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3513 A meeting of the Federal Reser ve Board was held in Washington on 'riday, November 16, 1934, at 3:00 P. 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: Letter dated November 15, 1934, from Mr. Sprou l, Secretary °f the Federal Reserve Bank of New York, and telegrams dated November 14 '1934) from Mr. Curtiss, Chairman of the Federal Reserve Bank of 4ston, and November 15, 1934, from :!.r. Sargent, Secretary of the l'edere'l Reserve Bank of San Francisco, all advising that, at meetOf the boards of directors on the dates stated, no changes were raate in the banks, existing schedules of rates of discount and purchase. Without objection, noted with approval. Letter to Mr. Williams, Federal Reserve Agent at the Federal ReFierve Ba nic of Cleveland, reading as follows: rec "The Federal Reserve Board has given consideration to the 1931flIrlendation contained in Mr. Fletcher's lette r of October 16, Res 'and/ pursuant to provisions of Section 19 of the Federal the in lell".7.eCt, grant s permission to the National Bank of America com ' l tsourgh, Pa., effective with the first semi-monthly reserve iticIn period beginning after the date of this letter, to a-Ln a reserve with the Feder Reser al ve Bank of Cleveland 4-fto not less than 7 perce nt of the aggre gate amount of it rala d depos its .pe ''eP°s and 3rcent of the aggregate amount of its time its This approval is granted with the understanding that Inain 1 (11 3514 11/16/34 mom "the recommendation contained in Mr. Fletcher's letter is that of the Board of Directors of your bank or of its Executive Committee. , "Please advise the National Bank of America in Pittsburgh, Of the Board's action in this matter, calling its attention o the fact that such permission is subject to revocation by the .vederal Reserve Board at any time after appropriate notice to the member bank." Approved unanimously. Letter to Mr. O'Connor, Comptroller of the Currency, reading as follows: 4 "In accordance with the recommendation of Acting Comptroller wait the Federal Reserve Board approves a reduction in the „: com' 4°4 capital stock of 'The First National Bank of Marlboro', Marlboro, New York, from $50,000 to $25,000, pursuant to a plan iOla provides that the released capital shall be used to elim(rats ats unsatisfactory assets, and that all estimnted losses and ation in lower grade securities not eliminated by appli; „;410n of the released capital shall also be charged off, all as t Icrth in Mr. Awalt's memorandum of November 10, 1934." n Approved. Letter to Mr. O'Connor, Comptroller of the Currency, reading 48 follows. tio "In accordance with Acting Comptroller Awalt's recommendamo 4) the Federal Reserve Board approves a reduction in the cornStock of 'The First National Bank of Mondovin, whiffi, Wisconsin, from $50,000 to $25,000, pursuant to a plan z2s-,1 provides that the bank's capital shall be increased by ,!°°° of preferred stock to be sold to the Reconstruction to e14Corporation, and that the released capital shall be used all alsininate a corresponding amount of unsatisfactory assets, set forth in Mr. Awalt's memorandum of November 7, 1954." Approved. Letter 4141ervs to Mr. Peyton, Federal Reserve Agent at the Federal Bank of M inneapolis, reading as follows: p rm, --e analysis of the report of examination of the 'Bank of 3515 11/16/34 -3- "Alpena', Alpena, South Dakota, as of August 22, 1954, made by State bank examiners, and copies of the correspondence from the Superintendent of Banks, indicate that in connection with the issuance of .q_51000 capital debentures to the Reconstruction Finance Corporation the bank agreed to reduce its common capital stock from $25,000 to ?1.510001 and that the State Superintendent of Banks has requested that the bank take steps to conform with the agreement. "It apoears from the information submitted that the entire amount of the proceeds of the reduction in the common capital stock is to be used to eliminate unsatisfactory assets and that 21.1oh reduction will result in a material improveme nt in the bank's condition. It is noted, however, that, although the amount of capital stock of the Bank of Alpena after the proposed reduction would be in excess of the minimum capital required for admission or the bank to membership in the Federal Reserve System in a Place the size of Alpena, the amount of the capital of such bank would be, nevertheless, insufficient for the organization of a ational bank in Alpena. In this connection, the Board has here°fore ruled that a membcr State bank may not, while remaining ;,member of the Federal Reserve System, reduce its capital below tiir amount required for the organizatioh of a national bank in Place in which the State bank is located. However, in view the fact that proposed reduction in common capital was the orde a part of an ar-eement under which the bank issued 15,000 on ,apital debentures to the Reconstruction Finance Corporation kugust 21, 