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3489
A meeting of the Federal Reserve Board was
held in Tashington
III7ecinesdaY, November 14, 1934, at 11:30 a. in.
PRESENT:
Mr.
Mr.
Mr.
Mr.
Mr.
Thomas, Vice Governor
Hamlin
Miller
James
Szymczak
Mr.
Mr.
Mr.
Mr.
Merrill, Secretary
Bethea, Assistant Secretary
Carpenter, Assistant Secretary
Paulger, Chief of the Division
of Examinations
Mr. Wyatt, General Counsel
Mr. Cherry, Assistant Counsel
There were presented for consideration
a number of Clayton Act
Pi-ielatiens on which members of the Board had indicated differences of
opinion
as to whether
the nermits applied for should be granted. During
t4eriouing
discussion as to what was in the minds of the respective
illa*ers of the Poard
in acting upon the Clayton Act amplications, Mr.
?411er stated
that he felt that a Clayton Act permit conferred a privi1;that
the re
sponsibilityis on the applicant to show affirmatively
th t
a-the issuance
of the nermit would be comatible with the public
and that if it
appears that a bank is in an unsatisfactory
e°14
ti°4 and the
applicant is connected with the errors of management,
illtre8t;
esPeciall,Y if the bank's condition is due in part to loans to
offial'
directors or their
interests, the presumntion is fairly well
31ished
that the
permit should not be granted.
1.H
said that he agreed with the statement made by Mr.
et.1 A
-nd that he
also felt that where a director or officer had
3490
11/14/3
4.
417sd the institutions involved in his Clayto
n Act application for maw
8.nd his service had not resulted in any situation that was contrary
to tile
public interest, the permit should be granted.
Mr. James stated that he had found that there were many factors
to be
Considered and that the issuance of a permit in
one community on
t4 basis of
certain facts would be proper, whereas the issuance of a
PeIlkit
under similar circumstances in another community might
not be comPa.tible with the public
interest, and that no definite formula could be
Ilsed ia
c
onsidering Clayton Act applications that would apply to all con1%11i-ties.
Thomas raised the question of the desirability in all doubt-
e
of requesting the agent to submit additional information on the
0C.1
6ituation.
ettti„._
wis
This matter was discussed but no action was taken.
The following action
s were then taken upon the Clayton Act applireferred to above:
The Secretary was requested to address a letter to
-r- Case, Federal Reserve Agent at the Federal Reserve
rank of New
York, stating that the Board has given con:ideration to the two applications referred to below
1
1:30r permits under the Clayton Act and that,
upon the
asis of the information before it, feels that the isst:lance of the permit applied for would
s
be incompatible
with the
public interest, and requesting the agent to
Imunicate to the applicants
the Board's position in
v s batter and to advise the Board prompt
ly as to whether
aPplicants desire to submit any additional data, and,
if
"I not, as to
what steps they propose to take in order to
C
mgY with the provisions of the Clayto Act:
n
H
a „81..1:17 °. Coughlan, for permission to serve at the same time
Nti
'
Iroctor and office
r of The First National Dank of Nutley,
:
7) New
Jersey, as a director of the Bank of Nutley, Nutley,
NtleerseY, and as a director of The Franklin National Bank of
Nutley, New Jersey.
T
3
3491
11/14/34
-3-
Marion L. Lewis, for permission to serve at the same tine
as a director and officer of The First National Bank of Nutley,
Nutley, New Jersey, and as a director of the Bank of Nutley,
Nutley, New Jersey.
Augsbury, for permission to serve
of Mr. Fronk
atThetheapplication
same time as a director and officer of the Ogdensburg
rust Company, Ogdensburg, New York, and as a director and officer
* The St.
Lawrence County National Bank of Canton, Canton, New
"k, was approved, Mr. :aller voting "no".
T
The application of M. Hyatt C. Hatch, for permission to serve
;the same time as a director and officer of the Atlanta National
Ba114, Atlanta, New York, and as a director of The Bath National
ank, Rath, New York, was approved, Messrs. Miller and Szymczak
voting 'Trio%
The a
pplication of Mrs. Mary H. Hoag, for permission to serve at
the same
time as a director of The Bath National Bank, Bath, New
York and
as a director of The Prattsburgh State Bank, Prattsburg,
"ew York, was approved, Mr. Lilller voting "no".
APPlioation of
Frank O. ilittag, Jr., for permission to serve
:t the same
time as a director of The First National Bank of WestNatjc1) Westwood, New Jersey, and as a director of The Bergen County
onal Bank of Hackensack, Hackensack, New Jersey.
Approved, together with a letter to Mr. Case, Federel
Reserve Agent at the Federal Reserve Bank of New
,,
T l1re
301e
;losing a copy of the Clayton Act permit referred
stating that, in the cir-unstances, the Board
concurs in the agent's opinion that the permit should be
D:anted but suggests that he endeavor, in cooperation
vo.th the
appropriate supervisory authorities, to bring
ab°11t the completion of the plans for strengthening the
caPltal structure of The First National Bank of Westwood
ird a correction of the matters which have been criticized
the examiner; and, reouesting that, when the agent sub(1. 1:J,:ta his
recommendation as a result of his annual review
bi.th? permit, he report fully as to the progress made in
mfinging about an improvement in such matters. On this
--ltter Mr. 1 i11er
voted "no".
APPlicat 0
same 4.. i
of Mr. Curtis Miller, for permission to serve atwthe
'lme as a director and officer of The National Ban:: of aterazial,
Waterville, New York, and as a director of the First Trust
ePcsit Company,
Oriskany Falls, New York.
