19340629_minutes.pdf

1975

A meeting of the Federal Reserve Board was held in Washington

on Friday, June 29, 1934, at 12:30 p. m.

PRESENT: Er. Black, GovernorMr. HamlinEr. MillerMr. JamesEr. ThomasMr. Szymczak

The Board met in executive session and considered the follow-

ing matters:

It was determined by the Board that steps should be taken to

l'ePlace Messrs. J. H. Case, E. L. Stevens, and C. C. Walsh, as Federal

Reserve Agents at the Federal Reserve Banks of New York, Chicago, and

Dallas, respectively, at the end of the current year.

It was also decided by the Board that Messrs. R. L. Austin and

14, L. McClure, Federal Reserve Agents at the Federal Reserve Banks of

l'hiladelphia and Kansas City, respectively, should be replaced at the

ezPiration of their present terms as Class C directors, both of which

1411 expire on December 31, 1935.

Governor Black advised the other members present that Mr.

korrill had reported to him that, in accordance with the action taken

et the meeting of the Board on June 27, 1934, he had negotiated further

Idth Mr. Mackintosh of Weaver Bros., Inc., local agents for the owners

ot the Washington Building, and that Er. Mackintosh had stated that he

11°111d submit to the miners of the building, with the request that they

441'°ve, a proposal which would provide that all of the space on the

4I'th floor of the building and about 1,700 square feet of space on the

/*xth floor of the building at the end of the New York Avenue wing

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

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V29/34 -2-

Would be leased to the Federal Reserve Board for a total consideration

Of '40,000 per annum under a lease which would run for a period of one

Year from the date upon which the proposed space is made available to

the Board, and, if not terminated at the end of that period by ninety

days prior notice to the lessor, mould run for a further period of two

Years, subject to cancelation at any time on like notice of ninety days

by the Federal Reserve Board. The lease mould also provide, Governor

Black said, that the Board would have the right to make any changes in

eZisting partitions or alterations in the space covered by the lease at

its own expense, and, in the event new partitions were installed, they

W°u1d be of the metal type of movable partitions now used in certain por-

tions of the building; would be erected at the expense of the Board; and

11150n vacation of the space by the Board would become the property of the

°liners of the building.

After discussion, the Governor was authorizedto execute a lease on behalf of the Board in accor-dance with the proposal outlined above.

Telegram dated June 29, 1934, from Mr. Case, Chairman of the Fed-

Olbal Reserve Bank of New York, stating that the board of directors of the

bank, at its meeting on June 28, gave careful consideration to the choice

Of an industrial advisory committee under the provisions of subsection

(4) of section 13b of the Federal Reserve Act, as amended by the Act of

jIllae 10, 1934, and voted, subject to the approval of the Federal Reserve

130ard, to invite the following to serve as members of such committee for

the second Federal reserve district:

Eduard J. Barcalo President, Barcalo Manufacturing Company,Buffalo, New York.


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6/29/34

John B. Clark

John Hartford

C. R. Palmer

alliam H. Pouch

-3-

President, Clark Thread Company,Newark, New Jersey.

President, Great Atlantic and Pacific Tea

Company, New York, New York.

President, Catlett Peabody and Company,

Troy, New York.President, Concrete Steel Company,

New York, New York.

The telegram stated also that the bank has not been able to consult all

of the persons named as to whether they will serve and the bank may find

it necessary to malm chan:es in the list; that the directors therefore,

also authorized the officers to invite the followinf: to serve as members

of the committee in the event that any of the five first named should not

be able to serve; and that a proval is requested of the proposed primary

and alternative appointments:

Edward J. Noble President, Life Savers, Inc.,

Port Chester, New York.

Carleton H. Palmer President, R. Seuibbs and Sons,

New York, New York.

William B. -;;arner President, McCall Corporation,

New York, Lew York.

