19341211_Minutes.pdf

egram dated December 10,

tItl'Y of the

8. fleeting

3787

ilmeeting of the Federal Reserve Board was held in Washing-ton 0„" Tuesday, December 11, 1934, at 4:30 p. m.

PRESEY.T: Lir. Eccles,hr. Thomas,Mr. HamlinIjr. LinerLr. James

GovernorVice Governor

Lir. Morrill, SecretaryEethea, Assistant Secretary

hr. Carpenter, Assistant Secretary

The Board acted upon the following matters:

Tel

Federal Reserve Bank of

of the board of directorsfade ill the

°ha, la

bats existing

1934, from Li-. Powell, Score-

Minneapolis, advising that, at

on that date, no change was

schedule of rates

Without objection,

Memorandum dated December 10, 1934, from Er. Morrill,

815eret4rY, stating that, at the request of Governor Eccles, the

1)%ibilit3ref finding additional space in the 'Washington Buildingthe

of discount and pur-

accommodation of 1"t°4 di and a

stenographer

/41414gement; that there is no spacethe third floor but that

N/T4 Z40, vhieh00,4 be

obtained

1, 1935, under the

noted with

Daiger, Special Assistant to the

has been taken up with the building

available on any floor above

there is a room on the "G" Street side,

contains a floor area of 516 square feet which

at a

approval.

cost of '.29 a square foot, beginning Janu-

s are terms as are contained in the leases

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

378812/11/34

Board in the Washington

441ding, with an agreement that, should there be at any time a

3rre81:)°nclinG amount of space released on the sixth floor, the

teard mill have a first option on it.

it 4 further understood that a partition will be installed and

-2-

clre) -rint, the space now occupied by the

The memorandum stated that

"'ain incidental adjustments will be made at the expense of

tue7washington Building, and that, while it is understood that L.ttliCer's

amployment may be temporary, being subject to the plea-Of the Governor, the increasing demands for

tha't ease his appointment should be terminated at any time

8"MS to be no doubt that good use can be made of the addi-t44a1 10,1

ce since the Board has no surplus space at present.

space are such

The Board authorized the Governor toexecute a supplemental lease covering thespace referred to at the cost stated.

Letter dated

"tt.he Board, to

December 10, 1934, approved by five members

lioxton, Federal Reserve AgentIleserve

Bank of Richmond,

'Re • .4319

34, celpt is acknowledged of lr. Fry's letter of Decembertransmitting a report of examination of the 'Farmers• 'erchants Bank of Summersville', Summersville, West Vir-Elnia, a

fertiat. 8 of October 8, 1934, with certain supplemental in-cl. port on and requesting the Board to permit the bank to usetime,te n cf its special reserve of $33,000 to eliminate es-

thd losses classified by the examiner aggregating ',4;25,750.rl,eorda '"(71 special reserve referred to was established in ac-

with condition of membership numbered 19, 'whichI in Part as follows:bLa„,s_ **** likewise prior to admission to membership, sucht,)%i shall establish a special reserve of not less thande '°00 for the purpose of removing any losses which may

liel°13 in loans classified as doubtful in the report cf

reading as follows:

at the Federal


12/11/34-3-

3789

I,,examination above referred to, and such reserve shall be

used for no other purpose except with the permission ofthe Federal Reserve Board.'

t, "Loans classified as doubtful in the report of examina-4_,2:°11 as of August 28, 1933, the examination referred to intdrie condition of membership, amounted to ,;40,400, and 14r. Fryhas A

eA4vised that the status of such loans on October 8, 1934,was as follows:Previously collected 800Previously charged off out of surplusand/or undivided profits 2,600

(onsidered bankable paper 15,900Classified in report of examination as:DoubtfulLoss 11,600

9,300 ry40,4C0

,"In view of the change in the status of the loans forZlen the special reserve was originally provided, and inwi rdance with the recommendation of Li.. Fry, the Board

Permit the use of a sufficient amount of the special re-to eliminate the estimated losses as shown in the reports?iination as of October 8, 1934.

the It has been noted that in the report of examination of

ez 1?allk as of October 8, 1934, as well as in the report ofaannation as of Lay 21, 1934, your examiner reported thatth (Nate credit data was not maintained. It is assumed,th:refore, that you will call the attention of the bank toconineoessity of maintaining such data not only in order to

with the condition of membership numbered 5 but also

'4-ut_,order that credit may be intelligently extended and the

erests of the bank protected."

