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A meetirg of the Board of Governors of the Federal Reserve

was held in Washington on Friday, November 24, 1_239, at 11:30 a.m.

PRESENT: Mr. SzymczakMr. McKeeMr. DavisMr. Draper

Mr. Bethea, Assistant SecretaryMr. Carpenter, Assistant SecretaryMr. Clayton, Assistant to the Chairman

The action stated with respect to each of the matters herein-

after referred to was taken by the Board:

The minutes of the meeting of the Board of Governors of the

4de 1re-L Reserve System held on November 22, lN9, were approved unani-

11101181y.

Of Bo

Leach) President of the Federal Reserve Bank of Richmond, Messrs.

8tew.„Powell and Leedy, Secretaries of the Federal Reserve Banks

Of P.L.Louis, Minneapolis and Kansas City, respectively, Mr. Stroud,

l'irst Vice President of the Federal Reserve Bank of Dallas and Mr.Weet' Vice President of the Federal Reserve Bank of San Francisco,

4t ng that the Board approves the establishment without change bythey

ber'2) bY the Federal Reserve Bank of Minneapolis on November 23, 1939,

Telegrams to Mr. Young, President of the Federal Reserve Bank

stcn, Mr. Hays, Secretary of the Federal Reserve Bank of Cleveland,

aderal Reserve Banks of St. Louis and San Francisco on November

21-' uY the Federal Reserve Banks of Cleveland and Richmond on Novem-

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and by the Federal Reserve Banks of Boston, St. Louis, Kansas City

and Dallas today, of the rates of discount and purchase in their ex-

isting schedules.

Approved unanimously.

Letter to "The First National Bank of Madison", Madison, Tis-

consdn, reading as follows:

Or

"The Board of Governors of the Federal ReserveSystem has considered your application for permissionto exercise fiduciary powers, and grants you authority,effective if and then the proposed consolidation ofThe First National Bank of Madison and the Centraltisconsin Trust Company of Madison, both of Madison,Wisconsin, is consummated, to act, when not in contra-vention of State or local law, as trustee, executor,administrator, registrar of stocks and bonds, guard-ian of estates, assignee, receiver, committee of es-tates of lunatics, or in any other fiduciary capacityin which State banks, trust companies or other cor-porations which come into competition with nationalbanks are permitted to act under the laws of the Stateof Wisconsin, the exercise of all such rights to besubject to the provisions of the Federal Reserve Actand the regulations of the Board of Governors of theFederal Reserve System.

"Upon receipt of advice from the Comptrollerof the Currency that the proposed consolidation hasbeen effected, a formal certificate evidencing yourright to exorcise fiduciary powers will be forwardedtO you.H

Approved unanimously.

Letter to Mr. Harrison, President of the Federal Reserve Bank

ell York, reading as follows:

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"Under the nrdvisions of paragraph (1), sub-section (i), of section 12B of the Federal Reserve Act,as amended, the Board of Directors of the Federal De-posit Insurance Corporation has found that the MountPleasant Bank and Trust Company, Pleasantville, NewYork, has continued unsafe and unsound practices inthe conduct of its business, has so advised the Boardof Governors of the Federal Reserve System, and hasrequested the Board of Governors to fix the time inwhich the bank shall make the necessary correctionsof such practices and to advise the Corporation of anyaction taken by the bank to effect such corrections.

"There is enclosed a letter the Board has ad-dressed to the Mount Pleasant Bank and Trust Company,Pleasantville, New York, together with three copiesthereof, advising of the findings of the Board of Di-rectors of the Federal Deposit Insurance Corporationand fixing March 23, 1940, as the date not later thanWhich the necessary corrections of the unsafe and un-sound practices mentioned shall be effected.

"You are hereby authorized to have the enclosedletter, together with a copy of the Federal Reserve Act,Personally presented to the Mount Pleasant Bank andTrust Company, Pleasantville, New York, the person whodoes so to make an affidavit of service in the usualform in which such affidavits are made in the State ofNew York. This affidavit, and a copy of the letter towhich it is attached, should be forwarded to the Board.

"One of the copies of the letter to the bank isfor your files, and you are requested to forward theOther copy to the Superintendent of Banks of the Stateof New York, for his information."

ofEls

Approved unanimously, together witha letter to the "Mount Pleasant Bank andTrust Company", Pleasantville, New York,reading as follows:

"Paragraph 1 of subsection (i) of section 12Bthe Federal Reserve Act, as amended, reads in partfollows:

Ithenever the board of directors shall findthan an insured bank or its directors ortrustees have continued unsafe or unsound

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practices in conducting the business ofsuch bank, or have knowingly or negligentlypermitted any of its officers or agents toviolate any provision of any law or regula-tion to which the insured bank is subject,the board of directors shall first give tothe Comptroller of the Currency in the caseof a national bank or a District bank, tothe authority having supervision of thebank in the case of a State bank, or tothe Board of Governors of the Federal Re-serve System in the case of a State memberbank, a statement with respect to suchpractices or violations for the purposeof securing the correction thereof. Un-less such correction shall be made withinone hundred and twenty days or such shorterperiod of time as the Comptroller of theCurrency, the State authority, or Board ofGovernors of the Federal Reserve System,asthe case may be, shall require, the boardof directors, if it shall determine to pro-ceed further, shall give to the bank notless than thirty days' written notice ofintention to terminate the status of thebank as an insured bank, and shall fix atime and place for a hearing before theboard of directors or before a person des-ignated by it to conduct such hearing, atWhich evidence may be produced, and uponsuch evidence the board of directors shallmake written findings which shall be con-clusive.'

"Pursuant to the statutory provisions above quoted,the Federal Deposit Insurance Corporation has submittedto the Board of Governors of the Federal Reserve Systema statement, a copy of which is attached hereto, with!espect to continued unsafe and unsound practices by themount Pleasant Bank and Trust Company for the purposeOf securing corrections thereof and of which you willPlease take notice. You are hereby directed to effectcorrections of the unsafe and unsound practices enu-merated in the enclosed copy of the statement of the

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Federal Deposit Insurance Corporation; and the Board ofGovernors of the Federal Reserve System has fixed theperiod ending March 23, 1940, 120 days from the date ofthis letter as the time within which such correctionsshall be effected. You are requested to advise theFederal Reserve Bank of New York on or before March 23,1940, as to the action which has been taken effectingcorrections of the unsafe and unsound practices referredto.

"For your information, there is enclosed a copyof the Federal Reserve Act and your attention is calledto section 12B thereof and particularly to the fulltext of subsection (i) of section 12B."

In connection with the above matter,the following letter to the Federal De-posit Insurance Corporation was also ap-proved unanimously;

"This refers to your letter of November 16,1939, in which it is stated that the board of directorsof the Federal Deposit Insurance Corporation has foundthat the Mount Pleasant Bank and Trust Company, Pleas-antville, New York, a State member bank, has continuedunsafe and unsound practices in the conduct of itsbusiness. Pursuant to paragraph 1 of subsection (i)of section 12B of the Federal Reserve Act, as amended,Your letter contains a statement with respect to suchPractices for the purpose of securing correction thereof.

"The Board of Governors has today addressed aletter to the bank serving notice regarding the requiredcorrection, and has fixed the period ending March 25,1940, 120 days from the date of the letter addressed tothe bank, as the time within which the necessary correc-tion of the unsafe and unsound practices in the conductof its business recited in your letter may be effected.Yc.)u will be informed as promptly as possible of any ad-vice which the Board receives as to any action takenbY the bank to effect such correction."

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Thereupon the meeting adjourned.

Assistant Secretary.

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