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0 P Y

X-7351

FEDERAL 3ES5MV6

BA H OF HEW

YORK

February

24 , 1 933 .

Dear Governor Meyer:

In

order

t o

protect certain banks

in New

Jersey

a law was

recently

introduced

and

passed

i n

that state authorizing

th e

supervisor

o f

banks, when-

ever

i n h i s

judgment circumstances warrant,

t o

permit banks

t o

defer payment

• f a

spec i f i ed port ion

of

their deposi ts

f o r

such time

as he may

determine.

Such banks

may

accept

new

deposits which will

not be

subject

t o

res tr i c t i ons

b u t

shal l

b e

payable

i n

f u l l upon demand.

So far a s w e

have been informed, th i s

l a w h a s

been availed

of by

only

one

i n s t i t u t i o n

in our

d i s t r i c t ,

th e

Trust Company

of ,

Hew

Jersey,

a

member bank.

The

enclosed photostatic copy

(a) of a

circular

issued under date

o f

February

21 , 1933 by the

Trust Company

t o i t s

depositors quotes

the New

Jersey

A c t o f

Assembly

# 1 9 5 ,

known

a s t h e

Altman

Bi l l and n o t i f i e s i t s depositors that i t i s a v a i l i n g i t s e l f o f t h e p e r -

mission granted b y t h e Commissioner of Banking and Insurance t o operate under

t h e

provisions

of the ac t a s o f the

close

of

business Tuesday, February

21 ,

1 9 3 3 .

Also enclose d

ar e the

following;

(b )

Pho tos tat ic copy

o f

letter, February

2 3 , 1 9 3 3 ,

from

t h e Trust Company to Mr. L. F, Sai l er ,

deputy governor

of

t hi s bank, no ti fy in g

u s

that

th e trust company i s operating under the New Jersey

A c t o f

Assembly

#19 5 , and

instructing that

a l l

deposits from th e beginning of business Thursday,

February

23 , 1933 , be

kept separate

and

apart from

t h e general assets of the company and maintained i n

l iquid funds.

( c )

Copy

o f

letter from

Mr.

Sai l er

t o t h e

Trust

Company, under date

o f

February

24 , 193 3 .

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: 3 9

X-7351

Federal Reserve Sank of Hew York 2 l 2/24/33.

(d )

Copy

o f

letter from

th e

Deputy Commissioner

of the

Department of Banking and Insurance, Hew Jersey,

State

of Hew

Jersey,

to Mr. B. M.

Sidney , ass i s t -

a n t deputy governor of this bank, enclosing

( e )

Copy

o f a

letter which

t h e

department

i s

sending

t o

certa in o f i t s i n s t i t u t i o n s r e Chapter 27 of th e

Laws of 1933 .

A l l o f th e

foregoing

i s

sent

you so

that

you may be

kept currently

informed o f what i s taking plac e along th e l i n e s o f recent legis lation which

affects banks in our d i s t r i c t .

A t this juncture i t appears probable that only those banks which

have practical ly no liquid resources wil l avail themselves of the provisions

o f t h i s a c t , s o that i t i s d i f f i c u l t to say just what i t s e f f e c t on the public

mind will

b e .

I understand that Mr. Logan h a s furnished y o u with copies of the

*Robinson b i l l pass ed by the Assembly of the State of Hew York on January 31,

1 9 3 3 .

Faithful ly yours,

(Signed)

J. H.

CASE

Chairman.

Honorable Eugene Meyer,

Governor, Federal Reserve Board,

Washington, D. C.

enclosures

(5)

•Th is b i l l became law on February 21 , 1 933 , by signature of the Governor.

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X-7351-a

C O P Y (A)

TRUST COMPACT

, IT. J .

TO OUH DEPOSITORS: February 21 , 19 33 .

The Legis lature and. the Governor of the State of New Je rs ey , have

deemed i t advisable t o enact th e f o l lo w in g b i l l t o safeguard th e depositors

an d banking structure of the State of New Jersey:

An Act conc erni ng banks, tr us t companies and savings banks.

B e i t enacted b y t h e Senate and General Assembly o f t h e State o f

New Jersey:

The Commissioner of Banking and Insurance i s hereby authorized

an d

empowered

i n

addit ion

t o a l l

other powers, whenever

i n h i s

judgment

th e circumstances warrant i t , t o authorize a n y a nd a l l banks, trust com-

panies and savings banks under h i s j u r i s d i c t i o n .

(a) To extend f o r a period of ninety days, and f o r a further period

i f h e deems i t expedient, payment of any time accounts where notice o f

withdrawal h a s been given or may hereaf ter be given.

(b) To

authorize

th e

postponement

f o r a n y

length

o f

time

of the

payment

of any

proportion

of the

depos i t s

i n

demand accounts

o f a n y i n -

dividual, f irm

or

corporation

as he may

deem necessary

and

expedient,

t o

be determined by him according t o t h e a b i l i t y of any bank, t rus t company

savings bank to pay such withdrawals.

