19330518_Minutes.pdf

292

A meeting of the Executive Committee of the Federal Reserve Board was

held in Washington on Thursday, May 18, 1933, at 10:30 a.m.

PRESENT: Mr. Miller, Chainnan of the Executive CommitteeMr. HamlinMr. TamesMr. O'Connor

Mr. Morrill, SecretaryUr. McClelland, Assistant SecretaryEr. Wyatt, General CounselMr. Snead, Chief, Division of Bank OperationsEr. Van Fossen, Assistant Chief, Division of

Bank Operations.

ALSO PRESENT: Mr. E. R. Black, Governor-designate of the FederalReserve Board.

The Committee considered and acted upon the following matters:

Letter dated May 11, 1933, fram the Secretary of the Federal Reserve

844:k Of New York, and telegrams dated May 10, 1933, from the Chairman of the

43411'1 Reserve Bank of Kansas City, May 11, 1933, from the Chairman of thel*Eld

Reserve Bank of Riohmnnd, May 12, 1933, from the Secretary of the

klsral Reserve Bank of Atlanta, and Law 17, 1933, from the Chairmen of the

44ral Reserve Banks of Boston, Philadelphia and St. Louis, all advising

1114t1 at meetings of the boards of directors on the dates stated, no changes

Wer"acle in the banks' existing schedules of rates of discount and purchase.

Without objection, noted with approval.

RePly on Law 11, 1933, to a letter dated May 6 from Er. Floyd R.

4 la As to the Governor, tendering his resignation to take effect

t.t. 1.13e,sure of the Board but in any event not later than May 15, 1933.

illeN31Y stated that, in accordance with Mr. Harrison's request, the Board

""Ilte 418 l'esignation as at the close of business May 15, 1933. The reply

(113:141e(1 an exPression of the Board's appreciation of La.. Harrison's services

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

2936/18/33

44d regret as to his resignation.

-2-

Approved.

Reply on May 13, 1933, approved by three members of the Board, to a

letter dated May 9 fronIM.r. Francis L. Fahy, Secretary to the Governor,teaderints his

resignation as at the close of business on May 15, 1933.telaIr stated that the Board has accepted, with regret, the resignation asUurea.

The

Approved.

Letter dated May 13, 1933, from Lir. Newton, Chairman of the FederalRea" Bank of Atlanta, inclosing a copy of a resolution adopted by the

13°4ra °I' directors of the bank at its meeting on May 12, 1933, accepting thereeig-h—t.

ion of Governor Eugene R. Black as Governor of the bank, effective

1415°11t4e assugPtion of his new duties as Governor of the Federal Reserve

11°11tcl* end expressing the hope that the present trying and emergent conditions

shortly eo far abate as to permit of the resumption by Governor Black of

44tlea as Governor of the Atlanta bank. The letter also stated that the

teotQrs had appointed Mr. W. S. Johns, senior deputy governor, as actingfterllor Of the bank, effective as of the date upon which the resignation of

LO'zi takes effect.

Noted.

1481110randa dated May 11 and 13, 1933, from Mr. Paulger, Chief of thekviaiort

(/f xaminations, recommending the appointment of Messrs. John C.Ettzolli

ead Herbert H. Hagler and their designation as assistant Federal

eXaMiners, with salaries at the basic rates of $2,000 and2,5130 per414W14, re

tteetve

sPectively, less the reduction of 15;).


5/i.s/33-3-

294

Messrs. 2ranzoni and Hagler were appointed exam-iners for all purposes of the Federal Reserve Act, asamended, and of all other acts of Congress pertainin;;to examinations made by, for, or under the directionOf the Federal Reserve Board, and were designated asassistant Federal reserve examiners, with salaries atthe basic rates of 02,000 and .2,500 per annum,respectively, less the reduction required by the Actof March 20, 1933, now 15:J, all effective as of May26, 1933, on which date they will assume their duties.

IlePlY on Lay 17, 1933, approved by four members of the Board, to adaved le-Y• 10 from Mr. Austin, Federal Reserve Agent at Philadelphia,

l'equestin 2; approval of the designation as assistant examiners at the bank

Oft:essra. 'Henry 'J. Evans, T. Carl Myers and Raymond L. Dorsch, with basic

8814zies at the rate of 2,200, .2,400 and .;2,400 per annum, respectively,to be errective Lay

Y be

48ignations

to deductions

15, 19;33, or as soon thereafter as the necessary arranije-

completed. The reply stated that the Board has approved the

as requested, with basic salaries at the rates named, subject

in accordance with the share-the-work plan in effect at the

Approved.

IlePlY to a letter dated May 11, 1933, from 1,:r. Austin, Chairman ofthe 1,ea

Or the

el'al Reserve Bank of Philadelphia, requesting approval by the Board

de34glation of 1:essrs. Harry 1. Eichmann, Tohn K. Neeley, and Cyril

eraPloYees of the bank, as assistants to examiners in the examinationof z30//le of the larGer member State institutions located in or near

1411"elPhia. The reply stated that the records of the Board indicate that

°r 3.4111111Y 1, 1933, 58 employees of the bank, in addition to the regular

°r examiners and assistant examiners, were authorized to participate


2955/16/33-4-

he ezamination of State member banks, and that, in view of this situation,

the 8°ard will appreciate advice as to the need for the designation of the

th-The additional annloyees referred to in the agent's letter.

Approved.

Reply on May 10, 1933, approved by three members of the Board, to

letters dated May 6 from Mr. Strater, Secretary of the Federal Reserve Bank

°r Cln—"la ds advising of the death on April 23 of Mr. C. L. Bickford,

4141ataut Cashier at the head office, and of the appointment, effective May

16' 1933, of Mr. P. A. Br , Assistant Cashier at the Pittsburgh branch, as

481114tant Cashier at the head office, to succeed Mr. Bickford, and of Mr.

Bolthouse, manager of the currency and coin function in the money

ciellEtrttaent of the head office, as Assistant Cashier at the Pittsburgh branchto

alleceedBrown. The reply stated that, in accordance with the action

714 bY the board of directors, the Federal Reserve Board has approved the

7tties at the basic rates of ::i;7,000 and 4,400 per annum (subject to

recilIcti°11 in accordance with the share-the-work plan in effect at the bank)

4ea bY the directors for Messrs. Brown and Bolthouse, respectively, inel 4411W Positions.

Approved.

Letter dated May 16, 1933, to Mr. Idoxtan, Chairman of the Federal

lieeel'76 Bank of Richmond, approved by four members of the Board, referringto 114J.8

letter of April 29, 1933, and stating that the Board approvedettlarie

Zli,44bsth

Lucius and 1r. Thomas X. Glanville, employees of the Baltimore

-"lying salaries on January 1, 1933, in excess of those provided

8 at the rates of "1,620 and c)1,080, respectively, for Miss T.


5/18/33

r°11 1/1 the personnel classification plan

°ectipied. The

Ployees in the

Which it

salaries

tion be given

aalaries which will apply

Reaerv

r/link Of Chicago, stating that the executive committee of the bankO L:ay r

aPProved the employment of Mr. Ralph H. Buss as Assistant Deputy

Q1)11e1Alor rN4'.trle Tederal ileserve Bank of Chicago; that the matter has been

taken

letter also stated that

Reconstruction Finance

appears

Of other

296

of the branch for the positions

with regard to the salaries of em-

Corporation custodian department,

are not subject to the percentage reductions applied to

employees of the bank, the Board suggests that considera-

to the desirability of adopting a unifom plan of fixing basic

to all

-5-

employees of the bank.

Approved.

Telegraphic reply on Lay 10, 1933, approved by three members oftIle 80

ar(11 to U. letter dated Lay a from Er. Stevens, Chairman of the 1?ederal

individuallY with

t° eMploy 7.3uss

directors on 1,1alr 261 tozqbject to approval by4t

the rate of

tilt the 'Board

1.33) with the

beaaiv on that date

Ile Will be designated

a majority of the directors; that it is proposed

as of Lay 15, 1933, and, at the meetint,,, of the beard of

designate him Assistant Deputy Governor; and that

the Federal Reserve Board, his salary is to be fixed

.8,550 per annum., effective Lay 15, 1c.)63. The reply stated

approves the sninry at the rate named, effective Lay 15,

understanding that Er. Buss

and,

will assume his duties at the

that at the meeting of the board

Assistant Deputy Governor.

Approved.

asPlY on Llay 12, 1933, approved by three members of the Board, to4 lett er (1.4.