11
3492
11/14/34
-4koproved, together with a letter to Mr. Case, Federal
Reserve Agent at the Federal Reserve Bank of New York, inclosing a copy of the Clayton Act permit issued to Mr.
Miller, and stating that, in the circumstances set forth
in the letter, the Board concurs in the agent's opinion
that the nermit should be granted, but suggests that he
endeavor, in cooperation with the appronriate supervisory
authorities, to
expedite the rehabilitation of the Wateryule bank and to bring about a correction of the conditions in both banks which have given rise to the examiners'
criticisms; and requesting that the
agent review the permit
not later than February 1,
1935, and that, when the agent
submits his recommendation at that time, he report fully as
to the progress made in bringing about an
improvement in
the condition of the
banks. On this matter Messrs. Hamlin
and Miller voted "no".
The follorinf: letter to :Ir. Case, Federal Reserve Agent at the Federal Reserve
Bank of vier York, was approved, Mr. Miller
voting "no" with respect to the issuance of
the Clay' on Act permit to Ma-. Walsh:
A
Act "There are inclosed the originals and conies of the Clayton
s, Permits
0
-'
111 DeZir4ffitt issued to Messrs. Harry H. Pond, F. Irving Walsh,
Hubbell to serve at the same time as directors and/
Ncers of the Plainfield Trust Company and
the Plainfield
,--"al Bank, both of
Plainfield,
New
Jersey,
for
transmittal
Yon to the
applicants, with conies to the banks involved and
Pie for your
files.
P1,4:
These 3.entlemen are all directors
and/or officers of the
fr;,./11.ield Title
and Mortgage Guaranty Compa
Company and it appears
infLY
2u
.
,1" letter of September
18, 1934, and the accompanying
of i;::cion that the
provisions of Section 32 of the Banking Act
fiel,%.are not now
applicable to their services to the Plainb'
4ltle anc,
Mortgage Guaranty Company and the banks involved
cotipen
ecal
°f the presently
restricted operations of the mortgage
However, the President states, in his letter to you
issuall'August 27,
1934, that it is now intended to resume the
of n ee and
sale of real estate mortgage bonds and
certificates
theTticiPation as soon as the present
restrictions
imposed by
l''parte au
thoritie;1 are removed.
the , the ci
rcur.stances, you are requested, when transmitting
the i'llermits to the
applicants, to advise each of them that when
it Tgage eeimPanY
1)ermit be neces5ar:7 resumes the issuance and sale of securities
for them to apply for and receive Section 32
the 132 °r
otherwise bring their services into conformity with
sions of that
section."
0
0
3493
11/14/34
-5The Clayton Act permits referred to in
the above letter were as follows:
Mr. Harry H. Pond, for permission to serve at the same time as
s
r. director and officer of The Plainfield Trust Company, Plaintield, Jew Jersey, and as a director of The Plainfield National
'
41-11:, Plainfield, New Jersey.
,
'/irs F. Irving Walsh, for permission to serve at the same time
a director and officer of The Plainfield Trust
Company, PlainNew jersey, and as a director of The Plainfield National
oank, Plainfield, New
Jersey.
laeWitt Hubbell, for permission to serve at the same time as
(bidirector and
officer of The Plainfield Trust Company, Plainr
-ew
Jersey, and as a director of The Plainfield Rational
nk, P
• lainfield, New Jersey.
application of ;;.r. George W. Bauer, for permission to serve
the
4. same time as a director and officer of the Union County
of .T.; C°mPany, Elizabeth, New Jersey, as a director and officer
une Linden
Trust Company, Linden, New Jersey, and as a direc'or
m,
Itle
First
'iational Bank of Roselle, Roselle, New Jersey,
Was
aPproved, ressrs. Hamlin and Miller voting "no".
The aPPlications of
Mr. G. P. Crandall, for nermis-ion to serve
at the
same time
e, as a director and officer of The National Bank
Westfield, New York, as a director and officer of
r
The°estfield,
U
ational Bank of Fredonia, Fredonia, New York, and as a di"tor °f The State Bank of Mayville, Mayville, New York;
Lir.
a
q.
Crandall, for Permission to serve at the same time as
field Nor and officer of The National Bank of Westfield, estLla cii;illew York, as a
director and officer of The State Ban!: of
the ii-j-e) 49.Yville, New York, and as a director and officer of
ank of
Brocton, Brocton, New York;
Mr.
offi •
Rouse, for permission to serve at the same time!as an
as ac
!
;
1. °I* The National Bank of Westfield, Westfield, New
York,
york '-rector of
The Rational Bank of Fredonia, Fredonia, Jew
tro4 and as a
director and officer of the Bank of Brocton,
York;
Mt** T711s(1,, 0
a dir„4_ --",
Price for permission to serve at the same time as
:Tew y-rr of The First
National Bank of Jamestown, Jamestown,
Irille°r Y and as a director of
The State Bank of Mayville, May—
-ew ork; and
11/14/34
-6-
3494
111.Fred W. Hyde, for permisEdon to serve at the same time as
director of The First National Bank of Jamestown, Jamestown,
York, and as a director and officer of The Clymer State
1111c, Clymer, New York, were approved, Mr. 7.iller voting "no"
witn regard to the issuance or a permit to Mir. Rouse.
In connection with the above applications, the following letter to 7r. Case, 'Federal Reserve Agent at the Federal Reserve Bank
of New York, was approved:
"There are inclosed for your files copies of Clayton Act
13„ermits granted to Messrs. G.
