19341017_Minutes.pdf

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ederalReserve Bank of Boston, and Mr. Wood, Chairman of the Federal

of St. Louis, both advising that, at meetings of the boards

today, no changes were made in the banks' existing schedulestes of

discount and purchase.

rithout objection, noted with approval.

Memoranda dated October 15, 1934, from Mr. Paulger, Chief of the

1)4181-°r1 of Examinations, recommending that the temporary employment of11188 tliz6beth B. Griffin and Miss Anna F. Scott, as stenographers in the

c1:4'1816,11, be extended for another period of thirty days from October 20

L0 16/ember8,1 19341 inclusive, with compensation at the rate at whichthey

were previously employed.

A meeting of the Executive Committee of the Federal Reserve Board

II" held in Washington on Wednesday, October 171 19341 at 3:30 p. in.

the p

8erVe Bank

()t direet0r8

PRESENT: Mr. Thomas, Vice GovernorMr. HamlinMr. MillerMr. James

Mr.Mr.

The Committee considered and

Telegrams dated October 170

Bethea, Assistant SecretaryCarpenter, Assistant Secretary

acted upon the following matters:

19341 from Mr. Curtiss, Chairman of

Approved.

Memorandmm dated October 91 19341 from the Committee on Salaries

nditures, submitting a letter dated October 2 from Mr. Helm,

rnor and Cashier of the Federal Reserve Bank of Kansas City,whieh

'41ci

bePtztyCrtre

equested approval of changes in the personnel classification plan

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

Natio

318510/17/34 -P-

Of the bank to provide for the discontinuance of the positions of

nstenographer-clerli." and "stenogrepher to assistant cashier" in the

fiscal agency department. The memorandum stated that the committee

had reviewed the proposed changes and recommended that they be approved.

The recommendation was approved by five members of the Board on October

16, 19:54.

Approved.

Memorandum dated October 15, 1934, from Mr. Wingfield, AssistantCourts

el, recommendincy that, for the reasons stated therein, no action betaken

by the Board with regard to reporting to the Attorney General a

1)8sible violation of the Provisions of Section 22(g) of the Federal

R'eser7 Ae /let by Mr. Roy S. Buck, Vice President of the Big Rapids Savings

1108r,

Big Rapids, Yichigan.

Approved.

Letter dated October 16, 1934, approved by five members of the

•°) to if-r. James C. Baker, Vice President and Cashier of "The First

nal Bank of Chester", Chester, Pennsylvania, reading as follows:

19 "This refers to the resolution adopted on February 21,

C34, br the board of directors of your bank signifying thewrk's desirq to surrender its right to exercise trust powersich have been granted to it by the Federal Reserve Board.

"The Federal Reserve Board understands that your bank has4, -J- exercised its right to act in trust capacities. The Board,IZrefore, has issued a formal certificate to The First Nationalej4) Chester, Pennsylvania, certifying that it is no longerth611°rized to exercise any of the fiduciary powers covered by

c': Provisions of section 11(k) of the Federal Reserve Act. This

rtificate is inclosed herewith."In this connection, your attention is called to th,! factunder the provisions of section 11(k) of the Federal Reserve


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"Act, as amended, when such a certificate has been issued bythe Federal Reserve Board to a national bank, such bank (1)shall no longer be subject to the provisions of section 11(k)Of the Federal Reserve Act or the regulations of the FederalReserve Board made pursuant thereto, (2) shall be entitled tohave returned to it any securities which it may have depositedWith 4-1, State or similar authorities for the protection ofPrivate or court trusts, and (3) shall not exercise any of thePowers covered by section 11(k) of the Federal Reserve Act ex-cept with the permission of the Federal Reserve Board."

Approved.


to the "First National Bank of Cicero", Cicero, Illinois, reading

" roilows:

"The Federal Reserve Board has given consideration to!.°1-1r aPplication for permission to exercise fiduciary powers,:14 grants you authority to act, when not in contravention ofnate or local law, as trustee, executor, administrator, guardiann estates, and committee of estates of lunatics, the exercise

all such rights to be subject to the provisions of the Federal48serve Act and the regulations of the Federal Reserve Board.

"This letter will be your authority to exercise the fiduciary12°Ilers granted by the Board. A formal certificate covering suchauthorization will be forwarded to you in due course."