'"oci 1Jay 9 from La-. Tohn N. Peyton advising formally of his

of directors on 1.".ay


297

i t

5/3433

"ceptance of

-6-

ap)ointment by the Federal Reserve Board as class C director

°f the Federal Reserve Bank of Einneapolis and designation as chairman of

the 13°ctzd of directors of the bank and Federal reserve agent, and inclosing

44 n41-'1-'""8 of office and a surety bond in the amount of 400,000 executed by

41'4 0111.ayB, 1933, as Federal reserve agent. The reply stated that the Board

8 liPProved the bond, and that it is understood that La.. Peyton will assume

his duties at the Federal Reserve Bank of 1,Anneapolis on May 15, 1933. The

4-4y a150 acknowledged receipt ofl-r. Peytonts letter of May 10, 1933, in

which " 1,e advised of the disposition of all of the bank stocks owned by him.

Approved.

Letter dated May 12, 1933, to Lir. Hamer P. Clark, Deputy ChairmanOf

'?ecleral Reserve Bank of Linneanolis, prepared in accordance with the

Eleti°11' te en at the meeting of the Lxecutive Committee of the Board on May

6) 19339 and approved by three members of the Board, stating that, in

ec'126ction with consideration by the Federal Reserve Board of the selection

OrPeytt)T1:j.1111eapo,:hiusi,rn of the board of directors and Federal Reserve4zent at

the by-laws of the bank were reviewed and it was110ted

that, altho 1-1311 the article relating to the executive committee pro-

Irides that 4,_?ederal reserve agent shall be a member of the committee,

It 4oes not provide that in his capacity as chairman of the board of direc-

tol% he shall also be chairman of the executive coramittee; that, in view

lEt-I"Liel/le'zi:Ir of the fact that the executive committee is authorized to

tlel'°1se between meetings of the directors all of their powers, it seems

to th0

'''ecleral Reserve Board that clearly the chairman of the board of

clil'ect°1'8 should be the chairman of the executive committee; and that, for


5/l8/33

the same reason, it

the slApervision and

include that of the

taken by the

this respect

of the beard

tratul consideration

Will feel that similar

298-7-

seems that in Section 3 of Article III the reference to

control of the board of directors should be extended to

executive committee. The letter referred to the action

board of directors of the Federal Reserve Bank of Cleveland in

in connection with the appointment of Mr. Williams as chairman

of directors, and stated that the Board believes that, upon

of the matter, the directors of the Minneapolis bank

action should be taken with respect to the by-laws of

thatbank; that it would be appropriate to make the change at the next

teetin, O f the board of directors so that it will take place as an incidentto the

filling of the vacancy in the position of chairman of the board of

clireetand that it will be appreciated if Mr. Clark will take the

r°atter,"1) with the other directors of the bnnk and advise the Board as to

eti°11 taken. The letter also inclosed a memorandum showing the manner1.4

eh the by-laws should be amended in order to carry out the suggested

the

"44ges,

Approved.

Telegraphic reply on May 11, 1933, approved by three members of the

113ar ) to a letter dated April 28 from Mr. Walsh, Chairman of the Federal

11"erve Bank ofthe blr,laws

the Drovision

Viletheli at amendment to the by-laws of the El Paso and Houston branches to

briIN them in conformity

1111th would be preferable.

Dallas, requesting an expression from the Board as to whether

of the branches of the bank should be amended so as to eliminate

for the office of Assistant Cashier at each of the branches, or

with the by-laws now in effect at the San Antonio

The agent's letter also referred to the custom


5/18/33

at the Houston branch, when

O n the sare de,)), in order to

execUtive committee meeting

299-3-

a director made two trips to the branch office

attend a board of directors meeting and an

, of paying to the director a separate fee forelach

bee

meetin;, and stated that,n instructed

Instead of two,

will not be necessarY•

aria la Paso branches be

eaehiersat those branchesezal

reserve bank., asard

stated that, in

°Ile fee will be

'leetinc,,a Of the

claY's

to arrange the

it is believed

as the managing director of the branch has

meetings so that only one fee will be paid

that a change in the by-laws of the branch

The reply suggested that the by-laws of the Houston

amended so as to make the appointment of assistant

optional with the board of directors of the Fed-

is provided in the by-laws of the San Antonio branch,

view of the agent's statement that in the future only

paid to a director of the Houston branch Who attends

board of directors and the executive committee on the sane

the by-laws

11°1114 aPPear to be reauired.

Change inof the branch with respect to this matter

Approved.

ReplY on I.:ay lb, 1933, approved by three members of the Board, toa letter dated May 5 from 1;:r. Newton, Federal Reserve Agent at San Francisco,

Qcl\ri814C that he has released Lir. S. L. Stewart, temporarily employed as

'llexalT.aner in the Federal'° the

-LIProval of the Federalbein

Qoutinued without pay in

48.tely in cue they114)t'oves

the continuanceroz,

4 Period Or six months from May 15, 1933,

Reserve Agent's department, but that, subject

Reserve Board, TIr. Stewart's desimation is

order that

should be needed.

his services may be available

The reply stated that the Board

of the designation of Mr. Stewart as an examiner

provided he does not leave


3005/18/33

-9-

the employ of the Reconstruction Finance Corporation during that time,

°theli than to return to the Federal reserve bank, and that it is requestedthat,

IL the event it is found necessary to recall Er. Stewart to the bank,the

Board be advised promptly.

letter indicates that, should the work in the examination department of

the hellit justify enlarging the force of examiners, Er. Stewart would be

tendered 13- Permanent appointment, and requested that, in the event such

eetion- -ecomes necessary, the Permanent designation of Mr. Stewart as

The reply also stated that the agent's

eXaM4—'4•11er be

submitted to the Board for approval.

talat, in

'1) 1933,

or theItQe.aio

e-xaminer"

°r4aszistant to examiner"or

4iklrlior clerk" in the

atatea that, with regard to

811ere-the-work plan, which it

decikletlohs applied to salaries

e411141 be given to the desirability

3alaries which will apply to all

Approved.

Letter dated I.:ay 17, 1933, to Lir. Austin, ahairman of the 17ederal

ileeellve Bank of Philadelphia, approved by three members of the Board, statin

the recommendation contained in his letter of Eayaccordance with

the 31_card has approved changes in the personnel classification plan

haak to Provide for a change in the title of the positions of

and "junior examiner" to "examiner", and of the position

to "assistant examiner", and for the new

credit department of the bank. The letter also

the salaries of employees taken on under the

appears are not subject to the percentage

of other employees of the bank, consideration

of adopting a uniform plan of fixing

amployees of the bank.

Approved.

ter dated May 12, 1933, to 1.1r. ia_lden, Controller of the FederalReeerveLet

44k or Di--Lchmond, approved by three members of the Board, stating


5/18/33

.9(

-10-

that, in accordance with the recomnendation contained in his letter of

LlaY 6' 1933, the Board has approved changes in the personnel classification

Plan- of the bank to provide for a change in the title of the positions

41Lior ezaminer" and "junior examiner" to "chief examiner" and "examiner",

respectivelY) and, for the new position of "assistant examiner" in the

eXarraning department of the bank.

Approved.

Letter dated Lay 17, 1033, to Deputy Governor Helm of the Federal

Re 8 ervuank of Kansas City, annroved by three members of the Board, statins,

that, i

51 1933

tionI'Lan affecting the econstruction Finance Corporation Department as

)11 the revised Pages of the Personnel classification plan inclosed

Ills letter.

n accordance with the recommendation contained in his letter of 711y

) the Board has approved changes in the bank's personnel classifica-

Approved.

Le tier dated Flay 12, 1933, to Er. Walsh, Chaiman of the Federal

aUk of Jallas, approved by three members of the Board, stating

or chi

tat,— accordance with the recomnendation contained in his letter of

A1933

) the Board has approved a change in the personnel classifica-

tiell4-'4111 of the El Paso branch to provide for the new nosit ion of "tynist"

14 the ao°I-Inting and service department of the branch.

letter dated Lay 1 from Er. Young, Secretary of the 1J'ederal Reserve Bank

ca o) statin that at the neetinv; of the board of directors on Aril

Approved.

RePlY en liay 12, 1933, approved by three members of the Board, to


B/18/33 302-11-

28 there was authorized a contribution by the bank of 2,000 toward the

eXPenses of the annual convention of the Nmnrican Institute of Barking to

be held in Chicago this year, and the payment of the expense, not to exceed

rlia 00 Per person, of a dinner to the delegates to the convention from°tiler Federal reserve banks and branches. The reply stated that the Board

41P111 the Payments involved in the action of the directors.

Approved.

Tel egram dated May 11, 1933, to Mr. Stevens, Federal Reserve Agent

approved by three members of the Board, stating that the Board

41)15lave8 the application of the Ida County State Bank, Ida Grove, Iowa, for

taellberalliP in the Federal Reserve System and for 29 shares of stock of the

l'eciez111- Reserve Bank of Chicago, subject to the conditions prescribed intie telegram.