P. Crandall, F. W. Crandall,
'• A. Rouse, Wilson
C. Price, and F. W. Hyde, covering their
rvices as officers and/or directors of
the banks listed in
1.1e respective permits. The Board has also considered
the
-P
Dlications of Mr. A. E. Skinner to serve at the same time
director and
officer of The National Bank of Westfield,
r”
v tfield, New York, and director of The State Bank of Mayo]f_Lle, T4
avville, New York, and Mr. E. D. Reagan to serve as
aalrflic7,r and/or director of these two banks as well as director
y -,cer of The National Bank of Fredonia,
Fredonia, New
UpOn the information
before it the Board feels that the
Ce of
permits applied for would be incompatible with the
Puh1
aliic interest.
You are requested to advise Messrs. Skinner
are Reagan of the Board's position in the matter unless there
ti;
,Pertinent facts which were not submitted with the applica"84nd which 70U feel should be given
consideration.
izea -Lfyou deem it
desirable or necessary, you are authoractio
!
o iflform Messrs. Skinner and Reagan that the Board's
abus " uPon their applications was based upon their
apparent
%of the credit
facilities of the banks involved.
that ,In communicatilq with the applicants please advise them
ert4.1n a
ccordance with section V (g) of Regulation L, considapp
i will he given to any additional facts or arguments not
they —e-Ig in their
applications and accompanying forms which
'el should
bebrow:flit to the Board's attention.
to whe4.,_ qls conlection
please advise the Board promptly as
tiorial Tr Messrs.
Skinner and Reagan desire to submit addiin orderat,"
rl, if not
as to what steps they propose to take
Lo comply
with the provisions of the Clayton Act."
r
.0_
The foll0win7 letter to Mr. Austin,
Federal
ZTerve Agent at the Federal Reserve Bank of
trulladelphia, was approved, Messrs. Thomas and
.ames voting
"no":
"The B
°arc' has reconsidered, the application of
art
Mr. Howard
T°1
!
4
1
.
1
1
River, New Jersey, for permission under the proviOf
(3- '"e Clayt-m Antitrust Act to serve at
the same time as
3495
-7-"a director of The First National Bank of Toms River and as
a director of Ocean County Trust Company, both of Toms River,
4ew Jersey, and upon the basis of the information before it,
including that submitted with your letter of September 27,
1934, transmitting conies of letters received by you from the
aPPlicanf, and from the presidents of The First National Bank
?f Toms River and the Ocean County Trust Company, still feels
th
the granting of the permit applied for would be incompati,Le
I
with the public interest as indicated in its letter to you
uated
September 6, 1934. You are reeuested to advise the applicant according1,y.
"Please ascertain and advise as to what further steps Mr.
'art Proposes to take in order to comnl, with the provisions
of the
Clayton Act."
The
, aPplication of Mr. Robert L. Ehrhart, for permission to serve
,z
a the same
time as a director of The First National Bank of
nover, Hanover, Pennsylvania, and as a director of the Hanover
St Company, Hanover, Pennsylvania, was approved, Messrs. Hamand Miller voting "no".
There was then approved,(Mr. Miller voting
"no") a letter to Mr. Williams, Federal Reserve
Agent at the Federal Reserve Bank of Cleveland,
inclosing the following Clayton Act permit for
transmittal to the applicant; stating that, in all
the circumstances, the Board felt that it would be
Preferable to grant the permit to the applicant in
order to avoid any unnecessary misunderstanding by
the communities which might prove detrimental to
the best interests of the banks, that, however, the
Board feels that a director should not merely lend
his name to an institution and that a satisfactory
attendance at directors' meetings is necessary for
the proper discharge of directors' duties; and requesting that, when transmitting the permit to the
.P.Plicant, the agent inform him of the Board's views
In tne matter, and that, when the agent submits his
recommendation as a result of his annual review of
the prm
e it, he
report filly as to the applicant's atnuance at directors' meetings and as to the progress
',Lade in the curtailment of his indebtedness and the
lind
ebtedness of his interests to The Citizens-State
an-- of Strasburg:
Mr. Th
direct°
,Tas KemP, for permission to serve at the same time as a
07' and officer of The First National Bank of Alexandria,
Alex 1;'
-rla/ Pennsylvania, and as a director and officer of The
ens-State
Dank of Strasburg, Strasburg, Ohio.
3496
11/14164
-8There was then approved (Mr. Miller voting "no") a
letter to Mr. Williams, Federal Reserve Agent at the
Federal Reserve Bank of Cleveland, inclosing the following Clayton Act permit for transmittal to the applicant;
stating that, in view of all the circumstances, the Board
felt that it would be preferable to grant the permit in
order to avoid any unnecessary misunderstanding by the
communities which might prove detrimental to the best
interests of the banks; suggesting that, when transmitting the permit to the applicant, the agent advise him
that it has been granted with the expectation that he
will improve his attendance at directors' meetings; and
f?questing that, when the agent submits his recommendaulon as a result of his annual review of the permit, he
report
fully as to the applicant's attendance at directors' meetings:
Mr. Harry m
direct
Rimer, for permission to serve at the same time as a
414,1e°40(1!fhe Citizens Trust Company, Clarion, Pennsylvania, as
of Th
The First National Bank of New Bethlehem, New BethNati.2 rennsYlvania, and as a director and officer of the Sligo
vnal Bank,
Sligo, Pennsylvania.
The a
sam
PPlication of Mr. Elias Ritts, for permission to serve at
;time as a
director and officer of The Butler County National
as
dire alld Trust Company of Butler, Butler, Pennsylvania, an
ctor of
the
ora National Bank, Lyndora, Pennsylvania, was
°Tpro
ved, Mr.
