Full text of Minutes of the Board of Governors of the Federal Reserve System : Meeting Minutes, April 8, 1930, Volume 17, Part 2

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A meeting of the Federal deserve Board was held in the office of the
Federal Reserve Board an Tuesday, April 8, 1930 at 11:00 a.m.
PdESENT:

Vice Governor Platt
Hanlin
Mr. Miller
Mr. James
Cunningham
Mr. McClelland, Asst. Secretary

The committee, consisting of Messrs. Hamlin and miller, appointed at
the meeting yesterday, to prepare a memorial regarding the death of Governor
Harding, submitted the following which was unanimously adopted and ordered
Spread upon the minutes:
"The death of jilliam P. G. Harding on April 7, 1930, at Boston
has removed ane of the leading and great figures associated with
the Federal deserve System through its whole existence.
'Called to membership on the Federal Reserve Board at the time of
its organization in 1914, he served until the expiration of his term
In 1922. During six years of this period he was Governor of the
Board. Shortly after his retirement he became Governor of the Federal Reserve Bank of Boston - the position he held until the day of
his death.
"The variety and range of his experience, first, as a commercial
banker in the South, next, as the head of the most important body
dealing with banking administration, then, as the executive head
of one of the largest of the Reserve banks, provided the basis in
an exceptional degree for broadly based judgments an questions of
Federal deserve policy, and made his attitude one of the most important influences in shaping the development of the Federal Reserve
System. As such, he had a unique position in the history of the
System and will forever be gratefully remembered by those who were
associated with him. These know how zealously he devoted himself
to work of the Federal Reserve Board and of the Federal reserve banks,
his indefatigable industry, his capacity for sustained study, his
mastery of Federal Reserve banking, his unselfish pursuit of duty,
and his independence and courage in performing his duty.
"Born in the South, Governor Harding was of New England ancestry,
and his outward nature had something of the austerity of the traditional Puritan. This was the side which he shamed to the world and
in the performance of duties of office. Those who were close to
him knew how deep and tender was his nature and how sincere and candid
his spirit.
"His passing is a grievous loss."




As a further tribute to Governor Harding's memory,
it was voted that when the Board adjourns it adjourn
over dednesday, the day of the funeral.

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The minutes of the meeting of the Federal Aeserve Board held on April
4th were read and approved, as amended.
The minutes of the meeting of the Federal Reserve Board held on April
7th were then read and approved.
Discussion ensued regarding the letter from the Chairman of the Federal
Reserve Bank of New York ordered circulated at the meeting on April 7th, enClosing copies of cables exchanged with Governor Harrison regarding a request
received from the Undersecretary of State for an expression of Governor
Harrison's opinion as to the size of any reparations bond issue in this
country.
Mr. James moved that in view of the situation developing by reason of the conflicting information coming to the
Federal Aeserve Board regarding the activities of the Bank
for international Settlements and the proposed sale of reparation bonds in this country, the Chairman of the Federal
serve Board be requested to advise the Board as to the status
of such affairs and the position occupied by the Board, In
the minds of the administration, as to responsibility in the
premises.
Mr. Hamlin moved, as a substitute for Mr. James' motion,
that the Chairman of the Board be advised that the reading
of the cables above referred to leaves the Board in doubt as
to whether it has any responsibility in the premises and it
will appreciate if he, as its Chairman, will give it any information he may have that will throw light on the matter.
Er. Hamlin's substitute motion, being put by the Chair,
was carried, Mr. Cunningham voting "no".
Mr. OunnIngham made the following statement:
"The cables between the Federal eserve Bank of New York
and Governor Harrison on the question of the flotation of
reparation bonds in this country in the near future, which
are now in circulation among the members of the Board, have
not as yet come to ma and, consequently, I have not had an
opportunity to consider than.
"Verbal representations on this subject, made at this
meeting, are rather confusing and raise the question in my
mind as to whet prompted the submission of this matter to




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-3"the Federal Reserve Board, in view of Governor Harrison's
apparently definite commitment. Personally, I do not care
to be committed to the approval of the distribution of
reparation bonds in this country and I, therefore, vote
'no' on the resolution before us."

