Full text of Minutes of the Board of Governors of the Federal Reserve System : Meeting Minutes, September 24, 1934, 4:15 PM, Volume 21, Part 5

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2920
A meeting of the Executive Committee of
the Federal Reserve Board
was held

in Washington on Monday, September 24, 1954, at
4:15 p.m.
PRESENT:

Mr.
Mr.
Mr.
Mr.

Thomas, Vice Governor
Hamlin
James
Szymczak

Mr.
Mr.
Mr.
Mr.

Morrill, Secretary
Bethea, Assistant Secretary
Carpenter, Assistant Secretary
Goldenweiser, Director of the Division
of Research and Statistics
Mr. Wyatt, General Counsel
Mr. Parry, Assistant Director of the Division
of Research and Statistics
ALSO PRESENT:

Mr. Black, Governor of the Federal Reserve Bank
of Atlanta.

Mr. Morrill submitted a memorandum dated
September 18, 1934, from
Mr.
Vest,
Assistant Counsel, referring to the question of the proced
ure
to be 4,
'
°110wed in closing the street and two
alleys on square E-88, pro—
to be
acquired by the Federal Reserve Board, together with
squsre
E-87
'a8 a site for
its new building, and stating that it appears that
the only
fpAstble method that is applicable in the circum
stances is to
Pl'°ceed under
the Street Readjustment Act of the District of Columb
ia,
11441' which the
District of Columbia Commissioners are authorized to close
Useles
°r unused street
s and slleys upon the recommendation of the Nation—
Cat81 p
8- -ark and
Planning Commission, and that this procedure probably
11111 tak
e about two
months to consummate the closing. The memorandum
els° r
"0/amended that the
Board obtain a certificate of title from a title
e° 1:144y
Geriere., f°11°wing which the matter should be submitted to the Attorney
°f the
United States for his opinion with respect to the title of
the Pr°Perty.




2921
9/24/34

-2After discussion, the matters referred to
in Mr. Vest's memorandum were referred to Mr.
Szymczak with authority to act, with the understanding that before a certificate of title
is requested from a title company an investigation
will be made to determine which of the two title
companies in the District of Columbia should be
used for this purpose and what the cost of the
certificate would be, and that, upon the basis
of this information, Mr. Szymczak will take such
action as is necessary in accordance with the
authority granted to him.

tar.

Morrill referred to the fact that the Board had received

fr°m the
Secretary of the Treasury a copy of a letter received by him
from the
Secretary of the Interior under date of August 51, 1934, in which

the Secretary

of the Interior had agreed with the opinion of Counsel for
the pede _
ral Reserve Board that title to the proposed site for the Board's
IleW building on Constitution Avenue could be conveyed effectively by the

SeretarY of the Treasury, and in which he had taken the position that
it Wa8 not
necessary for the Secretary of the Interior to execute a deed
e°Irering the property but
that, if it should be determined that such a
deed should be furnished
in order to avoid the possibility of any question
118 to

the
validity of the conveyance, he would be glad to execute the

deed
.

The opinion was expressed by the members
present that the Secretary of the Interior
should be requested to execute the deed in
question.
Mr. Morrill then Informed the Board that he had received from
the
46.ti°11a1 Park Service a draft of the necessary papers for the purpose of
obtairc
lng bids and
letting a contract for the demolition of the building
standi,
on square E-88, with a view to obtaining a payment in the
°f salvage for
the privilege of the removal of the building, and




2922
9/24/34
that the
papers hAd been turned over to Mr. Vest, Assistant
Counsel,
r°r the purpose of
reviewing them and placing them in a form satisfact°17 to the
Federal Reserve Board.
This matter was also referred to Mr. Szymczak, with authority to act at the proper time
to carry out the procedure.
Mr. Thomas stated that, in accordance
with the suggestion at
meeting this
morning, he had made arrangements with the Secretary of
the T
,
"easurY and the Comptroller of the
Currency to attend a meeting of
the
Board toaorrow
afternoon at 2:50 p.m. with the view to taking final
"tt°1a on the
regulation to be issued by the Board with regard to the extells10
11 and lfl&Lntenance of credit by brokers,
dealers, and members of
the

Ilaticnal

securities exchanges.

Mr. Morrill presented a
revised draft of the statement, proposed
.Printed
with the regulation on margin requirements,
regarding the
Pl'c'eedure to be
followed in submitting inquiries regarding the interpret4tio4
'ILI application of
the regulation.
tO

. The draft was discussed and approved preliminarily pending final approval at the time
the regulation is acted upon by the
Board.
A revised
draft of the proposed press statement to be issued with
the r_
'etaation on
margin requirements was presented and certain questions
raised ,
4-4
connection therewith were discussed.
It was understood that the proposed press
statement would be given further consideration
at the meeting of
the Board to be held tomorrow
afterno0n.
erel

Mr
'
13rril1 stated that replies had been received from
each Fedeserve
bank except
San Francisco stating that the chPirman or a




2923
9/24/34
-4member of the
industrial advisory committee of the district will be present
t the
meeting with the Board on September 27, 1934, and that Mr. Calkins,
GQ17e111°r of the Federal Reserve Bank of San Francisco, had advised that
he 4 r
enaining in Washington to represent the Twelfth Federal Reserve
ipistrict at the
meeting. The question of the program of the meeting was
raised) and
Messrs. Thomas and Szymczak stated that they had been giving
Nisideration to this matter.
Governor Black left the meeting and the Committee considered and
"ed upon
the following matters:
Letter dated September 22, 1934, approved by four
members of the
130ard, to
Mr. Newton, Chairman of
the Federal Reserve Bank of Atlanta, readikg as
follows:
"The
letter of Federal Reserve Board notes with approval from your
!toour bank September 17, 1934, that the board of directors of
has authorized for Mr. Hugh Foster, managing direcofr4 of the
Jacksonville Branch, a leave of absence, on account
let liness, until January 1, 1935. It is understood from your
er that Mr.
Foster is to be paid full salary during the
Od
04 the leave of absence.
"It is noted
also that Mr. George S. Vardeman, Jr., who
t:: been serving
as cashier of the Jacksonville Branch, has
a
SepLniTir3r1NIing
manager of the Branch to serve from
until the January meeting of your directors."
Approved
Telegram dated
September 22, 1934, approved by four members of the
13°e"I'd) to
Mr. Walsh,
Federal Reserve Agent at the Federal Reserve Bank of
tallas)
stating that,
subject to the conditions prescribed in the tele6/4t4111, the
Board
approves the application of the "Minden Bank & Trust Cornu,
Minden,
Louisiana, for membership in the Federal Reserve System and
rox.
the a
PPropriate amount of stock in the
Federal Reserve Bank of Dallas.




