2111 ? Federal Reserve Board approves the salaries …...1, "Your letter of September 18 re 'The...

A meeting of the Executive Committee of the Federal Reserve Boardwas held in Washinqton on Wednesday, September 26, 1954, at 4:00 p. m.

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

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

The Committee considered and acted upon the following matters:

York, reading as follows::

dir"In accordance with the action taken by the board of

? of Your bank at its meeting on September 20, advicecL l ti whi ectors

ch was communicated in your letter of September 21, 1954,t ? Federal Reserve Board approves the salaries fixed for cer-2111 Gofficers of the bank, effective as of September 21, 1934,cI the rates shown below:

Letter to Governor Harrison of the Federal Reserve Bank of New

Npme

Charles H. CoeHerbert H. KimballCharles N. Van Houten,

Ward Waters

Jr.

TitleAnnualSalary

Deputy Governor $15,000Assistant Deputy Governor 7,500Manager, Security CustodyDept. 6,000

Manager, Cash Custody Dept. 9,000

per "The Board also approves the salary at the rate of 4,800- who annum, fixed by your directors, for Mt. William F. Treiber,ted "I

if- ts been appointed Assistant Counsel. It will be apprecia-

ben, You will advise the Board when Mr. Treiber's appointnent--mss effective."

Approved.

Letter dto ated September 25, 19341 approved by four members of the

ard, to mr.rreston, DePuty Governor of the Federal Reserve Bank ofChi aeo

' reading as follows:

•

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

2963

9/26/34-2-

"The Federal Reserve Board approves the recommendationcontained in your letter of September 18 that the temporary!mPloyme nt of Mr. Ray Hartney, as electrician in the Service

tinuDepart

ment of the bank, at an annual salaryof $33001 be con-ed until October 6, 1934."

Approved.

Letter dated September 22, 1934, from Mr. Wood, Chairman of the?ederal Reserve Bank of St. Louis, advising of the acceptance by the

Of directors of the St. Louis bank, at its meeting on September°f the resignation of Mr. W. A. Brown as a director of the Louis-branch of the Federal Reserve Bank of St. Louis.

Noted.

Memorandum dated September 18, 1934, from the CommitteeSe'l"ies

onand Expenditures, submitting a letter dated September 7 from

Attebe,,, Deputy Governor of the Federal Reserve Bank of St. Louis,1'4°1 requested approval of changes in the personnel classification plan°I.the bto provide for seven new positions in the collateral & col-lecti°n,

Reconstruction Finance Corporation, and credit-discount depart-4"ts' the dis

continuance of three positions and increases in the salaryz6tilge or two

Positions in the collateral & collection, Reconstruction

1.14"ce Corporation department, and changes in the "description of work"441

ncIllallfications required" for several existing positions. The mem-°I4L114111 stated that the committee had reviewed the proposed changes and

teeoraraelided that they be approved. The recommendation was approved bytc41rMembers of th., Board on September 25, 1934.

Approved.


2964

9/26/34

theY to the boards of directors of the "Economy Bank of Ambridge",

AlltridgrAPennsylvania and "The Ohio-Merchants Trust Company", Massillon,Ohio

' each letter statinq that, subject to the conditions prescribed inthe 1...4,%t,'Ler, the Board approves the institution's application for member-,

-5-

Memorandum dated September 22, 1934, from the Committee onSalar4__

J-es and Expenditures, submitting a letter dated September 17 from

Walsh, Federal Reserve Agent at th,,, Federal Reserve Bank of Dallas,

7gh141 requested approval of a change in the personnel classification

P41 of the El Paso branch to provide for the new position of "R. F. C.04ni:ft in the Reconstruction Finance Corporation department. The mem,oranclum

stated that the committee had reviewed the proposed change and

recommended that it be approved. The recommendation was approved by

f(YLIrInell4ber5 of the Board on September 25, 1934.

Approved.

Letters dated September 25, 1934, approved by four members of

stock 4-,r1 the

-Federal Reserve Bank of Cleveland.

shiP in ,he

Federal Reserve System and for the approoriate amount of

Approved.

