesney at that time with respect to his services and t.,hery 4Jui your opinion, the permit should be revoked." A Approved. Letters to the respective Federal reserve agents stating that . V4e130 , 4rd has given consideration to the following applications for peruna bet e l' the Clayton Act, and that, upon the basis of the information it t4 ) 'feels that the issuance of the permits applied for would be e°r4Patibl -,..e with the public interest: a"."1-ght Fioolley,for permission to serve at the same time New 1.1c trler of Brown Brothers Harriman & Company, New York, Etnd T,.../. a and as a director of The Commercial mm National Bank --s ' Company of New York, New York, New York. 323 1/31/35 -8- Mr. L. P. Byars, for permission to serve at the same time as a director and officer of The Citizens Bank, Marion, South Carolina, and as a director of the Marion National Bank, Marion, South Carolina. Mr, A. M. Rose, for permission to serve at the same time as a director and officer of The Citizens Bank, Marion, South Carolina, and as a director of the Marion National Bank, Marion, South Carolina. 1.1x.s. Claude W. Gilliam, for permission to serve at the same time as a director of the Hondo State Bank, Hondo, Texas, and as a director of The First National Bank of Hondo, Hondo, Texas. Mr. W. G. Muennink, for permission to serve at the same time as a director of the Hondo State Bank, Hondo, Texas, and as a director of The First National Bank of Hondo, Hondo, Texas. Mr. Marcus Phillips, for permission to serve at the same time 118 director of The First National Bank of Kingsville, Kingsand as a partner of Robert J. Kleberg & Company, ,k1ng8vi1le, Texas. Th -etters also requested the agents to communicate to the applicants the Boardts Position in the matter, and to advise the Board promptly as to wL "ether the applicants desire to submit any additional data, and, if laot, to whctu steps they propose to take in order to comply with the Drovis, 113ns of .e Clayton Act. Approved. Letter erea to Mr. Clark, Assistant Federal Reserve Agent at the Fed- serva Bank of Atlanta, reading as follows: of 4 "The Board has given consideration to the application H. Kingman, Jr., Macon, Georgia, for permission saill;4;'ne provisions of the Clayton Act to serve at the Oom1-0,,:lme as director of The First National Bank & Trust orer-Y in Macon, Macon, Georgia, and as director and -eel' of City Bank & Trust Company, Macon, Georgia, and 324 -9"Jones County Bank, Haddock, Georgia. On the basis of the information before it, the Board feels that the issuance of the permit applied for would be incompatible with the public interest. You are requested to advise the applicant of the Board's position in the matter unless there are pertinent facts which were not submitted with the application and which You feel should be given consideration. "If you deem it desirable or necessary, you are authorized to inform Mr. Kingman that the Board's action upon his aPPlication was based largely upon the fact that the banks aPPear to be engaged in the same class or classes of business in the snme community and so located as to be in a position to compete substantially. It appears that it is the policy of the Congress, as declared in the Clayton Act, to terminate relationshins between banking institutions of certain classes which are in substantial competition, aPParently because the Congress felt that such relationships Illight tend to result in a substantial lessening of competition a restriction of credit. Therefore, the Board does not feel that it may grant this application since no other facts have been brought to its attention which would make it Z°TPatible with the public interest to issue the permit. In a connection, reference is made to the Board's letter of Tul ' 'January 9, 1935, (X-9082). th "In communicating with the applicant, please advise him siecit in accordance with Section V (g) of Regulation LI connoteration will be given to any additional facts or arguments he paPPearing in his application and accompanying forms which locoinZaorsihlould be brought to the Board's attention. In this please advise the Board promptly as to whether Mr. desires to submit any additional data and, if not, as totan steps he proposes to take in order to comply with the uvisions of the Clayton Act. he s "You are authorized also to inform Mr. Kingman that, if 0_0 desires, he may amend his application by letter to exrZel? therefrom one of the two Macon banks, and that upon Of tl ift of such amendment, accompanied by appropriate evidence be 4a severance of his connection with the bank which is to tion .7,luded from the anplication, the Board will give consideraaddit4° such amended application. The amendment, and any tion i°nal information submitted by the applicant in connecewith, should be transmitted to you, of course, and 811culdher be forwarded to the Board with your recommendation. Kin "Pleasee ascertain and advise the Board as to whether Mr. if ; 64 wishes to submit an amendment to his application and, `Jt) as ' to order to comwith the what stens he proposes to take in provisions of the Clayton Act." Approved. 325 1/331,35 -10Letter to Mr. McAdams, Assistant Federal Reserve Agent at the ?ederaa Reserve Bank of Kansas City, stating that the Board has re- censidered the following application for a permit under the Clayton Act 'and that, in view of the policy set forth in its letter of 41111447 9, 1935, feels that the issuance of the permit applied for w°111d be incompatible with the public interest: Mr* 5.D. Scott, for permission to serve at the same time T€pt! a director of the Patrons Co-operative Bnnk, Olathe, 4ealsas, and as a director of The First National Bank of Olathe, Olathe, Kansas. The 4. 