19341029_Minutes.pdf

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A meeting of the Federal Reserve Board was held in Washing-

on Monday, October 29, 1934, at 3:30 p. m.

PRESENT: gr. Thomas, Vice GovernorMr. Hamlingr. MillerMr. JamesEr. Szymczak

Er. Morrill, SecretaryEr. Carpenter, Assistant Secretary

The Board considered and acted upon the following matters:

Memorandum dated October 26, 1934, from Er. Smead, Chief ofthe n4-41vision of Bank Operations, recommending the appointment of

Liss Sybil E. Eainer as a stenographer in the division, with salaryat the rate of '1,620 per annum, effective November 1, 1934, subject

to ber passing a satisfactory physical examination.

Approved.

Memorandum dated October 26, 1934, from Er. Morrill, Secre-

tarY. stating that, in connection with the adoption by the FederalRetie

rre Board of the Retirement System of the Federal reserve banks,the

1°0ard took the position that new employees should pass a physicalexaxre

1 ation which would meet the requirements for ordinary life in-

at the normal rate; that it is expected that the Retirement

'ectwn44.

tee or the Board of Trustees ae the Retirement System will

Illik°1'ecommendations to the Board and the Federal reserve banks withregard

a uniform standard of physical examination and forms to

besod in connection therewith, but that in order that a form may

"411able in the meantime on -which the record of examinations

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

10/29/34 -2-

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Ude for the Board may be kept, the draft of form attached to the

memorandum. is submitted with the recommendation that it be approved

41141 mimeographed for use pending consideration of the recommendations

above referred to. The memorandum also stated that the form had

been aPProved by the Board's examining physician and by Lbssrs.

Stlead and Van Fos sen of the Division of Bank Operations.

Approved.

Lemorandum dated October 16, 1934, from Er. Wyatt, General

C°1111401, recommending that the Board authorize the purchase

tellowing law books, at the prices indicated below,

the 1egal division:

S. Reports (official), volumes 1 to 289Tswyers Reports Annotated, New Series, 52 volumes44awyers Reports Annotated, Third Unit, 24 volumesLawyers Reports Annotated, Index to Notes, 1 volume

Lawyers Reports Annotated, Digest, 10 volumes

'Is!'ican Law Reports, with Digest, 91 volumes

PtItIcTlease Law,

with Supplement and Indexon Corporations (new permanent edition)

ree°111mendation was approved by five members of the Board on Octo-

ber 27, 1934.

for the

of the

use of

T5(0)806 (less 6%

discount)85 (less 6%

discount)375225150 (less 6%

discount)

Approved.

Lemerandum dated October 22, 1934, from the Committee on

klaries and Expenditures,

11 " rrom Lr. Helm, Deputy Governor and Cashier of the Federal Re-

the

submitting a letter dated October 16,

, of Kansas City, mch requested approval of a change in

Personnel classification plan of the bank to provide for the new


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Position of "typist-clerk" in the fiscal agency department. The

Xemor andum stated that the Committee had reviewed the proposed change

alad recommended that it be approved. The recommendation vas approved

by five members of the Board on October 27, 1934.

Approved.

Letter dated October 26, 1934, approved by five members of

the Board, to Ir. Zillions, Federal Reserve Agent at the Federal Re-

81"e Bank of Cleveland, with regard to the steps which should be

takexl to correct the matters commented on in the report of examina-

ti a of the "Crawford County Trust Company", Meadville, Pennsylvania,ct of July 30, 1934.

the B°ard, to Mr. O'Connor, Comptroller of the Currency, reading as

toilows 3

Approved.


"In accordance with your recommendation, the Federal Re-reire Board approves a reduction in the common capital stock of

from irst National Bank of Cartersville', Cartersville, Georgia,i r°111 ;$200,000 to 4150,000, pursuant to a plan which providesthat the bank's capital shall be increased by '450,000 of pre-ferred stock to be sold to the Reconstruction Finance Corpora-

ion,.and that the released capital shall be used to eliminateunsatisfactory assets, all as set forth in your letter ofOctober 12, 1934."

