The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
3312 A meeting of the Federal Reserve Board was held in Washingtan on Monday, October 29, 1934, at 3:30 p. m. PRESENT: gr. Mr. gr. Mr. Er. Thomas, Vice Governor Hamlin Miller James Szymczak Er. Morrill, Secretary Er. Carpenter, Assistant Secretary The Board considered and acted upon the following matters: Memorandum dated October 26, 1934, from Er. Smead, Chief of the n 4-41vision of Bank Operations, recommendi ng the appointment of Liss Sybil E. Eainer as a stenographer in the division, with salary at the rate of '1,620 per annum, effective November 1, 1934, subje ct to ber passing a satisfactory physi cal examination. Approved. Memorandum dated October 26, 1934, from Er. Morrill, SecretarY. stating that, in connection with the adoption by the Federal Retie rre Board of the Retirement System of the Federal reserve banks, the 1°0ard took the posit ion that new employees should pass a physical exaxre 1 ation which would meet the requirements for ordinary life inat the normal rate; that it is expected that the Retirement ectwn44. ' tee or the Board of Trustees ae the Retir ement System will Illik°1 'ecommendations to the Board and the Federal reserve banks with regard a uniform standard of physical examination and forms to besod in connection therewith, but that in order that a form may "411able in the meantime on -which the record of examinations 3313 10/29/34 -2- Ude for the Board may be kept, the draft of form attached to the memorandum. is submitted with the recommendation that it be approved 41141 mimeographed for use pending consideration of the recommendations above referred to. The memorandum also stated that the form had been aPProved by the Board's examining physician and by Lbssrs. Stlead and Van Fos sen of the Division of Bank Operations. Approved. Lemorandum dated October 16, 1934, from Er. Wyatt, General C°1111401, recommending that the Board authorize the purchase of the tellowing law books, at the prices indicated below, for the use of the 1egal division: S. Reports (official), volumes 1 to 289 Tswyers Reports Annotated, New Series, 52 volumes 44awyers Reports Annotated, Third Unit, 24 volumes Lawyers Reports Annotated, Index to Notes, 1 volume Lawyers Reports Annotated, Digest, 10 volumes 'Is!'ican Law Reports, with Digest, 91 volumes with Supplement and Index on Corporations (new permanent edition) PtItIcTlease Law, T 5 ( 0 ) 80 6 (less 6% discount) 85 (less 6% discount) 375 225 150 (less 6% discount) re e°111mendation was approved by five members of the Board on October 27, 1934. Approved. Lemerandum dated October 22, 1934, from the Committee on klaries and Expenditures, submitting a letter dated October 16, 11 the " rrom Lr. Helm, Deputy Governor and Cashier of the Federal Re, of Kansas City, mch requested approval of a change in Personnel classification plan of the bank to provide for the new 3314 10/29/34 -3- Position of "typist-clerk" in the fiscal agency department. The Xemorandum stated that the Committee had reviewed the proposed change alad r ecommended that it be approved. The recommendation vas approved by five members of the Board on October 27, 1934. Approved. Letter dated October 26, 1934, approved by five members of the Board, to Ir. Zillions, Federal Reserve Agent at the Federal Re81"e Bank of Cleveland, with regard to the steps which should be takexl to correct the matters commented on in the report of examinati a of the "Crawford County Trust Company", Meadville, Pennsylvania, ct of July 30, 1934. Approved. Letter dated October 26, 1934, approved by five members of the B °ard, to Mr. O'Connor, Comptroller of the Currency, reading as toilows 3 "In accordance with your recommendation, the Federal Ree r ire Board approves a reduction in the common capital stock of irst National Bank of Cartersville', Cartersville, Georgia, from i r°111 ;$200,000 to 4150,000, pursuant to a plan which provides that the bank's capital shall be increased by '450,000 of preferred stock to be sold to the Reconstruction Finance Corporaion,.and that the released capital shall be used to eliminate unsatisfactory assets, all as set forth in your letter of October 12, 1934." Approved. the 13,, ri'elegra,.m dated October 27, 1934, approved by five members of "laza, to the Federal reserve agents at all Federal reserve banks, g as recuai follows: ti Ruling No. 33 interpreting Regulation T. In reply to 3315 10/29/34 -4- "certain inquiries as to whether cash or securities may be mithdramn from designated old accounts on and after November 15, 1934, the Federal Reserve Board points out that the third Proviso of section 7(a) of Regulation 1 is by its terms applicable only to withdrawals made prior to that date. Accordingly the Board rules that: (1) On and after November 15, 1934, securities may be withdrawn from a designated old account to any extent not forbidden by section 4 of the regulation; and (2) On and after November 15, 1934, cash may