19321006_1220p_minutes.pdf

1300(1,

178.ges and 11r. Hamlin will serve with Governor Meyer as members

°I' the'-ommittee during the last quarter of 1932.

The f°110wing matters were then presented for the consideration and

Of the committee:

Letters dated September 22 and 29, 1932, from the Assistant Secretary" the

A meeting of the Executive Committee of the Federal Reserve Board

was held in Washington on Thursday, October 6, 1932, at 12:20 p.

PRESENT: Mr. Magee, Presiding1.1r. Hamlin1.11*. Tames

Mr. Morrill, SecretaryMr. M.cClelland, Assistant Secretary

Mr. Harrison, Assistant to the Governor

Mr. Wyatt, General CounselMr. Paulger, Chief, Division of Examinations

Mr. Siems, Federal Reserve Examiner.

The Assistant Secretary stated that on October 5, 1932, the office

or the LlomPtroller of the Currency made a call on all national banks for

liell°"4 of condition as at the close of business on. Friday, September 30,

19'62, and that,bella14,

cq' the Federal Reserve Board on all State member banks for reports

or condition as of the same date.

The call made on behalf of the Boardwas ratified.

t tiOn'44 membership on the executive committee of the Federal Reserve

in accordance with the usual -practice, a call was made on

It was then stated that, in accordance with the usual order of

011e 5) 1962, from the Chairman of the Federal Reserve Bank of Boston,

4Dtemb

l'edel'al Reserve Bank of New York, and telegrams dated September 21

°et

1962, from the Chairman of the Federal Reserve Bank of Chicago,0 etobfkl,

1932, from the Chairmen of the Federal Reserve Banks of

Ilia wad St. Louis, all advising that at meetings of the boards of

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

276

Reserve Examiner, recommending the appointment of Messrs. Andrew W.

1MJ32 -2-

directors on the dates stated no changes were made in the banks' existing

"hedules of rates of discount and purchase.

Without objection, noted with approval.

Telegram dated September 28, 1932, from the Federal Reserve Agent

" DEL1-18 1 advising of the death on September 27, 1932, of Mr. T. 1.

Claber tech a Class B director of the bank.

Noted, with regret.

17emorandum dated September 21, 1932, from, Jr. 'ran i: J. Drinnen,

1?e4'el l Reserve Examiner, recomnending the appointment of Mr. Stuart L. Brown

hi8 deeighation as an Assistant Federal Reserve Examiner, with salary atthe zate or

000 per annum.

Drinnen's recommendatiou having been

approved by three members of the Board on Septem-ber 26, La.. Brown was appointed an examiner for

all purposes of the Federal Reserve Act, as amended,and of all other acts of Congress pertaining to

examinations made by, for, or under the direction

of the Federal Reserve Board; and was designated

as an Assistant Federal Reserve Examiner, with

salary at the rate of :;,i3,000 per annum, all effec-

tive September 27, 1932.

Iiemorandum dated September 27, 1932, from Ex. Frank I. Drinnen,

Lee ezaClarles A. Strahorn and their designation as Assistant Federal Re-

aMiners with salaries at the rate of ,2,100 and :A.,600 per annum,

'Doetively.

Drinnents recommendations having been

approved by three members of the Board on Septem-ber 30, Messrs. Lee and Strahorn were appointed

examiners for all purposes of the Federal Reserve

Act, as amended, and of all other acts of Congress

Pertaining to examinations made by, for, or under

the direction of the Federal Reserve Board; and were

designated as Assistant Federal Reserve Examiners

With salary at the rate of :)2,100 and ;„31,600 per

annum, respectively; the appointment and salary of


) 10/6/32 -3-

277

Er. Lee being effective October 1, 1932, and the

appointment and salary of ir. Strahorn effective

October 6, 1932.

Rely, apnroved by three members of the Board on October 4, to a

letter dated October 3, 1932, from Mr. Norval P. Wigginton, tendering his

resiiation as an employee on the night force of the Gold Settlement Section

°II theeral Aeserve Board, effective October 3, 1932; the reply advising

O r the acceptance of the resignation.

Approved.

1:emoranum from the Secretary dated October 5, 1932, advising thatthe

lee've of absence without pay on account of illness previously granted by

the B°all to 1:488 Lary E. Everett, money counter in the issue and redemption

"n of the office of the Comptroller of the Currency, expired on Septem-ber

2519321 and reconrending that, inasmuch as Kiss Everett did not resume

her du •tl" until October 1, the Board approve an additional leave of absence

her 26 to 30,1932, inclusive.

Pay Covering kiss Everett 's absence during the period from Septem-

Approved.

Letter to the Acting Comptroller of the Currency, approved by three

14etilbel'a of the Board on October 3, 1932, advising of approval by the Board0.

(1r 8-1-8-17 at the rate of .2,700 Der annum for National Bank Examiner104'1

e4 0' Starr, assigned to the Fifth Federal Reserve District.

Approved.

ReplYs approved by four menbers of the Board on September 27, to a

let Y,

alit'ad September 22, 1932, from the Chairman of the Federal ReserveZieolk or

lIew York stating that the board of directors of the bank, at itstr

on that date, voted to employ .11r. R. Cheseldine, on a temporary


10/6/32

(

-a -

' as a special research statistician assigned to the reports department

of the bank, and, subject to the approval of the Yederal Reserve Board, to

1i Ii'-. salary at the rate of'.)5 200 per annum; the reply stating that the130ard

approves the salary fixed by the board of directors of the New York

1344k) and requestinc; advice as to the date on which 1:127. Cheseldine's employ-

nlerlt becomes effective.

Approved.

Letter to the Federal Reserve Agent at Philadelphia, approved by

tee members of the Board on September 26, 1932, advising of approval by

the Board of the designation as special assistants to examiners of the

employees of the Philadelphia bank listed in the agent's letter of

elltenlber 21, 1932.

Approved.

Reply) approved by three members of the Board on October 3, to aletter ,

-"sd September 29, 1932, from the Federal deserve Agent at Chicago

I*15cBle ti,approval by the Board of the appointment of Mr. Ernest H.

klaciera

°4 as an assistant examiner with salary at the rate of .)3,000 per

4111114a; t eh- reply stating that the Board approves the appointment of Er.

kicieza°fl at the salary named, and requesting advice as to the date on which

'131-l0illt,ent becomes effective.

Approved.

Repi-,ap)roved by three members of the Board on September 27, to a

-' datedSeptember 21, 1932, from the Governor of the Federal Reserve

Of

eaPolis, advising that, at the request of the Reconstruction4ee --

4. z Cvlbrporation, the executive committee of that bank granted to 1 -r..e, 1,lanaging Director of the Helena Branch, a three months leave

ebzerl

ce, Without nay, to organize the RegionR1 Agricultural Credit


10/6/32

C°rPoration

279-5-

at Spokane, Washington, and that "Cs. Leland Powell, registered

1°411 teller and government de-Posit clerk, has been designated as Acting

18.4.ant Cashier of the branch without change in salary for such time as

T14°77-8 is absent from the bank; the reply advising that the Federal Re-

"'e Board interposes no objection to the action of the executive coramittee

illra"ing leave of absence to jr. Towle and in temporarily designating

1)(171611 as Acting Assistant Cashier of the branch, but ree.uesting further in-

r°rillation with regard to the Position of Paying Teller at the Helena branch,

to,will positioni r Charles iledpath was reported as having been recently

13r("e(1 with an increase in salary from .,)1,300 to 2,100 per annum, effec-

e 0weptember 1, 1932.

Approved.

ilePorts of the Committee on Salaries and Expenditures dated Septem

beli 23 eald 30, and approved by three members of the Board on October 4, with

to letters dated September 17 and 27, 1932, from the Chairman of the

-44el'al Reserve Jank

or '2'.10C) and .,2,100

appointed

t49 Irlsolvent Banks Department

4DDroval.

bet 241,

to letters dated September 21 and 22, 1932, from the Chairman of the

belA,ror

wra.vel expenses of representatives who attend the stockholders'ke etine

Ofthe Federal reserve bank on October 20, 1032; the reply statinr!).

of Dallas requesting approval of salaries at the rate

per annul', respectively, for I.essrs.

to the appraised position of special

G. T. 1Jobber and

representative in

of the bank; the Board's Committee recommend-

Approved.

Telee;raphic reply, approved by three members of the Board on Septem-

°serve Bank of Boston, with regard to the reimbursement of member


10/6/32 -6-

that the Board approves the expenditures authorized by the board of directors

c't the Boston bank in reimbursement of the amount expended for railroad fare

Ti pui,_-Luau accomr,odation by not more than one representative of each member

4'141' in attending such meeting.

be

Approved.

