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90 of the meeting of the Federal Reserve Board was held in the office o'clock_ a.m. Federal Reserve Board on Thursday, August 11, 1927, at 11:00 PREST=: Governor Crissinger _r. Platt 1 -r. Hamlin • James :r. LicIntosh • 3ddy, Secretary • :Toon, 2,sst. Secretary 10th from the Chairman of the Federal deserve Telegram dated Bank of Boston, advising that the followins present rates of discount :Arectors and purchase at that bank were reported to the Board of ineeting on t its ugust 10th: 3 1/.2, Rediscount rate Prime bankers acceptances: od 1 to 15 days 3 15 to 45 days 3 1X, 46 to 90 days 3 3/8;; 91 to 120 days 0 3 3/4/ 121 to 180 days 3 1/4;; Repurchase Second grade acceptances 1/3,: higher Repurchase — Governments 0 Trade Bills 3 1/2,-L; Noted with approval. Federal _deserve Telegram dated August 10th from the Chairman of the directors at its meeting Bank of San Francisco, advising that the board of that bank for purchases on August 9th voted to establish a minimum rate at as of bankers acceptances of 3,; and other rates for such acceptances adopted by the Federal Reserve Bank of :Taw York. i;oted with approval. a letter dated The Governor presented and had read to the Board of :,:illneapolis, August 3rd from the Chairman of the Federal Reserve Bank 8/11/27 Iii which the Jhairman expressed his own views with res,)ect to the desirability of chanfjno: the rediscount rate at the ..,ederal _ieserve Bank of :-innea':olis, and the possible action ":.Lish his directors might take relative thereto at their meeting to be held. on .August 8th. Zoted. Letter dated liugust 4th from the Federal Reserve iigent of New York, re questing permission to absent himself from his bank during the period from September 10th to October 20th, for the purpose of attending a meeting Of the General Council of The Reichsbank; the Agent stating that he contem- plates being in ':iashins7ton once or twice before September 10th. Approved. Memorandum from Counsel dated August 8th, with reference to the Clayton Act application of Mr. Jesse A. Bloch, involving the National Change Bank and the ''heeling Bank and Trust Company, both of Wheeling, . • Va.; Counsel recommending that the Board refuse the a-oplication temporarily, advise he applicant that on the evidence before it it cannot P3 xlmit him to servo the banks, and re-IA.0st hiLI to furnish the Board with twenty additional information, and further that unless the applicant within lads advises the Board of his desire to submit such additional information, the Board's refusal become final. Upon motion, Counsel's recommendations were approved and the application temporarily refused, with opportunity to the applicant to furnish additional information. *Memorandum from Counsel dated ;I:uust 8th, with reference to the First Camden Clayton :::ct application of Mr. Isaac l'orris, involving the 11 0/11/27 I7.ational Bank and Trust Company and the Security l!rust Company, both of J.; Counsel rocommendinp; that the Board refuse the application Jon, temporarily, advise the applicant that on the evidence before it it cannot permit him to serve the banks, and request him to furnish the - oard with additional information, and further that unless the applicant within twenty days advises the Board of his desire to submit such additional infonaation, the Board's refusal became final. Upon motion, Counsel's.recommendations were approved and the application temporarily refused, with opportunity to the applicant to furnish additional information. Letter dated August 4th from the Federal eserve Lgent at San - fancisco, advisin.7 of the intention of the American Trust Company, 2 jay). 2ralicisco, to close its Californiaontgomery Office (495 California dhich was the former head office of the lonericun Bank, and to move same to the Aass Building (251 L:outgomery .jtreet); the Agent stating that inasmuch as the branch is being moved only a distance of one block and will serve the same community, he is advising the bank that no objection is anticipated to the chance in location. Upon motion, it was voted to approve the removal of the branch to the new location. Report of Executive Committee on letter dated July 29th from the Assistant Federal Reserve Agent at :Anneapolis, transmitting and recommending approval of the application of the Central National Bank of lAnneapolis, for a reduction in its reserve requirements from 10% to 7% of demand deposits; the Committee also recommenaing approval. Approved.. -4- 8/11/27 Letter dated August 10th from the Governor of the Federal Reserve Bank of New York, referring to a previous communication to the Board, with referstating ence to the granting of a credit to the Bank of Poland; the