19341119_300p_Minutes.pdf

A. meeting of the

corllionday, November 19,

PRESENT:

3531

Federal Reserve Board was held in dashington

1934, at 3:00 p. m.

Mr. Eccles, GovernorMr. Thomas, Vice GovernorLi. hamlinLr. Lililor1.r. Jameshr. Szymczah

Mr.Mr.Mr.

Morrill, SecretaryBethea, Assistant SecretaryCarpenter, Assistant Secretary

The Board acted upon the following matters:

Lemorandum dated November 19, 1934, from Mr. Morrill submit-tine

the request of Governor Eccles that the Board approve the em-

131°Alent, effective immediately, of Miss Va Lois Egbert as secre-

ta'rY to the Governor, with salary at the rate of 43,600 per annum;

Qt11"henry h. Edmiston as an assistant to the Governor, with41xlery at the rate of 44,500 per annum; and of Charles R. Norris

48 rrlessenger assigned to the Governor's office, with salary atthS rof W.,080 per annum.

Approved.

Ilemorandum dated November 6, 1934, from Mr. Parry, Assistantkreetor of the Division of Research and Statistics, recommendingt4t the

Board authorize the payment to the firm of Haskins and444,

Certified Public Accountants, New York City, of $361.18

rel3re8e4ting reimbursement of traveling expenses incurred by two14141145ra of the firm, Mr. Andrew Steuart and Mr. C. R. Bowen, in°°1111tiorl with professional services renderedat Er.by them

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

3532

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11/19/34 -2-

request during August and September, 1934, in the prepara-

ti"' of the Board's Regulation T. The recommendation was approved

/1 five members of the Board on November 17, 1934.

Approved.

Lemorandum dated November 6, 1934,

Director of the Division of Research and

the Board retain the firm of Haskins and

ite°01Antants, New York City, for a period

lit4Tose of

Th.e

from Lr. Parry, Assistant

Statistics, proposing that

Sells, Certified Public

of three months, for the

Advising with regard to current interpretations of Regula-tIon T and with regard to matters involved in such amend-ments to this regulation, if any, as may became necessaryduring this period;

Advising with regard to the periodic reports to be requiredfrom members, brokers, and dealers;

Advising with regard to procedure to be established forinspection of the records of members, brokers, and deal-ers looking towards enforcement of the regulation;

Advising with regard to stock exchange and brokeragematters that will come up in connection with the Board's!segulation governing margin requirements for banks, whichls now in preparation; and

Such other services as may be required in connection withthe foregoing,

nielli°r8-11cluill stated that it is contemplated that Er. Andrew""nkrit

1 4 Partner of the firm, would be prepared to devote a maxi-

t11° N's a meek to the service referred to; and that, in

°Ifices of the organization of Haskins and Sells located

‘Iew York might be required to perform certain services in

4PectiN0 localities. The memorandum also stated that hr.


353311/19/34

Stewart t 8

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services would be charged for at the rate of 00 a day,

411d the rates for other members of the organization would vary from

day to $25 a day depending upon the class of men assigned in

"'l ease, and that it is understood that the cost to the Board of

the Proposed arrangement would not exceed 0_,000 a month. The pro-

(181/"1 Nv4a approved by five members of the Board on November 17,1934.

Approved.

Memoranda dated November 10, 1934, from Ir. Paulger, Chief

"he Division of Examinations, recommending that Liss Elizabeth

e riffiu, Liss Helene L. Kearney, Liss Frederica G. Ritter, and

448 44114 P. Scott, who have been employed temporarily as stenog-

rill**111 in the division, with salary at the rate of ii4.50 a day,be Pointed

permanently effective as of November 19, November 30,

11°/teraber 29, and November 19, respectively, as stenographers inthe

division, each with salary at the rate of $1,500 per annum,814/Ject to their passing a satisfactory physical examination, andthat it, the event they do not pass a satisfactory physical examina-

t1(1 theY be continued on the present temporary basis until such48 their

positions can be filled conveniently by permanent

litellogrEtphers. The recommendations were approved by five membersofthe

Board on November 17, 1934.

Approved.