Tel egraphic reply, approved by five members of the Board on Septffm-

r 23 10,_' to a telegram of that date from the Governor of the Federal

Reaerlr'6 Bank of Boston requesting an extension until October 7, 1932, of the

--.Y previously granted by the Board for an advance by the Boston bank,

4ecorda1Ice with the Provisions of

'Ict) 8-8 amended, to the Peoples fl'ational Bank, Southbridge, ITassachusetts,

14111 aM0Unt not to exceed .;75,000, with interest at the rate of 5 1/2,-; per

a/alland payable on demand. The

illterlocses no abjection

outstanding23,on September111 the

event the advance

t1111"tY days from September 23, the

11°611's attention with a statement

or the 2eclera1 Reserve Bank of Boston,the

acivance without demand for pant.

section 10(b) of the Federal Reserve

reply stated that the Federal Reserve Board

to the continuance of the advance, in the amount of

without demand for payment, and that,

is not repaid nor demand for payment made within

natter should aL;ain be brought to the

of the circumstances which, in the opinion

justify the bank in further continuing

Approved.

ber 23Tel

reply, approved by five members of the Board on Septem-

b 1932) to a telegram of that date from the Governor of the Federal4teze-

4:7e Ba211,-Of Boston recluesting approval of a renewal until October 7, 1932,

14 the

..;,50,000 outstanding on September 23, of the advance, with

at the rate of 5 1/2% per annum, payable on demand, made by the


10/6/32

Boston bank,

281_7_

under authority previously granted by the Board, and in

acctIr(lanoe with the provisions of section 10(b) of the Federal Reserve Act,

" aniended, to the Luincy Trust (3ompany, quincy, Lassachusetts. The reply

stated that the Federal Reserve Board interposes no objection to the contin-

gatice of the advance, in the amount of ;50,000 outstandin7, on September 23,

without demand for nayment, and that in the event the advance is not repaid

llor demand for DaYment made within thirty days from September 23, the matter

411°uld again be brou7,1it to the Board's attention with a statement of the

circlanstances which, in the opinion of the Federal Reserve Bank of Boston,

illstify the bank in further continuing the advance without demand for pay-

Approved.

Tel-eCraPhic reply, approved by five members of the Board on October

l93 totelegrams of that date from Governor Young of the Federal Reserve

BaIlkOr Boston requesting authority for a new advance in accordance with the

Drovisions of

C11111°Y Ilst -°mjany, Tuincy, Liassachusetts, in the amount of :)50,000, withirlterest at he

t rate of 5 1/2% per annum, payable on demand, and on the

4"11r1ty of 4-kneligible paper with a face value of .216,492 and readily

1441'1et"1e stocks with a market value of „64,807, the 10(b) advance to the

tzer4ber bank

4/7 4avalice

being desired because of the continuance of practically the same

"latiorlas

was outlined in Governor Young's letter of September 23, 1932.

relaY atated that the Board authorizes the advance subject to the terns

401. ci ria recornnended, and that in the event the advance is not repaid

ror Payment made within thirty days from October 5, 1932, the

section 10(b) of the Federal ileserve Act, as amended, to the

Previously authorized by the Board having been repaid and the


28210/6/32

matter should again be brought to the Board's attention with a statement

(12 the circumstances which, in the opinion of the Federal Reserve Bank of

808tca, justify the bank in further continuing the advance without demand

tor payment.

Approved.

Telegraphic reply, approved by five members of the Board on Septem-

ber22' 1932, to a telegram of that date from Deputy Governor Rounds of the

hderal Reserve Bank of Nen York, requesting authority for an advance in

accordance with the provisions of section 10(b) of the Federal Reserve Act,

44 4481148d, to the Labor National Bank, Paterson, New Jersey, in the amount

" 445,000, for a period of ninety days, with interest at the rate of 5 1/2%

azaura, and on the security of customers' collateral loans secured by

11411dine and loan shares and miscellaneous listed securities, with a marginOr tm.

--" lees than 25%; the advance being desired to take care of unusual

IlithclIia311113, Pending application to the Reconstruction Finance Corporation

it1°nal accommodation. The reply stated that the Board authorizesthe

advance subject to the terms and conditions recommended, and that ita utderstood that the new advance is in addition to that outstanding under

the 4144°11tY granted in the Board's telegram of Tuly 28, 1932.

Approved.

Telegraphic reply, approved by five members of the Board on Septem-btt24,

. to a telegram dated September 23, 1932, from Deputy Governor Roundsur theI'ederai

tk 0 Reserve Bank of New York, requesting authority for an advance,

4cite:-"clalice with the provisions of section 10(b) of the Federal Reserve

us) Eta aMended, to the Bank of Depew, Depen, New York, in the amount of

A4) tctr a Period of ninety days, with interest at the rate of 5 1/2%


10/6/32-9-

Per annum, and on the security of customers' notes, securities and tax

vlarrants with a margin of at least 25; Li.. Rounds stating that 0_5,000

O' the Proceeds of this advance will be used to retire the 10(b) advance in

that amount which is now outstanding and natures on October 111, 1932, and

that the balance is desired to meet continued withdrawals. The reply stated

that the Board authorizes an advance of 035,000, for a period of ninety days,

with .interest at the rate of 5 1/2'10 per annum, being an additional advance

."") and an extension until expiration of this period of the $15,000

c114111me made under the authority granted in the Boardts telegram of July

16) 1932.

Approved.

TeleGraphic reply, approved by five members of the Board on

'31)terrib„

of

—29, 1932, to a telegram of that date from Deputy Governor Rounds

the Pecleral Reserve Bank of New York, requesting authority for an ad-

accordance with the provisions of section 10(b) of the Federal

Ileaerve Act, as amended, to the Salt Springs National Bank, Syracuse, rew

in the amount of ,)150,000, for a period of ninety days, with interestthe rate or

1/2% per annum, and on the security of miscellaneous bonds

1144 a

of at least 2.5; the advance being desired because the bank

1)ae3ea itsregular dividend on September 28, and is fearful that the news

1184a some uneasiness and wishes to prepare for any emergency. The

atllY stated that the Board authorizes the advance subject to the terms and

Q(54(11t1 reeoimnended.

Approved.

Telegraphic reply, approved by five members of the Board on Septem-

193to a telegram of that date from Deputy Governor Rounds of the


10/6/32 -10-

284

Fecleral Reserve Bank of New York requesting authority for an advance, in

"c°1"clance With the provisions of section 10(b) of the Federal Reserve Act,

" amended, to the li'irst National Bank Croton-on-Hudson, New York, in the

E141311Ult of :25,000, for a period

Or 5 Vail, Per anmEn, and on the security of miscellaneous bonds with a

Ine'rgin of at least 25m the advance being desired to meet a steady loss of

cleposite. The reply stated that the Board authorizes the advance subject

to the terms and conditions recommended.

Approved.

Tel-egraphic reply, approved by five nembers of the 'Board on October

3, to letter dated October 1, and telegram dated October 3, 1932, from

1:1()/311-4Y Governor Tohns of the Zederal Reserve Bank of Atlanta requesting

Etilth.°11tY for an advance, in accordance with the Provisions of section 10(b)Of

of ninety days, with interest at the rate

the 2aderal Reserve Act, as amended,

14eras ?lorida,

illtereat at

reQei7abie

takdoer bank

oittlialed in a

the

to the First National Bank, Fort

in the amount of .;30,000, for a period of six months, with

rate of 5 1/2: per annum, and on the security of bills

aggregating .)70,161.71; the loan being desired to assist the

In. meeting the unsettled banking situation in its community as

letter to the 2ederal Reserve Bank under date of September

4% The reply stated that the Board authorizes the advance subject to the

terIlla and conditions recommended.

Approved.

TeleCraphic reply, approved by three members of the Board on

413te,44el' 30, 1932, to a telegram of that date from Deputy Governor Rounds

ederal Reserve Bank of New York requesting authority to purchase

e 2irst National Bank of East Rochester, New York, a tax note of the


10/6/32 -11-

285

T°77.11 Of Pittsford, New York, in the amount of 075.49; the reply stating

that the Board authorizes the purchase with the understanding that the note

raeets all requirements of Regulation E except as

113̀ "11.7; municipality and that the amount offered exceeds 25 of the total

(1111;2tanding warrants of the municipality.