Letter dated September 25, 1934, approved by four members of the(141'd, to m, w

00d, Federal Reserve Agent at the Federal Reserve Bank of-vul

3' reading as follows:

tical w, s r f e ers to the previous correspondence in connec-issuance by the Mississippi Valley Trust Com-

Missouri, of guaranteed mortgage paricpa-vall. ;u1I

I

iicates through its subsidiary, the,

MIssissippi

St. LouelnPallY, and by the United Bank and Trust Company,a, through its subsidiary, the United Corporation.


2965

9/26/54—4—

"In view of the information contained in Mr. Stewart'sletters of August 27, 1954, that both corporations have dis—e"tinued the business of issuing such certificates and aremaintained solely for the Durpose of tax economy, and inas—

r4 as it appears from the reports of examination of theJ.ssissippi Valley Trust Company as of June 21 19341 and oftthe United Bank and Trust Company as of January 221 1934,.hat neither bank is engaged, either directly or indirectly,in 'the business of issuing or selling real estate loans orpart

businesstherein, it does not appear to be necessaryfor the Board to take any further action in the circumstances."

Approved.

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

- eralAeserve Bank of San Francisco, reading as follows:

1, "Your letter of September 18 re 'The Bank of Spanishb ) Spanish Fork, Utah. Condition of membership num-2red 19 requires that estimated losses be charged off ornherwise

eliminated. Under the provisions of the condi-7p.a loan classified as estimated loss need not be charged

411 lf the bank has obtained adequate security to support.t.„7 1°an. Whether in any particular case the security ob—ti—neu is sufficient to remove the loan from the classifica—

of estimated loss and warrant the bank carrying it as'" asset is a matter of fact to be determined by your office."

Approved.

Letter dated September 251 19341 approved by four members of the13card, to

Wood, Federal Reserve Agent at the Federal Reserve Bank of.Loui

s, reading as follows:

All oeipt is acknowledged of Mr. Stewart's letter, dated' °O, 1934, with inclosure, in regard to whether the St.com's Union Trust Company, St. Louis, Missouri, is a holdingst 13;8147 affiliate of the First National Bank in St. Louis,

luis, Missouri.there Fr°m the information submitted, it is understood thatolit; are 6001000 shares of capital stock of the national bankof .ci;allding and that 485,309 shares were voted for the electionAt J-rectors of the national bank at the last annual election.such

or

272,290 shares, or more than-50% of the total


2966

9/26/34-5-

tinuirther voted, were owned, controlled, and voted by personsOther than the trust company.i "It is understood, however, that the trust company hasbn its possession 263,515 shares of stock of the national

or more than 50 per centum of the number of sharesvt°Ied at the last election of directors, but that it con-thic)ls°111,Y 207,646 of such shares, or less than one-half ofb e number of shares then voted. In this connection, it has,e!,4 noted that the trust company owns 188,681 shares and holdsITQ controls as sole trustee 18,965 shares. It also appears

rat the trust comp holds as executor, administrator, or cu-!tor, subject to order of court, 2,484 shares; that it holds

co-trustee, co-executor, co-administrator, or co-curator,jo!459 shares) control of which can be exercised only by thehort action of all the trustees, executors, etc.; and that it

ha' cis as agent subject to the control of a principal, 16,9,,,6

to res of stock. It is indicated that the trust company doesexeieZcsi,se a directing influence over its co-trustees, co-

other co-holders of the stock in question.a On the basis of the information submitted, it does notsZar that the trust company controls the stock which it holdsvidlilect to order of court, or in conjunction with other indi-centals, or as agent, or that it controls more than 50 perdirellnl of the number of shares voted for the election of

otheZ:" of the national bank at the preceding election orEitTicse comes within the definition of holding companydift.late. Accordingly, the Board knows of no reason toIhliof,with the conclusion of Mr. Stewart that the St. Louis

irust Company is not a holding company affiliate of theNational Bank in St. Louis."

Nteral Reserve

Agents',

Board '4" oraer to avoid unnecessary duplication of activitieslativ feels that work of Agents' Committee for Study of Legio-mitt: Suggestions should be combined with that of System Com-ll'a.rries,°11 Legislative Program which now consists of Governorsand t1711 ller and qyself,ton ofTfore has added Messrs. Williams of Cleveland and Pey-lative ;inneaPolis to membership of System Committee on Legis-Pedsr

Reserve On assumption that this is satisfactory to

-eserve Agent Conference, Messrs. Williams and Peyton-111g advised by wire today of their appointment and all

Telegram signed by Vice

approved by four members

Approved.

