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Published by: fedfraser on Apr 25, 2014
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A meeting of the Board of Governors of the Federal Reserve System was held in Washington on Saturday, November 16, 1935, at 11:30 a. m.PRESENT: Mr* Thomas, Vice ChairmanMr. Hamlin Mr. Miller Mr. James Mr* SzymczakMr. Morrill, SecretaryMr. Bethea, Assistant SecretaryMr* Carpenter, Assistant SecretaryThe Board acted upon the following matters:Letters to the chairmen of the Federal Reserve Banks of Bostonand Richmond stating that the Board approves the establishment withoutchange by the banks on November 13 and 14, 1935, respectively, of therates of discount and purchase in their existing schedules.Approved unanimously.Memorandum dated November 12, 1935, from Mr. James submitting a letter dated November 5 from Mr. Helm, Deputy Governor of the Federal Re-serve Bank of Kansas City, which requested approval of changes in the personnel classification plan of the bank to provide for the new position of "Statistician and Clerk" and the discontinuance of the position of "Typist-Clerk", both in the Statistical Division of the Federal Reserve Agent's Department. The memorandum stated that Mr. James had reviewed the proposed changes and recommended that they be approved.Approved unanimously*Letter to the "First National Bank in Santa Ana", Santa Ana, California, reading as follows:"The Board of Governors of the Federal Reserve System has given consideration to your application for permission
"to exercise fiduciary powers, and grants you authority to act, when not in contravention of State or local law, as trustee, executor, administrator, registrar of stocks and bonds, guardian of estates, assignee, receiver, committee of estates of lunatics, or in any other fiduciary capacity in which State banks, trust companies or other corporations which come into competition with national banks are permitted to act under the laws of the State of California, the exercise of all such rights to be subject to the provisions of the Federal Reserve Act and the regulations of the Board of Governors of the Federal Reserve System."This letter will be your authority to exercise the fiduci-ary powers granted by the Board pending the preparation of a formal certificate covering such authorization, which will be forwarded to you in due course."The Board's grant of fiduciary powers to you has been given on the assumption that The First National Bank of Santa Ana, California, will by appropriate proceedings be placed in voluntary liquidation as soon as it is possible to do so and the Board feels that, if you are tendered any of the trusts now held by such bank, you should carefully scrutinize their condition and that you should not accept any of such trusts which through their assumption may be detrimental to your interests."Approved unanimously.Letter to Mr* E. J. Walsh, Vice President, Third National Bank, Nashville, Tennessee, reading as follows:"Your letter of October 25, 1935, addressed to the Comptroller of the Currency, has been referred to the Board of Governors of the Federal Reserve System for reply. lou request advice as to whether an increase in the capital of the Third National Bank, Nashville, Tennessee, will make it necessary for the bank to increase its surplus in order to continue to exer-cise trust powers, in view of the provision of the laws of the State of Tennessee requiring a State bank to have a surplus 'equal to twenty per cent of its capital stock* to entitle it to receive appointment to *accept and execute trusts'."The records of the Board of Governors of the Federal Re-serve System show that, on July 21, 1927, the Third National Bank was granted permission to act in all of the fiduciary capacities authorized by section 11 (k) of the Federal Reserve Act and that, at the time of granting such permission, the bank had the capital and surplus required by that Act to exercisetrust power s.
11/16/35 -2-
"In connection with the issuance of permits authorizing national banks to exercise trust powers, section 11(k) of the Federal Reserve Act .provides as follows:•That no permit shall be issued to any national banking association having a capital and surplus less than the capital and surplus required by State law of State banks, trust companies, and corpora-tions exercising such powers.'"The Board has heretofore taken the position that this re-quirement is applicable only at the time of the granting of permission to a national bank to exercise trust powers. In the circumstances, the Board is of the opinion that the Third National Bank, Nashville, Tennessee, may lawfully continue the exercise of trust powers under the permission heretofore granted to it by the Board even though it increases its capital without making a corresponding increase in its surplus sufficient to comply with the provision of the laws of Tennessee referred to above."Approved unanimously.Letter to Mr. Austin, Federal Reserve Agent at the Federal ReserveBank of Philadelphia, reading as follows:"In connection with its consideration of the application of 'The First National Bank of Philadelphia*, Philadelphia, Pennsylvania, for a voting permit entitling such bank to vote the stock which it owns or controls of the 'First Trust Company of Philadelphia*, Philadelphia, Pennsylvania, the Board has determined that such applicant is not engaged, directly or indirectly, as a business in holding the stock of, or managing or controlling, banks, banking associations, savings banks, or trust companies, within the meaning of section 2(c) of the Banking Act of 1933, as amended by section 301 of the Banking Act of 1955, and that, accordingly, the applicant is not a holding company affiliate for any purposes other than those of section 25A of the Federal Reserve Act.■Inclosed herewith is a letter to the applicant advising it concerning the Board* s action in this matter. If, for any reason, you believe that this matter should be reconsidered by the Board, please communicate with the Board at once. Other-wise, you are requested to transmit the inclosed letter to the applicant. A copy of the letter is also inclosed for your files.■As you will note, the Board expressly reserves the right to make a further determination of this matter at any time on the basis of the then existing facts. In this connection, it
11/16/55 -5-

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