Miller voting "no".
The
the 'P-Llcation of Mr. J. F. Roberts, for permission to serve
atsheibm
time as a director of The First National Bank of Shelby,
y,
thitottY4, North
Carolina, and as a director and employee of the
'rust C°mPanY, Shelby, North Carolina, was approved.
The an,„
at thp:''Ication of Mr. Forrest Eskridge, for
permission to serve
Belik - same time as
a
director
and
officer
of
The First National
ficer°f Shelby,
Shelby,
North
Carolina,
and
as
a director and ofprcvedcf the
e Union
Trust Company, Shelby, North Carolina, was apTh
twhe
e s
aPPlieasaon
tof Mr. George Blanton, for permission to serve at
e
'
ct Shell time as a director and officer of The First National Bank
the
Shelby, North Carolina, and as a director and officer of
°11 Trust Company, Shelby, North Carolina, was
approved.
!PPlicafi
4ne ae. -- n of Mr.
Charles C. Blanton, for permission to serve atl
°t
as a director and officer of The First National Bank
Or the eT111031h,M
North Carolina, and as a director and officer
Company, Shelby, North Carolina.
3497
-9Approved, Messrs. Miller and Szymczak voting "no",
and Mr. James stating that, although when first considering the application he had been of the opinion that
the permit should not be granted, he now felt that
the
aPplication should be approved inasmuch as permits were
being granted to Messrs. Roberts, Eskridge, and George
Blanton to serve the Shelby banks.
The following letter to Mr. Stevens, Federal Reserve Agent at the Federal Reserve Bank of Chicago, was
approved, Mr. Miller voting "no":
let "Reference is made to
Assistant Federal Reserve Agent Young's
fr ter of October 1, 1934, inclosing copies of
letters received
z.la the Iowa
State Savings Bank, Creston, Iowa, and from Mr. Geo.
t,_ artle,
14e to theCreston, Iowa, submitting additional information relaapplication of Mr. Bartle for a Clayton Act permit,
1.4.21 was disapproved by the Board for the
reasons set forth in
"letter to
you of September 14, 1934.
aittThede Board has
given consideration to the additional facts
in accordance with Section V (g) of Regulation L and in
rear
'of such additional
facts, particularly the information with
to the
resignation from both banks of Mr. D. Davenport,
Whose
tor association
with and domination of the applicant appeared
ue the Principal unfavorable factor in this case, has granted
aPermit
The p4 _ to ?!
,r. Bartle to serve at the same time as a director of
tor'
a rst National Bank of
Prescott, Prescott, Iowa, and as direcThe
officer of the Iowa State Savings Bank, Creston, Iowa.
by y.oulginal and copies of the permit are
inclosed for transmittal
4 corn,t° Mr. Bartle and
the two banks, and there also is inclosed
liver".,_ r°r Your files. It is
requested, however, that before de4-lig the
Permit to Mr. Bartle and copies thereof to the banks
sige
,
er
,fledl You ascertain
definitely that Mr. D. Davenport has re' director
eignat%'s
and officer of the two banks and that his ret6;°11, in each case,
has been accepted.
'Lease inform the
Board of your action in this matter."
z
PPlicati
ame timtimeon 0-p Mr. George L. Gilkey, for
permission to serve at the
koeh, wi;as a
director
of
the
First
National
Bank in Oshkosh, OshAta
ericat Zri
!
ile=las a director and officer of the Citizens
1_, Wisconsin.
Approved, (Mr. Miller voting
"no"), together with a letter to
Mr. Peyton, Federal Reserve Agent
at the Federal Reserve Bank of
Minneapolis, reading as follows:
tt
vis4 There
4.01as 0
, is inclosed a copy
of a permit granted under the prothe
Clayton
Act
to
Mr.
to
George L. Gilkey, Merrill, Wisserve at the
same time as director of the First National
3498
11/14/34
-10"!ank in Oshkosh, Oshkosh, Wisconsin, and as director and officer
°' the Citizens American Bank, Merrill, Tisconsin. Mr. Gilkey's
13Plication was to serve as director and officer of the Citizens
Qtate Bank,
Merrill, Wisconsin, but the permit has been issued as
7tintioned above on the basis of advice received b7 the Board from
c'414Psderal Deposit Insurance Corporation to the effect that the
State Bank, Merrill, Wisconsin, was, on June 91 19341
,-i
iineolidated
with the American State Bank of the same city under
name of Citizens American Bank, and that Mr. Gilkey serves
the
"e co
izens nsolidated bank in the same cepacities-as he served the CitState Bank.
considering Mr. Gillrey's application it was noted that he
tiended only six
of twenty-nine meetings held by the directors of
ate
th First National Bank in Oshkosh during
the past two years; and
in the report of examination of
this bank as of April 271
the a portion of the indebtedness of the applicant and all
of
a .1.n
debtedness of two corporations in which he was interested as
,„,!!lrector and officer were classified
as slow by the examiner,
Qp,stated that the large direct and
indirect extensions of credit
yegirectors and their corporations suggested that those in command
theil,taking
of their positions on the board to further
arid °1"n personal interests. It was noted
also that the applicant
citi;°rPorations in which he was interested were indebted to the
ens State Bank, Merrill, Wisconsin, in the aggregate
,
of a
amount
eifiTc)xirnatelY )860001 of which approximately t70,000 was ciesor N- as slow in the report of examination of that bank made
as
alicecember 20,
19351 by an examiner for the Federal Deposit Insursiderporation. In granting the permit the Board took into coning 8;
tion the fact
that the applicant had stated that he was maktors, rangements
which would insure his being able to attend direcProminillene:tings regularly, that he was reported to be a member of a
and that
and to have a large following in the communities,
a
i
was said to be possessed of considerable executive
abil"At the
TaesteR
time of your annual review of this permit you are redirect- G C) raake Particular note of the applicant's attendance at
edtess°rst Of the First National Bank in Oshkosh and of his indebtbalaks and that
of
/ and report companies in which he is interested to both
fully to the Board with respect thereto."