Governor Thomas under date of September 251

of the Board, to mt. Stevens, Chairman of the

onference, reading as follows:


9/26/34

SePteinber 25, 1934, approved by four members of the Board, to the chair-rnela ov and g

__.ernOrS of 7411 Federal reserve banks, reading as follows:

. "At the Federal Reserve Agents? Conference held in May ofYear, there was appointed a Committee for the Study of

42egislative Suggestions, and during the conference of Governors;14 Federal reserve agents with the Federal Reserve Board inashington in June, 1934, a Recovery Program Committee was ap-r

1inted by the Board, for the purpose of making a study of bank-

, b,1C,3,-aws and of preparing a legislative program for consideration114 bile Board. Since then Governor Black as Governor of the Federaleserve Bank of Atlanta has been added to the latter committee.

+1, "In order to avoid unnecessary duplication of activities,irTue Federa.L Reserve Board felt that the work of the Agents? Com-l-ttee should be combined with that of the Recovery Program Com-mittee, and, therefore, has added Messrs. L. B. Williams, of44,eIreland and J. N. Peyton, of Minneapolis, who were members ofk"4.: Federal reserve agents? committee, to the membership of themit!very Program Committee, which will be called the System Corn-tee on Legislative Program. The other members of the commit-Gov:e Mr. Thomas, Vice Governor of the Federal Reserve Board,

;rnor Harrison of New York, Chairman of the Committee, Governor

la of Boston, Governor Norris of Philadelphia, Governor Fanchr.eveland Governor Black of Atlanta, and Governor Schaller oChicago

Ze;;t:tmr: il(t)ferthe committee on September 6, 1934, it was

R. Stark, who until recently was Chief ofpartmlnancial and Economic Research Section of the Treasury De-as8i ellt, should be employed on a monthly basis as technicalMonthtant to the committee, with salary at the rate of $750 per2 with the understanding that the expense involved would bearra ted.ocated among the twelve Federal reserve banks under the samebytiTerlent as was used in connection with the expense incurred

e oystem Committee on Reserves. It is understood that Mr.

-6-

,--)96f7

"Federal reserve banks are being advised by letter."

Approved, together with telegrams, alsodated September 250 1934, and approved by fourmembers of the Board, to Messrs. Williams andPeyton, Federal Reserve Agents at the FederalReserve Banks of Cleveland and Minneapolis,respectively, advising them of their appoint-ment to the committee and requesting that theyadvise if their appointment meets their approval.

In connection with the above, there was presented a letter dated


2968

9/26/34-7-

"Stark will also serve as secretary of the Committee. Under the

ropo sed arrangement Mr. Stark's salary would be paid by theederal Reserve Bank of New York and allocated among the Federal

;e,serve banks on the basis of the capital and surplus of the banks.committee's action has been approved by the Federal Reserve

noard•al "It will be appreciated if you will advise the Board if thetul"ation to your bark in the manner referred to of a portion

of1-the expense involved in connection with the employment of 1. Starkmeets with the approval of your directors."

Approved.

Telegram to the Federal reserve agents at all Federal reserve banks,

1161-11g as follows:

n "In condition report forms to be used by member banks on(;Vitt call Item 3 of assets will read 'United States Government

4-Ligat10ns, direct and/or fully guaranteed' and will includeT/tv gations of Reconstruction Finance Corporation, Federal Farm'"Eage Corporation and Home Owners' Loan Corporation guaranteedti to both interest and principal. In weekly member bank condi-ch°4 rPport, Form B-211 Item C, beginning October 31 should beinel7ed to read 'Securities guaranteed by United States Govern-by to both principal and interest'. Securities guaranteedLoa, states Government as to interest only (Home Owners'1(14. Corporation 4 percent bonds) should be included in Item DIsi;t7'er bonds, stocks and securities'. The explanatory words81„171.:1 in parantheses following Items B, C and D of Form B-21y.Z1-1-1-cl be eliminated. In order to guard against errors suggest13_211.T*nish reporting member banks with supply of revised Form

toa„to 1

4r. George V. Gilbert, Philadelphia, Pennsylvania, reading asl'°110ws.