Approved.

2924

k 9/24/34

_5_
Letter to Mr. Hoxton, Federal Reserve Agent at the Federal Reserve

Batic or
Richmond, reading as follows:
"Receipt is acknowledged of your letter of September 17,
193
t 4, in which you request the Board's permission to furnish
the attorney for the receivers of the 1,merican Bank and
GamPanY, Richmond, Virginia, a copy of a letter to you
°34 . X. C. Noell, Assistant Secretary of the Board, dated
FebruarY 24, 1930, relative to the purchase by that bank of
Stack 4
In the :est End Bank of Richmond.
yo
"Ut14er the circumstances, the Board will not object to
1,,t1r ruraishing a copy of this letter to the attorney for the
ae ceivers of the American Bank and Trust Company. If you so
you 'lay also fUrnish such attorney with copies of your
Of 2ebruary 1, 1930 and February 21, 1930 to the Board,
7"..11 of the Board's
letter to you of February 19, 1930, in reto this
matter, in order that the attorney may have coine i
nformation on the subject."

4

rr

Approved.
Letter to

•

Newton, Federal Reserve agent at the Federal Reserve

84.4k Of
lant
e

readin6 as follows:

"Reference is made to your letter of September 15, 1934,
Z.
,
umenddng approval of an application of the 'Bank of Canton',
the ;
:t Georgia, for a further extension to April 1, 1935, of
the ,7,
within which to dispose of its holdings of stock of
as '
f'
414ton Cotton lalls
carried in its investment account at
' ;20, the Board
having previously granted an extension from
-41:Y 19 1934, to October
1, 1934,
,4 VieW of the
circumstances as outlined in your letter of
by tir"
j
11er
151 193
1934,
4, and the extension to
1, 1935, granted
BaarAe
of Banks of the State of Georgia, the
°alit" extends
to April 1, 1935, the period in which the Bank of
17 TIsnall, as required by condition of membership numbered
SO of its
4.4a it
holdings of stock of the Canton Cotton 'ails,
statsa
reqUested that you advise the bank accordingly. As
h°wever, in the Board's letter of December 21, 1933, ,
the t
YoU of the
granting of the extension to October 1, 193,
eirablard reels
that corporate stocks do not constitute a deand she bavestment lor iunds of
a depositary banking institution
that 4:1d be disposed
of as soon as feasible; and it follows
Of Caatn,successive cranting of extensions of time to the Bank
toalzbe
within which
it may, as required by a condition of
uispose of the stock held by it at the time of adaio
It vuill to
views.
e tlembershin would not be consistent with such
b
ban_.
the
advise
will
you
therefore, if

L

Sept:




2925
9/211/34

-6-

"that the extension has been granted with the expectation
that the bank will make sincere efforts to dispose of the
stock as soon as practicable."
Approved.
Letter dated September 22, 1934, approved by four members of the
8c)ard, to Lir. 0/Connor, Comptroller of the Currency, reading as follows:
"In accordance with your recommendation, the Federal Reserve Board approves a reduction in the common capital stock
Of the
'Iirst National Bank in Georgetown', Georgetown, Illinois,
,
rcca col-0,000 to 25,000, pursuant to a plan which provides that
the bank's
capital shall be increased by 25,000 of preferred
stock to be sold to the Reconstruction Finance Corporation and
that the released
capital, 1;ogether with a portion of the bank's
d undivided profits, shall be used to eliminate anproxi;
1 -sc,L8,000 of unsatisfactory assets, all as set forth in your
m
emorandum of September 13, 1934.
"In considering the plan under which the proposed reduction
capital is to be effected, it has been noted that the condi.t
vi°4 of the bAnk will still be unsatisfactory in view of the large
mc/lunle of slow and undesirable assets remaining, and that the
7.ellagement is subject to severe criticism by your examiner. It
assumed, however, that you have these conditions in mind and
!hat
whenever it is feasible to do so you will require such further
corrections as may be practicable."

Z1)31

Approved.
Letter to the Federal reserve agents at all Federal reserve banks,
reEtdi
74; as
follows:
404. "Attention is invited to the fact that section 2(a) of the
,_ 4.8.,11Proved May 18, 1934 (Public No. 235), a copy of which was
—loam to You
under date of Tune 9, 1934, provides as follows:
'Thoever, by force nnd violence, or by putting in
fears feloniously takes, or feloniously attempts to
t ke, from the person or presence of another any property or money
or any other thing of value be1on6ing to,
°r in the care, custody, control, management, or posrssi°n of, any bank shall be fined not more than c;5,000
'Jr imprisoned not more than twenty years, or both.'
You will
Stoll
note that the word 'bank' as used in the provi°ye quoted is defined in the Act to include 'any member
ballk
the Federal Reserve System, and any bank, banking




0(li)C
e.4.v,44.•1,1
9/24/34

-7-

"'association, trust company, savings bank, or other banking
institution organized or operating under the laws of the
United states'. Accordingly, it would seem that a violation
,of these provisions my be involved if any property of the
41nd described therein 'belonging to, or in the care, custody,
control, management, or possession of' your Federal Reserve
Bank or one of its member banks is taken as the result of any
act in which force and violence or intimidation has been used,
and an attempt to commit an act of this kind, regardless of
Whether any actual taking occurred, would also seem to be
embraced by such provisions.
"It is requested, therefore, that apparent violations of
the Act of
flaY 18, 1934 which came to your attention in the
Performance of your duties be made the subject of a report to
the local
United States District Attorney and to the Federal
Re3erve Board for submission to the Department of justice in
accordance with the usual procedure. However, as indicated
in the
Board's letter of February 8, 1928 (X-5072), in a case
ere the only bank connected with the transaction is a national
ua44, it is not necessary to make such a report but merely to
!dvise the Chief National Bank Examiner for your district of
uhe matter for such action as he considers advisable. If a
Particular transaction, regardless of whether it affects a
ilational bank or other brinks of the kind described in the
”atute, appears to be one in which the _Cost Office authorities Would be interested, it is requested that you bring the
D1"tter to
the attention of those authorities and advise the
ecleral Reserve Board to that effect."
Approved.
Letter t o T.'s. 'Peyton, Federal Fe serve Agent at the Federal P,eserve &Ink
of Minneapolis, reading as follows:
19