Approved.

to the population of the

ielegraphic reply, approved by three members of the Board on October

1, tn- a telegram dated September 30, 1932, from Deputy Governor Rounds of

-2ederal Reserve Bank of New "York, renuesting authority for the purchase

tn eh- Oceanside National Bank, Oceanside, New York, of :34,000 of tax

4°t" °f Union .,'ree School District No. 11, Town of Hempstead, New York; the

reDly statins that the Board authorizes the purchase with the understanding

thatthe notes iieet all requirements of Regulation E except as to the popula-

ti°a of the issuing municipality and that the amount offered

the total outstanding warrants of the municipality.

Approved.

Telegraphic reply, approved by three members of the Board onOQ tab er 3

the2 1932, to a telegram of that date from Deputy Governor Rounds of

8.1 Reserve Bank of New York, requesting authority to purchasethe Be,

TovIlk of Depew, New work, a tax note of Union free

al or I.Leektovraga, New York, in the amountthat

tile Board authorizes

taaeta all requirenents

raunicinal_itY ist°Oether with

.;a5,000 of

eci.s 257; of the total

the nurchase

of itegulation

exceeds 25r;

from

School District No. 7,

of .110 000; the reply stating

with the understanding that the note

except that the population of the

less than 10,000 and the amount of the note offered,

such notes already held by the tow York bank,

outstanding warrants of the municipality.


28610/G/32

-12-

Approved.

Letter to ;:r. C. E. Calder, New York City, Hew York, approved by

thee members of the Board on Lleptember 30, 1932, inclosing a permit issued

1) the Board under the authority of section 8 of the Clayton Anti-Trust Act

()78ringT1-r. Calder's service as a director of the rational City Bank of

Ne"ork) and as a director of the first National Bank in iallas, Texas.

Tb.e 1-Letter stated that the Board is new considering certain general questions

a number of applications and permits under the Clayton Act, that

OTh Of these questions may have a bearing upon the Permit being issued to

cAl"'der; and that the Board may make the permit the subject of further

-'-ueration when it has reached its decision upon the general questions

'‘er"red to.

Approved.

RePly, approved by three nenbers of the Board on September 29, to

4 lettelv A y,,a6ed September 15, 1932, from the ..,'ederal iwserve Agent at St.

Loll;-s) re,)ortinc_; that the receivers of the Bozeman Uaters first National

4111>) P

e°2eYvi1le) Indiana, and the first National Bank, Chaffee, LAssouri,

11°t' within six months from the dates of their appointment, filed

tIll.j-eations for cancellation of the Federal reserve bark stock issued totile 1,

u 3 because it is believed by the receiver of the first bank that

thelle ie still a possibility of its reopening, and the receiver of the

1"c" ban': is of the opinion that the natter of reorganization of that

71111 be settled by the last of September; the reply stating that in

tile"circn1tances and in view of the agent's recorriendation, the Board

I*11 11°t at this time take any action with regard to the cancellation of

th"ecieral reserve bank stock issued to the banks, and renuesting the


Qf".4(4-L.3

10/6/32 -13-

agent to make a airther rePort and recommendation to the Board if these

a331ee have not been disposed of within three months.

Approved.

Reply, approved by three members of the Board on September 27, to

letter dated September 21, 1932, from the Federal Reserve Agent at Cleve-

landrePortinc; that the First National Bank of Jackson, Kentucky, and the

Pirst National Bank of Carrollton, Ohio, have been continuously deficient

ii their required reserves for periods of six months and six and

81113Mitted,

other than

respectively; the

the Board will

one-half

reply stating that, in view of the information

take no action in these natters at this time,

to forward a copy of the agent's letter to the Acting Comptroller

°t the Currency for the information of his office. The reply also reouest-

ecl tho age nt to advise the Board, within a reasonable time, as to whether

the 1344k have restored and are maintaining their renuired reserves.

Approved.

Et letter dated

1311a) advising

1143 continuously deficient

kohths ending Seutember

141bormation submitted

130ezti will take

%Plr of the

the intormation

the Board,

l*"tored and is

approved by three members

September 23, 1932, from

that the i'irst

of the Board on September 30, to

the Federal Reserve Agent at Cleve-

National Bank of Conneautville, Pennsylvania,

in its required reserves for the period of six

15, 1932; the reply stating that, in view of the

and in accordance with the agent's recommendation, the

no action in the matter at this time other than to forward

agent's letter to the Acting Comptroller of the Currency for

of his office. The reply also requested that the ac;ent ad-

within a reasonable time, as to whether the ban:: has

maintaining its required reserves.


28810/6/32 -14-

Approved.

Reply, apProved by three members of the Board on September 27, to

letters dated September 20 and 21, 1932, from the Federal iteserve Agent at

1111°nd, relative to the continuous reserve deficiencies of the Citizens

4t1.°nal 3ank of Parkersburg, West Virginia; the reply stating that the

le Pleased to note from hr. Hoxton's letter of September 21, that the

l'e3erve2 of the national bank have been restored to the recuired amount, and

that ,Copy of such letter, together with a copy of the agent's other

esPondence, is beinr, forwarded to the Acting Comptroller of the Currency

the information of his office. The reply also reauested the agent to

1(1111.8e the Board if the Citizens National Bank of Parkersburg does not con-titale

to maintain its reserves at the required amount.

Approved.

Reply, approved by three nenbers of the Board on September 27, to

Q letterdated September 20, 1932, from the Federal Reserve Agent at

alehorld,

rePortin that the rational Bank of Summers, Hinton, West Virginia,

1144 been continuously deficient in its required reserves daring the period

c't tie Pastsix months; the reply stating tilat, in view of the information

41111Tlitted and in accordance with the agent's recommendation, the Board will

take tio aet,_

the -Lun in the matter at this tine other than to forward a copy of

QC"erit's letter to the Acting Comptroller of the Currency for the infor-

1114.4°11 'r his office, although it is suggested that, if the agent has not

Q4"(11r done so, he consider the advisability of addressing a letter to

eEtell (21 the directors of the bank pursuant to Section 1V(b) of the Board's

D. The reply also requested the agent to advise the Board what

l'"131°n is made on this point and, within a reasonable time, whether the


10/6/32 -15-

b.8 restored and is maintaining its required reserves.

Approved.

Reply, approved by three mellbers of the Board on September 27, to

letter dated September 19, 1932, from the Federal Reserve Agent at

1:inneapolio, relative to the continuous reserve deficiencies of certain

bEtil̀ s in the ilinth Federal ileserve District; the reply stating that it is

the 1)(3ard'8 assumption that the reserve deficiencies of the Drovers State

118111') South St. Paul, Ilinnesota, and the Citizens and Security National

'' St* James, "lAnnesota, have been continuous for six months or more,

bit that, in view of the information submitted and in accordance with the

ageAt's recommendation, the Board will take no action in these natters at

tIlis time,Other than to forward a copy of the agent's advice concerning

the national bank to the Acting Comptroller of the Currency for the infor-

Illation. of his office, althoust it is suggested that, if the agent has not

Egready done so, he consider the advisability of addressing a letter to

4'614 or the directors of these banks pursuant to Section IV(b) of the

11(31\1'3 Regulation D. The reply further stated that, in view of the advice

e°rItained in the agent's letter of September 19, with regard to the con-

till4clus reserve deficiencies of the First National Bank of Foley, I:innesota,

t4ePirst National Bank of Swanville, Minnesota, the Yirst National Bank

e41a., South Dakota, and the First National Bank of Conrad, Montana,Whieh

have been Previously reported to the Board, and in accordance with

the El(,)ent's

recom_endution, the Board will take no action concerning these

(1"1"-eneies ut this time other than to forward a copy of the agent's ad-

their present status to the Acting Comptroller of the Currency


29010/6/32 -16-

for the information of his office. The reply also advised that the Board

18 Pleased to note that the reserves of the 2irst National Bank of Iron

Lachigan, previously reported as deficient, have now been restored

to the required amount.

three

serve4gent Sargent's letter of September 23, 1932, reporting that the

1116..Y National Bank, Rigby, Idaho, was continuously deficient in its required

l'e4IETIres during the period of six months ending I.:ay 31, 1932; the reply

Ottirlrthat in view of the information submitted the Board will take no

J-I1 the natter at this time other than to forward a copy of Lir.

411gentt2 letter and inclosures to the Acting Comptroller of the Currency

Approved.

Letter to the Federal Reserve Agent at San Francisco, approved by

members of the Board on October 3, referring to Assistant Federal Re-

theinformation of his office. The letter also requested that the agent

4dorise,

within a reasonable time, as to whether the bank's reserves have

11141'estored and are being currently maintained.