not be withdrawn from a designated old account, wheth er restricted or unrestricted, if such withdrawal results in an increase in the adjusted debit balance of the account in violation of the second proviso of section 7(a) of the regulation or is forbidden by section 4 of the regulation." Approved. Telegram dated October 27, 1934, approved by five members of the Board, to Kr. iiilliams, Federal Reserve Agent at the Federal Ree Bank of Cleveland, reading as follows: "Referring your letter of October 19, 1934, which inquires as to correctness of your conclusion that Joint Stock Land Bank Bonds are not 'exempted securities within meaning of Securities Exchange Act of 1934 and Board's Regulation T thereunder. Board knows of no reaso n for differing with your conclusion on question, and suggests that persons inquiring !hether securities have been designated for exemption by the "retary of the Treasury or the Securities and Excha nge Commis!ion be referred to those autho rities, unless you have definite Itformation regarding the security in question." Approved. the Telegram dated October 26, 1934, approved by five members of Board, to L. McClure, Federal Reserve Agent at the Federal ReBank of Kansa s City, reading as follows: "In order to carry out intention of Trans. 2132 it is suge_sted that in lette indic r ating differences between your print Of R egulation T and official print you specify not only the changes which you mention in your telegram of October 22, but ' t 150 the following; Secti on 2(d) comma after the paren,',Tals in last line of your print should be deleted; section "0-) words 'of this regulation' should be deleted from end of j 3316 10/29/34 -5- "first sentence of your print; section 3(c) comma after 'count' in sixth line of your print should be deleted; section 3(e) comma should be inserted after 'to' in last lino of your print; section 3(f) the subdivisions of clause 8 of section 3(f) which are designated in your print as (1) and (2) should be designated as (a) and (b) respectively; section 3(g) comma should be inserted after 'day' in last line on page 3 of your print; section 4(a) corama should be inserted after 'indirectly' in fourth line of your print; section 4(e) comma should be deleted after Sundays' in fifth line of your print and comma should be deleted after 'account' sixth line from bottom of page 4 of Your print; section 6 word 'and' should be deleted at end of next to last line of page 5 of your print; section 8(f) word t e.' should be deleted before 'part' in second line of your print. Stop. Designation of these additional changes may cause some inconvenience and is perhaps not necessary, but in view of criminal penalties for violation of regulation it is belleved important that every reasonable effort should be made to see that form of regulation upon which public is relying does not differ in punctuation or matters of substance from form in vihich regulation was adopted by Board." Approved. Letter dated October 26, 1934, approved by five members of the Board, to Er. W.. J. Chenometh, Secretary to Congressman Colgate ii barden, Jr., Washington, D. C., reading as follows: "This refers to your letter of October 17, 1934, in which YOU inquire whether or not there are provisions in any of the recent laws relating to loans to small industries that would ermit a loan to an industry for the purpose of erecting a new tli1 .1 ding. It is assumed that you have reference to the Act of _11-111e 19, 1931, relating to direct loans for industrial purposes eY Federal reserve banks, and for other purposes. For your information, a copy of the Act of June 19, 1934, is • Inclosed herewith, together with a copy of the Board's regu; Itti°11s issued pursuant thereto. You will note that the first teetion of that Act amends the Federal Reserve Act by adding a , evl section, namely, section 13b, and that under section 13b Is.deral reserve banks are authorized to make a portion of their resources available for the purpose of providing established 1711-Istrial and commercial businesses with 'working capital'. 44,:"er, a building represents a permanent or fixed investment, coT.e. loan used in erecting a building would be one used for a sj,ltal purpose and would not represent 'working capital'. "ee Congress has required that loans under section 13b shall t 3317 10/29/34 -6- "be for the purpose of furnishing 'working capital' and since loan for construction purposes would not meet this requirement, a Federal reserve bank may not lawfully make an advance to an established industrial or commercial business which would be used for the purpose of erecting a building. "Section 5 of the Act of June 19, 1934, also authorizes the Reconstruction Finance Corporation to make loans to any industrial or commercial business under the circumstances stated therein. There is inclosed Circular No. 13 of the Reconstruction Elnance Corporation, and your attention is particularly invited to the next to the last paragraph on page 2 of the circular, in regard to loans to be used for construction, improvement, and repair." Approved. Letter dated October 26, 1934, approved by five members of the Board, to Idr. James E. Goodrich, Vice-President and General Counsel of the Commerce Trust Company, Kansas City, Lissouri, reading 8.S 1'01101m "Receipt is acknowledged of your letter of October 17, 1934, in -which you state that the Keystone Corporati on was dulY dissolved by decree of the Circuit Court of Jackson County, Ilissouris on October 8, 1934, and that the trust agreement which the stock of that corporation was held for the benefit of the stockholders of the Commerce Trust Company, 'kansas City, Missouri, was terminated on the same date. 