1.4Ther also requested the assistant agent to communicate to the 413p4icant the Board's position in the matter, and to ascertain and advise the Board promptly as to what steps he proposes to take in order t° c°41PlY With the provisions of the Clayton Act. Approved. Letters to applicants for permits under the Clayton Act ad'?lsirle of approval of their applications as follows: Mr. 1 tin ; t1j-Ph L. French, for permission to serve at the same ton- as a director of The Thomaston National Bank, ThomasNat! Con and as a director of The Waterbury a lonalnecticut, Bank, Waterbury, Connecticut, for the period ending elluarY 14, 1936, Mr. 17, time ' lliam L. Olsen, for permission to serve at the same vial director of The Tottenville National Bank, Tottentamke ' mNew York, and as an officer of the West New Brighton jaw: r'est New Brighton New York, for the period ending "arY 14, 1936. Mr. Th. ttmeilayrIond S. Richardson, for permission to serve at the same Oarthas a director of the Carthage National Exchange Bank, Compalli e, ,New York, and as a director of the Lewis County Trust 19 6. v, A,otville, New York, for the period ending January 14, 326 1/51/35 Mr. Edward B. Vreeland, for permission to serve at the same time as a director of the Buffalo Branch of the Federal Reserve Bank of New York, and as a director and officer of the Salamanca Trust Company, Salamanca, New York, for the period ending January 140 1936. Mr, J. R. Durham, 4 director of The for permission to serve at the same time as Citizens National Bank of Lebanon, Lebanon, ! entucky, and as a di-rector of the Springfield State Bank, 'Pringfield, Kentucky, for the period ending January 140 1956. Mr. C. A. Bremer, for permission to serve at the same time as director and officer of the Aberdeen National Bank & Trust ,Company, Aberdeen, South Dakota, and as a director of The 'lrst National Bank of Leola, Leola, South Dakota, for the period ending January 140 1936. Mr. Robert Peterson, for permission to serve at the same time !!a director and officer of The First National Bank of CenterVille, Centerville, South Dakota, as a director and officer Of The Security National Bank of Viborg, Viborg, South Dakota, d as a director and officer of The Security State Bank, nakonda, South Dakota, for the period ending January 14, 1936. n6- s As J. Struble, for permission to serve at the same time a director and officer of The First National Bank of ,!nterville, Centerville, South Dakota, and as a director and VIcer of The Security National Bank of Viborg, Viborg, South alc°ta, for the period ending January 14, 1936. Mr, cl„ s %es. A. Ward, for permission to serve at the se am time % 1,.;1 uictor re of The Midway National Bank of St. Paul, St. OF-L., Minnesota, and as a director of the Western State Bank j St. Paul, St. Paul, Minnesota, for the period ending anuary 14, 1936. Mr. j as M. Bohart, for permission to serve at the same time Apa-1,uirector and officer of The First National Bank of Apache, of r?,"e) Oklahoma, and as a director of The First National Bank jat'l'acemont, Gracemont, Oklahoma, for the period ending uarY 14, 1936. Mr. 1. a d4._ J. Meade, for permission to serve at the same time as Itan;a l.ect°r and officer of The Lawrence National Bank, Lawrence, 444) and as a director of the First State Bank, Tonganoxie, ) for the period endint ,January 14, 1936. 327 1/4/35 -12- Mr. J. A. Elkins, for permission to serve at the same time as a director of the Huntsville Bank and Trust Company, Huntsville, Texas, and as a director and officer of The City National Bank of Houston, Houston, Texas, for the period ending January 14, 1936. J00 B. Matthews, for permission to serve at the same time as a director of The Moran National Bank, Moran, Texas, and 48 a director and officer of The First National Bank of Albany, Albany, Texas, for the period ending January 14, 1936. Mr. John F. Sedwick, for permission to serve at the same time 3 a director and officer of The Moran National Bank, Moran, Be3:as, and as a director and officer of The First National ank Albany, Albany, Texas, for the period ending January 14, 1936. 411 Mr, C. B. Snyder, for permission to serve at the same time a director and officer of The Moran National Bank, Moran, A xas, and as a director of The First National Bank of ''banY, Albany, Texas, for the period ending January 14, 1936. Mr. C. G. Stange, for permission to serve at the same time aan officer of The Sebastopol National Bank, Sebastopol, p_l'ifornia, and as an officer of The Analy Savings Bank, IZstopol, California, for the period ending January 14, n Approved. There Were then presented the following applications for chez ge8 in stock of Federal reserve banks: licati -°ns for ADDITIONAL Stock: Shares I Ihem„.-ational Bank of Pana, Pena, Illinois. 4 W-rst N ational Bank in Burlington, , -N P111.: 11 1 ngt°n, Iowa. zl-rEt 142‘" National Bank in Colfax, Colfax, Iowa. 6 Tow;.!tional Bank in Fairfield, Fairfield, tieti r 3 Mich4mingham National Bank, Birmingham, --4gan Itticts, a Bank of Ypsilanti, Ypsilanti, 2 22 lications for ADDITIONAL Stock: (Continued) rict he FirstNo. 9 -National Bank of White South Dakota. ae Anglo California National Bank of San l'renciSco, San Francisco, California. T,ue Valley National Bank of Milton, Milton, t 'Oregon. Ile First National Bank of Pullman, Pullman, Washington. Approved. Thereupon the meeting adjourned. Secretary. Vice Governor.
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