The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
151_7 A meeting of the Federal Reserve Board was held im -fiashington Thursday, May 24, 1934, at 11:00 a. m. Pid;SbliT: Er. Lir. Mr. Yr. Mr. Mr. Black, Governor Hamlin ivliller James Thomas Szymczak Mr. Morrill, Secretry Mr. Harrison, Governor of the Federal Reserve Bank of Eew York. Governor Black stuted that he had received a telephone request from Congressman 11.right Pathan for a 1st of salaries of officials of certain Federal reserve banks. After discussion, the follomi4; letter to Congressman Patman was approved and the Secretary was requested to send copies to the chairmen of all Federal reserve banks for their information; "In response to your telephone request for a list of salaries of officials of certain Reserve Banks, I beg to hand You a copy al the last published report of the board which gives information as to salaries of the two highest officers of each Reserve Bank and the total salaries paid officials of each Reserve Bank. 1 her- to advise that such salaries are paid entirely by the Reserve Banks and that the Board feels that any further information should be furnished at the request of Congress, or .1 appropriate committee of Congress. This is in accordance 1 11:1th the previous attitude of the Board and the System. -;;(3 111 be glad to comply with any such Congressional request." 7 1r- Morrill stated that Mr. Peyton, Federal Reserve Agent at the Federal Reserve Bank of Minneapolis, called on the long distance tele Phone Yesterday afternoon and said that information had come to hira f rorithe Burns Detective Agency, the Secret Service and the d States District Attorney at Minneapolis to the effect that 1518 6/24/34 -2activities were involved in the local labor disturbances and that sone of the agitation on the part of the communists was being directed against the Federal Reserve Bank of Minneapolis, by reason of which it would be advisable for the Federal Reserve Bank of Yanneapolis to increase its protective measures. Er. Morrill added that Mr. Peyton said that the guard force had been doubled; that outlooks had been placed in the street to signal the bank in ea "0f any approaching disturbance; and that persons who were not k4own to have business in the bank were not permitted to enter. Mr. Morrill also stated that Ur. Peyton said that in view of the circumEtmees he felt it would be desirable if arrangements could be made with the 'War Department to instruct the Connanding Officer at Fort fle1li vhich is within twenty minutes of the Federal Reserve Bank Of 1111neepoli5, to hold his troops in readiness for call in case they were needed for the protection of the bank. Yr. Morrill said that he reported this conversation to Governor Black, Mr. Thomas being present at the time, and that thereafter he succeeded in reaching AssietItut Secretary of War Woodring and General MacArthur, Chief of statf of the bnited States Army, both of whom promised complete co(313eratien and each of them authorized Mr. Morrill to advise the FedReserve Agent that he could convey a message to the Commanding %leer at Fort Snelling requesting him to cooperate with the Federal Reserve Bank. Mr. Morrill also reported that General MacArthur said that he would confirm the request by wire. lir. Morrill thereupon presented a telegram which he had just 151_9 5,/24,/34 received from Mr. Peyton statink; that arrangements with Fort Snelling had been completed and suggesting that it might be desirable publicity to have a statement issued by the proper Washington authority that Federal troops at Fort Snelling were mobilized for the protection of the Federal reserve bank, the Federal post office and other Federal property should the occasion require, and that such a state41°14 tight eliminate the possible necessity for the use of troops later. After discussion, the Secretary was authorized to advise Mr. Peyton as set forth in the following telegram: "Statement such as that suggested your telegram of this date mould have to be approved by War Department, and Board feels that in the absence of further developments it is preferable not to take such action." The Board then considered and acted upon the following mattersi Memorandum dated May 19, 1934, from Mr. Paulger, Chief of the Division of Examinations, recommending that Mr. L. S. Myrick, technical clerk in the Division of Benic Operations, and who has been deeignated an Assistant Federal Reserve Examiner, be designated Fed"ea Reserve Examiner, effective immediately, with no change in salary or working status. Approved. Momorandum dated May 21, 1934, from the Committee on Salaries d Expend ebtitures, submitting