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A meeting of the Executive Committee of the Federal Reserve Board
was held in Washington on Thursday, October 6, 1932, at 12:20 p.
PRESENT:
Mr. Magee, Presiding
1.1r. Hamlin
1.11*. Tames
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Morrill, Secretary
M.cClelland, Assistant Secretary
Harrison, Assistant to the Governor
Wyatt, General Counsel
Paulger, Chief, Division of Examinations
Siems, Federal Reserve Examiner.
The Assistant Secretary stated that on October 5, 1932, the office
or the LlomPtroller of the Currency made a call on all national banks for
liell°"4 of
condition as at the close of business on. Friday, September 30,
19'62, and
that, in accordance with the usual -practice, a call was made on
bella14,
cq' the Federal Reserve Board on all State member banks for reports
or
condition as of the same date.
The call made on behalf of the Board
was ratified.
It was then stated that, in accordance with the usual order of
t tiOn
'44 membership on the executive committee of the Federal Reserve
1300(1,
178.ges and 11r. Hamlin will serve with Governor Meyer as members
°I' the
'-ommittee during the last quarter of 1932.
The
f°110wing matters were then presented for the consideration and
Of the
committee:
Letters dated September 22 and 29, 1932, from the Assistant Secretary
"the
l'edel'al Reserve Bank of New York, and telegrams dated September 21
°et0
11e 5) 1962, from the Chairman of the Federal Reserve Bank of Boston,
4Dtemb
1962, from the Chairman of the Federal Reserve Bank of Chicago,
0
etobfkl,
1932, from the Chairmen of the Federal Reserve Banks of
Ilia wad St. Louis, all advising that at meetings of the boards of
276
1MJ32
-2-
directors on
the dates stated no changes were made in the banks' existing
"hedules of rates of discount and purchase.
Without objection, noted with approval.
Telegram dated September 28, 1932, from the Federal Reserve Agent
"DEL1-18 1 advising of the death on September 27, 1932, of Mr. T. 1.
Claber
tech a Class B director of the bank.
Noted, with regret.
17emorandum dated September 21, 1932, from, Jr. 'rani: J. Drinnen,
1?e4'el l Reserve
Examiner, recomnending the appointment of Mr. Stuart L. Brown
hi8 deeighation as an Assistant Federal Reserve Examiner, with salary at
the zate or
000 per annum.
Drinnen's recommendatiou having been
approved by three members of the Board on September 26, La.. Brown was appointed an examiner for
all purposes of the Federal Reserve Act, as amended,
and of all other acts of Congress pertaining to
examinations made by, for, or under the direction
of the Federal Reserve Board; and was designated
as an Assistant Federal Reserve Examiner, with
salary at the rate of :;,i3,000 per annum, all effective September 27, 1932.
Iiemorandum dated September 27, 1932, from Ex. Frank I. Drinnen,
Lee eza
Reserve Examiner, recommending the appointment of Messrs. Andrew W.
Clarles A. Strahorn and their designation as Assistant Federal ReaMiners with salaries at the rate of ,2,100 and :A.,600 per annum,
'Doetively.
Drinnents recommendations having been
approved by three members of the Board on September 30, Messrs. Lee and Strahorn were appointed
examiners for all purposes of the Federal Reserve
Act, as amended, and of all other acts of Congress
Pertaining to examinations made by, for, or under
the direction of the Federal Reserve Board; and were
designated as Assistant Federal Reserve Examiners
With salary at the rate of :)2,100 and ;„31,600 per
annum, respectively; the appointment and salary of
277
) 10/6/32
-3Er. Lee being effective October 1, 1932, and the
appointment and salary of ir. Strahorn effective
October 6, 1932.
Rely, apnroved by three members of the Board on October 4, to a
letter dated October 3, 1932, from Mr. Norval P. Wigginton, tendering his
resiiation as an employee on the night force of the Gold Settlement Section
°II the
Or the
eral Aeserve Board, effective October 3, 1932; the reply advising
acceptance of the resignation.
Approved.
1:emoranum
from the Secretary dated October 5, 1932, advising that
the
le
e've of absence without pay on account of illness previously granted by
the B
°all to 1:488 Lary E. Everett, money counter in the issue and redemption
"n of the office of the Comptroller of the Currency, expired on Septem-
ber
25
19321 and reconrending that, inasmuch as Kiss Everett did not resume
her du •
tl
"until October 1, the Board approve an additional leave of absence
Pay Covering kiss Everett's absence during the period from Septemher 26
to
30,
1932, inclusive.
Approved.
Letter to the Acting Comptroller of the Currency, approved by three
14etilbel'a of the Board on October 3, 1932, advising of approval by the Board
0.
8-1-8-17 at the rate of .2,700 Der annum for National Bank Examiner
(1r
104'1
e4 0
'Starr, assigned to the Fifth Federal Reserve District.
Approved.
let
Re Y,
plYs approved by four menbers of the Board on September 27, to a
a
Zieolk or lit'ad September 22, 1932, from the Chairman of the Federal Reserve
lIew York stating that the board of directors of the bank, at its
tr
on that date,
voted to employ .11r. R.
Cheseldine, on a temporary
(
10/6/32
-a-
'as a special research statistician assigned to the reports department
of the
bank, and, subject to the approval of the Yederal Reserve Board, to
1i Ii'
-.
130ard
salary at the rate of'.)5 200 per annum; the reply stating that the
approves the salary fixed by the board of directors of the New York
1344k) and requestinc; advice as to the date on which 1:127. Cheseldine's employnlerlt
becomes effective.
Approved.
Letter to the Federal Reserve Agent at Philadelphia, approved by
tee
members of the Board on September 26, 1932, advising of approval by
the
Board of the
designation as special assistants to examiners of the
employees of the Philadelphia bank listed in the agent's letter of
elltenlber 21, 1932.
Approved.
letter
Reply) approved by three members of the Board on October 3, to a
,
"
- sd September 29, 1932, from the Federal deserve Agent at Chicago
I*15cBle ti,
approval by the Board of the appointment of Mr. Ernest H.
klaciera
°4 as an assistant examiner with salary at the rate of .)3,000 per
4111114a; t e
h- reply stating that the Board approves the appointment of Er.
kicieza
°fl at the salary named, and requesting advice as to the date on which
'131-l0
illt,ent becomes effective.
Approved.
Repi-,
-' dated
ap)roved by three members of the Board on September 27, to a
September 21, 1932, from the Governor of the Federal Reserve
Of
4ee
4. z.
--eaPolis, advising that, at the request of the Reconstruction
vlbr
C poration, the executive committee of that bank granted to 1 -r.
1
e, ,
lanaging Director of the Helena Branch, a three months leave
ebzerl
ce, Without nay, to organize the RegionR1 Agricultural Credit
279
10/6/32
-5-
C°rPoration at
Spokane, Washington, and that "Cs. Leland Powell, registered
1°411 teller and
government de-Posit clerk, has been designated as Acting
18.4.ant Cashier of the branch without change in salary for such time as
T1
4°77-8 is absent from the bank; the reply advising that the Federal Re"'e Board interposes no objection to the action of the executive coramittee
illra"ing leave of absence to jr. Towle and in temporarily designating
1)(171611 as Acting Assistant Cashier of the branch, but ree.uesting further inr°rillation with regard to the Position of Paying Teller at the Helena branch,
to,
will
positioni r Charles iledpath was reported as having been recently
13r("e(1 with an increase in salary from .,)1,300 to
e 0
weptember 1,
1932.
2,100 per annum, effec-
Approved.
ilePorts of the Committee on Salaries and Expenditures dated Septem
beli 23 eald 30, and approved by three members of the Board on October 4, with
to letters dated September 17 and 27, 1932, from the Chairman of the
-44el'al Reserve
Jank of Dallas requesting approval of salaries at the rate
or '2
'
.10C) and .,2,100 per annul', respectively, for I.essrs. G. T. 1Jobber and
appointed to the appraised position of special representative in
t49
Irlsolvent Banks Department of the bank; the Board's Committee recommend4DDroval.
Approved.
bet 241,
Telee;raphic reply, approved by three members of the Board on Septemto letters dated September 21 and 22, 1932, from the Chairman of the
belA,
°serve Bank of Boston, with regard to the reimbursement of member
ror
wra.vel expenses of representatives who attend the stockholders'
ke
etine Of
).
the Federal reserve bank on October 20, 1032; the reply statinr!
10/6/32
-6-
that the Board approves the expenditures authorized by the board of directors
'
ct the Boston bank in reimbursement of the amount expended for railroad fare
Ti pui,_
-Luau accomr,odation by not more than one representative of each member
4
'
'
141 in attending such meeting.
Approved.
