19340614_Minutes.pdf

17E35

A Meeting of the ederal eserve Board was held in Aishington on

1111118daY3 June 14, 1934, at 10:40 a. m.

PRESENT:

Governor

te Pederal

Reserve

C°14PtulY, Nev York,

beresilip in the

1111leh had been

1)413ared thereon by

had been submitted

Mr. Black, GovernorMr. HamlinMr. MillerMr. JamesMr. _homes

Mr. Morrill, SecretaryMr. Carpenter, Assistant SecretaryYr. Eartin, Assistant to the GovernorYr. iyatt, General UounselET. raulger, uhief of the Division

of ExaminationsMr. Leonard, Federal Reserve Examiner

ilingfield, Assistant 'Jounsel

Black referred to the discussions at recent meetings of

Board with regard to the City Bank Tamers Trust

New York, and he stated that an application for men-

Federal Reserve System has been received from the company,

reviewed by the Division of Examinations and a

the

memorandum

division under date of June 12, 1934, copies of

to all members of the Board prior to this meet-

12-so called attention to, and there was read, a memorandum4tted,

Ulle 13 from 1,:r. Wingfield, Assistant Counsel, in connection with

41)11c4tio,,,

After a discussion of the questions presentedia Mr. Wingfield's memorandum, Mr. Thomas movedthat the application of the City Bank Farmers TrustC°171PanY for membership in the Federal Reserve System,4aI1d for the appropriate amount of stock in the Fed-eral Reserve fank of New York, be approved, subjectto the conditions recommended by the Division ofxelalnations and the Legal Division.

Carried, Mr. James voting "no".

The '

"1,,4J-11Ute3 of the meetings of the Federal Reserve Board held on

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1786

6/14/34-2-

29) and 31, and June 1, 1934, were approved.

The minutes of the meetings of the Executive Committee of the

Reserve Board held on Tune 4, and 6, 1934, were approved and the

recorded therein were ratified unanimously.

The Board then considered and acted upon the following matters:

Telegram dated June 13, 1934, from Mr. Curtiss, Chairman of theFederal.

'Iv-serve Bank of Boston, advising that, at a meeting of the board

Federal

letiots

Or

-.Lrectors on that date, no change was made in the bank's existingSee

of rates of discount and purchase.

'Nithout objection, noted with approval.

Renewal bond, in the amount of 0_00,000, executed on Tune 1, 1934,bY /fir. a. s. Wood as Federal Reserve Agent at the Federal Reserve Jqink of2t, Louis.

Approved.

Telegram dated June 13, 1934, approved by five members of theBoazy.Ato

;\I• L,ase, Federal Reserve Agent at the Federal Reserve Bank ofyove.

reading as follows:

assit: swerinr: your letter June 8, 1934 relating to temporaryxxatruient someone from your bank to assist in Boards Division ofter ,,,,i,t!tions$ Board appreciates your spirit of cooperation in .mat-

1:7t will be glad to have you send John H. Hartley to Washin-Y isttearlicst available date with understanding, as outlined in

aecsa "er of June seventh, that Board will reimburse bank for his174ilesrY traveling expenses, salary and six dollars per dienin Washington. Kindly advise when he will report."

Approved.

Tel dated June 13, 1934, approved by five members of the

to V.r. Peyton, Federal Rese--rve Agent at the

Federal Peserve Bankcrt 14

444.11cai3, reeding as follows:


17876/14/34

or A

-3-

AX1Swerinr your letter Tune 9, 1934 relating to temporaryneignment someone from your bank to assist in Boards Division

aminations, Board appreciates your spirit of cooperationraatter and will be glad to have you send Otis R. Preston to

c;anington at earliest available date with understanding, asb"lined in my letter of June seventh, that Board will reimburse!Ilk for his necessary zravelinc; expenses, salary and six dollarsPer diem while in Washington. Kindly advise when he will report."

AiJproved.

Telegram dated June 13, 1934, approved by five members of the

' to Mr- Newton, Federal Reserve A.;ent at the Federal Reserve Bank

44ta, reading as follows:

4.aeai "Answering your letter June 9, 1934 relating to temporaryor glImant someone from your bank to assist in Boards Division

4:erainations, Board appreciates your spirit of cooperationatter. and will be glad to have you send V. K. Bowman tooutT-ngton at earliest nvailable date with understanding, as

bellIci2ed in mY letter of June seventh, that Board will reimburseper r his neceJsary traveling expenses, salary and six dollarsdiem while in Washington. Kindly advise when he will report."

Approved.

Lett

cr Da,.

or to Lr. Walsh, Federal Reserve Agent at the Federal Reserve

e.g, with regard to the steps which should be taken to correct

4tters

„Eit 00 commented on in the report of examination of the lellas Bank &TN

ralpe)aY, Dallas, 'cexas, as of January 12, 1934.

