19341114_Minutes.pdf

3489

A meeting of the Federal Reserve Board was held in Tashington

III7ecinesdaY, November 14, 1934, at 11:30 a. in.

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

Mr. Merrill, SecretaryMr. Bethea, Assistant SecretaryMr. Carpenter, Assistant SecretaryMr. Paulger, Chief of the Division

of ExaminationsMr. Wyatt, General CounselMr. Cherry, Assistant Counsel

There were presented for consideration a number of Clayton Act

Pi-ielatiens on which members of the Board had indicated differences ofopinion

as to whether the nermits applied for should be granted. Duringt4eriouing

discussion as to what was in the minds of the respective

illa*ers of the Poard in acting upon the Clayton Act amplications, Mr.?411er stated that he felt that a Clayton Act permit conferred a privi-1; that the responsibilityis on the applicant to show affirmativelyth t

a-the issuance of the nermit would be comatible with the public

illtre8t; and that if it appears that a bank is in an unsatisfactorye°14

ti°4 and the applicant is connected with the errors of management,

esPeciall,Y if the bank's condition is due in part to loans to offi-al'

directors or their interests, the presumntion is fairly well31ished that the permit should not be granted.1.H

said that he agreed with the statement made by Mr.et. 1 A-nd that he also felt that where a director or officer had

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

349011/14/34.

417sd the institutions involved in his Clayton Act application for maw

8.nd his service had not resulted in any situation that was contrary

to tile public interest, the permit should be granted.

Mr. James stated that he had found that there were many factorsto be

Considered and that the issuance of a permit in one community on

t4 basis of certain facts would be proper, whereas the issuance of aPeIlkit under similar circumstances in another community might not be com-

Pa.tible with the public interest, and that no definite formula could beIlsed ia c

onsidering Clayton Act applications that would apply to all con-1%11i-ties.

Thomas raised the question of the desirability in all doubt-

0C.1 of requesting the agent to submit additional information on the

6ituation. This matter was discussed but no action was taken.

The following actions were then taken upon the Clayton Act appli-

e

ettti„._wis

referred to above:

The Secretary was requested to address a letter to-r- Case, Federal Reserve Agent at the Federal Reserverank of New York, stating that the Board has given con-:ideration to the two applications referred to below110r permits under the Clayton Act and that, upon the:3

asis of the information before it, feels that the is-st:lance of the permits applied for would be incompatiblewith the public interest, and requesting the agent to

TsImunicate to the applicants the Board's position inv batter and to advise the Board promptly as to whether

if aPplicants desire to submit any additional data, and,"I not, as to what steps they propose to take in order toC mgY with the provisions of the Clayton Act:H

a „81..1:17 roct

°. Coughlan, for permission to serve at the same timeNti 'I or and officer of The First National Dank of Nutley,3:7) New Jersey, as a director of the Bank of Nutley, Nutley,Ntl erseY, and as a director of The Franklin National Bank ofe

Nutley, New Jersey.


349111/14/34 -3-

Marion L. Lewis, for permission to serve at the same tine

Nutley,as a director and officer of The First National Bank of Nutley,

New Jersey, and as a director of the Bank of Nutley,Nutley, New Jersey.

The application of Mr. Fronk Augsbury, for permission to serveat the same time as a director and officer of the Ogdensburgrust Company, Ogdensburg, New York, and as a director and officer

T* The St. Lawrence County National Bank of Canton, Canton, New"k, was approved, Mr. :aller voting "no".

The application of M. Hyatt C. Hatch, for permission to serve;the same time as a director and officer of the Atlanta National

Ba114, Atlanta, New York, and as a director of The Bath Nationalank, Rath, New York, was approved, Messrs. Miller and Szymczakvoting 'Trio%

Thethe

application of Mrs. Mary H. Hoag, for permission to serve atsame time as a director of The Bath National Bank, Bath, New

York time

and as a director of The Prattsburgh State Bank, Prattsburg,"ew York, was approved, Mr. Lilller voting "no".

APPlioation of Frank O. ilittag, Jr., for permission to serve:t the same time as a director of The First National Bank of West-Natjc1 ) Westwood, New Jersey, and as a director of The Bergen County

onal Bank of Hackensack, Hackensack, New Jersey.

Approved, together with a letter to Mr. Case, Fed-erel Reserve Agent at the Federal Reserve Bank of New-,,301el1re;losing a copy of the Clayton Act permit referredT

stating that, in the cir-unstances, the Boardconcurs in the agent's opinion that the permit should be

vo.thD: anted but suggests that he endeavor, in cooperation

the appropriate supervisory authorities, to bringab°11t the completion of the plans for strengthening thecaPltal structure of The First National Bank of Westwoodird a correction of the matters which have been criticized

the examiner; and, reouesting that, when the agent sub-.1(1:J,:ta his

recommendation as a result of his annual reviewbi.th? permit, he report fully as to the progress made inmfinging about an improvement in such matters. On this--ltter Mr. 1 i11er voted "no".

APPlicat 0same 4.. i of Mr. Curtis Miller, for permission to serve at the

'lme as a director and officer of The National Ban:: of w ater-

azial, Waterville,

ePcsit Company, New York, and as a director of the First TrustOriskany Falls, New York.


