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

View original document

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

2673
A. meeting of the Executive Committee of the Federal Reserve
Board was held in Washington on Wednesday, September 5, 1934, at 11:10
a. in.
PRESENT:

Mr.
Er.
Mr.
Er.

Thomas, Vice Governor
Hamlin
James
O'Connor

Mr. Morrill, Secretary
M. Bethea, Assistant Secretary
Er. Carpenter, Assistant Secretary
Mr. Vest, Assistant Counsel.
The Committee considered and acted upon the following matters:
Telegram dated September 4, 1934, approved by two members of
the Board, to Mr. Stevens, Federal Reserve Agent at the Federal Reserve Bank of Chicago, reading as follows:
"Your letter September 1. Board approves for your bPrk,
effective immediately, minimum rate of 1% per annum and maximum
rate of 2% per annuza on industrial loan commitments in excess of
six months, mith authority to officers to fix rate on each such
commitment within limits of minimum and maximum rates."
Approved.
Memorandum dated August 28, 1934, from the Committee on
Salaries and Expenditures, submitting a latter dated August 23, from
Er. Helm, Deputy Governor and Cashier of the Federal Reserve Bank of
Kansas City, which requested approval of changes in the personnel
classification plan of the Oklahoma City Branch to provide for a decrease in salary range for the position of "clerk-nessenger" in the
non-cash collection department, and for an increase in salary range
for the position of "mail clerk" in the general service department.
The memorandum stated that the committee had reviewed the proposed

2674
9/5/34
changes and recommends that they be approved.

The recommendation was

approved by three members of the Board on August 30, 1934.
Approved.
Memorandum dated August 29, 1934, from the Committee on Salaries and Expenditures, submitting a letter dated August 25 from Er.
Martin, Governor of the Federal Reserve Bank of St. Louis, which requested approval of changes in the personnel classification plan of
the bank to provide for three new positions in the Federal Farm
Mortgage Corporation Division of the Fiscal Agency Department and a
change in the description of work of the position of "typist-clerk"
in the Fiscal Agency Department.

The memorandum stated that the com-

mittee had reviewed the proposed changes and recommends that they be
approved.

The recommendation was approved by two members of the Board

on August 31, 1934.
Approved.
Letter dated August 28, 1934, approved by three members of
the Board, to Er. Peyton, Federal Reserve Agent at the Federal Reserve
Bank of Minneapolis, reading as follows:
"Reference is made to your letter of August 4, 1934, transmitting a statement of outside business affiliations signed by
Mr. L. D. Reak of your Industrial Loan Department.
"Mr. Real: states that before entering the employ of the
Federal Reserve Bank he was manager and director of the Superior
Brick Corporation. It is not clear from the statement whether
Mr. Roak has resigned these positions, but if he has not and
they are within the scope of the Board's letter of April 29,
1933, X-7425, the Board feels that they should be discontinued,
unless Yr. Reak's employment at the Federal Reserve Bank is of
such a temporary nature that you feel there is justification for
making an exception to the policy stated in the letter of April
29, 1933, that officers and employees of Federal reserve banks

lie

2675
-3-

9/5/34

"occupying responsible positions should give their entire time
and attention to the affairs of the bank and not be identified
with any outside business interests. It will be appreciated if
you will advise the Board in this connection*
"It is assumed, in any event, that you have satisfied yourself that Mr. Reak's service to the corporation does not conflict
with his employment at your bnnk nor in any way impair his efficiency and that the affiliation does not involve any financial or
other relations that may be embarrassing to the bank.
"It is also assumed from the statement of outside business
affiliations submitted by Mr. John E. France, inclosed with your
letter of August 15, 1934, that during the time of his leave of
absence from the St. Paul Association of Commerce, and his employment at your bank, he will render no service whatsoever to
the association in an official capacity or otherwise."
Approved.
Letter to the board of directors of "The Farmington State
Bank", Farmington, Michigan, stating that, subject to the conditions
prescribed in the letter, the Board approves the bank's application
for membership in the Federal Reserve System and for the number of
shares of stock of the Federal Reserve Bank of Chicago to which the
institution will be entitled upon the basis of its capital and surplus
RS of the date upon which its membership becomes effective.
Approved.
Letter to Mr. Case, Federal Reserve Agent at the Federal Reserve Bank of New York, reading as follows:
"Reference is made to your letters of June 19 and July 30,
1934, in reply to the Board's letter of May 18, 1934, regarding
compliance by 'The Adirondack Trust Company', Saratoga Springs,
NOW York, with conditions of membership numbered 5 and 12.
"In connection with condition of membership numbered 5, it
has been noted that the bank has stated that it will be pleased
to obtain such further data as the examiners may require.
"Under the caption Violations of Federal Reserve Act,
Regulations or Conditions of Membership in the analysis of report of examination as of December 28, 1933, reference was made
to the $122,400 mortgage participations outstanding. According