"Receipt is acknowledged of your letter of September 17,
with regard to an address by you before the Minnesota
r3 Association
on Ceptember 19.
It was, of course, satisfactory to the Board for you to
take
th,i. such an address, and it is understood from your letter
:' in accordance with the last sentence of Mr. Morrill's
le:"o to you of June 23, 1933, you will arrange to for--ard
to
the hoard a re sume of your remarks."
Approved.

serve

Letter to
Mr. i-eyton, Federal Reserve Agent at the Federal Re-

Bank

of :Annea-lolis, reading as follows:




9/24/34
-8"Receipt is acknowledged of your letter of September 6,
1934, with
regard to a meeting of representatives of the
trust companies in your district which you rlanned to hold
subseTaent to the recent meeting of Assistant Federal Reserve
Agents and Trust Examiners at Washington.
It would seem that meetings of the kind suggested by
You should
be of material value to all concerned, and result
fl a
better understanding of trust problems by nany of the
banks exercisint.: such functions.
"Az you are ',robably aware, a conference along the lines
You propose
was recently held in the First Federal Reserve
1?lstr1ct and it
is possible that other districts will adopt
the plan of holding such meetings.
"
Approved.
Letter to :a*. Hoxton, Federal Reserve Agent at the Federal Reserve Bank of
Richmond, reading as follows:

"LI'. Fry's letter of August 27, 1934, asks whether the
:eal estate
mortgage bonds sold by the Union Trust Bank of
st°19 Tennessee, should be considered 'securities' within
he
purview of section 32 of the Banking Act of 1933.
fraa the FIT inclosed a form of the bond used. It appears
form of bond and from Nr. Fry's letter that the bond
the direct
obligation of the -ortgagor, being secured by
adeed
r
of
trust which is deposited with a trustee. The bonds
e issued
in series in denominations of '.: 100, :)500, or 4,000
:
tell) each series of bonds
being secured by one deed of trust.
bonds are negotiable in form and are payable to bearer.
.:11.t1 bonds are
represented by engraved certificates and have
thIached interest coupons payable semi-annually. Payment of
Ite 1310"d and coupons is guaranteed by the Union Trust Bank.
10,!cli)eare that the bonds are issued principally for sale
''-"-Y and are not
registered or listed on any exchange.
sul,th4 7,1P°n consideration of the information which has been
Is
uted +I,
e Board is of the opinion that these bonds are
4, 9.
tn+ of
r"ies'
1933. within the meaning of section 32 of the Banking

:

not b"Of course,
the information submitted by Mr. Fry does
ear upon the question whether the Union Trust Bank is
bo]a cip,a111" engaged in the businesJ of dealin;: in these
Bull j'thin the meaning of section 32 (see Federal Ileserve
lette7,14 f°r July, 1934, pages 485-486), nor does Yr. Pry's
e
Banki;,raise a question with respect to any provision of
-t
''et of 1933 other than section 32."




Approved.

2928
9/2‘/34

-9Letter to Mr. Sargent, Assistant Federal Reserve Agent at the

Pederal

Reserve Bank of San Francisco, reading as follows:

"Reference is made to your letter of Tuly 23, 1934, and
the inclosed
copy of a letter dated July 18, 1934, from Yr. T.
R. Miner, Vice President of the First National Bank of Seattle,
regar
the services of Yr. Tohn W. Eddy as a director of
that bank and as a director of the National Bank of Bay City,
"It appears from the facts recited in your letter of April
12) 1934, to Vice President Liner, which you quote in your
letter of July 23, 1934, that the relationship in question is
within the prohibitions of section 8 of the Clayton Act in view
er the fact that
the First National Bank of Seattle has resources,
as defined in
that Let, of more than :A,000,000. In the circumstances, his services as a director of both banks, without a
1?ermit covering such services issued by the Federal Reserve Board,
18 in violation of law. It also appears that, in addition to
as director of these national banks, he is President of
non-banking institution which makes loans secured by stock or
1°11(1 collateral, other than to its own subsidiaries. Under these
;fcumstances,
his service as a director of a national bFink is
the prohibitions of section 8A of the Clayton Act, and
it: Board, as
you state in your letter, is not authorized to
sue a permit covering such a relationship.
lint "It is noted that Mr. Eddy does not propose to resign volto ,11-1Y as a bank director and that Vice iTresident Miner wishes
ue advised as to what official notice is issued to such a
director under the circumstances.
for,."A.8 You know, a procedure is established by statute for enth,:111 campliance with the law. However, it does not appear
Eddy or Vice President Miner is asking that such proticangs be
instituted.
"Iti
Eddy tuLua_ -s expected that it will be sufficient to advise Yr.
t his service is in violation of law, and unless you
be!anY further comments or suggestions which you believe should
Eddynsidered by the Board, it is requested that you advise Yr.
ac
cordingly.
tte
"
1.1ease keep the Board advised as to the status of this
Ita
r
Approved.
the

LettlY.
t:-:h:ated September 22, 1934, approved by four members of
ard,
respective 2ederal reserve agents, stating that the




