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668 A meeting of the Federal Reserve Board was held in Washington on Thursday, March 14, 1935, at 2:15 p. m. PRISEiT3 Mr.:]ccles, Governor Er. Thomas, Vice Governor Er. Hamlin Mr. James Szymczak Er. Morrill, Secretary Mr. Bethea, Assistant Secretary Er. Carpenter, Assistant Secretary 'The Board acted upon the following matters: Telegram from lar. Hoxton, Chairman of the Federal Reserve 13anicof Richmond, advising that, at the meeting of the board of directors today, no change was made in the bank's existing schedule or rates of discount and purchase. Without objection, noted with approval. Memorandum dated March 12, 1935, from Mr. Morrill, reading 48 follows: "It is assumed that it is the desire of the members of the Doard to continuo in operation the system by which each EPPointive member serves in rotation on the executive committee fOr a period of two months as chairman in the absence of the governor and vice governor, and also acts during that period Its chairman pro tempore of the Board in the absence of the ,ocrotary of the Treasury, the governor and vice governor. " ' 21 Hamlin having served during the last period of two months in 1934, the continuation of the system during 1935 called for the following rotation: Mr. Miller, January and February; Mr. James, karch and April; Mr. Szymczak, May and June; Mr. Hamlin, July and August; ezd thereafter in the same order. 11 Accordingly, it is suggested that the Board formally continue this system in effect until changed by further order of the Board." Approved. 669 3/111/35 -2Eemorandum dated Larch 7, 1935, from la.. Parry, Uhiof of the Division of Security Loans, requesting that an invitation be extended to Mr. Kenneth L. Smith, Assistant Secretary of the Chicago Stock Exchange, to come to Washington as soon as possible for a Period of two or three days, to advise with the Division of Security Loans concerning plans for the enforcement of the Board's Regulation "T". The memorandum also requested approval of the payment by the board of hr. Smith's travelling and subsistence expenses in connection vdth the trip. Approved. Telegram to Mr. Austin, Federal Reserve Agent at the Federal Reserve Bank of Philadelphia, reading as follows: "Your letter March 13. Board approves temporary appointment of Carl B. Baldt as assistant examiner in Federal Reserve Agent's department your bank. Please advise effective date." Approved. Letter to Lr. O'Connor, Comptroller of the Currency, reading "i'ollows "In accordance with your recommendation, the Federal Reserve Board approves a reduction in the common capital stock °2 'The Putnam County National Bank of Carmel', Carmel, New 1?rk, from 100,000 to ,7,;50,000, pursuant to a plan which provides for the sale of 050,000 of Class 'B' preferred stock locally, the release of the directors' guaranty bond now held bY the bank, and the use of the released capital in eliminating !I corresponding amount of the least desirable assets in the osalk, all as set forth in your memorandum of Larch 6, 1935." Approved. Letter to Mr. O'Connor, Comptroller of the Currency, reading tte 4, 'L(2)110178: 670 3/14/35 -3- "In accordance with Acting Comptroller Aualt's recommendation, the Federal Reserve Board approves a reduction in the common capital stock of 'The First National Bank of Plainfield', Plainfield, Now Jersey, from w220,000 to44,000, pursuant to a plan which provides that the bank's capital shall be increased by the sale of ;550,000 of preferred stock to the Reconstruction Finance Corporation and 462,000 of new common capital stock to local interests, and that the released capital shall be used to eliminate a corresponding amount of unsatisfactory assets, all as set forth in hr. Awalt's memorandum of February 25, 1935 . "In considering the plan under which the capital reduction is to be effected, it has been noted that the remaining securities depreciation, if considered as a loss, would seriously Impair the bank's capital and that in addition the bank will still be burdened with an excessive volume of slow and doubtful assets and a heavy investment in banking house and furniture and fixtures. It is assumed, however, that you have these conditions in mind and that whenever it is feasible to do so You will require such further corrections as may be practicable." Approved, together with a memorandum from hr. Baumann, Assistant Counsel, stating that on the basis of tho