(c ) To authorize a l l such banks, t ru s t companies and savings banks

t o

thereafter receive

new

deposits which shall

be

segregated from

t h e o l d

depos i t s ,

and

said

ne w

deposits shal l

not be

subject

t o t h e

r e s t r i c t i o n s

or

l imita t ions here in or that may hereaf ter be imposed by the Commissioner

of Banking and Insurance, pursuant to the provis ions herein , an d sa id new

deposits shal l b e invested i n such liquid assets a s may be approved by the

Commissioner o f Banking and Insurance i n order t ha t banks, t rus t com*

panies an d savings banks may a t a l l times have su f fi ci en t funds t o meet

th e demands on such new depos i t s i n accordance herewith*

( d )

Whenever

t h e

Commissioner

o f

Banking

and

Insurance shall

authorize

and

empower

an y

bank, t rus t company

or

savings bank

t o a c t

under

th e

prov is ions

o f

t h i s

a c t , h e i s

hereby empowered

t o

make

and

adopt such rules

and

regu la t ions

as he may

deem proper

f o r t h e

protect ion

of the i n s t i t u t i o n and may require daily reports i n detail touching their

f inancia l condit ion.

This a c t shall take effect immediately.

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. 2 ***

4 1

X-7351-a

STAT0S5HT

The design of the above a c t i s t o permit th e Commissioner of

Banking

and

Insurance

to

make rules

and

regulations

f o r t h e

purpose

of

protec t i ng

n o t

only

th e

bank

b u t i t s

deposi tors.

The

following statement

was

issued

by

Charles

H.

Plenty, president

of the Hew

Jer sey Bankers Ass oci ati on,

i n

explaining

th e

purpose

of the

emergency bank b i l l :

The Altaian b i l l , passed by the Hew Je rs ey Legi sl at ur e, Lionday,

February 20 , 193 3 , i s a law somewhat similar to that of Hew York State,

and permits th e Bank Commissioner where i n h i s judgment a bank may have

to o large a percentage of frozen as se ts , to afford such bank a reason-

able time t o p a y i t s depos i ts by requiring such depositors t o present a

ninety-day notice o f intent ions to withdraw savings accounts, a nd p e r -

mitting checking depositors to withdraw such percentage o f their deposi ts

a s i n h i s

judgment li qu id a s s e ts would permi t.

The

object

o f th e

b i l l

i s t o

safeguard

th e

depos i tors

i n a

p e r f e c t -

l y

solv ent bank where under pres ent busi ness co ndi tio ns, in a b i l it y

to

convert fr oze n a s s e t s int o cash might cause

th e

c l os i ng

o f

such in st i t ut io n.

I have been asked t o make this statement that there may be no

misapprehension as t o the purpose o f t h i s new law,

The Trust Company h a s been granted permission by the

Commissioner of Banking and Insurance t o operate under t h e provisions

of the above a c t a s o f th e close o f business Tuesday, February 21 , 1 933 .

Your cooperation and consideration i s s o l i c i t e d .

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(B)

TRUST COUP

AMY

, N. J.

February 23, 1933 .

L . F . Sa i l er , E s q . ,

Deputy Governor,

Federal 3eserve Bank

of Hew

York,

New

York,

N. Y.

Dear

S i r :

The Trust Company i s operating under

New Jersey Act o f Assembly # 1 9 5 , known as the

Altman Sill and , under that A c t , a l l deposi ts

from th e beginning of business Thursday,

February 2 3 , 1 9 3 3 , shal l be kept separate and

apart from

t h e

general assets

of the

Company,

and

maintained

i n

liquid funds.

I t i s th e

intent ion

of the

Trust

Company

t o

maintain

a l l

funds received from

deposi tors i n th e Federal 2eserve Bank, and

we wish t o open this account a s -

11

The Trust Company of ,

New Jer sey , operat ing under Act of

Legislature #195, New Jersey - Approved

February 2 1 , 1933.

This account, being distinguished a s above

outl ined, we request that th e Federal Reserve

Bank advise th e Trust Company that

no part of t h i s new account wil l ever b e c o n -

sidered a s subject to any loans o r discounts

that

th e

Trust Company

now has or

might i n th e future have with th e Federal R e-

serve Bank.

Thanking y o u f o r your cooperation, we remain

Very truly yours,

President.

CHF/n-MPC

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C O P Y

• 43

jG-7351-e

( c )

February 2 4 , 1 9 3 3 .

Pre s ide nt , Trust Company,

,, Hew

Jersey.

