The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
f* , A meetini; of the :]xecutive Committee of the jj'ederal Reserve Board 141a held in Washington on ITonday, December 12, 1902, at 11:10 a. in PRESEFT: Governor 1Toyer Mr.ller. Mr. James Mr. 1.1a3ee Mr. 1;:orrill, Secretary LeClelland, Assistant Secretary Mr. Harrison, Assistant to the Governor Mr. Wyatt, General Counsel. The Board considered and acted upon the followin matters: Telegram dated December 9 1902, from the Secretary of the Federal erv e Ballk of Atlanta, advising that the board of directors, at its meeting o tliat cl"e, made no change in the bank's existing schedule of rates of disa/1,1 Purchase. /ithout objection, noted with approval. Tele graphic reply, approved by five mmbers of the Board on December to a telegram of that date from Deputy Governor Rounds of the FedN1 Reserve Bank of New 'fork, requesting authority for a further renewal, 141 the redUced amount of 0250,000, for a period of sixty days from December 19321 with interest at the rate of 5 1/2% per annum, of the advance made .2euer the , 43ey, al Reserve Bank of New York to the Lincoln National Bank, Newark, 411, in accordance with the orovisions of section 10(b) of the Federal 4‘1I'V'e Act and under the authority of the Board's telegrams of June 13 and 4i)teraber 9, 19'62; jeputy Governor Rounds stating that conditions do not t e qtti °InPlete liquidation of the loan at this time. The reply stated that authorizes the renewal of the advance subject to the terms and conl 'ecormended. Approved. 12/12/32 -2- Telegraphic reply, approved by five members of the Board on December 9, 1 to a telegram of that date from Deputy Governor Rounds of the Fed- eral rteserve Bank of New York, requesting authority for a further renewal, amount of 1.,200,000, or a 'Pruriod of sixty days, with interest at the kte Of 5 1/23 per annum, of the advance made to the Franklin Washington 11-lat -orapaaly, Newark, New Jersey, in accordance with the provisions of eQtio„, , - 1-9(b) of the Federal Reserve Act; Deputy Governor Rounds stating t44.t the , advance made to the bank under the authority of the Board's tele Of June 13 and 24 and SePtember 7, 1932, has been reduced to '1)0.07 -1995, but that the bank requests an increase of the advance to °00 because of possible demands resulting from the issue of Christmas $2°° ' q1.11b ell"ks to depositors. The reply authorized the renewal in the reduced 44°1111t Of 61r)roximately .A,000,000, now outstanding, for a Period of sixty hyzi tl'ora Or the 4tEtted December 12, 1932, with interest at the rate of 5 1/2 per annum, advance made under the authority previously granted by the Board, and that the Board authorizes additional advances to the bank in accordance "q th. Provisions of section 10(b) of the Federal Reserve Act, in an amount eY'eeedinc .200,000, at a rate of 5 1/2c:3 per annum, and to mature not te han sixty days from December 12, 1932. Approved. Telegraphic reply, approved by five members of the Board today, to a dated December 8, 1932, from the Governor of the Federal Reserve Bank Atlk ba, requesting authority for the further continuance without demand t01 1) in the reduced amount of :',304,009.85, at the rate of 5 1/2;2 per kttl, vaYable on demand with interest payable monthly, of the advance made tt) the kaerican Bank and Trust Company, New Orleans, Louisiana, in accordance 51 12/12t,32 ame,jam. witlithe Provisions of section 10(b) of the Federal Reserve Act, and under 8.1411()ritij of the Board's telegrams of June 17 and October 8, 1932; Governor illack stating that the reasons for the continuance are the same as when the a(Iliance was originally made. The re,Ay stated that the Board authorizes the t _ italauce of the advance without demand for payment, subject to the terms 4114 Qonditions recommended, and that in the event the advance is not repaid 11°1' detlarld for payment made within sixty days from December 14, 1932, the ktter should again be brought to the Board's attention with a statemnt of circUti—tances which, in the opinion of the Federal Reserve Bank of 4t1 arlta, justify the bank in further continuing the advance without demand Approved. Tele ;raphic reply, approved by three members of the Board on December .1.93 to a telegram of that date from -Assistant Federal.Reserve Agent atln at rew York, stating that the !First rational Bank, High Bridge, lie)? 'el ' 3e3r, intends to reopen for business, and requesting authority to aile to the bank 42 shares of the capital stock of the Federal Reserve ktaz or 1Tew York. The reply stated that the Board approves the issue of 42 41‘ez Of the stock of the Federal reserve bank to the First National Bank tr ea, 4 when the Comptroller of the Currency authorizes the bank to reopen Wi tha. EtPital of ,,g50,000 and surplus of :;20,000. Approved. tikber Letter to the Federal Reserve Agent at New York, approved by five Of the Board on December 9, 1932, with further reference to the kh 4°1'Dti -°11, as of December 19, 1931, by the Linden Ttust Company, Linden, eseY, a member, of the Linden rational Bank. The letter stated that 520 1V12/32 -4- t4 Board has reviewed the report of examination of the Linden Trust Company 48 °I' Xuly 25, 1032, and that inasmuch as it appears that the transaction 1148 1, -cu resulted in any material change in the general character of the 448ta Of or in the scope of the functions