Telegraphic reply, approved by five members of the Board on Septffmber 23 10,_
'
Reaerlr
'
6
to a telegram of that date from the Governor of the Federal
Bank of Boston requesting an extension until October 7, 1932, of the
--.Y previously granted by the Board for an advance by the Boston bank,
4ecorda1Ice with the Provisions of section 10(b) of the Federal Reserve
'Ict) 8-8 amended, to the Peoples fl'ational Bank, Southbridge, ITassachusetts,
14111 aM0Unt not to exceed .;75,000, with interest at the rate of 5 1/2,;
- per
a/alland payable
on demand.
Federal Reserve Board
The reply stated that the
illterlocses no
abjection to the continuance of the advance, in the amount of
outstanding23,
without demand for payment, and that,
on September
111 the
event the
advance is not repaid nor demand for payment made within
t1111"tY days from
September 23, the natter should aL;ain be brought to the
11°611's at
tention with a statement of the circumstances which, in the opinion
or the 2eclera1 Reserve Bank of Boston, justify the bank in further continuing
the
acivance without
demand for pant.
Approved.
ber 23
Tel
reply, approved by five members of the Board on Septem-
1932) to a telegram of that date from the Governor of the Federal
b
4teze4:7e Ba211,Of Boston recluesting approval of a renewal until October 7, 1932,
14 the
..;,50,000 outstanding on September 23, of the advance, with
at
the rate of 5 1/2% per annum, payable on demand, made by the
281
10/6/32
_7_
Boston bank, under authority previously granted by the Board, and in
acctIr(lanoe with the provisions of section 10(b) of the Federal Reserve Act,
"aniended,
to the Luincy Trust (3ompany, quincy, Lassachusetts.
The reply
stated that the
Federal Reserve Board interposes no objection to the contingatice of
the advance, in the amount of ;50,000 outstandin7, on September 23,
without demand
for nayment, and that in the event the advance is not repaid
llor
demand for DaYment made within thirty days from September 23, the matter
411°uld again be brou7,1it to the Board's attention with a statement of the
circlanstances which, in the opinion of the Federal Reserve Bank of Boston,
illstify the
bank in further continuing the advance without demand for pay-
Approved.
Tel
-eCraPhic reply, approved by five members of the Board on October
l93
to
BaIlk
telegrams of that date from Governor Young of the Federal Reserve
Or Boston requesting authority for a new advance in accordance with the
Drovisions of
section 10(b) of the Federal ileserve Act, as amended, to the
Ilst -°mjany, Tuincy, Liassachusetts, in the amount of :)50,000, with
C11111°Y
irlterest at he
t
rate of 5 1/2% per annum, payable on demand, and on the
4"11r1ty
of
4
-kneligible paper with a face value of .216,492 and readily
1 et"1e stocks
1441
'
with a market value of „64,807, the 10(b) advance to the
tzer4ber bank
by the Board having been repaid and the
4/7 4avalice Previously authorized
being desired because of the continuance of practically the same
"latiorl
as
was outlined in Governor Young's letter of September 23, 1932.
relaY atated
that the Board authorizes the advance subject to the terns
401. ci
ria
recornnended, and that in the event the advance is not repaid
ror Payment made within thirty days from October 5, 1932, the
282
10/6/32
matter should again be brought to the Board's attention with a statement
(12 the circumstances which, in the opinion of the Federal Reserve Bank of
808tca,
tor
justify the bank in further continuing the advance without demand
payment.
Approved.
Telegraphic reply, approved by five members of the Board on Septem-
ber
22
'1932, to a telegram of that date from Deputy Governor Rounds of the
hderal Reserve
Bank of Nen York, requesting authority for an advance in
accordance with the provisions of section 10(b) of the Federal Reserve Act,
44 4481148d, to
the Labor National Bank, Paterson, New Jersey, in the amount
"445,000,
for a period of ninety days, with interest at the rate of 5 1/2%
azaura, and on the security of customers' collateral loans secured by
11411dine and loan shares and miscellaneous listed securities, with a margin
Or
tm.
--" lees
than 25%; the advance being desired to take care of unusual
IlithclIia311113, Pending application to the Reconstruction Finance Corporation
it1°nal
accommodation.
The reply stated that the Board authorizes
the
advance subject to the terms and conditions recommended, and that it
a
utderstood that the new advance is in addition to that outstanding under
the 4144°11tY granted in the Board's telegram of Tuly 28, 1932.
Approved.
btt24,
ur the
tk
0
Telegraphic reply, approved by five members of the Board on Septem-
. to a telegram dated September 23, 1932, from Deputy Governor Rounds
I'ederai Reserve Bank of New York, requesting authority for an advance,
:
4cite -"clalice with the provisions of section 10(b) of the Federal Reserve
us) Eta aMended, to the Bank of Depew, Depen, New York, in the amount of
A4) tctr a Period of ninety days, with interest at the rate of 5 1/2%
10/6/32
Per
-9-
annum, and on the security of customers' notes, securities and tax
vlarrants with a margin of at least 25; Li.. Rounds stating that 0_5,000
O' the
Proceeds of this advance will be used to retire the 10(b) advance in
that amount
which is now outstanding and natures on October 111, 1932, and
that
the balance is desired to meet continued withdrawals. The reply stated
that the Board authorizes an advance of 035,000, for a period of ninety days,
with .
interest at the rate of 5 1/2'10 per annum, being an additional advance
."") and an extension until expiration of this period of the $15,000
c114111me made under the authority granted in the Boardts telegram of July
16) 1932.
Approved.
Tele Graphic reply, approved by five members of the Board on
'31)terrib„
—29, 1932, to a telegram of that date from Deputy Governor Rounds
of
the
Pecleral Reserve Bank of New York, requesting authority for an adaccordance with the provisions of section 10(b) of the Federal
Ileaerve Act, as amended, to the Salt Springs National Bank, Syracuse, rew
in the
amount of ,)150,000, for a period of ninety days, with interest
the rate or
1/2% per annum, and on the security of miscellaneous bonds
a
of at least 2.5; the advance being desired because the bank
1144
1)ae3ea its
regular dividend on September 28, and is fearful that the news
1184a some
uneasiness and wishes to prepare for any emergency.
atllY stated
Q(54(11t1
The
that the Board authorizes the advance subject to the terms and
reeoimnended.
Approved.
Telegraphic
193
reply, approved by five members of the Board on Septem-
to a telegram of that date from Deputy Governor Rounds of the
284
10/6/32
-10-
Fecleral Reserve Bank of New York requesting authority for an advance, in
"c°1"clance With the provisions of section 10(b) of the Federal Reserve Act,
"amended, to the li'irst National Bank
Croton-on-Hudson, New York, in the
E141311Ult of :25,000, for a period of ninety days, with interest at the rate
Or 5
Vail, Per anmEn, and on the security of miscellaneous bonds with a
Ine
'rgin of at least 25m the advance being desired to meet a steady loss of
cleposite.
The reply stated that the Board authorizes the advance subject
to the
terms and conditions recommended.
Approved.
Tel-egraphic reply, approved by five nembers of the 'Board on October
3, to
letter dated October 1, and telegram dated October 3, 1932, from
1:1()/311-4Y Governor Tohns of the Zederal Reserve Bank of Atlanta requesting
Etilth.°11tY for an advance, in accordance with the Provisions of section 10(b)
Of
the 2aderal Reserve Act, as amended, to the First National Bank, Fort
14eras
?lorida, in the amount of .;30,000, for a period of six months, with
illtereat at
the rate of 5 1/2: per annum, and on the security of bills
reQei7abie
aggregating .)70,161.71; the loan being desired to assist the
takdoer bank
In. meeting the unsettled banking situation in its community as
oittlialed in a
letter to the 2ederal Reserve Bank under date of September
4%
The reply stated that the Board authorizes the advance subject to the
terIlla and c
onditions recommended.
Approved.
TeleCraphic reply, approved by three members of the Board on
413te,44
el' 30, 1932, to a telegram of that date from Deputy Governor Rounds
ederal Reserve Bank of New York requesting authority to purchase
e 2irst National Bank of East Rochester, New York, a tax note of the
285
10/6/32
-11-
T°77.11 Of Pittsford, New York, in the amount of
075.49; the reply stating
that the Board authorizes the purchase with the understanding that the note
raeets all
requirements of Regulation E except as to the population of the
113`"11.7; municipality and that the amount offered exceeds 25
of the total
(1111;2tanding warrants of the municipality.