It was voted to advise Mr. Case that the Board approves

the appointment by the board of directors of the bank of

I-essrs. Barcalo, Clark, Hartford, Palmer, and Pouch, as members

of the industrial advisory committee for the second Federal re-

serve district; and that, in the event any of the above named

Persons are unable to serve as members of the committee and fur-

ther appointments are necessary to obtain the full membership

of five on the committee, the Board a proves the appointment of

Messrs. Noble, Palmer and,/or Warner.

Telegram dated June 29, 1934, from Lire Stevens, Chairman of the

l'ederal Reserve Bank of Chicago, stating that the executive committee of

he bank was authorized by a resolution of the board of directors last

l'"k to act for it in the appointment of an industrial advisory committee

114der the provisions of the industrial credit act; and that the executive

.e°Illilittee net today and appointed the following:


19786/29/34 -.4-.

William R. Odell, Jr. Treasurer, International Harvester Companyof America, Chicago, Illinois.

George W. Young Vice President, Marshall Field & Co.,Chicago, Illinois.

Max Epstein Chairman, General American Tank Car Cor-poration, Chicago, Illinois.

R. R. Monroe President, Des Moines Foundry andLlachinery Co., Des Moines, Iowa.

Major Howard Greene President, Milwaukee Drug Co.,Milwaukee, Wisconsin.

Alternate for Chicago members:Eduard Landsberg President, United States Brewing Co.,

Chicago, Illinois.Alternates for members outside of Chicago:A. C. Colby President, Chicago and Calumet District

Transit Co., Hammond, Indiana.Harold H. Seaman President, Seaman Body Corporation,

Milwaukee, Wisconsin.

The telegram stated also that Mr. Stevens had informally communicated

Vith all of the proposed regular appointees, who will accept if appoint-

tlent is tendered; that the bank has not yet communicated with the pro-

Posed alternates; and that the early approval by the Board of the persons

4641ed would be appreciated in order that the committee may begin its work

at once.

It was voted to advise Mr. Stevens that the Board approvesthe appointment of Messrs. Odell, Young, Epstein, Monroe andGreene as members of the industrial advisory committee of theseventh Federal reserve district, and that, in view of the factthat the law does not authorize the appointment of alternates,and also in view of the requirement that the committee be com-posed of not less than three nor more than five members, it isnot believed that alternates for members of the committee maylegally be appointed.

At the conclusion of the executive session, the Governor advisedthe ,

Apoard's secretary, Mr. Yorrill, as to the foregoing proceedings and

Nuested him to record the actiona as set forth above.

The minutes of the meetings of the Federal Reserve Board held on

41410: 20 Find 22, 1934, were approved.

The Board then considered and acted upon the following matters:


6/29/34 NO 511110

1979

Letter dated June 28, 1934, from hr. Sproul, Secretary of the

Federal Reserve Bank of New York, advising that, at a meeting of the

board of directors on that date, no change was made in the bank's

existing schedule of rates of discount and purchase.

Without objection, noted with approval.

Telegraphic reply to a telegram received today from Governor

liarrison of the Federal Reserve Bank of New York, requesting the ap-

proval of the Board of his taking hr. John C. Albes, an employee in

the bank's foreign information division, with him on his trip to Europe.

The reply stated the Board approves Er. Albes accompanying Governor

liarrison on the trip.

Approved.

Telegram to Er. Logan, Deputy Governor and General Counsel of

the Federal Reserve Bank or New York, reading as follows:

"Your telegram. Board approves salary at rate of $900 permonth fixed by your board of directors for Rufus J. Trimble astemporary assistant counsel your bank."

Approved.

teualcLetter to hr. Sailer, Deputy Governor of the Federal Reserve

of Nevi York, reading as follows:

"The Federal Reserve Board approves the recommendation con-tained in your letter of June 22 that the temporary employment ofLiSS Anna M. Rock as Stenographer, Administration Department,Stenographic Division, Stenographic Section, at an annual salaryof 32,280, which is $480 in excess of the salary range providedfor the position, be continued for an additional period of sixmonths from July 1, 1934."

Approved.