exercised by, the member trust oral) 41I7 within the meaning of the general condition under which it was MITat fed to membership in the Federal Reserve System, the Board, in accordance agent's recommendation, will interpose no objection to the transt. The letter also called attention to the undercapitalized condition o tile trust company and suggested that the agent discuss with the manage- 11°44 the possibility of effecting an increase in capital; also, that the et d.ve the Board an expression of his views in this connection and kLtz " e advice of any material changes in the condition of the institution. Approved. Letter to the Federal Reserve Agent at Philadelphia, approved by ierabers of the Board on December 10, 1932, with further reference to t4e ve°rPtion as of July 5, 1932, by the Schuylkill Haven Trust Company, 11111r1kill Haven, Pennsylvania, a mnber, jointly with the first rational '1:1 Trust Company of Schuylkill Haven, of the State Bank of Schuylkill ' The letter stated that the Board has reviewed the report of the 1nveati7ation of the Schuylkill Haven Trust Company as of August 13, `111c1 43 it is apparent that the transaction has resulted in no material e la the general character of the assets of, or in the scope of the °118 exorcised by, the member trust company within the meaning of the 1'41 condition under which it was admitted to membership, the Federal e Board, in accordance with the agent's recommendation, will interpose JeQtlon to the absorption. 12/12/32 -5Approved. Letter to the 2ederal Reserve Agent at Richmond, referring to the (114111rs13 of report of exanination of the Wachovia Bank and Trust Company, flzton,oalem, North Carolina, and to the payment of unearned dividends by t1 eb all-z in 1931 and 1952, and suggesting that the agent discuss with the etate 'Anking n Aepartment of North Carolina the question whether, in the tence3 confronting the bank, it would not be advisable for it to Q( "I've all of its resources. The letter also recluested that the agent illnal811, to the Board additional information with rec;ard to certain natters terei, red to in the analysis of report of examination. Approved. Letter to the 7edera1 Reserve Agent at Atlanta, referring to the 1111a1Y8is V report of examination as of: Trq84. 411 3t 21 1032, of the Hibernia Bank Company, New Orleans, Louisiana, and to the agent's letter of 5, 1939, recommending, with the concurrence of the Governor of the 4cierQ- reserve bank, that no action be talmn affecting the membership of 14e 1)4141z in the Federal Reserve System, but that the ratter be left to the j°14t efforts of the loederal reserve agent and Governor in aiding the bank to 1) 1t8 condition. The Board's letter recluested additional advice as to 411111. Matters referred to in the analysis of report of examination and s(%sted that the agent consider the advisability of discussing with the tellEttik commissioner of Louisiana the mlestion of further payment of q1.1 44'''clez:(.12 by the trust company in the light of the banking situation in .411 0t1eLtri3. 20proved. ' 2/12/32 -6- Letter to the Acting Comptroller of the Currency, approved by four 1484/61.8 of the Board on December 10, 1932, stating that, in accordance with te recoMmendation contained in his remorandum of December 8, 1932, the 4°41 Reserve Board has approved the application of the First National °r Parkers Landing, Pennsylvania, for permission to reduce its capital etoek rtom :,,i50,000 to :;',25,000 subject to certain conditions set forth in the letter. Approved. Letter to the Federal Reserve Agent at St. Louis, with regard to the cicttitm -°48 reserve deficiencies of the First National Bank, Winslow, Indiana, 41etters P e approved by five members of the Board on December 9, 1932, to ' ' 4e al Reserve Agents at St. Louis, Dallas and San Francisco, with re- tot 4-Lu continuous reserve deficiencies of the Citizens National Bank, Nee 're,t Xentucky, the National Bank of Commerce, Hugo, Oklahore., and the t'olz*cnvers and 2armrs National Bank, Wallowa, Oregon; the letters stating tio tV 64(111 ease that, in view of the agent's recommendation, the Board will take 4t:tti°11 With regard to the reserve deficiencies at this time, other than °I.Plal‘CI NNt a copy of the agent's letter to the Acting Comptroller of the for the information of his office. Approved. Witti Letter to Mr. W. G. Penn, Vice President of the Grundy County Oktti Beak, Morris, Illinois, inclosing a certificate Showing that the 1 ,4_ 40 longer authorized to exercise any of the fiduciary powers t(itnA section 11(k) of the Federal Reserve Act; the letter also 4tirt, . t4t that the certificate has been issued by the Board on the nwlerstandhett the national bank has been discharged or othervtise properly ecl it accordance with law of all of its duties as fiduciary. r- 4-1) 34:4) 1412/32 -7Approved. Telegraphic reply, approved by four members of the Board on December 101 1.932, to a telegram dated December 8, 1932, from the Governor of the / 1 4el'al Reserve Bank of Kansas City, stating that the regional agricultural (lieclit corporations at Wichita and Omaha have inquired whether the Federal 4143811 ank of Kansas City will discount eligible paper for the corporations, ' lequesting that the Board advise whether the Federal reserve bank should 01.110.t such paper upon the same terms and conditions as it has handled 1/4Del, lor Federal