Approved.
ielegraphic reply, approved by three members of the Board on October
1, tn
- a telegram dated September 30, 1932, from Deputy Governor Rounds of
-2ederal Reserve Bank of New "York, renuesting authority for the purchase
e
tn
hOceanside National Bank, Oceanside, New York, of :34,000 of tax
4°t" °f Union .,'ree School District No. 11, Town of Hempstead, New York; the
reDly
statins that the Board authorizes the purchase with the understanding
that
the notes iieet all requirements of Regulation E except as to the populati°a of
the issuing municipality and that the amount offered exceeds 25r;
the total
outstanding warrants of the municipality.
Approved.
Telegraphic reply, approved by three members of the Board on
OQ tab er
3
2
1932,
the
to a telegram of that date from Deputy Governor Rounds of
8.1 Reserve Bank of New York, requesting authority to purchase from
the Be,
Ilk of Depew, New work, a tax note of Union free School District No. 7,
Tov
al or
I.Leektovraga,
New York, in the amount of .110 000; the reply stating
that
tile Board authorizes the nurchase with the understanding that the note
taaeta all
requirenents of itegulation
except that the population of the
raunicinal_itY is less than 10,000 and the amount of the note offered,
t°Oether with
.;a5,000 of such notes already held by the tow York bank,
eci.s 257;
of the total outstanding warrants of the municipality.
286
10/G/32
-12Approved.
Letter to ;:r. C. E. Calder, New York City, Hew York, approved by
thee
members of the Board on Lleptember 30, 1932, inclosing a permit issued
1) the Board under the authority of section 8 of the Clayton Anti-Trust Act
()78ringT 1-r. Calder's service as a director of the rational City Bank of
"
Ne
ork) and as a director of the first National Bank in iallas, Texas.
Tb.e 1
-Letter stated that the Board is new considering certain general questions
a number of applications and permits under the Clayton Act, that
OTh
Of
these questions may have a bearing upon the Permit being issued to
cAl
"'der; and that the Board may make the permit the subject of further
-'-ueration when it has reached its decision upon the general questions
'‘er"red to.
Approved.
RePly, approved by three nenbers of the Board on September 29, to
4 lettelv A
y
,,a6ed September 15, 1932, from the ..'
, ederal iwserve Agent at St.
Loll;
-s) re,)ortinc_;
that the receivers of the Bozeman Uaters first National
4111>) P
°2eYvi1l e) Indiana, and the first National Bank, Chaffee, LAssouri,
e
11°t' within six months from the dates of their appointment, filed
tIll.j-eations for cancellation of the Federal reserve bark stock issued to
tile 1,
3 because
u
it is believed by the receiver of the first bank that
thelle ie still a possibility of its reopening, and the receiver of the
1"c" ban': is of the opinion that the natter of reorganization of that
71111
be settled by the last of September; the reply stating that in
tile"circn1
tances and in view of the agent's recorriendation, the Board
I*11 11°t at this
time take any action with regard to the cancellation of
th"ecieral reserve bank stock issued to the banks, and renuesting the
Qf".4
(4-L.3
10/6/32
-13-
agent to make a airther rePort and recommendation to the Board if these
a331ee have not been disposed of within three months.
Approved.
Reply, approved by three members of the Board on September 27, to
letter dated
September 21, 1932, from the Federal Reserve Agent at Cleveland
rePortinc; that the First National Bank of Jackson, Kentucky, and the
Pirst
ii
National Bank of Carrollton, Ohio, have been continuously deficient
their required reserves for periods of six months and six and one-half
respectively; the reply stating that, in view of the information
81113Mitted, the
Board will take no action in these natters at this time,
other than
to forward a copy of the agent's letter to the Acting Comptroller
the Currency
for the information of his office. The reply also reouestecl tho age
nt to advise the Board, within a reasonable time, as to whether
°t
the 1344k
have restored and are maintaining their renuired reserves.
Approved.
approved by three members of the Board on September 30, to
Et
letter dated
September 23, 1932, from the Federal Reserve Agent at Cleve-
1311a)
1143
advising that the i'irst National Bank of Conneautville, Pennsylvania,
continuously deficient in its required reserves for the period of six
kohths
ending Seutember 15, 1932; the reply stating that, in view of the
141bormation submitted and in accordance with the agent's recommendation, the
130ezti will
take no action in the matter at this time other than to forward
%Plr of
the agent's letter to the Acting Comptroller of the Currency for
the
intormation of his office. The reply also requested that the ac;ent adthe
Board, within a reasonable time, as to whether the ban:: has
l*"tored and
is maintaining its required reserves.
288
10/6/32
-14Approved.
Reply, apProved by three members of the Board on September 27, to
letters
dated September 20 and 21, 1932, from the Federal iteserve Agent at
1111°nd, relative to the continuous reserve deficiencies of the Citizens
4t1.°nal 3ank of Parkersburg, West Virginia; the reply stating that the
le Pleased to note from hr. Hoxton's letter of September 21, that the
l'e3
erve2 of the national bank have been restored to the recuired amount, and
that ,
Copy of such letter, together with a copy of the agent's other
esPondence, is beinr, forwarded
to the Acting Comptroller of the Currency
the
information of his office.
The reply also reauested the agent to
1(1111.8e the Board if the Citizens National Bank of Parkersburg does not contitale
to
maintain its reserves at the required amount.
Approved.
Reply, approved by three nenbers of the Board on September 27, to
Q letter
dated September 20, 1932, from the Federal Reserve Agent at
alehorld,
rePortin that the rational Bank of Summers, Hinton, West Virginia,
1144 been co
ntinuously deficient in its required reserves daring the period
c't tie
Past
six months; the reply stating tilat, in view of the information
41111Tlitted
and in accordance with the agent's recommendation, the Board will
take tio aet,_
-Lun in the matter at this tine other than to forward a copy of
the
QC"erit's letter to the Acting Comptroller of the Currency for the infor1114.4°11 'r his office, although it is suggested that, if the agent has not
Q4"(11r done so, he
consider the advisability of addressing a letter to
eEtell (21
the
directors of the bank pursuant to Section 1V(b) of the Board's
D.
The reply also requested the agent to advise the Board what
l'"131°n is
made on this point and, within a reasonable time, whether the
10/6/32
-15-
b.8 restored and is maintaining its required reserves.
Approved.
Reply, approved by three mellbers of the Board on September 27, to
letter dated September 19, 1932, from the Federal Reserve Agent at
1:inneapolio,
relative to the continuous reserve deficiencies of certain
bEtil`
s in the ilinth Federal ileserve District; the reply stating that it is
the 1)(3ard'8 assumption that the reserve deficiencies of the Drovers State
118111') South St. Paul, Ilinnesota, and the Citizens and Security National
'' St* James, "lAnnesota, have been continuous for six months or more,
bit
that, in view of the information submitted and in accordance with the
ageAt's re
commendation, the Board will take no action in these natters at
tIlis time,
Other than to forward a copy of the agent's advice concerning
the
national bank to the Acting Comptroller of the Currency for the inforIllation. of
his office, althoust it is suggested that, if the agent has not
Egready done
so, he consider the advisability of addressing a letter to
4
'614 or the directors of these banks pursuant to Section IV(b) of the
11(31\1'3 Regulation D.
The reply further stated that, in view of the advice
e°rItained in the
agent's letter of September 19, with regard to the contill4clus reserve
deficiencies of the First National Bank of Foley, I:innesota,
t4ePirst
e41a.,
Whieh
National Bank of Swanville, Minnesota, the Yirst National Bank
South Dakota, and the First National Bank of Conrad, Montana,
have been
Previously reported to the Board, and in accordance with
the
El(,)ent's
recom_endution, the Board will take no action concerning these
(1"1"-eneies ut this time other than to forward a copy of the agent's ad-
their present status to the Acting Comptroller of the Currency
290
10/6/32
-16-
for the information of his office.
The reply also advised that the Board
18 Pleased to note that the reserves of the 2irst National Bank of Iron
Lachigan, previously reported as deficient, have now been restored
to the
required amount.
Approved.
Letter to the Federal Reserve Agent at San Francisco, approved by
three
members of the Board on October 3, referring to Assistant Federal Reserve
4gent Sargent's letter of September 23, 1932, reporting that the
1116..Y National
Bank, Rigby, Idaho, was continuously deficient in its required
l'e4IETIres during
the period of six months ending I.:ay 31, 1932; the reply
Ottirlr
that in view of the information submitted the Board will take no
J-I1
411gentt2
the
the natter at this time other than to forward a copy of Lir.
letter and inclosures to the Acting Comptroller of the Currency
information of his office.
The letter also requested that the agent
4dorise,
within a reasonable time, as to whether the bank's reserves have
11141'estored
and are being currently maintained.
Approved.
Reply,
approved by three members of the Board on September 27, to a
etter dat
ed September 13, 1932, from the Federal Reserve Agent at Boston,
lurther information with regard to the fact that the Treasurer
ulote 11.