Approved.

et

Reply,approved by three members of the Board on September 27, to a

ter dated September 13, 1932, from the Federal Reserve Agent at Boston,

or lurther information with regard to the fact that the Treasurer

ulote 11.

be Ilion Trust Company of Ellsworth, 1.1.aine, who is reported to have

c4

,,oQora le3s and inefficient, has been relieved of all executive authority

t4 A

411" With the requirements of the bonding company; the reply stating141t

111 '71.ew of the information contained in the agent's letter, it does

4°t necess for the Board to take any further action in this matter,recitleat,11

the tzllat e:mna:hyew:::n:t::sa::::e the Board after the next examination of

been, or should be, taken to strengthen


29110/6/32 -17-

the illellaP'ement which was severely criticized in several previous reports

°11 examination, and to keep the Board currently advised of any corrective

lIcti°I1 taken by the bank to improve its unsatisfactory condition. The reply

1'1111'11°r reciuested the agent to discuss the natter of the payment of dividends

1)/' the trust company with the State Banking Department, with the view of

obtateiaIts cooperation in bringing about the necessary correction of the

4ituationas far as possible through the cessation of dividend payments and

otherwise.

Approved.

Confidential letter to the Federal Reserve Agent at 7:inneapolis,

"°17ea by three members of the Board on October 3, referring to Assistant

".51ede--4' Reserve Agent Bailey's letter of September 21, 1932, advising of the

"6138 Which have been taken by the State Bank Commissioner of Hinnesota in

4ie ei'rorts to imp rove the unsatisfactory condition of the Drovers State

116I'llk Of Sellth St. Daul, :Annesota; the Board's letter submitting, for the

.°11dislace of the Federal reserve agent in negotiations with the principal

-tc)eklIolder of the Drovers111rw,

'1114t1on which has come to the Federal Reserve Board through reports of

'114ti°11 of banks located in New York and Chicago, concerning the in-

debtedness of :a-.tIxe e

Brener to those banks, together with a brief digest of

°Illants made by the examiners thereon.

L

Approved.

etter to the Aderal Reserve Agent at New York, approved by threekernbeOf

the Board on September 28, replying to a letter dated September

ka,tte:62$ el%°E1 Assistant Federal Reserve Agent Jillistin, advising that the

state Bank, Mr. Otto Brener, certain confidential

t the application of the Steuben Trust Company, Hornell, 1:ew York,rot tie

erehiP in the Federal Reserve System has been discussed with the


292

10/6/32 -18-

Pl'esident of that institution, who advised that the trust company has

clealded to do nothing further regarding its application until the affairs

°r the institution are in a better condition; the Board's letter stating

that .' ln view of the information submitted, the Board will take no action

Olathe aPPlication and will consider the matter closed.

Approved.

Tele Graphic reply, approved by the 1]xecutive Cannittee on September

al, Ilnder the authority granted by the board on that date, to a letter dated

41)tenber 19,1932, from the _federal Reserve Agent at St. Louis, with re-

'to themembershin in the federal Reserve System of the Guaranty-Plaza

''.°111PanY, St. Louis, Lissouri; the reply stating that the Board has

that condition 0. 3 set forth in its letter of August 19, to the

*411" °°141°anY, and amended by its telegram of September 2 to Er. Wood, be

krtherended, by adding at the end thereof the following:

461ind Provided further, that such agreement may stipulate that

P€IYInents to the bank on account of such guaranty shall be

2rried in a special bond reserve account for a period of:7elve months and that, at the expiration of eighteen months

IL'am date of bank's admission to membership, the directors

8141:2-n any such payments may be reimbursed out of such

trclal bond reserve account to an extent not exceeding

net appreciation and/or profit, if any, on such bonds

anY actual payments they ray have made to the bank onO.t':cellnt of such guaranty, the amount of such net apprecia-

Z)n and/or profit to be determined by the federal Reserve

ils'ent at St. Louis on the basis of the book value of all

_4i°143 classified below the four highest grades which were

the bank's Portfolio at the time of its admission to

T?Mbership and on which there was a depreciation at sucha3e:Te as eamoared with the price actually realized on the

°f any such bonds, the amount received upon the pay-

Ella; c'f anY such bonds, and the appraised market value of

ez4, Such bonds remaining in the bank's portfolio at theamAration of such eighteen months' period; and

any

ex(t)nts remaining in such special bond reserve account

int-r such reimbursement of directors shall be covered

° the general assets of the bank."


10/G/32

haa aPDr°7ed the bank's amllication for membership in the Federal Reserve

SYstsm and for forty-five shares of the capital stock of the Federal Reserve

11441z Of Dallas, subject to certain conditions set forth in the letter.

1̀93-10-

The reply also stated that the Board agrees with the agent that such

'1/41'alltY must be joint and several; that if he is of the opinion that the

/billlIncial responsibility of the other directors is adequate for the bank's

I/°tection, the Board will not object to the omission from the guaranty of

the two directors mentioned in the agent's letter; and that in view of the

terrls stated in the Board's wire of September 2, it is essential that either

the reallar counsel for the St. Louis bank or some other attorney regularly

in the practice of law approve the form of agreement.

Approved.

Letter to the Citizens State Bank of Dalhart, Texas, approved by

threeimellbers of the Board on September 30, 1932, advising that the Board

Approved.

Letter to the Federal Reserve

le11113erz of the Board on September

illeormation submitted in the

elldation of the board oft40

Peaeral Reserve Board

Whether the menbership

te:Nilicited under

(*41' that the

Elbility to

the 130Eirdi3

regulation"

of

Agent at Dallas, approved by three

20, 1932, advising that, in view of the

agent's letter of September 9, and the recon-

directors of the Federal Reserve Bank of Dallas,

has again deferred decision on the question

the Junction State Bank, Junction, Texas, should be

the proceedings previously instituted by the Board, in

institution may have a further opportunity to demonstrate

comply with the provisions of the Federal Reserve Act and

The letter also requested the agent to keep the


10/6/32 -20-

Board currently advised of any important chances which may take

the condition o2 the Junction State Bank and,

294

Place in

upon completion of the next

6481111-nation of the institution, to forward to the Board an analysis of the

Ibel)°rt of examination, together with the recommendation of the board of

directors of the Federal re erve bank in the matter.

Approved.

Letter, approved by three members of the Board on September 27,

1932 to$ the First State Bank, Lorenzo, Texas, referring to the Board's

lettep- -0 the bank under date of August 2, 1932, with reg.drd to the proceed-

lairye lnstltuted by the Board to determine whether the bank's membership in

the 1?e,"Leral iteserve System should be terminated, and to the letter addressed

bY the bank to the Board under date of August 8, stating that the bank

174i7edit8 right to appear before the Board and that its representative

17°41d aDDear before the Federal Reserve Agent at Dallas. The letter stated

thel th

'"re Agent at Dallas and in accordance with this advice and the recom-

14e aati°II of the board of directors of the Dallas bank, the Board has de-

fel.x,ed raalan3

the 2il'St State Bank of

Itlay

e Board has been advised of the information submitted to the :i'ederal

e an opportunity

.71eions of the 2ederal

61°11€ the same lines,

aDDroved by threeit

E1CCOrda4Ce with theboElra w directors of1."tille on

ITovember 7,

a final decision on the question whether the membership of

Lorenzo should be terminated, in order that the bank

to demonstrate its ability to comply with the pro-

Reserve Act and the Board's regulations. A letter

addressed to the federal Reserve Agent at Dallas and

members of the Board on September 27, requested that,

agent's suggestion, the matter be presented to the

the Dallas bank for further consideration at their

1932, and that a recoramendation be submitted to the


295

Zeit era

1W52 -21-

deserve Board as to the action which should then be taken.

Approved.

Letter to the I:ewton rational Bank, Newton, Iowa, approved by three

Of the Board on September 23, 1932, advising that the Federal Re-

8"ve Board has approved the bank's application for permission to act, when

11(3t ill contravention of State or local law, as trustee, executor, aaminis-

tzato,s,recistrar of stocks and bonds, guardian of estates, assignee,

l'ec°17er, comuittee of estates of lunatics, or in any other fiduciary

ItY in which State banks, trust comnanies or other corporations which

into cometition with national banks are Permitted to act under the

of the State of Iowa; the exercise of all such rights being subject

to the Pr°visions of the Federal Reserve Act and the regulations of the

:61Eideral lieserve Board.

Approved.