Approved.

TeleEram dated June 13, 1934,tottl,la

441, t°

Ilewton, Federal Reserve

readin, as follows:

approved by five members of the

Agent at the Federal Reserve BPI* of

Rilt44 Boe -arEent's telegram June 8 re State Security Bank, Brigham,lirttip,a-Ettri dte Wire June 7 did not contemplate requirement for immediate

Q,!Pitai-:°A Of capital impairment in the case of banks which have soldWhi:tee or debentures to the Reconstruction Finance Corporation

-- have an adequate amount of net sound capital in relation to


1788

6/14/34

7tliab11itie5. As a matter of sound banking, however, Board feelshat the management of such banks should arrange as soon as prac-ticable to eliminate the impairment of capital stock in the manner.ctonsidered most advisable by the bank and the supervisory authori-ies in the light of all of the circumstances."

Approved.

Letter dated June 13, 1934, approved by six members of the Board,to

*. Curtiss, Federal Reserve Agent at the Federal Reserve Bank ofostob.

reading as follows:

ipr "Reference is made to your letter of May 18, 1924, and to the111,,evicals correspondence, in regard to the application of The Trades-:714's National Bank of New haven, New Haven, Connecticut, for per-'4183ion to exercise fiduciary powers.re "In view of your statement that you do not feel justified intlirIllendin8* the approval of the application at this time, in which1,1 ;,cfrice of the Comptroller of the Currency concurs, the Board4-1. take no further action in the premises.the "The Board will be pleased to consider a new application fromwar sUbiect bank whenever its condition is such that you would feel

ranted in submitting it with a favorable recommendation."

Approved.

to Letter dated June 13, 1934, approved by six members of the Board,/4x.. 0,0

(3411°r, Comptroller of the Currency, reading as follows:

with eiPt is acknowledged of your memorandum of'The 7..cforence to the proposed reduction in commonu2 5:,a3rriesville National Bank', iaynesville, Ohio,

arid the sale of 07,500 of preferred stock193-4.1'illance Corporation, which was approved by the

June 6, 1934,capital stock offrom 400,000 toto the Reconstruc-Board on Larch

Nn e,ei , ad 41;r1se that the Reconstruction Finance Corporation hasYou n

the b ('0 Purchase but $25,000 of preferred stock, and recommend thator 2.T1 be Permitted to efect a reduction and increase in capital

" 1\-00 each, instead of the larger amount originally contemplated.Dl'eviol accordance with your recommendation, the Board amends itsC,;2b,00ne approval to provide for a reduction in common capital ofstllact , and the sale of ,:25,000 of preferred stock to the Recon-thf:tt tb°4 Finance Corporation and/or others, with the understanding

"1: other provisions of the proposed plan remain unchanged.14stit of the obviously over-capitalized condition of thislitio,

--, and the aggregate of criticized assets as classified by


6/14/34

Y°ur examiner, the Board would be inclined to regard favorably a-Larger reduction in the common capital stock for the purpose ofeliminating undesirable assets than is now contemplated, withoutfnuiringa corresponding increase in the amount of preferred'boc to be issued, in the event that you determine such a pro-cedure to be desirable and practicable."

-5-

Approved.

Letter dated June 13, 1934, approved by five members of the

' to !1‘. O'Connor, Comptroller of the Currency, reading as follows:

to "In accordance with your recommendation, the Federal AeserveaPproves a reduction in the common capital stock of 'The

Tst National Bank of Lemont', Lemont, Illinois, from ';50,000 to

.j;°°01 pursuant to a plan which provides that the bank's capital

Ii"7-L1 be increased by 25,000 of preferred stock to be sold to thetoconstruction Finance Corporation, and that the released capital,itrather with such portion of the bank's surplus and undivided prof-res 8 Your office may require, shall be used to eliminate a car-y0,132nding amount of unsatisfactory assets, all as set forth inm orandum of June 5, 1934."

toara,

Approved.

Let ter dated June 13, 1934, approved by five members of the

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

80ara accordance with your recommendation., the Federal ReservePi rat 'TP.Proves a reduction in the common capital stock of 'Therroz 'l°nal Bank of 6tevens Point', Stevens oint, 'aisconsin,C"0)000 to ,A0,000, pursuant to a plan which provides that

to b capital shall be increased by „120,000 of preferred stockrele: 3°1d to the Reconstruction Finance Corporation, and that thettlacliv.-!ed caPital, together with a portion of the bank's surplus andbaorea4d?d

profits accounts, and ,:20,000 to be made available byto el.s116 the Carrying value of the bnnking house, shall be used;16.1_ntate

unsatisfactory assets in the amount of approximatelyall as set forth in your memorandum of June 2, 1934.

cot z:)1 considering the plan under which the proposed reduction incaPital is to be effected, it has been noted that the active

ettlz1:171t °f the applicant bank was severely criticized by yourteie r, and that the Federal Reserve Agent at Chicago, in histIlat recanmendinp approval of the capital reduction, stated1111(1 st: 'Management problem should be made satisfactory.' It is"Yollr̀ j°, that this feature of the case is receiving the attention

Approved.