11 11/14/34

3492

-4-

koproved, together with a letter to Mr. Case, FederalReserve Agent at the Federal Reserve Bank of New York, in-closing a copy of the Clayton Act permit issued to Mr.Miller, and stating that, in the circumstances set forthin the letter, the Board concurs in the agent's opinionthat the nermit should be granted, but suggests that heendeavor, in cooperation with the appronriate supervisoryauthorities, to expedite the rehabilitation of the Water-yule bank and to bring about a correction of the condi-tions in both banks which have given rise to the examiners'criticisms; and requesting that the agent review the permitnot later than February 1, 1935, and that, when the agentsubmits his recommendation at that time, he report fully asto the progress made in bringing about an improvement inthe condition of the banks. On this matter Messrs. Hamlinand Miller voted "no".

The follorinf: letter to :Ir. Case, Fed-eral Reserve Agent at the Federal ReserveBank of vier York, was approved, Mr. Millervoting "no" with respect to the issuance ofthe Clay' on Act permit to Ma-. Walsh:

Act "There are inclosed the originals and conies of the Claytons, Permits issued to Messrs. Harry H. Pond, F. Irving Walsh,-011'1 DeZir4ffitt Hubbell to serve at the same time as directors and/

0Ncers of the Plainfield Trust Company and the Plainfield,--"al

Yo Bank, both of Plainfield, New Jersey, for transmittaln to the applicants, with conies to the banks involved andPie for your files.

P1,4 :These 3.entlemen are all directors and/or officers of thefr;,./11.ield Title and Company Mortgage Guaranty Compa and it appearsinfLY2u.,1" letter of September 18, 1934, and the accompanyingof i;::cion that the provisions of Section 32 of the Banking Act

4lfiel,%.are not now applicable to their services to the Plain-b

ecal

' tle anc, Mortgage Guaranty Company and the banks involvedcotipen °f the presently restricted operations of the mortgage

However, the President states, in his letter to youissuall'August 27, 1934, that it is now intended to resume theof n ee and sale of real estate mortgage bonds and certificatestheTticiPation as soon as the present restrictions imposed byl''parte authoritie;1 are removed.the , th e circur.stances, you are requested, when transmittingthe i'llermits to the applicants, to advise each of them that whenit Tgage eeimPanY resumes the issuance and sale of securities1)ermit be neces5ar:7 for them to apply for and receive Section 32the 132 °r otherwise bring their services into conformity withsions of that section."

A


0 11/14/34 -5-

3493

The Clayton Act permits referred to inthe above letter were as follows:

Mr. Harry H. Pond, for permission to serve at the same time assr. director and officer of The Plainfield Trust Company, Plain-tield, Jew Jersey, and as a director of The Plainfield National'41-11:, Plainfield, New Jersey.

'/,irs F. Irving Walsh, for permission to serve at the same timea director and officer of The Plainfield Trust Company, Plain-

New jersey, and as a director of The Plainfield Nationaloank, Plainfield, New Jersey.

laeWitt Hubbell, for permission to serve at the same time as(b idirector and officer of The Plainfield Trust Company, Plain-r-ew Jersey, and as a director of The Plainfield Rationalnk, • Plainfield, New Jersey.

application of ;;.r. George W. Bauer, for permission to serveth4.e same time as a director and officer of the Union County

of .T.; C°mPany, Elizabeth, New Jersey, as a director and officer

'orune Linden Trust Company, Linden, New Jersey, and as a direc-

Was m,Itle First 'iational Bank of Roselle, Roselle, New Jersey,

aPproved, ressrs. Hamlin and Miller voting "no".

The aPPlth ications of Mr. G. P. Crandall, for nermis-ion to serve

e,at e

The U

same time as a director and officer of The National Bank°estfield, Westfield, New York, as a director and officer ofr

ational Bank of Fredonia, Fredonia, New York, and as a di-"tor °f The State Bank of Mayville, Mayville, New York;Lir. -a q. Crandall, for Permission to serve at the same time asfield Nor and officer of The National Bank of Westfield, est-Lla cii;illew York, as a director and officer of The State Ban!: ofthe ii-j-e) 49.Yville, New York, and as a director and officer ofank of Brocton, Brocton, New York;Mr.offi • Rouse, for permission to serve at the same time!as anas ac!.1; °I* The National Bank of Westfield, Westfield, New York,york '-rector of The Rational Bank of Fredonia, Fredonia, Jewtro4 and as a director and officer of the Bank of Brocton,

York;

Mt** T711s(1,, 0a dir„4_-- " Price, for permission to serve at the same time as:Tew y-rr of The First National Bank of Jamestown, Jamestown,Irille°r Y and as a director of The State Bank of Mayville,

-ew May—

ork; and


11/14/34 -6-3494

111.Fred W . Hyde, for permisEdon to serve at the same time asdirector of The First National Bank of Jamestown, Jamestown,York, and as a director and officer of The Clymer State

1111c, Clymer, New York, were approved, Mr. 7.iller voting "no"witn regard to the issuance or a permit to Mir. Rouse.