The Assistant Secretary then reported that under authority previously
granted by the Board the Governor yesterday approved a discount rate of 4%
established by the board of directors of the Federal Reserve Bank of Dallas on
all classes of paper of all maturities, effective today.
Upon motion, the rate of 47a established by the
Dallas directors was formally approved, Mr. Platt
voting "no".
Reports of Committee on Salaries and Expenditures an lists submitted
by the Federal Reserve Banks of Minneapolis and Dallas, of employees for

I

Whom the directors of those banks authorized leaves of absence with pay, on
account of illness, during the month of March, where the total of such absences
since January 1, 1930 has exceeded thirty days.
Upon recommendation, the salary payments involved
in the leaves of absence above referred to were approved.
deport of Committee an Examinations on letter dated April 2nd from the
Federal Reserve Agent at Cleveland, requesting permission for a representative
Of his department to make the usual credit investigations, without charge to

the member banks, of the Crawford County Trust Company, Meadville, Pa,, and
the Security-Peoples Trust Company, Erie, Pa. at the time those institutions
are under examination by State authorities.
Upon recommendation of the Committee, the permission
requested was granted.
Report of Committee on Examinations on letter dated March 31st from
the Federal Reserve Agent at Dallas, requesting permission to make credit
investigations, without expense to the member banks, of the Continental Bank




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and Trust Company, Shreveport, La., the Farmers State Guaranty Bank, Valliant,
Okla., and the Mimbres Valley Bank, Deming, New Mexico, at the time of examination of the Institutions by State authorities.
Upon recommendation of the Committee, the permission
requested was granted.
Letter dated April 3rd from the Chairman of the Federal deserve Bank of
Atlanta, advising of the action of the Executive Committee of his bank in
voting, subject to approval by the Board, to authorize the Havana Agency to
waive, for an additional period of sixty days from April 18th, the usual
commission of 41 per 41,000 on the exchange of old series Federal Aeserve
notes of the ‘,J00 denomination for 4100 Federal Aeserve notes of the new
series; the letter stating that since the original waiver of commission
91,432,000 of such notes have been exchanged by the Agency.
Approved.
Memorandum from Counsel dated April 5th, with regard to the recent application for fiduciary powers of the American National Bank, Grand _lapids,
Michigan, which the Board on March 17th approved as to executor, administrator,
guardian of estates and committee of estates of lunatics; Counsel advising
that after investigation it is clear that the Board may lawfully grant the
American National Bank of Grand dapids permission to exercise full powers.
Upon recommendation of the Law Committee, it was
voted to grant the bank in question permission to act
as trustee, registrar of stocks and bonds, assignee, receiver or in any other fiduciary capacity in which State
banks, trust companies or other corporations which come
into competition with National banks are permitted to act
under the laws of Michigan, in addition to the powers recently granted.
Memorandum from Counsel dated April 5th, regarding an inquiry made by




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the Manager of the Bond Department of the Second National Bank and Trust
Company, Saginaw, Michigan, with reference to the rights of stockholders
Of the First Federal Foreign Banking Corporation in case of liquidation of
this corporation incident to the acquisition of its stock by the Bush Service
Corporation.
Upon motion, letters to the Second National
Bank and Trust Company and to the First Federal
Foreign Banking Corporation, submitted with Counsel's
memorandum, were approved.
Draft of letter to the President of the First National Bank of Boston
revised in accordance with discussion at the meeting on April 1st, regarding
examination of the First National Old Colony Corporation of Boston by examiners of the Board.
Approved.
Draft of letter to the Acting Chairnan of the Open Market Policy Conference, advising of the action taken by the Board yesterday regarding the report submitted by the Conference on March 24th.
Approved, as amended.
Report of Committee on Examinations on letter dated April 3rd from the
Chairman of the Federal Reserve Bank of Philadelphia, recommending that the
Board interpose no objection to the Glenside Bank and Trust Company, Glenside,
Pa. carrying in its assets for a reasonable time 557 shares of stock in the
Keswick National Bank of Glenside, Pa., which it acquired without first se-

curing the approval of the Board under one of its conditions of membership
in the Federal Reserve System.




Upon recommendation of the Committee, it was voted
to interpose no objection to the carrying of the stock
for a reasonable time in view of the fact that it is the
intention of the trust company to eliminate the Stock
from its assets at the first satisfactory opportunity.