Lemorandum dated June 27, 1934, from the Committee on Salaries


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6/29/34 -6-

and Expenditures, submitting a letter dated June 22 from hr. Fleming,

Deputy Governor of the Federal Reserve Bank of Cleveland, mhich re-

quested approval of a change in the personnel classification plan of

the Pittsburgh branch to provide for the naw position of "maid" in

the building department. The memorandum stated that the committee had

reviewed the proposed chance and recommended that it be approved.

Approved.

Telegram to lir. Stevens, Chairman of the Federal Reserve Bank

Of Chicago, reading as follows:

"Your letter June 22. Board approves salaries at rates of3l2,000 and c?6,500 per annum fixed by your board of directorsfor Mr. Ralph H. Buss as managing director of your Detroit branch,and L:r. Arthur L. Olson as assistant deputy governor of your bank,respectively, both effective July 1, 1934."

Approved.

Letter to L:r. Williams, Federal Reserve Agent at the Federal

Reserve B ank of Cleveland, reading as follows:

"Receipt is acknowledged of Mr. Fletcher's letter of June15, 1934, advising of certain amendments which the Citizens TrustCompany, Toledo, Ohio, proposes to make in its Articles of Incor-poration. It does not appear that these amendments affect in anyway the bank's status as a member of the Federal Reserve System,and, provided they are effected in accordance with the provisionsOf the State law, the Board interposes no objection thereto. ItWill be appreciated, however, if you will advise the Board whenthese amendments become effective."

Approved.

Letter to Yr. Walsh, Federal Reserve Agent at the Federal Re-

4srve Bank of Dallas, reading as follows:

"Reference is made to your lotter of May 28, 1934, transmit-ting the request of the Southern Arizona Bank and Trust Company,


(!) 6/29/34 -7-

"Iucson, Arizona, for an extension of time of six months fromJune 30, 1934 within which the bank may dispose of its holdingsof stock in the Tucson Title Insurance Company, which was acquiredby the bank on December 30, 1933, in connection with a debt pre-viously contracted.

"Condition numbered 7 prescribed by the Board in connectionwith the bank's application for membership provides that the bankshall not, except with the permission of the Board, purchase oracquire the stock of any corporation except in satisfaction orprotection of debts previously contracted in good faith and thatall stocks thus acquired shall be disposed of within six monthsfrom the date on which it was acquired unless the time is extendedby the Board for good cause shown. It is noted that the bank hasrequested the extension of time in order that the stock of theTucson Title Insurance Company may be disposed of without sacri-fice.

"In view of such information and your recommendation, theBoard grants an extension of time to December 30, 1934, withinwhich the Southern Arizona Bank and Trust Company may dispose ofits holdin;s of stock in the Tucson Title Insurance Company, andit is requested that you advise the bank accordingly."

Approved.

Letter to Li. O'onnor, Comptroller of the Currency, reading

as follows:

"Reference is made to the Board's letter of November 9, 1933,with which was inclosed a copy of a letter to The First Nationalsank of Belfast, Belfast, Yaine, in connection with that bank'sapplication for permission to exercise fiduciary powers, fromWhich it will be noted that only limited authority was granted,and that action on the application for full fiduciary powers wasdeferred pending an examination of the now-bank after it had beenin operation for at least one year.

"Ihere is transmitted herewith a letter dated June 20, 1934,from the Assistant Federal Reserve A7ent at Boston, inelosinf; acopy of a letter from the President of The First National Bank ofBelfast, requesting that its application for full fiduciaryPowers be reconsidered, or that the bank at least be granted thespecific authority to act as executor under a certain will. Youwill note that the Assistant Federal Reserve Agent has advisedthat la-. Williams, the Chief National Bank Examiner, and the Com-mittee of Officers of the Federal Reserve Bank of Boston are ofthe opinion that the Bank should now be granted full fiduciarypowers, and, in the circumstances, the Board waives the require-ment previously made and will consider the application for full


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6/29/34 -8-

"fiduciary powers on the basis of the new report of examinationwithout awaiting the expiration of the stipulated one year period.The Board will, therefore, be pleased to have your recommendationon the subject bank's application for full fiduciary powers in thelight of the recent examination by your representatives.

