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A meeting of the Federal Reserve Board was held in the office of tlie Federal Reserve Board on Saturday, March 21, 1931, at 11:3J a. m. PRESENT: Governor Meyer Mr. Hamlin Mr. Miller Mr. James Yr. Pole Mr. McClelland, Assistant Secretary. PRESENT ALSO: Mr. Hoxton, Federal Reserve Agent at Richmond. The Board discussed with Mr. Hoxton the request of the McDowell C°1111ty National Bank in Welch, West Virginia, on which action was deferred 4t the meeting on March 14th, that the Board reconsider its action of Pebrilary 27th in limiting the exercise of trust powers by that institution to such business as may be taken over from the McDowell County National Bank Q welch, Which it was organized to succeed. Mr. Hoxton was advised of the re48°45 for the Board's policy of declining to aathorize the exercise of efteral trust powers by newly organized national banks until they have been eleIllined by the Comptroller of the Currency, and the desire of the Board for 114(1r4ation as to the qualifications of the management of such banks in the 11441ille of trust business. At the conclusion of the discussion, it was voted to request Mr. Hoxton to advise the McDowell County National Bank in Welch that the Board does not feel it can grant full fiduciary powers to the bank at this time, and that it has therefore voted not to reconsider its action of February 27th. The Board then discussed with Mr. Hoxton, in a general way, the (1141atio, - Of interlocking directorates with particular reference to the City Of w 48414gton. Mr. Hoxton state a that from all information he has been 4144 tO c.m4, in this " .'ner, there is no evidence that interlocking directorates 3/21/30 1/ -2- clitYare working to the detriment of the public interest. Hoxton then left the meeting. The Governor presented to the Board for action the application of Xr. George A. G. Wood, which was ordered circulated at the meeting on ebruary 25th, for permission to serve at the same time as a director of he Atierican Jecurity and 2rust Company and the Linsey Trust Company, both °2 4ashingto11, D. 0., and also the application of lir. John Saul involving 45.4 service as a director of the American Security and Trust Company and tlas Lincoln National Bank, also of Washington. After discussion, during which it was brought out that the Board at all times has authority to revoke Clayton Act permits previously granted if at any time a change in policy should be decided upon, it was, upon motion, voted to approve the applications of—essrs. dood and Saul. The minutes of the meetings of the Executive Committee of the Pea._ Aeserve Board held on !larch 6th, 11th, 12th, 14th, 17th and 19th Were then approved and, upon motion, the actions recorded therein were The minutes of the meetings of the Federal Aeserve Board held on 9th and 10th were also approved.. 711c Assistant Secretary then presented various matters of business wsre considered by the Board and acted upon as follows: Letter dated Li.arch 19th from the Secretary of the Federal °f 4aerv eserve ew York and telegram dated :,Iarch 19th from the Chairman of the Federal e 1/411 of San Francisco, both aavisiAg that their boards of directors lat 4(ahtia::"Ig's on the dates stated, made no changes in the banks' existing es Of rates of discount and purchase. Without objection, noted with approval. 3/21/31 -3- ' Letter dated March 18th from the Comptroller of the Currency, advising "tha appointment of :fl's. Thelma toy, as a money counter in the Federal lieaerve Issue and Aedemption Division, with salary at the rate of 41,380 per e4411m, effective April 1, 1931. Noted with approval. Letter dated March 20th from the Governor of the Federal Heserve j144k Of New York, transmitting the regular monthly compilation of the amount °f short-term funds held in New York for foreign account, agr,regating 12,204,295,000 as of Vebruary 28, 1931. Noted. Letter dated March 20th from Deputy Governor Crane of the Federal 4e4el've Bank of New York, advising of the completion of the liquidation of the , 4Peeial sterling bill account, amounting to approximately b7,200,000, lieh has been maintained at the Bank of England for the past several months. Ordered circulated. Letter dated March 19th from the Governor of the Federal Aeserve Bkik Of i;ew York, requesting approval of the action of the board of clilleetore of that bank in voting to authorize the employment of Lr. L,yles 0, 24euahill, now a member of the Jecret Service Division of the Treasury bellartnlent, at a salary of 46,500 per annum; Governor Harrison stating that It 14 "t Proposed to give Lr. LcOahill any special rank but that he will I'l4111 directly to the senior officers of the bank regarding matters of and procedure relating to the protection and safeguarding of t114 b 441t's cash and securities. After discussion, upon motion, it was voted to aDprove the salary fixed by the New York directors for Mr. 3/21/31 -4Application of the Farmers jtate 3ank, Leridian, 2exas, for member- ship in the Federal .teserve System and for 15 shares of stock in the Federal asserve Bank of Dallas, to which was attached a memorandum from Counsel pointgut that on the basis of losses set up by the Federal Aeserve Examiner the report of an examination of the applicant bank made on January 15, 