Approved.


t° Mr. O'Connor, Comptroller of the Currency, reading as follows:

Re "In accordance with your recommendation, the Federalof8:rve Board approves a reduction in the common capital stockfrt., 7,1,r First National Bank of Camden", Camden, South Carolina,

the b'000to $60,000, pursuant to a plan which provides that

ate bank's capital shall be increased by $15,400 of preferredor°ek to be sold to the Reconstruction Finance Corporation and/eli°thers, and that the released capital shall be used to

nate unsatisfactory assets and/or augment the bank's sur-and undivided profits accounts, all as set forth in your

-Letter of September 27, 1934."

Approved.

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


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10/17/54 —4-

4111cof New York, stating that the Board has given consideration to the

84Vlication of the "First National of Elmira Corporation", Elmira, New

l'c46 for a votina permit under the authority of section 5144 of the

aeliised Statutes of the United States, as amended, entitling such organ!-

1 to vote the stock which it owns or controls in "The Bank of ElmiraRei Ate

Elmira Heights, New York, and has authorized the issuance of a

litat

?ecie

tiOrl

1 a limited voting permit in accordance with the telegram.

ed permit to the applicant for the following purpose:

"At any time prior to December 31, 1934, to act upon aproposal or proposals to place The Bank of Elmira Heights,Elmira Heights, New York, in voluntary liquidation, and to_authorize the sale of its acceptable assets to 'First NationalBank & Trust Company of Elmira', Elmira, New York, under a planwhich provides for the assumption of the deposit liabilities ofll:/.1e Bank of Elmira Heights by said national bank and the estab—pilshment of a branch by said national bank at Elmira Heights,

YrIcGrk' all in accordance with the conditions prescribed byComptroller of the Currency in his letter of August 15, 1934,Z'clressed to the Board of Directors of First National Bank &Irust Company of Elmira."

te-egram also authorized the agent to have prepared by counsel for the

al reserve bank, and to issue to the First National of Elmira Corpora—

Approved.

Telegram dated October 16, 1934, approved by five members of thetes,

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

.tork and Chicago, reading as follows:

pri "Board believes that in so far as possible only official1111,1, of Regulation T should be distributed in future. Five

ed copies of official print going forward to you today.Y°11 will need additional copies to meet reasonable demand,Please

advise immediately number required. There is being for—With confirmation of this telegram copy of official print

iso copy of your -print on which have been indicated differ—


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enees between your print and official print. In opinion ofBoard there should be addressed to persons who, according toYour records, have received copies of your print, a lettern°wing all differences, other than differences in capitaliza-Q-on and similar matters of form, which exist between yourPrint and official print."

Approved, together with similar telegrams,also dated October 16, 1934, and approved byfive members of the Board, to Messrs. Case andStevens, Federal Reserve Agents at the FederalReserve Banks of New York and Chicago, advisingrespectively that two thousand copies of theofficial print of Regulation T were being for-warded to the New York bank and one thousandcopies to the Chicago bank.

Telegram to the Federal reserve agents at all Federal reservebalakt.-') reading as follows:

Re "Ruling No. 06 interpreting Regulation T. The Federal8erve Board has been asked for a ruling on the following‘'acts: A customer requests a broker to purchase for thepstomert s account certain registered securities to be paid21' bY the customer in cash. The customer has a bona fideJi?te vanti__

to pay in cash; but, when delivery day arrives, he

ties that he has not sufficient cash to pay for the securi-

br in full and desires to pay fifty percent and have thecuc)s er carrY the securities in his margin account until the

t'omer is ready to make payment in full. The question isPresenteder_ whether the broker may transfer such transactionr_vm the customer's cash account to his margin account. In4:1-J7 the Board advised that the transfer of such a trans-11.2.°n from a cash account to a margin account is expresslyii'mitted in exceptional cases by section 6 of Regulation T0rilitZuthorization is obtained from the business conduct com-ae es or other suitable committee of the appropriate nationalcurities

exchange."

Approved.

Telegram dated October 16, 1934, approved by five members of the110111.,4-'s to

Mr* Curtiss, Federal Reserve Agent at the Federal Reserve Bankor toe

ts3/11 reading as follows:

"Referring Gettemy's letter of October 10, Board considers


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"execution of agreement on F. R. B. Form T-1 or T-2 to havebeen made in accordance with prescribed form of resolution ofauthorization if agreement is signed by one of the two officersnamed in resolution and attested by the other."

Approved.

Letter dated October 16, 1934, approved by five members of theBoarra

to 7,Ir. H. S. fohe, In Cherge, Administration U. S. Warehouse Act,De,Partment of Agriculture, Washington, D. C., reading as follows:

"This refers to your letters of July 23, September 8 and8E'Ptember 13, 1934, addressed to the Board's General Counsel,'71-th regard to the eligibility of certain warehouse receiptsissued by warehouses operating in the State of South CarolinaIT security for bankers' acceptances under the reauirements of'Lle Federal Reserve Board as prescribed in its Regulation A.