"Kindly return the attached papers with your reply."

Approved.

Letter to Lr. O'Connor, Comptroller of the Currency, reading

as follow:

"This refers to the memorandum of Acting Comptroller of theCurrency Await of June 14, 1934, relative to the proposed recapi-Lalization of 'The Fulton County i,ational Bank and Trust Companyof Gloversville', Gloversville, iiew York. It is noted that onJune 22, 1932, the directors of the applicant bank executed ajunior lien agreement in the amount of c,100,000 covering a speci-fied list of the bank's securities. While the facts involved inthis matter are not clear, it appears that this agreement expiredon June 21, 1934, and that the directors desire to have the bankwrite up the book value of certain bonds in connection with whicha junior lien agreement was executed and return ,„;100,000 to thedirectors executing such agreement, the amount so returned to beused to purchase Class B preferred stock. In a letter to youdated June 1, 1934, Chief National Bank Examiner Roberts raiseda question as to the legality of this part of the proposed planand stated that it was his opinion that a write up of the entireamount of y100,000 would be an ultra vires transaction.

"It is assumed that your office has considered the legalityof that part of the proposed plan out of which such questionarose, but, before acting on this case the Board would appreciatefurther advice as to the facts involved together with a copy ofany opinion rendered by your counsel concerning the legality ofthat portion of the plan referred to above and a copy of thejunior lien agreement."

Approved.

Letter to L:r. O'Connor, Comptroller of the Currency, reading

at follows:

"In accordance with Acting Comptroller Await's recommenda-tion, the Federal Reserve Board approves a reduction in the com-mon capital stock of 'The Burlington County National Bank ofLedford', hadford, New Jersey, from ;100,000 to $50,000, pursuant


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6/29/34 -9-

"to a plan which provides that the bank's capital shall be in-creased by , 50,000 of preferred stock to be sold to present stock-holders and directors at a premium of 25,000, that the releasedcapital shall be used to eliminate a correspondins amount of un-satisfactory assets, and that the premium on the sale of preferredstock shall be credited to surplus, all as set forth in 1:1r.Awialt's letter of June 12, 19;p4.

"The Board's approval is predicated upon the understandingthat the preferred stock which is to be sold at a Premium shallbe retirable at a price not in excess of its par value."

Approved.

Letter to Mr. O'Connor, Comptroller of the Currency, reading

as follows:

"In accordance with Mr. Awalt's recommendation, the FederalReserve Board approves a reduction in the common capital stock of'The American Rational Bank of Vincennes', Vincennes, Indiana,from .500,000 to ,?250,000, pursuant to a plan which provides thatthe bank's capital shall be increased by 1.50,000 of preferredstock to be sold to the Reconstruction Finance Corporation, andthat the released capital, together with a portion of the bank'sundivided profits and/or reserve accounts, shall be used to elim-inate approximately ,137,300 of substandard assets and an %85,000loss which the chief national bank examiner states will be sus-tained through the assumption of the deposit liabilities of thebank's affiliate, The Citizens Trust Company of Vincennes, all asset forth in Yr. Awalt's memorandum of June 8, 1934 and as out-lined in the memorandum dated April 24, 1034 of a conference be-tween Chief National Bank Examiner I:eill and representatives ofthe applicant bank."

Approved.

Letter to i. O'Connor, Comptroller of the

follows:

Currency, reading

. "In accordance with Acting Comptroller Awalt's recommenda-tIon, the Federal Reserve Board approves a reduction in the com-/lion capital stock of the ';qestern National Bank of Duluth',Duluth, -innesota, from v150,000 to plOO,OO, Pursuant to a plan7.fl'aoh provides that the bank's capital shall be increased by'0,000 of preferred stock to be sold to the Reconstructionlance Corporation, and that the released capital shall be usedtO eliminate a corresponding amount of unsatisfactory assets,


6/29/31 -10-

"all as set forth in Li'. Await's memorandum of June 15, 1934."

Approved.