information available to the Board the Artcol Investing Company, Inc., Plainfield, New Jersey, is not a holding company affiliate of The First National Bank of Plainfield and therefore a voting permit is not necessary. Telegram to Yr. Austin, Federal Reserve Agent at the Federal Reserve Bank of Philadelphia, reading as follows: %uestion raised by your letter of January 12, 1935, involving reconsideration of Board's general policy in granting voting pormits has not yet been acted upon and in the circumt,ances Board extends to April 15, 1935, the time within which Iirst Trust Company of Philadelphia', Philadelphia, Pennsylrnia, may accomplish its membership and within which 'The First 1.4ational Bank of Philadelphia', Philadelphia, Pennsylvania, holding company affiliate, may obtain a voting permit. rlease advise banks accordingly." Approved. Telegrams to La-. Clark, Assistant Federal Reserve 2:;..3nt at the Federal Reserve Bank of Atlanta, authorizing him to issue limited 671 3/W35 -4- v°tinZ permits to "Almours Securities, Inc.", Jacksonville, Florida, and " Florida National Group, Inc.", Jacksonville, Florida, entitling such organizations to vote the stock -which they awn or control in "The Florida National Bank and Trust Company at Elami", Miami, Florida, for the Purposes set forth in the telegrams. Approved. Telegram to Er. McAdams, Assistant Yederal Reserve Agent at the Federal Reserve Bank of Kansas City, reading as follows: "hotel March 11 regarding question whether Roy Tovn Site ?Qmpany is holding company affiliate of First National Bank, ' ()Y., New Mexico. It appears that company owns 105 of 250 outstanding shares of bank's stock, and that 128 shares mere voted at last election of directors of bank, none of which belonged to company. From facts stated it does not appear that company is holding company affiliate." Approved. Letter to Honorable J. Hamilton Levis, United States Senator, reading as follows: "2eference is made to your letter of February 11 with inclosure of a letter and memorandum from Mr. Walter Metzenbaum, P,resident of the John Wieland Brewing Company, San Francisco, California, regarding the application of Mr. ketzenbaum's cornMay to the Federal Reserve Lank of San Francisco for a loan under the terms of Section 13b of the Federal Reserve Act. "In his memorandum Mr. DAzenbaum states that Governor Becies! letter of January 29 to Senator Eulkley would give the ilapression that the brewery ceased operation when prohibition 1:Jas adopted. The statement in Governor Eccles' letter that the brewery was operated in pre-prohibition days by a different !ampany from the applicant' as not intended and does not appear '41 imply that the company had ceased all operation; it was oroly intended to make clear, as further pointed out in Governor reeles' letter to Senator Lulkley, that the applicant 'is a , ecently organized company not connected as to ownership and 41ersonnel of management with the former Wieland brewery'. It 672 3/14/35 -5- "also appears that the old John Viieland brewery ceased brewing in 1926, purchased 'near' Leer from another brewery until April 1933, and since April 1933 has sold no beer whatever. Metzenbaum also takes exception to statements that the valuations used in the company's balance sheet were furnished by the applicant and in no way indicated the Federal Reserve bank's estimate of the liquidating value of the Property, and that the appraisals referred to were prepared in connection with an application to the State Corporation Commissioner for a permit to sell stock. These statements were merely intended to bring out that the valuations and appraisals of assets, as shown in the balance sheet, were not made by or for the account of the Federal Reserve bank. Haw and by -whom these valuations and appraisals were made is immaterial, however, since all factors in connection with the aPplication mere taken into account and, in the light of all the available information, the Industrial Advisory Committee and the Federal Reserve bniiir concluded that the loan could not be made on a reasonable and sound basis as required by law. "Mr. Yetzenbaum's other point relates to the question of the eligibility of his company for a loan as an 'established industrial or commercial business', under the terms of Section 13b of the Federal Reserve Act. This point was covered in the last paragraph of the Board's letter to you of January 30. its. Letzenbatun says that the