'The Federal Reserve Board has communicated with theFed 'The

Reserve Bank of Richmond with regard to this matter andadvised that auestions have been asked of the Federal Reservesai4.1' from time to time as to whether the bank would accept asi!l'isfactory collateral (presumably to a customer's note offeredor

rediscount by a member bank) warehouse receipts, whether ort the cotton represented by such receipt was owned by a person(.1t1;vning a portion or all of the stock of the warehouse corpora-

hut the Federal Reserve Bank has consistently declined to,2ue any statement in answer to such hypothetical questions

has replied to the effect that if such a note should beth'ered for rediscount, the bank would of course decide under12 circumstances of the perticular case whether such warehouse

would be accepted as satisfactory collateral. It ap-i)ears also that the Federal Reserve Bank of Richmond has notI n asked to give an opinion as to whether warehouse receipts04'881Td

by a Particular warehouse covering cotton owned by some-DZ 'Laving a stock ownership in the warehouse corporation mightBo-PerlY be used as security for bankers' acceptances under theeZdis Regulation A, and that the Federal Reserve Bank has nota7_ressed an opinion as to whether warehouse receipts issued bywo:arehouse operated under the laws of South Carolina would orth„,ld not be eligible as seciirity for bankers' acceptances underaas Pr°visions of that regulation. The Federal Reserve Bank

se: advises that if a member bank should offer to it paperredhY warehouse receipts involving a question as to the

the --2"113 of the warehouse, the reserve bank would investigaterticular case and decide it on its merits.

the In View of the information which has been obtained fromwoul'aederal Reserve Pank of Richmond in this connection, it

seem that the statements which have been made to you in


319010/17/34

"this connection with regard to the position of the FederalReserve Bank of Richmond as to the eligibility of warehousereceipts issued by warehouse companies in South Carolina assecurity for bankers' acceptances are based upon a mistakeor misunderstanding as to the facts. It would appear, there-fore, that any decision which may have been reached by ware-house companies tooperate under the warehousing laws of theState of South Carolina rather than under Federal license isnot the result of any assurances given by the Federal ReserveBank of Richmond as to the eligibility of warehouse receiptsissued by such companies as security for bankers' acceptancesunder the provisions of the Federal Reserve Board's Regulation4 or as to their acceptability as collateral for notes offeredfor rediscount."

Approved.

Letter to Mr. Walsh, Chairman of the Federal Reserve Bank of

411aAs, reading as follows:

"The Board has reviewed the report of examination of the!ederal Reserve Bank of Dallas made as at the close of business:J.une 23, 1934, copies of which were left with you and GovernormcKinney.Re "It has been noted (page 80) that charges assessed by theserve Bank against State member banks for examinations in-

clude charges for salaries of examiners computed on the basis;f 261 working days per year. In its letter of August 1, 1923,B-3797, the provisions of which have not been amended, theb°ard stated that it considered a 300 day basis as the proper,81-3 for computing salary charges in connection with assessing'ne costs of examinations of State member banks. It will be ap-It)reciated if you will advise the Board of the reasons promptinghe use of a 261 day basis for computing such salary charges.

page 85 the examiner reports that in a number of in-R:ances subscriptions to government issues made directly to thef aervs Bank by banks for themselves and/or customers were paidcr through the War Loan accounts of other banks. It was re-Ported, also, that subscriptions of several dealers had been

for through the Tar Loan accounts of depositary banks.e examiner states that while the Reserve Bank is not adheringNriet17 in this respect to the instructions contained int?aaurY Department Circular No. 92, the management believes,"at a service is being rendered to banks and subscribers and'f_efers to continue the present practice unless instructions torie contrary are issued by the Treasury Department. The Board.L eel

-Ls that a reserve bank, in acting as fiscal agent for theTreaaarY Department, should follow strictly the instructions


319110/17/34

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"of the Treasury Department unless specific authorization hasbeen received from the Treasury Department for any departurefrom the general instructions. It will be appreciated, there-fore, if you will submit this question to the Treasury Depart-ment and if you will advise the Board as to the Treasury'sl'uling in the matter."

Approved.