Ett chicam,

Approved.

Telegx ems dated May 12, 1933, to the respective Federal reserve

agetts, approved by three

4131roves the applications41111) in the Federal Reserve

ellbiect to the conditions

at_trie___91., Bank

413ital City Bank, Charleston,West Virginia.

41 agew Savings Bank, Glasgow,Mi

ssouri.

members of the Board, stating that the Board

filed by the following state banks for member-

System and for Federal reserve bank stock,

prescribed in the individual telegrams:

Number of Shares

Approved.

162

90

Federal Reserve Bank

Richmond

St. Louis


3035A8/33

-12-

Telegrams dated May 17, 1933, to the respective Federal reserve

agents approved by four metbers of the Board, stating that the Board

"t1W18 the applications filed by the following State banks for member-

13410 in the Federal Reserve System and for Federal reserve bank stock, sub-

to the conditions prescribed in the individual telegrams:

Name of Bank

licIlawood Bank at Pittsburgh,Pittsburgh, Pennsylvania.

844k of Hartsville, Hartsville,Tennessee.

Citizens Bank and Trust Company,Carthage, Tennessee.

Xeat, Condit and Grout, Bnnkers,Winchester, Illinois.

Number of Shares Federal Reserve Bank

75

30

18

84

Cleveland

Atlanta

Atlanta

St. Louis

Approved.

Tele graphic reply on May 17, 1933, approved by four members of the

4411, to a letter dated May 0 from Mr. Case, Federal Reserve Agent at New

With regard to the application for membership of The Southampton Bank,

S°14114/111/t°11, New York, and recommending that condition of meMbership

tlij4het'ed 18, as contained in the Board's letter of April 24, 1933, to the

tIllthe.14Pton Bank, be modified so as to permit the bank to reduce its surplust0

761°00 in order to provide for the eltmination of losses and depreciation.

l'ePlY stated that the Board amends condition nuthered 18 as requested

44a' aa set out in the reply.

Approved,

Reply on May 12, 1933, approved by three members of the Board

lettercleted May 10 from Mr. Case, Federal Reserve Agent at New York,


5/16/3,,304

-13-

l'ec°1kaellclillg an extension for 30 days of the time in which the Leonia Bank

and lin, 4.-"u Company, Leonia, New Jersey, may accept the conditions prescribed

1). rv,,ale for membership in the Federal Reserve System. The reply stated

th4t, inaccordance with the agent's recomendation, the Board grants an

"'It8ien to June 12, 1933, and that it will be appreciated if the agent will

"8e the applicant institution accordingly.

Approved.

Teleram dated May 11, 1933, to Er. Stevens, Federal Reserve Agenttit chi,'ago) approved by three menbers of the Board, replying to a telegram

4teaLlay 11-1

from Assistant Federal Reserve Agent Young stating that a

oe the board of directors of the Iestern State Bank, Cicero,Illino.

18' will be held on June 12, 1935, to consider the special conditionsor Merabersh ip

prescribed by the Board for the bank; that the bank has

l'eqq.ezted anextension of the time within which it nay accept the conditions;

411d tilat it

41'0c-tors,meeting. The reply stated that the Board grants an extension to

-11116 12, 1933.

is recommended that the time be extended to the date of the

Approved.

Teleraphic reply on May 12, 1955, approved by three members of the

13Qta l'cli t0 a telegram dated May 8 from 1:;r. 4alsh, Federal Reserve Agent at

tliansmitting the request of the City Savings Bank and Trust Company,

41'eveport Louisiana,that its application for membership in the Federal

'erve°Y3tem be held in abeyance until further notice, pending the

.&4 1Teeti

Th °- Plans looking to further improvements in the bank's condition.o

l*E411Y + --aved that the Board will hold the application in abeyance as


or ti1- -Line within which the bank may complete its membership and if it

cleeize

all extension beyond Lay 28, 1933, it should apply for such extension14 t4

e 14sual manner. The tele€,Tam also requested that the agent advise the

aa DromPtly as possible, of the results of his investigations and

O55/18/33

l'eglaested.

Dallas

Approved.

Telegrara dated Lay 12, 1933, to Er. Walsh, Federal Reserve Agent at

aPProved by three members of the Board, referring to the Board's

telefc'relli of Llay 29 approving the application of the Atoka State Bank, Atoka,

°klahoirin--`) for membership in the Federal Reserve System, and stating that it

41313°ar3 from recent developments, which have been discussed over the tele-

D1104e with the Federal reserve agent and Governor EcKinney, that the

4111)1i0allt balik's capital may be impaired by depreciation in its investments,

aria the Board feels that any further action pertaining to the admission of

tib3 bank to membership should be deferred pending further consideration ofthe s

ubjects but that the Board's telegram is not intended as an extension

4e otiati,

us With regard to the natter.

130e,ra,

'444zas

Approved.

Televaphic reply on liay 17, 1933, approved by three members of the

to a letter dated ',lay 9 from Lir. EcClure, Federal Reserve Agent at

J, requesting an expression of the Board's views regarding a pro-

ai)91ication for nembership by a bank which has recently secured agree-

depositors representing more than 90 of its total deposits

11e/Tirk: the bank of-'aividendswhi

I

all 1 liability on 15: of such deposits, but providing4t aIl

may be paid hereafter will be applied in pant


c)11 the Part of a5 of the depositors to the waiver of a certain partof their

deposits to bind the non-assenting depositors. The reply further

e:ted. that if in the opinion of counsel the State law is ccnstitutional.Etricl the

condition of the bank, the character of its management and theDro -spe ,'463 for its Dature growth are such that the agent and the membership

°°11.1.11ittee of the Federal reserve bank would be willing to recoill.end the

413P1'°vEL1 of the application, the Federal Reserve Board, upon receipt of full

"Inplete information, will be glad to give prompt consideration to the

rtlattez"1.11u to afford an opportunity for the withdrawal of the application

11' it ahould aPPear that favorable action cannot be taken thereon.

Approved.

Telegram dated I:ay 16, 1933, to /,:r. Stevens, Federal Reserve Agent

At chi

ePproved by four menbers of the Board, referring to the applica-ticz

5/16/33 ,M)C-15-

t° depositors to the extent of their waived deposits. The reply stated that

the (3ard is not in a Position to express an opinion without complete in-

fOrrtiOXi rocardin,; the terms of the agreement and the condition of the

including its liquidity and the character of its management, and that

it 18 felt that counsel for the Federal reserve bank should first satisfy

41111881f as to the constitutionality of any State law which permits an agree-

tietit

r the Suburban Trust and Savings Bank, Oak Park, Illinois, for per-

withdraw imnediately from membership in the Federal ReserveYeteta

atcln,ot The teler,ram stated that the Board waives the usual requirement of

sqz,z,et, 4t118 notice of intention to withdraw and that, accordingly, upon

cl" Or the Federal reserve bank stock issued to the Suburban Trust

Bank, the Federal Reserve Bank of Chicago is authorized to cancel


5/18/33-16-

Such stock and make a refund thereon.

Approved.

Letter dated May 12, 1933, to LTs. Stevens, 2ederal Reserve Agentat chi-

uago, approved by three members of the Board, stating that the Board

307

has e-wnsidered the application filed by the National Bank of ilartinsville,

lane, ,lor Permission to act in all fiduciary capacities authorized under

8eCtiOn 11„- of the Federal Reserve Act and that, while it appears that

candltion of the institution is satisfactory and that its management is

caDable)lii view of the brief existence of the bank, the Board has deferred

action°n the application until after another examination of the institution

has be-11 made, and it is requested that the agent so advise the nationalbianki

8.4'11ct•1°11 2inance Corporation to 1.x. Angfield, Assistant Counsel of the

l'equect1flU an informal expression as to the attitude of the Boardtolkra

eertadn amendments to the articles of incorporation of the Central

8 or o4k d, California, providing for authority to pay a dividend onhe

c3n1111°10, stock of that bank. The reply stated that the Board offers no

(IllieTti°11 to the

Finance

amendments if they meet with the approval of the

Corporation and the payment of such dividend will

114 rea4lt in violation any of the conditionsof membership prescribed

1)1;11Le 311c1 accepted

by the bank at tne time of its admission to

Illberehii) 1n the Federal Reserve System.

Approved.

Reply on May 12, 1933, approved by three members of the Board, to aletter

'&u(iressed by Er. J. R. Monroe of the legal division of the Recon-


3085/18/33

-17-

Approved.