Ilion Trust Company of Ellsworth, 1.1.aine, who is reported to have
bec4
le3s and inefficient, has been relieved of all executive authority
t4 A
,,oQora
the reply stating
411" With the requirements of the bonding company;
141t
111 '71.ew of
the information contained in the agent's letter, it does
or
4°t
necess
recitleat,11
for the Board to take any further action in this matter,
examination of
yew:::n:t::sa::::e the Board after the next
e mna:h
the tzllat :
been, or should be, taken to strengthen
291
10/6/32
-17-
the illellaP'ement which was severely criticized in several previous reports
°11 examination, and to keep the Board currently advised of any corrective
lIcti°I1 taken by the bank to improve its unsatisfactory condition.
The reply
1'1111'11°r reciuested the agent to discuss the natter of the payment of dividends
1)/
'the trust company with the State Banking Department, with the view of
obtateia
Its cooperation in bringing about the necessary correction of the
4ituation
as far as possible through the cessation of dividend payments and
otherwise.
Approved.
Confidential letter to the Federal Reserve Agent at 7:inneapolis,
"°17ea by three members of the Board on October 3, referring to Assistant
".51ed
e--4
'Reserve Agent Bailey's letter of September 21, 1932, advising of the
"6138 Which have been taken by the State Bank Commissioner of Hinnesota in
4ie ei'rorts
to improve the unsatisfactory condition of the Drovers State
116I
'
llk Of
Sellth St. Daul, :Annesota; the Board's letter submitting, for the
.°11dislace of
the Federal reserve agent in negotiations with the principal
-tc)eklIolder of the
Drovers state Bank, Mr. Otto Brener, certain confidential
111rw,
'1114t1on which has come to the Federal Reserve Board through reports of
114ti°11 of banks located in New York and Chicago, concerning the in'
debtedness of :a-. Brener to those banks, together with a brief digest of
tIxe e
°Illants made by the examiners thereon.
Approved.
kernbe
Letter
to the Aderal Reserve Agent at New York, approved by three
Of
the Board on September 28, replying to a letter dated September
62$ el%°E1 Assistant Federal Reserve Agent Jillistin, advising that the
:
ka,tte
rot tie
t the application of the Steuben Trust Company, Hornell, 1:ew York,
erehiP in the Federal Reserve System has been discussed with the
292
10/6/32
-18-
esident of that institution, who advised that the trust company has
'
Pl
clealded to do nothing further regarding its application until the affairs
°r the institution are in a better condition; the Board's letter stating
that .
' ln view of the information submitted, the Board will take no action
Olathe aPPlication and will consider the matter closed.
Approved.
Tele Graphic reply, approved by the 1]xecutive Cannittee on September
al, Ilnder
the
41)tenber 19,
'to
the
authority granted by the board on that date, to a letter dated
1932, from the _federal Reserve Agent at St. Louis, with re-
membershin in the federal Reserve System of the Guaranty-Plaza
'.°111PanY, St. Louis, Lissouri; the reply stating that the Board has
'
that condition
0. 3 set forth in its letter of August 19, to the
*411" °°141°anY, and amended by its telegram of September 2 to Er. Wood, be
krther
ended, by adding at the end thereof the following:
461ind Provided further, that such agreement may stipulate that
P€IYInents to the bank on account of such guaranty shall be
rried in a special bond reserve account for a period of
:7elve months and that, at the expiration of eighteen months
IL'am date of bank's admission to membership, the directors
8141:2-n any such payments may be reimbursed out of such
trclal bond reserve account to an extent not exceeding
net appreciation and/or profit, if any, on such bonds
anY actual payments they ray have made to the bank on
O.
t':cellnt of such guaranty, the amount of such net apprecia)n and/or profit to be determined by the federal Reserve
'
ils ent at St. Louis on the basis of the book value of all
were
i°143 classified below the four highest grades which
_4
the bank's Portfolio at the time of its admission to
?Mbership
and on which there was a depreciation at such
e:Te as eamoared with the price actually realized on the
a3
pay°f any such bonds, the amount received upon the
of
value
cf anY such bonds, and the appraised market
'
;
Ella
the
at
portfolio
, Such bonds remaining in the bank's
ez4
and any
amAration of such
eighteen months' period;
account
reserve
tnts remaining in such special bond
)
ex(
covered
be
shall
int-r such reimbursement of directors
bank."
° the general assets of the
2
Z
T
`193
10/G/32
-10-
The reply also stated that the Board agrees with the agent that such
alltY must be joint and several; that if he is of the opinion that the
'
'1/41
/billlIncial responsibility of the other directors is adequate for the bank's
I/°tection, the Board will not object to the omission from the guaranty of
the two directors mentioned in the agent's letter; and that in view of the
terrls stated in the Board's wire of September 2, it is essential that either
the reallar counsel for the St. Louis bank or some other attorney regularly
in the practice of law approve the form of agreement.
Approved.
Letter to the Citizens State Bank of Dalhart, Texas, approved by
three
imellbers of the Board on September 30, 1932, advising that the Board
haa a
PDr°7ed the bank's amllication for membership in the Federal Reserve
SYstsm
and for forty-five shares of the capital stock of the Federal Reserve
11441z Of Dallas, subject to certain conditions set forth in the letter.
Approved.
Letter to the Federal Reserve Agent at Dallas, approved by three
le11113erz of the
Board on September 20, 1932, advising that, in view of the
illeormation submitted in the agent's letter of September 9, and the reconelldation of the
board of directors of the Federal Reserve Bank of Dallas,
t40
Peaeral Reserve
decision on the question
Board has again deferred
Whether the
Texas, should be
menbership of the Junction State Bank, Junction,
te:Nilicited
(*41' that
under the proceedings previously instituted by the Board, in
the institution may have a further opportunity to demonstrate
Elbility to
Reserve Act and
comply with the provisions of the Federal
the 130Eirdi3
also requested the agent to keep the
regulation" The letter
294
10/6/32
Board
-20-
currently advised of any important chances which may take Place in
the condition o2 the Junction State Bank and,
upon
completion of the next
6481111-nation of the institution, to forward to the Board an analysis of the
Ibel)°rt of examination, together with the recommendation of the board of
directors of the Federal re erve bank in the matter.
Approved.
Letter, approved by three members of the Board on September 27,
1932$ to the
First State Bank, Lorenzo, Texas, referring to the Board's
lettep
- -0 the bank under date of August 2, 1932, with reg.drd to the proceedlairye l
nstltuted by the Board to determine whether the bank's membership in
the 1?e,
"Leral iteserve System should be terminated, and to the letter addressed
bY the bank to the Board under date of August 8, stating that the bank
174i7ed
it8 right
to appear before the Board and that its representative
17°41d aDDear before the Federal Reserve Agent at Dallas.
The letter stated
thel th
e Board has been advised of the information submitted to the :i'ederal
'"re Agent at
recomDallas and in accordance with this advice and the
14e aati
°II of the board of directors of the Dallas bank, the Board has defel.x,ed raalan3
a final decision on the question whether the membership of
the 2i
that the bank
l'St State Bank
of Lorenzo should be terminated, in order
Itlay
e an
the proopportunity to demonstrate its ability to comply with
.71eions of
the 2ederal Reserve Act and the Board's regulations. A letter
61°11€ the
same lines, addressed to the federal Reserve Agent at Dallas and
aDDroved by three members of the Board on September 27, requested that,
it
E1CCOrda4Ce
boElra w
the
with the agent's suggestion, the matter be presented to
d irectors
1."tille on
at their
of the Dallas bank for further consideration
submitted to the
ITovember 7, 1932, and that a recoramendation be
295
1W52
-21deserve Board as to the action which should then be taken.
Approved.
Letter to the I:ewton rational Bank, Newton, Iowa, approved by three
Zeitera
Of the Board on September 23, 1932, advising that the Federal Re-
8"ve Board has approved the bank's application for permission to act, when
11(3t ill contravention of State or local law, as trustee, executor, aaministzato,
s,
recistrar of stocks and bonds, guardian of estates, assignee,
l'ec°17er, comuittee of estates of lunatics, or in any other fiduciary
ItY in
which State banks, trust comnanies or other corporations which
into cometition with national banks are Permitted to act under the
of the
State of Iowa; the exercise of all such rights being subject
to th
e Pr°visions of the Federal Reserve Act and the regulations of the
:61Eider
al lieserve
Board.
Approved.
Letter to the Federal Reserve Agent at Kansas City, approved by
tee
ellialilbere of the Board on September 28, 1932, advising that the Board
114a „
'cl4sidered the application of the First National Bank in Bartlesville,
Ok411
under
Permission to exercise certain additional trust powers
the
ione of section 11(k) of the Federal Reserve Act, and that in
vie17
°f the criticisms set forth in the report of examination of the bank
b "4111 14,
1932, both in the comnercial and trust departments, the
examination
'rerred action on the application until after another
"de
the .
ins
titution has been made.