The a
the s ication of
Mr. R. H. Butterwick, for permission to serve at
1°rth-i?,time as a director of
the Bank of Sargent County, Forman,
li'''°.trt, and as
an
officer
of The Dakota National Bank of Fargo,
/ "orth
Dakota,
ta, was approved, Mr. Miller voting "no ".
Th
e aPPlic 4-.
e t3m- 13-1°11 of Mr. A. L. Hanson, for permission to serve
re
1,
,
--,7 as a director and
officer
of
The
First
Ban_,.
National
o
of
Thep
Twin
'
iat NationalValley Minnesota, as a director and officer
Bank Of Buxton, Buxton, North Dakota, and as a
3499
11/14/34
-11-
director and officer of the First State Bank, Ada, Minnesota,
vas approved, Mr. Miller voting
"no".
The application of Mr.
M. H. Hanson, for permission to serve
the same time as a director and officer of the First National
ank in Mahnomen, Mahnomen, Minnesota, as an officer of The First
ilatonal Bank of Buxton,
Buxton, North Dakota, and as a director
!Ind officer
of The First National Bank of Thompson, Thompson,
510rth Dakota, was approved, Mr. Miller
voting "no".
he a
Pplication of Mr. J. M. Travis, for permission to serve at
'
isle same time as a director of The Texas State Bank, JacksonYrIlle, Texas, and as a director of The First National Bank of
vacksonville, Jacksonville, Texas, was
approved, Mr. Miller
17°ting
There was then approved (Messrs. Miller and Thomas
voting "no") a letter to Mr. Walsh, Federal Reserve Agent
at the Federal Reserve Bank of
Dallas, inclosing the following Clayton Act permit for transmittal to the applicant;
suggesting that the agent advise the applicant of the
Board's views with regard to attendance at directors' meetings as set forth in the
letter; and requesting that, when
the agent sul-mits
his recommendation as a result of his
annual review of the permit, he report fully as to the applicant's attendance at directors' meetings and as to the
Progress made in bringing
about an improvement in the conand management of the banks involved in the permit:
Mr, E. B
dir
. Ritchie, for permission to serve at the same time as a
d,_ector of
The Strawn National Bank, Strawn, Texas, and as a
14-rector of The
State National Bank of Mineral rells, Mineral
'
lls, Texas.
There was also approved (Mr. Miller voting "no") a
letter to Mr. Walsh, Federal Reserve
Agent at the Federal
Reserve Bank of Dallas, inclosing the following Clayton
Act
permit for transmittal to the applicant; suggesting
that the
agent advise the applicant that it is with the
expectation that he will improve his attendance at direcPrst
meetings of The First National Bank of Lipan that
e Permit has been granted; and
requesting that, when
he agent
submits his recommendation as a result of his
annual review of
the permit, he report fully as to the
aPPlicant's attendance at directors' meetings:
Mr. w. ”
dire
n- Roach, for permission
to serve at the same time as a
Mitecu°r and officer of The
State National Bank of Mineral Wells,
tkiv1011..n
ral Wells Texas, and as a director and
officer of The First
'
44. Bank of
Lipan, Lipan, Texas.
n
3500
11/14/34
-12-
The application of Mr. Albert I. Kulzer, for permission to
serve at the same time as a director and officer of The First
National Bank of Chewelah, Chewelah,
Washington, and as a direc,or and officer of the Farmers & Merchants Bank, Springdale,
"lashington, was approved, Messrs. Miller and Szymczak voting
non.
I
At this point Governor Harrison of the Federal Reserve
Bank of
ly
Z3I'lc, Joined the meeting.
He stated that in May or June of this
'1411* be had discussed with
members of the Board's Committee on the
'4U
tklic
Federal Reserve District the suggestion that the Federal Reserve
of New York take over the clearing and examination functions of
the
"! York Clearing House Association, it being
contemplated that
the
bkit
3tezination of the clearing house banks by the Federal reserve
would take the place of examinations previously made by the
488°4ati0n and that the
clearing house examiners would be taken over
the
Federal Reserve Bank of New York and the examining force of the
bikrap
gradually
built up to a point where it could examine all member
444 in
the district in the event there
is unification of the exam11R
tnnetion. He explained that this suggestion would not, in his
:
c 1111°4
'require any change in existing law and the examination work
be
accomplished merely by enlarging the existing organization
kcl duties
Of
Federal Reserve Agent's Department. He thought that
Or the members of the clearing house association are members of
the l'ederal
Reserve System
He outlined the reasons for his opinion
thiqUie as
sumption by the Federal reserve bank of the clearing house
tkletioris r
eferred to would be a desirable step and he stated that he
Ilacliecussed the matter
with members of the clearing house associat111, a
ma
jority of whom, he felt, were not only willing but anxious that
3501
11/14/34
the
the
-15-
stel)be taken; that the chairman of the association was in favor of
* mMstion and had raised a question only as to when and under what
Prciceallrethechange would be made; and that the directors of the Federal
Ileserly,
IDank of New York were in agreement that theetuation was reaching
a PMalt where
the suggested action by the Federal reserve bank should be
to
Governor Harrison also said that he did not think it would be wise
1 earing.house organization to be abandoned entirely if the clearthec'-
an4
'
examining functions were taken over by the Federal Reserve Bank
New ,,4cirk, but that there should remain in existence a committee which
.01114
r'qresent the clearing house banks and with which matters could be
te
UP as r
epresentatives of the banks.