Telegrean dated May 12, 1933, to Mr. Hoxton, Federal Reserve Agent

Fticbmond, approved by three members of the Board, stating that, while

1111cler the law the proposed reduction in the capital stock of the Baltimore

CQ411116/rei51 Bank, Baltimore, Maryland, involved in. a tentative plan for the

e°1'ettilization of that institution, does not require approval by the Fed-

Re serve Board, the Board has considered information submitted in

°Ille"t1010. with such tentative reorganization plan and, in the circumstances,

Will c)fter no objection to the proposed reduction. The telegram also statedthat

it appears, however, that the plan contemplates no assessment on the

11°1(iere or the stock of the bank which

Ileltitlore Commercial Company and it is assumed that consideration has been

eil'et, to the question of preserving for

illetlt liability of the bank'sthe

reopening of the bank iseli

nation of the ttan of borrowed

415e0s that the old management

delreloped will be retained

1441Z66, that the agent hast.crted,

9.1rt borrowings of

°11°11sci new capital

will be exchanged for stock in the

recourse, if necessary, the assess-

old stockholders; that it is also assumed that

conditioned upon ample liquidity and the

money prior to such reopening;

under whoin the unsatisfactory

in the reorganized institution,

considered this matter fully.

that it

conditions

and that it is

The reply further

the present directors are in excess of the bank's

and that a number of such directors' loans are subjectto

oriticimn and it would seen that this and other matters commented upon

4415414 be satisfactorily adjusted.

Approved.


5/l8/33

•tj, el-ft

-15-

Letter datedEay 12, 1933, to nr. Case, Federal Reserve Agent at

New york,

44dTrUst Company, Bloomfield, New Jersey, of 96.5% of the stock of theliateessing Bank of Bloomfield disclosed by the analysis of report of exam-

1 "ion of the former as of Novenber 5, 1932, may be a change in the scope

Of the rletber bank's functions within the meaning of the condition under

which it was admitted to membership in

it will be appreciated if the agent

tacFte involved in the investment by

tileWatsessing Bank and of his views

t444 at this time, either by the Board

°trice) CO1Th1jj01 with the matter. The letter also

11144"1/at1on regardi113 the relationship of the member

Title Guaranty and Mortgage Company,

stating that it appears that the holding by the Bloomfield Bank

the Federal Reserve System, and that

will advise the Board in detail of the

the member institution in the stock of

as to whether any action should be

or the Federal reserve agent's

requested

bank

in the stock of whi

"e0N113.g to the analysis of report of examination above

1/1'esent investment of .140,000, and which it is assume

Of'41e Lossex Title Guaranty

bel'hattk had an investmentNisral

Reserve system.//le Etqvis

ability ofOr the

State of New

cillticlelicle, if not an

NtIlte of any such discussion114 the con

dition of the member

detailed

with the Essex

ch the member benk,

referred to, has

The letter further suggested that

Is a conversion

and Trust Company in the stock of which the men-

at the time of its admission to membership in the

the agent consider

discussing with the Comrdssioner of Banking and Insurance

Jersey the question of a further reduction in the company's

entire elimination thereof, advising the Board of the

and of any improvement whichmay be affected

bank.

Approved.


5/18/33-19-

Reply on May 17, 1933, approved by four members of the Board, to

8' letter dated

York, which he referred to the Board's letter of April 13, and inclosed

Et letter dated April 23 from the Chairman of the Bank of the Manhattan

a°111Dany, New York City, stating that the institution is in the midst of an

e444allation by the Clearing House Association, and that it is planned upon

111; a report of the examination to make such charge-offs and

Etilocatiorla to reserves as may seem proper. The reply stated that while,

1/11clel" the

the Board.

April 27, 1933, from Mr. Case, Federal Reserve Agent at Mew

Provisions of one of the conditions of membership prescribed by

Federal Reserve

laents or adjustments of its

13cktrcl, Would be necessary

8tEtearki denartient

l'aet that the bank is now

Aeeociation, will awaittrtY

rurther action with

11110eation or reserves.ir the

acent will forward

ellhation reoort,

has taken

e'cli4z1t1entE3

zholtld keep

Dti

und accepted by the bank, at the tire of its

"1 the

to its

admission to member-

Sys tam, the bank agreed to make such arrange-

assets as, in the opinion of the Federal Reserve

on the basis of the reports of examination by the

as of November 18, 1932, the Board, in view of the

in process of examination by the Clearing House

the completion of such

regard to requirements

The reply also stated

examination before taking

as to charge-offs or

that it will be apnreciated

to the Board an analysis of the Clearing House

together -rith advice as to what action, if any, the

toward effecting charge-offs or providing reserves against

nay be subject to criticism in such report, and that in making

follovzjng the examination the Bank of the Manhattan Company

---, mind the Board's usual policy of requiring an institution,

admission to membership, to charge off, or otherwise eliminate,


3115/1041/33

411 estimated losses and depreciation on stocks and defaulted bonds and on

"I*itiee other than those in the four highest grades as classified by a

ec()grtized investment service organization regularly engaged in the businessOf

rattag or grading securities.

Approved.

Letter dated May 17, 1933, approved by four members of the Board,to

Austin, Federal Reserve Agent at Philadelphia, stating that, in view

in a

company

request by the agent that the acquired

separate account and that such assets be

possible without undue sacrifice. The letter also

take no action at this time regarding the

of 34 shares of its in stock through the absorption

Princeton Securities Company, although the bank should

stock must be disposed of as soon as possible, and that

approval the action of the agent's office in advising

does

or

-20--

the information submitted by him, the Federal Reserve Board will take no

"ti°11 affecting the membership of the Princeton Bank and Trust Company,

Princeton) New XerseY'

by reason of the absorption by that institution of

ltearrillate, the Princeton Securities Company, but that it is requestedthat

.414 agent require the bank to make an adjustment as soon as possible

the°41‘rYing value of the proportionate interest in the securities

7141°4Wae transferred to the books of the bank on December 31, 1932, andthet

the Board approves the proposedassets be

carried by the bank

ligtlidated as rapidly as

eteted that the Board will

4Nikisition by the bank

the assets of the

beacbrised that such

the Boerd notes withthe balik that the Board

itstitUtions engaging in the

1311blis either directly or through

414(41kortgages are sold without recourse.

not look with favor upon commercial banking

business of selling mortgage loans to the

affiliated corporations, even though

Approved.


3125/18/33

-21-

Letter to Mr. Austin, Federal Reserve Agent at Philadelphia, stating

tilat' in view of the info tion submitted by him, it is apparent that the

alb80ntion of the V1anart State Bank, Wart, Pennsylvania,the wane

431) has

a nonmember, by

County Savings Bank, Honesdale, Pennsylvania, as of December 12,

resulted in no material change in the general Character of the

assets of, or in the scope

itstitUtion 'within the

aanlitted to tenbership

tion, the Board will take no

Colltty savings Bank by reason

it seems

evident, however,eella for

vigorous

test extent

the situation,

4gelat's office

tilzi°401 Personal

e°oPeration with the

of the corporate Dowers exercised by, the member

meaning of the general condition under which it was

and that, in accordance with the agent's reconnenda-

action affecting the membership of the Wayne

of the transaction. The letter elso stated that

that the condition of the member bank is one which

efforts to obtain prompt and material corrections, to the

Possible, of the many unsatisfactory features existing in

and that the Board will appreciate being advised by the

in this connection, and of any improvements effected either

contact with

State

the bank's manRgement and directorate or in

banking department.

Approved.