Letter to the Federal Reserve Agent at Kansas City, approved by

teeellialilbere of the Board on September 28, 1932, advising that the Board

114a „'cl4sidered the application of the First National Bank in Bartlesville,

Ok411

Permission to exercise certain additional trust powers underthe

ione of section 11(k) of the Federal Reserve Act, and that invie17

°f the criticisms set forth in the report of examination of the bank

b " 4111 14, 1932, both in the comnercial and trust departments, the

" de'rerred action on the application until after another examination

the .ins

titution has been made.

Approved.

RePlY, approved by three nenbers of the Board on September 30, to

letto-atecl September 10, 1952, from the Cashier of the

State-National


10/6/32-22-

296

Balacs Peru, Illinois, requesting that the 2ederal Reserve Board take no

Nrther action upon the bank's application for permission to exercise

till" Powers; the reply stating that in accordance with the request the

13°41'dwill take no further action on the application.

Approved.

Letter, approved by three members of the Board on September 28,

1932! to the First-Stroudsburg National Bank, Stroudsburg, Pennsylvania,

114W1 institution was formed on September 12, 1932, through consolidation

1144" the Act of November 7, 1918, of The First National Bank of Strouds-

111111€ 814 The Stroudsburg National Bank, under the charter of the latter

14441c; the letter transmitting a certificate of the consolidated bank's

1tY to exercise the fiduciary powers previously granted to the con-

"itilett national banks.

Approved.

Letter to Luther K. Brice, attorney-at-law, Spartanburg, South

CI*011.11-4, aPProved by three members of the Board on September 28, replying

to hi_letter of September 20, 1932, with regard to the requirements as to

the u

11°8" of securities in the trust department of the First National Bank

" aDar anhas a condition precedent to the use of trust funds by the

the conduct of its business; the Board's letter advising that thebkliz

Dziovia.1°118 of Section VIII of Regulation F permit all securities which con-

hewith + - - reqUirements set forth in the regulation to be used as.

et:11kt_

12r8-1 for trust funds awaiting investment or distribution which are

4D°aitde- -21 the commercial or savings departments of national banks; that

1144""eary for national banks to consult the Federal Reserve Board'411t4 r

it is

eel/eat to the use of securities which meet these requirements; and

t114I the8°14rd has not passed upon the use of any specific securities for


29710/6/32 -23-

tiliS PUrpose by the First National Bank of Spartanburg. The letter also

t ted that the Federal Reserve Board can not properly undertake to deter-

ihe whether the owner of a certain deposit in the First National Bank would

1147e a elatal against bonds and securities eet aside by it for the Protection

Oftrust estates held in its trust department.

Approved.

Letter to the 2ederal Reserve Agent at New York, approved by three

Itienbers of the Board on September 30, 1932, inclosing a copy of a letter

4tea'-'ePtember 15, 1932, from i.r. H. B.::achold, New York City, New York,

eqUesti-11C, in view of certain improvements in the condition of the Carthage

Ilxchanc,e Bank, Carthage, New York, that the Federal Reserve Board

expeai tC approval of the application of the institution for full trust

Do14E3/.8end. CODy of the Federal Reserve Board's reply thereto, also approved

by. t41'ee melabers

t1'13131teation was

or .1.1

"ttltItion,-- exist, the Board felt compelled to defer action until the results

next examination, which the office of the Comptroller of the Currencyticiv

1?ecier

Rcesrve Agent at New York called attention to the statement con-tq,,,Lea

Llachold's letter that the national bank was advised by a

l'eDre R1148-4ative of the board of directors of the New York bank that the

ex' b,'411°8 application received favorable action by the New York board

bUt that action had been withheld by the Tederal Reserve Board to

"(lit Elsubsequent examination of the condition of the bank, and suggested

rae

of the Board on September 30; the reply stating that the

given very careful consideration by the Board but in view

the circumstances, and in line with its usual policy where similar

th

tees.will be nade at an early date, are available. The letter to the

ett when

occasion arises for advising an applicant as to the status of an


298

1°/6/32 -24-

4PPlication it would serve the purpose adequately if the

informed simply that

t°e".ether with an appropriate

°Ixt indicating the nature of

Illether the 3oard's action was in accord therewith.

Aoproved.

Letter to the federal Reserve Agent at rew York, approved by three

apPlicant were

the application had been transmitted to the Board,

statement of the Board's action thereon, with-

the recommendation submitted to the Board or

lae*ersof the Board on September 28, referring to Assistant federal Reserve

°11113tin's letter of September 2, 1932, with which was transmitted a

/'6(111est of the Union Trust Company,

41(1 it its assets three small lots of bank stock purchased by it

''Iolation or

Ile*IershiP in

te 8°ard has

Endicott, New York, for permission to

in

one of the conditions under which the company was admitted to

the federal Reserve System; the Board's letter stating that

considered the natter in the light of the information sub-

114tted, and requestinglloilrd

does not look withIrld

trust companies, but

the agent to advise the Union Trust Company that the

favor upon the acauisition of stocks of other banks

will raise no objection for the time being to the

N;erltion in the assets of the trust company of the shares of stock referredto.

Approved.

Letter to the Federal Reserve Agent at New York, approved by threeta14%._

vcs of the Board on October 1, referring to Assistant Federal Reserve

bill-4-4i5tin's letter of September 26, 1932, inclosing copies of corres-

01la e rie

tiew

e with the President'YQ1-.1z

relative to that

41P requirinL; it to

of the Ogdensburg Trust Company, Ogdensburg,

company's noncompliance with a condition of

obtain and maintain adequate credit data in


10/6/32

connection

-25-

with unsecured loans, arid the holding by the institution of its

cln stook as collateral to loans. The Board's letter noted the statement

or the President of the trust company that since the date of the last exani:.-

11/8Aion considerable progress has been nade by the trust company in the

-44ulatien of current credit data, and stated that in the circumstances

cliltiined the Board will take no action at this time with regard to the stock

or the-rust company held by it as collateral to loans, although the ;oard

Will expect the bank to keep the natter constantly in mind and to dispose

of `h stock as soon as it is practicable to do so. The letter also re-

cltleeteALL that the agent advise the Board of the status at the time of the

11eZt e4amination of the natter last referred to, together with his recon-

Ilieli°11 in the Premises, and that he report at that tine the progress

134̀cle by theinstitution in obtaining adequate credit data in connection

1744 it8 unsecured loans.

Approved.

Letter to the Federal Reserve Agent at G'hicago, approved by three

taer41)el‘3 Of the Board on September 27, referring to Assistant Zederal Re-

A ont

'4113-Yaisof the report of examination, as of 1::arch 14, 1932, of the Fayette

114105(pz

ariarust (3ompany, Connersville, Indiana; the Board's letter stating

the.t,in

YoUng's letter of September 14, 1932, in connection with the

view of the information contained in 1r. young's letter, the Board

11111 tEtkeno action at this time in the natter of the menber bank's carry-

14 3e 7/32 shares of its own stock subscribed for by employees of the

1)11k) 1.thich have now been trusteed and which the bank has promised to dis-

le 'r within ne year.

eamination

or

the

letter also requested that at the time of

liezt bank, which it is assumed will be made within


30 0

10/6/32 -26-

the next few months and in which a representative of the Federal reserve

1:141111: will participate, the agent determine the status of the stock and ad-

the Board fully in regard thereto, with his recommendation in the

Pretaiaes.

Lie* e

Approved.

Letter to the Federal Reserve Agent at Cleveland, approved by three

118 of the Board on September 23, referring to the fact that the

ELIW4'sis of the report of examination of the Erie County Baning ConDany,

ITertrillion, Ohio, as of August 16, 1932, discloses that the company was hold-

10 shares of its awn stock as side collateral to a loan and that

411DazentlY such stock has been held for a period of several years; the

letterITinuestint; the ,.,1ederal reserve agent to advise the company that t

84 oulaelnate this loan or otherwise secure the same within a reasonable

tiilie _ _flcl to infolm the Board as soon as possible as to the disposition the

—4-on proposes to make of this matter. The letter also requested the

tO take up with the bank and advise the Board regarding a loan ineee

aa°J. the l' *tations prescribed by the State lay which apparently has

440 b -ncarried as such by the bank for several years.

t t,

Approved.

ap-)roved by three members of the Board on September 28, to

r dated August 24, 1932, fram Assistant Federal Reserve Agent

cf the Federal Reserve Bank of Cleveland with regard to the manner111 174iell

the 'jentral Trust Company of CincinIlati, Ohio, should report

“10 0of real estate mortgage bonds sold to customers with a guaranty01

Etbz 01,3 ea134/rIl1ent by the Pearl rarket Bank and Trust Company of Cincinnati, later

by the Central Trust Company; the reply stating that if the


30110/8/32 -27-

ill°ttgage bonds in question were not issued by the Pearl Market Bank and

7111" CoMpany but had been purchased and were awned by it at the time of

Bale to the bank's customers, the liability assumed by the Central Trust

should be reported as a contingent .liability in Schedule C of the

cett-11 report form, but that if mortgage bonds were issued by the Pearl

Itarket B-0--,,14. and Trust Company against which real estate mortgages were held

b7 it °r by another for its account as trustee, the amount of the liability

" the Central Trust Company thereon should be silo= in condition reports

44111st the liability item, lgortgage Bonds and Participation Certificates

44(linen, while the real estate mortgages pledged against such bonds

rtiPa---eipation certificates should be included in the resources item,

Lo

°14tat

titter,%, tatters

arid Discounts".