Approved.

Islecram to L. Wood, Federal Reserve Agent at the Federal

r("el'Ire BEtnk Of St•

e4:4434 to the application of "Trustees Under

stating that the Board has given consid-

tiltb Agreement Dated-1414'Y 31, 19lG, as Amended July 30, 1920, and January 26, 1923,

1:11 /43fsrence to Stocks in The Citizens Union National Bank of

'41.11d Fidelity and Columbia Trust Company, both of Louis-

for a voting permit under the authority of section

6-14 °r the Revised Statutes of the United States, as amended,


3790110.1/3

-4-

Such organization to vote the stock which it owns or con-trols 4

4-11 3The Citizens Union rational Bank of Louisville", Louis-

7'143, Kentucky, and has authorized the issuance of a limited permitto the

aPPlicant, subject to the following conditions:

theri:ePlciiiletLt,he issuance

"(1) the Federal Reserve Agent shall satisfy himselfthat each of the subsidiary banks of the applicant has?harged off or otherwise eliminated, (a) all losses inloans and discounts, (b) all depreciation in stocks anddefaulted securities, (c) all depreciation in securitiesnot of the four highest grades as classified by a recog-ized investment service organization regularly engagedln the business of rating or grading securities and (d)all other losses; as shown by the latest available reportsOf examinations by the appropriate supervisory authorities,

Tept that the charge-offs and eliminations required byahd (c) above may be based upon current appraisals of

arketable securities satisfactory to the Federal ReserveAgent;

that "(2)the Federal Reserve Agent shall satisfy himselfthe

the

has substantially performed any agree-Zellt or agreements heretofore executed by it as a condition,o the issuance of a limited voting permit by the FederalReserve Board;

the Federal Reserve.2,1;ee of the Federal reserve1o0 of such permit."

the--,ovang purposes:

"To electof sh directors of such bank at the annual meetingprio_areholders, or at any adjournnents thereof, at any timeof tt4- to April 1, 10.35, and to act thereat upon such mattersZeetir°Utille nature as are ordinarily acted upon at the annualLge of such bank."telegr,

also authorized the agent to have prepared by counsel

The

tor

r or

eu'ral reserve bank, and to issue to the applicant, a

dItio44

of the limited voting permit au-

Agent and the Executive Corn-Lank shall approve the issu-

Votig Permit in accordance with the telegram when the con-

Prescribed therein have been complied with.

Approved.


3791

a

-5-

Telegram to Mr. Sargent, Assistant Federal Reserve Agent

Et the Federal Reserve Bank of San Francisco, stcting that the Board

hks givea consideration to the application of the "Merced Securities

CarPcrationo, Merced, California,thority of

section 5144 of the Revised Statutes of the United States,

ksazended, entitling such organization to vote the stock which it%It or

controls in the "First Uational Bank in Lerced", L'ztrced,

C411-1‘°r1lia., and has authorized the issuance of a limited permit tothe

"dcant, subject to the following conditions:

thori :Lt,he issuance of the limited voting permit au-

th "her(1) the Federal Reserve Agent shall satisfy himself_,at each of the subsidiary banks of the applicant has

rarged off or otherwise eliminated, (a) all losses inand discounts, (b) all depreciation in stocks and

':faulted securities, (c) all depreciation in securities11?t of the four highest grades as classified by a recog-411,4" investment service organization regularly engaged in;4j. business of rating or grading securities and (d) allexl'er losses; as shown by the latest available reports of

except by the appropriate supervisory authorities,(4ePt that the charge-offs and eliminations required bymar,arld (c) above may be based upon current appraisals of