194 "Receipt is acknowledged of your letter of September 16,Res e.' addressed to Mr. Eugene Meyer, Governor of the FederalGovel've Board, and as Mr. Meyer's resignation as a member andhasTIox' of the Board was accepted in May, 19331 your letterbeen

referred to this office for reply.The members of the Federal Reserve Board are notar with the details of the credit research work which

Approved.

Letterdated September 251 1934, approved by four members of the


2969

9/26/s4-8-

You state was performed by you and in connection withWhich you are seeking reimbursement from the AmericanBankers. Association, and as it is not a metter which fallsWithin the purview of their authority, they are unable toexpress an opinion with regard thereto."

Approved.

Letter dated September 25, 1934, approved by four members ofthe Board,

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

"In considering the applications of certain individualsUnder the Clayton Act for permits to serve The HamiltonNational Bank of Chattanooga, Chattanooga, Tennessee, andcertain other banks, it has been noted that the report ofexamination of the national bank as at April 5, 1934, indi-lates that the bank had issued mortgage participation certi-icEsttes through the medium of an agency captioned 'The2amIlton National Bank of Chattanooga, Chattanooga, Tennessee,rarticipation Agency Account'.

"The information available to the Board does not make itcleara whether or not, in connection with such certificates,

national bank is violating the provisions of section 21(a)V.1.4 of the Banking Act of 1933. It will therefore be appre-7;ated if n YOU will advise the Board with regard to what action,in -T,9 You may see fit to take in connection with this matter- Order that the Board may have this advice before it in de -t errailling whether in its judgment it is not incompatible withthe

Public interest to issue the permits applied for underthe Provisions of the Clayton Act."

toard

u t° Mr. Fred A. Ironside, Jr., The Administrative Assistant,motional

EmergencY Council, Washington, D. C., reading as follows:

vio

T

a "Your letter of September 13, 1934, addressed to theGovernor of the Federal Reserve Board, with which youin mitted

sylit;elmessee copies of certain letters from your State DirectorIn regard to policies of the Federal reservegoarcelm, was brought to the attention of the Federal Reserve

Approved.

Letter dated September 25, 1934, approved by four members of the

"As one of the members of the Board--Mr. James--expected


2970

9,/26/54-9-

"to be in St. Louis on Wednesday, September 19, he invitedMr.• Humphreys to meet him in St. Louis on that date for

Purpose of discussing the matter. Mr. Humphreys mettlr. James in St. Louis where they attended a meeting of theooard of directors of the Federal Reserve Bank of St. Louis

ur_.ndY Mr. James feels sure that Mr. Humphreys was convincedthe officers and directors of the bank that he had been

misinformed and that the Federal reserve banks and Federalclessrve rules had nothing whatsoever to do with the problem4 ad in mind. He stated, however, that he was acting onVuormation furnished him by an officer of a member bank in',!emphis and because of that statement arrangements were made;or Chairman W Reserve

U. and Director Dillard of the Federal Resee

_411k of St. Louis to meet him in Memphis within the next weekten. days in order that they might go direct to the sourceclear information

. If you should receive any furtherinformation and have the misunderstanding

port from Mr. Humphreys regarding this matter, the Boardwould be pleased to be advised."

Iiieara) to

Governor Geery of the Federal ReeveBank of Minneapolis,reading as

follows.

to eference is made to your litter Of August 3 in regardmiped ,mum pensions under the Retirement System of theweReserve banks. About the time we received your letterhada-Lso were advised by another Federal Reserve bank that itit tisi°m?.. suggestions to offer with regard to the plan outlinedlett:: "3°ard's letter to you of August 1, and a reply to your

delayed pending the receipt of such suggestions.how In order not to delay further a reply to your letter,penjer) ur You are advised that the service for which a minimumservrn °f $30.00 per annum under Option One, for each year ofmaximum of twenty years, may be granted is notbIli'-ned to

creditable service der the rules and regulations,deren4include

underservice after attainment of retirement age ren-is 4,4-411°0 March 1, 1934, which under the rules and regulationsEteaQ regarded as creditable service. You are correct inco4eidng that a fractional part of a year may be taken intothe

Pro j810 Drer”ion in determining the maximum pension payable under'sions of the Board's letter of August 1, 1934."

Approved.

Letter dated September 25, f934, approved by four members of the

Approved.