Letter to 1.jr. O'Connor, Comptroller of the Currency, reading

as follows:

"In accordance with Lir. Awult's recommendation, the FederalReserve Board approves a reduction in the common capital stockof 'The Burns National Bank of Durango', Durango, Colorado, from"c100,0u0 to ,50,000, pursuant to a plan which provides that thebank's capital shall be increased by ';.50,000 of preferred stockto be sold to the Reconstruction Finance Corporation, and thatthe released capital shall be used to eliminate a correspondingamount of unsatisfactory assets, all as set forth in Fr. Analt'smemorandum of June 9, 1934."

Approved.

Letter to 1.x. O'Connor, Comptroller of the Currency, reading

as follows;

"In accordance with Er. Awult's recommendation, the FederalReserve Board approves a reduction in the common capital stockof 'The First hational Bank of Bancroft', Bancroft, Nebraska,from 50,000 to 25,000, Pursuant to a plan which provides thatthe bank's capital shall'be increased by ,;.25,000 of preferredstock to be sold to the Reconstruction Finance Corporation, andthat the released capital shall be used to eliminate a corre-

sponding amount of substandard assets, all as set forth in 12..Awalt's memorandum of June 18, 1931."

Approved.

Letter to 1:,r. O'Connor, Comptroller of the Currency, readinf,,

O. follows:

'In accordance with Acting Comptroll,r Awalt's recommenda-tion, the Federal Reserve Board approves a reduction in the commoncapital stock of the 'First I:ational Brank in Rockwall', Rockwall,lexas, from 25,000 to ;20,000, pursuant to a plan which providesthat the bank's capital shall be increased by ,;30,000 of preferredstock to be sold to the Reconstruction Finance Corporation, andthat the released capital shall be used to eliminate a corre-

spondint; amount of undesirable assets, all as set forth in


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6/29/34 -11-

"Awalt's letter of June 13, 1934."In this connection it has been noted from your files that

the proposed plan provides for the elimination of all itemsclassed as doubtful or loss by your examiner, amounting to ap-proximately .)14,565, by the use, in addition to the released cap-ital, of a portion of the bank's surplus and undivided profitsand the proceeds of a note of the affiliated Rockwall LortgageCompany for ,17,500, and it is assumed that such eliminationswill be required by you as a part of the recapitalization pro-

Approved.

'-,elegram to LI-. Sargent, Assistant Federal Reserve Agent at

the Federal Reserve Bank of San Francisco, reading as follows:

"Receipt is acknowledged of your telegram of June 26, 1934,recommending and requesting Board's approval of a proposed reduc-tion in contmon capital stock of 'Butte County Bank', Arco, Idaho,from \35,0(),0 to 25,000, pursuant to a plan which provides forsale of ,,10,000 preferred stock to Reconstruction Finance Corpora-tion.

"Since entire amount of released capital is to be appliedtoward elimination of losses and depreciation and after proposedreduction and increase bank's capital will be equal to amount ofits capital prior to such reduction, hot,rd offers no objectionto reduction in capital in amount indicated, with understanding,of course, that your counsel is satisfied as to legal aspects ofcase, and that transaction has the approval of Commissioner ofFinance of State of Idaho. In this connection, your attention iscalled to Board's mire of June 23, 1934, -J:-7933.

"It is assumed that entire amount of reduction in capitalstock will be used to eliminate estimated losses and depreciation,and that no part of reduction will be used to reduce indebtednessof president, mhos() loan, although classified as slow is consid-ered collectible.

"It is assumed also that in connection with the Board'sPolicy as expressed in the letter of April 6, 1934, ..-7848, youwill endeavor to obtain the elimination of the estimated lossesas shown in the report of examination as of Liarch 2, 1934. Inthis connection it has been noted that on the date of examinaiiorthe bank was carrying reserves of :.,12,500 for depreciation in se-curities and in banking house and furniture and fixtures. Thehoard feels that estimated losses and depreciation listed forelimination have not been properly eliminated by the setting upof reserves which are included with the bank's capital accountsin its published statements. If assets listed for elimination


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6/29/34 -12-

"are not charged off but are offset by reserves such reservesshould be valuation reserves and deducted from the assets againstwhich allocated thereby shoving only the net amount of the assetsin published statements."