4etable securities satisfactory to the Federal Reserve'Cent;

that J2) the Federal Reserve Agent shall satisfy himself

tiett e applicant has substantially performed any agree-to , or agreements heretofore executed by it as a condition

issuance of a limited voting permit by the FederalBoard;

mItt 0) the Federal Reserve Agent and the Executive Com-

alloee:f°ftch permit."e ( reserve bank shall approve the issu-

suklici torthe t

ollovd ng purposes:

for a voting permit under the au-

ttrnOr

eh 4:helect directors of such bank at the annual meetingPrior -olders, or at any adjournments thereof, at any tine

APri1 1, 1935, and to act thereat upon such matters


?irst Iiationai companym

kit 1144

the

States,

Telegram to Lr.

the

379212/11/34

-6-

of a routine nature as are ordinarily acted upon at the an-nual meetings of such bank."

Iletelegram also authorized

by counsel for the Federal reserve bank, and to issue to the Lerced

Seetwities Corporation,

the telegMTI when the conditions prescribed therein have been corn-

Wit}.

Wb theFederal Reserve Bank of San Francisco, stating thattoerd h43 given consideration to the application

the assistant agent to have prepared

a limited voting permit in accordance mith

Approved.

Sargent, Assistant Federal heserve Agent

the

of the "San Diego

San Diego, California, for a voting per-er the

authority of section 5144 of the Revised Statutes of

as amended, entitling such organization to vote

st3ek which ite. 4 owns or controls in "The First National Trust

"lige Bank of San Diego", San Diego, California, and hasEttithorized the

issuance o th

miof a limited pert to the applicant, sub-0 folloming conditions:

tho "Pri or to the issuance of the limited voting permit au-rlzed herein,

.44"#4 "(1) the Federal Reserve Agent shall satisfy himself

1 each arced of the subsidiary banks of the applicant hasi4L offor othermise eliminated, (a) all losses ind:rke alld discounts, (b) all depreciation in stocks aoLd! 11-:4Ulted

c• securities, (c) all depreciation in securitiesr the four highest grades as classified by a recog-i42.r

investment service organization regularly engagedEcTIthbert101:::: rating or grading securities and (a)

as shomn reportsby the latest available re ez exalninations by the appropriate supervisory tuthorities,"Pt that the charge-offs and eliminations required by


'with the

12/11/34 -7-

3793

"(b) and (c) above may be based upon current appraisalsof marketable securities satisfactory to the Federal Re-

serve Agent;

that 4) the Federal Reserve Agent shall satisfy himself

the applicant has substantially performed any agree-ment or agreements heretofore executed by it as a condi-'404 to the issuance of a limited voting permit by theFederal Reserve Board;

."(3) the Federal Reserve Agent and the ExecutiveComrattee of the Federal reserve bank shall approve theissuance of such permit."

Ilald for the following purposes:

"To elect directors of such bank at the annual meeting"3-1 shareholders, or at any adjournments thereof, at any time),V.or to April 1, 1935, and to act thereat upon such matters v4 a routine nature as are ordinarily acted upon at the 4u41 Inestings

an-of such bank."The tei

°gram also authorized the assistant agent to have'Isel for the Federal reserve bank,14e0

1.rst National Company, a limited voting

prepared

and to issue to the San

permit in accordance

teleCram when the conditions prescribed therein have been%II/Plied with.

Telegram to Lr.e't ths

Pederal Reserve Bank

1314'rd has given

consideration

:tent CompanY",te

klthority of section 5144

tates, as amended,.€45 Stock

which it owns

of San

Approved.