Dear S i r :

Receipt i s acknowledged o f your letter of February 23 , 1933 ,

advising u s that th e Trust Company i s ope rat ing under Hew

Jersey Act o f Assembly # 1 9 5 , known as the Altman B il l and that, under

that A c t , a l l deposits from th e beginning of business Thursday, February

2 3 , 1 9 3 3 , w i l l b e kept separate an d apart from th e general assets of the

Company,

and

maintained

i n

liquid funds.

As

requested

by you we

have opened

a new

account designated

-

The

Trust Company

of , Hew

Jersey,

Operating Under

Act of

Legislature

#195, Hew

Jersey

-

Approved February

2 1 ,

1933.

'7e agree that funds accepted f o r deposi t i n this account wil l not be ap-

plied by us i n payment of any loans or discounts heretofore made by us to

o r fo r th e Trust Company, or to the payment of any loans o r

discounts hereafter made by us to or fo r th e Trust Company the

proceeds o f which a r e n o t credited to the above account.

Yours very truly,

L. F. SAILER,

Deputy Governor.

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C O P Y X-7351-d

(D)

STATE

OF HEW

JERSEY

DEPAETlaENT OF MHXI3KJ AMD IFSUSAjCE

T3EETOH

February 23 , 19 33 .

Mr. B. M. G-idney, Assistant Deputy Governor,

Federa l Reserve Bank of New York,

Hew

York,

IT. Y.

Dear Mr. Gi&ney:

As promised y o u over th e telephone this morning,

I am

enclosing- herewith

a

copy

of the

letter which

we are

sending t o certa in of our i n s t i t u t i o n s r e Chapter 27 of th e

Laws

of 1 93 3 .

Very truly yours,

(Signed) V. D. Peer,

Deputy Commissioner.

Enc

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C O P Y

(E)

X-7351-e

STATE

OF NEW

JE2SEY

DEPARTMENT OP BANKING- AND INSURANCE

TRENTON

Gentlemen:

Pursuant

to the

power

in me

vested

a s

Commissioner

o f

Banking and Insurance under th e terms o f Chapter 2 7 , Laws of 1933

and deeming th e circumstances to warrant i t i n your instance, your

i n s t i t u t i o n i s hereby authorized t o operate commencing *

i n

accordance with

th e

provi s ions

of the

said

a c t

with

t h e

fol lowing

r e s t r i c t i o n s and condi t i ons : -

(a) To r e s t r i c t th e withdrawal f o r a period of ninety days

o f a l l depos i ts a s shown b y your books as o f the close

o f bus ine ss excep ting school savin gs and

club accounts and such accounts a s a r e held preferred

b y

s ta tu te .

(b) To

continue

t o

rece ive

new

dep osi ts which sh al l

b e

segregated from the o ld depos i ts and said new deposi ts

and the income therefrom shall b e invested i n such

l i qu i d a s se t s a s may be approved by the Commissioner

o f Banking and Insurance i n order that th e i n s t i t u t i o n

may a t a l l times have su f fi ci en t funds t o meet the

demand

o f

such

new

depos i ts

i n

accordance herewith.

In

view

of the

authority herein conferred

th e

fol lowing rules

and regulations a r e imposed while operating under this a c t :

(1) No dividends sha ll b e paid t o stockholders.

(2) Ho payment o f f e e s t o directors or committees.

( 3 ) Ho new loans of any kind or character may be made.

( 4 )

That

th e

interest payments

on the

deferred deposits

b e continued a s heretofore.

( 5 ) That th e Commissioner shall be supplied bi-monthly with

a complete statement of the i n s t i t u t i o n ' s f i n a n c i a l

condit ion.

( 6 ) That a s soon a s possible during t h e above mentioned Ainety

day period, there shal l be made available t o a l l d e -

p o s i t o r s a pro rata portion o f th ei r accoun ts, such p e r -

centage to be approved by the Commissioner upon a p -

p l i c a t i o n

to him by the

i n s t i t u t i o n .

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** 2 *~

X-7351

(7) The

c o s t s

o f

protests occasioned

by

this authorizat ion

s h a l l

he

home

h y th e

i n s t i t u t i o n

i n a l l

cases where

depositors' accounts

a r e

s u f f i c i e n t

t o

meet checks

presented.

( 8 ) That t h e authority herein conferred may only receive

further extension upon th e approval of the Commissioner

upon application

to h im a t

l e a s t

t e n

days prior

to the

expirat ion

of the

term specified.

( 9 )

From time

t o

time

t h e

Commissioner reserves

th e

r ig h t

to

change

or

a l t e r

i n any way

deemed advisable

by h im the

r u le s

and

regulations above enumerated.

Please acknowledge receipt.

Very truly yours,

Commissioner.

Received 2/24/33

frsbog_mim_v38_0038.pdf

Documents

t s i n s t i t u t

s s e t s

d i s t r i c t

i t i s d i f f i c

c t i c

i n g i t s e

department i s

foregoing i s