19350121_Minutes.pdf

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A meeting, of the Federal Reserve Board was held in Washington

on Monday, January 21, 1935, at 11:30 a. m.

PRESENT: Mr. Eccles GovernorMr. Thomas, Vice GovernorMr. HamlinMr. MillerMr. JamesMr. Szymczak

Mr. Morrill, SecretaryMr. Bethea, Assistant SecretaryMr. Carpenter, Assistant Secretary

The Board acted upon the following matters:

Telegram to Mr. Burke, Deputy Chairman of the Federal ReServe

)3ank of Cleveland, reading as follows:

"Your telegram. Board approves salary at rate of$23,000 per annum for Governor Fleming."

Approved.

Telegram to Mr. Frank T. Lovejoy, President, Eastman Kodak

C°11111"117, Rochester, New York, reading as follows:

"Federal Reserve Board has appointed you director ofBuffalo branch of Federal Reserve Bank of New York for un-expired portion of term ending December 31, 1937. Pleasevire acceptance collect."

Approved.

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

411k of St. Louis, reading as follows:

"Condition of membership numbered 25 prescribed in con-rection with the application of the 'Boyle Bank and Trust

°mPaA71, Danville, Kentucky, for membership in the Systemreads as follows:

"Prior to January 1, 1935, any holding companyaffiliate of such bank shall have obtained from theFederal Reserve Board, pursuant to the provisions ofSection 5144 of the Revised Statutes, as amended, a

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

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"voting permit entitling any such affiliate to votethe shares of stock, now or hereafter owned or con-trolled by the affiliate, of such bank and of allother subsidiary member banks for all purposes.

"As you were advised in a telegram dated January 8, 1935,the Board has extended to July 15, 1935, the time within which'The First National Bank of Louisville', Louisville, Kentucky,and the 'Trustees under Trust Agreement with Reference to Stockof The First National Bank of Louisville, Kentucky, and othercorporations, dated July 1, 1925', the holding, company affili-ates involved, may obtain the general voting permits heretoforeauthorized.

"In view of the circumstances, the Board extends to July15, 1935, the time within which compliance with condition ofmembership numbered 23 referred to above may be effected.Please advise the Boyle Bank and Trust Company accordingly."

Approved.

Letter to the "LaFayette National Bank", LaFayette, Indiana,

Ileading as follows:

"The Federal Reserve Board has given consideration to yourapplication for permission to exercise fiduciary powers, andgrants you authority to act, when not in contravention of Stateor local law, as trustee, executor, administrator and guardianof estates, the exercise of all such rights to be subject to theprovisions of the Federal Reserve Act and the regulations of theFederal Reserve Board.. "This letter will be your authority to exercise the fidu-?1ar7 powers granted by the Board. A formal certificate cover-lng such authorization will be forwarded to you in due course."

Approved.

Letter to Mr. O'Connor, Comptroller of the Currency, reading as

t°110178.

"In accordance with your recommendation, the Federal Re-"rye Board approves a reduction in the common capital stockof 'The West Winfield National Bank', West Winfield, New York,.!'. (3111 $25,000 to $8,000, pursuant to a plan which provides that;I.le released capital, together with the bank's surplus and un-!Ialvided profits account, shall be used to eliminate estimated

.""Elses and depreciation in securities, all as set forth in yourmemorandum of January 8, 1935.


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"It is noted that the bank's capital was increased onDecember 17, 1934, through the sale of $42,000 of preferredstock to the Reconstruction Finance Corporation and others,and that the proposed plan of recapitalization does not con-template a further increase in the hank's capital at thepresent time."

Approved.

Letter to Mr. O'Connor, Comptroller of the Currency, reading

48 f0110WS:

"In accordance with your recommendation, the FederalReserve Board approves a reduction in the common capitalstock of the 'First National Bank of Bainbridge', Bainbridge,Georgia, from $125,000 to $100,0001 pursuant to a plan whichProvides for the consolidation of the Bainbridge State Bank,Bainbridge, Georgia, with the subject bank, and the elimina-tlon of criticised assets from both of the merging institu-tions, all as set forth in your letter dated January 8,1935,and the accompanying memorandum."

Approved.


48 f'0110ws.

"In accordance with your recommendation, the FederalReserve Boarcl, approves a reduction in the common capitalstock of 'The First National Bank in Brooksville', Brooks-

Florida, from $50,000 to $30,000, pursuant to a plannich provides that the bank's capital shall be increased07 the sale of $20,000 of preferred stock to local interest-

r parties and that the released capital, together with the,!nkts reserve for contingencies of $50,000 and a voluntary;Aconditional cash contribution of :%60,0001 shall he used inlo!ducing the deficiency note of The First National Bank of1935;-rooks1Ti11e, all as set forth in your letter of January 9,. n

Approved.


48 t0110ws.


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"In accordance with your recommendation, the FederalReserve Board approves a reduction in the common capitalstock of'The Citizens National Bank of Maplewood; Maplewood,Missouri, from $100,000 to $25,000, pursuant to a plan whichprovides that the released capital shall be used in eliminat-ing estimated losses and other substandard assets, and pro-vides also that the pledge-back agreement between the bankand the subscribers to preferred stock shall be released, allas set forth in your memorandum of January 9, 1935.