question of eliRibility was raised at the time of the application, and that Nieland's Inc., which appears to be the present owner or one of the present owners of the property, agreed, if necessary, to make application for the loan, but that he was advised by officials of the Federal 1- -&”rve bank that the application should be made by his corporation, the John Wieland Brewing Company. He further states that 1 after proceeding on the advice of the officials of the Federal Reserve Bank', he was advised that he had 'proceeded in a manner that raises the question of eligibility', and that this vas not fair. ".he suggestion that the application should be made by r. letzenbaum's company rather than by Wieland's Inc., was not made with any idea of obstructing the loan. The application was rejected, as previously stated, because the loan could not be made on a reasonable and sound basis, as required Y law, and not because the application was submitted in the lame of John Iiieland Brewing Company instead of Wieland's, Inc. t owever, counsel for the Federal Reserve Bank of San Francisco "a3 rendered an opinion that the application cannot be conrued as that of 'an established industrial or commercial eusiness' within the terms of the law. "If 1"r. Letzenbaum has additional information which was 11°t available to the Industrial Advisory Committee and the I 673 3/14/35 "Federal Iteserve bank at the time his application was under consideration, it is suggested that he submit it to the Federal Reserve Bank of San Yrancisco and request that his application be reconsidered. As you are are, final decision on industrial loan applications rests with the Federal Reserve banks. Ile letter from 1:r. Letzenbaum, inclosed in your letter of February 11, is returned herewith as requested." Approved. Letters to Lr. Clark, Assistant Federal Reserve ,1,gent at the Federal Reserve Bank of Atlanta, inclosing the following mended Clayton Act permits for transmission to the applicants: G. L. Griffin, to serve at the same time as a director and officer of The Exchange Laticnal Bank of Tampa, Tampa, and as a director of the hernando State Bank, Brooksville, Florida, for the period ending January 14, 1936. J. K. Valliarson, to serve at the same time as a director of the Central Farmers Trust Company, 'irest Palm Beach, Florida, ?..,nd as a director and officer of the First National Bank in Idalm Beach, Palm Beach, Florida, for the period ending January 14, l936. Approved. Letter to hr. dark, Assistant Federal Reserve Agent at the Federal Reserve Bank of Atlanta, stating that the Board has tiver - consideration to the following application for a permit Irider the Clayton Act, and that, upon the basis of the information re it, feels that the issuance of the permit applied for would be 4°0111Patib1e with the public interest: L. Hardman, Jr., for permission to serve at the same till1B as a director of the Northeastern Bankin7 Company, Com' Irerce, Georgia, and as a director of he First 14ttional 1,ark °f CorraLerce, Commerce, Georgia. The , - 4.etter also requested the agent to communicate to the applicant 674 3/14/35 -7- the Board's position in the matter, and to advise the Board Promptly as to whether the applicant desires to submit any additional data, and, if not, as to what steps he proposes to take in order to eomPly with the provisions of the Clayton Act. Approved. Letters to applicants for permits under the Clayton Act ad11-d-ng respectively of the issuance of permits by the Board as follows: M. K. hunter, to serve at the same time as a director of ine Liberty National Epp% & Trust Company of Savannah, Savannah, Georgia, as a director of The First National Bank & Trust ComPany in Lacon, I.:aeon, Georgia, and as an officer of the Trust Company of Georgia, Atlanta, Georgia, for the period ending January 14, 1936. A. h. Turner, to serve at the same time as a director and Officer of the hardin Comity 1,ational Bank in Eldora, Eldora, -01m, and as a director and officer of the Farmers Savings tti Steamboat Rock, Ima, for the period ending January 14, 1.r. J. van Houten, to serve at the same time as a director of The Denver Eational bank, Denver, uolorado, and as a director and officer of the First National Bank in Raton, Raton, Lew Lexie°, for the period ending January 14, 1936. Approved. Thereupon the meeting adjourned. 4.er9(11-15,-11, - %roved: Governor. C Secretah.
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