In connection with the above applica-tions, the following letter to 7r. Case, 'Fed-eral Reserve Agent at the Federal Reserve Bankof New York, was approved:

"There are inclosed for your files copies of Clayton Act13„ermits granted to Messrs. G. P. Crandall, F. W. Crandall,'• A. Rouse, Wilson C. Price, and F. W. Hyde, covering theirrrvices as officers and/or directors of the banks listed in1.1e respective permits. The Board has also considered the-PDlications of Mr. A. E. Skinner to serve at the same time

r” tfi

director and officer of The National Bank of Westfield,v eld, New York, and director of The State Bank of May-o]f_Lle, T4avville, New York, and Mr. E. D. Reagan to serve asaalrflic7,r and/or director of these two banks as well as directory -,cer of The National Bank of Fredonia, Fredonia, New

UpOn the information before it the Board feels that thePuh1

Ce of permits applied for would be incompatible with thealiic interest. You are requested to advise Messrs. Skinnerare Reagan of the Board's position in the matter unless thereti; ,Pertinent facts which were not submitted with the applica-"84nd which 70U feel should be given consideration.izea -Lfyou deem it desirable or necessary, you are author-

actio!o iflfor m Messrs. Skinner and Reagan that the Board'sabus " uPon their applications was based upon their apparent%of the credit facilities of the banks involved.that ,In communicatilq with the applicants please advise themert4.1n accordance with section V (g) of Regulation L, consid-app

- i will he given to any additional facts or arguments not

they—e Ig in their applications and accompanying forms which' el should bebrow:flit to the Board's attention.to whe4.,_ qls conlection please advise the Board promptly astiorialTr Messrs. Skinner and Reagan desire to submit addi-in at, "rl, if not as to what steps they propose to takeorder

Lo comply with the provisions of the Clayton Act."

.0_ The foll0win7 letter to Mr. Austin, FederalZTerve Agent at the Federal Reserve Bank oftrulladelphia, was approved, Messrs. Thomas and.ames voting "no":

"The Bart

T°1 °arc' has reconsidered, the application of Mr. Howard

Of 411.1! River, New Jersey, for permission under the provi-(3- '"e Clayt-m Antitrust Act to serve at the same time as


3495-7--

"a director of The First National Bank of Toms River and asa director of Ocean County Trust Company, both of Toms River,4ew Jersey, and upon the basis of the information before it,including that submitted with your letter of September 27,1934, transmitting conies of letters received by you from theaPPlicanf, and from the presidents of The First National Bank

th ?f Toms River and the Ocean County Trust Company, still feels

the granting of the permit applied for would be incompati-I,Le with the public interest as indicated in its letter to youuated September 6, 1934. You are reeuested to advise the ap-plicant according1,y.

"Please ascertain and advise as to what further steps Mr.'art Proposes to take in order to comnl, with the provisions

of the Clayton Act."

The, aPplication of Mr. Robert L. Ehrhart, for permission to serve,za the same time as a director of The First National Bank ofnover, Hanover, Pennsylvania, and as a director of the HanoverSt Company, Hanover, Pennsylvania, was approved, Messrs. Ham-and Miller voting "no".

There was then approved, (Mr. Miller voting"no") a letter to Mr. Williams, Federal ReserveAgent at the Federal Reserve Bank of Cleveland,inclosing the following Clayton Act permit fortransmittal to the applicant; stating that, in allthe circumstances, the Board felt that it would bePreferable to grant the permit to the applicant inorder to avoid any unnecessary misunderstanding bythe communities which might prove detrimental tothe best interests of the banks, that, however, theBoard feels that a director should not merely lendhis name to an institution and that a satisfactoryattendance at directors' meetings is necessary forthe proper discharge of directors' duties; and re-questing that, when transmitting the permit to the.P.Plicant, the agent inform him of the Board's viewsIn tne matter, and that, when the agent submits hisrecommendation as a result of his annual review ofthe e prm fillyit, he report as to the applicant's at-

nuance at at directors' meetings and as to the progress',Lade in the curtailment of his indebtedness and thelindebtedness of his interests to The Citizens-Statean-- of Strasburg:

Mr. Thdirect°,Tas KA

emP, for permission to serve at the same time as alex 1;'07' and officer of The First National Bank of Alexandria,

-rla/ Pennsylvania, and as a director and officer of Theens -State Dank of Strasburg, Strasburg, Ohio.


11/14164 -8-

3496

There was then approved (Mr. Miller voting "no") aletter to Mr. Williams, Federal Reserve Agent at theFederal Reserve Bank of Cleveland, inclosing the follow-ing Clayton Act permit for transmittal to the applicant;stating that, in view of all the circumstances, the Boardfelt that it would be preferable to grant the permit inorder to avoid any unnecessary misunderstanding by thecommunities which might prove detrimental to the bestinterests of the banks; suggesting that, when transmit-ting the permit to the applicant, the agent advise himthat it has been granted with the expectation that hewill improve his attendance at directors' meetings; andf?questing that, when the agent submits his recommenda-ulon as a result of his annual review of the permit, hereport

fullytors'

as to the applicant's attendance at direc-meetings:

Mr. Harry mdirect Rimer, for permission to serve at the same time as a414,1e°40(1!fhe

Th Citizens Trust Company, Clarion, Pennsylvania, as

of The First National Bank of New Bethlehem, New Beth-Nati.2 rennsYlvania, and as a director and officer of the Sligovnal Bank, Sligo, Pennsylvania.

The asam PPlication of Mr. Elias Ritts, for permission to serve at

an; time as a director d officer of The Butler County National

dire alld Trust Company of Butler, Butler, Pennsylvania, an as

ctor of the°Tpro ora National Bank, Lyndora, Pennsylvania, wasved, Mr. Miller voting "no".