'From the information which you have submitted it appears that the requirements of section 9 of the Federal Reserve Act Which were referred to in the Board's telegram of June 15, 1934, to the Federal Reserve Agent at the Federal Reserve Bank Of Kansas City in regard to this matter have been satisfied." Approved. Letter dated October 26, 1934, approved by five members of Board, to Lr. Case, Federal Reserve Agent at the Federal Reserve Balak °f lIevir York, reading as follows: the "The Board has given consideration to 4. • Eur,ene P. Kinkead, New York, New York, ,`"11 ,6 Proons of the Clayton Act to serve '1rector and officer of the Colonial Trust the application of for permission under at the same 'time as Company, New York, 3318 10/29/34 -7- "New York, as director of Hudson County National Bank, Jersey City, New Jersey, and as director of the South Orange Trust ComPany, South Orange, New Jersey, and upon the basis of the information before it feels that the issuance of the permit applied for would be incompatible with the public interest. For the same reason that the Board believes the issuance of the permit under the present application 'would be incompatible with the Public interest, it also feels that the permit granted to the applicant on Eay 26, 1930, covering his services as director of the Hibernia Trust Company (predecessor to the Colonial Trust Company), New York, New York, and Hudson County National Bank, Jersey City, flew Jersey, should be revoked. Accordingly, you are requested to advise the applicant of the Board's position in the matter unless there are pertinent facts which were not submitted with the application and which you feel should be given consideration. "If you deem it desirable or necessary, you are authorized tc) inform fir. Kinkead that the Board's action with reference to nis present application, as well as to the permit which previously has been issued to him, was based upon the unsatisfactory ?ondition of the banks involved and the nature and extent of the use which he has made of their credit facilities. "In communicating with the applicant please advise him that, in accordance with Section V (g) of the Board's Regulation L, consideration will be given to any additional facts or arguInei.its not appearing in his application and accompanying forms, 17hich he feels should be brought to the Board's attention, and ttat also, in accordance with Section V (i) of the same regulahe may be afforded an opportunity to be heard in connec°-on with the revocation of his permit. In this connection, Pease advise the Board promptly as to whether Ia.. Kinkead deres to submit any additional data or to have a hearing, and not, as to what steps he proposes to take in order to comply with the provision s of the Clayton Act." 4 Approved. Letter dated October 26, 1934, approved by five members of the Board, to Li-. Willi, Federal Reserve Agent at the Federal Reserve t "lc of Cleveland, reading as follows: "Reference is made to Assistant Federal Reserve Agent I. ,etcher' s letter of October 6, 1934, inclosing a copy of a ;1:etter dated September 25, 1934, from Er. Frank C. Irvine, ' t rentum, Pennsylvania, and also submitting additional informah u obtained during a conference with kr. Irvine relative to Ie aPPlication for permission under the provisions of the 4 3319 "Clayton Act to serve at the same time as director and officer of First Lational hank in Tarentum, larontum, Pennsylvania, and as a director of The Citizens rational Bank of Evans City, Evans City, Pennsylvania, which was disapproved by the Board for the reasons set forth in its letter to you of September 18, 1934. "In accordance with Section V (g) of Regulation L, additional facts and arguments were submitted by the applicant from, which it appears that, although he attended only one of the monthly meetings held by the directors of The Citizens FAtional Bank of Evans City during 1933, and one meeting held during the first five months of 1934, he has been in constant touch with the bank's affairs through association with his father, vho is president of, and the dominating influence in, the bank; that he and his father own about 31 per cent of the capital stock of the bank; that the applicant's father is