2971

9126/34 -10 -

Letter dated September 25, 1954, approved by four members of

the Board, to Mr. Ronald Ransom, Chairman of The Banking Code Committee,

419.4ta, Georgia, reading as follows:

"There is inclosed herewith for your information a copyct a letter received by the Board from Mr. M. A. Arnold,!resident of the First National Bank of Seattle, Seattle,Nishington, presenting certain questions with regard to theanalysis of accounts and the absorption of exchange or col-lection charges by member banks in view of the provisions of8ection 19 of the Federal Reserve Act.

"You will observe that Mr. Arnold's last question iswhether it would be permissible to provide for the waiving of

of-pocket charges in a nominal amount, for example, one°r two dollars per month for any one customer, on any or all:Iccounts without regard to the amount of the balances. This-48 substantially the same question as that to which someconsideration, as you know, has already been given and you:ill recall that the advisability of the Board's publishingruling with regard to the question was considered by your-

8ceoti.Itte.members of the staff here as well as members of your

"You have been of much help to us in the consideration ofluestions relating to this subject heretofore and it will be!PPreciated very much if you will let us have the benefit of?IV' comments you may care to make with regard to Mr. Arnold's-"Iquiries before the Board replies to his letter."

Approved.


'4, to mr.

11111 J. E. McWilliams, Cashier of The Old National Bank and

--.°11 Trust Company of Spokane, Washington, reading as follows:

re "This refers to your letter of September 10, 1954, withtagard to the treatment of out-of-pocket expenses or chargesdr e to your bank by non-par banks in connection with checksijIT the'o them and handled for credit to your customers' accounts,

light of the ruling of the Federal Reserve Board pUb-

Z11,'e 1934 ed °11 Pages 394-396 of the Federal Reserve Bulletin for

e3cel, The ruling in question relates to the absorption ofel"Ige or collection charges by member banks and to the in--131011

of such exchange charges and other actual out-of-pocket


2972

9,/1 4

1,expenses in analyses of accounts of customers. Charges paiduY Your bank to non-par banks in connection with the collectioncr checks drawn on such banks and handled for credit to your2ustomers' accounts are charges of the kind referred to in theloard's ruling and are subject to the provisions of that ruling.Tn

accordance with paragraph numbered 1 on page 394 of the rul-111 , the absorption by a member bank of such charges in amountsinlch vary with or bear a substantially direct relation to the1,--ount of a depositor's balance, instead of passing such charges:ack.to its customers, constitutes an indirect payment of inter-

2

fle

reover,,,st in violation of law if the deposit is payable on demand.

in accordance with paragraph numbered 3 of the ruling,a:n; inclusion by a member bank of charges of the kind describeds your letter in an analysis of an account which also includes

redit allowed the customer for interest or for the reason-4 ple value of the account to the bank, involves a payment of;1.1131terest to the extent that such credit offsets such chargess° rbed IT the bank, and is in violation of law if the depositPaYable on demand."

ta" tCase, Federal Reserve Agent at the Federal Reserve Bank of

New y

Approved.


—11—

"k, reading as follows:

All„, :Receipt is acknowledged of Mr. Dillistin's letter of27, 1934, regarding the applications under section 32trnvue Ban In Act of 1933 of Mr. Herman J. Manzel and Mr.

aud C'teSt Pey

leg ler for permits to serve Liberty Bank of Buffalo

1)1.1141 Y Union Corporation, both of Buffalo, New York. Mr.jt,..4-stin inclosed copies of your letter to Mr. Manzel dated164.12, 1934, and of the applicants' replies dated August 7,

Vni,,,ITle replies from the applicants state that the City'crporation 'invests and trades for its own account.bil4 Particular phase of its business totaled 95.5% of the1.4 2lessfor the past year.' The corporation is also engaged

t''11.1e

brokerage business. Ninety-five per cent of the cor-P°rationthall t s Portfolio of investments has been held for lesstoliths!elve months and 80% has been held for less than six

appli"Mr. Dillistin says that the information contained in thetoal„.17alltst letters of August 7, 1934, appears to confirm the

s earlier conclusion that section 32 is applicable to the


29739/26/34

-12-

ttrelationships in question, and the Board is of the same°Pinion, since it appears that the firm's business consistsitiesalmost exclusively in actively ourchasing and selling secur-

.