Approved.

Letter to the Federal Reserve Agent at Kansas City, approved by

of the Board on October 5, referring to the Board's letter

" 446U5t 18, 1932, and the agent's reply of August 23, and inclosing a

letter addressed to the Deputy Comptroller of the Currency under

clate or September 24, 1932, by the board of directors of the Miami County

4"/°1183. Bank, Paola, Kansas; the letter stating that the Board would be

llit"eated4 -44 any comments which the agent may care to submit, after con-

t1° with the chief national bank examiner, as to the progress which

ellta Inctde bY the bank, as reported in the letter, and the explanation

therein of the matters referring particularly to President FrankW,8Polaable.

Approved.

Letter to the Federal Reserve Agent at Chicago, approved by three


10/8/32 -28--

Ilbers of the Board on October 4, referring to the agent's letter of

septenber 7, 1932, with further regard to the reduction of the capital stock

el' the Wheaton Trust and Savings Bank of Jheaton, Illinois, from .100,000 to

'0 000 '..rhe Board's letter stated that since the bank is not complying

With the capital requirements of the Federal Reserve Act, the Board can not

13IrlY approve the reduction in the bank's capital nor Permit the existing

8ittlfion 10 continue indefinitely; that it will be necessary for the bank

to in its capital to not less than .1.ao,0o0 as soon as it is feasible

to do SO, but that in view of the unanimous recommendation of the board of

di rectors of the Chicago bank, and

ba4k,

in view of the improvements made in the

condition, the Federal Reserve -3oard, in the exercise of its dis-

el'eti°11, will not require the bank to terminate its membership at this time,

althoilc,h the Board reserves the right to take any action at any time with

reard

s iatin-C, but that it will not take final action without first notifying

the b,411

k end grantinc, it an opportunity to be heard. The letter further

9ested that,A, in the event the bank's capital is not restored to at least

yr,v00 -'a.L./1 six months, the agent advise the Board. as to the conditionor

to this matter which seems advisable in the circumstances then

the bu at that time; what steps, if any, have been taken to provide

inin capital; and what action, if any, the 34.,ent and the

-c141'cl to directors of the Chicago bank recommend.

Approved.

:Eiffel' to the Director General of the Institute of Scrap Iron and

nes' 'new York, hew York, approved by three members of the Board oneDte*Ier

23) referring to his letter of September 9, 1932, inquiring as to

°clitie2 '417lich are considered merchantable and discountable by the Federal


10/6/32 -29-

:3 3

leserve Board, the letter stating that it is assumed by the Board that the

111(111117 relates to comodities which may be regarded as "readily marketable

staPlas" within the meaning of certain provisions of Section 13 of the :Ted-

era,-4 Reserve Act, and that the Board has from time to time passed upon

(Illesti°ns as to whether certain specific coLlmodities are to be regarded as

l'e4dilY marketable staples within the meaning of these provisions of law,

but it has not prepared a list of commodities which may be so classified

411c1 has not had occasion to consider the -uestion whether scrap iron and

8t801 are readily marketable staples. The letter also inclosed a copy of

the BGard's Regulation A calling attention to the definition of a readily

Inal'ketable staple contained therein.

Approved.

Reply, anproved by three members of the Board on October 3, to a

lettel' dated September 20, 1932, from Lir. Earle R. deldoney, Buffalo, Yew

'f°11k' Suggestin that claims of salesmen for deferred payments of commissions

'Loa be considered a proper basis for the extension of credit; the reply

4tat11le that the advisability of extending credit of this character is one

Olug Policy to be determined in the exercise of sound judgment by the

(111'"t31.3 and oficers of each ban, that the Board is not vested with

ealtkoisity to determine the course which the banks should follow with respect

t° this Matter, and that, accordingly, the Board has not had occasion to

consideration to the question and is not in a position to express any

°1114i°11 e°flCOjflg it.

Approved.

lett nePlY, approved by three members of the Board on September 27, to

el*8 dated Q- -eptember 17 and 23, 1932, from L:r. 1. H. Switzler, Vice


30410/6/32 -30-

President and Generall:anager of the St. Louis itefrigerating and Cold

StoraGeCompany, St. Louis, i_issouri, with regard to the appointment of a

SPecialcommittee of the Association of :lefrigerated - Tarehouses for the Pur-

Dose 04-L obtaining a hearing before the Board with reference to the

ityrediscount of the paper of customers of cold storage companies; the

reDlY statin,; that it is understood from Er. Switzler's second letter that

11° heering is desired by the committee in view of the fact that there is

atill-Ln force and recognized by all Federal reserve banks the ruling of

the Boe'rci Plablished on page 308 of the -.Arederal Reserve Bulletin for March,

1921) tnat notes of the customers of a cold storage company, representing

1(3alls 'lade to then by the company, are eli ible for rediscount if the

ellstoMers have used or are to use the proceeds for agricultural or

01•121..ercial purposes and if the notes comply in other respects with the law

11(1 the re:_:ulations of the Board.

Approved.

Telegram to the Governor of the Federal Reserve Bank of Dallas,

41)roved by three members of the Board on September 28, referring to his

lett°c'e August 30 and September 20, 1932, and advising that the Board

14 °I' the °Pinion that a note of the Verhalen liursery Company, Scottsville,

Teza,z, the proceeds of which have been or are to be used by it for the

letion or marketing of products such as those referred to in a letter

(1(11'eF-lecl bY the411cier aate of separny , to Deputy Governor Gilbert of the Dallas bank

the (ItTIallY

pending orderly

9, 1932, or

riarketinn, is a note given for an agricultural

or the carrying of such products by

1)1112e within the meaning of the Aderal Reserve Act and the Board's

11:''41ti°11 A) and that such a note, if it complies in other respects with


:305,10/6/32 -31-

therequiraments of eligibility, may be discounted by a Federal reserve

be'llic with a naturity not in excess of nine months. The teleran also stated

that a bill of exchange drawn by the colApany on a purchaser of its products

414 accepted by such purchaser arises out of a commercial transaction and

1:114Y not Properly be classified as agricultural paper, although such an

"aellt:auce, if otherwise eligible, may be discounted by a Federal reserve

When its ilaturity is not in excess of ninety days.

Approved.

Circular letter to the Governors of all Federal reserve banks,

al314.(1.7ed by three menbers of the Board on October 3, 1032, inclosing a copy

°I' a letter received _Cron the Chief of the Bureau of Agricultural Economics

of the Department of Agriculture under date of September 25, 1032, advising

or the extension of the Bureau's commercial grading service to include

el4111Led fruits and vegetables.

Approved.The Secretary was requested to bring the

matter to the attention of the Governors at their

forthcoming conference as one of the topics of

discussion with the suggestion that they take the

necessary steps to call the service to the

attention of their member banks.

