Full text of Minutes of the Board of Governors of the Federal Reserve System : Meeting Minutes, November 24, 1939, Volume 26, Part 4

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1457

A meetirg of the Board of Governors of the Federal Reserve
SYStem was
held in Washington on Friday, November 24, 1_239, at 11:30 a.m.
PRESENT:

Mr.
Mr.
Mr.
Mr.

Szymczak
McKee
Davis
Draper

Mr. Bethea, Assistant Secretary
Mr. Carpenter, Assistant Secretary
Mr. Clayton, Assistant to the Chairman
The action stated with respect to each of the matters hereinafter referred to was taken by the Board:
The minutes of the meeting of the Board of Governors of the
4de 1
re-L Reserve System held on November 22, lN9, were approved unani11101181y.

Telegrams to Mr. Young, President of the Federal Reserve Bank
Of Bo

stcn, Mr. Hays, Secretary of the Federal Reserve Bank of Cleveland,
Leach)

President of the Federal Reserve Bank of Richmond, Messrs.

8tew.„
Powell and Leedy, Secretaries of the Federal Reserve Banks
Of P.L.

Louis, Minneapolis and Kansas City, respectively, Mr. Stroud,

l'irst Vice
President of the Federal Reserve Bank of Dallas and Mr.
Weet
'Vice President of the Federal Reserve Bank of San Francisco,

4t ng that the Board approves the establishment without change by
they
aderal Reserve Banks of St. Louis and San Francisco on November
21'uY the
Federal Reserve Banks of Cleveland and Richmond on Novem-

ber
'
2) bY the Federal Reserve Bank of Minneapolis on November 23, 1939,




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11/24/39

-2-

and by the Federal Reserve Banks of Boston, St. Louis, Kansas City
and Dallas today, of the rates of discount and purchase in their existing schedules.
Approved unanimously.
Letter to "The First National Bank of Madison", Madison, Tisconsdn, reading
as follows:
"The Board of Governors of the Federal Reserve
System has considered your application for permission
to exercise fiduciary powers, and grants you authority,
effective if and then the proposed consolidation of
The First National Bank of Madison and the Central
tisconsin Trust Company of Madison, both of Madison,
Wisconsin, is consummated, to act, when not in contravention of State or local law, as trustee, executor,
ad ministrator, registrar of stocks and bonds, guardian of estates, assignee, receiver, committee of estates of lunatics, or in any other fiduciary capacity
in which State banks, trust companies or other
corporations which come into competition with national
banks are permitted to act under the laws of the State
of Wisconsin, the exercise of all such rights to be
subject to the provisions of the Federal Reserve Act
and the regulations of the Board of
Governors of the
Federal Reserve System.
"Upon receipt of advice from the Comptroller
of the Currency that the proposed consolidation has
been effected, a formal certificate evidencing your
right to exorcise fiduciary powers will be forwarded
tO you.H
Approved unanimously.
Or

Letter to Mr. Harrison, President of the Federal Reserve Bank
ell York,
reading as follows:




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11/24/39
"Under the nrdvisions of paragraph (1), subsection (i), of section 12B of the Federal Reserve Act,
as amended, the Board of Directors of the Federal Deposit Insurance Corporation has found that the Mount
Pleasant Bank and Trust Company, Pleasantville, New
York, has continued unsafe and unsound practices in
the conduct of its business, has so advised the Board
of Governors of the Federal Reserve System, and has
requested the Board of Governors to fix the time in
which the bank shall make the necessary corrections
of such practices and to advise the Corporation of any
action taken by the bank to effect such corrections.
"There is enclosed a letter the Board has addressed to the Mount Pleasant Bank and Trust Company,
Pleasantville, New York, together with three copies
thereof, advising of the findings of the Board of Directors of the Federal Deposit Insurance Corporation
and fixing March 23, 1940, as the date not later than
Which the necessary corrections of the unsafe and unsound practices mentioned shall be effected.
"You are hereby authorized to have the enclosed
letter, together with a copy of the Federal Reserve Act,
Personally presented to the Mount Pleasant Bank and
Trust Company, Pleasantville, New York, the person who
does so to make an affidavit of service in the usual
form in which such affidavits are made in the State of
New York. This affidavit, and a copy of the letter to
which it is attached, should be forwarded to the Board.
"One of the copies of the letter to the bank is
for your files, and you are requested to forward the
Other copy to the Superintendent of Banks of the State
of New York, for his information."
Approved unanimously, together with
a letter to the "Mount Pleasant Bank and
Trust Company", Pleasantville, New York,
reading as follows:
"Paragraph 1 of subsection (i) of section 12B
of the Federal Reserve Act, as amended, reads
in part
Els
follows:
I thenever the board of directors shall find
than an insured bank or its directors or
trustees have continued unsafe or unsound