2676
9/5/34

-4-

"to the bank's letter of May 29, 1934, these participations represent participations issued prior to the bank's admission to
membership in mortgages held as trust investments. Inasmuch as
no such certificates have been issued since the bank's admission
to membership, the question of possible violation of condition
numbered 12 is not involved.
"In accordance with your letter of July 30, 1934, this reply is confined to the specific questions in connection with The
Adirondack Trust Company, disregarding the general questions
raised in your letter of June 19, 1934."
Approved.
Letter to Li-. Stevens, Federal Reserve Agent at the Federal
Reserve Bank of Chicago, reading as follows:
"Receipt is acknowledged of Mr. Young's letter of August
10, 1934, with inclosures, regarding the reorganization of 'The
City State Bank of Lowell', Lowell, Michigan, and its proposed
merger with 'Lowell State Bank', Lowell, Michigan, a nonmember
institution, under the charter of The City State Bsillr of Lowell
and the new title of 'State Savings Bank'.
"The Board has reviewed the information submitted, from
which it appears that the transaction will not result in a
change in the general character of the member bank's assets or
broadening in the functions formerly exercised, such as will
tend to effect materially the standard required as a condition
of membership. It has also been noted that your counsel is of
the opinion that the merger will not result in any change in
the corporate status of the bank which will affect its membership
in the Federal Reserve System. The Board, therefore, interposes
no objection to the transaction."
Approved.
Letter dated September 4, 1934, approved by two members of
the Board, to Mr. O'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 First National Bank of Bellerosel, Bellerose, New York,
from $100,000 to .$)25,000, pursuant to a plan which provides that
the bank's capital shall be increased by $100,000 of preferred
stock to be sold to the Reconstruction Finance Corporation and/Or
others, that the released capital shall be used to eliminate a

2677
9/5/34

-5-

corresponding amount of the least desirable assets of the bank,
and that the funds received from the sale of preferred stock
shall be used in reducing the bank's liability for borrowed
money, all as set forth in your memorandum of August 24, 1934."
Approved.
Letter to Ir. O'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
Lynbrook National Bank Z'.c Trust Company', Lynbrook, New York,
from $150,000 to $50,000, pursuant to a plan which provides
that the bank's capital shall be increased by the sale of
4'265,000 of preferred stock to the Reconstruction Finance Corporation and/Or others, and that the released capital shall be
used to eliminate a corresponding amount of the least desirable
assets, all as set forth in your memorandum of August 21, 1934."
Approved.
Letter dated August 30, 1934, approved by three members of
the Board, to Mr. O'Connor, Comptroller of the Currency, reading as
follows:
"In accordance with your recommendation, the Federal Reserve
Board approves a reduction in the cannon capital stock of 'The
Farmers National Bank of Princeton', Princeton, Kentucky, from
,;75,000 to t30,000, pursuant to a plan which provides that the
bank's capital shall be increased by the sale of 425,000 of preferred stock to the Reconstruction Finance Corporation, and that
the released capital, a portion of the surplus and a voluntary
contribution of $10,000 to be made by local interests, shall be
used to eliminate approximately $65,000 of substandard assets,
all as set forth in your memorandum of August 10, 1934.
"This approval supersedes the Board's approval of January
25, 1934.
"The latest report of examination of the subject bank includes severe criticism of the trust department. It is understood, however, that this matter has been receiving the attention
of your office and that corrections have been or are being made
which will place that department in a generally satisfactory condition.
"It is also understood from information in your files that
the management of this institution, which was severely criticised

2678
9/04
"by your examiner, is being strengthened by the appointment of
a new president."
Approved.
Letter to Mr. O'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
Union City National Bank', Union City, Michigan, from $50
:
000
to $25,000, pursuant to a plan which provides that the bank's
capital shall be increased by the sale of $25,000 of preferred
stock to the Reconstruction Finance Corporation and that the released capital, together with a portion of surplus and undivided.
profits, shall be used to eliminate approximately $40,000 of unsatisfactory assets, all as set forth in your memorandum of
August 20, 1934."
Approved.
Letter dated September 4, 1934, approved by two members of
the Board, to Mr. O'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
First National Bank of Hereford', Hereford, Texas, from $50,000
to $25,000, pursuant to a plan which provides that the bank's
capital shall be increased by the sale of $25,000 of preferred
stock to the Reconstruction Finance Corporation, and that the
released capital shall be used in eliminating or reducing a corresponding amount of undesirable assets, all as set forth in
your letter dated August 21, 1934."
Approved.
Telegram to Mr. Case, Federal Reserve Agent at the Federal
Reserve Bank of New York, stating that the Board has given consideration to the application of the "Silver Springs Shareholders, Inc.",
Silver Springs, New York, for a voting permit under the authority of
section 5144 of the Revised Statutes of the United States, as amended,