letter that the 2ederal eserve Bank of New York has agreed to an extension from Aumst 20 to -november 1, 1927, of the time in which the program of stabil- the ization of the Government of the _iepablic of Poland and the issuance of loan by private bankers may be consummated, which ';:culd -permit of the isif necessuance of the loan and the pramul, tion of the prorTam in October, sary. Upon motion by Lr. Hamlin, it was voted to interpose no objection to the extension agreed to by the Federal Reserve Bank of New York. Memorandum from Counsel dated August 1st submitting letter dated July 29th from Mr. B. F. Castle, Vice President of the First Federal Foreign interInvest_ent ?rust, New York, N. Y., raising a question as to the proper pretation of that portion of Section XI (b) of the Board's Regalation bonds or derelating to the substitution of collateral securing issues of the question bentures by Edge Act corporations; Counsel discussing fully ng raised in the letter regarding the present sub-section and suggesti that it be amended to read as follows: B. Certifying that such substitution or change has not resulted in a reduction of the aggregate market value of the collateral to an amount below one • hundred and ten percent of the aggregate principal amount of the obligations issued or to be issued against such Securities." Upon motion by Mr. Hamlin, it was voted to of approve the above amendment to Jection J (b) K. on the Board's Regulati _ 94 8/11/27 -5- ,111 I.:emorandum from hr. Gilbert, 3upe_.visor of Examinations, stating that a general question has arisen in the work, of his office as to whether, in view of the provisions of Section 5204 of the :devised Statutes, the • continuance of membership in the Federal deserve System of a state member bank which, through losses or other wit Arawals, has suffered an impairment of its caoital, is unlawful; the memorandum also suänittinrz several Other questions incidental to the application of Sections 5204,5205 and 5209 of the _,evised Jtatutes answers to are desirable and necessary in conductin,; correspondence 's'ith the Federal Lieseive _ents relative to state member banks havinr. impairments of capital. Upon motion, it was voted to refer the questions set forth in the above memorandum to Counsel for an opinion. _emorandum dated July 22nd from Counsel, regarding the matter referred to him by the Board on July 5th, namely suggestion of :.:r. that the term "outlying district" as used in Jection 5138 of the devised Statutes as amended and in Section 19 of the Federal deserve Act be construed to mean "that portion of the territory included within the corporate • limits of a city which lies so far outside of the recognized business and financial area of such city as to -_;ive to the business and accounts in banks SO located a character essentially different from those of banks in the business area proper"; Counsel stating that he is of the opinion that the definition sup:ested by hr. _flier would be a practical definition for the ioL,rd to use in interJreting the term °outlying district" within the meaning of Section 19 of the :SoC,_eral -eservo _ct, but would not be a practical -6- 8/11/27 ting definition for the Comptroller of the Currency to adopt in interpre Section 5138 of the Revised Statutes, and that if the Board and the on of the Comptroller of the Currency desire to adopt a uniform definiti d 'term he believes it would be desirable to adopt the definition submitte formerly Deputy Comptroller of the Currency, and himself . Colins,' in their memorandum of Juno 11th, as follows: "The term 'outlyin district' is construed to mean that portion of a city which is located outside of, and at a considerable distance and from, the recognized business and financial center of such city, includes all suburban districts." After discuss ioh, upon motion by Mr. Hamlin, it was voted to adopt the definition of the term "outlying district" submitted by Mr. Collins and Mr. Wyatt in their memorandum of June 11th as quoted above. The minutes of the meetin of the Federal lieserve Board held on July 28th were then read and approved as amended. kaust The minutes of the meetings of the Executive Committee held on 2nd, 9th and 10th, were read and the actions recorded therein ratified. aEP0.0.3 OF 3TA1T_ LIG 00:1.72.1ITT_RES: Dated, August 10th, 11th, _Dated, ,uc;.ust 6th, 8th, A9commending changes in stock at Federal Reserve Banks as set forth in the Auxiliary Minute Book of this date. Recommendations approved. Recommending action on applications for fiduciary powers as set forth in the A iliary Minute Book of this date. aecommendations a-npr The metir': adjourned qtalip approved: a I Secret
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