Approved.
30, to
RePlY, approved by three nenbers of the Board on September
letto
State-National
-atecl September 10, 1952, from the Cashier of the
296
10/6/32
-22-
Balacs Peru, Illinois, requesting that the 2ederal Reserve Board take no
Nrther action upon the bank's application for permission to exercise
till
"Powers; the reply stating that in accordance with the request the
13°41'dwill take no further action on the application.
Approved.
Letter, approved by three members of the Board on September 28,
1932!
to the First-Stroudsburg National Bank, Stroudsburg, Pennsylvania,
114W1 institution was formed on September 12, 1932, through consolidation
1144
"the Act of November 7, 1918, of The First National Bank of Strouds111111€ 814 The Stroudsburg National Bank, under the charter of the latter
14441c; the
letter transmitting a certificate of the consolidated bank's
1tY to exercise the fiduciary powers previously granted to the con"itilett national banks.
Approved.
Letter to
Luther K. Brice, attorney-at-law, Spartanburg, South
CI*011.11
-4, aPProved by three members of the Board on September 28, replying
to hi _
letter of September 20, 1932, with regard to the requirements as to
the u
11°8
"of securities in the trust department of the First National Bank
"aDar anh
bkliz
as a condition precedent to the use of trust funds by the
the conduct of its business; the Board's letter advising that the
Dziovia.
1°118 of Section VIII of Regulation F permit all securities which conwith +he
- reqUirements set forth in the regulation to be used as.
et:11kt_
12r8-1 for trust funds awaiting investment or distribution which are
4D°aitd
e- -21 the commercial or savings departments of national banks; that
it is
Board
1144""eary for national banks to consult the Federal Reserve
'
411t4 r
eel/eat to the use of
t114I the
securities which meet these requirements; and
8°14rd has not passed upon the use of any specific securities for
297
10/6/32
-23-
tiliS PUrpose
by the First National Bank of Spartanburg.
The letter also
t ted that the Federal Reserve Board can not properly undertake to deterihe whether the owner of a certain deposit in the First National Bank would
1147e a elatal against bonds and securities eet aside by it for the Protection
Of
trust estates held in its trust department.
Approved.
Letter to the 2ederal Reserve Agent at New York, approved by three
Itienbers of the Board on September 30, 1932, inclosing a copy of a letter
4tea
'
-'ePtember 15, 1932, from i.r. H. B.::achold, New York City, New York,
eqUesti-11C, in view
of certain improvements in the condition of the Carthage
Ilxchanc,e Bank, Carthage, New York, that the Federal Reserve Board
expeai
tC approval of the application of the institution for full trust
Do14E3/.8
end. CODy of the Federal Reserve Board's reply thereto, also approved
by. t
41'ee melabers of the Board on September 30; the reply stating that the
t1'13131teation was
given very careful consideration by the Board but in view
or .1.1
the circumstances, and in line with its usual policy where similar
"ttltItion,
-- exist, the Board felt compelled to defer action until the results
next examination, which the office of the Comptroller of the Currency
tees.
will be nade at an early date, are available. The letter to the
1?ecier
Rcesrve Agent at New York called attention to the statement con-
ticiv
tq,,,Lea
Llachold's letter that the national bank was advised by a
l'eDre R114
8-4ative of the board of directors of the New York bank that the
rae
ex' b,
'
411°8 application received favorable action by the New York board
Board to
bUt that action
had been withheld by the Tederal Reserve
"(lit El
subsequent examination of the condition of the bank, and suggested
th
ett when
the status of an
occasion arises for advising an applicant as to
298
1°/6/32
-24-
4PPlication
it would serve the purpose adequately if the apPlicant were
informed simply that the application had been transmitted to the Board,
t°e".ether with an appropriate statement of the Board's action thereon, with°Ixt i
ndicating the nature of the recommendation submitted to the Board or
Illether the 3oard's action was in accord therewith.
Aoproved.
Letter to the federal Reserve Agent at rew York, approved by three
lae*ers
of the Board on September 28, referring to Assistant federal Reserve
°11113tin's letter of September 2, 1932, with which was transmitted a
/'6(111est of
the Union Trust Company, Endicott, New York, for permission to
41(1 it its assets three small lots of bank stock purchased by it in
''Iolation or
one of the conditions under which the company was admitted to
Ile*IershiP in the federal Reserve System; the Board's letter stating that
te
8°ard has considered the natter in the light of the information sub114tted, and
requesting the agent to advise the Union Trust Company that the
lloilrd
does not look
with favor upon the acauisition of stocks of other banks
Irld
trust
companies, but will raise no objection for the time being to the
N;erltion in the
assets of the trust company of the shares of stock referred
to.
Approved.
Letter to the Federal Reserve Agent at New York, approved by three
ta14%._
vcs of
the Board on October 1, referring to Assistant Federal Reserve
bill
-4-4i5tin's letter of September 26, 1932, inclosing copies of corres01laerie
e
tiew
'YQ1-.1z
with the President of the Ogdensburg Trust Company, Ogdensburg,
relative to
that company's noncompliance with a condition of
41P requirinL;
it to obtain and maintain adequate credit data in
10/6/32
-25-
connection with unsecured loans, arid the holding by the institution of its
cln stook as collateral to loans.
The Board's letter noted the statement
or the President of the trust company that since the date of the last exani:.11/8Aion considerable progress has been nade by the trust company in the
-44ulatien of current credit data, and stated that in the circumstances
cliltiined the Board will take no action at this time with regard to the stock
or the
-rust company held by it as collateral to loans, although the ;oard
Will expect the bank to keep the natter constantly in mind and to dispose
of `h
stock as soon as it is practicable to do so. The letter also recltleeteA
LL that the agent advise the Board of the status at the time of the
11eZt e4amination of the natter last referred to, together with his reconIlieli°11 in the Premises, and that he report at that tine the progress
134`cle by the
1744
it8
institution in obtaining adequate credit data in connection
unsecured loans.
Approved.
Letter to the Federal Reserve Agent at G'hicago, approved by three
taer41)el‘3 Of the Board on September 27, referring to Assistant Zederal ReA ont YoUng's letter of September 14, 1932, in connection with the
'4113-Yais
of the report of examination, as of 1::arch 14, 1932, of the Fayette
114105(pz
ariarust
the.t,
(3ompany, Connersville, Indiana; the Board's letter stating
in
view of the information contained in 1r. young's letter, the Board
11111 tEtke
no action at this time in the natter of the menber bank's carry14 3e
7/32 shares of its own stock subscribed for by employees of the
1)11k)
1.thich have now
been trusteed and which the bank has promised to disle
'r within
liezt
eamination
or
ne year.
letter also requested that at the time of
the bank, which it is assumed will be made within
300
10/6/32
-26-
the next few months and in which a representative of the Federal reserve
1:141111: will participate, the agent determine the status of the stock and adthe Board fully in regard thereto, with his recommendation in the
Pretaiaes.
Approved.
Letter to the Federal Reserve Agent at Cleveland, approved by three
Lie*e
118 of the Board on September 23, referring to the fact that the
ELIW4
'sis of the report of examination of the Erie County Baning ConDany,
ITertrillion, Ohio, as of August 16, 1932, discloses that the company was hold-
10 shares of its awn stock as side collateral to a loan and that
411Daze
ntlY such stock has been held for a period of several years; the
letter
ITinuestint; the ,.,1ederal reserve agent to advise the company that
84oula
tiilie
t
elnate this loan or otherwise secure the same within a reasonable
_ _
flcl to infolm the Board as soon as possible as to the disposition the
—4-on proposes to make of this matter.
The letter also requested the
tO take
up with the bank and advise the Board regarding a loan in
eee
aa
°J. the l' *tations prescribed by the State lay which apparently has
440 b -n
carried as such by the bank for several years.
Approved.
ap -)roved by three members of the Board on September 28, to
tt,
r dated August 24, 1932, fram Assistant Federal Reserve Agent
111 174iell
cf the Federal Reserve Bank of Cleveland with regard to the manner
the 'jentral Trust Company of CincinIlati, Ohio, should report
01
“100of
real estate mortgage bonds sold to customers with a guaranty
134/rIl1ent by
the Pearl rarket Bank and Trust Company of Cincinnati, later
3ea
Etbz01,
by the Central Trust Company; the reply stating that if the
301
10/8/32
-27-
ill°ttgage bonds in question were not issued by the Pearl Market Bank and
"CoMpany but had been purchased and were awned by it at the time of
7111
Bale to the bank's customers, the liability assumed by the Central Trust
should be reported as a contingent .liability in Schedule C of the
cett-11 report form, but that if mortgage bonds were issued by the Pearl
Itarket B-0-,,14. and Trust Company against which real estate mortgages were held
b7 it °r by another for its account as trustee, the amount of the liability
"the
Central Trust Company thereon should be silo= in condition reports
44111st the
liability item, lgortgage Bonds and Participation Certificates
°14tat
44(linen, while the real estate mortgages pledged against such bonds
Parti
- --eipation certificates should be included in the resources item,
Lo
arid Discounts".