seventy-two years of age and depends to a large extent upon the assistance and banking knowledge of his son; and that the aPplicant stated he would in the future attend directors' meetings of this bank. It also appears that the statement made by Your office, in the original report submitted with this application, to the effect that it was believed that the best interests of the public would be served by the applicant's limiting his services to the First rational Bank in Tarentum as that hank 'would need his undivided attention to succeed, is somewhat offset by the fact, as indicated in Er. Fletcher's letter of October 6, 1934, that, since the reorganization, the deposits of the First ULtional Bank in Tarentum have increased, the bank is now on an earning basis and the applicant apparently enjoys the confidence of the bank's customers. "In view of the foregoing, and in accordance with the rec. 7 .1nendation of your office, the Board has approved the application of hr. Irvine, and there are inclosed the original and copies of a permit covering his services with the above-named , 1ks for transmit tal by you to the applicant and the banks inf?;Lved. There also is inclosed a copy of the permit for your The Board feels, however, that a director should have a ! ltisfactory record of discharging his duties and responsibili_”s by participating in the management and operations of a bprk ch he is serving through attendance at directors' meetings, when transmitting the permit to Er. Irvine, it is suggested You advise him that the permit has been granted with the thate xpectati on that, as indicated in his statement to you, he will ectation IT_P!'clie his attendance at directors' meetings of The Citizens cnal Bank of EVMSCity. ti__ "The Board requests that, when you submit your recommendeas a result of your annual review of this permit, you report fu Y 11.1 to la-. Irvine's attendance at directors' meetings." 7 Z T g Approved. ‘ 36-) 4.r0 10/*34 -9- Letter dated October 26, 1934, approved by five members of the Board, to 1s. Stevens, Federal Reserve ,,gent at the Federal serve Bank of Chicago, reading as follows: "Reference is made to Assistant Federal Reserve Agent Young's letter of October 1, 1934, inclosing a copy of a letter from Lx. C. P. Bentley, Owosso, lachigan, submitting additional information relative to the application of Lx. Bentley for a Clayton Act permit, which MRS disapproved by the board for the reasons set forth in its letter to you of September 20, 1934. "The Board has given consideration to the additional facts submitted in accordance with Section V (g) of Regulation L and has granted a permit to Lix. Bentley to serve at the same time as a director of The Liari Beach First 'Ea-uional Bank, Liari Beach, Florida, and as director and officer of the Owosso Savings Bank, Owosso, Lichigan. There are inclosed the original and copies of the permit for transmittal by you to Lir. Bentley and the two banks, and a copy for your files. "In considering Br. Bentley's application and the additional information submitted, the Board noted the applicant's statement that he always attends directors' meetings at The Liam' Beach First Rational Lank during the three or four months of his residence ir Liami Beach each winter and that the majority of the bank's business is done during the winter season. It uas noted also that in the report of examination of this bank Larch 28, 1934, the applicant was reported to have at'tended four of the six meetings of the directors held since the Previous examination, this being the best attendance record of ofthe three nonresident directors of the bank's board of alrelors of fourteen members. ihe Eoard feels that a director should have a satisfactory recor d of discharging his duties and responsibilities to a bank is serving throup-,h attendance at directors' meetings and ough exercising supervision over the bank's affairs in 71114Ys. Although it appears that during the several ' 1"ns he resides at Iiiam!1Beach each year, Br. Bentley properS his responsibilities to The idami Beach First clonal Bank through attendance at directors' meetings, it was 11°t disclosed in what way he keeps in touch with the bank's ! f_fairs throughout the rest of the year. Ehen transmitting the ermit to 11r. Bentley, you are requested to inform him that the rmit has been granted with the expectation that he will keep -u?uch through appropriate means with the affairs of The Beach First Nntional Bank not only during that portion of re :.rear in which he resides in Liand Beach, but during the ialnder of the year when distance prevents his attendance at urmal directors' meetings. zL Z!F V r 3321 10/29/34 -10"Please advise the Board of your action in this matter." 