19341110_Minutes.pdf

3464

A meeting of the Executive Committee of the Federal Re-

rve Board was held in Washington on Saturday, November 10, 1934,

Ett 11230 a. in.

PRESENT: Mr. Hamlin, Chairman of the ExecutiveCommittee

Mr. MillerIr. JamesMr. Szymczak

Morrill, SecretaryMr. Carpenter, Assistant Secretary

The Committee acted upon the following matters:

Letter dated November 8, 1934, from Yr. Sproul, Secretary

"th6 Federal Reserve Bank of New York, and telegrams dated Novam-

ber 9' 1934, from Mr. Strater, Secretary of the Federal Reserve4,111c

Of Cleveland, and November 10, 1934, from Mr. "Walsh, Chairman

the Federal Reserve Bank of Dallas, all advising that, at meet-ch et the boards of directors on the dates stated, no changes

Itl*e 244de in the banks' existing schedules of rates of discount6441

PtIrchase.

ore+'a-rY, recommending that Ir. Louis G. Ficks, secretary to Er.kLiaer

Without objection, noted with approval.

Lemerandum dated November 8, 1934, from Er. Noell, Assistant

Who has been ill since October 1, 1934, be granted an addi-

tl°1141 leave of absence of thirty days on account of illness.

Approved.

Telegram to Lr. Peyton, Federal Reserve Agent at the Federal

4ak of Minneapolis, referring to the application of the

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

11/10/34

ot'"Ples State Bank of Bloomer",

3/165_ 0_

Bloomer, Wisconsin, for permission

to withdraw- immediately from membership in the Federal Reserve

378teril, and statinr, that the Board waives the usual requirement of

months' notice of intention to withdraw and that, accordingly,

111)°11 surrender of the Federal reserve bank stock issued to the

4'cTles State Bank of Bloomer, the Federal Reserve Bank of Minne-

e'l is authorized to cancel such stock and make a refund thereon.

Approved.

Letter dated lovember 9, 1934, approved by four members of

ard, to hr. O'Connor, Comptroller of the Currency, reading

"alows.

130

"In accordance with Acting Comptroller AT;alt's recommenda-tion, the Federal Reserve hoard approves a reduction in thecovmon capital stock of ''he Peoples 1:ational Bank of Pulaski',1M-aski, Virginia, from 1.00,000 to ;50,000, pursuant to a

ran uhich provides that the bank's capital shall be increased50,000 of preferred stock to be sold to the Reconstruction

,lnance Corporation, and that the released capital shall be'od- to eliminate the losses and doubtful assets shown in the

report of examination of Lay 25, 1934, and to establish a re-. 13I'Ve against future losses, all as set forth in Li.. Avalt's

t's1-etter of October 30, 1934."

Telegrar dated441e

Loara, to Lr.

of Lew York,

the ElDpii ation

1;e17 York, for a

t4e rtevised Statutes

4111 oratization to

Approved.

-.Lovember 8, 1934, approved by four members of

Case, Federal Reserve Agent at the Federal Reserve

stating that the Board has given consideration to

of "Citizens Shareholders of Arcade, Inc.", Arcade,

voting permit under the authority of section 5144 of

of the blii-,ed States, as amended, entitling

vote the stock vhich it owns or controls in


3466IVICV34

he '2irst National Bank of Arcade", Arcade, hew York, and has au-

Zed the issuance of a limited permit to the applicant, subject

t0tIle following conditions:

1•••

"Prior to the issuance of the limited voting permitauthorized herein, the Federal Reserve ligent at the Federal 1-e-erve Bank of New York (hereinafter referred to as the Federal

iZeservo iigent) shall satisfy himself that: (1) the .,30,000carried on the books of The First i,ational :dank of Arcade as'Reserve Account', which, according to a report of examinationOf such bank as of Lay 21, 1934 by an examiner for the New YorkState Banking Department, was transferred from the deposit ac-count of Applicant to the Reserve Account of such bank, hasbecome the property of such bank; (2) the sale, repurchaseand resale by such bank of certain criticized assets mountingto approximately 24,0u0, as described in the above-mentionedreport of examination of such bank, has been adjusted in aillaziner which shall be approved by the Federal Reserve Agent."