Sargent, Assistant Federal Reserve Agent

Francisco, stating that the

to the application of the "Tustin

Tustin, California, for a voting permit under

of the Revised Statutes of the

entitling such organization to vote

1114tie, or

Tustin., California

controls in "The First National Bank

4ktteci Perldt to the applicant,

, and has authorized the issuance of a

subject to the following conditions:


379412/11/34

"Prior to the issuance of the limited voting permit au-thorized herein,

"(1) the Federal Reserve Agent shall satisfy himselfthat each of the subsidiary banks of the applicant hascharged off or otherwise eliminated, (a) all losses in1°ans and discounts, (b) all depreciation in stocks anddefaulted securities, (c) all depreciation in securitiesnot of the four highest grades as classified by a recog-nized investment service organization regularly engagedin the business of rating or grading securities and (d)all other losses; as shown by the latest available reportsof examinations by the appropriate supervisory authorities,except that the charge-offs and eliminations required by(b)

and (c) above may be based upon current appraisals ofmarketable securities satisfactory to the Federal ReserveAgent;

that :(2) the Federal Reserve Agent shall satisfy himself

.he applicant has substantially performed any agree-!lent or agree s heretofore executed by it as a condition,-cs the issuance of a limited voting permit by the FederalAeserve Board;1111.„, "(3) the Federal Reserve Agent and the Executive Com-'tee of the Federal reserve bank shall approve the is-suan

ce of such permit."

the following purposes:

"10 elect directors of such bank at the annual meetingshareholders or at any adjournments thereof, at any tinePrpi°r to April 1, 1935, and to act thereat upon such natters

riu

meeting

a routinenn:au=sbEaulvdinarily acted upon at the an-

tele

by gram

also authorized the assistant agent to have preparedcourise

/3:Ives

for

1 for the Federal reserve bank, and to issue to the Tustincorr._

tele 11'11Y, a limited voting permit in accordance with theZ1'8111 Whe

the

th conditions prescribed therein have been complied

belle 44d stated that it appears that additional information mayces3the lilat 4rY before an opinion can be expressed in connection with

th- 141-ragraph

-44al, 0.1 14r. Sargent's letter of October 15, 1934,titt

14Z thev°tinc permit application of the Tustin Investment


379512/11/34

-9-

and this mill be discussed in a subsequent communication

atthe earliest practicable date.

Approved.

Telegram to Lr. Sargent, nssistant Federal Reserve Agent atthe

Federal Reserve Bank of San Francisco, stating that the Board

has '1.17en. consideration to the application of the "Vollmer Security

C°141)411Y". Lemiston, Idaho, for a voting permit under the authorityOf

section 5144 of the Revised Statutes of the United States, asknellade

d, entitling such organization to vote the stock which it

cl4r18 or controls in

Ide,h "The First National Bank of Lewiston", Lewiston,

and "The First National bank of Grangeville", Grangeville,Idaho' and has

authorized the issuance of a limited permit to the

ELPPlicant, subject to the following conditions3

autho,Y) Prior to the issuance of the limited voting permit4-1zed herein,or, \

tl ‘1) the Federal Reserve Agent shall satisfy himselfeat each of the subsidiary banks of the applicant hasl'oxrged off or otherwise eliminated, (a) all losses ina°4118 and discounts, (b) all depreciation in stocks andxinultedsecurities, (c) all depreciation in securities

1.41; Of the four hi,hest grades as classified by a recog-ilaz! investment service organization regularly engaged

:::so! rating or grading securities and (d)as shown by the latest available reportsex,:x!minations by the appropriate supervisory authorities,(16-

ai Pt; that the charge-offs and eliminations required by

(e) above may be based upon current appraisals ofe&elable securities satisfactory to the Federal Reserve

ti 2) the Federal Reserve Agent shall satisfy himself

Merit '"e applicant has substantially performed any agree-tor agreements heretofore executed by it as a condi-4,1'1_1_"

the issuance of a limited voting permit by the':1 Reserve Board;(3) the Federal Reserve Agent and the Executive


3796

-10-

"Committee of the Federal reserve bank shall approve theissuance of such permit."(2) Prior to the issuance of the limited voting per-zit authorized herein, applicant shall deliver to you, in

accordance with requirements of Board's Regulation P, Exhibit11; ,(F.R.B. Form P-3) and Exhibit X (I.R.B. Form P-4) coveringcau4 of Vollmer, Vollmer Clearmater Company, Erb Hardware

