Full text of Minutes of the Board of Governors of the Federal Reserve System : Meeting Minutes, October 1, 1934, Volume 21, Part 5

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3030
A

meeting of the Executive Committee of the Federal Reserve Board

hell in Washington on
Monday, October 1, 1934
PRESENT:

at 3:00 p. m.

Mr. Thomas, Vice Governor
Mr. James
Mr. Szymczak
Mr. Bethea, Assistant Secretary
Mr. Carpenter, Assistant Secretary

The C
ommittee considered and acted upon the following matters:
Letter dated
September 27, 1934, from Mr. Sproul, Secretary of the

Peder

al Reserve Bank of
New York, and telegram dated September 281 1934,
troti m
ra Stevens,
Chairman of the Federal Reserve Bank of Chicago, both
ache
--Lg that,
at meetings of
the boards of directors on the dates stated,
rtoeheal
gea were
made in the banks' existing schedules of rates of
discount
alici
chase.
Without objection, noted with approval.
Memorandum dated
September 24, 1934, from Mr. Goldenweiser, Di—
r
tern

(3—

"i)Oral.7

the °I-vision of Research and Statistics,
recommending that the

b,r4ionbemPloYment of Mrs. Helen H. Hassell as a stenographer in the
e extended
1,411
for a period of three months from October 2, 1934,
la-17 at
the same rate
tier,
as her previous employment. The recommenda-4 was a
PPr°ved by four members of the Board on September 281
1934.
Approved.
Lett,
-r dated
I/10

September 29, 1934, approved by three members of the

°Ilorable Francis
B. Sayre, Assistant Secretary of State, read—
.rollows:
tvr..
04

accordance with your renuest, the Board has desigWalter R. Gardner to
serve on the Special Committee
°Iange Control
as suggested in your letter of September 26.
Ar




3031

1,/1/34
m
"While the
ieetings of the
,
°ard wishes to
6° speak for
it

Board is glad
Committee and
make it clear
on agy metter

to have Mr. Gardner attend the
to participate in its work, the
that Mr. Gardner has no authority
of policy."

Approved.
Telegram
'
.1) to ,Ar.
y

dated September 28, 1934, approved by four members of the

Case, Federal Reserve Agent at the Federal Reserve Bank of

°r1c, reading
as follows:
pa "Your letter
twenty-fourth. Board approves appointment of
8 111 R. Fitchen effective September 201 1934 and
Richard A.
eff
theective
ndePe
September
19341
11
as
assistant
examiners in
ra Federal
reserve agent's department of your bank at salary
stpe
!of :3,009.00 and 21000.00 respectively, with the underpifl'ing that arrangements will be
made immediately by Mr.
to liquidate
his indebtedness to the State member bank
'
that the
loan of Mr. Sanders to the national bank will be
Paj
eby present
maturity. Board also approves designation of
thell,en emPloyees as assistant examiners without change in
?it compensation. Board understands appointment of Messrs.
te..'
en and Sanders to be on permanent basis, while other fifoi-11 to be temporary designation and their services used prin.3all.7
bat
'
lakst 60 lend clerical assistance in examinations of larger

Approved.
Letter to Mr. McClure, Chairman of the
Federal Reserve Bank or
'4%8 ait
Y/ l'eading as follows:
Nt "The Federal Reserve Board has
received your letter of
!Az. rber 26, 19341 advising of the death on September 24 of
Hardy, a director of your Omaha branch, and a tele'
gram
1 511T,, e been sent to Mr. Earhart expressing the regret of the
Patj,;-f °f the Board and requesting that he convey their symto the
members of the family and to Mr. Hardy's former
'
eleitrues on the
branch board.
to '
n
the asmuch as Ir. Herdy was one of the Board's appointees
Potm directorate of the Omaha branch, the matter of the ap8,11c1
nt of his successor will be taken up in the near future
will be advised of the action taken."




Approved.

3032
-3_.
Telegram
dated September 28, 1934, approved by four members of
the
lloard to
Mr• Walsh, Federal Reserve Agent at the Federal Reserve
Bank
°I

11ae, reading as
follows:
, "Your
telegram September 28 re 'Minden Bank & Trust Come*A5", Minden, Louisiana. In view of the circumstances and
rrecommendation Board
extends until December 31, 1934,
e
,,time
within which the bank may accomplish admission to
'
In°ership in the
System."