eliclfcr the following purposes:

"At any time prior to December 1, 1934, to place TheFirst National Bank of Arcade in voluntary liquidation, andtc authorize the sale of its assets and the transfer of itsdePosit accounts and other liabilities to Cithens Bank of.?cade, Arcade, New York, substantially in accordance with

t3 plan of merger of the two banks as set forth in the sup-?):LeMent to Exhibit K of the voting permit application of410P1icant, dated April 11, 1934, and to do all things neces-arY to complete such plan."

teleF,ram also authorized the agent to have prepared by counsel

tIle Federal reserve bank, and to issue to Citizens ShareholdersctArcElde,

Inc., a limited voting permit in accordance with thetel t.

he

tor

Approved.

, Letter dated November 9, 1934, approved by four members of

14,1:4rd, to the Federal reserve agents at all Federal reserve

readinc as follows:


3467

1v10/34 -4-

"In a letter to all Federal Reserve Agents dated eptem-l'er 26, 1934 (Z-8028), the Federal Reserve Board outlined thecircumstances and conditions under which general voting permitswould be granted to holding company affiliates, and stated thatit desires to issue general voting permits in all cases -wherereports of current simultaneous examinations of holding companyaTfiliates and their subsidiaries are available and indicatec°11dition, management and relationships to justify. It wasalcc stated that as a condition precedent to the granting of

voting permits the hoard will require holding companyc:filiaes and their subsidiary banks in general to comply744th the same conditions as to elimination of criticized as-sets, corrections of management policies, and relationships,.!:3 if they wore applying for and being admitted to membership-11 the Federal Reserve System.p. "Thereafter, hr. Leo Ii. Paulger, Chief of the Board's2t\rision of ilaamirations, addressed a letter dated Septembera ' 1°34 (Exam. 53), to all Federal Reserve Agents requestingrePort concerning the progress made in completing and analyz-

ia1the simultaneous examinations of banks and holding company19, 11,-ates as outlined in the Board's letter dated January 20,

lX-7763) and hr. Paulger's letter dated February 16, 1934ho7ir7:" 20), and concerning the extent to which such banks andth company affiliates have been, or will be, able to make12,el

iminations and corrections referred to in the Board'suvuel;af September 28, 1934 (..A.-8028).oar desires to issue during d d- this year, or at thecDrliest

e 7,-,

,,. practicable date, general voting permits in all cases"alch reports of current simultaneous examinations of hold-ei'afc)r.Tany affiliate groups are available and indicate finan-is condition, management and relationships which justify there,o e'll of such permits. however, from the above mentioned

Paras to the status of each holding company affiliate, and

.e4:° infermation contained in the Board's files, it is ap-not b

e that, in many cases, holding company affiliates willjalitall,, able to obtain general voting permits prior to thearraz dr, 1935 meetinns of the banks involved, either because

slIpere4m°11ts could not be made with the national and Statefor simultaneous examinations, or be-

Zteer:;7=E;r1o=ny affiliates and their subsidiaryor 1,, "InKs have noL completed their rehabilitation programs a-01,:e not made the required eliminations and corrections, and41111-Ekr

elitlY not be in a position to do so prior to the, 1935 meetinrs.all cases in which it has been or will be impracticable'1

• 1°:;eneral voting permits prior to the January, 1935 meet-

°5, the Board will consider the issuance of-7°tilaC permits to vote thc) stock owned or controlled


346811/10/3,1

by holding company affiliates at the regular annualor any adjournments thereof, held by shareholders ofsidiary member banks prior to April 1, 1935, for thepurposes:

1.2.

-5-

lo elect directors of the subsidiary mober bTo act thereat upon such matters of a routineas are ordinarily acted upon at the annual meetings ofthe subsidiary member banks.