Letter to Mr. Austin, Federal

i•n accordance with the action

C°113raittee or the Board on May

k'olztoseci by Mr. C. S. Noviha11,'t(31'

Inatirances on Lives111 1118

letter of May 1,

11°411a/117 Et COrapany of

Reserve Agent at Philadelphia, pre-

taken at the meeting of the Executive

10, 1933, with regard to the alternatives

Vice President of the Pennsylvania Company

and Granting Annuities, Philadelphia, Pennsylvania,

1933, in connection with the disposition by the

the stock of the Mein Line Trust Company of


313

5/18/33-22-

4L14°e, Pennsylvania. The Board's letter stated that the first of the four

41te/ill tive suggestions submitted would not neet with the Board's approval

1560allse the only change in the existing situation which would result there-

ttaaLwould be the elimination from the existing declaration of trust of the

IDI-sicln which authorizes the trustees to transfer and assign all of the

stock of the flAin Line Trust Company held by them to the Pennsylvania

C°111138zY on such terns and conditions as the trustees may stipulate; that, in

the li of the statements made by L. Newhall, the fourth alternative,

Which contemplates the closingit Would deprive the community

Ilee ed, and la.. Newhallor the

Pennsylvania

the declaration

(141elella consisting

t-lternative providing

be 4cceptab1e to the Federal

wit4i4 a

C°k10.ftty,

C°111PanY, althouchth6te were

coupled with

Ylvatia Company

114111 Line Trust

iltil°4t at theliThe letter also

414" than the

t41" alternative

of the bank, would not seem desirable since

of banking facilities which appear to be

states that it would give rise to severe criticism

Company; but

to the

of the

that either the second alternative providing

stockholders of the Pennsylvania Company of a

stock of the 1.1ain Line Trust Company, or the third

for the sale of the stock to outside interests, would

Reserve Board, provided that it is carried out

easonable time in such a way as not to retain in the Pennsylvania

directly or indirectly, any interest

the second alternative

it any arrangements

would be prevented

Company freely mid

in or control of the lain Line

would not be satisfactory if

by which the stockholders of the

from transferring the stock of the

without any restriction whatsoever and

same time transferring their stock in the Pennsylvania Company.

stated that it is believed that the Pennsylvania Company

Federal Reserve Board should decide whether the second or

should be adopted, and that when the company has reached


314.5/18/33

-23-

Et dei'inite decision and has advised the Board, it ',All be glad to consider

thecluestion how rauch tii:D should be allowed for the consumation of the

Eul 8'doPted by the Pennsylvania Company.

the 8Ge°11(1 01' third alternative is acceptable to the Board, it would notseem ne

c"sary for Lir. Newhall and Er. Eason, Chairman of the Eain Line

The reply further stated that as

Cork)any to come to Washington, as suggested by Er. Newhall, for the

134113Q" or discussing the matter with the Board. The Federal reserve agent

17" el-so requested to transmit a copy of the letter to .12Lr. ITewhall and to

ellaeavor to ootain from the Pennsylvania Company prompt advice as to the4etien

"idea upon with respect to the matter.

Approved.

Letter dated Lay 11, 1933,

'Itianta, approved by three members

or report of examination of

Eta or October 31, 1932, and

to Er. Newton, Federal Reserve Agent at

of the Board, referring to the analysis

the Trust Company of Georgia, Atlanta, Georgia,

to the agent's letter of December 31, 1932,

e to the Principal criticisms

lIce.rd is entirely in accord with the

Zecl„„,

reserve arent relative to thecomp

Y in the stock of th

tlit it is assuined that,

()I'licerri of the0

1)eZations has

D4riy, if ita°04 as

practicablethee° and

ether eormnon

of the institution and stating that the

criticisms of the examiner and the

syndicate operations of the trust

e Coca-Cola Company and the Continental Gin Company;

in. accordance with the advice received from the

trust company, the practice of participating in such

been discontinued; and that the Board

has not

feels that the trust

already done so, should take appropriate steps as

to reduce sub °tent ia.11y the large concentrations in

stocks, and to correct its books so that they will


5/18/33

show the liability of the trust

r)1A 0-

-24-

company for its proportionate part of the

8z1101Jxt borrowed by the syndicate.

doPoslt of ,:,;6,000,000 made by the 2irst

e

The letter also stated that the large

liational Bank of Atlanta in the

°InPanY appears to be more in the nature of a loan than a deposit and

faX in excess of the legal loaning limit of the national bank; that the

illzestnent Of a large proportion of these funds in speculative

alsoan unsound Practice; and that it is suggested

118.8 this excessive loan with the chief national bank

ciltriet with the view of enlisting his cooperation

this Unsatisfactory feature of the trust

suGcested that the agent have an

eZezlination of the trust

provQaent effectederitiet

in

that the

examiner

the

comon stock

agent dis-

of the

correction

company's condition.

examiner participate

of

The letter

in the next

company and that the Board be advised in detail of

in the conditions which were subjected to

in the last report of examination, together with the agent's

ndat ions and requested that the iloard be furnished with a complete

ee'PY or the report of the next examination in addition to the customary

thezeof.

Approved.

Letter dated Llay 11,

k131)1'°11 ed by three members ofthe :Tecierea

Reserve Agent atthe

Qriticized natters

°Ilr of Georgia and stating

4ttent iOn of the Comptroller of the Currency for the reason that one of the

114'1°1' l'iticiards relates

1933, to the Comptroller of the Currency,

the Board, enclosing a copy of the letter to

Atlanta, above referred to, in connection with

disclosed in the report of examination of the Trust

that the Board's letter is brought to the

to the large deposit of .)6,000,000 of the Arst


316

from .,)100,000 to .50,000.

3/3433-25-

NEtti°11a1 Bank of Atlanta in the Trust Compary of Georgia which is regarded

beinC 'More in the nature of a loan than a deposit; that it will be notedthat

the trust company inhas been engaged certain investnnnt operations

Which are not in accord with sound banking Practices; and that the informa-

tion is referred to the Comptroller for whatever action he nay desire to

t ke in the premises.

Approved.

Letter to the Comptroller of the Currency, replying to a memorandumdated

APril 12, 1933, from the Acting Comptroller and to a memorandum dated1.-.sy 10

from LIT. Gough, Deputy Comptroller, relative to the proposed

-- in the capital stock of the Patapsco National Bank, Micott

la ill

sY111PathY with tile desire on the part of the depositors and others

the bank to reorganize its affairs, it feels, in view of the

e*Q141stan—Ce8 referred to in the letter, that it cannot properly grant its

1111 ,11)rov-4. Of the proposed reduction in the capital stock of the bank as a

Deal cypthe contemplated plan of reorganization.

The reply stated that while the Board

Approved.

Letter dated Liay 10, 1933, to Fir. Wood, Chairman of the Federal Re-

of St. Louis, commenting upon the various natters referred to14 the

1-'312°rt of examination of the bank made by the Board's examiners ast the close or

business on Tanuary 28, 1933, and reeuesting that the reporteliq the Boarats

to Et e letter, as well as the chairman's reply thereto, be brow-litthe tt

irt ion

of the directors of the bank and that the Board be advised().1' their conrents

on the findings of the examiners.


-26-

Ap-or oved.

Letter to the Comptroller of the Currency referring to the cableam

receiv-,by him under date of :.:arch .12, 1936, from I:r. Prickett, National

hnk .in which He advises that the London office of the International

Bezatin C°rPeration is inactive and that he does not think the results to be

e'c°1111)lished would

letter stated that in view of this information and the advice

B°E1I'd from the International Banking Corporation that the

its London office are confined principally

011 them by various branches of the National City Bank

the London branch has no dealings

IllaInlY of cash and due from banks, the

with the

to the

justify the expense of an examination. The Board's

received by

activities of

acceptance of bills drawn

of New York, and that

public and its assets consist

Board will not require an examination

°I' the London branch at this tine and will

°f the CurrencY will so advise -Cr. Prickett.

Approved.

Reply on ,'air 16, 195'), approvedletter

dated 118.y 5 fromSt L01115 , replying to the Board'sthe

subject of indebtedness

to a resolution adopted by of

3431) to the ei?F'ect

its branches must

ile4ez`Ve District.

4131141'entlY Provided only

rauat not borrow

the board

that officials

not borrow

The reply

by

appreciate it if the Comptroller

four members of the Board, to a

\food, Chairman of the Federal Reserve Bank

letter

of

of April 29, 1953, (::-.7425), on

of officers and anoloyees, and calling attention

directors of the hank on Nay 20,

and erployees of the St. Louis bank and

from member banks within the Eighth Federal

stated tint it is noted that the resolution

that officials and employees of the bank and its

from member banks in the Eighth Federal Reserve


5/18/33-27-

'strict. that the views expressed in the Board's letter of April 29 were

4)-k.,

llot 00,,p.-4.1ned in their application to rember banks in the district, but referred

t° 411Y indebtedness which might be incurred (except for current bills for

°I'dinarvPersonal and household expenses), contemplated that reports should

be 1114de to the Board of Directors, and referred to connections of officersfld

emPloyees with business concerns; and that, in the circumstances, it is

113t clear to the Board whether all aspects of its letter have received the

ec'lli(leration of the directors of the bank, and, if not, it is assumed that

they v7111 'Qe [-riven careful consideration and the Board advised as to the

ation taken inall these respects.

A bpi- ov ed.

letter

Uated, April 24 from Deputy Governor McKay of the Federal Reserve Bank

c) Chicago raising certain questions with regard to the assessmont of

loorialties for deficiencies in reserves which do not appear to him to beNlly

covered by the Board's telegrams of March 30 and April 8, 1933. Thel'eTly

stated that the loard.Ts telegram of April 8 advised the Federal re-SO e

bEtriks that the Board would interpose no objection to the non-assessment

pe/izilties for deficiencies in reserves of member banks from March 1 to11

15 e'lls08 where member banks did not have an adequate opportunity totore

de-eicient reserve balances to amounts reouired by section 19 of theeqe

ileserve Act and that, accordingly, assessment of penalties for

l'eeeti\re (leficiencies of menber banks located in reserve cities for the weekarch 16.