'Tor reasons with which you are familiar, the Boarddoes not feel that it may properly grant permits in cases

this kind,the and it is therefore reauested that you advise

sPplicants that, after consideration of the informationslibmitted, the Board has denied their applications."

Approved.

Letter dated September 25, 1954, approved by four members of the?card

) to Mr. J. M. Brittain, Philadelphia, Pennsylvania reading astqlovs:

i "Reference is made to your letter of September 6, 1934,

to sing a copy of a letter dated August 31, 1934, addressedt.mr. E. C. Hill, Assistant Federal Reserve Agent at the

;Pinaeral

Reserve Bank of Philadelphia, in which you ask for theion of the Board with regard to the auestion whether Mr.

Billiam K. Eckert, who holds the position of Manager of theeclInIllch Office at Reading, Pennsylvania, of Graham, Parsonsth'0.) should be regarded as a /manager' of that company withine meaning of section 3? of the Banking Act of 1953.

poi .L Your y letterand the letter from Graham, Parsons & Co.,home

nu gut that Mr. Eckert' s authority is limited and that the

:2„ 1 tra

office prescribes definite rules which he must follow in4-ions. The letter from Graham, Parsons & Co.Plifiesnsact

this statement, and adds that he has no authority

Fttalinece :haracter of the business transacted. In the air-) You suggest that section 32 is not applicable to

illelkert since the word 'manager' should be interpreted toflue persons who not only carry on some part of the manage-

of",11 of the organization but who are also vested Witha shareae...:"Ile nal control or authority in the organization, or'3°11 ifin formulating its policies.Which

The Board has given careful consideration to the viewis f You express in this matter but, as the word 'manager'

requsntly -4:snch used to describe a person in charge of a local

the .(aIrs of an organization and in view of the wide use

as applied to managers of branch offices ofvas ,ljties dealers at the time when the Banking Act of 1933opiscler consideration by Congress, the Board is of the"-4°n that the words 'officer, director, or manager' in


2974

9,/ 4

"section 32 are properly to be regarded as including a managerof. such a branch office. This view is indicated in the defini-:blon of the word 'manager' in the Board's Regulation R and hasbeen .followed in connection with several applications undersection 52 which have been acted upon by the Board."

Approved.

Letters dated September 251 19341 approved by four menbers of the

13"1, to the respective Federal reserve agents, stating that the Boardhas given consideration to the following applications for permits underthe pl

'1443rtOrl Act, and that, upon the basis of the information before it,e°11clirs wI •th the opinion that the issuance of the permits applied forWould b

e incompatible with the public interest. Each letter requestedthe agent to co lIcate to the applicant the Board's position in the

and to advise the Board promptly as to whether the applicantdew-'4'J:es to

Submit any additional data, and, if not, as to what steps

tatte

he pr

°Pc)see to take in order to comply with the provisions of the ClaytonAt.

11* Hatti e lt M. Barnes, for permission to serve at the same tine

ii'l !ja director of The First National Bank of Lacon, Lacon,e) and as a director of the Lacon Sate Bank, Lacon, Illinois.

!Ir. Ra

,d. Al. Barnes, for permission to serve at the same time as

a

as lrect

.

or of The First National Bank of Lacon, Lacon, Illinois,azd

or

and officer of the Lacon State Bank, Lacon, Illinois,Tol,as a director and officer of The Citizens National Bank of

Toluca, Illinois.Mr. S.direw. 1". Scott, for permission to serve at the same time as aas a ,,,T11 of the Patrons Co-operative Bank, Olathe, Kansas, and

'Irector of The First National Bank of Olathe, Olathe, Kansas.

Approved.

Letter dated September 241 1934, approved by four members of theto Mr

• 4cClur., Federal Reserve Agent at the Federal Reserve Bank


2975

9/26/34-14-

of-ansas City, reading as follows:

"There are inclosed the Clayton Act permits and copiesthereof issued by the Board to Mr. C. IL Brown, covering his8!rvicss as director and officerof The First National BankOf Cambridge, Cambridge, Curtis State Bank, Curtis, and StateBank of Trenton, Trenton, and to Mr. Chas. Mousel, covering

.111is services as director and officer of The Wilsonville Stateanky Wilsonville, and as director of The First National Bankof Cambridge, Cambridge, all of Nebraska, for transmittal byYou to the applicants and the banks, together with copies forYour files. -