116113.orandum dated November 14, 1934, from Er. Goldenueiser,


3534114.9/34

Director of the Division of Research and Statistics, recommending

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the .-PPointment of Lrs. Julia Haigh as a clerk in the division,

'withsalary at the rate of 0,800 per annum, effective as of the

cllite upon which she enters upon the performance of her duties.

Thememorandum stated that hrs. Haigh was employed in the Division

"Research and Statistics from February 20, 1928, to September 11,

1934' when she resigned to accept a position at the Denver branch

Or the Federal Reserve Bank of Kansas City; that in the intervening

454t418 111.8* Haigh has found it difficult to adjust herself to the'it it of Denver; that, for this reason, the Denver branch is

11:41111g to release her and has given her leave of absence to lookter

4N4loyment in a more favorable altitude; and that, since Lire.

'18 service with the Federal Reserve System has been continuous

1141" 1928 and she is now a member of the retirement system of the?oder

41 reserve banks, it is assumed that no physical examination

°I required in her case. The recommendation was approved by_members of the Board on November 17, 1934.

Approved.

XeMorandum dated November 14, 1934, from Liz'. Goldenmeiserstzlvett- or the Division of Research and Statistics, recommendingthe

4PPointzment of Nr. Leroy Li. Piser as a research assistant inthe division,

With salary at the rate of 44,200 per annum, effectiveIte or the date upon which he enters upon the performance of his

(14148 Etter having passed a satisfactory physical examination.


11/19n4

The recommendation was

November 17, 1934.

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approved by five members of the Board on

3535

Approved.

Telegram dated November 17, 1934, approved by four members

q the Board, to hIr. Walsh, Federal Reserve Agent at the Federal

Reserve Bank of Dallas, reading as follows:

"Your mires. Board approves November sixteenth insteadof December first as the effective date of appointment of A. 0.Nicholson."

Letter

the Board, to

tollows g

Approved.

dated November 16, 1934, approved by five members of

Lr. O'Connor, Comptroller of the Currency, reading

"In accordance with Acting Comptroller Amult's recom-/endation, the Federal Reserve Board approves a reduction of

0 in the common capital stock of 'The Abington National'61-4k of Clark's Summit', Clark's Summit, Pennsylvania, pur-Int to a plan which provides that the bank's capital shallt' 4nereased by the sale of 450,000 Class 'A' preferred stockc;). the Reconstruction Finance Corporation and $26,000 of

'B' preferred stock and $40,000 of new common stock to

4c44. interests; that the resultant amount of common capitales°d

:d

t0191%( 1).00, shall be reduced to $50,000 by the proposed@10,000, and that the released capital shall bea_ to

eliminate a corresponding amount of unsatisfactory, all 4 ets, _ s1934. a set forth in 1).1r. Awult's letter of October 31,

041 "Although the plan as stated provides for the use otete.t the 4i40,000 of released capital in eliminating unsa

.:o.s-

the crY assets, it is assumed that your office will requirefiedctitination, at least, of all estimated losses as classi-Au Y Your examiner in the report of examination as ofgue28p 1934.

eottrn.„4-3a considering the plan under which the reduction inthere- eaPital is to be effected, it has been noted that

111.11 remain in the bank unprovided for a substantialsecurities depreciation, which, if considered as a


353611/19/34

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"loss, mould impair the bank's common capital stock. It isassumed, however, that you have this condition in mind andthat 'whenever it is feasible to do so, you will require suchfurther corrections as may be practicable."

Approved.

Letter dated November 16, 1934, approved by four members of

the Board, to Er. Austin, Federal Reserve Agent at the Federal Re-

"I've Bank of Philadelphia, reading as follows:

"Reference is made to your letter of November 9, 1934,roc.°Inmending that the 'West Branch Bank and Trust Company',lliamsport, Pennsylvania, be granted permission to reduce'ts capital stock from $725,000 to 4475,000 by the retirement:and cancellation of $250,000 of preferred stock awned by theRec

onstruction Finance Corporation.The Board has reviewed' the information submitted, to-with the report of examination of the bank as of June1934, from which it appears that upon completion of the

ProPosed retirement of preferred stock the bank will have a!Ltisfactory capital structure as compared to its deposit

Jilabilities. In accordance with your recommendation, there-4.orss the Board approves a reduction of 4250,000 in the capi-,n1 of the nest Branch Bank and Trust Company by the retire-tent of that amount of preferred stock with the understanding,tp,,,e°ursei that the transaction has been approved by the Secre-

0f Banking of the Commonwealth of Pennsylvania and that"unsel is satisfied as to the legality of the proceed-

ga in oonnection therewith."