Approved.

ri'elegra,.m dated October 27, 1934, approved by five members ofthe 13,,"laza, to the Federal reserve agents at all Federal reserve banks,g as

follows:

recuai

ti

Ruling No. 33 interpreting Regulation T. In reply to


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"certain inquiries as to whether cash or securities may bemithdramn from designated old accounts on and after November15, 1934, the Federal Reserve Board points out that the thirdProviso of section 7(a) of Regulation 1 is by its termsapplicable only to withdrawals made prior to that date.Accordingly the Board rules that: (1) On and after November15, 1934, securities may be withdrawn from a designated oldaccount to any extent not forbidden by section 4 of theregulation; and (2) On and after November 15, 1934, cash maynot be withdrawn from a designated old account, whetherrestricted or unrestricted, if such withdrawal results in anincrease in the adjusted debit balance of the account inviolation of the second proviso of section 7(a) of the regula-tion or is forbidden by section 4 of the regulation."

Approved.

Telegram dated October 27, 1934, approved by five members of

the Board, to Kr. iiilliams, Federal Reserve Agent at the Federal Re-

e Bank of Cleveland, reading as follows:

"Referring your letter of October 19, 1934, which inquiresas to correctness of your conclusion that Joint Stock LandBank Bonds are not 'exempted securities within meaning of Se-curities Exchange Act of 1934 and Board's Regulation T there-under. Board knows of no reason for differing with yourconclusion on question, and suggests that persons inquiring!hether securities have been designated for exemption by the"retary of the Treasury or the Securities and Exchange Commis-!ion be referred to those authorities, unless you have definiteItformation regarding the security in question."

Approved.

Telegram dated October 26, 1934, approved by five members ofthe

Board, to L. McClure, Federal Reserve Agent at the Federal Re-

Bank of Kansas City, reading as follows:

"In order to carry out intention of Trans. 2132 it is sug-e_sted that in letter indicating differences between your printOf Regulation T and official print you specify not only the

but changes which you mention in your telegram of October 22,jt '150 the following; Section 2(d) comma after the paren-,',Tals in last line of your print should be deleted; section"0-) words 'of this regulation' should be deleted from end of


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"first sentence of your print; section 3(c) comma after 'count'in sixth line of your print should be deleted; section 3(e)comma should be inserted after 'to' in last lino of your print;section 3(f) the subdivisions of clause 8 of section 3(f) whichare designated in your print as (1) and (2) should be desig-nated as (a) and (b) respectively; section 3(g) comma should beinserted after 'day' in last line on page 3 of your print; sec-tion 4(a) corama should be inserted after 'indirectly' in fourthline of your print; section 4(e) comma should be deleted afterSundays' in fifth line of your print and comma should bedeleted after 'account' sixth line from bottom of page 4 ofYour print; section 6 word 'and' should be deleted at end ofnext to last line of page 5 of your print; section 8(f) wordt e.' should be deleted before 'part' in second line of yourprint. Stop. Designation of these additional changes maycause some inconvenience and is perhaps not necessary, but inview of criminal penalties for violation of regulation it is be-lleved important that every reasonable effort should be made tosee that form of regulation upon which public is relying doesnot differ in punctuation or matters of substance from form invihich regulation was adopted by Board."

Approved.


the Board, to Er. W.. J. Chenometh, Secretary to Congressman Colgateii barden,

Jr., Washington, D. C., reading as follows:

"This refers to your letter of October 17, 1934, in whichYOU inquire whether or not there are provisions in any of therecent laws relating to loans to small industries that wouldtermit a loan to an industry for the purpose of erecting a new.1tli1ding. It is assumed that you have reference to the Act of_11-111e 19, 1931, relating to direct loans for industrial purposeseY Federal reserve banks, and for other purposes.is •

For your information, a copy of the Act of June 19, 1934,Inclosed herewith, together with a copy of the Board's regu-;Itti°11s issued pursuant thereto. You will note that the firstteetion of that Act amends the Federal Reserve Act by adding a,evl section, namely, section 13b, and that under section 13b

resources Is.deral reserve banks are authorized to make a portion of their

available for the purpose of providing established1711-Istrial and commercial businesses with 'working capital'.44,:"er, a building represents a permanent or fixed investment,coT.e. loan used in erecting a building would be one used for asj,ltal purpose and would not represent 'working capital'."ee Congress has required that loans under section 13b shall


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"be for the purpose of furnishing 'working capital' and sinceloan for construction purposes would not meet this require-

ment, a Federal reserve bank may not lawfully make an advanceto an established industrial or commercial business which wouldbe used for the purpose of erecting a building.

"Section 5 of the Act of June 19, 1934, also authorizesthe Reconstruction Finance Corporation to make loans to any in-dustrial or commercial business under the circumstances statedtherein. There is inclosed Circular No. 13 of the ReconstructionElnance Corporation, and your attention is particularly invitedto the next to the last paragraph on page 2 of the circular, inregard to loans to be used for construction, improvement, andrepair."