"In all cases in which the -board has received applicationsfor Voting permits on F.H.B. Form P-1, with exhibits, fromholding company affiliates in your district which desire tovcte the stock of their subsidiary member banks at the nextannual meeting only for the purposes set forth in 1 and 2abeve, it will not be necessary for the board to receive anyrequest for limited voting permits for such holding companyaffiliates. If, however, any such holding company affiliatetislIrt; vote the stock which it owns or controls of its

member banks at the January, 1035 meetings for anyturpoees other than those set forth in 1 and 2 above, it willne necessary that, the Board be advised of the addiLiol;a1 pur-1'1°3" for which a limited voting permit is desired. If youEa." not already done so, please obtain and furnish to thetrrd such information together with a detailed outline ofsue Plan or plans for which such shares are to be voted.13 4 information when forwarded to the board should be accom-:teeiied by your recommendation and that of the Executive Uommit-add.°_f Your bank concerning the issuance of a permit for suchrenl:"i°nal Purpose or purposes, and concerning any additionalth ulrements to be prescribed as a condition to the issuance

"In c' dot

view of the fact that it is impossible at this timeer/id4ble , ne which of the holding company affiliates will be1035 Lo

T obtain general voting permits prior to the January,

Loara eetin,s, it will be appreciated if you will advise theccrai'm at the earliest possible date concerning any holdingits;ly affiliate which 'desires to vote the stock of any oftatod Gidiary member banks for purposes other than thosea& hav in 1 and 2 above, except such holding company affiliatescase ie already been granted general voting permits. In anyi4form:jhich the Board has not received by December 1, 1934,

that a holding company affiliate desires a limitedfOX' 101,, errrlit to vote the stock of its subsidiary member banksy-v°0es in addition to those stated in 1 and 2 above,to z.,,u(3°}111'd consider that it will not be necessary to issuecove.rin,401dinz company affiliate a limited voting permitabove. any Purposes other than those mentioned in 1 and 2Il L13

4 condition precedent to the issuance of a limited

meetings,the sub-following

anks.nature


11/10/34 -6-

3469

'Ir°ting permit for the purposes set forth in 1 and 2 above,the Board will require the following:

1. Prior to the issuance of the limited voting permit theFederal Reserve Agent shall satisfy himself that eachof the subsidiary banks of the applicant has chargedoff or otherwise eliminated (a) all losses in loansand discounts, (b) all depreciation in stocks and de-faulted securities (c) all depreciation in securitiesnot of the four highest grades as classified by arecognized investment service organization regularlyengaged in the business of rating or grading securi-ties and (d) all other losses; as shown by the latestavailable reports of examinations by the appropriatesupervisory authorities, except that the charge-offsand eliminations required by (b) and (c) above may bebased upon current appraisals of marketable securitiessatisfactory to the Federal Reserve Agent.2. Prior to the issuance of the limited voting permit theFederal Reserve Agent shall satisfy himself that theholding company affiliate has substantially performedanY agreement or agreements heretofore executed by itas a condition to the issuance of a limited voting per-mit by the Federal Reserve Board.3. Prior to the issuance of the limited voting permit thePederal Reserve Agent and the Executive Committee ofthe Federal reserve bank shall approve the issuance of

0,such permit.ehola,lhe above requirements are minimum conditions whichIra-L.111u be complied with prior to the issuance of a limitedbe 41.5 Permit and in certain cases additional requirements maypartirsed, depending upon the facts and circumstances in anylot, eular ease. However, in any case in which, in your opin-theis°111Pliance with conditions prescribed in connection withPossibrance of a limited voting permit is impracticable or im-yolyea,e Prior to the annual meeting of any of the banks in-tacts 21ease advise the Board concerning all of the pertinentWith

:41_u. circumstances in such case, and furnish the Boardshoulfr recommendations as to uhat modification, if any,tilte,Thade in the conditions prescribed.ls contemplated that in authorizing the issuance ofIles of tnting Permits hereafter the Board will continue theclitteci Der ANCIGAR telegram procedure outlined in its lettera.00ire "ter 21, 1933 (X-7730). Instead of writing .)ut the

tel°fled conditions 14111;i d' •A, GAR ons following the letter 'C' in each<CIGAR 4 egram, as has been done heretofore, in futurecode wou.ms these conditions will be referred to by arolaavrach will have the meaning set opposite such word