"In the consideration of the applications of Mr. Brownard Mr. Mousel it was noted that The First National Bank ofCambridge and the Curtis State Bank had previously been re-Ported being in unsatisfactory condition but that the con-

ofthP Cambridge bank has been improved by a capital!ehabilitation involving the sale of '525,000 preferred stockrr. the

Reconstruction Finance Corporation aryl the elimination°I certain criticized assets, and that the Curtis bank was re-QrgTlized on May 11, 1933, involving a waiver of 35% of de-posits and contributions by stockholders of ft0,000; that Thefllsonville State Bank has been reported as being in unsatis-uaet°rY condition but that recently 1..2,000 preferred stock:s been sold to the Reconstruction Finance Corporation and„Ftaln assets eliminated, resulting in an improvement of the;Lluation although the Nebraska Department of Banking considersalled !!ankts situation still to be unhealthy and unsatisfactoryasa uelieves that it may be necessary to levy and collect an

essment against the common stockholders; that the conditionof' a the Cambridge bank apparently was attributable to the man-irTent of Mr. Brown, whom the national bank examiner described

report of examination as at February 5, 1934 as hope-re's14Y incompetent; and that Mr. Mousel apparently was largelyoernsible for the condition of the Wilsonville bank because.

domination, together with other officers, of the policles,L that institution.

the "or these reasons, the Board has not been disposed to grantotl, Permits. However, the Board has taken into consideration theer:r factors involved in these cases, Particularly with refer-brart° the substantial stockholdings of Mr. Brown in the Cam-

ridt Cu rtis banks and the long periods of service withrse --"4.s of both Mr. Brown and Mr. Mousel, and, in view of your40.4111mendations, the Board has granted the permits. It will bettl'edy however, that the permits have been granted to continue1-94ffeet only for the period ending at the close of December 31,re u' and, in transmitting the permits to the applicants, you areq ested to call their attention to this feature of their permits.


2976

9/26/34-15-

"The Board has granted the permits for the period ending at theClose of December 31, 19341 with the expectation that the statusof Mr. Brown and Mr. Mousel will, at the next annual meetingsof the stockholders of the banks which they areserving, be broughtinto conformity with the provisions of the Clayton Act and youare

requested to inform Mr. Brown and Mr. Mousel of the Board'sPosition in the matter. This will avoid the necessity of theirsevering their connections with any of the banks at this time,and the situation can be met, it would seem, without embarrass-ment or a misunderstanding by the communities.

"Please keep the Board informed of the action taken in thisTratter.n

Approved.

Letter dated September 251 19341 approved by four members of theBOa

rd, to Mr. McClure, Federal Reserve Agent at the Federal Reserve Bankof r

a8 City, reading as follows:

mr. "The Board has given consideration to the application ofv. .W. W. Frye, Olathe, Kansas, for permission under the pro-

of the Clayton Act to serve at the same time as director,114 officer of the State Bank of Stanley, Stanley, Kansas, as a`,.,I reotor of Patrons Co-operative Bank, Olathe, Kansas, and asctor and officer of The First National Bank of Olathe, Olathe,

ilInsas, and uPon the basis of the information before it, concursbe Your opinion that the issuance of the permit applied for wouldadvre°mPatible with the public interest. You are reauested tole 4.8e the applicant of the Board's position in the matter, nn-

there are pertinent facts which were not submitted with theication and which you feel should be given consideration.In communicating with the applicant, please advise him that,

wocordance with Section V (g) of Regulation LI considerationin hibe given to any additional facts or arguments not appearingbrcp, ht aPPlication and accompanying forms which he feels should be1r4,:tg to the Board's attention. In this connection, please ad-

the Board promptly as to whether Mr. Frye desires to submitt;fcee'dditional data, and, if not, as to what steps he proposes to

n order to comply with the provisions of the Clayton Act.to if You deem it advisable or necessary, You are authorizedwan b °rmMr. Frye that the Board's action upon his applicationxalis ased Upon the fact that the Patrons Co-Onerative Bank, Olathe,%It: and The First National Bank of Olathe, Olathe, Kansas are in

antial competition. It appears that it is the policy of thereigalje8, as declared in the Clayton Act, to terminate interlockingare ilonships between banking: institutions of certain classes which

aubstantial competition, apparently because the Congress


2977

9/26/34

toa

) to Mr• McClure, Federal Reserve Agent at the Federal Reserve Bank

"a"as City, inclosing the following Clayton Act permit, and stating

if the agent finds to his satisfaction that the provisions of sec-

ti°4 2 of the Banking Act of 1933 are not applicable to the applicant,he is authorized to transmit the Clayton Act permit to the applicant.