2929
9/24/34
-10Bc)arcl "
11
given consideration to the following applications for permits
114cler the
Clayton Act, and that, upon the basis of the information beit

feels that the issuance of the permits applied for would be

ille°raPatible with the public interest. Each letter also requested the
agellt to
communicate to the applicant the Board's iosition in the matter,
811c/

t° advise the
Board promptly as to whether the applicant desires to

8114a4t anY additional
data, and, if not, as to what steps he proposes to
te_ke
°rder to comply with the provisions of the Clayton Act.
L. Hall, for permission to serve at the same time
4
- a director
of the First National Bank and Trust Company
Th AmitYville, Amityville, New York, and as a director of
The Bank
of Farmingdale, Farmingdale, New York.
1_,Ire Albert E.
%la director Kettle, for permission to serve at the same time
of The First National Bank and Trust Company of
zet„einaz°0, Kalamazoo, idchigan, and as a director of the Kala'40
Industrial Bank, Kalamazoo, lachigan.
tire y s
r. Brooks, for permission to serve at the same time as
'hcicirector aud officer of
The First National Bank in Richmond,
Of r,r1(311:11 California, and as a director of the Eechanics Bank
A4chmond, Richmond, California.
Approved.
Letter dated
September 22, 1934, approved by four members of the
b3ctl'cl) to lire
Case, Federal eserve ,Igent at the Federal Reserve Bank of
17"1 York,
in
closing the following Clayton Act permit; and statinge:h::,
14 all
the
circumstances, the Board has granted the permit in.
e'c3111.13'11Y 11AllecessarY misunderstanding by the communities which mi:ht
13rove
detrimental to the
best interests of the banks; that the Board sugesto,
however,
that the ar'ent
endeavor, in cooperation with the appropZ'iate
supervisory a
uthorities, to expedite the completion of the program




2930
9/2V34
-11providing additional capital for both banks; and that it is requested

that the agent, when he submits his recommendation as a result of his
ej-1- review of the permit, report fully as to the progress Lade in the
11111)11°veraent of the capital structure and condition or the banks.
11r. Charles A. Luce, for permission to serve at the same time
a director and officer of the First National Bank and Trust
„"PanY of Amityville, rnityville, New York, and as a director
vz The First national
Bank of Lindenhurst, Lindenhurst, New
York
Approved.
Letter dated September 22, 194, approved by lour members of the
Boa
rd, to Mr.
Case, Federal Re serve Agent at the Federal Reserve Bank of
YOrk, r A,
eaLung as follows:
"There are inclosed the original and copies of the Clayton
Permit issued to 1,:r. E. D. Mitchell covering his service as
ector and
officer of the South River .12rust Company, South
New Jersey, and as director of The First National Bank of
Cranbury, New Jersey.
is noted from form 94a, item 14 (d), prepared by The
;:st Ilational
Bank of Cranbury, that the applicant has not yet
asquired capital stock of the institution to enable him to qualify
tile director but that arrangements have been made to purchase
&t 41111°ulat required. It will be appreciated if you will investitore tilt;
matter and, when Mr. Mitchell has qualified as a direcize,
°I the national bank by the purchase or stock, you are authorvol;e-udo. deliver
the perLait to him and copies to the banks inV.ease advise the Board when such action has been taken
ill order
hat the files mn y be complete."

T

Approved.
41,10,1c Of
14,Z.

Letter to
Mr. Austin, Federal Ileserve Agent at the Federal Reserve

'ihiladelphia, inclosing the fol]owing Clayton Act permit; suggestthat the
agent advise the applicant that it is with the expectation

th'it he
heta

been

will imt-ove
his attendance at directors, meetings that the permit
canted

t1°4 as a

and requesting
ng that, when the agent submits his recommenda-

result of his
annual review of the permit, he report fully as to




2931
9124/34

-12-

tie applicant's
attendance at directors' meetings:
!\.1:. Rembrandt Peale, Jr., for permission to serve at the same
nlraa.as a director or The Deposit Hational Bank of DuBois,
.2'°1a, Pennsylvania, and as a director of The First National
'
-8411C Or Carrollton, Carrolltown, Eennsylvania.
Approved.
Letter dated September 22, 1934, approved by four members of the
(311r(1) to La..

Austin, Federal Reserve Agent at the Federal Reserve Bank

Or
Philadelphia, reading as follows:

.
"There are inclosed the original and copies of a Clayton
;!!,Permit granted to Mr. Harold S. Schutt, 1
- =hiladelphia, PennsylIT'LL-I-a, to serve at the same time as director of The Market Street
1
i°nal Bank of Philadelphia, Philadeli)hia, Pennsylvania, and as
!\
d
irector
of
,the
Wilmington Trust Company, iiilmington, Delaware.
aa1uch as Mr.
Schutt
is not at the present time servinE: as a
director 4,
`'l
(3, The Market Street National Bank of Philadelphia, but
desiredit
his application be passed on in anticipation of election,
butls requested that you advise Mr. Schutt of the Board's action,
a3 withhold delivery of the permit and copies until such time
toryou are definitely advised that he has been elected a direcmatte;Please inform
the Board concerning the dis_osition of this
in order that its records may be complete."
,:,pproved.
Letter dated
September 22, 1954, approved by four members of the
2

t°

ot olemire,

14.11- Williams, Federal Reserve Agent at the Federal Reserve Bank

land) readinc; as
follows:
Act 10:Thsra are inclosed the original and copies of a Clayton
at
granted to Mr. F. R. Brifigpinn, London, Ohio, to serve
Bank e same time as director and officer of The Madison :ational
both :f
and as director of the London Exchange Bank,
London,
the t 2 -London,
Ohio, for transmittal by you to Mr. Bridgman and
two
bank5, and a copy for your files.
ravoi
:X3u are requested to inform Mr. Bridgman of the Board's
action on his application and, upon his election and
as a director of the London Exchange Bank, to forion
ward
"e Permit to him
and the copies thereof to the banks.




Approved.

29:32
9/24/
34

-13Letter dated September 22, 1934, approved by four members of the

B°ard, to la..

Newton, Federal Reserve Agent at the Federal Reserve Bank

°r

Atlanta, inclosinq the followin- Jlayton Act IDermit, and requesting
that
the agent
withhold delivery of the permit to the applicant until he
i8

satisfied that the provisions of section 32 of the Banking Act of 1933

44d

Of

section 8A of the Clayton Act are not applicable in this case or

that
applicant is complying with the provisions of the sections, in
Which

event the agent is
authorized to transmit the permit.