1)

is

not required if, in the opinion of the Federal reserve

4k) e4eh banks did not have an adequate opportunity to restore their

Re13-. 1Yon May 13, 1933, approved by four members of the Board, to a


314 95/16/33

-28-

reserves for the week to the re(luired level. The reply also noted

tha:t certain unlicensed member banks in the Seventh Federal Reserve District

llave not o,-)ened special accounts with the Federal reserve bank for the

clepocit o2 tho proceeds of segregated new deposits or have not maintainedin ail&

accounts balances sufficient to cover the amount reruired as reserve

sitch new deposits and that Er. ::aKay recommended that penalties benot

a'a8essed in such cases, because these banks were not advised until April

11 to the requirement for reserves against such deposits and in all cases

or thi8 killd the banks had sufficient funds in their reserve accounts with

t48 2e4eral reserve bank to cover the reserve required on the segregatedne

clePosits, and stated that, in the circumstances, it is the Board's view

t44t Peaalties should not be assessed in these cases. The reply further

bcite(1 that the Board interposes no objection to the non-assessment of

Derlelties incurred by the newly admitted member banks referred to in L:r.

letter on account of deficiencies in reserves which were due to

1111.1114erstaildin{:; or misinformation as to the reserve requirements and which

(111‘reci prior to the time that correct advice as to the reserve recuirement

174 rIlrIliShed to such banks.

Approved.

Letter dated4 1.1ay 11, 1933, to Governor Harrison of the Federal Re-

%.e 134111

or New York, prepared in accordance with the request made at

t4""t14'.; of the wxecutive Committee of the Board on May 9, 1933, and

:1131)1reci' by three members of the Board, referring to the Board's letter of

2Q) 1933) with reard to the account maintained by the Federal Reserve-41t Or 1-

York with the Bank for International Settlements, and stating


5/18/33

that as the records of the Board do not show that any reply to this letter

448 been received, the Board will appreciate it if Governor Harrison will

a4718e it Bally in response to its letter, or, if a reply has been trans-

raitteaPreviously, the Board will appreciate receiving a copy thereof for

it.8 consideration.

-29-

Approved.

Letter to Lr. Winthrop W. Aldrich, President of The Chase Bank,

Nev77k. J1 r Yaw 7cw1:, replying to a letter dated ::ay 10, 1933, from theCezhier

02 the bank statinc that, due to the bank's inability to acquire

el'Iltable premises for the purpose, it has not yet opened the agency in the

Chinatown section

bY the 3°arcl in its

mozitits

Nay stated that,

1)"eillber 15, 19;,-3.2:,,

lishe(1) z3ubje0t to

or 1)ecerabor 15, 1932.

of New York City, the establishment of which was approved

letter

of th,,,?, tine

of Decenber 15, 1932, and requesting an extension

within which the agency may be established. The

in accordance with the request, the Board extends to

the period within which the proposed agency may be estab-

conditions (a) and (c) set forth in the Board's letter

Approved.

Letter dated May 13, 1933, to L. Newton, Federal Reserve Agent at

414 approved by three members of the Board, replying to Er.

4t'elltt8 letter of May 1 inclosing a certified copy of an amended agree-Ilent betwee4 ,,e

0. li'ederal reserve agent and the Federal Reserve Bank of San

411 laC° C°1feri1- the

el", 3a1t Lake City and Portland branches and advising that the

l'e()Illtic)11 adopted by the directors authorizing the execution of the agree-

custody of unissued Federal reserve notes at the


5/16/33C)21_

-30-

illerit had been amended to conform to the changes made therein as suggested

illthe3c)ard's letter of April 14, 1933. The reply stated that the Fed-

iieserve Board has no objection to the establishment of the arrangenent

Pr0v1ciecl in the agreement for the custody of unissued Federal reserve notes

at the ,uranches named, with the understanding that the Board may require

the au.,4.- gement to be modified or discontinued whenever it may deem it

tc11118able to do so.

Approved.

RePlY on nay 11, 1933, approved by three members of the Board, toa letter

dated IT 3 from Er. Stevens, Federal Reserve Agent at Chicago,4Q1Zowlecif,.',1ng receipt of the Board's letter of 1.ay 1, 1933, with regard to

the

"Ipeed4re to be followed in connection with possible violations of the

°141°11 and stating that there are a few cases in the district involvin

118'114 whicil are closed and that it is assumed that, until such time as they

l'e°13ened, nothing need be done about the matter. The reply stated that,

e'itil°11/th it is not felt that applications are necessary in the cases re-

re ed to in theagent's letter at this time, it would nevertheless seem

11)111'(3131'1Elte to proceed in the manner indicated in the Board's letter of May

1 that 41,_"'Ito. persons involved may be advised of the necessity of obtaining

if they e wish to serve such banks when they are reopened and in

whel'e the agent feels that he is not prepared to recomnend the approval

'I'Dlications that such parsons be advised of that fact.

Approved.

Let+1?eci.

.er dated May 10, 1933, from Mr. Crane, Deputy Governor of the

e--rlie Bank of New York, stating that all participants in the


5/18/336)C-14-1

-31-

4*Illsbank credit have agreed to an interest charge of 4;; per annum on the

82413114t of the credit outstanding during the period from March 4 to April

13' 19331 on which latter date the credit was repaid, and that interest at

til'at rate has been paid by the Lieichsbank.

Noted.

IlePlY to a letter dated May B, 1933, from flr. Burgess, SecretaryOr the Opea flarket Policy Conference, transmitting a copy of a tentativearaft of the minutes of the meeting of the Open Market Policy Conference

held in/ashin,,,,ton on April 22, 193'0. The reply suggested a change in thelOçt to the last paragraph of the tentative draft with regard to the meetingor the

conference With the Board, and called attention to the consideration

Which has be, e;iven by the Board to3 the three resolutions adopted at the

'leetillg of the Conference.

Approved.

Letter dated May 17, 193:J, to Mr. Paul Bestor, Farm Loan Commission-

el%) al3131'°ve(1 by three members of the Board, referring to the recent con-

Irelitl°1.1 between Messrs. Carson and Cagle of the Federal farm Loan Bureau

11(1';a1"Int CeUnsel Vest of the 'Federal Reserve Board, from which it is4114(31‘24.

°°c1 that the aia Loan Commissioner desires that checks in payment

(1r al or interest on loans made Pursuant to the provisions of section

4 °I' the Act ,Laij 12,

t° '2441M Lo::

1936, the Agricultural lielief Bill, be made payable

sioner or to his field agent and deposited by such

prope_ay indorsed, directly with the Federal reserve bank of the

in which such agent is located in the general account of theu

the United States for credit on the books of the Treasurer to


C109

5/1EV33

the'-'count of the Farm Loan Ccunissioner, subject to the provisions of the

18411rY DePartment circular 176; and also that checks drawn by

4141icants for such loans, in payment of expenses of appraisals or other fees

arld cornmissions incident to the making of the loans, be deposited with the

Icieral reserve bank under the same arrangement but for credit to a special

accoUnt of the Farm Loan Commissioner on the books of the Treasurer of the

$tates. The letter stated that in order to ascertain whether the

3ev°ral 2ederalreserve banks would have any objection to handling items

uncler the

Wize with

-32-

arrangaments described, the Federal Reserve Board comunicated by

each Federal reserve bank and is advised that none of the Federal

l'el"re banks has any objection to the handling of items under the arrange-

rr4artts described, except that the

to :make a

1)14 that it is

1r the"coUnt

e:q)elase,it is

414 be wil, .n,

Governor of one bank has advised that it is

commitment for the bank without knowing some of the details,

the desire of the bank to cooperate in every way, and that,

becomes so active as to create a large amount of additional

assumed that the Farm Loan Cormis loner would be in a position

to reimburse the Federal reserve bank.

Approved.

