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60 A meeting of the Executive Comnittee of the Federal Reserve Board 178.8 held in Washington on Thursday, April 6, 1933, at 2:45 p.m. PRESENT: Mr. Mr. Ur. Er. Woodin, Chairman of the Federal Reserve Board Miller, Chairman, Executive Committee Hamlin Tames Er. Morrill, Secretary Mr. McClelland, Assistant Secretary Er. Harrison, Assistant to the Governor. Ur. Miller stated that Governor Harrison of the Federal Reserve 11/a4lz of New York had just called him over the telephone and advised that ett ite meting this afternoon the board of directors of the bank had voted, aubiect to review and determination of the Federal Reserve Board, to establish a rediscount rate of 3%, effective April 7, 1933. 'Ir. Miller stated that Governor Harrison advised that Governor Meyer attended the tilesting in New York and is in favor of the reduction in rate. The rate of a:, established by the board of directors of the New York bank was approved, effective April 7, 1933. The Secretary referred to the fact that the President of the United States on April 5, 1933, Issued an executive order prohibiting the hoarding of r, L43-4u, in the fora approved by the executive connittee of the Board at its Illeeting on April 3, 1933. He stated that a number of Federal reserve banks e inquired whether, in view of the executive order, the Board still clesil'es to have forwarded to it the lists requested in its telegrams of Ilaxcu 0, 12, and 13, 1933, of persons who have withdrawn gold and not re- cisPosited it in a bank on or before March 27, 1933. The Secretary was requested to send a telegram to the Governors of all Federal reserve banks stating that the Board still desires to receive the lists requested by it. 61 4/6/33 -2The following press statement of the Secretary of the Treasury as to the executive order referred to above was presented for the record: "The President's order of today requiring the turning in Of hoarded gold, and at the sane time providing that gold shall be available for all proper purposes, is an expected step in the process of regularizing our monetary position and furnishing adequate banking and currency facilities for all eustomary needs. "Such an order was in contemplation from the time of the Passage of the Ilmergency Banking Act. As the President indicated today, while many of our citizens voluntarily and helpfully turned in their gold, there were others who did not SO respond. In fairness, the conduct of all citizens with reference to gold Should be the sane in this emergency, and this is assured by the order. Those surrendering gold, of course, receive an equivalent amount of other forms of currency, and other forms of currency nay be used for obtain-111C gold in an equivalent amount where authorized for proper Purposes. "Gold held in private hoards serves no useful purpose Under present circumstances. When added to the stock of the 2ederal reserve banks it serves as a basis for currency and credit. This further strengthening of the banking structure adds to its Power of service toward recovery. "A vital provision of the order is that authorizing the Secretary of the Treasury to issue licenses for gold for Proper business needs not involving hoarding. Applications Will be passed upon as the facts in each case warrant. "Regulations governing the procedure of the Treasury under the new order are in course of preparation." At the request of the Chairman of the Board, the Committee went into GZee 14ive session, and 1.:essrs. Liorrill, EcClelland and Harrison then left the At the conclusion of the executive session the Chairman of the Board rt the room and Lessrs. Eorrill, If.eClelland and Harrison rejoined the meeting. The Assistant Secretary reported that the Secretary of the Treasury hesi aPproved the telegram to the Federal Reserve Agent at San Francisco, 62 4/6/33 -3- approved by the other members of the Board at the meeting yesterday, with cgard to the currency printing program and the policy to be followed in connection with the issuance of Federal reserve bank notes. He stated that in accordance with the Board's instructions letters along the same lblas are being addressed today to the other Federal reserve agents. The Executive Committee then considered and acted upon the following matters: Telegrams dated April 5, 1933, from the Chairmen of the Federal Reaerve Banks of Boston Find Philadelphia advising that, at meetings of their oards of directors on that date, no