The lettc:r

41° requested that the
agent inform the Board of the action taken in the
nlatter.
Ir° G. L. Hight, for
°emission to serve at the same time as
:
d irector
of The ilationsl City Bank of Rome, Rome, Georgia,
es a
Georia director of the Bank of Chickamauga, Chickamauga,
Approved.
Letter dated
September 22, 1934, approved by four members of the
to itais
Stevens, Federal Reserve Agent at the Federal Reserve Bank
or
ehicago,

reading as follows:

yo

Reference is made to Assistant Federal Reserve Acent
s letter of
August 28, 1934, inclosing copies of letters
CluY O. Babcock, the Nekoosa State Bank, Nekoosa, Tissulowar and the
Farmers and Merchants Bank, Rudolph, Wisconsin,
or r, tilag additional inronnation relative to the application
aim * GUY O. Babcock for a Clayton Act permit, which was dis,
1°766 hY the Board on the grounds set forth in its letter
to-1
,
"-u on Xuly 30, 1934.
submi
:
The Board has given consideration to the additional facts
stili:ted in accordance with Section V (g) of Regulation L but
reels that it would be incompatible with the public
interest
to
to grant the permit applied for, and you are requested
aclv-7-3e the applicant of the Board's decision in the mtter.
ait
nh at its files in this case may be complete,
tr
Pleas;lsZe
and advise the Board as to what steps 1,1r.

Tr1
(
;
14




2933
9/24/34

"Babcock proposes to take in order to comply with the provisions of the Clayton
Ict."
21pproved.
Letter dated September 22, 1934, approved by four members of the
13°aI'd, to M.
Stevens, Federal Reserve Agent at the Federal Reserve Bank
Ot 011;-."Thkgo, reading
as follows:
c„ :0/1 July 31, 1934, the Board advised you that it had given
rl"31-0,eration to the application of Lir. I. Floyd Garrott, Battle
-r_r°und, Indiana, for permission under the provisions of the Clay?n Antitrust
Aet to serve at the sane time as director of The
zlrstMerchants National Bank of Lafayette, Lafayette, Indiana,
director and officer of the Battle Ground State Bank, Battle
8:°und, Indiana, and as director and officer of the Fowler State
fc:
6
,
,c ',Y°711er) Indiana, and upon the basis of the information be'
4, concurred in your opinion that the issuance of the per11't
m aPplied
led for would be incompatible with the public interest.
th:
action upon the application was based largely upon
unsatisfactory management and condition of The First-Merchants
othl°nal Bank of Lafayette and the Battle Ground
State Bank and
er e
ritieiams set forth in your report.
tiola "S
ubsequently, in accordance with Section V (g) or Regulaas additional facts and arguments not appearing in his aptioz i°n and accompanying forms were submitted for the consideralIrstor the
Board. From this information it appears that The
the -Merchants
National Bank of Lafayette has recently completed
Corinie or .500,000 preferred stock to the Reconstruction .Linance
14-4:'ation and or ;225,000 of second preferred stock to local
aave-ests and,
that this rehabilitation program resulted in much
c°mment, the bank having lost approximntely ç300,000 in
that
during this reconstruction period. It further appears
banking situation in Lafayette, Indiana, is in a
Fe2t.".
state and that, while The First-Merchants National
lareerr Lafayette acknowledges that its board of directors is
cause ot
fhan it need be at the present time, it feels that beto 11
,ak - the local
banking disturbances it would be inadvisable
ditiala e
- .allY changes in its directorate under the exsiting con-

t

"It .is
Illetaber
also noted that the applicant, as a banker and
d a
tilet0
h
1,e e
Zteli
°1ai
slature of the State of Indiana, has been of
Lafeyetue bank, having contributed liberally
that 181.,, t,!-Ine and efforts in the rehabilitation of the institution,
that C l'as the
and
conridence of a large part of the communityre.
SerViCe to the
public
bank from the standpoint of
'
s or co
the
of
view
nsiderable value, particularly in




2934
9/24/34
9
unsettled conditions prevailing.
"In view of the roregoinc facts, your recommendation and
the request contained in the letter of Executive Vice president
!
. Yk111) dated August 8, 1934, that a temporary permit be granted
4 for six months or one year or pending stabilization of the bankSituation locally,' the Board has granted the permit, with
tthe un
derstanding, however, that it shall be considered as of a
i eruP°11arY character; and you are requested to keep this matter
ndnd and advise the Board as soon as the interlockin,: rela°Ilshilis between the three banks may, in your opinion, be
el'Inixtated without adverse effect upon the interests of the banks
7d the
communities in which they are located. In the circumance s) You
are requested to review this permit at intervals
lp,t7,:t exceeding
three months during its continuance, reporting fully
-c_I-uh respect to
the conditions then existing and submitting your
ecom
mendations.
,_
"There are inclosed the original and copies of the permit
Jan-ted to 1:-. Garrott for tranamittal by you to him and the
concerned, and a copy for your
files."

l

Approved.
Letter dated
September 22, 1934, approved by four members of the
to mr.
Steven, Federal Reserve Agent at the Federal Reserve Bank

or chi
cago,
the sgent

inclocinc the rollowing Clayton Act permit; suggesting that

advise the applicant that
it is with the expectation that he

Will
improve his
attendance at directors' meetings of the Second National
Wad Trust
Company of Saginaw that the permit has been granted; and
reqtlesting that,
when the agent submits his recommendation as a result
or hi
42

annual review
of the permit, he report fully as to the applicant's
Sttend
SlIce at
directors meetings:
14r.
a
sbern Hanson,
ame time
ror permission to serve at the s.
6%4 director and
officer of the Grayling State Savin!g
-,
vkLut and
'
/c421inC
) and as a director of the Second National
Trust
of Saginaw, Sazinaw, Michigan.
Approved.
Letter

dated September
22, 1934, approved by four members of the




2935
9/24/34
-168oard, to
Nr. Stevens, Federal Reserve Agent at the Federal Reserve Bank
Or

Chicago, reading as follows:
y
"Reference is made to Assistant Federal Reserve Acent
,(3111Ms letter of Aur,ust 14, 1934 inclosing copy of a letter
cated ,
lugust 10, 1934 from The First-Merchants National Bank,
,afayette, Indiana, submitting additional information relative
the Clayton Act application of Mr. William C. Mitchell,
raYette; Indiana, which was disapproved by the Board on the
rotuads set forth
in its letter to you of Tuly 31, 1934.
:
"Ze
d Board has given consideration to the additional facts
) in accordance with Section V (g) of Regulation L, but
feels that it would be incompatible with the public interto
grant the permit applied for, and you are requested to advl.se the
applicant of the Board's decision in the matter.
ase, "In order that its file in this case may be co.Liplete, please
and advise the Board as to what steps 1.:r. Nitchell proI °ses toin order to comply with the provisions of the Clayton
-ict.,1

1

a

!.t

Approved.
4Eal

Letter dated
September 22, 1934, approved by four members of the

'to 111 applicant for a permit under the Clayton Act, advising of
,
°I. his application as
follows:
Ur. Oscar
G. Schalk,
as an
officer of the
L'ts
Na L°111s) las3ouri
tional Bank
in St:

for permission to serve at the same tiEe
Mercantile-Commerce Bank and Trust Company,
and as an officer of the Mercantile-Cammerce
Louis St. Louis Missouri.