Letterthe 8

oard, toEta follows*

Approved.

dated November 16, 1934, approved by four members of

Mr• O'Connor, Comptroller of the Currency, reading

T"In accordance with Acting Comptroller Awalt's re?om-

:dation, the Federal Reserve Board approves a reduction inTi:,1111°n capital stock of 'The Citizens National Bank of

a. liPton, Indiana, from $100,000 to 450,000, pursuantIlhich provides that the bank's capital shall be

r--sed by 0,000 of preferred stock to be sold to the


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11/19/34 -7-

0,xteconstruction Finance Corporation and that the released

capital, together with a portion of the bank's surplus andundivided profits, shall be used to eliminate or reduce un-desirable assets, all as set forth in Lir. Amult's memorandumof November 8, 1934."

Approved.

Telegram dated November 16, 1934, approved by four mambersor the Board, to Er. Peyton, Federal Reserve Agent at the Federal

Reserire Bank of Linneapolis, stating that the Board has given con-

sideration to the application of "1;AT-sha11-McCartney Company",

1341ces, iiorth Dakota, for a voting permit under the authority of

section 5144 of the Revised Statutes of the United States, as

841ellcieds entitling such organization to vote the stock which it

41113 or controls in "The First National Bank of Oakes", Oakes,

Dakota, and has authorized the issliAnce of a limited permitto the

applicant for the following purposes:

Pr°P°s

0At any time prior to December 31, 1934, to act upon a

toal or proposals to issue and sell preferred stock andi). rnake such amendments to the articles of association andbe

W5 aE said bank and to take such other action as shallR4 "essary to authorize the issuance and sale of such-voeke st

The+'elegram stated also that the issuance of a limited voting per-41:1t to

reduce the common capital stock of The First National BankOf okk

-elS 111.11 be considered in connection with an application for

of1°

The te

caPital stock when such application is received by the4ard.,J-cgram authorized the agent to have prepared by coun-laei tor t

C he Pcderal reserve bank, and to issue to Earshall-McCartney

el111-441 Et limited voting permit in accordance with the telegram.

Approved.


353811/19/34 -8-

Letter dated November 17, 1934, approved by five members of

the Beard, to Mr. Edward C. Moore, Vice President and Treasurer

°f the Erie City Iron Works, Erie, Pennsylvania, reading as fol-

lows:

"This refers further to your letters of October 5 and October 22, 1934, relative to a claim by the Federal ReserveBank of Cleveland fcr expenses incurred in connection withthe aPplication by the Erie City Iron Works for a loan undersection 13b of the Federal Reserve Act.

"Mr. Levis B. Williams, Federal Reserve Agent at theFederal Reserve Bank of Cleveland, has advised the Boardthat he will be pleased to discuss the natter with you andthat he is confident that a satisfactory agreement can be!leached. It is suggested, therefore, that you see Mr.

$ and it is hoped that the matter can be settled toyour

satisfaction."

Approved, together with a letter, alsodated November 17, 1934, and approved by fivemembers of the Board, to Mr. Williams, FederalReserve Agent at the Federal Reserve Bank ofCleveland, reading as follows:

Receipt is acknowledged of your latter of November 2,1034, relative to a claim by the Federal Reserve Bank ofCleveland for expenses incurred in connection with an ap-iieation by the Erie City Iron Works for a loan under see-

13b of the Federal Reserve Act."In view of Mr. Moore's feeling and of your desire to

??rrect his impression that the charge is unjust, it is be-lleyed that it would be desirable for you to discuss the:atter with Mr. Moore and endeavor to reach a satisfactory.,ettlement.

There is inclosed herewith a copy of a letter11J-11 Which it has been suggested to Mr. Moore that he callP°11 You in regard to the ratter."