a letter dated Mu. 16 from Mr. Helm, DeNty G overnor and Cashier of the Federal Reserve Bank of Kansas CitY, mhich requested approval cif a change in the personnel classifi- 5/24,/34 ciltion plan of the Omaha branch to provide for the new position of 11 clerk (telegraph)" in the r,;eneral service department, and stating that the comndttee has reviewed the proposed change and recommends that it be approved. The recommendation was approved by six members of the Board on Lay 23, 1934. Approved. Telegram to Lr. Yialsh, Federal Reserve Agent at the Federal "eserve bank of Dallas, readin as follows: Telegram Lay 21 regardino- Central State Bank, IcKinney, ! ,x81* If you are satisfied that report of examination by na-cionsl e:mminers in contemplation of conversion into national b!Ink correctly reflects the condition of the bank and are satisfled to make your recommendation to the Board on the basis of such report, the report will be acceptable for certification Purposes in lieu of a report of examination by your examiners." Approved. Letter dated hay 23, 1934, approved by six merbers of the -,u, to "The Union National Bank in lance, Lanot, Ibrth Dakota, rss-d.flg as follows: rocto : s This refers to the resolution adopted by the Board of Diof your bank sip;nifyin, ,L, the bank's desire to surrender tts right to exercise the trust powers which have been ranted y the Federal Reserve Loard. The Board understands that The Union National Bank in 'anot, pro Linot, North Dakota, has been discharged or otherwise peri_ 4y relieved in accordance with the law of all of its duties as fiduciary. The Board, therefore, has issued a formal certifiZtte to The Union National Bank in Linot certifyin; that it is 0 longer authorized to exorcise any of the fiduciary powers :overed by ervetAct. trio pro-lisions of Section 11(k) of the Federal ReThis certificate is inclosed herewith. ' Ti this connection, your attention is called to the fact '_t_hat, under the provisions of Section 11(k) of the Federal ReAct, as amended, when such a certificate has been issued by uY the pe deral Reserve Board to a national bank, such bank (1) 1521 5/24/34 -5- shall no longer be subject to the provisions of Section 11(k) of the Federal Reserve Act or the reulations of the Federal 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 permission of the Federal Reserve Board." Approved. Letter to Mr. O'Connor, Comptroller of the Currency, readin!_; as fellows: "In accordance with Acting Comptroller Awalt's recommendation, the Federal Reser-ve Board approves the reduction in the common capital stock of 'The Calhoun National Bank', Calhoun, Georgia, from , ' 75,000 to :;50,000, pursuant to a plan which provides that the bank's capital shall be increased by :;50,000 of Preferred stock to be sold to the Reconstruction Finance Corpor4tlon, and that the released capital shall be used to eliminate unsatisfactory assets, all as set forth in 1,:r. Awalt's letter of Lny 16, 1934." Approved. Letter to Mr. O'Connor, Comptroller of the Currency, reading as followz: "In accordance with your recommendation, the Federal ReBoard approves a reduction in the =anon capital stock of he.Munroe and Uhamblics National Bank of Ocala', Ocala, .0,rida, from 6100,000 to S50,000, pursuant to a plan which prolacLes that the bank's capital shall be increased by Q50,000 of eferred stock to be sold to the Reconstruction Finance Corporaot, and that the capital released shall be to used eliminate !corr esponding amount of unsatisfactory assets, all as set rorth in your letter of May 15, 1934." Serve / r J.pproved. Letter dated May 23, 1934, approved by six members of the Board, lowt to Mr. O'Connor, Comptroller of the Currency, readinp; as fol- T 4/1 accordance with your recornendation, the Federal 1_522 , 1 5/24/34 'Reserve hoard approves a reduction in the common capital 5-Lock of "lhe Citizens i.ational Bank of Toluca', Toluca, Illinois, from 950,000 to ,25,000, pursuant to a plan which provides that the bank's capital shall be increased by '25,000 of preferred stock to be sold to the Reconstruction Finance Corpora-don and that the released capital shall be used to eliminate a corresponding amount of unsatisfactory assets, all as set for-0) in Your memorandum of :..ay 11, 1934." Approved. Letter to Li. O'Connor, Comptroller of the Currency, readin as fellows: "In accordance with Acting Comptroller of the Currency Amalt's reconnendation, the Federal Reserve hoard approves a reduction in the common capital stock of llhe First National Bank of Sioux Center', Sioux Center, Iowa, from :$50,000 to 25,0000 in accordance with a plan which provides that the bank's capital shall be increased by %;25,000 of preferred stock to be sold to the Reconstruction Finance Corporation, and that the released capital shall be used to eliminate a corresponding; amount of unsatisfactory assets, all as set forth in Yr. Avalt's memoranum of :uay 16, 1934. In this connection, it is noted that _':/.1e preferred stock has already been sold to the Reconstruction Finance Corporation." Approved. Letter to Lr. O'Connor, Comptroller of the Currency, reading f ollows; t "In accordance with your recommendation, the Federal Reserve r?ard approves a reduction in the common capital stock of 'The : tirnt Eational Bank of -;lk City', Elk City, Kansas, from ,?25,000 .