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-4-

practices in conducting the business of
such bank, or have knowingly or negligently
permitted any of its officers or agents to
violate any provision of any law or regulation to which the insured bank is subject,
the board of directors shall first give to
the Comptroller of the Currency in the case
of a national bank or a District bank, to
the authority having supervision of the
bank in the case of a State bank, or to
the Board of Governors of the Federal Reserve System in the case of a State member
bank, a statement with respect to such
practices or violations for the purpose
of securing the correction thereof. Unless such correction shall be made within
one hundred and twenty days or such shorter
period of time as the Comptroller of the
Currency, the State authority, or Board of
Governors of the Federal Reserve System,as
the case may be, shall require, the board
of directors, if it shall determine to proceed further, shall give to the bank not
less than thirty days' written notice of
intention to terminate the status of the
bank as an insured bank, and shall fix a
time and place for a hearing before the
board of directors or before a person designated by it to conduct such hearing, at
Which evidence may be produced, and upon
such evidence the board of directors shall
make written findings which shall be conclusive.'
"Pursuant to the statutory provisions above quoted,
the Federal Deposit Insurance Corporation has submitted
to the Board of Governors of the Federal Reserve System
a statement, a copy of which is attached hereto, with
!espect to continued unsafe and unsound practices by the
mount Pleasant Bank and Trust Company for the purpose
Of securing corrections thereof and
of which you will
Please take notice. You are hereby directed to effect
corrections of the unsafe and unsound practices enumerated in the enclosed copy of the statement of the




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11/24/39

-5-

Federal Deposit Insurance Corporation; and the Board of
Governors of the Federal Reserve System has fixed the
period ending March 23, 1940, 120 days from the date of
this letter as the time within which such corrections
shall be effected. You are requested to advise the
Federal Reserve Bank of New York on or before March 23,
1940, as to the action which has been taken effecting
corrections of the unsafe and unsound practices referred
to.
"For your information, there is enclosed a copy
of the Federal Reserve Act and your attention is called
to section 12B thereof and particularly to the full
text of subsection (i) of section 12B."
In connection with the above matter,
the following letter to the Federal Deposit Insurance Corporation was also approved unanimously;
"This refers to your letter of November 16,
1939, in which it is stated that the board of directors
of the Federal Deposit Insurance Corporation has found
that the Mount Pleasant Bank and Trust Company, Pleasantville, New York, a State member bank, has continued
unsafe and unsound practices in the conduct of its
business. Pursuant to paragraph 1 of subsection (i)
of section 12B of the Federal Reserve Act, as amended,
Your letter contains a statement with respect to such
Practices for the purpose of securing correction thereof.
"The Board of Governors has today addressed a
letter to the bank serving notice regarding the required
correction, and has fixed the period ending March 25,
1940, 120 days from the date of the letter addressed to
the bank, as the time within which the necessary correction of the unsafe and unsound practices in the conduct
of its business recited in your letter may be effected.
Yc
.)u will be informed as promptly as possible of any advice which the Board receives as to any action taken
bY the bank to effect such correction."







Thereupon the meeting adjourned.

Assistant Secretary.