1790

-6-

Letter dated June 12, 1934, approved by six members of the

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

"In accordance with your recommendation, the Federal ReserveBeal-0approves a reduction in the common capital stock of 'The

Irst National Bank of Carmi', Canal, Illinois, from 400,000 topursuant to a plan which provides that the bank's capital11 be increased by 1,;50,000 of preferred stock to be sold to the

ruction Finance Corporation, and that the released capital'i4J-1 be used to eliminate a corresponding amount 01. unsatisfactoryasaetR all as set forth in your memorandum of June 7, 1934."

Approved.

Letter dated June 13, 1934, approved by six members of the Board,to t

C°nnor, Comptroller of the Currency, reading as follows:

rean,:Receipt is acknowledged of your memorandum of June 2, 1934, in01,7' to the proposed reduction in capital of 'The First National Bank4h,,eLe ca t, ia.seca

' ninnesota, which was approved by the Board on--4,4arY 10, 1934.

84 "You advise that due to an improvement in the bank's conditionsar3.74°n bY the last report of examination it is not considered neces-ti411;,04uat the local contribution of ;;25,000 be made as originally con-4,7e1i1xiation

,:7etad. It is noted that the plan now proposed will permit theOf all estimated losses and securities depreciation and

re13°1vroxzmately ,900 of doubtful assets as classified in the latest' °I' examination.

plielr'In accordance with your recommendation, the Board amends itsbiltirl,(1118 aPProval by eliminating the requirement for a local contri-ori,a)with the understanding that the other provisions of the

Plan remain unchanged."

Approved.

Letterdated June 13, 1934, approved by five members of the Board,

°tC°1111°r, Comptroller of the Currency, reading as follows:

41)1)In accordance with your recommendation, the Federal deserve Board'4;ch'es a reduction in the common capital stock of 'The Farmers and:2b Zits 1\lat1onal Bank of Eureka', Eureka, Nevada, from 40,000 to2) Pursuant to a plan which provides that the bank's capital

;e increased by . 25 000 of preferred stock to be sold to thel'inance'Co;poration, that directors and/or other share-

ill purchase at face value and for cash, loans classified asand worthless to the extent of ,;30,000 and that the released


-17916/14/34

"capital shall beset forth in your

used to eliminate unsatisfactory assets, all asletter of May 31, 1934."

Approved.

Tel egram dated Tune 13, 1934, approved by five members of the

)3(411'cl, to Governors Schaller, ,.",artin, Geery, and McKinney of the Federal

Reservebanks of Chica::0,

1.3r, readirig as follows:

ace° v,u"!!?ferrin;. to Board's June 5 wire and replies thereto regarding

om, '"Ing conference, Governor Fancher, Chairman of the Governors'Ct1-1-:erellee Committee on fiscal agency operations and reimbursementspeL-1"?for has been consulted on subject and both Board and GovernorRelleu-sr feel that while a conference of representatives of all FederaleSIbeanks is not necessary at this time, it is important that aa

be designated to review reports (B-941) covering fiscalrecileY, depositary, and custodianship work and to submit definitevianiendations covering changes in expense reports necessary to pro-

or accurate and complete cost fi,sureJ relating thereto and forsup °IluitY in requests for reimbursement of such expenses. It ise4rasted that representatives designated by Governors Fancher, Martinob. :41111ae.,7, who constitute the committee of the Governors' Conferencettve," subject, and of Governors Schaller and Geery, and representa-Dos: from the Board meet in Chicago on Wednesday, June 2'7, for 'Air-bet"; of considerin,2,- this subject. Meeting would also consider failedace° IleeoUntinz questions as suggested by Governor Geery and any otherstetlint14 Problems which banks milat like to place on proram.8..941e Copies of statements submitted in response to Board's letter

Wheth r1,11d b e furnished you before committee meeting. Please adviseYell. 6 4°11 coneUr and if so whether June 27 will be satisfactory to

itte advise name of your -representative who will attend com-e -eetin, if held."

St. Louis, Linneapolis, and Dallas, respective-

Approved.

Let'zerv,e 'der to mr. rilliams, Federal Reserve Y:zent at the Federal Re-

e'41( Of ,Cleveland, reading as follows:

Bn -'1.11:1 to Mr. Fletcher's letter of June 4, the Federal Re-Ito 0 :I'd approves the application of the liquidating committee of24.4ce Xel National Bank of Chillicothe, Chillicothe, Ohio, for the

of 156 shares of stock of the Federal Reserve Bank of4r outstanding in the name of the bank.

