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t A meeting of the Executive Committee of the Federal Reserve Board was held. in the office of the Federal Reserve Board on Thursday, December 18, 1924°, at 11:45 a. in. PiiESENT: Governor Meyer Mr. Hamlin Mr. James Mr. McClelland, Assistant Secretary. Letter dated December 16th from the Deputy Governor of the Federal Relierni Bank of Chicago, requesting a ruling by the Board on the propriety of 4511bscription by the Chicago Bank to an unemployment fund being raised by the atete of Illinois. Attention was called to the fact that, while the Board has /lever ruled on an identical subscription, practically the same question was 15teserited in 1925 by the Federal Reserve Bank of Dallas, and in 1928 by the 51 Reserve Bank of Minneapolis, when they requested permission to make ' 441 e°4tr1buti0n5 to local Community Chest Funds; in both instances the Board ll thzia that it could not authorize expenditures of Federal Reserve funds by ' /11qr of donations to further purposes, no matter haw worthy, which were not (14eotly related to the conduct of the affairs of the banks. A discilssion ensued during which Ir. Wyatt, the Board's General Counsel, was called in the meeting and advised the Board that, while he has not looked into the matter recently, he is familiar with several court decisions to the effect that national banks cannot use their funds for making gifts of any kind and that in his opinion the same rule would apply with even greater force to the funds of Federal Reserve banks. Accordingly it was voted to advise the Federal Reserve Bank of Chicago along the lines of the Board's previous position, expressing at the same time the Board's sympathy with the movement referred to and its regret at being unable to authorize a contribution by the Federal Reserve Bank. 12/18/30 -2- The Assistant Secretary then referred to the action of the Board on ItIvernber 17th in citing the First 3tate Bank of Abernathy, '2exas, to show ell"a why its membership in the Federal Aeserve Jystem should not be terminated because of its failure to maintain the reserves required by the Federal lieserve Act. He stated that no representative of the First State Bank of 4h raathy appeared at the time set by the Board for hearing - eleven o'clock Yesterday, December 17, 1930, the bank having waived its right to appear betcll'e the Board and appeared instead before the Federal Aeserve Agent at Dallas "a hearing conducted by him on December 10th. He presented a memorandum dated December 16th from Counsel submitting teatilliony presented at the hearing before the Federal Aeserve Agent and 411ing attention to the fact that the board of directors of the Federal Ae1417e Bank of Dallas, which made the recommendation that the Board institute 13/1°eeedings against the First State Bank of Abernathy, has not had an c14"unity to consider the additional information submitted to the Federal 4eserve Agent by the member bank. After discussion, upon motion, it was voted, in view of the assurances given by the member bank at the hearing before the Federal Aeserve Agent that if permitted to remain a member of the 3ystem in the future It would keep the reserve required by law, to ask the Federal Aeserve Agent to submit the record of the hearing to his directors at their next meeting with a request that the Board be advised whether in their opinion the member bank should be given an opportunity to demonstrate its intention and ability to so operate as to maintain required reserves or whether they desire to continue their previous recommendation that the membership of the bank be Verminated. tter approved on initials by the Executive Committee yesterday, namely, tej dated December 16th from the Federal Aeserve Agent at Jan Francisco, (t 12118 /30 - . / recommending approval of the action of the Bank .of iasco, iasco, Oregon, a teraber bank, in consolidating with the Bank of Joramerce of ,;asco, a nonmember 4letitution, under the charter of the member bank. Formally approved. Telegrams dated December 17th from the Lthairmea of the Federal deserve Ea Ilks of Boston, Philadelphia and 3t. Louis, all advisinr' that their boards Of directors at neetinv's on the date stated made no change in the banks' ell3tirW schedules of rates of discount and purchase. jithout objection, noted with approval. ldemorandum dated December 15th, approved b;,- the ,ssistant 3ecretary, oMmending that in