2679
9/04

-7-

entitling such organization to vote the stock which it awns or controls
in 'The Silver Springs National Bank', Silver Springs, New York, and
has authorized the issuance of a limited permit to the applicant, subject to the following conditions:
"Prior to the issuance of the United voting permit authorized herein, applicant shall agree as follows:
First. That within such time as shall be fixed by the
Federal Reserve Agent at the Federal Reserve Bank of New
York (hereinafter referred to as the Federal Reserve Agent),
and in any event prior to December 1, 1934, the undersigned
will charge off or otherwise eliminate from its assets (a)
carrying value of subsidiary bank's stock in excess of the
adjusted value of such stock, amounting to $92,193.75 after
giving effect to items (a) and (d) in Second below and allowing credit for net appreciation in securities as shown by the
report of examination made by a national bank examiner as of
May 12, 1934, and (b) deferred organization expenses amounting
to $326.14;
Second. That the undersigned mill cause The Silver
Springs National Bank, if it has not already done so, to
charge off or otherwise eliminate from its assets (a) all estimated losses in loans and discounts, (b) all depreciation
in stocks and defaulted securities, (c) all depreciation in
securities not in the four highest grades as classified by
a recognized investment service organization regularly engaged in the business of rating and grading securities, and
(d) all other losses, based upon the report of examination
made by a national bank examiner as of May 12, 1934, or a
more current report if such is available, or with respect
to items (b) and (c) a current appraisal of the listed securities, the amounts and extent of the charge-offs or eliminations to be satisfactory to the Federal Reserve Agent;
Third. That, until such time as in the opinion of the
Comptroller of the Currency and the Federal Reserve Agent
all estimated losses have been provided for and earnings are
sufficient to justify the payment of dividends, the undersigned will cause The Silver Springs National Bank to conserve its earnings and not declare or pay dividends on its
common stock without first receiving the approval of the
Comptroller of the Currency and the Federal Reserve Agent;
and
Fourth. That the undersigned will make, or will cause
The Silver Springs National Bank to make, such corrections
as shall be requested by the Federal Reserve Agent in order
to remove the cause of any criticism relating to such bank's

2680
9/5/34

-8"practices, policies, management or financial condition
which has been made by the appropriate supervisory authorities."

and for the following purposes:
"To elect directors of such bank at the annual meetings of
shareholders, or at any adjournments thereof, at any time prior
to February 1, 1935, and to act thereat upon such matters of a
routine nature as are ordinarily acted upon at the annual meetings of such bank."
The telegram authorized the agent to have prepared by counsel for the
Federal reserve bank, and to issue to the Silver Springs Shareholders,
Inc., a limited voting permit in accordance with the telegram, and
requested that he keep in touch with the affairs of the applicant
and the bank, especially with respect to management, and to advise
the Board at a later date of his reoommendation as to the granting
of a general voting permit.
Approved.
Letter dated September 1, 1934, approved by two members of
the Board, to the Federal Reserve Agents at all Federal Reserve Banks,
reading as follows:
"In order that the Board may be kept currently informed as
to the activities of your bank with regard to applications for
industrial advances or for commitments to make industrial advances, it will be appreciated if you will submit to the Board
reports as of close of business each Wednesday on Forms B-22
and B-22a, a supply of which is inclosed.
"In addition to the information required to be shown on
BD-4 schedules covering industrial advances and commitments,
outlined in the Board's letters B-1003 and B-1004 of July 25,
please show in the case of each advance and each commitment the
character of business of the borrower and the gross business
receipts of the borrower during each of the past five years.
Please also furnish the Board with corresponding data covering
loans and commitments for which schedules have already been sent
to the Board.
"It will also be appreciated if you will furnish the Board

2681
9/5/34
"a statement shoving the following information as of close of
business Wednesday, September 5, for each advance (as distinguished from commitment) which has been approved by your bank
but under which no disbursements have been made: (1) Name and
location of borrower, (2) character of business, (3) amount to
be advanced by Federal Reserve bank, (4) whether the advance is
to be made direct or through a financing institution, (5) gross
business receipts during each of past five years. It is further requested that you submit a report as of each Wednesday
thereafter showing similar information for each advance approved during the week but on which no disbursements have been
made.
"In order that the Board may be more fully advised as to
the effect which the activities of the Federal Reserve banks
under Section 13b are having on the general credit situation,
it will be appreciated if you will write the Board a letter as
of each Wednesday night giving such details as are available regarding each industrial loan or commitment made by financing
institutions that would probably not have been made had the
Reserve banks no authority to make industrial loans. Kindly
also include in this letter such additional information as you
have been in the habit of sending the Board on Saturdays in response to the Board's telegram Trans 2044 of July 21.
"The Board mould appreciate receiving the reports and information called for above on the Monday morning following the
Wednesday report date."
Approved.
Letter dated September 4, 1934, approved by two members of
the Board, to Mr. Williams, Federal Reserve Agent at the Federal Reserve bank of Cleveland, reading as follows:
"Reference is made to your letter of August 20, 1934, concerning loans made by lwriking institutions under the provisions
of Section 2, Title I of the National Housing Act and, particularly, the classification of such loans by examiners for the
Federal Reserve Banks.
"The National Housing Act provides for the insurance of
such loans, under the conditions imposed, to an amount not to
exceed 20 per cent of the total amount of the loans, advances
Of credit, and purchases made by each approved financial institution for the prescribed purposes.
"Under Section 3, Title I of the Act, the Administrator is
authorized to make loans to institutions insured under Section 2,
upon the security of obligations which meet the requirements prescribed under Section 2, for the full face value of the obligations offered as security, subject to such rates, terms and