Nrulad"nt,h reference to the liquidatinc_4 committee's request that thethe Federal Reserve bank stock be withheld until July 1 in


6/14/34 -8-1792

"order that dividends for the full six months' period may be earnedthereon. The Board feels, as stated in the second paragraph of itsletter of August 18, 1921, X-31861 that 'such stock should be sur-rendered as soon as the accounts between the liquidating bank andthe Federal Reserve Bank can be reasonably adjusted'."

Approved.

Draft of a letter to Senator Fletcher, Chairman of the Bankingand

Currency Committee of the Senate, prepared for the signature of the

Secretary of the Treasury in accordance with a request received underdate of

Jun ....._

e 5, 1934, from Mr. William H. McReynolds, Administrative

Assistant to the Secretary, (for a report on bill S. 3700, entitled "Atill To amend section 19 of the Federal Reserve Act, as amended, and forOther

Purposes%) The letter was in substantially the same form as theletter addressed by the Board to Senator Fletcher on the same subjectIllader date of May 29, 1954.

Approved.

Telegram dated June 13, 1934, approved by six members of the

E11411' to Mr. Henry Y. Offutt, Vice President of the Kentucky TitleTrUst

c0rspa4Y, Louisville, Kentucky, reading as follows:

"Referring Board's letter June 6, 1954, and letter of June 11,4°4, addressed to Board by Ralph C. Gifford, you are advised thatcareful reconsideration Board is of opinion that KentuckyTitle Trust Company is engaged principally in the issue and sale

lo„,eecurities within meaning of Section 20 of the Banking Act ofand that, in view of affiliation of Kentucky Title Trust Com-Z

:

IY with First National Bank of Louisville, appropriate actionA 11d be taken to comply with requirements of Section 20 of BankingCor;,(.!f 1933. Board also is of opinion that Kentucky Title Trust

is engaged primarily in the business of selling or negotiat-14xsecurities within meaning of Section 52 of the Banking Act of23.1.7 Your attention is also again called to provisions of Sectionler of the Banking Act of 1933 which were referred to in Board'ster of June 6, 1954."

Approved.

Letter dated June 13, 1934, approved by six members of the Board,

eux'tise, Federal Reserve Agent at the Federal Reserve Bank of


VA9 CI)

6/14/34

icist°11, reading as follows:

"Receipt is acknowledged of your letter of June 5, 1934,l'egarding the applicability of the provisions of Section 32 of

bankiflg Act of 1933 to the service of directors and officersa member bank as directors and officers of the Lawyers Mort-

Corporation of Boston, Boston, Lassachusetts.pt is also acknowledged of a memorandum from Mr. Carrick,

T''lleral Counsel of the Federal Reserve Bank of Boston, to Mr.-iaael a letter dated June 2, 1934, from Mr. Bartlett Harwood,(;; .lerriek, Smith, L'onald and _oarley, to the Federal Reserve Bank

boston, a letter dated May 18, 1934, from Lx'. Harwood to you,140f!)61111 of Insured First Mortgage Certificate issued by Lawyersorr4gaGe Investment Corporation of Boston, consolidated reports11„. that corporation for the years 1931, 1932, and 1933, respective-"' lawYers Eortgai-e Investment Corporation of Boston Plan of Ad-ins tment dated ebruary 28, 1933, and letters to the holders of In-;Ierd first Mortgage Certificates issued by that corporation dated1,e,ruarY 28, 1932, and July 26, 1933, respectively, all of which

-ve inclosed in your letter.Iva_ "It appears that, pursuant to the plan of adjustment which40; declared operative on July 24, 1933, the corporation is notagr,nrellasnegotiatinging, selling, or negotiating its own certificates, hassic--u not to take or insure any new mortgages other than exten-13,048 and mortgages incidental to the sala or exchange of foreclosedforD!!tY and that the free assets of the corporation are retainedi)ric"ae benefit of all its obligations without preference orby ifitY. It appears further that the plan is now in effect andsith us terms

shall continue to be effective until March 1, 1939,atat". , 11 the same be changed upon the request or consent of a

6'4 ,,Percentage of the holders of outstanding certificates.nthe

light of the foregoing, the Board agrees with youOr Carrick that the Lawyers Mortgage Investment CorporationPuz.ch:t°4 is not currently 'engaged primarily in the business ofOf ,8s !ing, selling, or ne:otiating securities' within the scope4ess e6104 32 because the statute has reference only to the busi-eon4s entlY transacted by the organization in question. In this13eard;v4.0n, reference is made to the footnote to Section II of the40t 803 liagulation R, series of 1933. Since the corporation is

Pra41:eoneriir ed, the Board believes it unnecessary at this time to

question whether the Insured .,irst Lortgage CertificateskesilifilY issued by that corporation are 'securities' within thewhich g of Section 32. Therefore, unless there are other factsit is n1 believe should be called to the attention of the Board,

-egested that you notify Mr. Harwood accordin-jy."