Thethe 'P-Llcation of Mr. J. F. Roberts, for permission to serve atsheibsame time as a director of The First National Bank of Shelby,y,thitottY4, North Carolina, and as a director and employee of the

'rust C°mPanY, Shelby, North Carolina, was approved.The an,„at thp:''Ication of Mr. Forrest Eskridge, for permission to serveBelik - same time as a director and officer of The First Nationalficer°f Shelby,prcvedcf of-the

Shelby, North Carolina, and as a director and of-e Union Trust Company, Shelby, North Carolina, was ap-

Tht e awhe s PPli t-easaon of Mr. George Blanton, for permission to serve atc't Shell

etime as a director and officer of The First National Bankthe Shelby, North Carolina, and as a director and officer of

°11 Trust Company, Shelby, North Carolina, was approved.!PPlicafi4ne ae.-- n of Mr. Charles C. Blanton, for permission to serve atl°t as a director and officer of The First National BankO r the eT111031h,M North Carolina, and as a director and officer

Company, Shelby, North Carolina.


3497-9-

Approved, Messrs. Miller and Szymczak voting "no",and Mr. James stating that, although when first consid-ering the application he had been of the opinion thatthe permit should not be granted, he now felt that theaPplication should be approved inasmuch as permits werebeing granted to Messrs. Roberts, Eskridge, and GeorgeBlanton to serve the Shelby banks.

The following letter to Mr. Stevens, Federal Re-serve Agent at the Federal Reserve Bank of Chicago, wasapproved, Mr. Miller voting "no":

let "Reference is made to Assistant Federal Reserve Agent Young'sfr ter of October 1, 1934, inclosing copies of letters receivedz.la the Iowa State Savings Bank, Creston, Iowa, and from Mr. Geo.t,_ artle, Creston, Iowa, submitting additional information rela-14e to the application of Mr. Bartle for a Clayton Act permit,1.4.21 was disapproved by the Board for the reasons set forth in"letter to you of September 14, 1934.

zaittThede Board has given consideration to the additional facts

in accordance with Section V (g) of Regulation L and inrear' of such additional facts, particularly the information withWhose

to the resignation from both banks of Mr. D. Davenport,tor association with and domination of the applicant appeared

aPermit ue the Principal unfavorable factor in this case, has grantedto ?!The p4_ ,r. Bartle to serve at the same time as a director oftor a'rst National Bank of Prescott, Prescott, Iowa, and as direc-

The officer of the Iowa State Savings Bank, Creston, Iowa.by y.oulginal and copies of the permit are inclosed for transmittal4 corn, t° Mr. Bartle and the two banks, and there also is inclosedliver".,_r°r Your files. It is requested, however, that before de-4-lig the Permit to Mr. Bartle and copies thereof to the bankssigee,'r,fledl You ascertain definitely that Mr. D. Davenport has re-eignat%'s director and officer of the two banks and that his re-t6;°11, in each case, has been accepted.'Lease inform the Board of your action in this matter."

PPlicatiame timtimeon 0-p Mr. George L. Gilkey, for permission to serve at thekoeh, wi; as a director of the First National Bank in Oshkosh, Osh-Ataericat Zri!ile=las a director and officer of the Citizens

1_, Wisconsin.

ttThvis4 ere

4.01as 0,

to

Approved, (Mr. Miller voting"no"), together with a letter toMr. Peyton, Federal Reserve Agentat the Federal Reserve Bank ofMinneapolis, reading as follows:

is inclosed a copy ofthe Clayton Act to Mr.

serve at the same time

a permit granted under the pro-George L. Gilkey, Merrill, Wis-as director of the First National


11/14/34-10-

"!ank in Oshkosh, Oshkosh, Wisconsin, and as director and officer°' the Citizens American Bank, Merrill, Tisconsin. Mr. Gilkey's13Plication was to serve as director and officer of the CitizensQtate Bank, Merrill, Wisconsin, but the permit has been issued as7tintioned above on the basis of advice received b7 the Board fromc'414Psderal Deposit Insurance Corporation to the effect that the

,-i State Bank, Merrill, Wisconsin, was, on June 91 19341

iineolidated with the American State Bank of the same city under

the name of Citizens American Bank, and that Mr. Gilkey serves"e consolidated bank in the same cepacities-as he served the Cit-izens State Bank.

considering Mr. Gillrey's application it was noted that hetiended only six of twenty-nine meetings held by the directors ofth First National Bank in Oshkosh during the past two years; and

ate

in the report of examination of this bank as of April 271the a portion of the indebtedness of the applicant and all ofa .1.n

debtedness of two corporations in which he was interested as,„,!!lrector and officer were classified as slow by the examiner,

Qp,stated that the large direct and indirect extensions of credityegirectors and their corporations suggested that those in commandtheil,taking

and

of their positions on the board to furtherarid °1"n personal interests. It was noted also that the applicantciti;°rPorations in which he was interested were indebted to theof a,ens State Bank, Merrill, Wisconsin, in the aggregate amounteifiTc)xirnatelY )86 0001 of which approximately t70,000 was cies-or N- as slow in the report of examination of that bank made asalicecember 20,

19351 by an examiner for the Federal Deposit Insur-siderporation. In granting the permit the Board took into con-ing 8;tion the fact that the applicant had stated that he was mak-tors, rangements which would insure his being able to attend direc-Prominillene:tings regularly, that he was reported to be a member of aand that a and to have a large following in the communities,i was said to be possessed of considerable executive abil-

"At

G

thTaesteR e time of your annual review of this permit you are re-direct-

°rC) raake Particular note of the applicant's attendance at

edtess st Of the First National Bank in Oshkosh and of his indebt-balaks and that of companies in which he is interested to both/ and report fully to the Board with respect thereto."