•


347011/10/34

-7-

Prior to the issuance of the limited votingPermit authorized herein, (1) the FederalReserve Agent shall satisfy himself that eachof the subsidiary banks of the applicant hascharged off or otherwise eliminated, (a) alllosses in loans and discounts, (b) all depre-ciation in stocks and defaulted securities,(c) all depreciation in securities not of thefour highest grades as classified by a recog-nized investment service organization regu-larly engaged in the business of rating orgrading securities and (d) all other losses;as shown by the latest available reports ofexaminations by the appropriate supervisoryauthorities, except that the charge-offs andeliminations required by (b) and (c) above maybe based upon current appraisals of marketablesecurities satisfactory to the Federal ReserveAgent; (2) the Federal Reserve Agent shallsatisfy himself that the applicant has sub-stantially performed any agreement or agree-ments heretofore executed by it as a conditionto the issuance of a limited voting permit bythe Federal Reserve board; (3) the Federal he-serve Agent and the Executive Committee of theFederal reserve bank shall approve the issu-ance of such permit.

'out, 1,1, k ewlse, in future Ai:CIGAR telegrams, instead of writingbeen lowing the letter 'D' in each AI:CIGAR telegram, as hasTrlomlo(Te heretofore, the purposes for which stock of subsidiarythis lernks may be voted as set forth in 1 and 2 of page 2 ofvinich,..?r, such purposes will be referred to by a code word

A,T„.ILC

"±:1-1 have the meaning set opposite such word as follows:ao elect directors of such (bank) at the annual(meeting) of shareholders, or at any adjourn-ments thereof, at any time prior to April 1,1935, and to act thereat upon such matters ofa routine nature as are ordinarily acted uponat the annual meetings of such (bank).

214bs. .lore the

limited voting Permit covers more than onemember bank, please use the plural ins,ead of thebe 41'ttl. of the words inclosed in parentheses above. It will

eZeeT'!ciatedL you will promptly forward to the Loard two7,eu copies of any limited voting permits issued by you.c42oa In order that general voting permits may be issued in all

coriti,Et the earliest date practicable, you are requested toholdi- ue Your efforts to complete simultaneous examinations of11̀ ' c°111Pany affiliate groups in your district and, in each


347111/10/34

-8-

case in which such examinations have been completed, to fur-nish to the Board your recommendations concerning the conditionsUpon which a general voting permit should be issued. Regardlessof whether simultaneous examinations have been completed orrecommendations furnished in all cases, it will be appreciatedIf You will complete and forward to the Board, if you have notalready done so, at the earliest possible date, Part II of theratus reports requested in Mr. Paulger's letter dated Septem-r 29, 1934 (Exam. 53). It was contemplated that Part II ofsUch report covering each holding company affiliate group inrill district mould be forwarded to the Board as soon as infer-!tion was obtained in each case, without waiting for the corn-

obvleticn of simultaneous examinations, or for information to be•ta"ed concerning any other holding company affiliate group."

Approved.

Memorandum dated November 5, 1934, from Mr. Smead, Chief ofthe Division of Bank Operations, submitting a copy of the presentbkittlIce sheet form 34 used by Federal reserve banks in submitting

(1143"Y reports of assets and liabilities to the Federal Reserve Board,41'1 aUggesting certain changes in the form to be used during 1935.IllenleMor andum also reconmended that, beginning with the meekly tate-4311t or co

ndition of Federal reserve banks for November 14, 1934, theNrt144 "Secured by United States Government obligations" under billscil"°1113•ted be

changed to read "Secured by U. S. Government obliga-direct

and/or fully guaranteed", and that any securities fullyttZteeeecidbby the United States Government which may be hereafter

y

the Federal reserve banks be shown separately in the11‘lellr etatczent,

immediately following the item "Total U. S. Govern-"euritiesn,

by II against the caption "Securities fully guaranteedI 8' OcverrImentn.4batit ao The memorandum stated further that there is