°I1 LIEw 10, l9, approved by three members of the Board, to4 letter

dated April 26

4144 ClIrrency of the Senate inclosing a letter from I:essrs. Hawthorne,

*t€tr(Irci Pitts oftilehelaer 02 Alexandria, Louisiana, stating that that firm represents

,I.lezariazia,c::::::ia dbonds issued by the Lutual Loan and Investment Company

111"1411 Co.mpany of New

from the Acting Clerk of the Committee on Banking

by a mortgage under which the Interstate Trust and

Orleans is trustee; that the firm is desirous of


321

obtaini_4-"G" from the trust company the names of all the bondholders in order

th" they inglY communicate with them with a view to making arrangements to

Plic)teet the bondholders interests; and that the trust company has refusedtop,

,urnish the names. The rely stated that while the Federal Reserve Board

Derforas

heilks ofthe 2edera1 Reserve System, it is not within the scope of its law-

Ali functions to undertake to detemine the rights of the parties in a

3ituation such asabove described or to remire a member bank to take any

acti°11 with respect thereto; that the subject is one which appears to be

'.(311'1.1ecl by the applicable local law; and that, in the circumstances, the

is not in a Position to advise regarding the matter.

Apnroved.

Reilly on May 10, 1933, approved by three members of the Board, to

4 letter dated Anril 21 from Senator Lorris Sheppard Quoting a communica-

2rell, Honorable Nathan Adans of Dallas, Texas, advocatinr- the direct

Learance or checks through banks instead of through the gold settlement1\114. The reply stuted various reasons why, in the opinion of the Board,

the aaoption of the su >7eJ tion would not be advisable.

certain duties of a supervisory character with respect to member

Approved.

Reply on May 13, 1933, approved by three members of the Board, toletter

cIllestirl,

az41,11.

that there be Prepared far the signature of the Secretary of theTZe

or the

Senat with regard to S. 1539 a bill to amend Section 13 of the

dated 1.14.y_2 from Assistant Secretary of the Treasury Douglas, re-

_11e

R--,A''Te Act, as amended, with respect to rediscount powers of Federal

report to the Chairman of the Comvittee on Banking and Currency


25

-34-

Ileeerv° bankThe reply enclosed a draft of a proposed letter to the

C1141r-nan of the I3ankirig and Currency Cormittee of the Senate for the signa-

tUre of the Secretary of the Treasury, statin:- that under the provisions ofthe

bill the Federal Reserve Board would be authorized, for two years afterits e-,

ctaent, to permit any Federal reserve bank, during such periods as

thererore, .s

i oPposed to the enactment of the bill. There was also

Illelitecl a similar report dated i.lay 13, 1933, approved by three menbers

the (:)Eirci. and 8if7ied. by the Secretary of the Board, to the•.;hairrilan oftile Be.tithip.

Nd Currency Coirraittee of the Senate, in response to a request

eived from the -Acting Clerk of the Committee

under date of ',lay 1, 1933.

the T1,-yard Might determine, to discount obligations of any State, county,

cliztrict)POlitical subdivision or municipality, including irrigation,

cirainarLe and recltion districts, for any individual, partnership or

ccz,poration, including the body issuing such obligations, when they have a

tlaturity from the date of discount of not exceedin,_; six months and areissue(' in anticipation of the collection of taxes or of the receipt or

atIreci revenues. The proposed letter also called attention to subsection

(b) Section 14

l'easons outlined

of the ITederal Reserve Act and stated that, for the

In the letter, it is believed that the discount in sub-

8t4tial amounts of ob1i2;ations of States and their political subdivisionsrair:ht serious,_

imPair the ability of the -Federal reserve banks to performthe runction :

for which they were created, and the Treasury Departr_ent,

Approved.

the —randUm to -LI.. Steven B. Gibbons, Assistant to the Secretary of1,1,ect,

'"11.17, with regard to a proposal of Lir. Tinian. C. Safford, Vice


P.2e

ItcloDte(i

5/3-8/33-35-

President o2 the Western and Southern Indemnity Company of Cincinnati, Ohio,

that the Federal Reserve Act be amended so as to extend the privilege of

recliscountin:: at the Federal reserve banks to life insurance companies

licensed for the purpose by the Secretary of the Treasury. The memorandum

c)illined reasons why the Federal Reserve Board considers the proposal to be

761'Y Material departure from the fundamental purposes of the Federal

Res°r1le Act and stated that to add this function to their already heavy

bl"Lens might seriously impair the ability of the Federal reserve banks to

Ibt°11/11 the functions for which they were created.

Approved.

There was then presented for the record the following expression

bY the Federal Advisory Council at its meeting on Tay 16, 1933:

"The Federal Advisory Council desiresto place on itsree°rds this minute expressing its great satisfaction and17atification in the way the general situation has been21Ded by the President's leadership and by the action of411e.Con:7,ress in passinL; so promptly the emergency bankingC1slation of I:arch 9, 1933.

the :The reollenin of sound banks has contributed largely to"The

of public confidence. A careful survey showsthe whole banking situation is steadily improving. In

al" of the successful results of the constructive measuresfar undertaken the Council has given careful considera-on to the wisdom of enacting further banking legislation

s. session of the Congress and has discussed especially-1-63l and H.R. 5593 (the Glass and Steagall bills).

eMb The Council recognizes the many constructive featuresodied .

0, in the two bills mentioned such as the divorcementtl affiliates from banks, the regulations as to qualifica-ze°112 for directorships, the limitations placed upon officialsthrvin with companies handling investment securities, and

ifeelnt ed et. The Council believes that many of these provisionsinto law will be beneficial to the country.


3275/34/33

-36-

. "On the other hand, the Council questions the advisa-bility of Preventing in the future banks from participatingin long term capital financing. The Council would pointO ut that with the complete elimination of banks from alltYpes of underwriting it is likely to prove impossible toPlace at the disposal of commerce and industry the fundsneeded for the progress of industrial development in thiscountry. There are sinply not available outside of thebanks sufficient accumulations of capital to handle thefinancing and refinancing required.

"Above all else, the Council is vigorously opposed tothe •Principle of the guarantee of bank deposits as provided

f°r in the bills under consideration. It believes that"en as an emergency measure such a step is both unnecessaryat the present time and doomed to failure in practice.

"The Council realizes and admires the faithful and con-scientious study that distinguished members of the CongressI.ave.given to the banking problems, but it ventures to ask

View of there being an entirely new administration in,11? DePartnent of the Treasury and a new Governor of the42ueral 'Reserve Board whether it night not be wise to allownese new financial authorities more time for a still moreIlorough study of the situation and the formulation ofPolicies based thereon."

flz. Lorrill presented a memorandum dated Kay lb, 1935, from Er. 1. A.

4'116) Chief of the Statistical Division of the office of the Comptroller 01

CUrrency, attaching a copy of a resolution adopted by the Senate

C°11ittee °n Banking and Currency requesting the Comptroller of the Currency

t° ObtEtin for the Committee information as to the number and aggregate

118'1e/ices of all deposit accounts of national banks segregated as follows: (a)

118'4"Is 11°t exceeding 12,5OO, (b) over '2,500 and not exceeding ,:15,000, (c)

and not exceeding .;10,000, (d) over ,10,000 and not exceeding

and ,e‘k ) in excess of ,)50,000; Kr. Kane stating that, in accordance

111*t11 this ronuest, 0 telegrams were sent to 41,8311 national banks requestingthe

zlnation as at the close of business on Ilay 13, 1933. L:r. Lorrill raised


3285/18/33

the question whether

State member banks.

-37-

the Board desired to obtain the same information

After discussion, the Secretary was requestedto send a telegram to all Federal reserve agentsasking that they obtain the same information fromState member banks by telegraph and forward it tothe Board by air mail.

RePlY to a letter

l'reastirY Doucias

17ashinton,

84111',:e or ilichnond, Chicago

Tzeasurer of the United

bealkinr,; conditions

Trectall-rer of the United

\40)000,000 of such notes;te

P'ederal Reserve Bank of

l'aes; that 9800or14 f,'0111'erence with

.allestecl that the

cl.rtine and placed in the

are still in the original sealed

notes may well be disposed of; that

of the Federal Reserve Board it has been

be returned to the Bureau of Engraving

reserve vault of the Federal Reserve Board, and

thal the '91800,000 of circulated notes be redeemed in the usual manner; andthat it

will be appreciated if theCe(1111,

, stating

a large amount

12 ,factory to it, as it is desired to receive credit in the

Z%Ul'el"s account for the notes before the end of the current week. The

inclosed a°r 041,:celley,

bY r2reasurer

dated Eay 17, 1933, from Assistant Secretary

that, during the recent banking emergency in

of Federal reserve

from

of the

notes of the Federal Reserve

and New York was paid to the local banks by the

States; that, with the return of more nearly normal

in the community, these notes have been returned to the

States, resulting in an accumulation of over

that the Treasury holds .12,200,000 of notes of

Richmond which

circulated

representatives

sealed Packages

Board will advise prorptly if this pro-

copy of a letter addressed by the Board to the Comptroller

requesting that arrangements be made for the return today,

Of the United States to the custody of the Comptroller of


14

3295/1a/33

theCul'rencY at the Bureau of Engraving and Printing, of the ,A2,200,000 of

Federal reserve notes of the federal Reserve Bank of Richmond held by theTree

surer which are still in the original sealed packages as received fromthe Dux__

't't1 o ngraving and Printing, and stated that with regard to the

ts9)6()°'°°() of circulated notes it is understood that the Treasurer of the

Utited States has made arrangements to have these notes redeened in the usual

rilariner) and that the Board sees no objection to such action. Attention was

ea-lied to the fact that the adoption of the proposed procedure in returning

the PEtekaF,'ed notes of the federal Reserve 3ank of IZichmond to the Bureau of111PT,n

--411111 and Printing has been requested by the Richmond bank.