_9-

Approved.Telet,

4" '5*ram dated .Tune 13, 1934, approved by five members of the

) t°Federal Reserve Agent at Federal 1-ieserve Bank


179/7G/14/3,1

Of

.ve baak

New York, reading as follows:

-10-

"Your wire June 12. iiithout undertaking on basis of informa-t1.°11 at hand to pass upon necessity under law for obtaining permitwith respect to each relationship between the various member banksand dealers named and referred to in your telegram, Board grantsto member banks and dealers named as managers in your telegram andalso to all member banks and dealers which are invited to becomenial2lbers of group being formed to offer such issue, a permit underSection 32 of i3anking ,Ict of 1933 to extent that same may be neces-!arY Under law to have correspondent relationships solely in connec-i°n with issue of ,132,000,000 Iederal Land Bank 4,; bonds dated21Y 1) 1934 and redeemable July 1, 1944. Such permit is effectiveturaodiately as to member banks and dealers named in your telegramuallt other member banks and dealers invited to became members of groupr

filed be named in a certified list of such institutions which must be

before with you by the managers or proper representatives thereofinvitation referred to is extended and before permit becomes.1.fective as to any member bank or dealer named in such list. You

7i:Y advise any member bank or dealer named in your telegram or inta ch list of Board's action in this matter upon inquiry or as youi27 deem advisable. This telegram is to be considered a permitoraed by the Federal Reserve Board under Section 32 of Banking Actwit 933 for purposes of this case. Please furnish Board promptly" coDY of certified list of banks and dealers filed with you."

Approved.

Tel-egram to Mr. Case, Federal 2eserve Agent at the Federal Re-

NOW York, reading as follows:

Trm "Your wire of this date re application Manufacturers andor Trust Company for permit under Section 32 of Banking ActIlajzzo9;33. Board grants permit under above section to member bank

above to act as correspondent bank for Adams McEntee and00!44Y, Inc., New York, New York, and George D. B. Bonbrightagt; ,1°Chester, New York, solely in connection with an issue of ly pu00 bonds of the City of Binghamton, New York, maturing serial-obt ri nl 1935 to 1939 inclusive referred to in your telegram. PleaseCovt7 and forward for Board's files an application by member bankrorra--nE relationships referred to together with usual accompanying

F°Tmal permit being prepared and will be mailed shortly.New., advise applicant and George R. Waldmann, One Wall LAreet,

Approved.

T"eCrem to Mr. Case, Federal Reserve 21,-.:ent at the Federal Re-

Or new York, reading as follows:


17956/4/34

-11-

"Your wire of this date re application Manufacturers andir aders Trust Company for permit under Section 32 of Banking :let°f 1933. Board grants permit under above section to member bank1,,,aMed above to act as correspondent bank for Lehman Brothers and

W. Pressprich and Company, New York, New York, and Sage RuttySteel, Rochester, New York, solely in connection with an issueW.,350,000 notes of the City of Rochester, New York, due three,°ix and eight months, referred to in your telegram. Please obtainr forward for Board's files an application by member bank cover-relationships referred to together with usual accompanying

..0,1141s. Formal permit being prepared and will be mailed shortly.ase advise applicant and George R. ,:;aldmann, One Wall Street,New York."

Approved.

Letter to Mr. Williams, Federal Reserve Agent at the Federal

blank of Cleveland, reading as follows:

.0, "his refers to your letter of .Tune 6, 1934 with regard to1:(4)e

aT

PPlications of Messrs. H. C. Rorick, H. Rorick, and A. V.sest!r Under Section 32 of the Banking Act of 1933 for permits toI've as officers and/or directors of The Fayette State Savings

T,

u Jayette, Ohio and as partners of Spitzer, Rorick & Company,

led°, Ohio.hall "The Board understands that the securities business formerlyoire!l!cl by the firm of Spitzer, Rorick & Company has been taken

eY a corporation bearing the name of Spitzer--i-iorick & Co.bus.' and that Spitzer, Rorick& Company is transacting no new11. fless and is in liquidation. It is also understood that 1,:essrs.tion i and M. H. Rorick are officers and/or directors of the corpora-tio' 1:1,nd that Mr. A. V. Foster is not connected with the corpora-