Approved.

Telegram sent this morning to Li-. Curtiss, Federal Reserve

Agent at the Federal Reserve Bank of Boston, with the approval of all

of the appointive members of the Board except Er. Miller. The tele-

gram read as follows:

"Re Board's ANCIGAR telegram June 15, 1934, regarding 'In-dustrial Trust Company' and 'The hechanics National Bank ofProvidence', both of Providence, Rhode Island, Board amends con-dition C Third to read as follows 'Prior to December 31, 1934,the undersigned will reduce the amount at which the stock of In-dustrial holdinr;s, Inc. was carried on its books on January 6,1934, by at least four hundred thousand dollars (400,000), andduring the year 1935 will further reduce the carrying value ofsuch stock by at least four hundred thousand dollars (400,000),and prior to January 1, 1936, will have the assets owned by In-dustrial holdings, Inc. appraised in a manner mutually satis-factory to the Federal Reserve Agent and the undersigned, andupon the basis of such appraisal and within the time specifiedby the Federal Reserve Agent, will make such adjustments in thecarrying value of its investments in securities issued by andadvances to Industrial Holdings, Inc. as shall be requested bythe Federal Reserve Agent, subject to the approval of the Fed-eral Reserve Board' Board is unwilling to amend requirementcontained in condition C First in ANCIGAR telegram of June 15,1934. Please advise the Industrial Trust Company accordingly."

Approved.

Telegram to 1.1r. Peyton, Federal Reserve Agent at the Federal

Reserve Bank of Minneapolis, stating that the Board has given consid-

eration to the application of the "Northwest Bancorporation", Linne-

4P°1i8, Einnesota, for a voting permit under the authority of section

544 of the Revised Statutes of the United States, as amended, entitl-

-u such organization to vote the stock which it owns or controls in


'11 4.)c.1Ni._IL 4„FL) e-

6/29/34 -13-

"The First National Bank of Marshall", Marshall, Minnesota, and has

authorized the issuance of a limited permit to the applicant for the

following purposes:

"At any time prior to September 1, 1934, to act upon a pro-posal or proposals to reduce the bank's common stock from fiftythousand dollars (c50,000) to twenty-five thousand dollars(425,000) and to make such amendments to the bank's articles ofassociation and to take such other action as is necessary to ef-fect such purpose; such proposal or proposals to be in accordancewith a plan or plans which shall have been approved by the appro-priate supervisory authorities and which shall be satisfactoryto the Federal Reserve Agent at the Federal Reserve Bank of Min-neapolis."

The telegram also authorized the agent to have prepared by counsel for

the Federal reserve bank, and to issue to the Northwest Bancorporation,

4 limited voting permit in accordance with the telegram.

Approved, together with a letter to Er.O'Connor, Comptroller of the Currency, readingas follows:

"In accordance with the recommendation of Acting Comptrollerof the Currency Await, the Federal Reserve Board approves a re-duction in the common capital stock of 'The First National Bankof Marshall', Marshall, Minnesota, from $50,000 to $25,000, pur-suant to a plan which provides that the released capital shall beused to eliminate a corresponding amount of unsatisfactory assets,all as set forth in Er. Awalt's memorandum of June 13, 1934."

Letter to Er. Williams, Federal Reserve Agent at the Federal

Reserve Bank of Cleveland, reading as follows:

"This refers to the recent telephone conversation between Mr.Fletcher, Assistant Federal Reserve Agent, and Mr. Paulger, Chiefof the Board's Division of Examinations, with regard to theamount of depreciation in securities to be charged off or other-vise eliminated by State member banks. The Board's letter of De-cember 9, 1933, X-7705, stated in detail the general policy oftreating appreciation and depreciation in securities in connec-tion with applications for membership, and the Board's letter ofApril 6, 1934, X-7848, expressed the opinion that State member


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6/29/34

"banks should observe the standards prescribed for admission tomembership in the System and that accordingly whenever possiblea State member bank should charge off or otherwise eliminatenot only all losses in loans and other assets and all deprecia-tion in stocks and defaulted bonds, but also depreciation in allother securities except the four highest grades as defined inthe letter.