1,pproved. Letter dated October 26, 1934, approved by five members of ;t4 Beard, to Mr. Stevens, Federal Reserve Agent at the Feder al Reserve Bank of Chicago, reading as follows: "The Board has reconsidered the application of Mr. h. C. Jamieson for permission under the provisions of the Clayton Act to serve at the same time as officer of The First National Bank of Madison, Madison, Wisconsin, and as director of the Bank of Poynette, Poynette, Wisconsin, and, upon the basis of the information before it, including that submitted by the applicant in his letter dated October 8, 1934, still feels that the granting of the permit applied for would be incompatible with the public interest, as indicated in its lettor to you dated September 16, 1934. You are requested to advis e the applicant accordingly. "Please ascertain and advise as to what steps Mr. Jamieson proposes to take in order to comply with the provisions of the Clayton Act." Approved. Letter dated October 26, 1934, approved by five members of the Board, to Mr. Stevens, Federal Reserve Agent at the Federal Reserve Bank of Chicago, reading as follows: yr he Board has reconsidered the applications of Messr s. 1,1 11113111 L. Smith and 6chuy1er L. Marshall, both of St. Johns, .7'clligans for permission under the provisions of the Clayton :met to serve at the same time as directors of The St. Johns lijational Bank and the Clint on County Savings Bank, both of St. Iichigan, and, upon the basis of the additional informajtcn furnished the Board in leters from Assi Assistant stt Federal Reserve Acent Young, dated October 9, 1934, has granted the Pernit511 r iho originals and copie s of the Clayton Act permits are inclosed for transmitta l by you to the applicants and the two bara-s . involved, with copies for your files." Approved. Letters dated Octob er 26, 1934, approved by five members of 3322 10./29/34 -11- the Board, to the respective Federal reserve agents, stating that the Board has given consideration to the follolling applications for Permits under the Clayton Act, and that, upon the basis of the inforille.tien before it, feels that the issuance of the permits applied for Wciuld be incompatible with the public interest. Each letter also requested the agent to communicate to the applicant the Board's position in the matter, and to advise the Board promptly as to whether the applicant desires to submit any additional data, and, if not, as to 1, 17 at steps he proposes to take in order to comply with the provisions of the Clayton Let: 14r, Bartholomew E. Brophel, for permission to serve at the same as a director of the Genesee Valley Kational Bank and trust Company of Geneseo, Geneseo, Hew York, and as an officer !t,Ild director of the Genesee River Kational Bank of Mount Lierris, Mount Morris, New York. " 1 E. Walter Moses, for permission to serve at the same time officer of the Dalton Banking House, Dalton, rem York, !:Ild as a director of the Genesee Valley National Lank and Irust Company of Geneseo, Geneseo, New York. "an P.W. Kavanaugh, for permission to serve at the same time ec,s a director and officer of the Manufacturers Bank of Cohoes, ,5'hoes, New York, as a director of the Bank of Waterford, t erford, New York, and as a director of the Bolton National of Bolton Landing, Bolton Landing, Kew York. 1dr. ly 'I. Ired-way, for permission to serve at the same time as 11,r d irector of The Coraopolis National Bank, Coraopolis, Pennsyl0411i,, and as a director of The'Coraopolis Trust Company, CoraP°118, Pennsylvania. r Approved. Letters dated October 2G, 1934, approved by five members the of Board, tO the following applicants for permits under the Clayton ' Sig of approval of their applications as follows: 33°3 10/0A4 -12- Lr. S. L. Caum, for permission to serve at the same time as a director and officer of the Bethlehem National Lank, Bethlehem, Pennsylvania, and as a director of the Federal Home Loan Bank of Pittsburgh, Pittsbur, Pennsylvania. bavid F. ....culoskey, for permission to serve at the same tire as a director and officer of the First National Lank in Charleroi, Charleroi, Pennsylvania, and as a director and officer of the Charleroi Savings and Trust Company, Charleroi, Pennsylvania. 4...r. Joseph Coudon, for Permission to serve at the same time as a director and officer of The Citizens National Lank of Havre de Grace, Havre de Grace, :dary]and, and as a director and officer of The hational Lank of Perryville, Perryville, Laryland. LI'. C. L. Lrunsdale, for permission to serve at the same time as a director and officer of The First and Farmers National of Portland, Portland, Forth Dakota, and as a director of -che Goose River hank, Mayville, North Dakota. J'Ipproved. There irmre then presented the followins applications for e444Ces in stock of Federal reserve banks: /&lication for ORIGINAL Stock: t'.1717-0. 7. 1:671-hank of Lanark, Lanark, Illinois Shares lictions for SURREhDER of St(1 . blo. 2. clietirCaratri—i—c Trust l'iew York,Few 36 36 3,000 3,000 2 . Company, York ti, if3triet LG. 10. ate Wialfield, Kansas The Central Savincs and Trust Company, a Lnk Den.7cr, Colorado Approved. 9 90 Total 99 3,099 3324 Thereupon the meeting adjourned. %roved: Vice Governor.
@FedFRASER