"This approval supersedes the Board's approval datedAugust 10, 1934, of a previous plan of capital reduction."

Approved.

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

serve Bank of New York, reading as follows:

Chi

"This will acknowledge receipt of your letter of January8, 1935, transmitting a copy of your letter of January 7, 1935,to Union Trust Company of Rochester, Rochester, New York, asUbsidiary nonmember bank of 'Marine Midland Corporation',Jersey City, New Jersey, together with related inclosures. Itis noted that, in accordance with the agreement executed byMarine Midland Corporation in connection with the issuance of alimited voting permit on January 6, 1934, you have granted thetrust company permission, subject to modification or revocationbY the Federal Reserve Board, to continue to hold in its assets80 shares of stock of Servandum, Inc., a subsidiary real estateCompany.

"It is understood that your office is compiling a compre-hensive memorandum based on reports of simultaneous examinationsof Marine Midland Corporation and its subsidiary banks and com-12anies as of September 28, 1934, and that the report will be'°rwarded to the Board at an early date for use in connectionwith the consideration of the issuance of a general voting per-mit to Marine Midland Corporation. It is assumed that the re-port will contain detailed information regarding the conditiond SCOpe of operations of Servandum, Inc. Accordingly, theard will defer any consideration of this matter until consid-

eration is given to the issuance of a general voting permit toMarine Midland Corporation."

Approved.

Letter to the chairmen of all Federal reserve banks, except

No, reading as follows:


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"There are inclosed a copy of a letter dated January 2,1955, from Governor Schaller of the Federal Reserve Bank ofChicago to Mr. Szymczak, with reference to sending two officersof the bank out into the district to contact member and non-member banks in the district on industrial loans and other mat-ters, and a copy of the Board's reply thereto.

"It will be appreciated if you will present this correspon-dence to the board of directors of your bank and advise theFederal Reserve Board of your directors' reaction to the ques-tion of inaugurating a similar program in your district and asto any suggestions they may have to make as to topics whichcould be discussed by the representatives of the Federal reservebank with banks in your district if the program were adopted."

Approved.

Letter to Governor Calkins of the Federal Reserve Bank of San

l'rancisco, reading as follows:

"Reference is made to your letter of January 4 regardingthe Board's letter of December 26, X-9051, authorizing thegranting of retirement allowances to certain employees, whohave attained age 65, in excess of the allowances to whichthe7 are entitled under the provisions of Subsection 1 ofSection 5 of the Rules and Regulations governing the Retire-ment System of the Federal Reserve banks.

"Voluntary contributions of an employee, whether before°r after attainment of age 65, made for the purpose of provid-

annuity in excess of that to which he is entitled onile.basis of his required contributions, together with contri-

dle=n3).n athe bank, need not be taken into consideration inthe maximum allowance which may be paid to him

under the conditions set forth in the Board's letter X-9051of December 26, 1934."

tank

Approved.

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

of New York, reading as follows:

28 "Reference is made to Mr. Dillistin's letter1934, and to Mr. Gidney's letter of January 7311g that the 'Franklin Washington Trust Company',

_el:BeY, had sold $500,000 preferred stock and hadcriticized assets amounting to $735,600.

of December1935, advis-Newark, Newcharged off


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"After giving effect to the issuance of the $500,000preferred stock the report of examination of the bank as ofMay 3, 1934, the most recent report available, reflects anet sound capital of $877,000, after allowance for estimatedlosses, depreciation in securities, and doubtful assets, ascompared with deposits of $4,562,000. The bank, however, hasa heavy investment in banking houses, furniture and fixtures,the total investment for the head office and four branchesamounting to $1,448,000, or 22 per cent of the total assetsof the bnnk. All of the properties were reported to be non-income producing except one property which produced a grossincome of $4,000 in 1933. The analysis of the report of exam-ination as of August 24, 1933, contained information to theeffect that steps were under way to dispose of some of theProperties, but apparently the sales have not materialized.While the banking premises were carried at less than appraisedvalues it is hoped that the bank will be successful in reduc-ing its investment in banking premises to a more reasonableamount as compared with its capital structure and volume ofbusiness.

"The report of exsmination indicates that the largestPersonal trust administered by the trust department amountedto $268,8751 and that $261,758 of the investments of thetrust consisted of mortgage certificates purchased by thetrust company from its affiliate, the Franklin Mortgage andTitle Guaranty Company. You are familiar with the Board's'Jews regarding self-dealing in the purchase of investmentsor trust funds and with the fact that for some time in con-

nec'p.on with applications for membership, the Board has pre-scribed the following regular condition:

Such bank shall not, after the date of its admissionto membership, invest trust funds held by it in obli-gations of the bank's directors, officers, employeesor their affiliations or corporations affiliated with

,. the bank.will be appreciated if you will acquaint the bank with the

„ard s views in the matter and advise the Board what action

ge trl!.st company has taken or will take to bring its policy„ardlng investment of trust funds in accord with approvedv'lnciples of trust administration."