Letter to ,T:r. J. Van

44re/Ice Warehouse Company,

04°4) Chief of the Bureau

-clature, both approved

1.32' with further..511)te proposed

44"cl rzom the

°°419,5111 with the

-1..kPO

Cartmell, Executive Vice President of the

Chicago, Illinois, and letter to Lr. N. A.

of Agricultural

by

Lconomics of the Department of

four members of the Board on September 23,

re7ard to the question whether certain warehouse re-

be issued by that empany for goods stored in warehouses

Southern Idaho Bean Growers ooperative Association would

requirements of the 2edera1 Reserve Act and the Board's


17hetlie,such

receipts comply with the requirements

Company under the arrangements entered into between that

lieserve -4ct that warehouse receipts securin barkers' acceptances

o tinle-nee the storage of readily marketable staples must convey or,t1.0 title 4

4° such staples, and because such receipts do not, in theof*d,a

10/6/32 -32-806

Regulations with reference to warehouse receipts securing bankers'

"eePtances drawn to finance the storage of readily marketable staples;

the letters statinc; that, notwithstanding the fact that the Lawrence 'Jere-

hetlee''() PanY has withdrawn its request for a reconsideration by the

5a1)al ent of Agriculture of certain questions pertaining to its operations,

the Beard has continued its consideration of the question whether such

U.S receixts comply with the requirements of the Federal Reserve Act

the Board. 's regulations because it appears that some of the -11edera1

zae8ei'v'e banks may have discounted or purchased bankers' acceptances securedby e

- Pts issued under similar circumstances and that the Lawrence Ware-ho 0

- Cal nY has advertised that credits based on its field warehouse

l'eceiPt8 are elir,ible for rediscount at Federal reserve banks. The letters

qe° atatedthat in connection with its investigation of this matter the

11°6‘1'clhas consulted with several of the Federal reserve banks, has carefully

the information furnished by the Lawrence :iarehouse Company and

lt4 att-4411eYs and the arguments made by them, together with information

N:eived rrom other sources, and after studying all of the information re-ceive

°I1 the subject, is of the opinion that bankers' acceptances issuedt

T_ l'eceiPts such as those proposed to be issued in the name of the

-ce "IarehouseQ( .k3

44:1 elld the Southern Idaho Bean Growers Cooperative Association are notqiUh

le -01* rediscount at Federal reserve banks, because it is doubtful

of section 13 of the

j1.41ment, Comply with the requirements of section X: of the Board's


307

10/6/32 -33-

RegIllation A that warehouse receipts securing such bankers' acceptances

rflllat be "issued by a party independent of the customer". The letter further

3t"rjct that in giving expression to this opinion the Board is not undertaking

to P32S upon the nerits of field warehousing in general, either as con-

by the Lawrence ,Jarehouse Company or by any other company, and that

the Bc)srd's opinion relates solely to warehouse receipts such as those pro-

P°8ed t° be issued under the arrangements entered into between the Lawrence

'°11ae Com)any and the Southern Idaho Bean Growers Cooperative Associa-

tOetaber

3 of the Board on September 30, 1932, stating that in r;oinz over thecli e011,4

,?ktees

4ecter

1 ileserve Act, it has been noted that in all cases of schedules that

ille.114e 411Y paper di-counted for individuals, partnerships or corporations,

4141°171eagement of the receipt of the paper by the Assistant federaleze

Ageut has an appended note stating that the paper discounted for

141a13, Partnerships, and corporations is not eligible to secure

Letters anproved, together with letters, also

approved by four members of the Board on September 23,

to the attorneys for the Lawrence ..iarehouse Company,

Deputy Governor Kenzel of the federal deserve Bank of

hew York, the Governor of the Federal Reserve Bank of

jhicago, and the Governor of the federal Reserve BankOf San 2raneisco, each inclosing a copy of the letter

addressed to the Executive Vice President of the Lawrence

aarehouse Company.A circular letter to the federal deserve Agents at

all federal reserve banks, approved by four members ofthe Board on September 24, asking for the agent's viewsOS to the advisability of publishing in the federal Re-

serve Bulletin a ruling on the question considered in

the correspondence above referred to, was also approved.

Letter to the federal Reserve Agent at New York, approved by three

t schedules recently received from the New 'York bank coverinL-; ad-

der Section 10(b) and the third paragraph of Section 13 of the


1°A5/32 _34_

2ederal reserve notes. The letter stated that such paper is elijble as

e°11ateral security for Federal reserve notes to the same extent as paper

418Counted for member banks under other provisions of section 13, and re-

that the agent furnish the Board with revised recapitulation Sheets

e°varinC, with the exception of one case in which the paper was net elicible

becav—`^`" of its maturity, all such loans made by the Few York bank; also,

thata nulther of Guestions have arisen from time to time in the past re-

f̀I'rding the preparation of schedules covering advances made by the Few York

bW:Under the provisions of section 10(b) and the third paragraph of

eetiorl 13 of the Federal

13°118'llt that the Board's records in connection with these loans

e°1'resPond in each instance with the law and contain all

l'ecIttested by the

IlEkred with the duty of reviewing the schedules carefully before they are

allbtlitted to the Board.

kent

Reserve Act and that, as it is particularly in-

the

should

information

Board, it would be helpful if some officer of the bank were

Approved.

Letter to the Federal Reserve Agent at Richmond, approved by three

Of the Board on September 20, referring to

ieholla

letter of September 16,

Il Loan Agency

11°4 l'oe;arding the

1)1a-*It contained

'Le letter

referred

t4°atialf', access

1/(kitcl addressed

174'4 4"e ard to the furnishin7,

Assistant Federal Reserve

1932, relative to the furnishing to the

of the Reconstruction Finance Corporation of informs:-

condition of member banks in the Fifth Federal Reserve

in the confidential sections of examination reports.

to the

to reports

general policy of the System in the natter of

of examination; to the circular letter which the

to all Federal reserve agents under date of Llarch 9, 1032,

of information to the local agencies of the


3091°/6/32 -35-

Reconstructi011 Finance Corporation, and to the confidential Loan Agency

Bulletin ko. 2 of the Corporation. It stated that, in view of the fact that

the confidential sections of reports of examination often contain the most

78.111ab1e information reggrdin-: the condition and management of the banks,

it 14°111d seem that to detach the confidential sections before making such reports

to representatives of the Reconstruction Finance Corporation would

he i• nconsistent with the purposes of the law which authorizes the 7ederal

l'eeerve banks to make such reports available to the corporation, but that it

18 "• flerent from the statements contained in Er. fry's letter that the num-

'lel' °• I' Persons who have access to the information contained in reports fur-

nished bY his office to the Richmond agency of the corporation is not

l'icientlY restricted, and that the necessity exists for prompt action on

thee• entte Part to review the situation and to determine, in consultation

Ilith the Manager of the agency, the exact persons connected with the agency

114° 11• 4/r ProPerly have access to such reports and such limitations upon the

113e o• f the information contained therein as may seem necessary.

Apiroved.

nemoranda from Counsel dated September 21 and 23, 1932, approved bythree melobers

of the Board on September 28, 1932, recomnending that there be

1111)lislied in the next issue of the Federal iZeserve Bulletin a supplementary

tterearding the branch banking situation in Virginia based on

e4cliti°118.1 information received from the Federal Reserve Bank of Richmond

°n.11ecti°n with the statement as to changes in the law of the several

:::tea relative to branch banking which appeared in the July issue of the-4J'iatill) and also the recent ruling of the Board that funds collected by

11414k3 44Hrld held for remittance to the Collector of Internal Revenue in


3 -10

10/6/32 -36-

Elccordance with the requirements of the Revenue Act of 1952, with respect

tO the tax on checks, drafts or orders for the payment of money, are not

84bject to the reserve requirements of the Federal Reserve Act.

Approved.

Letters to the Governors of the Federal Reserve Banks of Richmond

Etila ellsas City, approved by three members of the Board on September 23,

1.932 .' '-1-1111e; attention to the fact that those two districts are now the

°IllY ones in which progressive penalties are being assessed against member

lor continued deficiencies in reserves, and stating that in the cir-

clArnstances the banks may wish to give further consideration to this natter,

ancl that 4,-11.eY should desire to discontinue the assessment of progressive

Detal+4es, the Board will be glad to give consideration to a request that

thia be done.

In o4Y Consideration of this subject it is suggestcd that the bank's counsel

e0113

The letter to the Governor of the Richmond bank stated that

Illted With regard to the question whether the discontinuance of theaaao2s

'Thant of progressive penalties in the _?ifth ederal Reserve District17043.d

in anY Way adversely affect the interests of the bank in any pending

-Lc') in which it is involved, with particular reference to cases

"g clUt of the closing of member banks in. New Bern, North Carolina.

Approved.

TelegraPhic reply, approved by three members ofbe roo

t° a letter dated Lieptember 26, 1032, from the

"ezve Ban. of Kansas City referrin to the Board) aza ze

q"sting that the Board consent to the Kansas City bank discon-

ttw4

the 3oard on Septem-

Governor of the Fed-

's letter of September

i4g, a8 01 October 1, 1932, the assessment of progressive

penalties for

ael'iciencies in reserves of member banks; the reply stating that


10/6/32 -37-

the B°ard discontinues, effective October 1, 1932, the progressive penalties

heretofore in effect in the Tenth Federal Reserve District, and that the

isseeernent of progressive penalties should not be resumed by the Kansas City

13"k except after application to the Federal Reserve Board.

Ap)roved.