Approved, together with a letter, also dated
September 22, 194, and approved by four members
of the Board, to Er. ':iood, Federal Reserve Agent
at the Federal Reserve Bank of St. Louis, reading
as follows:
the :
t There is
inclosed a copy of the permit issued pursuant to
i61.0113
the Clayton Act
ct covering the services of Mr.
ezd Tr
; Schalk
as an officer of the Mercantile-Commerce Bank
Louis 3t C°111ParlY and Mercantile-Commerce National Bank in St.
:leilo2,°f St. Louis, Missouri. There are also inclosed the
Licca —4
'
4 copies of a Clayton Act permit granted to Mr. Toseph
tile,
c rthY to
serve at the same time as officer of the MercanNationr3larce Bank and Trust Company and the Mercantile-Commerce
J. Bank.

Z




2936
9/24/34
"In considering Mr. McCarthy's application for a Clayton Act
permit, it was noted (Item 12 - F.2.B. Form 94, dated Yay 9, 1934)
that he was
serving as director and vice president of the Landers
Investment Company, Springfield, Missouri, the business of which
the
applicant describes as 'holding company'. It appears possible
that the
provisions of Section 32 of the Banking Act of 1933 are
applicable in
this case and the Board does not have detailed information with respect to the character of the business conducted by the
eQ1)811Y. Therefore, the Board requests that you make such investigation as is necessary
to determine the status of Mr. McCarthy with
rcespeot
to the provisions of Section 32. If you find that Mr. ECsarthyts
service with the Landers Investment Company and the banks
involved comes within the provisions of Section 32, you are reto advise him of the requirements of that section and as to
procedure in making formal application for a Section 32 permit.
or upon a consideration of all the facts involved, with the advice
th..Your counsel, you are unable to determine to your satisfaction
c 7 aPPlicability or Section 32 in this case, the Board,
reelPt of full information, will be glad to rule upon the matter.
t, "It was also
noted that Yr. McCarthy answers in the affirmafe to the first
,
part of question 13, Form 94, to the effect that
of the corporations served by him in various capacities, of
l
ich twelve are
listed, make loans secured by stock and bona
sutl teral to persons, firms or corporations other than their own
tim,
31diaries. He does not answer the second part of the same ques,,,:" as to what corporations make such loans and as to the nature
1 extent of
such business in each case. It is presumed that
„IY the banks involved mnke such loans but this should be definitely
-Quer!ained before delivering the permit.
tio
If you find to your satisfaction that the provisions of Sectio1
,
2
1 2 are not applicable to Mr. McCarthy and that the corpora"if served by him, other than the banks involved, make no loans
ti°1ation of Section 8A of the Clayton Act, you are authorized
to li
it the Clayton Act permit to him and copies thereof to
the
sho,;anks involved. However, delivery of the Clayton Act permit
se14-1d not be made
until it has been determined that Er. McCarthy's
/lot Ar with the Landers Investment Company and the two banks does
,'
or I"
s
within the T)rovisions of Section 32 of the Banking Act
'
-i
two
and that loans made by the corporations other than the
seot.44
"served by him are not in violation of the provisions or
8A of the
Clayton Act.
1?ase advise the Board of the action taken in this matter.
Lolisda lL Sanuary 16, 1934, permits were issued to Messrs. John G.
liataiii,e1 L. lade Childress, TT. B. Cowen, Louis H. Egan, 7;. L.
C. Illax7)George D. Earkham, S. A. Mitchell, E. T. Mudd, Frank
`4.rg0.),), Ernest
Stix, P. W. A. Vesper, James L. Westlake, and
13,441jbe ". Viilson to serve as directors of the Mercantile-Commerce
Trust Company and Mercantile-Commerce National Bank. At
"
a

Z

Z




2937
9/24/34
-18"that time,
you were requested to review all of these penmits
not later
than June 15, 194, and advise the Board whether, in
Y
.,,,o_ur °Pinion, in view of all the circumstances then involved,
"le public interest
required their revocation. To date your
advice has not
been received. It is presumed that you have the
atter in mind
and, in this connection, your attention is called
,o the fact that Director Egan attended only
33 meetings of the
trust compa
ny's board out of 100 held between Larch 14, 19,:2,
and Larch
24, 1934, and Directors Cowen and Litchell attended
3 meetings and 6 meetings, respective
ly, of 16 held by the
natio
nal bank'
44 tionel
s
board
inter
in
the
betwe
im
en
the last two examineons

T

Bel*

Letter to .1:Lr. McClu
re, Federal Reserve Agent at the Federal Reserve
-L 1.-eases
City, reading as follows:
"On August 1, 1934, the Board advis
ed you that it had Liven
.s
c
e°
, ideration to the
application oi Er. E. T. Guymon, San Diego,
-"r°rnia, for permission under the provisions of the Clayt
=ct
on
to serve
at the same tie as director and officer of The
National
k of Hutchinson, Hutchinson, Kansas, and
direct
or and
ecter
officer of The Citizens ,Aate Bank, Liberal, Kansas,
uPon the basis of
the information before it, felt that the
Of the permit appli
ed for would be incompatible with the
t—u-L1c inter
est. The Board's action upon the application was
da
isect upon Mr. Guymon's unfavorable record of attendance at the
ajecti3rse meetings of the two banks, it appearing that he had
Theel?& Only four of twenty-nine directors' meetings held by
The —4'ricen National
Bsnk and one of eight meetings held by
furtOitizens
state Bank during the past two years, and upon the
hallkher fact that
his residence at a great distance from the
these ilised considerable question as to his ability to serve
ta
stitutions adequately.
,,aha
tr "
nitti
The 4ard
has received your letter of _-i.uust 22, 1934,
n
copies of letters received by you from Er. Guymon
'trem the
Citiz
presidents of The American National Bank and The
State Bank in connection
with the Board's action on
Gens
alppealli's application. Fram the information submitted, it
that when one
of the oldest banks in Hutchinson closed
atealt
°11 came to Hutch
inson immediately and made a very subdeposit in
The American National Bank and gave that
other be benefit
of his counsel for about two weeks and no
It eisne4k in the commu
nity was disturbed by the suspension.
bald 1/117t app
that Mr. Guymon makes frequent trips to Liberal
that th -illson. in connection with his business interests and
ea eilci;' President
of The Citizens Bank of Liberal states that
'ts the
CO
affairs of that bank are discussed, his
3 sought and
his opinions are respected, and further,