'jut ls engaged in the liquidation of the old firm.that a letter dated April 30, 1934, M. II. Rorick statedcoladi3i.° far as he was personally concerned practically the same(Sc 00.";-°11e exist in connection with his service to Jpitzer-RorickRoxleic-alc. as existed in connection with his service to Spitzer,is tru Comp, and it is understood by the Board that the sameStated in Mr. H. C. Rorick's case. On the basis of the factspro.813°ve, the Board has reached the conclusion that Section 32The the service of Messrs. H. C. Rorick and M. H. Rorick toaza talYette State Savings Bank and to Spitzer-Rorick & Co. Inc.,It wil t Permits should not be issued covering these relationships.Illuy."4- be appreciated if you will advise these applicants accord-

?fin14 li "rlew of the fact that Spitzer, Rorick Er. Company is nownecesqllidat"fl, the Board is of the opinion that no permit isPeye.4417 in connection with Jr. A. V. Foster's service to The6 State Savings Bank and to Spitzer, Porick & Company and it


IL:70- 6

-12-

"will be appreciated if you will so advise Mr. Foster."

Approved.

Letter dated .Tune 13, 1934, approved by five members of the

13°111'd, to L-1.. • Newton, Federal Reserve Agent at the Federal Reserve

h4Lk (:)f Atlanta, reading as follows:

"In connection with the application of Mr. Russell Clarkutder Section 32 of the Banking _,ct of 1933 for permission toilerve at the same time as a director of the Whitney National0.?k and as a partner in the firm of Ino. F. Clark & Co., both

l'rew Orleans, Louisiana, Mr. Robert S. Parker has written,141Tder date of April 5, 1934, asking whether, in the opinion of:1,e Board's Counsel, there is any substantial difference betweenV914situation referred to in the Board's letter of March 27,tio4 7637), and the situation covered by Er. Clark's applica-

-, "An examination of Mr. Clark's application discloses no

rostantial difference between the margin accounts carried by;el" F• Clark a, Co. and the margin accounts which were the sub-„ et of the Board's letter of March 27, 1934. It therefore ap-Trs that Section 8A of the Clayton Act would be applicable toOf ark's service as a partner of that firm and as a directorne national bank and that, consequently, the granting of a'• mit toPose. 1,:r. Clark under Section 32 would serve no useful

"Itz• stances

pur-

appears fram Mr. Parker's letter that, under these cir-, You may wish to suggest to Mr. Clark that he withdraw

ETPlication under Section 32. Please advise the Board whats Clark decides to do in this connection.”

Approved.


tekt t° the followinL; applicant for a permit under section 32 of the

c't 193; the letter stating that it appears that the rela-

4 4a13

covered by the application is within the class which section

481Ened to terrainate, and that, accordingly, the Board is4'e to

--d that it would not be incompatible with the public in—t

c/eelared by the Congress to grant the application, although


179'7

6/14/34 -13-

in the event the applicant desires to submit further facts or argu-

rileilt in support of the application the Board is prepared to give them

e&lreful consideration:

Tv. T. Gray, Jr., for permission to serve at the same timeeLa a director of the 4merican National Bank, Nashville, Tennessee,

asPresident and director of Gray-Shillinglaw & Co., Nashville,Tennesse0.

toaa.d $ to Lir.

Newton, Federal Reserve Agent at the Federal Reserve Bankor stti

'a, readin as follows:

"Reference is made to the applications of American National17.7K. Nashville, Tennessee, and Gray-Shillinglaw & Company, Nash-

e, Tennessee, under Section 32 of the Banking Act of 1933 forr4is5ion to serve as correspondent bank and as correspondent

,,ealer for each other.0 "It appears from the application that Gray-ShillinglawacjellY carries its active account with the bsnk, clears its trans-

through the bank, and borrows money from the bank on col-but apparently there are no other regular transactions

vo'ween the two institutions. In answer to question No. 3 of F.R.B.04! 9913 the bank states that it does not join underwriting syndi-de,:s! does not sell securities to its customers, and has no bondi2v14rIlment. On. the basis of the above facts it appears that there

ties "rrespondent relationship between the bank and the securi-tio,, e2mPanY. In this connection, reference is made to the defini-II - 'correspondent bank' and 'correspondent dealer' in Section

°I' the Board's Regulation R.cm, "Unless there are other facts which you believe should bewilled to the attention of the Board it will be appreciated if youDernrE,rvise the applicants that in the judgment of the Board noe,Dr,1!"3 are necessary covering the relationships descldbed in their

z--lcations.”

Approved.


Approved.

Letter dated June 13, 1934, approved by six members of the Board,to kr. 4

ed UhlMann, Chicago, Illinois, reading as follows:

"The FPlicat. ederal Reserve Board has given consideration to your ap-"4 under ,ection 32 of the Banking Act of 1933 for a permit


1_798

6/14/34-14-

"to serve at the same time as a director of the American NationalBank and Trust Company of Chicago, and as partner of Uhlmann&Beajamin, both of Chicago, Illinois.