Letter to the Governor of the Federal Reserve Bank of San Francisco,

aPPI'°ved by three members of the Board on September 23, referring to Cashier

liale's letters of September 14, 1932, and advising that the Federal Reserve

8(l'azci interPoses no objection to the action taken by the Federal Reserve Bank

Or Sall -,-. 1.anciseo in the establishment of currency depots at Boise and Twin

Palls) Idaho, through the shipment of :500,000 of currency to Boise on

1; the l• etter notin:-.; that the Twin Falls depot was terminated on September 7,

tilz°1-1 h

411(1 thatat Boise :125,000 of currency was withdrawn by member banks,

° was returned to the Salt Lake City Branch on September 9, and itiz

437b,00

8t 31, 1932, and :200,000 to Twin Falls on the same date, the Boise

111/1)1Y be-5 supplemented by an additional shipment of :;500,000 on September

the return of the 2O0,000 in currency to the Salt Lake City Branch,

ellected that the remaining .500,000 will remain in the depot for atemI)ozazy period

until definite determination is made as to the possibility

• t°°1*Callizi ng the First National Bank of Idaho at Boise. The letter also

11'189c1 that it Would be appreciated if, in any case of this kind in the

l'11141be vi• llere advance information can not be furnished to the Board, a report

• the a• ction taken be made by telegraph in order that the Board may be

advised.

Approved.


10/6/32312

-38-

Letter to the Chairman of the Federal Reserve Bank of Cleveland,

EIPPreved by three members of the Board on September 30, referring to the

Clukthlants reply of September 14 to the Board's letter of August 26, 1932,

rel4tive to the matters discussed with the officers of the bank by the

8.415111111er2 in connection with the examination as of Lay 28, 1932; the Board's

letter stating that it would appear that when Canadian currency is selling

at a substantial discount it is particularly desirable that all Federal re-

serve banks should continue to offer their facilities to member banks for

the collection and conversion of such currency into United States funds at

the raost favorable rate of exchange obtainable. The letter also requested

Ilrther advice as to certain other matters referred to in the Board's letter

el* AllUat 26.

Approved.

Ella:proved

Letter to the Chairman of the Federal Reserve Bank of San Francisco,

by three members of the Board on September 27, referring to hisletter

°f September 1, 1932, in which he advised the Board with regard to

"'istraents

the lioarats examiners in the report of their examination of the San Francisco

13e1 April 2, 1932; the letter stating that the Board would appreciate

841l1ce as to v

ihether its understanding as to the action taken on certain

4%rs is correct.

and changes which have been made as a result of the comments of

Approved.

tO03, approved by three members of the Board on October 4, 1932,

*°ettera

Oki reeeived from. bankers in Durant, adill, Colbert and '111 Creek,

refel-rinz, to a proposal to request the transfer to the Tenth


313

BOE11,on October 3, 1932:

41altz17rt"-tio,rnose 3.11(0)1: ADDITIONAL Stock: Col

e

Bank an nAltad. Trust Company of — ,Pi R.;.tat '3olorado. (Increase in surplus)

-liational Bank, Anthony, Kansas'ktici‘Illcrease in surplus)711ce &tate Bank, Sundance, Wyoming.

'Illcrease ta surplus)

lications for SURRUTDER of Stock:?izalict 4.

cl.,17Lollsoiacitcloounnaltyi.3Tankrust

jecnkoraii)ilaZ,ICYL;w1(vinsilloelv'enPetrill) a.ree•se in surplus)1314t •plz:t1Qt nos 5.

v-Jvational 13ank of nannington, Llannington,-olitieraber)(V.L.Suc. by _,'irst Exchange Bank,

10/6/32 -39--

11'8Cleral. Reserve District of certain counties in Oklahoma which are now in the

ter_citory of the Eleventh Federal Reserve District, and protesting against

a change; the replies stating that such a transfer will be considered by

the 11°ard only when submitted to it by the Federal oserve Banks of Dallas

8.14:1 TPA.,City with their recommendations, and that no representations on

-qoject have been received from those banks. The replies also stated

thatc°Piee of the letters received by the Board aro being forwarded to the

Govern.Or of the 2ederal li.eserve Banks of Dallas and Kansas City for their

Larc):ziati—on in connection with any consideration they may be giving to the

rilatter.

Approved.

Reports of Standing Committee dated September 20 and 21, 1932,

l'ecorcriA„,---,u4ng approval of the following changes in stock at Federal reserve

1). 11k8.' the recommendations havin been approved by three members of the

Shares

1

1

6

75

60

60

135


lications or SURRENDER of Stock: ( Cont1To. 5. (Contid)

i'llt8t and -----[3;71es National Bank of Gate City, Va.(Cons. of peonies National Bank and j'irstNational I3ank)

1,9i:strict No. 7.ICational Bank, Ackley, Iowa. (Insolvent)

bistrict 1:o. 8.rielid?raon. Lational 3ank, Henderson, Kentucky.

(Insolvent)

C°111Tribi.:Tional :7,an1z, Columbia Heights, Linn.(Insolvent)

Zst t Nrico. 11.4̀8 -first hational Bank of Decatur,

C. by The Jirst National Bank

ttriQt

Texas. (V.L.in Decatur)

1:0. 12.

Bank, ',San _i'rancisco, California.za1,„1

(V.L.Abs. by Pacific National Bailk.)4 t11ational

(Insolvent) Silverton, Oregon.

Shares

20 SO

3C) 36

156 156

18 18

78 78

405

30 435Total 938

.A-o-oroved.

deports of Standing Committee dated September 22, 23, October 1, 3

'4.1ici 4' 1932, recommending approval of the following changes in stock at

reserve banks:

41)11)1,t1.teica. jns for ORIGINAL Stock:l'o• 5.

aton National Bank, Weston, 1. Va.t tr 90

ational Bank in Henderson, N. C. 72 162bi8t

/To 6• .'1'4°11 fi31-71:tal Bank, Johnson City,

blons for ADDITIONAL Stock: --

-atBank of Fleisclunanns, Fleischmanns 2

(Increase in capital and surplus)

Shares

Tenn. 160Total

18

180342

18


1°/6/32 -Al-

TAALZ4,_gons for ADDITIONAL Stock: (Cont'd)Lastzief73_7Clav -

,.'"•11-IY National Bank, Spencer, Iowa.t Increase in surplus)

A--‘cationa for SURRINER of Stock:

at 1T0.t1onai Bank, Kenmore, N. Y. (Decrease

surplu8)7-48 National 3ank, Vreeport, Levi Yori.kDecrease in surplus)

ketriet 3.81311111V-ield National Bank, Springfield, Pa.

(Insolvent)

-1istrict No. 4.

1,r8t alfional Bank, Cairnbrook, a (Insolvent) 30

Cit.azehett -44i°nal 3ank, Yukon, Pa. (Insolvent) 27,- National Bank, Indiana, Pa. (Insolvent) 45

,1)1\1;aitIllet Eo. 5.CitY National Bank, Bluefield, Va. (Insolvent) 35

48°4 County National Bank of Independence,PdoPendence, Va. (Cons. of Grayson CountyIPti°nal Bank of Independence, Va. and Firstational Bank of Troutdale, Va.) 18

1;8t1uona;!.Bank, Sevierville, Tenn. (Insolvent) 45,katriet 7.

pirt,--L. National Bank Joencer, Indiana. (Insolven-G) 45

(TIT!,tional Bank in Sioux Rapids, Iowa.IlEttlZ731vent) 33

111'4

of(V .3orrimerce

' :Iilwaukee, Wisconsin.

e-.413" by Tirst Wisconsin National Bank) 720Total

31r

Shares

3 3Total

300

60

45

21

360

4.5

102

53

45

7981,403

Approved.

deports of Standing Cormaittee dated September 29 and 30, 19:52,Qo ox1di

approval of the following Clayton Act applications:

Samuel B. T.:eisenhelder, for permission to serve atnnlle tills as director of the York Trust Company of York,

" B ania, and as .tor of the Dillsburg National Bank


-42-

, Ix. Guy W Moore, for Permission to serve at the sametrrie as director and officer of the Luzerne National Bank of

.-111zerna, Pennsylvania, and as director of the L:iners Bank ofailkes-Barre, Pennsylvania.

1, Craig B. Hazlewood, for permission to serve at the08taMe, time as director and officer of the First rational BankIlicago, Illinois, and as director and officer of the Lake

"Ore Trust and Savings Bank of Chicago, Illinois.

4ptoyeti:

Approved.

Thereupon the meetin3.. adjourned.

..4/1a7t.

xecutive Cammitt e.

Se crc.:

4

316


19321006_1220p_minutes.pdf

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