3498

The athe s ication of Mr. R. H. Butterwick, for permission to serve at1°rth-i?,time

Bank as a director of the of Sargent County, Forman,

" li'''°.trt, and as an officer of The Dakota National Bank of Fargo,/ orth Dakota, Th ta, was approved, Mr. Miller voting "no ".

e aPPl 4-ic .e t3m- 13-1°11 of Mr. A. L. Hanson, for permission to serve re1,-,-,7 as a director and officer of The First National Ban_,. oThepiat an

Twin Valley Minnesota, as a director d officer of

' National Bank Of Buxton, Buxton, North Dakota, and as a


349911/14/34

-11-

director and officer of the First State Bank, Ada, Minnesota,vas approved, Mr. Miller voting "no".

The application of Mr. M. H. Hanson, for permission to servethe same time as a director and officer of the First National

ank in Mahnomen, Mahnomen, Minnesota, as an officer of The Firstilatonal Bank of Buxton, Buxton, North Dakota, and as a director!Ind officer of The First National Bank of Thompson, Thompson,510rth Dakota, was approved, Mr. Miller voting "no".

he aPplication of Mr. J. M. Travis, for permission to serve at'isle same time as a director of The Texas State Bank, Jackson-YrIlle, Texas, and as a director of The First National Bank ofvacksonv ille, Jacksonville, Texas, was approved, Mr. Miller17°ting

There was then approved (Messrs. Miller and Thomasvoting "no") a letter to Mr. Walsh, Federal Reserve Agentat the Federal Reserve Bank of Dallas, inclosing the fol-lowing Clayton Act permit for transmittal to the applicant;suggesting that the agent advise the applicant of theBoard's views with regard to attendance at directors' meet-ings as set forth in the letter; and requesting that, whenthe agent sul-mits his recommendation as a result of hisannual review of the permit, he report fully as to the ap-plicant's attendance at directors' meetings and as to theProgress made in bringing about an improvement in the con-

and management of the banks involved in the permit:Mr, E. Bdir . Ritchie, for permission to serve at the same time as ad,_ector of The Strawn National Bank, Strawn, Texas, and as a14-rector of The State National Bank of Mineral rells, Mineral'lls, Texas.

There was also approved (Mr. Miller voting "no") aletter to Mr. Walsh, Federal Reserve Agent at the FederalReserve Bank of Dallas, inclosing the following ClaytonAct

permit for transmittal to the applicant; suggestingthat the agent advise the applicant that it is with theexpectation that he will improve his attendance at direc-Prst

meetings of The First National Bank of Lipan thatne Permit has been granted; and requesting that, whenhe agent submits his recommendation as a result of hisannual review of the permit, he report fully as to theaPPlicant's attendance at directors' meetings:

Mr. w. ”dire n- Roach, for permission to serve at the same time as aMitecu°r and officer of The State National Bank of Mineral Wells,tkivral Wells Texas, and as a director and officer of The First1011..n '44. Bank of Lipan, Lipan, Texas.


3500

-12-

The application of Mr. Albert I. Kulzer, for permission toserve at the same time as a director and officer of The FirstNational Bank of Chewelah, Chewelah, Washington, and as a direc-I,or and officer of the Farmers & Merchants Bank, Springdale,"lashington, was approved, Messrs. Miller and Szymczak votingnon.

At this point Governor Harrison of the Federal Reserve Bank of

Z3I'lc, Joined the meeting. He stated that in May or June of this

'1411* be had discussed with members of the Board's Committee on the

'4U Federal Reserve District the suggestion that the Federal Reservetklic

of New York take over the clearing and examination functions of

11/14/34

ly

the"! York Clearing House Association, it being contemplated that

the

bkit3tezination of the clearing house banks by the Federal

would take the place of examinations

488°4ati0n and that the clearingthe

Federal Reserve Bank ofbikrap

gradually built up444 in the district

11R tnnetion.

c:1111°4' require

be accomplished

kcl duties

Or thethe l'ederal Reserve System thiqUie assumption by the

tkletioris referred to would

Ilacliecussed the matter witht111, a ma

jority of whom, he felt, were not

house

New York

to a point where

in the event there

previously made

examiners

and

reserve

by the

would be taken over

the examining force of the

it could examine all member

is unification of the exam-

He explained that this suggestion would not, in his

any change in existing law and the examination work

merely

Of Federal

by enlarging the existing organization

Reserve Agent's Department. He thought that

members of the clearing house association are members of

He outlined the reasons for his opinion

Federal

be

members

reserve bank of the clearing house

a desirable step and he stated that he

of the clearing house associa-

only willing but anxious that


3501

-15-the

stel)be taken; that the chairman of the association was in favor ofthe

* mMstion and had raised a question only as to when and under what

Prciceallrethechange would be made; and that the directors of the Federal

Ileserly,IDank of New York were in agreement that theetuation was reaching

a PMalt where the suggested action by the Federal reserve bank should be

11/14/34

Governor Harrison also said that he did not think it would be wiseto

thec'- 1earing.house organization to be abandoned entirely if the clear-an4' examining functions were taken over by the Federal Reserve BankNew ,,-

4cirk, but that there should remain in existence a committee which

te UP as representatives of the banks.