2682
9/5/34

-10-

"conditions as the Administrator shall determine. Bulletin No.
1, issued by the Federal housing Administration August 10, 1934,
contains the following statement:
'Liquidity is assured by an agreement of the Federal
Housing Administration incorporated in the Contract of Insurance, to advance cash to any financial institution demonstrating the reed for same, at any time, up to the full face
value of all outstanding insured notes in good standing.'
"It is further explained in the Bulletin that such rediscount facilities are not intended for use in order to obtain
government money to lend but are to assure the ability of the
financial institution to raise cash against such receivables in
case of emergency.
"The Board feels that the examiners for the Federal Reserve
Baits should be instructed that no part of the loans made under
the provisions of Section 2, Title I of the National Housing
Act should be classified as slow., doubtful, or loss so long as
the insurance provided by the Federal housing Administration
adequately covers the loans or portions thereof which might
otherwise be so classified. It is understood that similar instructions have been issued by the Comptroller of the Currency
to all national bank examiners.
"It is understood that, if you have not already done so,
you will receive copies of the regulations of the Federal Housing Administration from that organization."
Approved, together with a letter, also
dated September 4, 1934, to the Federal reserve agents at the other Federal reserve
banks, transmitting copies of the letter to
Ir. Williams.
Letters dated August 30, 3934, approved by three members of
the Board, to applicants for permits under the Clayton Act, advising
of approval of their applications as follows:
Er. Oliver S. Eames, for permission to serve at the same time
as a director of The Fall River Morris PlLn Company, Fall River,
Massachusetts, and as a director and officer of The Fall River
National Bank, Fall River, Massachusetts.
Mr. Thomas E. Lahey, for permission to serve at the same time
as a director of The Fall River Morris Plan Company, Fall River,
Massachusetts, and as a director of The Fall River National Bank,
Fall River, Nassachusetts.
Mr. Asa A. Mills, for permission to serve at the same time as a
director of The Fall River Morris Plan Company, Fall River,

2683
9/5/34

-11-

Massachusetts, and as a director and officer of The Fall River
National Bank, Fall River, Massachusetts.
Ir. Everett B. Mills, for permission to serve at the same time
as a director of The Fall River Morris Plan Company, Fall River,
Massachusetts, and as a director of The Fall River National
Bank, Fall River, Massachusetts.
Mr. Everett N. Slade, for permission to serve at the same time
as a director and officer of The Fall River Morris Plan Company,
Fall River, Massachusetts, and as a director of The Fall River
National Bank, Fall River, Massachusetts.
Approved, together with a letter also dated
August 30, 1934, and approved by three members of
the Board, to Er. Curtiss, Federal Reserve Agent at
the Federal Reserve Bank of Boston, inclosing copies
of the permits; suggesting that he advise Messrs.
Eames, A. A. Mills and E. B. Mills that it is with
the expectation that they will improve their attendance at directors' meetings of the Morris Plan Company that the permits have been granted, and
requesting that, when the agent submits his recommendations as a result of his annual review of the
permits, he report fully as to the attendance of
these directors at directors' meetings.
Letters dated August 29, 1934, approved by three members of
the Board, to applicants for permits under the Clayton Act, advising
of approval of their applications as follows:
Mr. James M. Cavanagh, for permission to serve at the same time
as a director and officer of the Federal Trust Company, Newark,
New Jersey, and as a director of the Kearny National Bank, Kearny,
New Jersey.

Yr. C. W. Feigenspan, for permission to serve at the same time
as a director and officer of the Federal Trust Company, Newark,
New Jersey, and as a director and officer of the Kearny National
Bank, Kearny, New Jersey.
Mr. Albert T. Martin, for permission to serve at the same time
as an officer of the Federal Trust Company, Newark, New Jersey,
and as a director of the Kearny National Bank, Kearny, New
Jersey.
Er. Frank C. Mindnich, for permission to serve at the same time
as a director and officer of the Federal Trust Company, Newark,

2684
9/5/34

-12-

New Jersey, ard as a director and officer of the Kearny National
Bank, Kearny, New Jersey.
Approved, together with a letter, also
dated August 29, 1934, and approved by three
members of the Board, to Mr. Case, Federal
Reserve Agent at the Federal Reserve Bank of
Now York, reading as follows:
"There are inclosed copies of Clayton Act permits issued
to Eessrs. Frank C. Mindnich, C. W. Feigenspan, James M.
Cavanagh and Albert T. Martin to serve as directors and/or officers of the Federal Trust Company, Newark, New Jersey, and
Kearny National Bank., Kearny, New Jersey.
"In considering these applications it was noted that plans
for strengthening the capital structure and eliminating undesirable assets in the Federal Trust Company had been formulated,
but the information now in hand does not indicate that any
definite conclusions have been reached with respect to the rehabilitation of Kearny National Bank. It appears that in 1931
the Federal Trust Company and allied interests organized Kearny
National Bank to take over The Kearny National Bank which was
insolvent. The report of examination of Kearny National Bark,
as of April 29, 1934, indicated doubtful assets, estimated losses
and securities depreciation approximately $174,000 in excess of
the bank's capital, surplus and undivided profits plus voluntarily subordinated deposits. Assets classed as slow amounted
to $461,000 and other real estate owned totaled $151,000, of
which 410,000 was estimated as loss but of which no part was
classed as slow or doubtful. Because of the apparently serious
situation in Kearny National Bank, the Board suggests that you
endeavor, in cooperation with the appropriate supervisory
authorities, to bring about a rehabilitation of that bank.
"It was also noted that loans of the Federal Trust Company
in the amount of $568,000 to Director Feigenspan and his interests were classed as slow in the report of examination of the
bank as of May 22, 1934, and that portions of the loans of the
Federal Trust Company to the other applicants involved, or their
families, were classed as loss. In granting the permits the
Board has given consideration to the financial condition of the
Feigenspan interosts and the earning capacity of the other applicants as set forth in the report of examination, and to the
favorable comments concerning the management of each of the two
banks involved contained in the reports of your office accompanying the applications. It is felt, however, that careful attention should be given to the situation with regard to the indebtedness of the applicants to the Federal Trust Company.
"The Board requests that when you submit your recommendations as a result of your annual review of these permits you
report fully as to the progress made in bringing about improvement