Ilbt as to whether the maturity classification, now shown as a


114'34 -9-

3472

Patt of the weekly condition statement of the Federal reserve banks,

t1/21Y complies with the law which provides that the statement "Shall,

-'84 full information regarding ... the amount, nature and ma-

tUrities of the

reaere bast'

Ifith JEtZliary 1

taturities of

The rea

1.

paper and other investments owned or held by Federal

$ and that it is recommended, therefore, that beginning

1935, the maturity classification be changed to show

the following:

Bills discounted2. Bills bought in open market3. Industrial advances4. United States Government direct obligations5. Securities fully guaranteed by U. S. Government6. Other securities

(Xlmendations were approved by four members of the Board on

er 9, 1934 •

the tii4ac

Of

to Lr . Case, Federal Reserve Agent at the Federal Reserveur New

York, reading as follows:stReference is made to your letter of November 2 requesting

X..901Ziation as to whether the Board's letter of October 29,pit regarding the issuance of Federal Reserve notes, ap-es t°41Y to the issuance of notes to branches.Rea 'The Federal Reserve Board is of the opinion that Federalsarerve notes should not be issued, whether to the Federal Re-easr bealk or to a branch, without specific authority in each'lase °f the Federal Reserve Agent or of an Assistant Federalrert:," ACent at the Head Office and its letter of October 29,-red to above, should be so interpreted."

Approved.

Letter dated November 8, 1934, approved by four members of

Letter dated November 9, 1934, approved by four members of

4 to *. Stevens, Federal Reserve Agent at the Federal

Approved.


1V10/34

Reeerve Bank of Chicago, reading as follows:

"Consideration has been given to the application oftr,ames C. Ames under the provisions of section 32 of the Bsnk-ng Aot of 1933 for a permit to serve as director of therersonal Loan & Savings Bank and as president and director ofAmes, Zmerich & Co., Inc., both of Chicago, Illinois. It isfeted that you recommend that the application be refused since,-he relationship involved comes within the class that section°2 waS designed to terminate.

the °In describing the business of Ames, Emerich & Co., Inc.,

I, aPplicant states (F.R.B. Form 99a, Item 2) that it is,,411vstment Banking', and the corporation states (F.R.B. Form

Item]) that it is the 'Purchase and sale of high gradebonds and stocks of Governments, Dinicipalities, Utilitiesnd Industrials'. It thus appears that the corporation isngaged primarily in purchasing and selling securities within"le meaning of section 32, and that the relationship coveredi

t.he application is within the class which that section vas

ingned to terminate. Accordingly, for the reasons statedlts letter of March 7, 1934 (X-78l1), the Board is unablelind that it would not be incompatible with the public in-

terestt4 as declared by the Congress to grant Mr. Ames' applica-tion, ssztion. aJuLL you are requested to advise him of the Board's posi-

41 In the event that Mr. Ames desires to submit further.ataets or arguments in support of his application, the Board,11,8YOu knovir, is prepared to give them careful consideration.t-Eio ever,

any additional facts or arguments should be submittedY°11, in writing, as promptly as possible; and, in the

ar:Ilt that he does not desire to subrult any further facts oret;IfillTts, he should be requested to notify you as to whatth he takes to bring his relationships into conformity withe pr

ovisions of the law."

-10-3473

Approved.

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

of New York, reading as follows:

011. August 28, 1934, the Board advised you that it hadlikli7onsideration to the applications of Messrs. Raymond N.of th"d z]dward G. Miner for permission under the provisions

Clayton ci/or Act to servo at the same time as director

leW all off.

leers of the Buffalo Branch, Federal Reserve Bank of

"P,ow, k, and the Lincoln-Alliance Bank and Trust Company,ester , New York, as well as the Ontario County Trust Company,


347411/10/34

0Cana1daigua, New York, in the case of Yr. hall and the Roches-ter Trust and Safe Deposit Company, Rochester, New York, in thecase of Mr. Liner. Because of the unsatisfactory conditionindicated by the report of examination of the Lincoln-Alliance134ak and Trust Company, Mr. Ball's poor record of attendanceat meetings of the directors of the Ontario County Trust Corn-

and the nature and extent of the use of the credit facili-ties of the Rochester Trust and Safe Deposit Company by Mr.lanetr, the Board did not feel that the permits should begranted, and requested you to advise the applicants in thePremises.