1931, the capital of the institution is impaired to the extent of approximately and that, in his opinion, the bank is not at this time legally ligible for membership in the system uecause of this impairment of its capital. It was pointed out that the .ixecutive Committee of the Federal Aeserve Bank of Dallas recorm.ends that the Farmers State Bank of -eridian, 10exas, be admitted to membership, and upon motion, it was voted to refer the application to the Dallas bank for reconsideration in the light of Counsel's opinion. aeport of _;xecutive Committee on memorandum dated Larch 18th from the , omptroller of the currency, with regard to an application of the rirst 44tioaso n Dank of Lacona, iiew York, for permission to reduce its capital from i5C) onn ' --v to v25,000, and immediately thereafter increase the capital back to *5°1°00 the sale of stock at a premium of 100,0, the amount of the capital reatIction and the premium on the new stock, along with approximately ,,;10,000 tl‘" Undivided profits, to be used in eliminating from the bank losses aggregatini,45,,503; the .xecutive committee concurring in the recommendation of the e°111Ptroller that the application be approved, provided the new stock is sola only to those who have knowledge of the use to which the released capital 414 Pli6rni11111 on the new stock is to ue put. Upon motion, the application was approved as recomended. -7, 10 34/21.),31 -5Iteport of .r.latecutive Committee submitting draft of letter to the 14/(141%1 Aeserve Agent at Cleveland, with regard to stock in the First lietional Bank of Wilkinsbarg, Pennsylvania, purchased and held by the PeoplesPitteburgh Trust Company, Pittsburgh, Pennsylvania, withou t first securing the approval of the Federal Reserve Board, as required by one of the condiof membership under which the Peoples Savings and Trust Company, the 151lecleoessor of the Peoples-Pittsburgh Trust Company, was admitted to membership the Federal Reserve System; the propose letter d (1) advising that in view of the circumstances, the Board feels that it cannot approve of the member btro, continuing to carry the stock among its assets, and that the Federal 488alive agent should so advise the Peoples-Pittsburgh Trust Company and report t° the Board what arrangements the member bank will make to divest itself of eiraerip,4 -AP of the stock, and (2) requesting the Federal Reserv e Agent to advise the , Qoard whethe r the Peoples-Pittsburgh Trust Company is now holding any stock Of oth r 1, e- -anks acquired by it in violation of its conditions of membership. After discussion, upon motion, the proposed letter was approved and ordered transmitted. Application of the Citizens National Bank of Cicero, Indiana, for 1/ertais 84011 to exercise general fiduciary powers together with a favorable ; reottorne ncletion thereon from the Federal Reserve Bank of Chicago, and a kernorail cl4n1 Prepared at the request of Mr. Hamlin, pointing out the slight vement which has taken place in the condition of the applicant bank ant 4144 it a 1 examination following which the granting of trust powers was Clete rreti Qa recomme ndation of the Chicago bank. Ordered circulated. i() 3/21/31 -6Memorandum from Counsel dated March 16th, with regard to stock in the Depositors state Bank, ehicago, Illinois, held by the affiliated 4positors securities eompany; eounsel auvising that the Depositors Securities ectliPallY is not awned by the member bank, its stock being held in trust by tiltae trustees for tae benefit of all of the stockholders of the member bank, end that accordingly the holding of stock of the member bank in the assets of the affiliated company does not constitute a violation of the provision of tha Federal Aeserve Act prohibiting a member bank from purchasing or holding its own stock. After discussion, upon motion, it was voted that no further action be taken by the Board in the matter. OP STAND V 0 144°49 Uarch 21st 'Recommending changes in stock at Federal deserve Banks, as set forth in the Auxiliary Minute Book of this date. Recommendations approved. Waarch 20th Recommending approval of the application of 1.1r. Allen Kirkpatrick, Jr., for permission to serve at the same time as a director of the Braddock National Bank of Braddock, Pennsylvania, as a director of the Monongahela National Bank of Pittsburgh, Pa., and as a director of the First National Bank of Indiana, Pennsylvania. Approved. The meeting adjourned at 12:25 p. in. w Assistant secretary VAVOIred; AUXILIARY L:INUr2 (Larch 21, 1931.) Aeports of Standing Committee, dated Larch 21st, recommending changes Ari stock at Federal Reserve Banks, approved as follows: t at!1.19ations for SUARENDER. of Stock: 44tional Safety Bank & Trust Co., New York, N.Y. (Decrease in capital and surplus) 4korsernere Trust Company, Palisades Park, N. J. (Insolvent) District No. 4. 4rine National Bank, Ashtabula, Ohio. (V.L.Suc. by Marine Savings Bank Company) fl.rat National Bank, Jeannette, Pa. (V.L.Abs. by Jeannette Savings & Trust Company) cIrst Ti National Bank, Cherokee, Iowa. (Insolvent) Dietrict 110. 11. ALI Citizens National Bank, ar1in, Texas. (Cons. vltizens National Bank with the above bank) Shares 1,115 75 1,190 68 120 188 120 120 105 Total 105 1,603 (01W/ft, Assistant Secretary. 41)prov.
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