°1T1PanY, and any other organization mith -which applicant orEtIlY Of its subsidiaries is affiliated but which vas not1?,Ye!'ed by such exhibits filed with the application, all of71'eh

additional exhibits shall be in form satisfactory torunsel for the Federal Reserve Bank of San Francisco, andsD,13i.eanit shall deliver to you Curther information regardingadditional affiliated organizations as required by Ex-"101ts D, G, and H of the application."alld for

the following purposes:\

banks kl) To elect directors of such bas at the annual2(11e''r'Cs of shareholders, or at any adjournments thereof, at-4Y time prior to April 1, 1935, and to act thereat upon such

the of a routine nature as are ordinarily acted upon atmeetings of such banks.

ealdi (2) At any time prior to April 1, 1935, to authorizesto r ratify a reduction and retirement of preferred capitalOf The First National Bank of Lewiston, Lewiston,zon °' in the amount of 325,000, and an increase in the com-xklc caPital stock of said bank in the same amount, and tobawec arlY amendments to the articles of association of saidtioh neeee _sary to give effect to such change in capitaliza-b00 Pr°vided that such change in capitalization shall have

The tapproved by the appropriate supervisory authorities.

eicram stated

toauthor

also that the issuance of a limited voting

the issuance of preferred stock by The Firsto441 Bahk

cr Gciet. rangeville will be considered if and whenz'-ottile

oltait are formulated and the issuance of a limited votingP. t

12/11/34

o authorize the reduction of the common stock of such bank

Will be

e°11sidered in connection with an application for a reduc-°I' theto capital stock mhen such application is received by thekrd; that,

for 1dr. Sargent's information, condition (2) referred


12/11/34-11-

t0 abcIre vith respect to Vollmer Clearwater Company and the Erb1411'dtrare

ComPany was based on a statement on page (A) of the con-

fidelltial section of the examination report of The First National

LeirlI3tOn as of October 1, 1934; and that the Bank of Voll-rier _.va.15

included because information in the application was insuf-

ant to shuw its present corporate status. The telegram

414t11°I'lzed the assistant agent to have prepared by counsel forthe

Federal reserve Lank, and to issue to the Vollmer Security

C°1111)811Y.1 4 limited voting permit in accordance with the telegramIvhen the

conditions prescribed therein have been complied with.

the Boa

_Approved.

3797

Letter dated December 10, 1934, approved by four members of

serve tr_di to Lr. Curtiss, Federal Reserve Agent at the Federal Re-

of Boston, reading as follows:

l'oR. e' an IReference is made to Assistant Federal Reserve

A„n tte 's letter of October 8, 1934, inclosing a copy ofr'ealet-Bor dated

October 6, 1934, from LI-. Bernard 11. Trafford,

Ileweet°r Lassachusetts, requesting permission to serve as aOf French American Bankin Corporation, New

York fot York,

in adcTtion to his services as director and officer44) k4d First as ational Bank of Boston, Boston, Massachusetts,Corpo director and officer of First of Boston Internationale1av+1;nen, New York, New York, for which latter services a4et Permit wns issued by the Board to the applicantcopi°PueMber 27, 1934. There are inclosed the original and130t4e4of the

Clayton Act permit, as amended, issued by thebanks ;4) *. Trafford, for transmittal by you to him and theni;ITiclved, and a copy for your files.Ilrexich 7e file in this case shows that I. Trafford served19ZO, u=ican Banking Corporation as a director from January,4t the -7J—L January-, 1934; that he vs not elected a directorVElettli 'January, 1934, anaual meeting; and that, to fill a°4 Septr waa again elected a director of the corporation—raver 18, 1934. he vas reported to have attended none


American Banking Corporation during 1932 and 1933. As inthe case of Li-. Philip Stockton, it appears that Ls.. Traf-ford f s failure to attend such meetings was due largely tothe fact that The First National Bank of Boston has anotherrsPr

esentative on the board of French American Banking Cor-Poration, Mr. Daniel A. de 1:enocal, who resides in New YorkandWho regularly attends directors' meetings.