"The Board feels that the general attitude of Congress asevidenced by the provisions of the Clayton Act and other legis-lation is not favorable to interlocking directorates and thatiL the public mind the grant by the Board of the privilege ofServing

two or more institutions is in the nature of a stampof aPProval upon the individual upon whom it is conferred.

,,Lerefore, it is felt that it is incumbent upon the Board be-lore it grants applications for such permission to investigatee

bttrefully the surrounding circumstances in order that it maytial satisfied that those to whom the privilege of serving more

411 c/ne institution is accorded are likely to promote better

te IsIbnr banking management which in time will result in bet-conditions and thus better serve the public interest.

t4 t1:118 connection, it may be added that the provision in the

.4/.1,3f2-11C Act of 1933 relating to removal of directors for viola-Of law and for the continuance of unsafe or unsound44J:actices seems clear evidence of the intent of Congress with

resPlt to the qualifications and responsibilities of directors.setti The Board is not unaware that there has been much un-enient in the banking world in the course of recent years

collcrurally is not desirous of adding unnecessarily to thisgrsat'lcz. It feels, however, very strongly that one of thethis est contributions to economic and financial stability inbaziki"tilltry will Conte only through general improvement inO hell Inenagement. Therefore it is felt that there should beappli:ltation by reason of undue solicitude for the individual411t to proceed with the solution of this problem.1934, Our letters of September 4, 1934, and September 17,

tiol,p,nave been considered in connection with these applica-B to _'4,-rd has-

n ther with the accompanying information, and thepron„ noted the completion of the capital rehabilitation. or1111Proire„, the Lincoln-Alliance Bank and Trust Company, the,,,,the R0,7at of the status of the obligations of Liner toyoz,k, -4,ester Trust and Safe Deposit Company, Rochester, Newset roand Your recommendations, together with the other factswi in Iclated se_t

L anaging Director R. Y. O'Hara's letter to you

ember 1, 1934, with reference to the welfare of the

-11-


347511/10/34

"banks served by the applicants, the banking situation in thewestern part of New York State, the difficulty of findingsuitable men to serve as directors of the Buffalo Branch ofthe Federal Reserve Bank of New York, and the possible reac-tion of the public if the permits should be denied.

"After consideration of all these circumstances theBoard has decided to grant a permit to Lr. Ball to continue

!i?7L effect only until the expiration on December 31, 1934, of1,18 term as a director of the Buffalo Branch, and a permit to

Miner to continue in effect until the expiration on Decem-ber 31, 1936, of his term as director of the Buffalo Branch.The originals and copies of the limited permits are in-1O6ed for delivery by you to the applicants, with copies to-che

banks involved and copies for your files."

Letterthe

Loard, to

4erlie Bank of

nideration to

qayton Act, and that,

e°11oUrc it the agent'sPlied for

wculd be6Llto

requested the agentknitioh in the matter,l'44.er the

applicant143t' an to what stepsthe

111'°1rinions of the

dated November 9,

Approved.

1934, approved by four members of

Ir. Austin, Federal Reserve Agent

Philadelphia,

at the Federal Re-

stating that the Board has given con-

the following application for a permit under the

Lir. Leon E.(1

director of The First NationalCity Les, for permission to serve at the same time as

Pe of Lahanoy City, hiahanoy2 nalnylvania, and as a dire=: and officer of The First-c‘ional Ban

upon the basis of the information before it,

opinion that the issuance of the permit ap-

incompatible with the public interest. The letter

to communicate to the applicant the Board's

and

-12-

to advise the Board promptly as to

desires to submit any additional data, and, if

he proposes to take in order to comply with

y n Act.

of Nuremberg, Nuremberg, Pennsylvania.