2685
9/5/34

-13-

"in the condition of Kearny National Bank and in the lines of
credit extended by the Federal Trust Company to the applicants
who are now receiving permits."
Letter dated August 30, 1934, approved by three members of
the Board, to Mr. Case, Federal Reserve Agent at the Federal Reserve
Bank of New York, inolosing the following Clayton Act permit for
transmission to the applicant; suggesting that the agent advise the
applicant of the Board's views as expressed in the letter with regard
to attendance at directors' meetings; and requesting that, when he
submits his recommendation as a result of his annual review of the
permit, he report fully as to the applicant's attendance at directors' meetings of the Roxbury banks
Mr. Charles C. Huitt, for permission to serve at the same time
as a director and officer of the Ampere Bank and Trust Company,
East Orange, New Jersey, as a director and officer of The Dunbar
National Bank of New York, New York, New York, and as a director
and officer of The National Bank of Roxbury, Roxbury, New York.
Approved.
Letter dated August 29, 1934, approved by three members of
the Board, to Mr. Austin, Federal Reserve Agent at the Federal Reserve
Bank of Philadelphia, inclosing the following Clayton Act permit, and
requesting that the agent withhold delivery of the permit until he is
satisfied that Section 8A of the Clayton Act does not apply to the
applicant's service as treasurer of Carroll Securities, Incorporated,
Trenton, New Jersey, in which event the agent is authorized to transmit the permit to the applicant.

The letter also stated that there

was some hesitance on the part of the Board in deciding to grant this
permit because of the past record of the banks involved and particularly

2686
9/5/34
that of the State bank and the fact that the applicant no doubt had
a share in the responsibility therefor, and the Board desires that
when the agent submits his report as a result of his annual review
of the permit he advise the Board specifically with reference to the
quality of the services rendered by Mr. Haverstick and whether, in the
agent's opinion, he has measured up fully to his responsibilities as
a director of each bank and as a member of the executive committee of
the State bank.
Mr. Samuel Haverstick, for permission to serve at the same time
as a director of The Yardville National Bs*, Yardville, New
Jersey, and as a director of the Hanover-Capital Trust Company,
Trenton, New Jersey.
Approved.
Letter dated August 30, 1934, approved by three members of
the Board, to the following applicant for a permit under the Clayton
Act, advising of approval of his application as follows:
Mr. Thomas P. Littlepage, for permission to serve at the same
time as a director and officer of the Liberty National Bank of
Washington, Washington, D. C., and as a director and officer of
the Bank of Bowie, Bowie, Maryland.
Approved, together with a letter dated August
30, 1934, also approved by three members of the
Board, to Mr. Hoxton, Federal Reserve Agent at the
Federal Reserve Bank of Richmond, reading as follams:
"On May 28, 1934, the Board advised you that it had given
consideration to the application of Mr. Thomas P. Littlepage,
Union Trust Building, Washington, D. C., for permission under
the provisions of the Clayton Act to serve at the same time as
director of Liberty National Bank of Washington, Washington,
D. C., and as director of Bank of Bowie, Bowie, Maryland, and
upon the basis of the information before it, held that the issuance of the permit applied for would be incompatible with
the public interest. The Board's action upon the application
was based largely upon the nature and use which the applicant

2687
9/5/34
"and his interes
ts had made of the credit facilities of the
Liberty National Bank and the Bank of Bowie and upon the involved condition of the applicant's financial affairs. Subsequently, in accordance with Section V (g) of Regulation L,
additional facts and arguments not appearing in his application
and accompanying forms were submitted for the consideration of
the Board. From the additional information submitted by the
applicant it appears that Mr. Littlepage is reducing his indebtednees and that both banks desire the continuation of his
service.
"In view of the foregoing and in accordance with your
recormiendation, the Board has approved the application of Yr.
Littlepage and there is inclosed a copy of the permit covering
his service as director and officer of Liberty National Bank
of Washington, Washington, D. C., and as director and officer
of Bank of Bowie, Bowie, haryland. The Board suggests, however,
that you review this case prior to December 1, 1934, in the
light of the applicant's financial affairs and his indebtedness
to both banks as revealed by current examination reports, and
report fully thereon as to your conclusions.
Letter