He then stated
that he would like to get an indication from the
4'41e113 °f the Board as
to whether the Board is generally in sympathy with
the 811ggesti0n
that the bank assume the clearing and examination functions
r the
New York
Clearing House Association. He referred to the consideratt°4 b
tl,b el
"given at the present time in Washington to the unification of
eicieranic examination
function and he stated that, in his opinion, the con—
of
this matter was not a reason for deferring action on the pro-
v"ed step by
the New York Bank, and that he had discussed the matter with
4"441c that
had not felt
that there should be unification of examinations
alkl that
the
Federal Reserve Bank is the best agency through which the
ebk.,
-4441444
--Lons could be
made.
the
IIPon
New york
.
nclulry Governor Harrison stated that he would propose that
Bank examine all banks which are
e)
.
members of the New York
-4L1111g. H
°I1Be Association,
whether State or national hanks. He also
3502
11/14/34
8414 that he felt that the Federal reserve banks are in the best position
tob,
"41.zs examinations, as they are coming in constantly closer contact with
— yanks and their knowledge of the banks' affairs is growing, and
that
ti.
ls close contact is an almost necessary adjunct to any examination.
A general discussion of the question of bank examinations ensued
hich Mr. James stated that he had suggested for a long time that
w
131114 be desirable for the examination function to be vested in the
Feder
al Reserve Board
which would supervise, through the Federal reserve
belike
'the examination of member banks and would absorb the cost of exami1144011,
.i
" He said that under this arrangement the banks would get the
e4efit of
- examinations
without direct cost while their ownership
q the
Stock of
the Federal reserve banks would place them under respon—
"bility
to bear indirectly
the expense of such examinations. He added
thq hi_
suggestion would also provide that where the condition of the
such that
additional examinations were desirable, the expense of
811°1 °3cellinati0n5
could be assessed as a penalty on the bank for alloying
the
111188`tisfactory condition to develop.
1)iecussion of Mr. James' suggestion raised the questions whether
tbe
tl3Ponsibility for examinations should rest with the Federal Reserve
)11\71 '31' the -Federal
reserve banks, the procedure to be followed in con—
examinations, and whether it would be desirable, in view of
e4the
circumstances, for the Federal reserve bank to take upon itself
for making examinations of clearing house banks in
17"°rIt City,
that
In connection
with the first question, Governor Harrison stated
e it that it
would be more satisfactory if the supervision of
3503
11/14/34
-15were placed primarily in the hands of the Federal reserve
444, subject to
supervision by the Federal Reserve Board, and that he
telt
the Federal Reserve System would be more likely to get the support
°I* illember banks if the examination
function is handled through the Fedeserve banks so as to avoid the concentration or congestion which
has be
en experienced in other offices in Washington.
Re then stated that he would like to
take up with the Chairman of
thp,
w 401,1c
Clearing House Association the matter of the assumption by
the?ed
eral Reserve Bank of New York of the clearing and
examination funcof the
association, and advise him that the Federal Reserve Bank
lickld beg
-fl to examine the
clearing house banks, it being understood that
the
assoc iettion would abandon its examinations and
permit the transfer of
its
r`aminers to the
Federal Reserve Bank of New York.
During the latter part of the discussion, Mr.
Daiger, Assistant
to
Thomas, joined the
meeting.
At the conclusion of the discussion it was
understood that Governor Harrison would confer
on the matter
with the Board's Committee on the
Second Federal Reserve District which would make
a report to the Board with regard
thereto.
Messrs. riYatt,
Paulger, Cherry, Daiger and Harrison left the meetthe 13
oard acted
upon the following matters:
Telegram to the
Federal reserve agents at all Federal reserve
reading as
follows:
se
No. 38 interpreting Regulation T. In response to
t
cp,,o,'nquiries, the Federal Reserve Board rules that interest
at tb--" dividends
on securities in any restricted account may,
azer:4,ptien of
the.creditor be paid to the customer if they
on the same
day on ;hich,
in accordance with the creditor's
3504
4/14/34
—10-
practice, they are credited to the customer's account.
xnismiling applies to interest on coupon bonds as well as to
interest on registered bonds and cash dividends on stocks."
Approved.
Telegram toMr. Newton, Federal Reserve Agent at the Federal
erve
Bank of Atlanta, reading as follows:
, "Your wire November 13 re election Class A Director. It
;Ls Board's view that a member bank which has cast invalid
ballot may be permitted to substitute properly prepared ballot
Provided (a) that the outer envelope on which appears the sig—
nature of the officer of the voting member bank is plainly
Tarked 'substitute' or 'duplicate' (b) such substitute ballot
ls cast before
the closing of the polls and (c) that as soon
:e the
ballot box is opened after the closing of the polls the
,Tre10Pe containing the ballot originally cast by the bank in
'
estion is identified and such original ballot withdrawn from
cons
ideration."
Approved.
Letter to Mr.
Williams, Federal Reserve Agent at the Federal Reserve
0,„
I01eveland, reading as follows:
1, "There
are inclosed the original and copies of a Clayton Act
4,rmit granted to Mr.