Approved.
titter,
Letter to the Federal Reserve Agent at Kansas City, approved by
%, tatters
of the Board on October 5, referring to the Board's letter
"446U5t 18,
1932, and the agent's reply of August 23, and inclosing a
letter addressed to the Deputy Comptroller of the Currency under
clate or
Se
ptember 24, 1932, by the board of directors of the Miami County
4"/°1183. Bank,
llit"eated
4
Paola,
Kansas;
the letter stating that the Board would be
-44 any comments which the agent may care to submit, after con-
t1
° with the chief national bank examiner, as to the progress which
ellta Inctde bY the bank, as reported in the letter, and the explanation
W,
therein of the matters referring particularly to President Frank
8Polaable.
Approved.
Letter
to the Federal Reserve Agent at Chicago, approved by three
10/8/32
-28--
Ilbers of the Board on October 4, referring to the agent's letter of
septenb
er 7, 1932, with further regard to the reduction of the capital stock
el' the Wheaton Trust and Savings Bank of Jheaton, Illinois, from .100,000 to
'0 000
'..rhe Board's letter stated that since the bank is not complying
With the
capital requirements of the Federal Reserve Act, the Board can not
13IrlY approve the reduction in the bank's capital nor Permit the existing
8ittlfion 10 continue indefinitely; that it will be necessary for the bank
to in
its capital to not less than .1.ao,0o0 as soon as it is feasible
to do
SO, but that in view of the unanimous recommendation of the board of
di
rectors of the Chicago bank,
and in view of the improvements made in the
b a4k,
condition, the Federal Reserve -3oard, in the exercise of its disel'eti°11, will not require the bank to terminate its membership at this time,
althoilc,h the
Board reserves the right to take any action at any time with
reard
to this
matter which seems advisable in the circumstances then
s iatin
-C, but that it will not take final action without first notifying
the b,411
k end grantinc, it an opportunity to be heard. The letter further
9ested that,
in the event the bank's capital is not restored to at least
A,
,v00 yr
-'a.L./1 six months, the agent advise the Board. as to the condition
or
the b
u
at that time; what steps, if any, have been taken to provide
in
-c141'cl to
,ent and the
in capital; and what action, if any, the 34.
d
irectors of the Chicago bank recommend.
Approved.
Eiffel' to the Director General of the Institute of Scrap Iron and
:
nes''new York, hew York, approved by three members of the Board on
eDte*Ier
23) referring to his letter of September 9, 1932, inquiring as to
417lich are considered merchantable and discountable by the Federal
°clitie2'
:3 3
10/6/32
-29-
leserve Board, the letter stating that it is assumed by the Board that the
111(111117 relates to comodities which may be regarded as "readily marketable
staPlas" within the meaning of certain provisions of Section 13 of the :Tedera,
-4 Reserve Act, and that the Board has from time to time passed upon
(Illesti°ns as to whether certain specific coLlmodities are to be regarded as
l'e4dilY marketable staples within the meaning of these provisions of law,
but it
has not prepared a list of commodities which may be so classified
411c1 has not had occasion to consider the -uestion whether scrap iron and
8t801 are readily marketable staples.
The letter also inclosed a copy of
the BGard's Regulation A calling attention to the definition of a readily
Inal'ketable staple contained therein.
Approved.
Reply, anproved by three members of the Board on October 3, to a
lettel' dated September 20, 1932, from Lir. Earle R. deldoney, Buffalo, Yew
'f°11k' Suggestin
that claims of salesmen for deferred payments of commissions
'Loa be considered a proper basis for the extension of credit; the reply
4tat11
le that the advisability of extending credit of this character is one
O
lug Policy
to be determined in the exercise of sound judgment by the
(111'"t31.3 and oficers of each ban, that the Board is not vested with
ealtkoisity to
respect
determine the course which the banks should follow with
t° this
Matter, and that, accordingly, the Board has not had occasion to
cons
ideration to the question and is not in a position to express any
°1114i°11 e°flCOjflg it.
Approved.
lett
el*8
nePlY, approved by three members of the Board on September 27, to
Q
dated
- -eptember
17 and 23, 1932, from L:r. 1. H. Switzler, Vice
304
10/6/32
-30-
President and Generall:anager of the St. Louis itefrigerating and Cold
StoraGe
SPecial
Company, St. Louis, i_issouri, with regard to the appointment of a
committee of the Association of :lefrigerated - Tarehouses for the Pur-
Dose 04
-L obtaining a hearing before the Board with reference to the
ity
rediscount of the paper of customers of cold storage companies; the
reDlY statin,;
that it is understood from Er. Switzler's second letter that
11° heering is desired by the committee in view of the fact that there is
atill
-Ln force and recognized by all Federal reserve banks the ruling of
the B
oe'rci Plablished on page 308 of the .-Arederal Reserve Bulletin for March,
1921) tnat
notes of the customers of a cold storage company, representing
1(3alls'
lade to then by the company, are eli ible for rediscount if the
ellstoMers have used or are to use the proceeds for agricultural or
01•121..ercial purposes and if the notes comply in other respects with the law
11(1 the re
:_:ulations of the Board.
Approved.
Telegram to the Governor of the Federal Reserve Bank of Dallas,
41)roved by
three members of the Board on September 28, referring to his
lett°
'
c e August 30 and September 20, 1932, and advising that the Board
14 °I' the °Pinion that a note of the Verhalen liursery Company, Scottsville,
Teza,z, the
proceeds of which have been or are to be used by it for the
letion or
marketing of products such as those referred to in a letter
(1(11'eF-lecl bY sepa
ny
r, to Deputy Governor Gilbert of the Dallas bank
411cier aate ofthe
9, 1932, or
the
(ItTIallY
or the carrying of such products by
pending orderly riarketinn, is a note given for an agricultural
1)1112e within the meaning of the Aderal Reserve Act and the Board's
11:''41ti°11 A) and that such a note, if it complies in other respects with
:305,
10/6/32
the
-31-
requiraments of eligibility, may be discounted by a Federal reserve
be'llic with a naturity not in excess of nine months.
The teleran also stated
that a
bill of exchange drawn by the colApany on a purchaser of its products
414 accepted by such purchaser arises out of a commercial transaction and
1:114Y not Properly
be classified as agricultural paper, although such an
"aellt:auce, if otherwise eligible, may be discounted by a Federal reserve
When
its ilaturity is not in excess of ninety days.
Approved.
Circular letter to the Governors of all Federal reserve banks,
al314.(1.7ed by three menbers of the Board on October 3, 1032, inclosing a copy
°I' a letter
received _Cron the Chief of the Bureau of Agricultural Economics
of the Department of Agriculture under date of September 25, 1032, advising
or the e
xtension of the Bureau's commercial grading service to include
el4111Led fruits
and vegetables.
Approved.
The Secretary was requested to bring the
matter to the attention of the Governors at their
forthcoming conference as one of the topics of
discussion with the suggestion that they take the
necessary steps to call the service to the
attention of their member banks.
Letter to ,T:r. J. Van Cartmell, Executive Vice President of the
44re/Ice
Warehouse Company, Chicago, Illinois, and letter to Lr. N. A.