changes were made in the banks' "i8tinC schedules of rates of discount and purchase. Without objection, noted with approval. Telegram dated April 6, 1933, from the Chairman of the Federal Re80r1te Bank of San Francisco stating that, subject to the approval of the teclel'al Reserve Board, the board of directors of the bank had fixed a rate "ECL for all advances to nonmember State banks and trust companies under t46 Provisions of section 404 of the Act of March 9, 1933, as amended by the, Act of March 24 1933. established by the board of The rate of directors of the San Francisco bank was approved, effective today, April 6, 1933. Telegraphic reply to a telegran dated April 5, 1933, from ate74311a, Chairman of the Federal Reserve Bank of Chicago, stating that he 17111 Present the request contained in the Board's letter of April 3, 1933, "the meeting of the executive committee of the bank on April 7, 1933, and etici°4v°' 1 to make arrangements for three of the directors to accompany him 63 4/6/33 to t Jashington; that it may be difficult to arrange a time when he and three of the directors can come to Washington together; but that it is hoPed that a meeting can be arranged same tine during the first part of next week. The reply stated that it will be satisfactory to the Board if Stevens will arrange for a meeting with the Board in Washington early next week. Approved. Telegraphic reply to a telegram dated April 5, 1933, front L. CiIrties, Federal Reserve Agent at Boston, requesting approval of the aPPointment of Messrs. Richard Rapport and George V. Wallace, Jr., as eZenliners in the Federal reserve agent's department, with salaries at the .5.tes- or 04,020 and :3,300 per annum, respectively. The reply stated that °4 the assumption that the appointments are to be on a temporary basis for the Period of emergency only the Board approves the appointments at the 4alaries named and requests that the agent advise the dates on which the aPPointments become effective and that he forward to the Board for its information as to the qualifications and experience of the 413 peintee8. Approved. Letter to Mr. Case, Federal Reserve Agent at New York, replying to 4asistant Federal Reserve Agent Dillistints letter of April 3, 1933, reapproval by the Board of the temporary appointment of Messrs. .c`aePil D. Gross, Charles D. Tohnston, Tohn George Kauderer and Ferris I. 11321er as assistant examiners in the Federal reserve agent's department. he rePly stated that the Board approves the temporary appointments effec- 64 V6133 tive as of the dates stated in Fa.. Dillistin's letter upon which the employ' lent of the respective appointees bean. Approved. Letter to the Acting Comptroller of the Currency statin7, that, in "cordance with the reconrerdation contained in his letter of April 4, 1933, ths Board has ar»roved a salary at the rate of ,.3,000 per annum for national bank examiner Francis B. Fanning assigned to the Seventh Federal ileserve District. Approved. Letter to the Acting Comptroller of the Currency referring to his lettc--L' of April 6, 1933, with further regard to the reappointment of :r. -114 Hoover as a national bank examiner and advisin3 that the Federal Ilesery -.e Board, in accordance with the recomendation contained in the Acting C°111Dtrollerts letter, has approved for i Hoover a salary at the rate of :369000 Per annum. APoroved. Telegraphic reply to a telegram dated I.-Larch 25, 1933, from lir. 411st , 149 Jederal Aeserve Agent at Philadelphia, tranamittin the request of the " -Li-es-Barre Deposit and Savings Bank, :filkes-Barre, Pennsylvania, for len to acquire 200 shares of stook of the i.:iners Bank of ;AL.:es Barre e'rul 25 shares of stock of the 'Jest Side Trust Com)any of ITewark, rIew Tersey; the re4, '°4 C.j.ven for the request being that this stock is now held as calateral to a loan which it may be necessary to call very soon and the hunk desires to protect its interests if no satisfactory bids are reeet7, cd• The telegram also reconzaended that the request be granted on -Lcn that the stock be disposed of within a period of six months. The 65 4/6/33 -6- 1)1Y $tated that in view of the circumstances described and the agent's recotenendation, and pursuant to the condition of membership prescribed for aceepted by the Wilkes-Barre Deposit and Savings Bank, the Board will illterpose no objection to the acquisition by the bank of the shares of "oak referred to, if it is necessary for the bank to acquire such stock to