Approved.

Of

OPerations, stating that, in view of the provision in the Dmergency

13111:11.10 0r Private, it is reconrended that the following changes be made intiler

I"klY press Statenient showing the condition of Federal reserve banks:

eu*ine amounts now shown against the items "Reserves other than gold"

cash" into one item "Other cash", (2) change the item

%te'l lieserves,, to "Total gold reserves and other cash", and (3) change the44acIra m

item "Ratio of total reserves to deposit and federal reserve note

combined" to "Ratio of total g

and Federal reserve

old reserves and other cash to

41,10 1.0 note liabilities combined". The memorandum

LIamor ALalln dated :.:ay 17, 193.i, from lIr.Smoad. Chief of the Division

':°rtgage Act of 1933 making all coins and currencies, coined or issuedby 0„

4: Una er the authority of the United States, legal tender for all debts,

(1)

Illended that the text accompanying the statement to be issued todayQ°11tili the followinc

statement regarding the changes:


:3,10-39-

"Following the passage of the Act of May 12, 1933,Inak1lk7 all coins and currencies, coined or issued by orunder the authority of the United States, legal tenderfor all debts public and private, amounts formerly re-Ported against items 'Reserves other than gold and'Lion-reserve cash' have been cambined and are now shownaminst the item *Other cash', and the item 'Total goldreserves and other cash' has been substituted for 'Totalreserves'."

Attention was called to the fact that under the provision of law

5/16/33

above T.

-eferre(1 to, Federal reserve notes and Federal reserve bank notes are

leCal t nde --er and are therefore lawful money and eligible as reserves against

clep°8its •Ied.eral reserve banks, and the Question was raised as to whether

"ILL reSerVe notes held by the issuing bank and Federal reserve bank notes

be •included as reserves in the item "Other cash" in the revised state-

1)111.11/1 the discussion, Mr. O'Connor left the meeting.

At the conclusion of the discussion, the re-endations contained in 7 -r. Smead Ts memorandum

were approved, with the addition to the revisedstatement of an explanatory note that the item'Other cash' does not include Federal reserve

11"es or a, bank's own Federal reserve bank notes."

The Secretary stated that it is expected that the Board's Annual

tO QrOw

11101111nC and he recomrended that the report be released to the press

Presentation to the Speaker of the House of Representatives tomorrow.

operations for the year 1932 will be received from the printer

Approved..

Gove,-or filack stated that he desired to recormiend to the Board that,err,

be iTzlediately, Mr. E. E. LicClelland, Assistant Secretary of the Board,°:1311oi

a2 Assistant to the Goveinor, with the understanding that if and


5/3-8/33

.2fzi

whet G,'vernor Black leaves the office of Governor, Er. McClelland will be

l'"1313°Inted to hia present position of Assistant iecretary.

Er. McClelland was appointed Assistant to theGovernor, effective immediately, in accordance withGovernor Black's recommendation.

1"1'• -orrill stated that, in order to fill the position of AssistantSee et

l'-'arYnlade vacant by the appointment of Mr. ilcClelland as Assistant to

th"°Vernor, he desired to recommend to the Board the appointment of Lr.S.

Denter as Assistant Secretary, to perform all of the duties here-

t(31'c)re Performed by Lir. McClelland as Assistant Secretary, with the under-

t111111L' th", if and when Ex. McClelland is reappointed as Assistant

Seex*etarY the Board, Mr. Carpenter will be retained in his present1/Qait

loa 14 the Secretary's office.

1 7t,04,

'ederal Reserve Agent at Atlanta, of the sudden death yesterday of-" ilar(i

Albertson, Assistant Federal Reserve Acent at the bank.

Carpenter was appointed Assistant Secretary,effective immediately, in accordance with Mr. Eorrill'sreconmendation.

In connection with the above appointments, thequestion was raised as to whether there should be achanL;e in the salaries now being paid to 1 essrs. V,cClellandand Carpenter, and the matter was deferred for further con-sideration.

Gevernor Black stated that he had just received advice from

Z'eQ

A 111"4111-e: aoproval of the followini; chanes in stock at -,Federal reserve banks:Ill t . va- for ORIGINAL stock Shares

D. n2°11 C°11"Y National Bank, 'dindsor, Vermont.4

36 36

1441tiorlal-3ank at Massillon, Ohio.

Noted with regret.

1-ePorta of Standing Committee dated May 11, ro, 15 and 18, 193'6,

150 150


5/1e/33

lications for ORIGINAL Stock:pjAtrict IT0, 7,r-Bark in Burlington, Burlington,•kaga lid-City National Bank, Chicago, Illinois.zirst

National Bank in Colfax, Iowa.

Nationai Bank of Park Rapids, Minnesota.

ADDITIONAL Stock:41-1-EII4.11t No. 2.NaT."73i—'—lal Bank, Islip, New York. (IncreasecaPital)

tastrict No. 7.Old Second

National Bank, Aurora,in Cl c

apital)tizerla

Nationa.1 Bank, Decatur,IA capital) Illinois. (Increase

beititrict ric. 11.itY National Bank in ',Iichita Falls, Texas.(increase in ca.pital)

IliottriQt No. 12.4 at

National Bank, Park City, Utah.hah 4( re Eta e in capital)--4;11gton. National Bank: Vancouver,atetease in capital) Washington.

A411"ttiona for SURRENDER of Stock:

0°A iiNationE71 Bank & Trust Company, Hartford,14 (Decrease in capital)Pit, 4,

Natio

katrFiret-

ic L. No. 7.

hr1\41t!"°1:411 Bank, Black River Falls, Wisconsin.Pea°14-;:11c• bY First State Bank of Black River

,ich raerged with Jackson County Bank4v4,1,1e za-Laewhk River Falls, Wisconsin, nonmember)by'41 4:4',,„ Nati onal Bank, Wausau, Wisconsin. (V.L.Suc.

rst American State Bank of Wausau,nonmember)

-41-

(Cont'd)

latziet No. 5.

13-1-, vent)I Bank, Hampstead, Earyland.

in

Shares

Iowa. 6927018

18 Total

Illinois. (Increase

57

24

60

240

14

30Total

180

81

60

540

332

357

18461

57

84

240

44425

180

81

600


333

—4-2-

5/15/33

A1D.Plioations for SITRIt.1,11)Ell of Stock: (Con.t'd)

IT°k°rnis National Bank Nokonis, Illinois. (Insolvent)

Lowell Bel'ikee. National 3aril'c, St. Louis, (Insolvent)

ank, St. Louis, I:issouri. (Insolvent)

District No, 9.Zest Hef-JET—dfae Bank,(Insolvent)

East Helena, Liontana.

/1)113triet No. 11.all County National Bank,Necrease

tiemphis, Texas.In surplus) "lzens State Bank, Richardson, Texas.

(Decrease in capital and surplus)I)ceistriet No. 12.

4*al Natfonal dank(Insolvent)

Oakland, California.

41)Dro

ADD

Approved.

Shares

60150180

39

9

9

1,440Total

IlePorts. of Standing Committee dated Hay 13, 1933, recommending

valthe following Clayton Act applications:

cia Scott P. Ennis, for penaission to serve at the same timeulfector of the Bank of America National Trust and Savings

of San Francisco, California, and as director of the°I* Er lea of San Francisco, California.

t Liz. Arthur xle3molds, for penaission to serve at the sameaz •

director and officer of the Bank of America National TrustSaviciirect 11C';s Association of San Francisco, Thlifornia, and as

an1 officer of the Bank of America of San Francisco,lto

as X. :Paul 'Alder, for permission to serve at the same tirBAaz0-4ector of the Bank of &Erica National Trust and Savings

,.e i°n of San Francisco, California, and as director of thec)'4 Aluerica of San Francisco, California.

Ve

A.ppr owed.

Thereuoon the meeting adjourned.

Chairman, Executive C omit tee.

390

39

18

1,440 2,748

Secretary.


Documents

19330518_Minutes.pdf