dated August 30, 1934, approved by three members of

the Board, to kr. Peyton, Federal Reserve Agent at
the Federal Reserve Bank of Minneapolis, inclosing the following Clayton Act
permit
for transmission to the applicant; suggesting that
the agent advise
the applicant that it is with the expectation that
he will improve
his attendance at directors' meetings of the nationa
l bank that the
Permit has been granted; and stating that the Federal
Reserve Agent
at the Federal Reserve Bank of Chicago
has been requested, when he
submits his recommendation as a result of his annual review
of Mr.
Mesterman's permit, to report fully as to the applicant's attendance
at directors' meetings of the national bank:
Er. F. G. Westerman, for permission to serve at the same time
as a director and officer of The Orange City National Bprk,
Orange City, Iowa, and as a director of the Citizens State Bank,
Montgomery, Minnesota.

Approved.

2688
9/5/34

-16Letter dated August 31, 1934, approved by two members of the

Board, to Yr. McClure, Federal Reserve Agent at the Federal Reserve
Bank of Kansas City, inclosing the following Clayton Act permit, and
requesting that the agent ascertain the status of the charges against
Mr. Mullendore in connection with a possible violation by him of Section 22(g) of the Federal Reserve Act; and stating that, in the event
the case has been duly considered and closed without prosecution,
the agent is authorized to release the Clayton Act permit to the applicant.

The letter also requested that, when the agent submits his

recommendation as a result of his ennual review of the permit, he
report fully as to whether Mr. Mullendore has further violated any
provisions of the law.
Mr. R. F. Mullendore, for
as a director and officer
Hominy, Hominy, Oklahoma,
National Bank, Cleveland,

permission to serve at the same time
of The National Bank of Commerce of
and as a director of The Cleveland
Oklahoma.
Approved.

Letter dated August 31, 1934, approved by two members of the
Board, to Er. McClure, Federal Reserve Agent at the Federal Reserve
Bank of Kansas City, inclosing the following Clayton Act permit, stating that the Board understands that the First National Bank in Blackwell is in process of organization and that the organization plans
have

been approved by the Comptroller of the Currency; and requesting

that the agent hold the Clayton Act permit until the new Blackwell
bank has been granted a charter and has opened for business, at which
time he is authorized to release the permit to Ir. Goodson:
Mr. Ole. Goodson, for permission to serve at the sane time as a

2689
9/5/34

-17-

director and officer of the First National Bank in Blackwell,
Blackwell, Oklahoma, and as a director of The Stillwater National Bank, Stillwater, Oklahoma.
Approved.
Letters dated August 30, 1934, approved by three members of
the Board, to applicants for permits under the Clayton Act, advising
of approval of their applications as follows:
Er. Marry P. Gifford, for permission to serve at the same time
as a director of The Salem Morris Plan Company, Salem, Massachusetts, as a director of The Warren National Bank of Peabody,
Peabody, Massachusetts, and as a director of the Day Trust Company, Boston, Massachusetts.
Mr. Carl F. A. Morse, for permission to serve at the same time
as a director and officer of The Merchants National Bank of
Salem, Salem, Massachusetts, and as a director and officer of
The Salem Morris Plan Company, Salem, Massachusetts.
Mr. John A. Hunnevell, for permission to serve at the sane
time as a director and officer of The Appleton National Bank of
Lowell, Lowell, Massachusetts, and as a director and officer of
The Lowell Morris Plan Company, Lowell, Massachusetts.
Mr. James H. Leighton, for permission to serve at the same time
as a director of The Appleton National Bank of Lowell, Lovell,
Massachusetts, and as a director of The Lowell Morris Plan Company, Lowell, Massachusetts.
- . Marden, for permission to serve at the same time
Er. Robert 2
as a director of The Appleton National Bank oC Lowell, Lovell,
Massachusetts, and as a director and officer of The Lovell
Morris Plan Company, Lowell, Massachusetts.
Nk.. George id. Runels, for permission to serve at the same time
as a director and officer of The Appleton National Dank of
Lowell, Lovell, Massachusetts, and as a director and officer
of The Lowell Morris Plan Company, Lovell, Massachusetts.
Mr. Fred D. McGregor, for
as a director and officer
Haverhill, Massachusetts,
National Bank, Haverhill,

permission to serve at the same time
of the Haverhill Morris Plan Company,
and as a director of The Haverhill
Massachusetts.

Mr. T. I. Hare Povel, for permission to serve at the same time
as a director of the Newport Trust Company, Newport, Rhode