"The method of determining net depreciation to be eliminatedafter allowances for appreciation in other securities, as sotforth in the Board's letter of December 9, 1933, is likewise ap-plicable to the determination of depreciation in securities tobe eliminated after the examinations of State member banks.There may be, of course, instances in which appreciation is insuch volatile issues that conservative banking practice wouldnot consider such appreciation an appropriate offset to depreci-ation in remaining securities. Such cases, however, are left tothe determination of the examiners and supervisory authorities.

"In a recent letter, the Board has advised the Federal Re-serve Agent in another district as follows:

'In this connection it has been noted that estimatedlosses as classified in the report of examination includedc$89,086.30, the total amount of depreciation in lower gradesecurities, although the total net depreciation in the invest-ment account amounted to only 61,555.58 on account of appre-ciation in the higher grade bonds. In the circumstances, the2oard believes that it would be appropriate to confine the re-quest for elimination of depreciation in securities to thenet depreciation in the entire account."

Approved, together with a letter to allFederal reserve agents inclosing a copy ofthe letter to Yr. Williams.

Letter to Mr. Walsh, Federal Reserve Agent at the Federal Re-

serve Bank of Dallas, reading as follows:

"Receipt is acknowledged of your letter of May 26, 1934with reference to the Clayton Act application of Er. J. Id. Beganof Lewisville, Texas, for permission to serve as director and of-ficer of The Denton County National Bank of Denton, Texas, andEIS director and officer of Lewisville State Bank., Lewisville,iexas, together with copies of letters addressed to you bypecan, Mr. R. L. Barns, Cashier of The Denton County NationalBank of Denton and Mr. A. Hayes, Cashier of the Lewisville StateBank.

"It is noted that the Lewisville State Bank has no loansat the present time secured by stocks and bonds, that the bank


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6/29/34 -15-

"has had no such loans since January 1, 1934, and that the Boardof Directors of such bank by resolution adopted May 14, 1934provided that 'During the incumbency of J. W. Degan as an of-ficer, director, or employee of this bank and for as long as thesaid J. W. Degan is an officer, director or employee of theDenton County National Brualc of Denten, Texas, the active officialsor employees of the Lewisville State Bank of Lewisville, Texas,shall not make may loans secured by stocks or bonds nor permit itto be done by anyone representing the said Lewisville State Bank.'

"In view of these facts it appears that Mr. Degan's relation-ships conform to the provisions of Section 8A of the Clayton Act;and it appears also that 1,1r. Degan's relationships do not camewithin the prohibitions of Section 8 of such act. Therefore nofurther action appears necessary in this matter.

"It is further noted in your letter that several conferenceshave been held with Mr. Degan at which the necessity for an im-provament in the condition of The Denton County National Bank ofDenton has been emphasized; and that at a conference with Mr.Degan held May 25, 1934, at which Chief National Bank ExaminerCollier was present, Ur. Degan's connection with the bank and hisresponsibility for its present unsatisfactory condition were dis-cussed fully, and that rhile Yr. Collier was inclined to give Er.Degan further time in which to work out these matters, he informedIr. Degan that something must be done at a very early date. Inthis connection the Board is desirous that you continue your en-deavors, in cooperation with the Chief National Bank Exerrinor, tobring about a strengthening of the management and a correction ofthe conditions which have given rise to the examiner's criticisms."

Approved.

Letter to an applicant for a permit under the Clayton Act, ad-

.113i-lag of approval of his application as follows:

14r. H. F. Owen, for permission to serve at the same time as a di-rector and officer of the State Bank of Taft, Taft, California,and as a director of the First National Bank in Bakersfield,Bakersfield, California.

4Pproved 3

Approved.

Thereupon the meeting adjourned.

Secretary.

Governer.


19340629_minutes.pdf

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