° 12,500 pursuant to a plan which provides that the bank's cap?-0.1 shall be increased by 37,500 of preferred stock to be soli: 'to the Reconstruction Finance Corporation, and that the released eaPital shall be used to eliminate unsatisfactory assets in the nt of approximately ,12,000 and to establish a surplus of a PProximately $500, all as set forth in your memorandum of Lay 10, 1934. "In reviewin c, the plan under which the proposed reduction in c, Capital stock is to be effected, consideration has been l yenialran it many unsatisfactory features in connection therewith, 5h particular reference to the asset condition of the bank, ' L e severely criticized management and its apparent inability to (1 5/21/34 -7- oPerate at a profit. In view of these conditions the desirability of this bank continuin.:, its operations seems questionable and the Board's approval of the capital reduction is based upon the additional protection which will he afforded the depositors through the strenr;thenin, of its capital structure, if consummated, rather than on the desirability of the plan as a whole." Approved. Letter to Ur. O'Connor, Comptroller of the Currency, reading "f011ows: . "In accordance with Acting Comptroller kwaltis recommendaLion, the Federal Reserve Board approves a reduction in the Conmon capital stock of tlhe First ::ational Bank of :iosebud', 2osebud, Texas, 'rom50,000 to25,000, pursuant to a plan which provides that the bank's capital shall be increased by t ,he sale of .25,000 of preferred stock to the Reconstruction Ilnance Corporation and that the released capital shall be used t,o eliminate or reduce undesirable assets, all as set forth in Awaltis letter of May 16, 1934." Approved. Letter to Mr. Case, Federal Reserve Agent at the Federal ReServe- Bank of ;ow York, readinc as follows: "The Board has considered the applications filed respectively /0,,r Atlas Corporation and Pacific Eastern Corporaeion for votins7 Permits under section 5144 of the Revised Statutes, as amended, :1_11d in view of the stipulations subject to which the applications aave been filed the Board is unwilling at this tine to grant a .1tr?ing permit to either applicant on the basis of its applica"n. In compliance with a request made by each applicant, however, the ioard tentatively sets Kay 29, 1934, at 11 o'clock, ,s.the time for a hearing, to be held in the Board Room, ireasury uullding, Washinton, D. C., upon the question of the propriety °f the Board's granting permits in view of the stipulations prori d. by the applicants. aii 11 you please communicate with ch applicant and advise the Board whether this time is satisfactory." App roved. Telegram to Lr. Peyton, Federal Reserve Agent at the Federal Reserve Bank of Linneapolis, stating that the Board has given consid- 5/24/34 -8- eration to the application of the "Northwest Bancorporation", IJinneall°1is, Linnesota, for a voting permit under the authority of section 5144 of the Revised Statutes of the United States, as amended, entitling such organization to vote the stock which it owns or controls "The First National Bank of Knapp", Knapp, Wisconsin, and has authorized the issuance of a limited permit to the applicant for the f ollowing purpose: "At any time prior to July 1, 1934 to act upon a proposal to liquidate the said bank." The telegram also authorized the agent to have prepared by counsel for the Federal reserve bank, and to issue to the Northwest Bancorporat a limited voting permit in accordance with the telegram. Approved. Letters dated Lay 23, 1934, approved by six members of the Bos.rd, to applicants for permits under the Clayton Act, advising of aPProval of their applications as follows: Ix. H. 74 Farr, for permission to serve at the same time as a director of The Greeley National Bank, Greeley, Colorado, and as a director of the Denver branch of the Federal Reserve Bank of Kansas City, Denver, Colorado. " 11 F. S. Iderstetter, for permission to serve at the same time as a