2690
9/5/34

-18-

Island, and as an employee of The Providence National Bank,
Providence, Rhode Island.
Mr. Robert H. Russell, for permission to serve at the sane time
as a director of the Holyoke National Bank, Holyoke, Massachusetts, and as a director of the Morris Plan Company, Holyoke,
Massachusetts.
Mr. E. As Johnson, for permission to serve at the sane time as
an employee of The First National Bank in Sioux City, Sioux
City, Iowa, and as a director of The Orange City National Bank,
Orange City, Iowa.
Mi. W. S. Slagle, for permission to serve at the same time as a
director of The Orange City National Bank, Orange City, Iowa,
and as a director and officer of the Alton Savings Bank, Alton,
Iowa.
Approved.
Letters dated August 30, 1934, approved by two members of
the Board, to applicants for permits under the Clayton Act,
advising
of approval of their applicaLlonsas follows:
Mr. W. P. Dwelle, for permission to serve at the same time as a
director of the Cedar Point State Bank, Cedar Point, Kansas,
and as a director and officer of The Farmers and Drovers National Bank of Marion, 'Marion, Kansas.
Mr. J. J. Klenda, for permission to serve at the same time as a
director and officer of the Pilsen State Bank, Pilsen, Kansas,
and as a director of The Farmers and Drovers National Bank of
Marion, Marion, Kansas.
Mr. T. W. Spachek, for permission to serve at the same time as
a director and officer of the Pilsen State Bank, Pilsen, Kansas,
and as a director and officer of The Farmers and Drovers National Bank of Marion, Marion, Thnsas.
Mr. George Yoxall, for permission to serve at the same time as
a director and officer of The Stockton National Bank, Stockton,
Kansas, and as a director of the Rooks County State Bank, Woodston, Kansas.
Er. 0. G. Thomas, for permission to serve at the same time as
a director and officer of the Bank of Ringgold, Ringgold, Louisiana, and as a director of The First National Bank of Arcadia,
Arcadia, Louisiana.

Approved.

2-691
9/5/34

-19Letter dated August 31, 1931, approved by three members of

the Board, to the following applicant for a permit under the Clayton
Acts advising of approval of his application as follows:
hr. Harold J. Roig, for permission to serve at the same time as
a director of the Grace National Bank of New York, New York,
New York, and as a director of Grace Brothers & Company, Ltd.,
London, England.
Approved.
Letters dated August 31, 1934, approved by two members of the
Board, to applicants for permits under the Clayton Act, advising of
approval of their applications as follows:
Mr. A. C. Adams, for permission to serve at the same time as a
director and officer of The Cleveland National Bank, Cleveland,
Oklahoma, and as a director and officer of The National Bank of
Commerce of Hominy, Hominy, Oklahoma.
Mr. James E. Berry, for permission to serve at the same time as
a director and officer of The Stillwater National Bank, Stillwater, Oklahoma, as a director and officer of The First National
Bank of Cushing, Cushing, Oklahoma, and as a director of The
Farmers State Bank, Ripley, Oklahoma.
Mr. Thomas N. Berry, for permission to serve at the same time as
a director and officer of The First National Bank of Cushing,
Cushing, Oklahoma, as a director and officer of The Stillwater
National Bank, Stillwater, Oklahoma, and as a director and officer of The Farmers State Bank, Ripley, Oklahoma.
Mrs. E. J. Blank, for permission to serve at the same time as a
director of The First National Bank of Cushing, Cushing, Oklahoma, and as a director of The Farmers State Bank, Ripley,
Oklahoma.
Mr. L. D. Edgington, for permission to serve at the same time as
a director and officer of The First National Bank at Ponca City,
Ponca City, Oklahoma, and as a director and officer of The National Bank of Commerce of Hominy, Hominy, Oklahoma.
Ir. G. K. Laughlin, for permission to serve at the same time as
a director and officer of The First National Bank of Cushing,
Cushing, Oklahoma, and as a director and officer of The Farmers
State Bank, Ripley, Oklahoma.

2692
9/5/34

-20-

Mr. E. C. Mullendore, for permission to serve at the sane time
as a director and officer of The Cleveland National Bank, Cleveland, Oklahoma, as a director and officer of The First National
Bank of Cushing, Cushing, Oklahoma, and as a director of The
Stillwater National Bank, Stillwater, Oklahoma.
kr. E. C. Mullendore, Jr., for permission to serve at the same
time as a director of The First National Bank of Pamnee, Pawnee,
Oklahoma, and as an officer of The Cleveland National Bank,
Cleveland, Oklahoma.
Approved.
There was read a letter dated August 30, 1934, from Ur.
Francis Marion Law, President of the American Bankers Association,
suggesting that consideration be given by the Board to the advisability of calling a meeting of the governors of Federal reserve banks
during the annual convention of the American Bankers Association,
which will be held in Washington on October 22-25, 1934.
It 'was decided that Mr. Thomas should discuss the
suggestion with the governors of Federal reserve banks
who will moot in Washington tomorrow as members of the
Legislative Committee, and that, if they favor the
suggestion, Mr. Thomas should take the matter up with
Governor Calkins, Chairman of the Governors' Conference.
Er. Thomas reported that, in accordance with the action
taken at the meeting of the Executive Committee of the Board on
August 29, 1934, he had discussed with representatives of the Federal
Deposit Insurance Corporation and Mr. Karl A. Crowley, Solicitor of
the Post Office Department and other representatives of that department, the matter of the Postal Savings System permitting the withdraw,al, without notice, of Postal Savings deposits and paying the accrued
interest thereon.