C. E. Kapitzky, Cleveland, Ohio, to serve
ta the 88
u
.ms time as director and officer of The First National
ort
fl;' °f Alexandria, Alexandria,
Pennsylvania, and as director and
f0
,
12er of The Citizens—State Bank of Strasburg, Strasburg, Ohio,
F,ansmittal by you to the applicant and the two banks, and a
vPyttior your
files.
liot In the
consideration of Mr. Kapitzky's application it was
eeZ1 from recent
reports of exsnination that the banks he is
ti;v1ng were in
unsatisfactory condition (although their condi—
ca /41,sUbsequently had been imnroved by the
strengthening of their
04i'al structures);
that thE'condition and management of The
the zens—State Bank of Strasburg were
especially criticized by
the eaaTiner for
the Federal Deposit Insurance Corporation; that
143J-1 oant was considered to be largely
responsible for the
oeca
,
, aeborY condition of The Citizens—State Bank of Strasburg
alpi oe of his
domination of its affairs; that he and his family
a4d ;!
/ 4tTY have used unduly
the credit facilities of this bank,
by thuat he attended
only eight of the twenty—four meetings held
the :ne directors of
The First National Bank of Alexandria during
tst two Years.
or these
reasons, the Board has not been disposed to grant
4
3505
11/14/34
-17-
"the permit. However, it has given consideration to the other
factors involved in this_case, particularly the long service
of Mr. Kapitzky tothebaaks and the fact that he and his family
have substantial stockholdings in the Strasburg bank, and, in
of the recommendations of Assistant Federal Reserve Agent
Fletcher and the Federal Reserve Agent at Philadelphia, the Board
Ilas granted the permit. It will be noted, however, that the permit has been
granted to continue in effect only for the period
ending at the close of December 31, 1934, and, when transmitting
the Permit,
you are requested to call the applicant's attention
feature
of the permit, advising him also that the Board
110 this
2-s
granted the permit with the expectation that at its expirablon he will bring his relationship into conformity with the
12cY7i5i0n3 of the Clayton Act. This will avoid the necessity
ilva severance of his connection with either of the banks at
time, and the situation can be met, it would seem, without
rrassment or a misunderstanding in the communities, by efthe desired adjustments in the managements of the banks
uY December
31, 1934.
"Please keep the Board informed of the action taken in this
matter,
A copy of this letter is being sent to the Federal Reserve
Agent at the Federal Reserve Bank of Philadelphia."
Z
ir
Approved.
Letter to Mr. Peyton, Federal Reserve Agent at the Federal Reserve
kik or m.
lnneapolis, reading as follows:
A "There are
inclosed the original and copies of a Clayton
Det permit
granted to Mr. 0. S. Hanson, Grand Forks, North
T111 1a, to serve at the same time as director and officer of
a e First National Bank of Buxton, Buxton, North Dakota, and
ss a director of The First National Bank of Thompson, Thomptr, North
Dakota, for transmittal by you to Mr. Hanson and
e 14Dianks involved,
and a copy for your files.
, UPon the basis of the information before it the Board
te
aiels that the
issuance of the permit applied for to serve
Grs° as a director of the First National Bank in Grand Forks,
1,elld Forks, North Dakota, would be incompatible with the pubtiLlo i
nterest. You are reouested to advise the applicant of
e Board's
position in this matter unless there are pertinent
f'acts
j. which were not submitted with the application and which
oU teel
should be given consideration.
to 4 If You deem it desirable or necessary you are authorized
tiof!
*°rm :/r. Hanson that the Board's action upon his applica4.1
,
1 in respect to his service as a director of the First
aulonal
Bank in Grand Forks was based primarily upon your
3508
11/14/34
-18-
mmendation and the fact that, as indicated in your letter
°f October 2, 1954, he is already sufficiently burdened with
responsibilities in his capacities as director and officer of
The First National Bank of Buxton and as director of The
First
National Bank of Thompson, particularly in view of the
unsatisfact°rY condition of the former bank and the difficulties being
exPerienced in effecting its program of
rehabilitation.
, "In view of the statement in your report to the effect that
4r. Hanson was connected with several outlying banks, including
The First National Bank of Buxton and The First National Bank
°f Thompson, it is requested that before transmitting the permit
:Ind the
copies thereof to the banks involved you determine that
Hansont s relationships with all the banks with which he is
'
onilencted are in conformity with the Clayton Act.
,
In communicating with the applicant please inform him that,
-2_-11 accordance with
Section V (g) of Regulation LI consideration
111 be given to any additional facts or arguments not appearing
1,11 1118 application and accompanying forms which he feels should
be
brought to the Board's attention. In this connection, please
sulbrise the Board promptly as to whether Mr. Hanson desires to
any additional data and, if not, as to what steps he proto take in order to comply with the provisions of the Clay-
7
Approved.
Letters to the respective Federal reserve agents stating that the
to4rci has given
consideration to the following applications for permits
tillcier the
ClaYton. Act, and that, upon the basis of the information before
Its r
eels that
the issuance of the permits applied for would be incompatwith the
public interest. Each letter also requested the agent to
e°
icate
to the
applicant the Board's position in the matter, and to
t1(11'18e the
Board promptly as to whether
the applicant desires to submit
kqy ad .
clItional data,
o
and, if not, as to what steps he proposes to take in
rtier to f,
-0111131,7 with the
provisions of the Clayton Act:
Mr. Art,_
as an "ur L. Bowerman, for permission to
at the same time
Newa officer and
director of the Lincoln National Bank of Newark,
of
rkl Ilew Jersey, and as a director of The Franklin
Bank
mr.Nutley,
Nutley, New Jersey.
ofri!lbert E. Howe, for permission to serve at the same time as 1
Ne -er and
y,
14 w'
Ter etr director of The Franklin National Bank of Nutley,_u
-utlev. 2,,,Y and as an officer and director of the Bank of Nutley
/
m" 'ley' Jersey.