intermediate credit banks. The reply stated that since t4 1_ 4-0a7 also provides that eligible paper of regional agricultural corporatiOh. -gIllaY be discounted with Federal intermediate credit banks, it is underthat the ieederal Farm Loan Board has the matter under consideration; t1kt einoe the questions involved in arrangements for the rediscounting of koh ) , vaPer by either Federal intermediate credit banks or 2ederal reserve 41141 la,Y affect all credit corporations and branches, the Washington (Trio 138 Of to the Reconstruction Finance Corporation are giving consideration the entire matter of general policy; and that when advice is received as to tia 6 COrpOratiOLOS conclusions, the Board will communicate with Governor ilt°11 further. Approved. The Secretary then presented a letter dated December 10, 1932, from f the Federal Reserve Bank of Cleveland, requesting approval 46 Board of a share-the-work plan approved by the board of directors of 441c at its reeting on December 9, 1932, which would provide for certain le deductions from the salaries of all officers and employees at the 14 °rrice and branches for a period of six months beginning December 15, 524 12/12/,62 -3- 14*4; for the emploYment of from 40 to 40 temporary employees during the 81Zr1onths Period; and for a reduction in the working time of the present 6411310Yees of the bank of one day per month and perhaps more in certain dekrb, -11.ts as the plan is develoPed. After a brief discussion, it was decided to interpose no objection to the plan as submitted and to approve the salary payments involved in the employment of additional people in accordance with the plan. The Secretary stated that Er. Hamlin had advised him, in connection with the plans submitted by the 2ederal ileserve Banks of Yew York and Philadelphia, that he is opposed to share-the-work plans involving deductions from the salaries of employees, and that if Er. HaraLin were present he would undoubtedly request that he be recorded as voting "no" in connection with the above action. rieference was then made to the action taken by the Governors and Reserve Agents at their conferences on November 16, 1932, and by the ' . e"ral Advisory Council at its meeting on November 17, 1932, in tIst • -14C that the 3oard recommend to Congress that the provisions of 1,411,4 042 ‹, and 3 of the Glass-Steagall Act be extended for at least one After a brief discussion it was decided to make this natter a special order of business for consideration at a rooting of the 3oard to be held on Wednesday, December 14, 1932. :Mier then referred to a nemorandua submitted by the Chairman the r. ' -ormaittue on Branch, Group and Chain 3anking under date of December .Q3D outlining the status of the detailed reports being Prepared by the 14h, O e and stating that it is expected that the reports will be entirely .°41111et 1141t d. by the end of Uarch, that the expenses of the Committee to date tlJaollnted to ,i 142,453 and that the estimated additional expense will be 12/12/32 -9- 413Pr°:cilnately 500. ltr, Euler stated that in his opinion the expenditure 1)/' the Federal reserve banks of additional money for this purpose is not tified and he moved that the Coralittee be discharged as of Tanuary 1, 1933. After brief discussion, Er. Eillerts motion was laid on the table. The Governor then stated that advice had been received by the Federal aeoe -e Bank of New York from the Bank of :England that it had been instructed " 1)Y t,"G British GovernnEnt to hold in New York at the disposal of the .A.r.rican krcre rrullent, on Thursday, December 15, 1932, gold to the value of ..,;95,550,000; 1114t it will take about five or six weeks to ship that amount of gold; and that the Bank of England had requested that the Federal Reserve Bank of New Place at the disposal of the Bank of England in New York as of December 151 1932, gold to the amount of :y95,550,000 against an equivalent amount of t°141 to he earmarked by the Bank of England in London for the account of the IPOzk bank, it being understood that the Bank of England will 4t at tart ship- its own cost and risk of such earmarked gold to New York conmencinE 1:je etabe such shipments to be completed not later than the end of and that the Bank of England will obtain from the British Government 411(lertakin c)ici% not to put any obstacles in the way of exporting the earmarked Governor Lleyer stated that he had discussed this matter with the el'Ilc)r of the Federal Reserve Bank of New 'fork over the telephone and that latter had stated that, if it meets with the approval of the Federal ?Le, Be'aras the New York bank win advise the Bank of England that it will --"el`ze the transaction 'AIY1 ' - 11g the Rutter. and that the New York bank would write the Board 526 12/12/3a -10After discussion, the Governor was requested to advise the Governor of the Federal Reserve Bank of New Yo/.7k that the Board interposes no objection to the proposed transaction. Secretary's Note: immediately following the meeting Governor LIeyer advised Governor Harrison by telephone of the Board's action, and Governor Harrison stated that it was understood from telephone conversations with the Bank of England that the plan was based on instructions received by that bank from its Government to male only provisional arrangements. Thereupon the meeting adjourned. Pno-t,(1i2 p Secretary. 4111'crved:
@FedFRASER