Federal

Approved.

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

Reserve Bank of San Francisco, reading as follows:

This is1934 in reply to Mr. Wheeler's letter of November 8,

9 with which was inclosed a copy of a letter dated October


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"31, 1934, from the Security Dealers Association of SanFrancisco, signed on behalf of the Association by Mr. J. R.Shuman, Chairman, Committee on Laws, and Mr. Wallace H.Fulton, Secretary.

"With respect to point No. 1 on page 2 of the letter fromthe Association which raises a question as to the proper agencyto grant extensions of time under the provisions of section 6Of the Regulation in the case of cash transactions involvingunregistered, non-exempted securities, the attention of theAssociation should be called to the Board's ruling No. 40 in-terpreting Regulation T which has been issued since the dateon which the Association's letter was written.

"With respect to point No. 2 on the same page, the under-standing of the Association is correct that in a bona fide cashtransaction which falls within the scope of section 6 of theRegulation the period of seven days within which credit may bemaintained will not start to run in the case of the sale of asecurity 'to' a customer until title to the security passes tothe customer without the customer having paid for the security.Accordingly, if title does not pass until payment is receivedthere will be no violation of the Regulation by reason of themaintenance of credit for a period longer than that permittedby the section. It should be borne in mind, however, that salesby dealers to their customers will not constitute 'bona fidecash transactions' within the definition contained in section 61,1111ess there is an agreement made in good faith that the cus-tomer will 'promptly' make full cash payment for the security.

"It is believed that all of the other questions raised bythe letter from the Association have been satisfactorily dis-posed of by the Board's Ruling No. 34 interpreting Regulation TWhich was issued after the letter from the Association was writ-te and which revoked the earlier rulings No. 16 and No. 27.

"It is noted that in the second paragraph of his letter Mr.T(reler requests a statement of the Board's opinion with regardhis belief that it will be necessary sooner or later to clari-fy the situation 'with regard to who shall act as policemen for!_r the counter dealers and others not members of securitiesChanges., In the opinion of the Board this is a subject which

'-Primarily within the jurisdiction of the Securities and Ex-change Commission. The Commission is now engaged in a study of

0th which it is believed will clarify the situation forvTaa the Board and the Commission."

Approved.

Letter to Mr. McAdams, Assistant Federal Reserve Agent at thel'ede1111 Reserve Bank of Kansas City, transmitting the following amendedelt°n Act

permit:


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Mr. S. Conant Parks, for permission to serve at the same timeas a director and officer of The First National Bank of Lander,Lander, Wyoming, and as a director and officer of The ShoshoneNational Bank of Cody, Cody, Wyoming, for the period endingJanuary 14, 1936.

Approved.

Letters to applicants for permits under the Clayton Act advis-

ing/ in accordance with the policy set forth in the Board's letter of

4444trY 9, 1955, X-90831 of approval of their applications as follows:

Mr. R. Leon Jones, for permission to serve at the same time asa director of The American National Bank of Pensacola, Pensa-cola, Florida, and as a director and officer of the Bank ofAtmore, Atmore, Alabama, for the period ending January 14, 1936.

Mr* VV. B. Leech, for permission to serve at the same time as adirector of The First National Bank of McMinnville, McMinnville,Tennessee, and as a director and officer of the Bank of Charlotte,Charlotte, Tennessee, for the period ending January 14, 1956.

Mr. Ira G. Hedrick, for permission to serve at the same time asa director and officer of The Citizens National Bank of Chili-the, Chillicothe, Missouri, and as a director and officer ofxhe Ludlow National Bank, Ludlow, Missouri, for the period end-ing January 14, 1936.

Mr.C. A. Fosnes, for permission to serve at the same time as a

:tlrector and officer of The Security National Bank of Montevideo,rntevideo, Minnesota, and as a director of the Clara City State1936'ank Clara City, Minnesota, for the period ending January 14,

Mr. 0d4 H. Klein, for permission to serve at the same time as a.1L'rector and officer of The First National &Ink of Chaska, Chaska,sotal as a director and officer of The Security National Bank4

Montevideo, Montevideo, Minnesota, and as a director and officerPert

First National Bank of Waconia, Waconia, Minnesota, for theod ending January 14, 1936.41% C. p.

Klein, 4.4-1ein, for permission to serve at the same time as a144 _ uLor and officer of The First National Bank of Chaska, Chaska,i:413.188°.ta, and as a director of The Klein National Bank of Madison,Minnesota, for the period ending January 14, 1956.


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Mr. O. W. Schulz, for permission to serve at the same time asa director of The Klein National Bank of Madison, Madison,Minnesota, and as a director of The Security National Bank ofMontevideo, Montevideo, Minnesota, for the period ending Jan-uary 14, 1956.

Approved.

Thereupon the meeting adjourned.

-)CTIA.A-Le Secretary.

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19350121_Minutes.pdf

Documents

federal reserve act

federal reserve agent

boyle bank

federal rerye board

national bank of louisville

federal reserve411k

lafayette national bank

assistant secretarythe