3507
11/14/34
—19—
Mr. Edward H. Yerg, for permission to serve at the
same time as
a director
of The First National Bank of Nutley, Nutley, New
''eree5r, and as an officer and director of the Peoples
National
'oink & Trust
Company of Belleville, Belleville, New Jersey.
Mr- Robert -5.
Douglas, for permission to serve at the same tine
an officer
of the Union County Trust Company,
Elizabeth, New
„eree,Y, and as a director
of The First National Bank of Cran4ord, C
ranford, New Jersey.
r
Mr. n,
--LarK McKay Vhittemore, for
permission to serve at thesame
;;44v as a director and
officer of the Union County Trust Company,
tliizabeth, New Jersey, as a director of
the Linden Trust Company,
0
,
14
1"/ New Jersey, and as a director of
The First National Bank
-4 uranford,
Cranford, New Jersey.
Mr. v.
dir "rrY
cHoliday, for permission to serve at the same time as a
ectcr typ
.L The Butler County National
Bank and Trust Company of
ver,
Butler, Pennsylvania, and as a director of the
Lyndora
.510nal Bank,
Lyndora, Pennsylvania.
1% Clemens, for permission
to serve at the same time as a
No_ctor and
officer of The Dakota National Bank of Fargo, Fargo,
stfIll Dakota,
and as a director and officer of the Bank of
Steele,
vele, North
Dakota.
•
e -L-Lam Stern, for
dire,
permission to serve at the same time as a
tiort,zor
and officer of The
Dakota National Bank of Fargo, Fargo,
Dak4
1 Dakotav'as a
director of the Bank of Steele, Steele, North
Po,__ 4, and as a
director and officer of the Bank of Sargent County
...wan, North
/
Dakota,
Approved.
Letters
(T,
to
applicants for permits under the Clayton Act, advising
of their
applications as follows:
as a "rick M
cDonough, for permission to serve at the same time
pial
director and
officer of The First National Bank of South
:
(1, South Plainfield, New
g el
Jersey, and as a director of
-Lanfield National
Bank, Plainfield, New Jersey.
14r. ("Dv. ri
dire4v ". Bange, for
permission to serve at the same time as a
1744i °r or The
PerinELY111c1 as a First National Bank of Hanover, Hanover, Pennsyl—
director of the Hanover Trust Company, Hanover,
Brough, for
permission to serve at the same time as a
)4
3508
11/14/34
-20-
director
and ofilcer of The First National Bank of Hanover,
Hanover, Pennsylvania, and as a director of the
Hanover Trust
Cftlpany, Hanover, Pennsylvania.
!
re C. N. Nyers, for permission to serve
at the same time as a
director of
The First National Bank of Hanover, Hanover,
Pennsyllaniay and as a director and officer of
the Hanover Trust Company,
anc'very Pennsylvania.
T
*.7, H. D. Sheppard, for
permission to serve at the same time as
a director of The First
National
Bank of Hanover, Hanover, PennSylvania,
and as a director and officer of the Hanover
Trust CoinPa/171 Hanover,
Pennsylvania.
*.
T,
(14
q. Allman, for permission to serve at the
same time as a
rector of
The Butler County National Bank and Trust Company of
T utlery Butler, Pennsylvania,
and as a director and officer of the
*L'Yndora
National Bank, 4
1 ndoral Pennsylvania.
Mr. D
ean B. Copeland, for
permission to serve at the same time as
7
01
;
-Lrector of The
Braddock
National Bank, Braddock, Pennsylvania,
alla as a
director and officer of The Butler County National
Bank
Trust Company of
Butler, Butler, Pennsylvania.
m
Amsler, for permission to serve at the same time as
di
a
atdrect
asor of the
Citizens Trust Company, Clarion, Pennsylvania,
p_
a
director of The First National Bank of Fryburg,
'
1111sYlvania.
Fryburg
time'Llarles E.
Andrews, Jr., for permission to serve at the same
Be,
L as a
director and officer of The First National Bank of
levr
ote ehem, New Bethlehem,
Pennsylvania, as a director and officer
and as First National Bank of Rimersburg,
Rimersburg, Pennsylvania,
Pennan;:irtteector and officer of the Sligo
National Bank, Sligo,
Mr• ty
g. m. H
dir
ufnagel, for permission
mi
to serve at the same time as a
...ector and
-,y-ItrAir,4 ...
officer of the Citizens Trust Company, Clarion,
Pennas a
director of the Sligo National Bank, Sligo,
PennsylPrybul and as a
director of The First National Bank of Fryburg,
rgy
Pennsylvania.
. p. n
direc,%).
Andrews, for permission to serve
Nan ;Apr of
at the same time as a
The First
Uational Bank of New Bethlehem, New Bethlehem,
Ilrest%:a
y and as a
director of The Bank of Rainelle, Rainelle
3509
11/14/34
21111". H. Bachenheimer„ for permission to serve at the same time as
D irector of The Dakota National Bank of Fargo, Fargo, North
(AEL, and as a director of the American State Bank, Moorhead,
Natresota.
Approved.
Thereupon the
Vice Governor.
ei ng adjourned.
@FedFRASER