He then stated that he would like to get an indication from the

4'41e113 °f the Board as to whether the Board is generally in sympathy with

the 811ggesti0n that the bank assume the clearing and examination functionsr the New York Clearing House Association. He referred to the considera-

tt°4 btl,b el" given at the present time in Washington to the unification of

.01114r'qresent the clearing house banks and with which matters could be

eicieranic examination function and he stated that, in his opinion, the con—

of this matter was not a reason for deferring action on the pro -v"ed step by the New York Bank, and that he had discussed the matter with4"441c that

had not felt that there should be unification of examinationsalkl that

the

-4441444 Federal Reserve Bank is the best agency through which theebk.,

--Lons could be made.IIPon .

the N

nclulry Governor Harrison stated that he would propose thatew york

e) . Bank examine all banks which are members of the New York-4L1111g. H

°I1Be Association, whether State or national hanks. He also


3502

hich Mr. James stated that he had suggested for a long time that

q the Stock of the Federal reserve banks would place them under respon—

"bility to bear indirectly the expense of such examinations. He added

11/14/34

8414 that he felt that the Federal reserve banks are in the best positiontob,

"41.zs examinations, as they are coming in constantly closer contact with

— yanks and their knowledge of the banks' affairs is growing, andthat ti.

ls close contact is an almost necessary adjunct to any examination.

A general discussion of the question of bank examinations ensued

w131114 be desirable for the examination function to be vested in the

Federal Reserve Board which would supervise, through the Federal reserve

belike

' the examination of member banks and would absorb the cost of exami-1144011,i." He said that under this arrangement the banks would get the

e4efit of- examinations without direct cost while their ownership

thq hi_

suggestion would also provide that where the condition of the

such that additional examinations were desirable, the expense of

811°1 °3cellinati0n5 could be assessed as a penalty on the bank for alloyingthe

111188`tisfactory condition to develop.

tbe 1)iecussion of Mr. James' suggestion raised the questions whether

tl3Ponsibility for examinations should rest with the Federal Reserve

)11\71 '31' the -Federal reserve banks, the procedure to be followed in con—

exami nations, and whether it would be desirable, in view ofe4the

circumstances, for the Federal reserve bank to take upon itself

for making examinations of clearing house banks in17"°rIt City,

that

In connection with the first question, Governor Harrison stated

e it that it would be more satisfactory if the supervision of


350311/14/34

-15-

w ere placed primarily in the hands of the Federal reserve

444, subject to supervision by the Federal Reserve Board, and that hetelt

the Federal Reserve System would be more likely to get the support

°I* illember banks if the examination function is handled through the Fed-

eserve banks so as to avoid the concentration or congestion whichhas be

en experienced in other offices in Washington.

Re then stated that he would like to take up with the Chairman ofthp,

w 401,1c Clearing House Association the matter of the assumption bythe?ederal Reserve Bank of New York of the clearing and examination func-

of the association, and advise him that the Federal Reserve

lickld beg-fl to examine the clearing house banks, it beingtheas

its

to

Bank

understood thatsoc -

iettion would abandon its examinations and permit the transfer of

r`aminers to the Federal Reserve Bank of New York.

During the latter part of the discussion, Mr. Daiger,

Thomas, joined the meeting.

At the conclusion of the discussion it wasunderstood that Governor Harrison would conferon the matter with the Board's Committee on theSecond Federal Reserve District which would makea report to the Board with regard thereto.

Messrs. riYatt, Paulger, Cherry,the 13

Assistant

Daiger and Harrison left the meet-

oard acted upon the following matters:

Telegram to the Federal reserve agents at all Federal reservereading as

follows:

cp,,o,'nquiries, the Federal Reserve Board rules that interest

seNo. 38 interpreting Regulation T. In response to t

at tb--" dividends on securities in any restricted account may,azer:4,ptien of the .creditor be paid to the customer if theyon the same day on ;hich, in accordance with the creditor's


4/14/34

practice, they are credited to the customer's account.xnismiling applies to interest on coupon bonds as well as tointerest on registered bonds and cash dividends on stocks."

3504

Approved.

Telegram toMr. Newton, Federal Reserve Agent at the Federalerve

Bank of Atlanta, reading as follows:

, "Your wire November 13 re election Class A Director. It;Ls Board's view that a member bank which has cast invalidballot may be permitted to substitute properly prepared ballotProvided (a) that the outer envelope on which appears the sig—nature of the officer of the voting member bank is plainlyTarked 'substitute' or 'duplicate' (b) such substitute ballotls cast before the closing of the polls and (c) that as soon:e the ballot box is opened after the closing of the polls the,Tre10Pe containing the ballot originally cast by the bank in'estion is identified and such original ballot withdrawn fromcons

ideration."

0,„

I01eveland, reading as follows:

—10-

Approved.