Approved.


11/10/34:3476

Letter dated Lovember 0, 1934, approved by four members ofthe u

c'ard, to Lr. :,00d, Federal Reserve Agent at the Federal Reservea

Of St. Louis, reading as follows:

"The board has given consideration to the applications of''iecsrs. Laurence Taylor and i. C. Pinkston of Jackson, Tennessee,''°1' Permission umier the provisions of the Clayton Act to serveat the sane timeas directors of The Rational Bank of CommerceJ,ackson, Jackson, Tennessee, and as directors of The First

Lonol Lank of Jackson, Jackson, Tennessee, and to the appli-caLicn of Er. Lolland of Jackscn, Tennessee, to serve(a)t the same time as director and officer of The Rational Lank

cerxierce of Jackson, Jackson, Tennessee, and as director ofSecond Rational 1:iank of Jackson, Jackson, Tennessee; and,

0')°11

athe basis of the information before it, concurs in your

ni l en that the issuance of the permits applied for -would be,_,,e0L1patible with the public interest. You are requested to

e

rise the applicants of the board's position in the matter un-th!' l'here aro pertinent facts which were not submitted withaPPlicaticns and which you feel should be given considera-

"If you deem it necessary or desirable, you are authcrized

11-

-1°) inforn —essrs. Taylor and Pinkston that the hoard's actionen1oir applications was based largely upon the fact thatapt,z-arcntly the existing interrelationship may result in a re-

th °n of credit and a lessening of competition, as well asj,„(1,1111satis-nactorv condition of the First Rational Bank ofh-e'80n, its large accumulation of substandard loans, theof,,YY and apparently unjustified advances to its directors,th.4a.1tehers and their interests. You may also inform Er. Taylor1„et.--is unsatisfactory record of attendance at directors'betes.111Cs of the Rational Lank of Comerce was, in part, theit ls for refusal of his application. Likewise, if you deem

are authorized to inform hr. nolland that thethion Upon his application was based upon the factree.LL f9parently the existing interrelationship may result in afacj,teti°11 of credit or lessening of competition, the unsatis-of j-n1): condition and past record of the Second Rational LankthRt1'20n and the substantial amount of criticized paper in

th-nstitution, and the unsatisfactory status of the loansbank which he has endorsed.thflt, conmunicating with the applicants, please advise thenicier '1.1 accordance with Section V (g) of Regulation L, con-/lot ,

ctatPpeaion

• will be given to any additional facts or argumentsr1TIC in their applications and accompanying forms which


11/10/34-14-

"they feel should be brought to the Board's attention. Inthis connection please advise the Board promptly as to whetherthe aPplicants desire to submit any additional data and, ifriot, as to what steps they propose to take in order to comply'with the provisions of the Clayton Act.

"It is noted that Kr. Taylor states (F. R. B. Form 94,Itex4) that he is president of the Jackson Banking Company

°of Jackson, Tennessee (apparently the Jackson Bank and Trust°111Pany) which, although engaged in the business of banking,

!q?Parently is not a commercial banking institution but is anstildilstrial bank operating on Morris Plan Bank lines. It is';°t clear, however, whether the Jackson Bank and Trust Company

a 'bank' within the contemplation of the Clayton Act and.rethr it makes loans upon the security of stocks and bonds.

Zthe Jackson Lank srd Trust Company is not a 'bank' within.meaning of the Clayton Act Mr. Taylor will, of course, be11ged to sever his connection with both of the national banksocu)lrered by his application or with the Jackson Bsnk and Trust

et:nnY if the latter does make loans on the security ofthe and bonds, in order to comply with the provisions ofte FlaYton Act. If the Jackson Bank and Trust Company is do-fled to be a 'bank' within the meaning of the Clayton Act

reconsideration is requested, his application should be.1;411?d to include the Jackson Bank and Trust Company or heOf 41,11e an. application with respect to his services with onencl nati°n an al banks involved and the Jackson Bank d Trust"ITIPany.n

3477

Approved.