T

Approved.
toarci,

Letter dated
September 29, 1934, approved by four members of the
j°

O'Connor, Comptroller of the Currency, reading as follows:

a

"There is
transmitted herewith for your consideration an
/7PP11-cation of The Marine Trust Company of Buffalo, Buffalo,
etw,
Y°rk, a member bank, for permission to establish a branch
onyder, New York, after absorbing the Bank of Snyder, Snyder,
;
al .T.°1°4, a nonmember bank. The Marine Trust Company of Buffalo
00,.,'Lle Bank of Snyder are both controlled by the Marine Midland
-Pooration, Jersey City, New Jersey.
tuff Sn7der, an incorporated
village, is a residential suburb of
the al°, New York, about five miles from the downtown section of
ope,
eitY. The Bank of Snyder is the only banking institution
ap ating in the village of Snyder, which has a population of
°ximateiy 2,200. It is proposed to merge the Bank of
Snyder
tio° The Marine
Trust Company of Buffalo and continue the opera""of the office as a
branch.
redu (3/1 January 19, 1934, The Marine Trust
Company of Buffalo
eed its common capital stock from $12,500,000 to .!- '8,000,000
1.e.co°n January 25,
1934, sold $6,0M1000 of capital notes to the
perilsitruction Finance Corporation. During the six months'
rese„ ending June 30, 1934, the bank charged off or provided
:v e
,
r e for unsatisfactory
assets aggregating approximately
.•..
;3, of „.00. The report of condition after these adjustments,
e 30, 1934, showed the following capital structure:
Capital notes (R.F.C.)
Capital stock (common)
Surplus and Undivided Profits
Reserves

6,000,000
8,000,000
7,000,000
2,000,000

Ne4The Federal Reserve Agent at the Federal Reserve Bank
of
toard°1%k has
recommended approval of the application and the
i2 of the opinion that the establishment and operation of




3033
W1/34

-4-

"the branch
at Snyder is in accordance with the provisions of
. 11e Federal Reserve
Act governing the establishment of branches
,a State
member bank with the understanding that such establishiit is
approved by appropriate State authorities and provided
11r aPproval thereof is given. It is recommended, therefore,
that,
You approve the establishment and operation of a branch in
°'13rder by The
Marine Trust Company of Buffalo on the conditions
that:

7

The establishment and operation of a branch at
Snyder, New York, by The Marine Trust Company of
Buffalo shall be approved by the appropriate State
authorities; and
"2. Prior to the establishment
of the branch at Snyder,
New York, and the absorption of the Bank of Snyder,
Snyder, New York, incident thereto the Bank of Snyder
shall, if it has not already done so, charge off or
otherwise eliminate estimated losses of 31400, doubtful assets aggregating :t161251 and securities depreciation of et20,3201 all as s'lown in the report of
examination of the Bank of Snyder as of May 2, 1934,
made by an exqminer for the New York State Banking
Department, and any other known losses, and depreciation in securities.
"The.attached file contains copies of the latest reports of
---u-Lrmtion of The Marine Trust Company of Buffalo and of the Baak
SlaYder, together
Diem°
with other pertinent data, and a copy of a
wilirnium prepared by the Board's Division of Examinations. It
your we appreciated if you will return this file 7hen it has served
on tjurpose, and when you have advised the Board of your action
ue application described above."
Approved.
11(1

Letter
dated September 291 1934, approved by four members of the
to
-eyton, Federal Reserve Agent at the Federal Reserve Bank

,
411eRpo1 S,
.1
reading as follows:

illei"This refers to your letter of September 13, 1934, with
Allstrures, relating to the desire of 'The Austin National Bank',
Powo
Minnesotr, to surrender its right to exercise trust
Of d"
iit has been noted from the resolution adopted by the board
to oifeotors of The Austin National Bank that the bank desires
a formal certificate from the Eoard terminating its