04°4) Chief
of the Bureau of Agricultural Lconomics of the Department of
-clature, both approved by four members of the Board on September 23,
1.32' with
further re7ard to the question whether certain warehouse re..511)te proposed
-1..
kPO be issued by that empany for goods stored in warehouses
44"cl rzom
the Southern Idaho Bean Growers ooperative Association would
°°419,5111
with the
requirements of the 2edera1 Reserve Act and the Board's
806
10/6/32
-32-
Regulations with reference to warehouse receipts securing bankers'
"eePtances drawn to finance the storage of readily marketable staples;
the letters statinc; that, notwithstanding the fact that the Lawrence 'Jerehetlee
''() PanY has withdrawn its request for a reconsideration by the
5a1)al
the
ent of Agriculture of certain questions pertaining to its operations,
Beard has continued its consideration of the question whether such
U.S
receixts comply with the requirements of the Federal Reserve Act
the Board.'s
regulations because it appears that some of the -11edera1
zae8ei'v'e banks may have discounted or purchased bankers' acceptances secured
by e
Pts issued under similar circumstances and that the Lawrence Wareho 0
- Cal nY has advertised that credits based on its field warehouse
l'eceiPt8 are elir,ible for rediscount at Federal reserve banks. The letters
qe° atated
that in connection with its investigation of this matter the
11°6‘1'clhas c
onsulted with several of the Federal reserve banks, has carefully
the information furnished by the Lawrence :iarehouse Company and
lt4 att
-4411eYs and the arguments made by them, together with information
N:eived
rrom other sources,
and after studying all of the information receive
°I1 the subject, is of the opinion that bankers' acceptances issued
t
'
leceiPts such as those proposed to be issued in the name of the
T_
Q( .k3
-ce "Iarehouse Company under the arrangements entered into between that
44:1 elld the
Southern Idaho Bean Growers Cooperative Association are not
qiUh
le -01* rediscount at Federal reserve banks, because it is doubtful
17hetlie,
such
receipts comply with the requirements of section 13 of the
lie
serve -4ct that warehouse receipts securin barkers' acceptances
o
tinle-nee
the storage of readily marketable staples must convey or
title 4
4° such staples, and because such receipts do not, in the
of*d,a
,t1.0
of the Board's
j1.41ment, Comply with the requirements of section X:
307
10/6/32
-33-
RegIllation A
that warehouse receipts securing such bankers' acceptances
rflllat be
"issued by a party independent of the customer".
The letter further
3t"rjct that in giving expression to this opinion the Board is not undertaking
to P32S upon the nerits of field warehousing in general, either as conby the Lawrence ,Jarehouse Company or by any other company, and that
the Bc)srd's opinion relates solely to warehouse receipts such as those proP°8ed t° be issued under the arrangements entered into between the Lawrence
°11ae Com)any and the Southern Idaho Bean Growers Cooperative Associa'
Letters anproved, together with letters, also
approved by four members of the Board on September 23,
to the attorneys for the Lawrence ..iarehouse Company,
Deputy Governor Kenzel of the federal deserve Bank of
hew York, the Governor of the Federal Reserve Bank of
jhicago, and the Governor of the federal Reserve Bank
Of San 2raneisco, each inclosing a copy of the letter
addressed to the Executive Vice President of the Lawrence
aarehouse Company.
A circular letter to the federal deserve Agents at
all federal reserve banks, approved by four members of
the Board on September 24, asking for the agent's views
OS to the advisability of publishing in the federal Reserve Bulletin a ruling on the question considered in
the correspondence above referred to, was also approved.
Letter to the federal Reserve Agent at New York, approved by three
tOetaber
3
cli e011,4
,?ktees
4ecter
of the Board on September 30, 1932, stating that in r;oinz over the
- adt schedules recently received from the New 'York bank coverinL;
der Section 10(b) and the third paragraph of Section 13 of the
1 ileserve Act, it has been noted that in all cases of schedules that
ille.114e 411Y paper di-counted for individuals, partnerships or corporations,
4141°171eagement of the receipt of the paper by the Assistant federal
eze
Ageut has an appended note stating that the paper discounted for
141a13, Partnerships, and corporations is not eligible to secure
_34_
1°A5/32
2ederal reserve notes.
The letter stated that such paper is elijble as
e°11ateral security for Federal reserve notes to the same extent as paper
418Counted for member banks under other provisions of section 13, and rethat the agent furnish the Board with revised recapitulation Sheets
e°varinC, with the exception of one case in which the paper was net elicible
becav—
`^`" of its maturity, all such loans made by the Few York bank; also,
that
a nulther of Guestions have arisen from time to time in the past ref̀I'rding the
preparation of schedules covering advances made by the Few York
bW:Under the provisions of section 10(b) and the third paragraph of
eetiorl 13 of the
Federal Reserve Act and that, as it is particularly in13°118
'
llt that the Board's records in connection with these loans should
e°1'resPond in each instance with the law and contain all the information
l'ecIttested by
the Board, it would be helpful if some officer of the bank were
IlEkred with
the duty of reviewing the schedules carefully before they are
allbtlitted to the
Board.
Approved.
Letter to the Federal Reserve Agent at Richmond, approved by three
Of the
Board on September 20, referring to Assistant Federal Reserve
kent
letter of September 16, 1932, relative to the furnishing to the
Ilieholla
Loan Agency of the Reconstruction Finance Corporation of informs:11°4
l'oe;arding the condition of member banks in the Fifth Federal Reserve
1)1a-*It
contained in the confidential sections of examination reports.
'Le
letter
referred to the general policy of the System in the natter of
t4°atialf', access
to reports of examination; to the circular letter which the
1/(kitcl
addressed to all Federal reserve agents under date of Llarch 9, 1032,
174'4 4"e ard to
the furnishin7, of information to the local agencies of the
309
1°/6/32
-35-
Reconstructi011
Finance Corporation, and to the confidential Loan Agency
Bulletin ko. 2 of the Corporation.
It stated that, in view of the fact that
the confidential sections of reports of examination often contain the most
78.111ab1e information reggrdin-: the condition and management of the banks,
it 14°111d seem that to detach the confidential sections before making such reports
to representatives of the Reconstruction Finance Corporation would
he i• nconsistent with the purposes of the law which authorizes the 7ederal
l'eeerve banks to
make such reports available to the corporation, but that it
18 "• flerent from the statements contained in Er. fry's letter that the num'lel' °• I' Persons who have access to the information contained in reports furnished bY his office to the Richmond agency of the corporation is not
l'icientlY restricted, and that the necessity exists for prompt action on
the
e• entte Part to review the situation and to determine, in consultation
Ilith the Manager of the agency, the exact persons connected with the agency
114° 1• 4/r ProPerly have access to such reports and such limitations upon the
113e o• f the information contained therein as may seem necessary.
Apiroved.
nemoranda from Counsel dated September 21 and 23, 1932, approved by
three melobers
of the Board on September 28, 1932, recomnending that there be
1111)lislied in the next issue of the Federal iZeserve Bulletin a supplementary
tte
rearding the branch banking situation in Virginia based on
e4cliti°118.1 information received from the Federal Reserve Bank of Richmond
°n.11ecti°n with the statement as to changes in the law of the several
:::tea relative
to branch banking which appeared in the July issue of the
-4J'iatill) and
also the recent ruling of the Board that funds collected by
11414k3 44Hrld held for remittance to the Collector of Internal Revenue in
310
10/6/32
-36-
Elccordance with the requirements of the Revenue Act of 1952, with respect
tO the
tax on checks, drafts or orders for the payment of money, are not
84bject to the reserve requirements of the Federal Reserve Act.
Approved.
Letters to the Governors of the Federal Reserve Banks of Richmond
ellsas City, approved by three members of the Board on September 23,
1.932
.
'
-1-1111e; attention to the fact that those two districts are now the
'
Etila
°IllY ones in
which progressive penalties are being assessed against member
lor continued deficiencies in reserves, and stating that in the circlArnstan
ces the banks may wish to give further consideration to this natter,
ancl that
4,
-11.eY should desire to discontinue the assessment of progressive
Detal+4
es, the Board will be glad to give consideration to a request that
thia be
.
done
The letter to the Governor of the Richmond bank stated that
In o4
Y Consideration of this subject it is suggestcd that the bank's counsel
e 0113
Illted With regard to the question whether the discontinuance of the
aaao2s
'Thant of progressive penalties in the _?ifth ederal Reserve District
17043.d
in anY Way adversely affect the interests of the bank in any pending
-Lc') in which it is involved, with particular reference to cases
"g clUt of the
closing of member banks in. New Bern, North Carolina.
Approved.
be roo
SeptemTelegraPhic reply, approved by three members of the 3oard on
t° a letter dated Lieptember 26, 1032, from the Governor of the Fed-
"ezve Ban. of Kansas City referrin
)
to the Board's letter of September
aza ze
bank discon"
q sting that the Board consent to the Kansas City
ttw4
i4g, a
penalties for
8 01 October 1, 1932, the assessment of progressive
reply stating that
ael'iciencies in reserves of member banks; the
10/6/32
the
-37-
B°ard discontinues, effective October 1, 1932, the progressive penalties
heretofore in effect in the Tenth Federal Reserve District, and that the
isseeernent of progressive penalties should not be resumed by the Kansas City
13"k except after application to the Federal Reserve Board.
Ap)roved.