Approved.


the Board, to Idr. James E. Goodrich, Vice-President and General

Counsel of the Commerce Trust Company, Kansas City, Lissouri, reading

8.S 1'01101m

"Receipt is acknowledged of your letter of October 17,1934, in -which you state that the Keystone Corporation wasdulY dissolved by decree of the Circuit Court of Jackson County,Ilissouris on October 8, 1934, and that the trust agreement

which the stock of that corporation was held for thebenefit of the stockholders of the Commerce Trust Company,'kansas City, Missouri, was terminated on the same date.

'From the information which you have submitted it appearsthat the requirements of section 9 of the Federal Reserve ActWhich were referred to in the Board's telegram of June 15,1934, to the Federal Reserve Agent at the Federal Reserve BankOf Kansas City in regard to this matter have been satisfied."

Approved.

Letter dated October 26, 1934, approved by fivethe

Board, to Lr. Case,Balak

Federal Reserve

°f lIevir York, reading as follows:

"The Board has given consideration to

members of

Agent at the Federal Reserve

4. • Eur,ene P. Kinkead, New York, New York,,`"11,6 Proons of the Clayton Act to serve'1rector and officer of the Colonial Trust

the application offor permission underat the same 'time asCompany, New York,


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"New York, as director of Hudson County National Bank, JerseyCity, New Jersey, and as director of the South Orange Trust Com-Pany, South Orange, New Jersey, and upon the basis of the infor-mation before it feels that the issuance of the permit appliedfor would be incompatible with the public interest. For thesame reason that the Board believes the issuance of the permitunder the present application 'would be incompatible with thePublic interest, it also feels that the permit granted to theapplicant on Eay 26, 1930, covering his services as director ofthe Hibernia Trust Company (predecessor to the Colonial TrustCompany), New York, New York, and Hudson County National Bank,Jersey City, flew Jersey, should be revoked. Accordingly, youare requested to advise the applicant of the Board's positionin the matter unless there are pertinent facts which were notsubmitted with the application and which you feel should begiven consideration.

"If you deem it desirable or necessary, you are authorizedtc) inform fir. Kinkead that the Board's action with reference tonis present application, as well as to the permit which previ-ously has been issued to him, was based upon the unsatisfactory?ondition of the banks involved and the nature and extent ofthe use which he has made of their credit facilities.

"In communicating with the applicant please advise himthat, in accordance with Section V (g) of the Board's RegulationL, consideration will be given to any additional facts or argu-Inei.its not appearing in his application and accompanying forms,17hich he feels should be brought to the Board's attention, andttat also, in accordance with Section V (i) of the same regula-

he may be afforded an opportunity to be heard in connec-°-on with the revocation of his permit. In this connection,Pease advise the Board promptly as to whether Ia.. Kinkead de-

4res to submit any additional data or to have a hearing, andnot, as to what steps he proposes to take in order to comply

with the provisions of the Clayton Act."

Approved.


the Board, to Li-. Willi, Federal Reserve Agent at the Federal Re-serve t

"lc of Cleveland, reading as follows:

"Reference is made to Assistant Federal Reserve AgentI.,etcher's letter of October 6, 1934, inclosing a copy of a;1:etter dated September 25, 1934, from Er. Frank C. Irvine,t'rentum, Pennsylvania, and also submitting additional informa-h u obtained during a conference with kr. Irvine relative toIe aPPlication for permission under the provisions of the

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"Clayton Act to serve at the same time as director and officerof First Lational hank in Tarentum, larontum, Pennsylvania,and as a director of The Citizens rational Bank of Evans City,Evans City, Pennsylvania, which was disapproved by the Boardfor the reasons set forth in its letter to you of September 18,1934.

"In accordance with Section V (g) of Regulation L, addi-tional facts and arguments were submitted by the applicantfrom, which it appears that, although he attended only one ofthe monthly meetings held by the directors of The Citizens FA-tional Bank of Evans City during 1933, and one meeting heldduring the first five months of 1934, he has been in constanttouch with the bank's affairs through association with hisfather, vho is president of, and the dominating influence in,the bank; that he and his father own about 31 per cent of thecapital stock of the bank; that the applicant's father isseventy-two years of age and depends to a large extent uponthe assistance and banking knowledge of his son; and that theaPplicant stated he would in the future attend directors' meet-ings of this bank. It also appears that the statement made byYour office, in the original report submitted with this applica-tion, to the effect that it was believed that the best interestsof the public would be served by the applicant's limiting hisservices to the First rational Bank in Tarentum as that hank'would need his undivided attention to succeed, is somewhat off-set by the fact, as indicated in Er. Fletcher's letter of Octo-ber 6, 1934, that, since the reorganization, the deposits ofthe First ULtional Bank in Tarentum have increased, the bank isnow on an earning basis and the applicant apparently enjoys theconfidence of the bank's customers.