X




2938
9/24/34

-19-

"as a result of his wide financial interests outside of the
agricultural
region in which Liberal is located, the bank benefits fram
his experience and knowledge of general economic conditions which locl directors do not have. The president of
this bank also
states that Lir. Guymon's influence has been a
factor in the
successful management of the bank since its
°rganization in
1907. It is noted from your letter that the
,rivestuent of Lir. Guyiaon and his interests in The American
LTati°nal Bank of Hutchinson represents slightly more than
'
GA Per cent of the capital stock or that bank, that for many
Years he has
been considered as one of the outstanding success1
business men in the localities in which the banks are located and, on account
of his long and close association with
number 01
industries located in that section of the state,
40.8 name adds
stability to the banks with which he is identified.
t. "As stated in the Board's letter of August 1, l93e:, considera4.1°4 was given to the fact that the applicant has been a direcur and officer of both banks for many years, that he keeps in
With the affairs of the banks throu,fn tri-weekly skeletolich
reP°rts and constant correspondence with officers and direcreP°rts
hat on account
aC
of his successful business experience and
J'lltY bot4 banks value
his advice and counsel, that he is reilgt
eed to h
-e a man or means and that he is favorably regarded.
moj
e aDreared to be no unfavorable factors other than Yr. GuyUnsatisfactor
y record of atten,lance at directors' meetings.
In
view of your recommendation that nr. Guymon's application
be
s 'ven favorable reconsideration and to avoid any unnecessary
whichtstandin by the communities in which the banks are located
the :"ght Prove detrimental to the best interests of the banks,
to Board feels, in the circumstances, that it would be preferable
Euld'?" the permit and accordingly there is inclosed the original
two rpiss thereof for transmittal by you to Mr. Guymon and the
to Liranks, and a copy for your files. In transmitting the permit
feel.. GllYmon it is sua:ested that you convey to him the Board's
char g that a
airector should have a satisfactory record of disrnanat,:ing his
duties and responsibilities by participating in the
attsr eat and operations of a bank which he is servin,7 through
edviZa,ce at directors'
meetings, and it is suggested that you
iZprov
GuY2on that it is with the expectation that he will
!
AI "is attendance at directors' meetings of the Hutchinson
atd'
appear :fal banks that
the permit has been granted, since it would
ties wouilat his
reported frequent business trips to these communi11:1,Permit an improvement in his record of such attendance.
-)c)ard requests that, when you submit your recomerdation
as
Of Your annual review of this permit, you report fully
as
GuYmon's attendance at directors' meetings."

j

4




Approved.

2939
9/24/34
-20Letter
BOard

dated September 22, 1034, approved by four members of the

to an
applicant for a pelauit under the Clayton Act, advising of

8.PProval of
his application as follows:
:1'x** Chas. F. Stuart, for permission to serve at the same time
;
3 a director and officer of The American National Bank of
awhuska, Pawhuska, Oklahoma, and as a director of the American
Wagoner, Oklahoma.
Approved, together with a letter, also dated
September 22, 103,_, and approved by four members
Of the Board, to Yr. McClure, Federal Reserve Agent
at the 2
- ederal Reserve Bank of Kansas City, stating that, in all the circumstances, the Board felt
that it would be preferable to grant the nermit to
Ii. Stuart in order to avoid any unnecessary misunderstandin, by the communities which might Prove
detrimental to the best interests of the banks involved, but it sucgests that the agent endeavor,
in cooperation with the :Astrict Chief National Bank
Examiner, to bring about a correction of those
Matters which have been criticized by the examiner,
and that the Board requests that, when the agent
submits his recommendation as a result of his annual
review of the permit, he report fully as to the progress made in bringing about an improvement in these
matters.
Letter to Mr.
Walsh, Federal Reserve Agent at the :ederal :--,eserve
iicu3k of _
2ellas, stating that the Board has given consideration to the
r°11(3wincy
aPPlication for a permit under the Clayton Act, and that, upon
tile tas.
18 Of the
infollmation before it, feels that the issuance of the
atni;
'
4-4-ed for would be incompatible with the public interest. The
letter
alsn
-- requested
the agent to communicate to the applicant the Board's
tile III)
in the
matter, and to advise the Board promptly as to whether
Plicant
desires to submit any additional data, and, if not, as to
4at 8top,
Or

th c

he

Proposes to take in order to comply with the provisions

1
a-Yt°r1tCt,




The letter stated further that it is requested

•

9/24/34

-21Mat the agent make such investigation as is necessary to determine the
S1113 Of the applicant with respect to the provisions of section 32 of
the
.
414k1n8 Act of 19,)6, and that, if the agent finds that the applicant's

"-s with the national banks involved in his Clayton
Act application

44a the

Citizens Loan (b: Investment Company, Abilene, Texas, come within

the Pr°1713ions of section 32, he is requested to inform the applicant of
the
requirements of that section and as to the procedure in making
a formal
ation for a section 32 permit.
tin Ge0. L. Paxton, Sr., for permission to serve at the same
i_"e aS a director and officer of The Citizens National Bank
a4bilene Abilene, Texas, and as a director of The parmers
L erchants National Bank of Merkel, Merkel, Texas.