Lett er to Mr. Williams, Federal Reserve Agent at the Federal Reserve

1, "There are inclosed the original and copies of a Clayton Act4,rmit granted to Mr. C. E. Kapitzky, Cleveland, Ohio, to serveta theu 88.ms time as director and officer of The First Nationalortfl;' °f Alexandria, Alexandria, Pennsylvania, and as director andf0,12er of The Citizens—State Bank of Strasburg, Strasburg, Ohio,

F,ansmittal by you to the applicant and the two banks, and avPyttior your files.liot In the consideration of Mr. Kapitzky's application it waseeZ1 from recent reports of exsnination that the banks he isti;v1ng were in unsatisfactory condition (although their condi—ca /41,sUbsequently had been imnroved by the strengthening of their04i'al structures); that thE'condition and management of Thethe zens—State Bank of Strasburg were especially criticized bythe eaaTiner for the Federal Deposit Insurance Corporation; that

143J-1oant was considered to be largely responsible for theoeca,

e, aeborY condition of The Citizens—State Bank of Strasburgalpi o of his domination of its affairs; that he and his familya4d /;!4tTY have used unduly the credit facilities of this bank,by thuat he attended only eight of the twenty—four meetings heldthe :ne directors of The First National Bank of Alexandria during4tst two Years.or these

reasons, the Board has not been disposed to grant


350511/14/34 -17-

"the permit. However, it has given consideration to the otherfactors involved in this_case, particularly the long serviceof Mr. Kapitzky tothebaaks and the fact that he and his familyhave substantial stockholdings in the Strasburg bank, and, in

Fletcher of the recommendations of Assistant Federal Reserve Agent

and the Federal Reserve Agent at Philadelphia, the BoardIlas granted the permit. It will be noted, however, that the per-mit has been granted to continue in effect only for the periodending at the close of December 31, 1934, and, when transmittingthe Permit, you are requested to call the applicant's attention

110 this feature of the permit, advising him also that the Board

2-s granted the permit with the expectation that at its expira-blon he will bring his relationship into conformity with the12cY7i5i0n3 of the Clayton Act. This will avoid the necessity

Zilva severance of his connection with either of the banks attime, and the situation can be met, it would seem, without

irrrassment or a misunderstanding in the communities, by ef-the desired adjustments in the managements of the banksuY December 31, 1934.

"Please matter,

keep the Board informed of the action taken in this

A copy of this letter is being sent to the Federal ReserveAgent at the Federal Reserve Bank of Philadelphia."

Approved.

Letter to Mr. Peyton, Federal Reserve Agent at the Federal Reservekik or m.

lnneapolis, reading as follows:

A "There are inclosed the original and copies of a ClaytonDet permit granted to Mr. 0. S. Hanson, Grand Forks, NorthT111 1a, to serve at the same time as director and officer ofa e First National Bank of Buxton, Buxton, North Dakota, andss a director of The First National Bank of Thompson, Thomp-tr, North Dakota, for transmittal by you to Mr. Hanson ande 14Dianks involved, and a copy for your files.

te, UPon the basis of the information before it the Board

aiels that the issuance of the permit applied for to serveGrs° as a director of the First National Bank in Grand Forks,1,elld Forks, North Dakota, would be incompatible with the pub-tiLlo interest. You are reouested to advise the applicant ofe Board's position in this matter unless there are pertinentf'acts oU

j. which were not submitted with the application and whichteel should be given consideration.

to 4 If You deem it desirable or necessary you are authorizedtiof!*°r m :/r. Hanson that the Board's action upon his applica-

4.1,1 in respect to his service as a director of the Firstaulonal Bank in Grand Forks was based primarily upon your


3508

t1(11'18e thad .kqy

11/14/34-18-

mmendation and the fact that, as indicated in your letter°f October 2, 1954, he is already sufficiently burdened withresponsibilities in his capacities as director and officer ofThe First National Bank of Buxton and as director of The FirstNational Bank of Thompson, particularly in view of the unsatis-fact°rY condition of the former bank and the difficulties beingexPerienced in effecting its program of rehabilitation., "In view of the statement in your report to the effect that4r. Hanson was connected with several outlying banks, includingThe First National Bank of Buxton and The First National Bank°f Thompson, it is requested that before transmitting the permit:Ind the copies thereof to the banks involved you determine that

Hansont s relationships with all the banks with which he is'onilencted are in conformity with the Clayton Act., In communicating with the applicant please inform him that,

7-2_-11 accordance with Section V (g) of Regulation LI consideration111 be given to any additional facts or arguments not appearing

1,11 1118 application and accompanying forms which he feels shouldbe brought to the Board's attention. In this connection, please

sulbrise the Board promptly as to whether Mr. Hanson desires toany additional data and, if not, as to what steps he pro-

in order to take in order to comply with the provisions of the Clay-

Letters

to4rci has given

tillcier the ClaYt on.