Ilhe letter also requested that the agent advise the Board of the action

the matter.

-16-

nolelt that such relationships might tend to result in a substan-tial lessening of competition and a restriction of credit. There-fore, the Board does not feel that it may grant this application,since no other facts have been brought to its attention which would7.!.lake it compatible with the public interest to issue the permit.In this connection, reference is made to item (c) on page 3 of theBoard's letter of May 1, 1933 (X-7426).

If Mr. Frye elects to continue as a director and officer ofThe First National Bank of Olathe, Olathe, Kansas and continues to-Terve as a director and officer of the State Bank of Stanley, Stan-'e,7) Kansas, the Board will be glad to give consideration to hisaPPlication to serve these banks upon receipt of the usual forms,

PreTerlY executed, and your recommendation.A, In the consideration of Mr. Frye's application for a Clayton

Permit it was noted (Item 12 - F.R.B. Form 94, dated June 20,r4) that he was owner of the Frye Investment Company, Olathe,la"as, the business of which MS reported to be 'investments and'1'°IfInal. It is suggested that it might be feasible to determineOf initelY the status of Mr. Frye with respect to the provisions

Section 32 of the Banking Act of 1933 and with respect to the°71eions of Section 8A of the Clayton Act. If you find that

13,_,FrYe's service with the above named company and the national4. 1/4 comes within the provisions of Section 32, you are requestedr advise him of the reouirements of that section and as to thegocedure in making formal application for a Section 32 permit.h, nu find that the Frye Investment Company makes loans securediY_StOek or bond collateral, it is suggested that you advise Mr.47e Of the provisions of Section 8A.Of „. "Please keep the Board informed with respect to the statusthis case."

Approved.



2978

9/26/34-17-

Don Ricksecl:er, for permission to serve at the sane timeas a director of The City National Bank and Trust Connelly of

4ansas City, Kansas City, Missouri, and as a director and0fficer of the Westport Avenue Bank, Kansas City, Missouri.

Approved.

Letters dated September 25, 19F4, approved -by four members of the

to applicants for permits under the Clayton Act, advising of an-

of their applications as follows:

lArs Charles D. Hayward, for permission to serve at the same ti-e110.? an officer of The First National Bank of Kansas City, Kansas

Missouri, and as a director of the Overland Park State Bank,vverland Park, Kansas.

Mr.A. .Lank Hodges, for permission to serve at the same time as arector and officer of The First National Bank of Olathe, Olathe,

p;;;:s;call:Idirector of the Overland Park State Bank, Overlaridand as a director and officer of the State Bank ofStanley,

Stanley, Kansas.Mr. ri

`eorge H. Hodges, for permission to serve at the same time asrel',director of the State Bank of Stanley, Stanley, Kansas, as a1Z-rector of The City ";ational Bank and Trust Comnany of Kansas City,Of Missouri, and as a director of The First National Bank

Olathe, Kansas.

There

ill stock of a

Approved, after having given considera-tion, in connection with the application ofl'Tr. Frank Hodges, to a memorandum datedSeptember 11, 19:44, from Mr. Cherry, Assis-tant Counsel, stating that it apnears thatthe Reconstruction Finance CorporationShould not be regarded as a corporationwithin the meaning of Section 8A of theClayton Act, and that that section shouldbe held to be inapplicable to the serviceOf the Reconstruction Finance Corporationby a director of a bank organized or oper-ating under the laws of the United States.

was then presented the following application for a change

Federal reserve bank:


29799

A lication for ORIGINAL Stock

Pirst National Bank in Blackwell,

Blackwell, Oklahoma

6/34

APProved:

60 60

h--)(71A.,tteSecretary.

-18-

Shares

Thereupon the meeting adjourned.

Vice Governor.


2111 ? Federal Reserve Board approves the salaries …...1, "Your letter of September 18 re 'The...

Documents

Transcript of 2111 ? Federal Reserve Board approves the salaries …...1, "Your letter of September 18 re 'The...