Letter to the Governor of the Federal Reserve Bank of San Francisco,
aPPI
'
°ved by three members of the Board on September 23, referring to Cashier
liale's letters of September 14, 1932, and advising that the Federal Reserve
8(l'azci interPoses no objection to the action taken by the Federal Reserve Bank
Or Sall -,. 1.anciseo in the establishment of currency depots at Boise and Twin
Palls
) Idaho, through the shipment of :500,000 of currency to Boise on
8t 31,
1932, and :200,000 to Twin Falls on the same date, the Boise
111/1)1Y be-5
supplemented by an additional shipment of :;500,000 on September
1; the l• etter
notin:.;
- that the Twin Falls depot was terminated on September 7,
tilz°1-1 h the
return of the
411(1 that
2O0,000 in currency to the Salt Lake City Branch,
at Boise :125,000 of currency was withdrawn by member banks,
437b,00
iz
° was returned to the Salt Lake City Branch on September 9, and it
ellected that the remaining .500,000 will remain in the depot for a
temI)ozazy period
until definite determination is made as to the possibility
• t°°1*Callizi
ng the First National Bank of Idaho at Boise.
The letter also
11'189c1 that it
Would be appreciated if, in any case of this kind in the
l'11141be vi• llere advance information can not be furnished to the Board, a report
• the a• ction taken be made by telegraph in order that the Board may be
advised.
Approved.
312
10/6/32
-38Letter to the Chairman of the Federal Reserve Bank of Cleveland,
EIPPreved by three members of the Board on September 30, referring to the
Clukthlants reply of September 14 to the Board's letter of August 26, 1932,
rel4tive to the matters discussed with the officers of the bank by the
8.415111111er2 in connection with the examination as of Lay 28, 1932; the Board's
letter
stating that it would appear that when Canadian currency is selling
at a
su
bstantial discount it is particularly desirable that all Federal reserve
banks should continue to offer their facilities to member banks for
the
collection and conversion of such currency into United States funds at
the
raost f
avorable rate of exchange obtainable. The letter also requested
Ilrther
advice as to certain other matters referred to in the Board's letter
el* AllUat 26.
Approved.
Letter to the Chairman of the Federal Reserve Bank of San Francisco,
El
la:proved
by three
members of the Board on September 27, referring to his
letter
°f September
1, 1932, in which he advised the Board with regard to
"
'istraents
and changes which have been made as a result of the comments of
the lioarats
examiners in the report of their examination of the San Francisco
13e1
841l1
April 2, 1932; the letter stating that the Board would appreciate
ce as to v
ihether its understanding as to the action taken on certain
4%rs is
correct.
Approved.
tO
03, approved by three members of the Board on October 4, 1932,
*°ettera
reeeived from. bankers in Durant,
Oki
adill, Colbert and '111 Creek,
refel-rinz, to a proposal to request the transfer to the Tenth
313
10/6/32
-39--
11'8Cleral.
Reserve District of certain counties in Oklahoma which are now in the
ter_citory
of the Eleventh Federal Reserve District, and protesting against
a change; the replies stating that such a transfer will be considered by
the 11°ard only when submitted to it by the Federal
8.14:1
TPA.,
oserve
Banks of Dallas
City with their recommendations, and that no representations on
-qoject have been received from those banks. The replies also stated
that
c°Piee of the letters received by the Board aro being forwarded to the
Govern.
Or of the
2ederal li.eserve Banks of Dallas and Kansas City for their
Larc):ziati
—on in connection with any consideration they may be giving to the
rilatter.
Approved.
Reports of Standing Committee dated September 20 and 21, 1932,
'
lecorcriA„,
---,u4ng approval of the following changes in stock at Federal reserve
1). 11k8.
' the recommendations havin been approved by three members of the
BOE11
,
on October 3, 1932:
41al
tz
17r
"
tt
- io,rn
os
e 11
3.
(
)
01: ADDITIONAL Stock:
Col
Bank and. Trust Company of nAlta
—
,
Pi R.;.tat
e
'
3olorado. (Increase in surplus)
-liational Bank, Anthony,
Kansas'
ktici‘Illcrease in surplus)
11ce &tate
Bank, Sundance, Wyoming.
'Illcrease ta surplus)
Shares
7
1
1
6
lications for SURRUTDER of Stock:
?izalict
4.
cl.,17Lollsoiacitcloounnaltyi.3Tankrust
jecnkoraii)ilaZ,ICYL;w1(vinsill
oelv
'
enPetrill) a.
ree•se in surplus)
1314
t
•
plz t1Qt nos 5.
:
75
60
v-Jvational 13ank of nannington, Llannington,
(V.L.Suc. by _,'irst Exchange Bank,
-olitieraber)
60
135
lications or SURRENDER of Stock: ( Cont
1To. 5. (Cont i d)
----[-3;71es National Bank of Gate City, Va.
i'llt8t and
(Cons. of peonies National Bank and j'irst
National I3ank)
Shares
20
SO
3C)
36
156
156
18
18
78
78
1,9i:strict No. 7.
ICational Bank, Ackley, Iowa. (Insolvent)
bistrict 1:o. 8.
rielid?raon. Lational 3ank, Henderson, Kentucky.
(Insolvent)
C°11
1Tribi.:Tional :7,an1z, Columbia Heights, Linn.
(Insolvent)
stri t
N
Z
co.
11.
`48 -first
hational Bank of Decatur, Texas. (V.L.
C. by The
Jirst National Bank in Decatur)
t
triQt 1:0. 12.
Bank, ',San _i'rancisco, California.
1,„za(V.
L.Abs.
41 t
by Pacific National Bailk.)
11ational
Silverton, Oregon.
(Insolvent)
405
435
938
30
Total
.A-o-oroved.
deports of Standing Committee dated September 22, 23, October 1, 3
'1932, recommending approval of the following changes in stock at
'4.1ici 4
reserve banks:
4
1)11)1
,t1.
teica.jns
for ORIGINAL Stock:
l'o• 5.
aton
National Bank, Weston, 1. Va.
t tr
ational Bank in Henderson, N. C.
bi8t
/To• 6.
'1'4°11 fi31-71:tal Bank, Johnson City, Tenn.
Shares
90
72
162
160
Total
180
342
blons for ADDITIONAL Stock:
--at
Bank of Fleisclunanns, Fleischmanns 2
18
(Increase in capital and surplus)
18
31r
1°/6/32
-Al-
TAALZ4,_gons
ADDITIONAL Stock: (Cont'd)
Lastzief73_for
7
Clav ,.'"•11-IY National Bank, Spencer, Iowa.
t
Increase in surplus)
Shares
3
21
3
Total
A
--‘cationa for SURRINER of Stock:
at 1T0.t1onai Bank, Kenmore, N. Y. (Decrease
surplu8)
7-48
National 3ank, Vreeport, Levi Yori.
kDecrease in
surplus)
ketriet
3.
81311111V-ield National Bank, Springfield, Pa.
(I
nsolvent)
istrict No. 4.
-1 t t
1,r8t
alfional Bank, Cairnbrook, a (Insolvent)
,- -44i°nal 3ank, Yukon, Pa. (Insolvent)
Cit.azehe
National Bank, Indiana, Pa. (Insolvent)
,1)
1\1;aitIllet Eo. 5.
CitY National Bank, Bluefield, Va. (Insolvent)
48°4 County
National Bank of Independence,
doPendence, Va.
(Cons. of Grayson County
IPti°nal Bank of Independence, Va. and First
ational Bank of Troutdale, Va.)
300
60
360
45
4.5
30
27
45
102
35
P
1;8t1u
ona;!.Bank, Sevierville, Tenn. (Insolvent)
,katriet
7.
18
53
45
45
pirt,--L.
National Bank Joencer, Indiana. (Insolven-G) 45
(TIT!,tional Bank in Sioux Rapids, Iowa.
IlEttlZ731vent)
33
111'4
.3orrimerce :Iilwaukee, Wisconsin.
e-.413
of(V
"by
720
Tirst Wisconsin
National Bank)
'
Total
798
1,403
Approved.
Qo
deports of Standing Cormaittee dated September 29 and 30, 19:52,
ox1di
approval of the following Clayton Act applications:
Samuel B. T.:eisenhelder, for permission to serve at
nnlle tills as director of the York Trust Company of York,
ania, and as
.
tor of the Dillsburg National Bank
"B
316
-42,
Ix. Guy W Moore, for Permission to serve at the same
as director and officer of the Luzerne National Bank of
.-111zerna, Pennsylvania, and as director of the L:iners Bank of
ail
kes-Barre, Pennsylvania.
trrie
1, Craig B. Hazlewood, for permission to serve at the
08taMe, time as director and officer of the First rational Bank
Ilicago, Illinois, and as director and officer of the Lake
"Ore Trust and Savings Bank of Chicago, Illinois.
Approved.
.. adjourned.
Thereupon the meetin3
..4/1a7t.
Se crc.:
4ptoyeti:
4
xecutive Cammitt e.
@FedFRASER