3034
-5n .
right to
a release exercise trust powers in order that it may effect
of the securities depoFited by it with the State
authorities
in connection with the operation of its trust deantment. It has been noted also that the president of the
, k has
advised your bank that 'the Commissioner of Banks of
he State
of Minnesota recently sent a special trust investi,
t
2r, who examined all of our closed trusts and who has cer_liied to the
Commissioner of Banks that our trust accounts
€ire all
properly closed.'
"In view of the provisions of section 11(k) of the Federal
t;!erve Act requiring the Board, before issuing a formal cert"icate terminating
the right of a national bank to exercise
irliSt Powers
to satisfy itself that the 'bank has been relieved
accordance
with State law' of all of its duties as fiduciarY,
t le Board would
be unwilling to issue a certificate of this kind
s,
,
c) 7he Austin Uation
al Bank upon the basis of the finding of the
ecial State
trust investigator referred to above. The Board
desirable, in accordance with its usual practice, that
the
alle,facts in this case be established for its purposes through
the-Lnvestiga
tion by an examiner designated by the Comptroller of
wa, CurrencY. However, since it is understood that this bank
re:Placed in
voluntary liquidation on March 4, 1931, with the
byllt that no
further regular examinations of it will be made
the he Comptroller of the Currency, and, since it appears that
cat2:incipal purpose of the bank in requesting such a certif
ipi4 'rom the Board is to secure
a release of the securities
auti ged with the State author
ities, it is possible that those
biltflorities would not insist
upon a certificate of this kind
of truld be willing to releas
e such securities upon the basis
larre"e information alread develo
ped by their own special trust
y
ecorteotigator. It is suggested, therefore, in the interests
of
you brit: and
expedition, that, if you have not already done so,
tion lng this possibility to the attention of The Austin Naatvank, and it is requested that the Board be advised as to
to. ielsion reache
d by the State authorities with respect thereobta4 11 the event that they still deem it necess
ary that the bank
secu;
:
I1 a formal
certificate from the Board before releasing the
will Ities, this office, upon advice from
the bank to that effect,
by a .romPtlY
1
request the Comptroller of the Currency to develop
h th'gPecial
e oard investigation the information customarily required
fi
as a prerequisite to the issuance of such a certicatesn

r

f

4

Approved.
11N1.17 11770 tele grams_ to
Mr. Case, Federal Reserve Agent at the Federal
of New York, stating that the Board has given consideration to
1)"icati°118 of the "First Securi
ties Corporation of Syracuse" and the




3035
10/1/34
-6u3t and Deposit Company", both of Syracuse, New York, for voting
Permits under
the authority of section 5144 of the Revised Statutes of the
United StateB-, as
amended, entitling such organizations to vote the stock
they oval or
control in the following banks:

7Thehe First
National Bank of Canastota," Canastota, New York
First

National Bank of Earlville," Earlville, New York
trirnhe First
National Bank of nexico," Mexico, New York
i
North Syracuse National Bank," North Syracuse, -Jew York
iiheThe F
irsz National Bank of Waterloo," Waterloo, New York
klcl ha
8 slithorized the issuance of limited permits to the applicants, subJett
to

the

following condition:

au4i, "That prior to the issuance of the limited voting permit
in'"°rized herein, applicant shall agree as follows: That with41, such time as
shall be fixed by the Federal Reserve Agent at
.all
;eFed
eral Reserve Bank of New York and in any event not later
eau uecember 31, 1934, the undersigned will take, and will
0114! its
subsidiary banks to take, such steps as shall be reof Lea 1D the Federal Reserve Agent at the Federal Reserve Bank
er New York in order to effect the maximum amount of corrections
b, eliminations of
losses and/or depreciation in assets as shown
b'arikexamination reports of the undersigned and its subsidiary
sec-us as °f March 23, 1934, or current appraisal of the marketable
be
ritles, as in the judgment of such Federal Reserve Agent shall
of -1)„1:acticab1e
in view of the total available capital structure
he u
fldersirmed and its subsidiaries, and in order to remove
the
sUbs ise of any criticism relating to any feature of its or its
oendi •er7 banks' practices, policies, management or financial
autl, •.(3/1 which has been made by the appropriate supervisory
-°r1ties.11
Einci f
Or the f
ollowing purposes:
ings 2;* To elect directors of such banks at the annual meetprio --L sha
reholders, or at any adjournments thereof, at any time
or a.
Decetber
ecember 31, 19F4, and to act thereat upon such matters
illeeti;tesInirIN.are ordinarily acted upon at the annual
of
To
authorize a reduction in capital stock, change in
of
°f shares of
stock and/or change in par value of shares
Stock
Nier -jf allY of such banks subject to the approval of the
'
eserve Agent at the Federal Reserve Bank of New York
atdthe
aPpropriate supervisory authorities including the Federal