Its reels that the

Approved.

to the respective Federal reserve agents stating that the

consideration to the following

Act, and that,

issuance

with the publice° ic ate to the applicant

applications for permits

upon the basis of the information before

of the permits applied for would be incompat-

interest. Each letter also requested the agent to

the Board's position in the matter, and to

e Board promptly as to whether the applicant desires to submit

o clItional data, and, ifrtier to f,

-0111131,7 with the provisionsMr. Art,_as an "ur L. Bowerman, for permission to

National at the same timeNewa officer and director of the Lincoln Bank of Newark,

Nof rkl Ilew Jersey, and as a director of The Franklin Bankmr. utley, Nutley, New Jersey.

ofri!lbert E. Howe, for permission to serve at the same time as 1Ne -er and director of The Franklin National Bank of Nutley,_u y,14 w ' etr-utl

Terev. 2,,,Y and as an officer and director of the Bank of Nutley/m" 'ley' Jersey.

not, as to what steps he proposes to take in

of the Clayton Act:


11/14/34—19—

Mr. Edward H. Yerg, for permission to serve at the same time asa director of The First National Bank of Nutley, Nutley, New''eree5r, and as an officer and director of the Peoples National'oink & Trust Company of Belleville, Belleville, New Jersey.

rMr- Robert -5. Douglas, for permission to serve at the same tinean officer of the Union County Trust Company, Elizabeth, New„eree,Y, and as a director of The First National Bank of Cran-4ord, Cranford, New Jersey.

Mr. n,--LarK McKay Vhittemore, for permission to serve at thesame;;44v as a director and officer of the Union County Trust Company,tliizabeth, New Jersey, as a director of the Linden Trust Company,0,141"/ New Jersey, and as a director of The First National Bank-4 uranford, Cranford, New Jersey.

Mr.c- v.

dir "rrY Holiday, for permission to serve at the same time as aectcr typ Thver,

.L e Butler County National Bank and Trust Company ofButler, Pennsylvania, and as a director of the Lyndora.510nal Bank, Lyndora, Pennsylvania.

1% Clemens, for permission to serve at the same time as aNo_ctor and officer of The Dakota National Bank of Fargo, Fargo,stfIll Dakota, and as a director and officer of the Bank of Steele,vele, North Dakota.

3507

•dire,-L-Lam Stern, for permission to serve at the same time as atie

ort,zor and officer of The Dakota National Bank of Fargo, Fargo,Dak41 Dakotav'as a director of the Bank of Steele, Steele, NorthPo,__4, and as a director and officer of the Bank of Sargent County/...wan, North Dakota,

Letters(T, to

applicants for permits under the Clayton Act, advising

as a "rick McDonough, for permission to serve at the same timepial director and officer of The First National Bank of Southg el:(1, South Plainfield, New Jersey, and as a director of-Lanfield National Bank, Plainfield, New Jersey.

Approved.

of their applications as follows:

14r. ("Dv. ridire4v ". Bange, for permission to serve at the same time as a1744i °r or The First National Bank of Hanover, Hanover, Pennsyl—PerinELY111c1 as a director of the Hanover Trust Company, Hanover,

Brough, for permission to serve at the same time as a


)4 11/14/34

Mr. Dean B. Copeland, for permission to serve at the same time as701;-Lrector of The Braddock National Bank, Braddock, Pennsylvania,alla as a director and officer of The Butler County National BankTrust Company of Butler, Butler, Pennsylvania.m

o Amsler, for permission to serve at the same time as adirectatd as r of the Citizens Trust Company, Clarion, Pennsylvania,p_ a director of The First National Bank of Fryburg, Fryburg'1111sYlvania.

atime'Llarles E. Andrews, Jr., for permission to serve at the same

anBe,L s a director d officer of The First National Bank of levrote ehem, New Bethlehem, Pennsylvania, as a director and officerand as First National Bank of Rimersburg, Rimersburg, Pennsylvania,Pennan;:irtteector and officer of the Sligo National Bank, Sligo,

-20-

3508

director and ofilcer of The First National Bank of Hanover,Hanover, Pennsylvania, and as a director of the Hanover TrustCftlpany, Hanover, Pennsylvania.

!re C. N. Nyers, for permission to serve at the same time as a

Tdirector of The First National Bank of Hanover, Hanover, Pennsyl-laniay and as a director and officer of the Hanover Trust Company,anc'very Pennsylvania.

*.7, H. D. Sheppard, for permission to serve at the same time asa director of The First National Bank of Hanover, Hanover, Penn-Sylvania, and as a director and officer of the Hanover Trust Coin-Pa/171 Hanover, Pennsylvania.*. T,(14 q. Allman, for permission to serve at the same time as ar

utector of The Butler County National Bank and Trust Company ofT lery Butler, Pennsylvania, and as a director and officer of the*L'Yndor a National Bank, 14ndoral Pennsylvania.

Mr ty• g. m. Hdir ufnag miel, for permission to serve at the same time as a...ector and-,y-ItrAir,4 ... officer of the Citizens Trust Company, Clarion, Penn-as a director of the Sligo National Bank, Sligo, Pennsyl-Prybul and as a director of The First National Bank of Fryburg,rgy

Pennsylvania.. p. n

direc, %). Andrews, for permission to serve at the same time as aNan ;Apr of The First Uational Bank of New Bethlehem, New Bethlehem,Ilrest%:a y and as a director of The Bank of Rainelle, Rainelle


ei ng adjourned.

11/14/3421-

111". H. Bachenheimer„ for permission to serve at the same time as

D irector of The Dakota National Bank of Fargo, Fargo, North(AEL, and as a director of the American State Bank, Moorhead,

Natresota.

3509

Approved.

Thereupon the

Vice Governor.


Date post:	13-Feb-2016
Category:	Documents
Upload:	fedfraser
View:	214 times
Download:	0 times

19341114_Minutes.pdf

Documents