4

Approved.
Letters dated September 22, 1934, approved by four members of the

130arci

to
-- applicants for penults under the Clayton Act, advising of approval
their
aPPlications as
follows:
3

Or

*. -.II

Burke, for permission to serve at the same time
ulrector and officer of the Commonwealth Trust Company,
tal
,
°11 City, New Jersey, as a director of The Hamilton I:ational
Zieehawken, .eehawken, New Jersey, and as a director and
• leer or the .eaboard Trust Company, Hoboken, New Jersey.
Mr. /a aiL144rcld V. Cook, for
permission to serve at the same time as
arta rector of The
People's Bank of Hamburgh, Hamburg, Hew York,
u director of The Arst National Bank of Kenmore, Kenmore,
ew 48
york
01._
e ai`44arles JJable,
for permission to serve at the same time as
coh,
rector of The '.:estport Bank and Trust Company, 7;estport,
;;'Itect Cut,
and as a director of The City National Bank of 6outh
talk, .3,csuth
I.orwalk, Connecticut.
x
• di,,°1111 E. RinG, for permission to serve at the same time as
Daliv-ector and
office'
, of The First National Bank and Trust CornOf
Shore, Bay Shera, New York, and as a director of The
-Tationel
Bankof Islip, Islip, New York.




2941
9/24/34

-22-

H. llobbins, ior permlesion to serve at the same time
as a director and officer of The First National Bank and Trust
Company of Bay Shore, Bay 3hore, New York, and as a director of
the South
Side Bank of Bay Shore, Bay Shore, New York.
la% Williamb. Ploch, for permission to serve at the same time
€,ts.a director of the First National Bank and Trust Company of
mityville, New York, and as a director and officer
01 the
National City Bank of Long Beach, Long Beach, New York.
Frederic B. tuawell, for permission to serve at the same
,,I1Le as a director and officer of the Northern Westchester Bank,
rtonah, New
—
York, and as a director of The Barnett National Bank
..von Park, Lyon Park, Florida.
tir•
• ,amuel P. Vatcher, for permission to serve at the same time
s a director of The First National Bank of Bellerose, Bellerose,
c)
3 :
a nd as a director of the Floral Park Ban!:, floral Park,
:
11 71:
iY
y(

Z

Mr

'Ilison C. .:,ysong, for permission to serve at the same time
a.director and
officer of The Williston 1,ational Bank of
n 1-ark, Last Williston, f4ew York, and as a director of
J-11 Harbor
york. National Bank of Port Washincton, Fort Th.shington,
New

3.

A. 14. Northrup, for permission to serve at the same tine as
:sirector and officer of The First National Bank of Ashley,
,IgeY, Pennsylvania, and as a director of The First National
Of Lanville, Danville, Pennsylvania.
Scott, for permission to serve at the sane time as
eilEl'irector of The First National Bank of Frankford, Frankford,
B
ware, and as a cirector and officer of The Bishopville Bank,
sh°/3vil1e, L:aryland.
x„
-c°° E. Slothower, for permission to serve at the same time
t
i a diTector
of the West Shore National Bank of Lemoyne, Lemoyne
orsYlvania, and as a director of the Janson East 2nd Trust
PanY, Harrisburg, Pennsylvania.

Mr.Frd
e
as ,

-

Spellissy, for permission to serve at the same time
director and officer of The Market Street National Bank of
eelPhia,
,
the ,.
thiladelyhia, Pennsylvania, and as a director of
del
stnut Hill Title and Trust Company, Chestnut Hill, PhilaPhial Pennuylvania.
Mr. v. t,
a ai
Stouck, for permission to serve at the same time as
solabrector and officer of The Johnsonburg National Bank, JohnIlre, Pennsylvania, and as a director of the Lock Haven Trust




`3942
9/24/34

-23-

C°14anY, Lock Haven, Pennsylvania.
T. Dennison, for permission to serve at the same time as
a director
and officer of The First I;ational Bank of Falls Creek,
Creek, Pennsylvania, and as a director and officer of The
rookville Bank & Trust Company, Brookville, Pennsylvania.
H. E. Nunemnker, for permission to serve at the snmr! time as
director and officer of The Citizens National Bank of Tobias,
i2obias, iiebraska, and as a dire ctor and officer of The First
National Bank of Friend, Friend, Nebraska.
LI
"
H. J. Southwick, for permission to serve at the same time as
director and aeficer of The First National Bank of Friend,
Priend) iebraska, and as a director of The Citizens National Bank
or
as, Tobias, Nebraska.
Mr. X. L.
McMurtry, for permission to servo at the sane time as
a clirector
of the -!American National Bank in McLean, McLean, Texas,
01
;a3 a director and officer of The Donley County State Bank,
rendon, Texas.
111r. E. I Downer, for permission to serve at the srImP time as
,4 rector of The
First National Bank in Richmond, Richmond,
as a director and officer of the Mechanics Bank of
the 14.nd) Richmond, California, and as a director and officer of
Of rinole, Pinole, California.

Z

x. zo.
a
Van Nuys, for permission to serve at the same time as
Alx_rector
of The Farmers and Merchants National Bank of Los
1:168) Los Angeles, California, and as a director or the Title
urance and Trust Company,
Los Angeles, California.
Mr• 0. n
a dir -0. Voorhis, for permission to serve at the same time as
pas ,eetor of the First Trust and -,avings Bank of Pasadena,
of .8Zella) California, and as a director of the Los Angeles branch
iPederal Reserve Bank of San Francisco, Los An7,eles, Cali-

Approved.
Letters

to applicants for permits under the Clayton Act, advising

tl)Drov.,
their applications as follows:
B.!
,IcCreight, for permission to serve at the same time r-s
butwector and
officer of The Deposit National Bank of DuBois,
buB0.
11
PenusYlvania, and as a director of the Peoples State Bar',
-)
Pennsylvania.

0.




2943
9/24/34
-24Z7 Tames, for permission to serve at the same time as a
Larector and officer of The Farmers and Merchants National Bank
of
Abilene, Abilene, Texas, as a director and officer of The
!st
National BAnk of Baird, Baird, Texas, and as a director
‘ulu officer of
The First NationAl Bank of Winters, Winters,
Texas.

n

H. Sullivan, for permission to serve at the same time as
!director
of the Bardwell State Bank, Bardwell, Texas, and as
ct director
of The Citizens National Beak in Ennis, Fnnis, Texas.
Approved.

Thereupon the meeting adjourned.

°