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A meeting of the Federal Reserve Board was held in the office of the Federal Reserve Board on Thursday, August 22, 1929 at 11:00 a.m. PRESENT: The Chairman Governor Young Yr. Hamlin Mr. Cunningham Mr. Pole Mr. McClelland, Asst. Secretary The Governor submitted a letter dated August 16th fram the Governor of verbal the Federal Reserve Bank of New York, with reference to his previous advice of the action of the board of directors of that bank in authorizing the officers to purchase up to .25,000,000 of Sterling; the letter stating that, in his opinion, the present is an appropriate time to make purchases, the way as Sterling exchange has been weak, with ,5,000,000 of gold now on came to New York from London, and unless Sterling strengthens more gold may from England on steamers leaving during the current week. In his letter, FedGovernor Harrison stated that if by the purchase of Sterling bills the eral Reserve System can help to minimize or avoid these shipments, without for at the same time going contrary to the policy which has been adopted disadour awn market, there seems to be not only great advantage but no g vantage in purchases of Sterling, especially to the extent that Sterlin stateis converted into bills and reflected in the Federal Reserve banks' ment in open market purchases of bills. The Governor stated that desiring Sterling an expression from the Board, the New York bank refrained from buying until last Tuesday when 200,000 was purchased to prevent an import of gold. Yesterday, he stated, an additional 12175,000 was purchased and today all being converted into bills. The Governor stated that he feels there is no objection to Sterling purchases at this time and that Messrs. Platt and James with wham he communicated over 600,000, -2- 8/22/29 the telephone, are of the same opinion. He stated that he is not sure of the position of Mr. Miller with wham he also communicated, but believes that .L.r. Miller would prefer to have more information before indicating his approval. After discussion, the Governor moved that the Governor of the Federal Reserve Bank of New York be advised that the Board sees no objection to the action of the New York directors in authorizing the officers to purchase Sterling up to 25,000,000. Governor Young's motion, being pat by the Chair, was carried. The Governor then presented a report of the Committee on District ;-p4 on letter dated August 6th from the Governor of the Federal Reserve Bank of Cleveland, advising that the board of directors of that bank has rescinded authority previously granted him to negotiate for the purchase of property at the corner of Grant Street and Strawberry Way, Pittsburgh, as a building site for the Pittsburgh Branch, and has authorized him to negotiate instead Way; the the purchase of property at the corner of Grant Street and Ogle fronts letter stating that the property which it is now desired to purchase William Penn 85 feet on Grant Street and runs back approximately 195 feet to :,50 per Way, 16,575 square feet, and can be purchased, it is understood, for by resale square foot or 4828,750, which amount can be reduced to s•,;780,000 g property on to the Gulf Refining Company of five front feet next adjoinin erection of Grant Street which has been purchased by that Company for the a new building. In his letter, the Governor of the Cleveland bank submitted the tentative estimates for the construction of a building of 4800,000 for building proper and ,J;542,000 for vaults, fixed machinery and equipment. the Board In its report, the Committee on District ,p4 recommended that 102 -3- 8/22/29 authorize the Cleveland bank to purchase the property referred to at a price not to exceed 4828,750, with the understanding that a plot 5 feet by 195 feet will be resold at ::)48,750, making the cost to the Federal Reserve bank of the property retained, not to exceed 4780,000. The Committee further reported that no action with respect to the proposed building is required at this time, but suggested that the Federal Reserve Bank of Cleveland be requested to advise the Board when revised estimates of the cost of the proposed building have been prepared and the batik is ready to seek Congressional authority in connection with the expenditure. The Governor stated that he mentioned the above matter also to Messrs. Platt, James and Miller, end that Mr. Platt favors the purchase, Mr. James is opposed to it, feeling that the present facilities of the Pittsburgh Branch are adequate, and Mr. Miller, not being familiar with the situation at Pittsburgh, is willing to follow the recommendation of the District Committee. After discussion, Mr. Hamlin moved approval of the recommendation of the Committee on District 44. Carried. The Governor then reported that, in accordance with the action of the Board at the meeting on August 16th, he advised the White House of the Board's desire to have a written request for the reports which have been