"It appears from the information contained in your applica-tion that the business of Uhlmann & Benjamin is confined to thePurchase and sale of securities in the open market as brokers onthe order and for the account of others. The Board believes thatthe provisions of Section 32 are not applicable to such a business,"t:Ild for that reason no permit is necessary to bring your service to11e two institutions named in your application into conformity withthe provisions of Section 32.

"However, Section 8A of the Clayton Act makes it unlawful foranY director, officer, or employee of any bank, banking association,°r trust company, organized or operating under the laws of theunited States to serve at the same time as a director, officer, or!MPloYee of any corporation (other than a mutual savings bank) or'1;418 a member of a partnership which mal:es loans secured by stock or,!Ild collateral, other than to its own subsidiaries. The Board isult.he opinion that the carrying of margin accounts involves thea, lug of such loans within the meaning of this section; and itJPeare that the carrying of margin accounts constitutes a substan-'al Portion of the business of Uhlmann & Banjamin.

"The Federal iieserve Board is authorized by Section 8 of theClayton.:E1 Act to issue 7)ermits covering relationships between not more5nantheeee banking institutions which are otherwise prohibited by

8 or Section 8A, if such relationships are not incompatible• 4.1 the public interest. However, it is not the Board's practicealuvlseue permits authorizing relationships between national banks

bastitutions carrying margin acounts because it appears thatre7• or the principal purposes of Section SA was to terminate suchrenonships and that the issuance of permits authorizing suchtaelt,lonehips would be incompatible with the public interest as

-red by the Congress.to 7/1 the circumstances, irrespective of whether or not Uhlmann

s, is a banking institution of a kind referred to in Section04e-ci; will be necessary for you to discontinue your services withrorm r the other of the institutions named above in order to con-

the provisions of Section 8A of the Clayton Act. Pleasechi• cQe the Federal Reserve Agent at the Federal Reserve Bank of

of the action which you take in order to comply with the

Approved, together with a similar letterdated Tune 13, 1934, approved by six membersof the Board, to hir. Henning Chambers, Louis-ville, 1.entucky, with regard to his applicationunder section 32 of the Banking Act of 1933 fora pellmit to serve at the same time as a direc-tor of the Citizens Union National sank and aset member of the firm of Henning Chambers and

C(1) PanY, both of Louisville, ::entucky.


6/14/34

1799

Letters dated dated Tune 13, 1934, approved by six members of the

eircl, to Mr. ;Toxton, Federal Reserve Agent at the Federal Reserve

BcIllk Of Richmond, stating that the Board has given consideration tote

f°11cw1ag applications for permits under the Clayton Act, and that,

11Pell the basis of the information before it, feels that the issuance

ef the Permits applied for would be incomTatible with the public in-

telbeSt• .1]ach letter also requested the agent to communicate to the

"-leant the Board's position in the matter, and to advise the Board

131‘QtaPtlY as to whether the applicant desires to submit any additionalkta,

'uld, if not, as to what steps he proposes to take in order toeozapi,_4NT with the provisions of the Clayton Act.

Mr, 17as "' N. Fitzwater, for permission to serve at the same timewe S director of the Citizens National Bank of Lakins, Elkins,

Virginia, and as a director and officer of the Bank ofen3, Pickens, West Virginia.

B -• ,.Eirtin, for permission to serve at the sane time asvilareotor of the Citizens National Bank of Elkins, lakins,we Virginia, and as a director of the Bank ce Adrian, Adrian,3t VirCinia.

lie.aerv

Approved.

Letter t -t.r. LcClure, Federal Reserve Agent at the Federal

ansas City, readinf,-, as follows:

1sau:IThere are inclosed Clayton Act permits and copies thereoforf17 bY the Board to i r John Hay to serve as director andtor e'er °I' The Rock Springs National Bank, Rock Springs, as direc-and 14:1 cer of The American i:ational Bank of Cheyenne, Cheyenne,11r. director and of of First Bank of Superior, Superior,c4ri's Gottsche to serve as director and officer of The RockOf 1,11T3 Ilational Bank, Rock Springs, and as director and officerets di St Bank of 'Superior, Superior; Robt. D. Eurphy to serve, 'rectoLipriaE) r and officer of The Rock Springs :rational Bank, Rock

as dil.ecter of FirstBmk of Superior, Superior; and


18C0

to ,.cIPPlloant4D13 s for penaits under theroval

ur theiraPPlications as follows:141.,

Oh(11) CurleY, for permission to serve at the same time as

Or The First National Bank of Glen Cove, Glen Cove,

6/14/34-16-

John W. Hay, Jr., to serve as director of The Rock SpringsNational Bank,'Rock Springs, and as director of ,tate Bank ofPinedale, i-inedale, all of wyamin3.