1934, and since the capital of the bank will be Zetater , -4 T1 the amount of 5,000 than its capital prior to such sul,e, the Board feels that the purposes of the law will have been testantia11:7 complied with. In this connection see Board's ' egfiam of June 23, 1934 (X-7933). The condition s of membership accepted by the bank provide that lalis.1t shall not reduce its capital stock except with the perot,!1°m of the Federal Reserve Board. In view of all the circumab cee and your opinion that the proposed reduction is desirfrom24e Board approves common capital reduction stock in the be to 1.5,000 provided that the released capital shall ancl'!?d to eliminate a corresponding amount of estimated losses pro,nlaer unsatisfactory assets which sh411, however, remain the Suplj e;ftY of the bank, that the transaction is approved by the Intendent of Banks of the State of South Dakota, and that 1:Iur_ocounsel is satisfied as to the legality of the proceedings c ./-_lection therewith . amewmIt will be appreciated if you will forward copies of any with i?nts to the bank's charter which were adopted in connection -1.1e capital adjustments." Z Approved. Tele „..‘ gr-iu to Mr. Peyton, Federal Reserve Agent at the Federal 3516 11/16/3d -4- Reserve Bank of Minneapolis, stating- that the Board has given consideration to the application of the "First Bank Stock Corporation", 114111eaP0lis, Minnesota, for a voting permit under the authority of secti°n 5144 of the Revised Statutes of the United States, as amended, entatliug such organization to vote the stock which it owns or controls "The first National Bank of Bison", Bison, South Dakota, and the flPirst National Bank in Lemon", Lemmon, South Dakota, and has author- fle issuance of a limited permit to the applicant for the follow- "To act at-any time prior to December 31, 1934, upon a proposal or proposals to authorize or ratify the assumption of the irosit liabilities of The First National Bank of Bison by First ional Bank in Lemmon and the sale of certain assets of The tFirst National Bank of Bison to First National Bank in Lemmon, ' ciTcl to place The First National Bank of Bison in voluntary liquiti;ti°n' all in substantial conformity with the plan outlined in ter dated November 9, 1934, from the Applicant to the Federal Reserve Agent at Minneapolis." The tele gram also authorized the agent to have prepared by counsel for hFederal reserve bank, and to issue to the First Bank Stock Cora limited voting permit in accordance with the telegram. Approved. Memorandum dated November 9, 1934, from Mr. Smead, Chief of the Di • . v/s1(41 of Bank Operations, stating that on November 7, the date ot the last Weekly condition statement of Federal reserve banks, indusa dvances made by the Federal reserve banks, ..;,6,617,0001 exceeded bank holdings of bills bought in the open market, and were only ThcIllt nn less than total bills discounted, that, in the cirItastane the ' s it seems desirable to show the amount of industrial ad- 3517 11/16/34 —5- vane "made by the Federal reserve banks in the statistica table l ap— Pearing below the text on the first page of the statement; that to 11°w the amount of such advances, however, without also showing the 8111c t of the Federal reserve banks' commitments to make such advances, raiglit give the wronp impression; and that, accordingly, it is recom— mended that the statistical statement at the bottom of the first page °f the statement be revised to include the item of "Industrial advances (not i ncluding commitments)". The recommendation was approved by five members of the Board on November 15, 1934. Approved. Letter to Mr. Grayson, Auditor of the Feder al Reserve Bank of C".eland, readin 7, as follows: "I am pleased to ackno wledge receipt of your letter of 14°vember 10, 1934, and the report of audit of the accounts of the F f iscalAgent of the Federal Reserve Board covering the period June 12, to Octob er 20, 1934, inclusive. "It is noted that under the caption 'comm ents' on page 5 )1-1 suggest that the Fiscal Agent be given permission to make 4-411°r ' that corrections in vouchers submitted by field men in order Prompt payment of the vouch ers may be made to these men, that when a voucher has been changed by the Fiscal Agent con— oit rmation of the change should be gotten from the payee and kept mi file for the auditor's information. It io assumed that the 01,11°P corrections to which you refer are corrections on account errerr°rs in calculation, or what are commo nly called clerical Boa°r13- This matte r has been brought to the attention of the r(m„' I d and the Board authorizes the Fiscal Agent to carry out —Lir suggestion. em , "Errors found in checking the records of prior service of rePeees of the Board who have applied for membership in the yourrement System of the Federal reserve banks refer , red to in co °°mments, have been repor ted to syste the officials for m rrection. that "In Y3ur letter of August 10, 1934, you offered the