requested Informally of employees of the Board receiving an annual salary of 4 2500 or more. He was advised, he stated, that the President has made similar requests verbally of the Cabinet members and it is felt a letter to the Board is unnecessary and might be misunderstood. After discussion, Mr. Cunningham moved that the Board reconsider its action of August 16th and that the Governor be aathorized to comply informally with the verbal request made by the White House. t 8/22/29 The Assistant Secretary then reported that, in accordance with the directions of the Board at its meeting on August 16th, he communicated with the Secretary of the United States Civil Service Commission and was advised that the Commission no longer wishes to withdraw its letter of August 6th with reference to previous requests that it be furnished with reports of changes in the personnel of the Federal Reserve Board; that letter stating that the information requested is desired solely for record purposes and not with any purpose on the part of the Commission of interfering with or changing in any way the methods of appointing or changing the personnel of the Federal Reserve Board. A discussion ensued during which it was the consensus of opinion that there is no apparent objection to furnishing the reports requested by the Civil Service Commission, without admitting, however, the authority of the Commission to require such reports and with the understanding, as stated in the Commission's letter of August 6th, that the information is desired solely for record purposes. Id After discussion, upon motion, the matter was referred to the Governor and Mr. Hamlin with power. Letter dated August 16th from the Governor of the Federal Reserve Bank of New York, transmitting copy of letter sent to the Governor of each Federal Reserve Bank, with respect to bill and. discount transactions during the past week; the circular letter stating that there was an increase of about i;35,000,000 in the System bill portfolio, offset almost equally by a reduction in discounts for the System. In the letter, it was also stated that the present purpose is to proceed very cautiously in voluntarily increasing the bill portfolio until the seasonal increase in the volume of acceptance credit becomes more important than is now apparent. Ordered circulated. -5- 8/22/29 Letter dated August 10th from the Chairman of the Federal Reserve Badk of Chicago, advising of discussion at the meeting of the Executive jommittee of the bank on August 9th regarding an increase in the discount rate; the letter stating that all directors present were inclined to believe that the rate should be increased but after conferring with Deputy Governor McKay, who attended the meeting in WaShington, no action was taken. The above letter, having been circulated among the members of the Board, was noted. The minutes of the meetings of the Federal Reserve Board held on August 15th and 16th were then read and approved. Telegram dated August 21st from the Chairman of the Federal Reserve Bank of Philadelphia and telegram dated August 16th from the Chairman of the Federal Reserve Bank of Chicago, advising that the board of directors and the Executive Committee of the respective banks at meetings on the dates stated made no changes in their existing schedules of rates of discount and purchase. Without objection, noted with approval. Memorandum dated August 16th from the Director of the Division of Research and Statistics, recommending that the temporary appointment of Miss Elizabeth M. Barcalow, stenographer in the Division, which expires on September 3rd, be made permanent at her present salary of „1;1440 per annum. Approved. Memorandum dated .August 16th from the Director of the Division of ,cosearch and Statistics, submitting the resignation of 7*rs. Kathleen B. Perry, statistical clerk in the Division, effective at the close of business September 30th, and recomnending its acceptance with the understanding that prior to t 8/22/29 -6- 3eptember 30th Mrs. Perry will be granted thirty dgys manual leave. Upon motion, the resignation was accepted in accordance with the recommendation of the Director. Letters dated August 15th all 20th from the Comptroller of the Currency, advising of the appointment of Mrs. Ruth Whittaker, Miss Hilda V. Schaeffer and Mrs. Florence .1. Hopkins as Money Counters in the Federal Reserve Issue and Redemption Division, with salary at the rate of :1200 per annum. Approved. deports of Executive Committee on letters dated August 19th and 21st from the Comptroller of the Currency, recommending approval of a salary of 44500 per annum for National Bank Examiner William E. Hughes, assigned to the Second Federal Reserve District, and a salary of „;2700 per annum for National Bank • Exaniner Thomas B. Williams, assigned to the Twelfth Federal Reserve District; the Board's Connittee also recommending approval. Approved. Report of Committee on Salaries and Expenditures on list submitted by the Federal :Reserve Bank of San Francisco of employees for whom the directors of that bank approved leaves of absence with pay, on account of illness, during the month of July, where the total of such absences since January 1, 1929,has exceeded thirty days; the Board's Committee recommending approval of the salary payments involved. Approved. Letter dated August 20th from the Federal Reserve Agent at Atlanta, trans- • mitting and recommending approval of an application Of the doodlawn-American National Bank, Birmingham, Alabama, an outlying institution, for a reduation in -7- 8/22/29 • its reserve requirements from 10d to 7,; of demand deposits. The Assistant Secre- the tary reported that the applicant bank was chartered by the Comptroller of Currency with the amount of capital permitted in the case of an outlying bank. After discussion, upon motion, the application was unanimously approved. Letter dated August 17th from the Assistant Federal Reserve Agent at New York, advising of the proposed merger of the Midtown Bank of New York, a member institution, into the Prudential Bank, New York, N. Y., a nonmember. Noted. Letter dated August 21st from the Assistant Federal Reserve Agent at New into the York, advising that the merger of the Mutual Trust Company of New York International Germanic Trust Company, New York, N. Y., a member bank, plans for which were previously reported to the Board, was effected on August 12th; the Assistant Federal Reserve Agent reporting that the Mutual Trust Company did not protect deengage in banking as an independent institution but was organized to and liapositors of the defunct City Trust Company, a nonmember, certain assets Trust COmpany bilities of which are being taken over by the International Germanic in the present merger. Noted. Report of Committee on Salaries and Expenditures on letter dated August request17th from the Deputy Governor of the Federal Reserve Bank of New York, September ing approval of an increase from „2,880 to „;3,300 per annum, effective Acting Chief 1st, in the salary of Mr. John H. Hartley, recently promoted from to Chief of the bank's Credit Division. Upon motion, the increase in salary was approved. r _8_ 8/22/29 Letter dated August 20th from the Vice President of the Foreign Trade Securities Company, Ltd., New York City, requesting a further extension for a period of thirty days in the Board's reservation of the title "Foreign Banking and Investment Corporation" for the corporation proposed to be organized under Section 25 (a) of the Federal Reserve Act. Upon motion, an extension of thirty days from August 24th was granted. Report of Executive Committee on memorandum dated August 20th from the Comptroller of the Currency, recommending approval of an application of the Fourth and First National Bank, Nashville, Tennessee, for a reduction in its capital from y2,625,000 to .?200,000; the Comptroller stating that the reduced capital is desired to enable the national bank to continue to operate and handle • its trust accounts, after sale to the Nashville Trust Company, a state member bank, of all of the assets of the national bank except sufficient to balance its reduced capital and surplus. After discussion, upon recommendation of the Executive Committee, the reduction in capital was approved. Memorandum from Counsel dated August 16th, advising that the weekly bulletin of the Banking Department of the State of New York reports that the Equitable Trust Company of New York City has been authorized to open and maintain a branch in the city of Detroit; Counsel submitting draft of a letter to the Federal Reserve Agent at New York, requesting him to call the attention of the Equitable Trust Company to the fact that it may not lawfully establish a branch outside of New York City and continue to hold its stock in the Federal 11 Reserve Bank. Upon motion, the letter submitted by Counsel was approved. f-) -.9-. 8/22/29 Memorandum from Counsel dated August 20th, submitting the application of Mr. John R. Macomber, for permission to serve at the same time as director of the First National Bank of Boston, as officer aid director of the Harris Forbes Trust Company, Boston, and as director of the Harris Trust and Savings Bank, Chicago, Illinois; Counsel stating that Yr. Macomber is also serving as an officer and director of Harris Forbes and Company, Inc. of Boston, which no longer conducts a banking business and does not came within the prohibitions of the Clayton Act. After discussion, upon recommendation of the Law Committee, Mr. Macomber's application was approved. The Assistant Secretary then submitted for ratification the following changes in the Inter—district Time Schedule of the Federal Aeserve Bank of 111 Dallas, which were approved on initials on August 12th: Fran Dallas to Los Angeles " El Paso " Philadelphia u Charlotte It u Portland Salt Lake City • u Spokane San Antonio to Omaha " Birminghan It ft " Nashville ft " San Francisco From 4 days to 3 days ft ft ft 3 4 ft It f13 It 4 ft if