In connection with the above there was presented a letterdEtteci4011-ember 17, 1934, approved by rive members of the Board, toths

Chair a all Federal reserve banks, reading as follous:

for "The board recently received a letter from an applicantan industrial loan under Section 13b of the Federal


3539

11/19/34 -9-

"Reserve Act stating thiA he had received a bill from theIederal reserve bank to which the application was submitted,for several hundred dollars, representing the charge made byat outside firm of auditors for making an examination in con-hection with the application. The applicant for the loanstates that he either overlooked entirely a paragraph in theb411kIs application form relating to payment of expenses, orelse took it for granted that when he furnished a full detailedreport by auditors of recognized standing there would belittle $ if any, expense involved for further investigation.

"After considering the correspondence in this case, andthe replies to the board's telegram of October 12, 1934,Trans 2124, it is felt that, in order to avoid misunderstand-1.11i's, it would be desirable for the Federal reserve bank be-.ore

undertaking any investigation or examination in connec-tion.with an application for a loan under section 13b whichMaY involve expense to the applicant to advise such applicantaa to the bank's policy with respect to the payment of therTense of such investigation or examination and to give the:713Plloant an estimate of the amount of the charges it willbe

expected to pay wherever it is possible to do so. Itflea not appear to be sufficient to rely upon a printed state-'4ent in the application form, since such a statement may beoverlooked or not fully appreciated by the applicant."

Approved.

Telegram to Ir. hoxton, Federal Reserve Agent at the Federal

415"1113 Bank at Richmond, reading as follows:

ir

(

"Referring to kr. Fry's November 13 letter, Board re-A,),k!'s aPProval application The National Bank of Ansted$

-6;8Lt4cel; T

le.el:tan

aprginia, for Federal Reserve bank stock granted

sua proves new application for 36 shares made x_r nt to resolution adopted at meeting of board of direc-held on October 20, 1934, effective if and when Comptrol-'14 of Currency authorizes bank to commence business."

Approved.

Telegram dated November 16, 1934$ approved by four members'arthe Board, to Mr. Stevens, Federal Reserve Agent at the Federal11eaer

lie Bank of Chicago, reading as follows:

"Your -wire november 16. Consideration now being given


354011/i9/64

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"to question hether blanket permit under section 32 of Bank-lng Act of 1933 as contained in Trans. 2015 should be extendedafter December 1, 1934. In event such blanket permit is notextended, Board will issue permit under section 32 to HarrisTrust and Savings Bank, Chicago, Illinois, covering corre-sPcndent relationships referred to in your telegram in connec-tIon with ce30,000,000 State of Illinois relief bonds to beoffered for sale November 22. Such permit will be subject toterms and conditions stated in Trans. 2015 except as to dateOf expiration."

Approved.

Letter to 'Dir. Sargent, Assistant Federal Reserve Agent at

the Federal Reserve Bank of San Francisco, reading as follows:

"heceipt is acknowledged of your letter of November 8,1934, regarding the applicability of section 32 of the Bnrk-ing Act of 1933 to the service of Li.. Paul Shoup as a direc-tor of two national banks and as president and director ofthe Railroad Securities Company, San Francisco, California.

'You state that it is the opinion of counsel for yourbank that Railroad Securities Company is not engaged primarily11.1 the business of purchasing, selling, or negotiating securi-ire within the meaning of section 32 of the Banking Act of, 33' and in view of the information submitted the Board seesfreason to differ with that opinion since it appears, among_1/4"acner things, that purchases and sales of securities for theL.sttlfour years averaged, respectively, less than 30% oft, a- assets and that, as of September 30, 1934, over 60% oftr_ securities owned by the company had been held for over"1 years and only about 80 had been held for less than sixIrlonths.

II A _

selling 'la you know, if the company is actively engaged in

such its Own shares or other securities to the public,plie ”tivity might raise a further question as to the ap-19, aellity of section 32 (see Board's letter of October 26,04, x,809-,

/). liowever, no information has been submittedindicating such activity on the part of the company."

Approved.

There were then presented the following applications fore4Nes ln stock of Federal reserve banks:


11/19/34

D' lications for ORIGINAL Stocks

No. 7.e Firs iational Bank in Dolton,Dolton, Illinois

4e0kuic National Bank,Keokuk, Iowa

District r0.146, 1 Na ional Bank of Gladewater,

41adewater, Texas

District No. 12.The ational Security Bank of Toledo,

Toledo, Oregon

Approved.

36 Total

Thereupon the meeting adjourned.


19341119_300p_Minutes.pdf

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