3036
10/1/34

-7-

Reserve Board
if its approval is required by law.
"3. To authorize the issuance by any of such banks of
?referred stock subject to the approval of the Federal Reserve
gent at the Federal
Reserve Bank of New York, and, if required
DY law) Of the Comptroller of the Currency.
inco 4. To amend the articles of association, certificate of
rporation and/or by-laws of any such banks and to take such
:
ther actions as may be necessary in order to effect the changes
et forth in P
and 3 above."
The t
elegrams Also authorized the agent to have prepared b - counsel for the
al reserve
bank, and to issue to the First Securities Corporation of
-e and the
First Trust & Deposit Company, limited voting permits in
84:cor,
`'ance with the telegrams
when the condition prescribed therein has
b eh
complied with.
Approved.
T
elegram to Mr. Case, Federal Reserve Agent at the
Federal Reserve
NtrIk Of ilew
York, stating that the Poard has given consideratiAl to the
1)114oation of
"Geneva Shareholders, Inc.", Geneva, New York, for a voting
13eNit tinder
the authority of section 5144 of
the Revised Statutes of the
tilitted
States as
amended, entitling such organization to vote the stock
l'hich it
owns or
controls in "The National Bank of Geneva", Geneva, New
and has
autaorized the issuance of a limited permit to the applisubject to
the following condition:
"Irior to the issuance of the limited
voting permit hereby
time°-12ed applicant shall
agree
as
follows:
That within such
a shall
peders
be fixed by the Federal Reserve Agent at the
becem l Reserve
Brink of New York, and in any event prior to
19:34:
"(if'
reh
. It will cause
The National Bank of Geneva to
pinabilitate its capital structure in accordance with a
au-n which
shall have been approved by the appropriate
Pervis°r:7 authorities and shall be satisfactory to the
yorZI;a1
Reserve Agent at the Federal Reserve Bank of New
(2). It
make ,
will cause The National Bank of Geneva to
'Lich c
orrections as shall he requested bY the Federal




3037

1w1A4

atld fcir

-3"Reserve Agent at the Federal Reserve Bank of New York and
Within such period or periods as he may prescribe, in order
to remove
the cause of any criticism relating to any feature
of its practices, policies, management, or financial condition which has been made by the appropriate supervisory
au
thorities."
the following
purposes:

,"At any time prior to December 31, 1934, to act upon ally proe.--a-L or proposals to create and issue common and/or preferred stock
P
and.to reduce
common stock and to make such amendments to the
les of association and/or by-laws of such bank as may be necesaq'Y for such purposes, such proposal or proposals to be in accord'
a ce with a plan or
plans which shall have been approved by the
ate sunervisory authorities and shall be satisfactoryYork."
to
the F
Federal Reserve Agent at the Federal Reserve Bank of New
tei
egram also
authorized the agent to have prepared by counsel for the
reserve bank,

and to issue to Geneva Shareholders, Inc., a limited

,

Permit in
accordance with the teleq;ram when the condition prescribed
'
herein
'las been
complied with.
Approved.
Tel
-egram to Mr. Case, Federal Reserve Agent at the Federal Reserve
ap of New York stating that the Board has given consideration to the
1111e4tion of
the "Marine Midland
Corporation", Jersey City, New Jersey,
Irc)tillE permit
under the authority of section 5144 of the Revised
sof the
United States, as amended, entitling such organization to
1/°te t
he stock
Itrai
which it owns or controls in "The Marine Trust Company of
0,"
Buffalo, New
York/ and has authorized the issuance of a limited
Perkit
the
aPplicant, subject to the following condition:
t1pr.

!

Ilthort7.1°r to the
issuance of the limited voting permit hereby
e
-''
You shall satisfy yourself that, in so far as pra:
'he a,:1' aPPlicant
has put forth its best efforts to comply
'-eement
executed by it on January 3, 1934, as a condition




3038

10/1/34
"to the
issuance of a limited voting permit."
a/lci for
the following
purposes:

"At any time prior to
December 31, 1934, to act upon a
Proposal for the absorption by
The Marine Trust Company of
Buffalo, New York, of the Bank of Snyder, Snyder,
York, and upon a proposal
to establish and maintain a
Dranch in the said Village of Snyder, and to do such
things
a8 1fl4Y be
necessary for such purposes."
The tel
egram also
authorized the agent to have prepared by counsel for
the
mteral reserve
bank, and to issue to the Marine Midland Corpora—
tion)
a
limited voting permit in accordance
with the telegram.
Approved.