He stated that.Mr. L. E. Birdzell, General Counsel

Of the Federal Deposit Insurance Corporation, had prepared a

2693
9/5/34

-21-

memorandum to the effect that the payment of interest in such cases
is in violation of section 8 of the Postal Savings Act, as amended by
the Banking Act of 1933; that this memorandum had been submitted to
the representatives of the Post Office Department, together with a
copy of the Board's Regulation Q and of the Board's letter of May 8,
1934 (X-7890), to all Federal reserve banks, with regard to the classification of time and savings deposits; and that while no decision
vas reached at the conference, the representatives of the Post Office
Department had stated that they would study the matter and advise the
Board of the decision reached.
In connection with the above, reference was made to the decision reached at the meeting of the Executive Committee of the Board
on August 29, 1934, that no change should be made at this time in the
maximum rate of interest of

on time and savings deposits prescribed

in the Board's Regulation gio and the question was raised as
to uhether
the Federal reserve banks should be advised of that decision.
Upon motion by Mr. O'Connor, the Secretary was requested to prepare a letter to
all Federal reserve agents advising of the
decision.
Er. Thomas stated that, following the meeting of the Executive
Committee on August 29, 1934, he had taken up with the West Publishing
Company the question of the publication of a revised edition of the
Federal Reserve Act, and had been advised that it would not be possible for representatives of the company to come to Washingto
n to
confer on the matter until the latter part of September.

He said

thr1J,,
- in view of this informPtion, he had conferred again
with

2694
9A/34

-22-

Wyatt, General Counsel, and the decision had been reached, subject to
the approval of the Board, that the Legal Division should undertake
immediately the work of preparing a revised edition of the Act which
will be printed as promptly as possible, with the understanding that
a representative of the West Publishing Company will be invited to
come to Washington in order that the Board may have the benefit of
his views. It was also proposed, Mr. Thomas said, that the Legal Division begin immediately to bring the Board's Digest of Rulings up to
date in order that it may be published as soon as possible.
After discussion, the procedure suggested by Mr.
Thomas was approved, with the understanding that
when the revised editions of the Act and Digest of
Rulings are ready to be printed, the procedure to be
followed in arranging for printing will be submitted
to the Board for approval.
Ur. Morrill stated that Mr. Frederick P. h. Siddons, President
of the District of Columbia Bankers' Association, had called on the
telephone and stated that a meeting of the members of the association
is being planned for September 24, to which will be invited the directors of the banks represented, for the purpose of an informal discussion of the requirements of the Securities Exchange Act of 1934; that
the meeting will not be public; that Mr. James H. Landis, Commissioner
Of the Securities Exchange Commission, has accepted an invitation to
attend; and that the association would like to have a member of the
Board's staff present to explain the provisions of the act which are
administered by

Federal Reserve Board.

Mr. O'Connor moved that Mr. Thomas be requested
to attend the meeting and to take with him such

2395
9/5/34
members of the Board's staff as he thinks desirable.
Carried.
At the request of Li-. Thomas, there was read a letter dated
August 31, 1934, from Governor Black, together with an inclosed letter received by him from the President of the Mandeville
Mills, Carrollton, Georgia, expressing appreciation of the expeditious manner
in which the company's application for an industrial loan was handled
by the Federal Reserve Bank of Atlanta.
Noted.
Ir. Thomas stated that on August 16, 1934, he had sent to the
Secretary of the President, at the latter's request, a tabulation
Showing the amount of industrial loans and commitments approved by
the industrial advisory committees and the
Federal reserve banks and
the amount actually disbursed by the banks
in connection with such
loans

and that he had prepared today a rough draft of a letter to

the President giving additional informat
ion received from the Federal
reserve banks.

The draft of letter was read and Mr. Thomas stated

that he had not had an opportunity to check the accuracy
of the statements contained in the letter against the information received
from
the Federal reserve
banks.
Mr. O'Connor moved that the letter, with such
changes as are found necessary to bring it into
agreement with the information received from the
Federal reserve banks, be approved.
Carried.
Er. Thomas was authorized to send a copy of
the letter to the Secretary of the Treasury for
his information.

2696
9/5/34

-24hr. Thomas raised for further consideration the question

whether there are any additional steps which the Board could take to
aid the industrial loan program.

The matter was discussed and the

suggestion made that the Board devise SOMO method of advising the
public promptly of the activities of the Federal reserve banks in connection with industrial loans, as well as other important matters concerning the Federal Reserve Board and the Federal Reserve System.
At the conclusion of the discussion, Ur. O'Connor
moved that Er. Thomas be requested to give consideration to the suggestion and submit recommendations to
the Board as to the advisability of, and the method
to be used in, making public currently information
with regard to important matters concerning the Federal
Reserve System.
Carried.
Mr. Morrill reported that the National Capital Park and Planning Commission had advised that the survey to be made of the site
for the Board's building on Constitution Avenue is now under way, and
that a report probably will be received by the Commission tomorrow;
that the cost of outstanding obligations of the Treasury for the purPoses of the agreement made by the Board with the Secretary of the
Treasury is being determined; and that it is hoped that a report will
be submitted to the Board shortly.
Er. Morrill said also that reports
had been received showing the borings made on the lots north and south
of the building site, and that the National Park Service had suggested
that when title is transferred, the Board authorize it to arrange for
sUch borings on the building site as may be necessary to determine
foundation requirements.

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

FRASER