it 3 it 4 It it It It ft it it ft 3 it If tt 4 ft ft It 2 It It It 3 II 2 11 ft 3 It 4 ft II 3 If 4 5 3 2 Upon motion, the above changes were formally approved. Memorandum dated August 19th from the Chief of the Division of Bank Operations, submitting statements of expenditures by the Federal Reserve banks for educational and welfare work, etc. during the month of July and for the seven months, period ending July 31st. Ordered circulated. -10- 6/22/29 an agreeMemorandum from Counsel dated August 21st, with reference to the ment entered into between the First National Bank of Tampa, xchange a, governing National Bank of Tampa and the Federal Reserve Bank of Atlant the authority th3 establishment at Tampa of a revolving currency fund under ent is in granted by the Board on July 16th; Counsel stating that the agreem proper legal form. the The Assistant Secretary reported that the fund is in t of a fund up amount of .g00,000, whereas the Board authorized establishmen banks rather than in to „,i1,000,000, and is under joint control of two member single custody as were the funds previously maintained at Miami. Upon motion, it was voted to approve the agreement entered into by the Federal Reserve Bank of Atlanta. g CorporaLetter dated August 20th from the First Federal Foreign Bankin sed to it by the Board under tion, New York City, replying to the letter addres te plan has been formulated date of August 16th; the reply stating that no defini l .ieserve Act but to secure a charter broader than that afforded by the Federa t corporation as any such plan would necessitate the dissolution of the presen fully informed. and surrender of its present charter, the Board will be kept no change in the class In the letter, it was also stated that there has been sole business at the of business which the corporation is carrying on, its ing accounts heretofore present. time being the liquidation of foreign financ itable by the high cost undertaken, the continuance of which is rendered unprof of money. Noted. ce with the Federal The Assistant Secretary then submitted corresponden ^ -11- 8/22/29 Reserve Agent at Chicago, regarding termination of the manbership of the Home Bank and Trust Company, Chicago, due to a consolidation under a new charter with the Hatterman and Glan7 State Bank, a nonmember; the Federal Reserve Agent advising that although an application for membership on behalf of the new bank has been filed, action thereon is being withheld at the request of the bank, due to the fact that the Executive Committee of the Federal Reserve bank does not feel that it can recommend approval thereof by the Federal Reserve Board. Upon motion, the withholding of action on the application in question was noted without objection. Letter dated August 15th from the Secretar., of the Federal Advisory Council, advising that the next meeting of the Council will be held on September 17th and requesting that he be advised of topics which the Board may wish the Council to discuss. Referred to the Executive Committee. Letter dated August 20th from the Governor of the Federal Reserve Bank of New York, transmitting the third monthly compilation of the anount of short-term funds held in New York for foreign account, aggregating 42,650,177,000 as of July 31, 1929. Ordered circulated. Letter dated August 21st from the Deputy Governor of the Federal Reserve Bank of New York, advising that since his letter to the Board of August 14th the Open Market Investment Account has increased to .36,125,000 as a result of 0,000,000 of securities being taken over temporarily from the Federal Reserve Bank of Dallas; the letter also stating that there has been some improvement in 11 -12- 8/22/29 the Government security market and that the bill market has been somewhat less active. Ordered circulated. REPORTS OF STANDING COMMITTEES: Dated, August 19th, 20th, 21st, Dated, August 14th, 19th, 20th, Dated, August 12th, Recommending changes in stock at Federal Reserve Banks as set forth in the Auxiliary ilanute Book of this date. Recommendations approved. Recommending action on applications for fiduciary povers as set forth in the AuYiliary Minute Book of this date. Recommendations approved. Recommending approval of the application of Yir. Wylie Hemphill for permission to serve at the same time as director of the Marine State Bank, Seattle, Washington, as director of the National Bank of Commerce, Seattle, Washington and as officer of the National Bank of Commerce, Seattle, Washington. • Approved. Dated, August 15th, Recommending approval of the application of Mr. Carter Stewart for permission to serve at the same tine as officer and director of the Public National Bank & Trust Company, Houston, Texas, as officer and director of the First National Bank of LaPorte, Texas and as officer and director of the First National Bank of Harlingen, Texas. Approved. The meeting adjourned at 12:45 p.m. Assistant Secretary. Approved: Chainnaa.
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