"Information obtained from the files of the Comptroller ofbee

Currency indicates that Er. John a. Hay has committed a nun-01 violations of Section 22(g) of the Federal Reserve Act by

(3.1iardrawing his account in The i;ock Springs rational Bank and that!.. e alleged violations were reported to the Attorney General of"le United States. it also appears that the account of Er. H.Gott sche was habitually overdrawn, although this possible viola-,_'

1()12 of the Banking Act of 1933 was not reported to the Attorney,.!,11eral on the grounds that :Ls. Gottsche was not an executive-4fieer of the bank. In this connection, reference is made toYjur letter of Eay 12, 1934, relative to the Clayton Act applica-i n

I. Cy Lllinger of aashington, Oklahoma, in which you ad-that that the United States Attorney for the district in whichjr:,hlaliager resided had informed you that he had taken up aof such cases with the Attorney General and authority wascjanted to close some such cases by calling the attention of the

tilltLeers of the bank to the new legislation and admonishing them4't such irreEularities would not be permitted in the future.vol "The 3oard feels that, in connection with applications in-

beeavoitZorted violations of law, definite information shoulds

regarding the disposition which was made of suchisanbefore permits under the provisions of the Clayton Act arethet-e • You are requested therefore, to ascertain the status ofir cuarges against Mr. John a. Hay and cv:ainst Mr. W. H. CottscheclorY; and in the event the cases have been duly considered andilicled without prosecution, you are authorized to release the14111:Ted Permits to 1.:essrs. John Hay, a. H. Gottsche, TRobt. D.balILY and John W. Hay, Jr., and to forward copies thereof to thei41.160-u i

nvolved, at the same time furnishing the Board complete01.deflilation with respect to the disposition of these matters in

that its records may be complete.t/04,"The Board also desires that when you submit your recammenda-rilli, 1E3 a result of your annual review of these permits you report1.0114r, as to whether Mr. John W. Hay has further violated any provi-whet171 the law by overdrawing his account or otherwise, andcir :;:x°cte=,has continued the practice of habitually over-evoz. 1.

Approved.Lettexis

dated Zune 1:5, 1904, approved by six members of the

Clayton Act, advising of


atoolc:

11)

4-eation________s for ORIGIRZ_Stock:

1411, let Izo. 3.

thweatern llational Bank in Philadelphia,

Itiladelphia, Pennsylvania

6/14/34

.1113GJL

-17-

NOW York, and as a director and officer of The State BankOf Sea cliff, Sea Cliff, New York.

S. W. Dittenhofer, for permission to serve at the sameas a director of The First National Bank of Saint Paul,

t,jealtki:linnesota, and as a director of the Grand AvenueSt. Paul, Minnesota.

- R. Fairchild, for permission to serve at the same timean officer of The First National Bank of Saint Paul, St.

--,!1-11, Minnesota, and as a director of the Grand Avenue State3ttlik:, St. Paul, Yinnesota.

* -L4. J. Gifford, for permission to serve at the same time18;3 an officer of The First National Bank of Saint Paul, St.sT11, Illinnesota, and as a director and officer of the Securityvette Bank of Saint Paul, St. Paul, YAnnesota.

Ivir n.C s Lillibridge, for permission to serve at the same

St as an officer of The First Natioaal Bank of Saint Paul,

Linnesota, and as a director of the Security StateOf Saint Paul, St. Paul, i!innesota.

*. A.as -1 LeNee, for permission to serve at the same timep,„ 11-1 officer of The First National Bank of Saint Paul, St.s;"-L,

Minnesota, and as a director of the Farmers & Merchantsate Bank of Saint Paul, St. Paul, Idnnesota.

Phil; Tas n 1-i. Ray, for permission to serve at the same time

'Ilrector and officer of The First National Bank of SaintPaul,innesota, and as a director of the Grand

Bank,State St. Paul, 'r;:innesota.

G,ttrae '0 e M. Robbins for permission to serve at the samezt. p4s an officer of The First Natiolial Bank of Saint Paul,StEctsal,1,1) lannesota, and as a director of the Grand Avenue

St. Paul, Minnesota.

Approved.There e

'Jrthen presented the following a.:plications for changes

Shares

360 360


8/14/34-18-

A —.cations for ORIGINAL Stock:District No. 7.

(Continued) Shares

4141Z County National Bank in Eldora,tidora) Iowa 60

District No• 11°The First National BFInk of Angleton,tigleton, Texas

lication for SURRENDER of Stock:

State T

National Bank of Texarkana,exarkana, Arkansas

Approved.

60

36 36Total

120

Thereupon the meeting adjourned.

41)Drcv

456

120

1802


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