Prevent losses on debts previously contracted, upon condition that the 8t°ok shall be disposed of within six months from the date of acquisition /141ess the time is extended by the Federal Reserve Board. The reply also stated (1) that in conformity with the regular condition /To. 7 now being IMPOsed on banks applying for membership, it will be the policy of the 13°/Iras in cases where a bank is subject to a condition similar to the one ,114Posed on the Wilkes-Barre Deposit and Savings Bank, not to object to the 4agilisition of stock by such institutions in any other bank or trust 44741°WaY in satisfaction or protection of debts previously contracted in 8°Qd faith, provided that the stock so acquired shall be disposed of within Six Months from the date on which it was acnuired unless the tine is extended 17 the Board, (2) that in the absence of unusual circumstances the agent Ileed not submit to the Board any case of this kind unless the bank fails to diaPose of the stock within six months from the date acouired and (3) I14t the agent is requested, however, in each such case which COMBS to his 4ttelltion to immediately advise the bank involved of the Board's position 1:41 asses of this kind and that a failure to dispose of any such stock within Months after it is acquired may be considered a violation of the conto which the bank is subject, unless an extension of such six months 13ellod is obtained from the Board. 4/6/33 -7- 66 Approved, and the Secretary was authorized to advise the other Federal reserve banks, for their information and guidance, of the policy of the Board as stated above. Telegraphic reply to a telegram dated April 4,1933, from Governor Y(31Ing of the Foderal Reserve Bank of Boston calling attention to the Practice, which has existed for a number of years in Boston, for certain iliveatment houses and brokers to supply savings banks and others with time ccalateral notes secured by stocks and bonds, and inquiring if it would be P°s8ible for the Board to call this practice to the attention of the c°mMittees considering the bill now before Congress which provides for the auPervieion of the sale of investment securities in interstate commerce, with the vier to having placed in the bill a provision exempting this class "PaPer from its provisions. The reply stated that the Board believes it ElUld be more appropriate for those interested in the matter to take it up directly With the Senate Committee on Banking and Currency or the House C01111ittee on Interstate Commerce. Approved. Telegraphic reply to a telegram dated April 4, 1933, from Governor Seal' or the Federal Reserve Bank of Richmond referling to the Board's teleasill of April 3, 1933, with regard to the classification of paper held lutder discourit for a member bank which has not been licensed to open by the Se cretary of the Treasury, and inquiring whether the Board construes banks it the hands of conservators as banks in process of liquidation. The l'ePlY stated that for the purposes of the Board's telegram of April 3, 1933, a batk in the hands of a conservator should not be treated as in process of liquidation unless the conservator is in fact a liquidating agent. Approved. 1/6/33 Telegraphic reply to a telegram dated April 4, 1933, from Governor 41kirts of the Federal Reserve Bank of San Francisco, referring to the 8°4rd es wire of March 30, 1933, directing that penalties should not be assessed against a member bank for deficiencies in reserves for the period be8inning March G, 1933, and ending on the date next preceding March 13, 14 1114. 15; calling attention to the fact that bank holidays in all States the Twelfth Federal Reserve District were effective at earlier dates °Q13111elleing March 2, 1933, during which time member banks were unable to l'ePlenish reserves; and requesting authority to waive penalties during the eriod from March 1 to March 15 in any instance which the Federal reserve baIlk deems proper. The reply stated that the Board interposes no objection to the n°n-assessment of penalties for deficiencies in reserves of member 1)4441 from March 1 to 15 in those cases where, in the 'judgment of the Fedreserve bank, member banks did not have an adequate opportunity to rePlenish reserves. Approved. Telegram to the Governors of all Federal reserve banks, stating thIlt the Board has advised in response to inquiries received from a Federn, -4. reserve bank with regard to a State member bank in the hands of a Q°113ervator that (1) the