"In view of the foregoing, and in accordance with the rec-.7.1nendation of your office, the Board has approved the applica-tion of hr. Irvine, and there are inclosed the original andcopies of a permit covering his services with the above-named

7,1ks for transmittal by you to the applicant and the banks in-f?;Lved. There also is inclosed a copy of the permit for your

The Board feels, however, that a director should have a

Z!ltisfactory record of discharging his duties and responsibili-_”s by participating in the management and operations of a bprkTch he is serving through attendance at directors' meetings,

when transmitting the permit to Er. Irvine, it is suggested

thatexpectation You advise him that the permit has been granted with the

gectation that, as indicated in his statement to you, he willIT_P!'clie his attendance at directors' meetings of The Citizens

cnal Bank of E VMSCity.ti__ "The Board requests that, when you submit your recommende-fu as a result of your annual review of this permit, you report

Y 11.1 to la-. Irvine's attendance at directors' meetings."

Approved.


‘34.r6-)0

10/*34 -9-


the Board, to 1s. Stevens, Federal Reserve ,,gent at the Federal

serve Bank of Chicago, reading as follows:

"Reference is made to Assistant Federal Reserve AgentYoung's letter of October 1, 1934, inclosing a copy of a letterfrom Lx. C. P. Bentley, Owosso, lachigan, submitting additionalinformation relative to the application of Lx. Bentley for aClayton Act permit, which MRS disapproved by the board for thereasons set forth in its letter to you of September 20, 1934.

"The Board has given consideration to the additional factssubmitted in accordance with Section V (g) of Regulation L andhas granted a permit to Lix. Bentley to serve at the same timeas a director of The Liari Beach First 'Ea-uional Bank, LiariBeach, Florida, and as director and officer of the Owosso Sav-ings Bank, Owosso, Lichigan. There are inclosed the originaland copies of the permit for transmittal by you to Lir. Bentleyand the two banks, and a copy for your files.

"In considering Br. Bentley's application and the addi-tional information submitted, the Board noted the applicant'sstatement that he always attends directors' meetings at TheLiam' Beach First Rational Lank during the three or four monthsof his residence ir Liami Beach each winter and that themajority of the bank's business is done during the winter season.It uas noted also that in the report of examination of this bank

Larch 28, 1934, the applicant was reported to have at-'tended four of the six meetings of the directors held since thePrevious examination, this being the best attendance record of

oft he three nonresident directors of the bank's board ofalrelors of fourteen members.ihe Eoard feels that a director should have a satisfactoryrecor

d of discharging his duties and responsibilities to a bank

zLis serving throup-,h attendance at directors' meetings and

Zough exercising supervision over the bank's affairs in!F 71114Ys. Although it appears that during the several'1"ns he resides at Iiiam!1Beach each year, Br. Bentley proper-

V S his responsibilities to The idami Beach Firstclonal Bank through attendance at directors' meetings, it was

11°t disclosed in what way he keeps in touch with the bank's!f_fairs throughout the rest of the year. Ehen transmitting the

rermit rmit to 11r. Bentley, you are requested to inform him that thehas been granted with the expectation that he will keep

-u?uch through appropriate means with the affairs of TheBeach First Nntional Bank not only during that portion of

re: .rear in which he resides in Liand Beach, but during theialnder of the year when distance prevents his attendance at

urmal directors' meetings.


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"Please advise the Board of your action in this matter."

1,pproved.


;t4 Beard, to Mr. Stevens, Federal Reserve Agent at the Federal Re-


"The Board has reconsidered the application of Mr. h. C.Jamieson for permission under the provisions of the Clayton Actto serve at the same time as officer of The First NationalBank of Madison, Madison, Wisconsin, and as director of theBank of Poynette, Poynette, Wisconsin, and, upon the basis ofthe information before it, including that submitted by the ap-plicant in his letter dated October 8, 1934, still feels thatthe granting of the permit applied for would be incompatiblewith the public interest, as indicated in its lettor to youdated September 16, 1934. You are requested to advise the ap-plicant accordingly.