Letter dated November 9, 1934, approved by four members ofthe Board, to Mr. McClure, Federal Reserve Agent at the Federal Re-4erire

44411:k of Xansas City, reading as follows:

Act "There are inclosed the original and copies of a Claytonaer Permit granted to Mr. Neil Sims, Fort Smith, Arkansas, oriatZe at the sane time as director and officer of The Firstrejnal Bank of Fort Smith, Fort 3mith, Arkansas, and as di-ror Zr of The Central National Lank of Poteau, Poteau, Oklahoma,eop,-rallsinittal by you to Lir. Sims and the two barks and a'1'0/' your files,above i8 noted that, in addition to the two banks namedsims serves as director and officer of the DanvilleViabbeDanville, Arkansas; Nebbers Falls State Bank,rs pa, , _

-L-Ls, Oklahoma; Clayton State Bank, Clayton, Oklahoma,


3418-15-

State Lxchange Bank, Bokoshe, Oklahoma. In view ofstatements made by the applicant in his application and in a-Letter to Assistant Federal Reserve Agent Stewart, dated Sep-tember 19, 1934, that the banks, other than those named in the11PPlication, do not make loans on stocks or bonds, a permitt48 been granted covering the applicant's service with thewo national banks.ai "It is suggested that you inform Mr. Sims of the provi--°118 of Section 8A and advise him that if any of the banksmet

covered in the permit should, in the future, make loanssr.T*ed by stock or bond collateral within the meaning ofb-c'lon 8A, his service at the same time with the two nationalorkswould be illegal, unless there is in force a permitte.tve.ring his services with the bank nking such loans and theti 1°Ilal banks served by him, or unless he severs his rela-naqtrat .11ither the bank making such loans or the two

Approved.

Letter to Mr. Sargent, Assistant Federal Reserve Agent at

the ll'edereaReserve Bank of San Francisco, reading as follows:

Brooke The Board has reconsidered the application of Mr. J. F.to r. for Permission under the provisions of the ,

FirstClayton iLetilat!erve

.̂kt, the same time as director and officer of The :1,ank in Richmond and as director of the Mechanics

Itichmond, both of Richmond, California, and, upon theihT °I' the information before it, including that submittedreel e.LePPlicant in his letter dated October 25, 1934, still

eora 8 at the grantinm of the permit applied for would be in-toY?

vjit date

Patible h the public interest, as indicated in its letterd September 22, 1934.l You are requested to advisericant accordingly.

Propos lease ascertain and advise as to what steps Li-. BrooksClayt 68 to take in order to comply with the provisions of the°Ya. Act,"

the

Approved.

Letters dated November

9,

to applicants for

permits93:approved by four members of

IPProunder the Clayton Act, advisingcf their

applications14r. as follows:

Eischel, for permission to serve at the sarre time as


3479

11/10/34 -16-

director and officer of The First National Bank of Aurelia,elia$ 'Map as a director of the First Trust & Savings Bank,

tIta$ Iowa, and as a director of the Commercial Trust & Savings4Jank, Storm Lake, Iowa.

1:tl • William h. Regnery, for permission to serve at the same

411.1e as a director of The halsted Exchange National Bank ofr leago, Chicago, Illinois, and as a director and officer ofhe First National Bank of Hinsdale, Hinsdale, Illinois.

Approved.

Letter to an applicant for a permit under the Clayton Act,

81.11C of approval of his application as follows:

14" Charles S. Dewey, for permission to serve at the same timeEclia director of the City National Bank and Trust Company ofThe".go, Chicago, Illinois, and as a director and officer of

4ilu6.ukee Avenue National Bonk of Chicago, Chicago, Illinois.

Approved.

There viRs then presented the following application for atlie4ge in stock of a Federal reserve bank:A

1) ieation for SURRENDER of Stook: Shares,.7trict Lb. 7-1441stot

Trust and Savings Bank':111111.ston, Illinois 15

APProveds

Approved.

Thereupon the meeting adjourned.

Chairman, Executivs Committee.

15

Secretary.


19341110_Minutes.pdf

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