mere fact that a conservator or other State triqa1 having similar authority has been appointed for a State meMber btal, - Pursuant to the executive order of March 18, does not make it necessary thEtt „ he bank surrender its stock in the Federal reserve bank unless and the bank should be placed in receivership or liquidation or its !aerobe , -' 11.P terminated in the manner provided by the Federal Reserve Act, 68 1/6/33 -9 (2) the balance with the Federal reserve bank to the credit of the bank in the hands of a conservator or State official having similar authority may be Uithdrawn subject to the provisions of the Federal Reserve Act and the 8°arate Regulation D, but it is assumed that the Federal reserve bank will 4°t permit withdrawal in an amount which will exceed the amount of such belence in excess of any indebtedness of the bank to the Federal reserve becak, and (3) the Federal reserve banks are not authorized to discount for or to Illtc)re. advances to banks in hands of conservators or to such conserThe telegram also stated that the questions raised had specific tererence olto a State member bank in the hands of a conservator but the conclusions stated are applicable to national banks in the hands of (41neervators and to such conservators, and that in connection with the 413°1re conclusion number (2) as applied to national banks, attention is call "to section 402 of the instructions of the Comptroller of the Currency to conservators of national banks. The telegram further advised that the 8°"cl hae also stated, in reply to an inquiry from a Federal reserve bank, that the question whether a Federal reserve bank should extend credit to 411 utlicensed. State member bank which is operating under Treasury regulatio, - IN°. 27 is one for the determination of the Federal reserve bank in the lioat of all the circumstances of the case, and that in this connection the 13° " cl had called attention to Treasury Interpretation No. 12 defining the a , 4 er the banking functions which unlicensed State meMber banks 1114Y eat17 on in operating under Regulation No. 27 and also the telegram l'tQr4 the Secretary of the Treasury of March 22, 1935, with regard to the atIties „ -4- Federal reserve banks in this connection. Approved. () 1 69 4/6/33 -10'Lleports of Standing Comndttee dated April 5 and 6, 1933, ream- niendAnC approval of the following changes in stock at Federal reserve banks: z.q) .211.cations 1 for ADDITIOn1L Stock: Distrf 9. 4Qa Lational Bank, Ada, Einnesota. (Increase in surplus) "irst ITational Bank, I,:arshall, :annesota. 14. (Increase in surplus) ' ' - 1(10Imincton-Lake National Bank, Linneapolis. Linnesota. (Increase in surplus) 2irat::utjonal lank, Geyser, I'mitana. (Increase in surplus) National Bank (II, Trust Company, Lake liorden, S. Dak. (Increase in surplus) - d-Les National Bank, Hayward, :isconsin. (Increase in surplus) Shares 1 1 1 1 1 7 13 18 150 150 102 102 20 20 23 23 ' j plications for STMEEDER of Stock: 4rIl1ers National Bank, Exchange, Pennsylvania. by Danville National Bank, Danville, ifennsylvania) 1_19.I.1_9., 4 ' L:c4lier National Bank, Ligonier, Pennsylvania. (7.L.Suc. by First National Bank in Ligonier) 4112 .1A1L - E 5li,,ti-OE:i-kank, Statesville, (Insolvent) bia . -d.rzt Natfonal Bank, Huntsville, Tennessee. (Insolvent) et Fo. 7. I:ational Bank, Iowa. (Insolvent) kstz. 3 '`71‘cant 1le-Comnerce Bank and Trust Company, h St- Louis, ::o. (Decrease in surplus) 3; Trust Company, St. Louis, No. Pi (Insolvent) rat rational Bank,Sebree, 1:entucky. Abs. by Sebree Deposit Bank, nomenber) 1,800 168 36 2,004 70 V6/33 ( for SURRENDER of Stock: (. Cont No. 10. anlith fiTrenaliiank, St. Edward,.1Tebraska. (Insolvent) Shares 36 36 120 30 150 72 Total 72 2:575 Distrint re)• 11 I '41.11/1-Citizens rational Bank, Marlin, Texas. ( Insolvent) zirst State Bank, Lorenzo, Texas. (Insolvent) Distrioto I .. 12. '-iasst Savings Trust Bank,Colfax, Washinr:ton. (Insolvent) Approved. Ileoort of Standing Committee dated April 5, 1933, recommending /11Yorn -1 , 01 the fo1lowij Clayton. Act application: ia% Je R. Harding', for i)ermission to serve at the save us officer of the United States National Bank of Port-Latd, Oregon, as director of the Tilirst National Bank of St. Helens, Orei2;on, and as officer of the Peninsula National Bank Of Portland, Ore Jon. Ap'woved. Thereupon the meeting adjourned. 2A-- 4131.)1oved: _ Chairnan, Executive Committee. /A Secr-eiiary.
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