3I5
4/8/30
al Reserve Bank
Letter dated April 2nd from the Governor of the Feder
Of

the condition of memPhiladelphia, with regard to the interpretation of

which a bank subject
bership set out in Regulation H, Series of 1928, under
or trust company through
thereto may not acquire an interest in another bank
sethe purchase of stock in such other bank or trust company without first
particularly to certain
curing the approval of the Board; the letter referring
of Philadelphia.
small investments made by the Integrity Trust Company
Ordered circulated.
cation for membership
Report of Committee an Examinations on appli
stock in the Federal
in the Federal Reserve System and for 2400 shares of
the new Franklin-American
Reserve Bank of St. Louis, filed on behalf of
gh consolidation of the
Trust Company, St. Louis, Mo., to be formed throu
a member, and the Phoenix Trust
existing Franklin-American Trust Company,
Company, a nonmember.
cation
Upon recommendation of the Committee, the appli
rship
membe
of
was approved subject to the regular conditions
special conditions:
set out in Regulation 11 and the following




ny,
(1) That the new Franklin-American Trust Compa
board
its
of
ng
St. Louis, Mo. shall at the first meeti
by
f
behal
its
in
of directors ratify the action taken
ing
apply
in
ny
the old Franklin-American Trust Compa
Louis and
for stock in the Federal Reserve Bank of St.
d by
impose
rship
membe
in accepting the conditions of
tors
direc
of
board
the
and
the Federal Reserve Board,
pass
shall
ny
Compa
Trust
of the new Franklin-American
.
rship
membe
of
tions
condi
a resolution accepting such
ny
Compa
Trust
ican
-Amer
lin
Frank
(2) That at the time the
al
capit
sed
propo
its
ess
busin
is authorized to commence
be fully
of .r 2,600,000 and surplus of .,A,400,000 shall
paid in.
per(3) Except after applying for and receiving the
linFrank
the
,
Board
ve
mission of the Federal Reser
powers,
American Trust Company shall not exercise the
ity
fidel
a
ct
condu
to
its;
depos
al
to guarantee speci
ess; to
insurance business; to conduct a surety busin
ities; to
guarantee the principal or interest of secur

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_7_

guarantee titles to real estate; to execute Hand issue
notes and debentures secured by mortgages or other securities; and to buy and sell stocks.
Application of the present Franklin-American Trust Company, St. Louis,
Mo. for the surrender of 1800 shares of stock in the Federal Reserve Bank
Of St. Louis, together with a recommendation by Counsel that if the Board
approves the application, it do so only upon the condition that before the
stock is actually cancelled the application made on authority of a resolution
Of the executive committee of the member bank shall be ratified by the board
Of directors of the consolidated institution.
Upon motion, the application was approved in accordance with Counsel's suggestion.
REPORTS OF STANDING COMMITTEES:
Dated, April 5th,

Recommending approval of the application of Mr. d. E.
Harber for permission to serve at the same time as director and officer of the First National Bank of Seminole,
Okla., as director of the Liberty National Bank of Oklahoma City, Okla.; and as director and officer of the
Farmers National Bank of Holdenville, Okla.
Approved,
Dated, April 5th, Recommending approval of the application of Mr. F. A.
Irish for permission to serve at the same time as director
of the First National Bank in Moorhead, Minn., and as director
and officer of the First National Bank & Trust Company of
Fargo, N. D.
Approved.
Dated, April 7th, Recommending approval of the application of Mr. Charles F.
Cutler for permission to serve at the same time as director
-of the Atlantic National Bank of Boston, Mass. and as director of the Cohasset National Bank of Cohasset, :ass.
Approved.
Dated, April 7th, Recommending approval of the application of Mr. Lee M.
Friedman for pennission to serve at the same time as director of the Atlantic National Bank of Boston, Mass. and
as director of the Rockland Trust Company of Rockland,
Mass.
Approved.




4/a/3
REPOATS OF STANDING COMITTEES: (Cont'd)
Aecammending approval of the application of Mr. George
datson for pernission to serve at the same time as director and officer of the National City Bank of New
Rochelle, N. Y. and as director of the Westchester
Title & Trust Company of dhite Plains, N. Y.
Approved.
Dated, April 7th, Aecammending approval of the application of Mr. Hugh
Bancroft for permission to serve at the same time as
director of the Atlantic National Bank of Boston, :lass.,
and as director and officer of the Cohasset National Bank
of Cohasset, Mass.
Approved.
Dated, April 7th, Recommending approval of the application of Mr. E. W.
Backus for permission to serve at the same time as director of the Northwestern National Bank of Minneapolis,
Linn. and as director of the First National Bank of
International Falls, Minn.
Approved.
Dated, April 7th, Aecammending approval of the application of Mr. Frank
Phillips for permission to serve at the same time as
director and officer of the First National Bank in
Bartlesville, Okla., as director of the Chatham Phenix
National Bank & Trust Campany, New York City, N. Y.,
and as director of the First National Bank in St. Louis,
Mo.
Approved,

Dated, April 7th,
)

The meeting adjourned at one o'clock until
Thursday, April 10th.

69&Weizi&1
Assistant Secretary.
Approved:




Vice Governor.