or the

Two telegrams
dated September 28, 1934, approved by four members
°ard)
to Mr. Sargent, Assistant Federal Reserve
Agent at the

Feder
al Reserve Bank of San Francisco, stating
that the Board has given
to the applications of
the "Transamerica Corporation" and
the nTI,
-ansamerica Bank Holding Company", both of San Francisco, Cali—
rorn4
for
}ley

voting permits under the authority of section
5144 of the

eu
Statutes, as amended, entitling such
organizations to vote the
etock
which they
own or control in the "First National Bank in Reno",
-1 Nevad
4
a) and has
authorized the issuance of limited permits to the

s for the
following purposes:
"To act
upon a proposal or proposals to increase the
Zt:
1 stock of
such bank and to take such action as may be
b r arY in connection
therewith at any time prior to Decem—

e1934.n
711e tele
grams

also authorized the
agent to have prepared by counsel for
ederaa
kid the T '
eserve bank and to issue to the Transamerica Corporation
Illaeamerica Bank Holding Company, limited voting permits in




3039
10/1/34
-10accordance with the
telegrams. •
Approved.
Telegram dated September 28, 1934, approved by four members of
tile B
°ard, to the Federal reserve
agents at all Federal reserve banks,
reading as

follows*

'Till appreciate it if you will advise by wire principal
reasons rhich delay disbursements of funds after applications
industrial
loans have been approved by industrial advisory
com
mittee."
Approved.
Te
legram dated September 28, 1934, approved by four members of the
tO the
Federal reserve agents at all Federal reserve banks, readas
follows:
Re "In order to
carry out provisions of section 10 of Board's
liorlation T, each Federal Reserve Agent should until
further
Resice notify
each other Federal Reserve Agent and the Federal
teler7e Board, by
telegraph with confirmation by mail, the
ei
lgr
4Zrt
i be numbered serially beginning with number one in
et, of the name and principal place of business of
7:111
nonmember bank which files an agreement on F. R. B. Form
li l T-2 Pursuant to section 8(a) of Securities Exchange Act
of ico;
'
- )4 and is given a certificate on F. R. B. Form T-3. For
Purpose code word I.PLIGHTABLEI is assigned to mean 'Agreeent
cat °fl P. R. P. Form T-1 or T-2 has
been filed by and certifibia
!
R. B. Form T-3 -iven to (name of bank) of (principal
b
usiness)/. This code word should be inserted on page
1 AL/GriVeral Reserve Telegram Code Book following the code
Pach Federal Reserve Agent should prepare and have
and aule for distribution upon request a list showing the name
has riflciPal place of business of each nonmember bank which
i
an agreement on F. R. B. Form T-1 or T-2 which is
Agent -II effect. At the end of each month each Federal Reserve
erati should
forward a copy of such list to the
ronsid,
Board.sin
.t°n will later be given to the advisability of
issuing a
ge 14
A
-,
-st by the Board
for distribution to all Federal Reserve
gente.t,




Approved.

3040
10/1/34

-11Tele gram

the

dated September 28, 1934

approved by three members of

Board, to Dean K.
Worcester, Assistant Secretary of the New York Stock

4change) New York, New
York, reading as follows:
"Answering
specific question Redmond's wire of today to
att.
Orders executed Saturday September 29 even though not
lesIually debited or
credited to accounts until after October
013
'1:na5r be considered as
part of accounts maintained at the
firing of business on October 1, 1.974, so as to secure bene,Qs of
provisions of section 7(a) of Federal Reserve Board's
negulation T."

?