"Please ascertain and advise as to what steps Mr. Jamiesonproposes to take in order to comply with the provisions of theClayton Act."

Approved.

Letter dated October 26, 1934, approved by five members ofthe Board, to Mr. Stevens, Federal Reserve Agent at the Federal Re-


yr he Board has reconsidered the applications of Messrs.1, 11113111 L. Smith and 6chuy1er L. Marshall, both of St. Johns,1.7'clligans for permission under the provisions of the Clayton:met to serve at the same time as directors of The St. Johnslijational Bank and the Clinton County Savings Bank, both of St.

jt Assistant

Iichigan, and, upon the basis of the additional informa-cn furnished the Board in leters from Assistt Federal Re-serve Acent Young, dated October 9, 1934, has granted the

Pernit511 riho originals and copies of the Clayton Act permits are

inclosed for transmittal by you to the applicants and the twobara-s .involved, with copies for your files."

Approved.

Letters dated October 26, 1934, approved by five members of


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the Board, to the respective Federal reserve agents, stating thatthe Board has given consideration to the follolling applications for

Permits under the Clayton Act, and that, upon the basis of the infor-

ille.tien before it, feels that the issuance of the permits applied for

Wciuld be incompatible with the public interest. Each letter also

requested the agent to communicate to the applicant the Board's posi-tion

in the matter, and to advise the Board promptly as to whether

the applicant desires to submit any additional data, and, if not, asto 1,

17 at steps he proposes to take in order to comply with the provi-sions of the Clayton Let:

14r, Bartholomew E. Brophel, for permission to serve at the sameas a director of the Genesee Valley Kational Bank andtrust Company of Geneseo, Geneseo, Hew York, and as an officer!t,Ild director of the Genesee River Kational Bank of MountLierris , Mount Morris, New York.

1" E. Walter Moses, for permission to serve at the same time" an officer of the Dalton Banking House, Dalton, rem York,!:Ild as a director of the Genesee Valley National Lank andIrust Company of Geneseo, Geneseo, New York.

P.W. Kavanaugh, for permission to serve at the same timeec,s a director and officer of the Manufacturers Bank of Cohoes,,5'hoes, New York, as a director of the Bank of Waterford,rterford, New York, and as a director of the Bolton Nationalof Bolton Landing, Bolton Landing, Kew York.

1dr. ly' I. Ired-way, for permission to serve at the same time as11,r director of The Coraopolis National Bank, Coraopolis, Pennsyl-0411i,, and as a director of The'Coraopolis Trust Company, Cora-P°118, Pennsylvania.

Approved.

Lett ers dated October 2G, 1934, approved by five members oftheBoard,

tO the following applicants for permits under the Clayton'

Sig of approval of their applications as follows:


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Lr. S. L. Caum, for permission to serve at the same time as adirector and officer of the Bethlehem National Lank, Bethlehem,Pennsylvania, and as a director of the Federal Home Loan Bankof Pittsburgh, Pittsbur, Pennsylvania.

bavid F. ....culoskey, for permission to serve at the sametire as a director and officer of the First National Lank inCharleroi, Charleroi, Pennsylvania, and as a director and of-ficer of the Charleroi Savings and Trust Company, Charleroi,Pennsylvania.

4...r. Joseph Coudon, for Permission to serve at the same time asa director and officer of The Citizens National Lank of Havrede Grace, Havre de Grace, :dary]and, and as a director and of-ficer of The hational Lank of Perryville, Perryville, Laryland.

LI'. C. L. Lrunsdale, for permission to serve at the same timeas a director and officer of The First and Farmers National

of Portland, Portland, Forth Dakota, and as a director of-che Goose River hank, Mayville, North Dakota.

J'Ipproved.

There irmre then presented the followins applications for

e444Ces in stock of Federal reserve banks:

/&lication for ORIGINAL Stock:t'.1717-

Shares 7.0.

1:671-hank of Lanark,Lanark, Illinois

lictions for SURREhDER of St(1. 2.blo. 2.

clietirCaratri—i—c Trust Company,l'iew York,Few York

ate

tii,f3triet LG. 10.

Wialfield, KansasThe Central Savincs Lnka

Den.7cr, Coloradoand Trust Company,

Approved.

36 36

3,000 3,000

9

90 99Total 3,099


3324

%roved:

Thereupon the meeting adjourned.

Vice Governor.


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