Letter dated October 16, 1954, approved by five members of theBOA 1,4

'4414, to Mr. Peyton, Federal Reserve Agent at the Federal Reserve Bank

Or knneapolis, reading as follows:

"Receipt is acknowledged of your letter of October 5, 1954,and the inclosed application of Mr. Paul 3. Kalman under theProvisions of section 32 of the Banking Act of 1953 for a permitIto serve as director of the First National Bank of St. Paul, St.aul, Minnesota, and as resident partner at the St. Paul officeof Harris Upham & Company, New York, New York.et "As you state in your letter, it appears that Harris UphamCompany makes loans secured by stock or bond collateral in

considerable volume and that, therefore, the relationship cov-ered by the application is prohibited by section SA of the Clgy -

en Act. In view of the fact that it does not appear that Harris,Pham & Company is a banking organization of the kind referred to-Ln section 8 of the Clayton Act, it appears that the Board has noauthority under that Act to grant a permit covering that relation -shIP. See Federal Reserve Bulletin for April 1954, page 244., "In view of the fact that the relationship is prohibited by

-ale Clvton Act, and in view of the fact that a permit issuedunder the provisions of section 32 of the Banking Act of 195511110111d not render lawful a relationship prohibited by the Clayton42t (see Federal Reserve Bulletin for February 1954, page 125),-'13 is unnecessary to give consideration to the applicability of4?cti

0n 32 to the relationship in question, although the informa -:14°4 which has been submitted is not sufficiently complete toTlow that the provisions of that section are applicable. In thise°rInection, see Federal Reserve Bulletin for June 1954, pages 593-394

"It will therefore be appreciated if you will advise Mr.lialman that it appears that his service as director of the First4t1°nal Bank of St. Paul and as partner of Harris Upham & Com-

11,47 is prohibited by section 8A of the Clayton Act and request4.::rrl to advise you of the steps which he takes to comply withhe

provisions of that Act."

Approved.


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Letter dated October 15, 1934, approved by four members of the

13°ard, to Mr. Peyton, Federal Reserve Agent at the Federal Reserve Bank

of Minneapolis, reading as follows:

"There are inclosed the original and copies of a ClaytonAct permit granted to Mr. J. S. Day, c/o The Richland NationalBank, Sidney, Montana, to serve at the same time as directorand office,. of The Richland National Bank of Sidney, Sidney,Montana, and as director of The Tanners National Bank of Cats-kill., Catskill, New York, for transmittal by you to Th-. Dayand the two banks and a copy for your files. A copy of thePermit and a copy of this letter are being transmitted toFederal Reserve Agent Case at the Federal Reserve Bank of NewYork for his files.

"In the consideration of the application of Mr. Day, itwas noted that.while his attendance at directors' meetings ofthe Montana bank has been satisfactory, he has attended nomeetings held by the directors of The Tanners National Bank.?..f Catskill, Catskill, New York, during the past two years.In view of the applicant's age and the distance separatingthe two banks, it appears that the applicant's attendance inthe future at the directors' meetings of The Tanners NationalBank of Catskill will not show an improvement over his recordilor the past two years. Although the Board feels that a direc-tor should have a satisfactory record of discharging his dutiesand responsibilities by participating in the management an0 oPerations of a bank which he is serving through attendance atdIrectors, meetings, it has granted the permit in this case inIrlew of the satisfactory condition and management of both in-stitutions, the fact that The Tanners National Bank of Catskillwas organized in 1831 by the applicant's forbears, that membersof his family have served the bank continuously for a period ofninety-nine years and that, as stated by Assistant FederalIaeserve Agent Dillistin in his report covering this application,rot.,-Lue present strong condition of the Tanners National Bank and'he character of its management is testimonial to the quality°f the guidance and influence of this family of bankers forover a century.'"

Approved.

There were then presented the following applications for changes

stock of Federal reserve banks:

PZ1.1441Azp for ORIGINAL Stock: Shares mo. 3

eQ,U_Iii°11 National Bank of Shenandoah,L'nenandoah, Pennsylvania 156 156


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4 lications for ORIGINAL Stock: _SContinued)pistrict No 4TheNational Bank of Lorain,Lorain, Ohio

trict No. 5National Bank of Commerce of Gastonia,

Gastonia, North Carolina

Diatrict No. 11The Stockmens National Bank in Cotulla,Cotulla, Texas

YVIleations for SURRENDER of Stock:1-tle First National Bank of Dale,

Dale, Wisconsin

katrict o . 9m" Pirst National Bank of Calumet,Calumet, Michigan

tilstrict No. 126 First National Bank of Cucamonga,Cucamonga, California

Approved.

Shares

144 144

144 144

55 55Total 477

27 27

270 270

50 50Total 527

Thereupon the meeting adjourned.

Assistant Secretary.

Vice Governor.


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