Boa„

Approved.
Tel
_
egram dated September 29, 1934, approved by three members of the

Clark, Assistant Federal Reserve Agent, at the Federal Reserve
4
* of _
Atlanta, reading as follows:
"Your
gntained telegram September 28. Regulation T will not be
in September issue of Federal Reserve Bulletin.
It
:
me
aPPear to be desirable to mail copies of regulation to
low .
7 and nonmember banks, and suggest that procedure be
There is no objection to transmitting with regulation
-'410stance of
press release given out by Board."
Approved.
Letter

dated September 29, 19341 approved by three members of the
1(341
'
cl) to 0
:
v::11°r Schaller of the Federal Reserve Bank of Chicago, readE 8.8 01
ow

res "R
eceipt is acknowledged of your
letter of September 26, in
yo
arg°118e to the Board's
September
letter of
19 suggesting that you
to call
centlige
meetings of representative bankers at important
trian in Your district
for the ourpose of discussing the indus-,
of suciii-°an program, in
which
you express the view that the holdinc,
Biaci , meetings
should
be
deferred
until the arrival of Go- ernor
c -Ln Chicago.
"T1,few
Board is glad that Governor Black has promised to spend
render 11.8 in the Seventh District and is confident that he will
made d valuable
s
However, as indicated by statements
temberu;ing the assistance.
Governors' Conference held in Washington on Septhe Board is intensely interested in the matter and




3041

10/1/34

-12-

"desires the management of each reserve bank to do its utmost
:
c) help, through personal contacts with bankers and industrialin
disseminating information and stimulating interest
with respect
to industrial loans. Moreover, it is assumed that
InGovernor
.
Black will not be in a position to attend all such
,:eta-ngs, and, therefore, the Board believes that you should
r
poceed
with your speaking program at the earliest possible
date,
advising
the Board promptly as to the dates and places
of the
proposed meetings."
Approved.
Letter dated September 29, 1934, approved by four members of the
130a,,
4.1, to a
--overnor McKinney of the Federal Reserve Bank of Dallas, readas follows.
wit
,"Reference is made to your letter of September 10, 1934,
" which you
submitted a copy of an opinion rendered by your
tic)In,
se1 relative to transferring funds amounting to P2,160 from
in- uank's
Suspense Account-General to Profit and Loss Account,
mmacc°rdance with the recommendation of the Board's examiner
"e in connection
with the examination of the Federal Reserve
Dallas as of June 2E, 1934.
received by noted that the funds in question represent payments
ic
icy-ived by the bank in 1921 under its group life insurance polupon the death of two former employees, that the funds have
beve,
the-,!al
'
ried in Suspense Account-General since that time for
the ,
-J'ason that the ban: has been unable to locate any heirs of
thatu?cesed employees, and that it is your counsel's opinion
spe,+ t -s Perfectly proper for the bank to transfer the re-,
Los
'
s'Ive sums from its
SusT)ense Account-General to Profit and
AprilAccount. The Board's- files indicate that it approved on
Januari
'
v- 1 ,1;926, the plan outlined in Governor Talley's letter of
1926, whereby the proceeds of insurance policies
kmeu
whotill
to S216on the lives or two former employees for
heirs could be located were to be utilized for making
loan
tO
needy employees of the bank. It is assumed that these
are t
s
,?-me funds referred to in your letter of September 10,
outl!nn'tthat the sums were never utilized for the purpose
1/TA 'fl Governor Talley's letter of January 19, 1926.
couns
view
el, the of all the circumstances and the opinion of your
or sue-LI
Board will interpose no objection to the transfer
profiV1 funds
from the bank's Suspense Account-General to its
-- and Loss Account."




Approved.

3042
-13Board,

Letter dated September 29, 19540 approved by four members of the
to Mr.
e
Case,
Federal Reserve Agent at the Federal Reserve Bank of

New
York,

reading as follows:

19z, "There is inclosed a
copy of a letter dated August 28,
')**) addressed to
the
Board
by Mr. Henry T. Cohu, rith further
reference
to his application under section FP of the Banking
s.ett of 1933 for a permit to serve as director of The Harbor
orate Bank,
New York, New York, and as treasurer and director
kir Investors, Incorporated, Jersey City, New Jersey.
inf "You will note
that Mr. Cohu believes that the statistical
°rmation previously submitted does not give a true picture of
activities of the corporation because of the fact that the
iyr
,
Pc)ratic)n ts principal long-term holding was sold and immediatesid'ePurchased toward the end of 1933 and may properly be conof !Jed to have been held continuously in determining the nature
whi 'te
activities. Mr. Cohu submits revised figures
seccil indicate
that, on the basis suggested by him, 875 of the
in the corporation's Portfolio as of the end of 1933
Should
mon;‘' De regarded as
having been held continuously for over 24
Zott
s
;;
d el
:i also points out that The Harbor State Bank is
law to purchase aviation stocks whereas, under
4
'
"er,
the
corporation is primarily interested in purchas,
-;-Letion stocks.
.rest Althourji
the statement that 87% of the portfolio of an innot Tent trust
had been held for over 24 months would obviously
bunrIldicate that the investment trust was primarily engaged in
alloe4 and selling securities within the meaning of section 32, it
tui.11--s that, even on the basis suggested by Mr. Cohu, the average
i7er in the
years-. ep4ccess of portfolio of the corporation would have been large100% of total assets pr year for the past five
00.4-11 sPite of the Act that a substantial portion of the assets
lid )
ver
c
l- rrtioipatP in this turnover. These facts would indicate
- ,:fg11 rate of turnover in the remainder of the portfolio.
ized t -°reover, the fact that The Harbor State Bank is not authorof
has aviation stocks, nor, apparently, the stock
Zre
ePsiti:ors Incorporated, is not necessarily controlling. When
advis:7(1 wrote to Mr. Cohu on August 20, 1.934, it was already
We ;:tItil t Purchases and sales of securities by the corporation
on the open market and that the corporation never purto the securities
with a view to reoffering or distributing tl-em
-nli
3 " However, these facts would not negative the possitoynervs that the bank
might be influenced in its advice to its cusand el.;
1 7garding securities which the corporation was purchasing
-ng or regarding the corporation's own stock.
no factccorinay,
the Board believes that Mr. Cohu's letter states
eral
waioh would justify the making of an exception to the gen'e PrescrlIed by Congress and therefore denies his applica-

tZ

1




3043
1

10/1/34
-14ILL. o
course, the denial of Mr. Cohuts application is
1;)
: based upon the belief
that his interlocking relationship
actually resulted in any
of the undesirable practices vflich
ii"gress sought to
prevent by the enactment of section 32, but
greaPPears that the relationship
is one of the type which Con0Ugh to
terminate in order to guard against the possidencitthat, in the
future, such relationships might have a tenbanks. 0 affect
the credit and investment policies of member
"Unless there are further considerations which
you believe
Should
mrbe
brought to the attention of the Board, please notify
th; C°hu of the Board's action
and request him to advise you of
of stePs which he takes in order to comply
with the provisions
section
Approved.
Letter

dated September 29, 1934, approved by four members of the

to the
following applicant for a permit under section 32 of the
Ct of
1933; the letter stating that, on the basis
of the infor141;tiori submitted,
Jones & Fowler appears to be "engaged primarily in the
bias;
''less of
purchasing, selling, or negotiating securities" within the
4111e of
section 32 and
the relationship covered by the application to
8erl,re
COraPany and
bte,
The First National Trust and Savings Bank of San
i8 in the
t() t
class which the Board believes that section was
desifzned
ei'll4nate, and
that, in the circumstances, the Board is unable to find
thq
1" would
not be
oO
incomoatible with the public interest as declared by
to grant
tit,es
the
application, although in the event the applicant de13411ki1

th btoUb1tfurther
facts or arguments in support of the application
'
4 °8.1'd is
Pre
to give them careful consid
• eration:
/Ars

.1)il*ct ,
1'11% of
,
:10
for permission to serve at the same time as a
;4.ego:sa,%The
-11/11

First l
Trust and Savings Bank of San
an
eg°, California, and as a partner of Jones & Fowler,
-0, c
Cail




Approved.