director and officer of the Exchange State Bank, Kansas ItY, Kansas, and as a director of The Commercial National Bank °J* Kansas City, Kansas City, Kansas. Mr.. ti C. Morris, for permission to serve at the same time as director and officer of The Exchange National Bank of Colorado ?,Prings, Colorado Springs, Colorado, and as a director of The uolorado Savings Bank, Colorado Springs, Colorado. Burt Griggs, for permission to serve at the same time as a airector and officer of The First National Bank of Buffalo, Bufalo $ Wyoming, and as a director and officer of the Wyoming Loan 11.5`)r; 5/211/34 -9- and. Trust Company, Buffalo, Yiyoming. L•r• Richard Younr,, for permission to serve at the scu-w time as a director and officer of the .iiyominr, Loan and Trust company, Buffalo, ;7-joining, and as a director of The First National Bank of Buffa.lo, Buffalo, ,;yomin ,;. .approved. Letter to an applicant for a permit under the Claz,rton Act, advisinz of approval of his application as follows: lir- Hervey E. ijhesley, for permission to serve at the same time as a director and officer of 'ihe Hamilton National Bank, Hamilton, Texas, and as a director of The Perry llational Bank of -Hamilton, Hamilton, Texas. Approved, together with a letter to :ialsh, Federal Reserve Agent at the Federal Reserve Dank of Dallas, readinf, as follows: "There is inclosed for your files a cop: of the Clayton Act permit issued by the Board to Mr. Hervey E. Chesley, of Hamilton, Texas, to serve as director and officer of the Hamilton National Bank and as director of the Perry National Bank of Hamilton, both of Hamilton, Texas. "In considering Iir. Chesle;/ s applic ation it was noted that the two banks which he servin is are 7, engaged in active c boinpet ition for all classes of business; that there are three n'llizs in Hamilton which, in the opinion of the national bank exjaminer, is too small to support that number and in his opinion , LhO 1 °8-ning policies of the banks have resulted in some losses C incurred; and that the examiner has recommended the conof two out of the three banks but that while negotialions have been in progress no definite results have been ac13eorlplished. The examiner reported that the Hamilton Nation al : 21/: was not in an entirely satisfactory condition although its ap ait tEilLs elcture was strong in relation to its total deposits management was weak, being dominated by its presi°Lent. Ath respect to the Perry National Bank the examiner reerted a large amount of doubtful assets and estimated losses re aLing more than the undivided profits and surplus, although this case also the capital structure is stronp: when compared .th e total deposits. 7Tith resoect to the management the oxreported that it is dominated by its president and that th :directors depend entirely on him. In granting the permit ,.1-oard took into consideratio n that the applicant had been rector of the banks for many years; that his services were l 152r V2V34 -10- "said to have resulted in no restriction of credit or lesseniiv of competition; that he is attorney for each of the banks and that he has been rer;ular in his attendance at board meetin-s. "In all the circumstances, the Board felt that it would be Preferable to grant the permit in order to avoid any unnecessarY misunderstandine; by the community which mi;-ht prove detrimental to the best interests of the banks but it su,; - gests that you endeavor, in co-operation with the chief national bank examiner of your district, to brinc; about a strengthening of the 111.1nagement and a correction of the conditions which have ,.iven rlse to the examiner's criticisms. The Board also desires that When you submit, your recommendations as a result of your annual review of this permit you report fully as to the progress made in bringinc about an improvement in the management and condition of each of these banks." There were then presented the followin- applications for ch4nCes in stock of Federal reserve banks: 41112.19ptions for ORL1INAL Stock: TliTi-belta—ffaircilial Bank, Delta, First14enncYlvania liational Bank at jallitzin, Gallitzin, Pennsylvania kctri t p00. 7. L Pira- National Bank at ueillsville, Leillsville, Wisconsin 12 -strict Lo. 8. Shares 45 36 81 36 36 P3-r21-1EvEiriar-Bank in Golconda, Golconda, Illinois for SUMMER of tockz `let lios T:7----14Ettional—ffa-nk"-of America at ,L'itsburgh, Pittsburpth, Pennsylvania Listriet p, -Lne IsiI71717-17:97X3nal Bank of Swanville, '17/1111rille, Minnesota Dis4-riot Lo. haional 10. °,"31-Ith Broad National Bank of 'enver, Denver, Colorado Total 36 153 480 480 20 20 135 Total 135 635 Thereupon the meeting adjourned.
@FedFRASER