"The Board feels that a director should have a satis-fac

u1,t cry record of discharging his duties and responsibilities

,lulPating in the management and operations of a bsnkflinle" e is serving through attendance at directors' meet-Tails =h it is requested that you advise Yr. Trafford that

the expectation th:_t he will satisfactorily at-:e!Id directors, meetings of all of the banks which he isr7i-C that the permit has been granted.

be i IA copy of this letter and a copy of the permit areserng

sent to the Federal Reserve Agent at the Federal Re-hi:re Bank of Kew York with the request that, when he submitspe; recommendation as a result of his annual review of this

dirrettOrl: ! report fully as to Lr. Trafford's attendance at

meetings of French American Banking Corporation."

12/11/34

of thefifty-three meetings held by the directors of French

-12-

3798

Approved.

December 10, 1934, approved by four members

Austin, Federal Reserve Agent at the Federal

f Philadelphia,

transmittal to the

aPplicant that the

as indicated

Federal

directors'

his

Permit,

Letter datedO r the Board, to

ileserve 13

Perrait for

klviae the

Pectation that,to

Aoting Assistant

44

attendance atthe

agent submits

Nvievir of the

tetidalloe at directors'

he has discharged

inclosing the following Clayton Act

applicant; suggesting that the agent

permit has been granted with the ex-

in his letter of November 7, 1934,

Reserve Agent Fenner, he will improve

meetings; and requesting that, -when

recommendation as a result of his annual

he report fully as to the applicant's at-

meetings and as to whether, in the agent's

his duties and responsibilities as a


Ett

12/11/34

director.

Lrt.. W. Harrison, .for permission to serve at the same,1311e as a director and officer of The Tradesmen's 1;ationa14f!Ink of

Conshohocken, Conshohocken, Pennsylvsnia, and as a0u-rector of the Montgomery Trust Company, Norristown, Penn-sYlvania,

et t.k--e Betird, to Mr. Fletcher, Assistant Federal Reserve Agent

-13-

Approved.

Letter dated December 10, 1934, approved by four members

the Federal Reserve Lank of Cleveland, reading as follows:

:There are inclosed the original and copies of a Clay-ton 4.t

Lpermit granted to r. John Haussermann, Eanila, P. I.,-° serve at the same time as director of the Peoples Bankd Trust Company, Manila, P. I., and as director and of-ofOr The New Richmond National Bank, New Richmond, Ohio,tr stnsmittal by you to Er. Haussermann and the two banksaileoPy for your files.

In considerinc, the application of Mr. Haussermann, it:f 8 noted that while his attendance at directors' meetingsfaneop1es Bank and Trust Company of Eanila has been satis-to:C°rY, The New Richmond National Bank reports that he has

althattend ed directors' meetings during the past two yearsthat"h the reports of examination of that bank indicateof t .Lrom January 28 to October 3, 1932, he attended three

deuce ten meetinrs held. In view of the applicant's resi-at : anLtA nila it appears that his attendance in the future

4re I'll-rector-I

meetings of the New Richmond bank will not be11 el's Although the Board feels that a director should

IZs? satisfactory record of discharging his duties and re-.bilities by participating in the determination of theat 4"1 of a bank which he is serving, including attendanceett„ !'ector.„'

meetings, it has granted the permit in this111411a view of the apparent satisfactory condition and

0

/ratjeetilellt of The New Richmond National Balk, Er. Hausser-ite 1v4,1;:°ng service with that institution, his interest inatre, ::'are and his demonstrated willingness to support and"gchen it."

3799

Chetzte J.

Approved.There

was then presented the following application for a4 stock of a Federal reserve bank:


1V1 1/34

4Plication for ORICalia, Stock:ulscrict 1;0. 7.,oxrano -L.w--71 Bank,

Slialvarlo Sconsin

-14-

Approved.

Shares

54

Thereupon the meeting adjourned.

Go -nor. •

54

3800


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