3044
l0/l/ 4
-15Letter dated September 291 19F4, approved by four members of the
Board to mr
,u
ac3xton, Federal Reserve Agent at the Federal Reserve Bank
of
Richmond, reading as
follows:
s.„4. "Receint is
acknowledged of your letters of September 6 and
TI;Villber 12, 19F,A, concerning the Clayton Act application of r.
ert A. Wagner, Baltimore, Maryland. It is observed that Mr.
darer advised you
under date of September 5 that he was on that
as a director and member of the executive committee
he Maryland Trust Company, and that under date of Septeb(!
he informed you that he had tendered his resignation
Opi
Giii
,..11e directorates of the Baltimore Company and the Baltim?reco ?' C°mPellY. In view of this inforiqation it appears that further
isIsiderat
of Mr. Waqner's Clayton Act application by the Board
el_
v
reu
sunnecessar?ed, howev'e;, Before the Board's files in the matter may be
it should be ascertained whether Mr. Wagner's
atic11-2atimn from the Maryland Trust Company, the Baltimore Company,
ingt'ue Baltimore-Gillet Company has been duly accepted in each
wh;,411ce) and it is accordingly requested that you inform the Board
4 :11Ch
action has been taken.
=5
11:s noted with interest the copy of the letter
dted Zleytl
th
1934, from Mr. Heyward E. Boyce, president of
/aot
alarYland Trust Company. As stated in your letter, it does
whier
ptear that Mr.
Boyce's letter supplies new evidence upon
° base a reconsideration of Mr. Wagner's application for a
Act
permit.!?Approved.
Letter dated
September 29$ 1934, approved by four members of the
) to
Walsh, Federal Reserve Agent at the Federal Reserve Bank
ttalaas
$ reading
as follows:
"here
Permiti
are
same 44 granted inclosed the original and copies of a Clayton Act
to Mr. Jas. H. Simms, Simms, Texas, to serve at
ofthe
as
director
and
Bank
officer
of
The
National
First
tailk
New,
Boston, Texas, and as a director of First National
DeK.11b, DeKalb, Texas.
Act 1,,,-Ln the c
onsideration of Mr. Simms' application for a Clayton
n
l'orm
m”) it was noted
answer
to
question
13
of
F. part..
that in
flershi'' (dated June 27)
1934), the applicant stated that the d:
at ti2 of Simms & Simla% of which he was an active partner, ha
al
stater made loans
lio
secured b- stock and bond collateral. He ;
shit)
however,
) that it had been several years since the p
ns4.ed
aad m.A
such a loan. In the circumstances, you are reque




3045
34
-16"to

withhold delivery of the Clayton Act permit to.
-r Simm
until you have satisfied yourself that Simms
& Simms are not
ma'in loans on stock or bond colla
teral, and also that
the
40 aPplicant
and thetwo banks involved understand fully that
Simms & Simms, or any other nonhanking organizati
on with
iuich
Iv
Mr. Simms is connected, should in the futur make
e
any
° stock
or bond collateral within the contemplation of
Sect
2
etion 8A of the Clayton Act, his servi
ces at the same time
7tth either of
the
banks
named
the
permi
in
t would become
Illegal.
When you have satisfied yourself as to these points,
reaut
autho
horiz
rized
ed to transmit the permit to Mr. Simms and
:
3r
e are
to the banks involved.
"Please advise the Board of the disposition of this matter
in order
that its records may be complete.
n_
t was
noted that the First National Bank in DeKalb aped to be
in poor condition when examined as at July 24,
wa°-, but that a plan looki
ng to a rehabilitation of its capital
ab
!
leuggested by the natio
nal bank examiner. In view of the
si,11 land prestige
which Mr. Simms apparently possesses and
ba,e it appears that he contributes financial strength
to the
the Board felt
would
that
prefe
it
be
rable
grant
to
a
lit to him
in order to avoid any unnecessary misunderstandby the
communities which might prove detrimental to the best
i
,berests of the
banks involved, but it suggests that you keep
r e.j
e c3se touch with the efforts being m-de to bring about a corcrit
:
°n of the conditions which have given rise
to the examiner's
n „
lc!
_ -sms. The Board requests that when you submit your recomre,_o
ici'-L n as a result of your annua
l review of this permit you
Ully as to the progress made
in bringing about an improvementjutrti
the condition of the First Natio
nal Bank in DeKalb."

g

ir

Approved.
Letter dated
September 27, 1q74, approved b- four members of the
to
an applicant for a permit under the Clayt
on Act, advising of
tiProvel.
Of
his sPplication as follows:
Mr* Geo
a
rge W. Reny, for permission to serve at the same
time as
bur eetor and
officer of The Harrisburg National Bank, HarrisTrust Irl,ennsYlvania, as a director and officer of the Harrisburg
Pedera;'OTPan,Y, Harrisburg, Pennsylvania, and as a direc
tor o
e
"eserve Bank of Philadelphia, Philadelphia, Pennsylvaniq.
Approved.
was then presented the following application for a chang
StockThelle
e
of
a Federal
reserve bank:




3046
JOAN
—17—
cations for ORIGINAL
Stock:
Ikon
National Bank of
Reading,
}leading,
Pennsylvania




Shares

1140
Approved.

Thereupon the meeting adjourned.

Vice Governor.

1140