suggestion , a,seParate account be set up on the books of the Richm thro ond bank ".ga which the building funds of the Federal Reserve Board would 3518 11/16/34 "be handled. This suggestion has been given consideration and there is attached a copy of a memorandum addressed to the Board 111.1der date of Octoter 17, 1934, in this connection, together With a copy of 3 levter dated November 2, 1934, to Mr. V. W. Hoxton, Chairman of the Federal Reserve Bank of Richmond, re— questing thattwo building accounts be opened on the books of bank. Mr. Hoxton has replied that the procedure suggested 1/1 the Board's letter is satisfactory to the bank and will be followed by it." Approved. Letter dated November 15, 1934, approved by five members of the Boa , ru, to Mr. Walter Lichtenstein, Secretary of the Federal licks° rY council, reading as follows: t "I have your letter of November 9, 1934, in regard to °1-cs for consideration at the next meeting of the Federal Ac11 b v'sorY Council and am bringing it to the attention of the mem— ers of the Board. Par your information I may say that your letter of October 17 1934, was brought to the attention of the members of the rd for their consideration." B4 Approved. Letter to Mr. Wood, Federal Reserve Agent at the Federal Re— se of St. Louis, reading as follows: incl. "Receipt is acknowledged of your letter of November 8, 1934, Vic...°, s,ing a copy of a letter received by you from Mr. W. R. Cobb, xen 'resident of the Citizens Union National Bank, Louisville, u Y", with regard to industrial loans. 4 The Bot3rd vi is pleased to learn of the constructive manner ; -. 1 11g 1. hich the national bank is handling this matter, and it is be igp st°6' that, unless you see some objection, Mr. Cobb's letter 'light to the attention of the other Federal reserve banks." Approved. Letter to Mr. Wood, Federal Reserve Agent at the Federal Re— aez,ve Ballk of St Louis, reading as follows: "Receipt ipt is acknowledged of your letter of November 3, 1934, 351_9 11/16/34 _7_ H and nclosures relating to the applications of Mr. George Samuel Neal and :jr. A. J. Mathews under the provi sions of sec32 of the Banking Act of 1933 for permits to serve as officers and/or directors of the Bank of Russellville and of Mathews Investment Company, Inc., both of Russellville, Arkansas. "It appears from the letter of the company and the letter of the attor ney for the company, which you inclosed, that the IcoOmPany does not engage in the underwriti ng, flotation or distri,'Iti°n of securities; that, although it occasionally sells original Tortgage notes acquired by it, it does not sell participations such notes or mortgages; and that it has discontinued dealing in securities of any kind and has requested the cancelation of its Permit, which is required under the laws of the State of Arkansas. , "In the light of the information previously submitted, it efore appears that the company is now engag ed chiefly in a 'ting insurance, conducting a title abstract business, and, to th-?sser extent, in making loans upon real property. It appea rs 1,..!') in the oast, it purchased a considerab amoun le t stock of as "I nntments but that it has disposed of a large portion of such Alcudlriga. r "Accordingly, on the basis of the information submitted, It p;:jaPpears that Mathews Investment Company, Inc. is not 'engaged set:nal 4Y in the business of purchasing, selling, or negotiating : Coi71.tiesi within the intendment of section 32, and that permits eazIationships referred to in the first paragraph of ter therefore not necessary. It will be appreciated You will advise Yir. Neal and Mr. Mathews accordingly." Approved. serve Letter to Mr. Hoxton, Federal Reserve Agent at the Federal Re- ank of Richmond, stati ng that the Board has given consideration t° th e ' 1011ov:1n, application for a permit under the Clayton Act, and that uPon the basLi of the information before it, concu rs in the agent's °Pi/lion that the issuance of the permit applied for would be incompatible 7lith the public interest. The letter also requested the agent to cornklIrticate to the applicant the Board's position in the matter, and to adthe Board Promptly as to wheth er the applicant desires to submit N7* Etdditionel data, and, if not as to what steps he proposes to take order to complY With the provisions of the Clayton Act: 3520 _8_ Mr. George P. Sacks, for permission to serve at the same time 18 . a director and officer of the Bank of Bethesda, Bethesda, ;rrYland, and as a director of The National Bank of Washington, Hashington, D. C. Approved. Letter to an applicant for a permit under the Clayton Act, of approval of his application as follows: Mr. orris E. Marlow, for permission to serve at the same time director of the East Washington Savings Bank, Washington, and as a director of The National Bank of 'Washington, " 1-8aington, D. C. ta! Approved. Thereupon the meeting adjourned. Secretary. Vice Governor.
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