accordance with a suggestion of the Federal deserve - at launeapolis the 3oard issue an order, under the provisions of ecti-0n II, paragraph (G) of _tegulation I, for the cancellation of 18 shares Of atOok in the Federal deserve Bank of 1,.inneapo1isstariiint7, in the name of the • Ilew First liational Bank of Howard, 3outh Dakota, which went into l'°111 ry liquidation, effective 1.1ay 12, 1930, but from whose liquidating tt5 Ilgatt no application for cancellation of stock has been reccived. Upon motion, cancellation of the stock in question was approved. idemorandum dated December 15th from the Jhief of the Division of Bank ODe rations, silbmitting statements of expenditures by the Federal teserve ' a for educational and welfare work, etc., during the mouth of 1-;ovember tirui for the eleven months ending L'ovember 30th. Ordered circulated. Bonds in the amount of ,460,000 each, executed under date of December 13, 12/18/30 -4- 193° by Messrs Robert L. Honeycutt and Henry Schutz, recently desinated as 4°tIng Assistant Federal Aeserve Agents at the Charlotte and Baltimore Branches /3t the Federal deserve Bank of Richmond. Approved. Letter dated December 17th from the Deputy Governor and General Counsel (4 the Federal Reserve Bank of New York, advising of the employment of the , of Davis, Polk, 4ardwell, Gardiner and Reed as Consulting Counsel in Q°1111ection with the closing of the Bank of United States, and expressing the 14)14 that this will meet with the Board's approval; the letter also requesting of a salary of -6,000 per annum, effective December 13, 1930, for liarold J. Jchuitz, who has been temporarily appointed assistant counsel or the Bank due to the illness of 1;ir. 2heodore M. Orisp, who has been granted leave of absence without pay beginning January 1, 1931. Upon motion, the salary of :f 6,000 per annumwas approved for Mr. jchultz. It was also voted to advise the New York Bank that the Board interposes no objection to the employment of Messrs. Davis, Polk, ';iardwell, Gardiner and Reed, with the understanding that before any payment is made to the firm for its services the fee will be submitted to the Board for approval. Letter dated December .15th from the Federal Reserve Agent at Atlanta, 414115in "4, A that subject to the approval of the Board, he has designated Mr. , Radford to serve as Examiner during the year 1931, and has also tiesinated the following officers and employees of the bank as 4pecial 44Miners: 'lard Albertson, Asst. Federal deserve Agent. Deputy Governor. J. 8. Johns, E. P. Paris, General auditor. J. W. Honour, Assistant Auditor. 12/18/30 -5- (if H. • V. J. H. F. K. A. N. Conniff, Assistant Cashier. Bowman, Assistant Cashier. Walker, Assistant Manager, New Orleans Branch. Harrison, Field Representative. Approved. Letter dated December 15th from the Chairman of the Federal eserve Bank et iliehmond., advising that the board of directors of that bank has appointed 41** L. S. Zimmerman, Vice President of the Maryland 2rust Company of Baltimore, ea a director of the Baltimore Branch for the unexpired term ending December 31, 1932, to succeed Mr. C. G. Osburn, resigned. Noted. Aeport of Committee on Salaries and Expenditures, dated December 13th, ii Necolmending approval of the personnel classification plan submitted by the Pecleral :deserve Bank of Minneapolis covering employees of that bank and its lielenaBranch; the Committee also recommending that the Minneapolis Bank be 4(hr1sad (1) that it is authorizedto hire any employee and to promote or clernote such employee without first securing the Board's approval, with the 1144e1'standing that the salary paid each employee must not exceed, without the 4erats specific approval, the maximum salary provided in the classification 1544 for the position occupied, (2) that no change should be male in the 11"se11el classification plan without the approval of the Board, and (3) that the Board will require the bank to submit to it for approval on or about 4411114rY 1 of each year a statement showing the salary of each employee of the Be di Upon motion, the plan was approved in accordance with the recommendations of the Committee. Ilemorandum from Counsel dated December 13th on letter dated December 11th treti the Federal Reserve Agent at Aichmond, submitting an agreement entered I .. 12/18/30 , 41t0 with the Federal Aeserve Bank of Aichmond, covering the custody of un- 4I -6- tealled Federal deserve notes at the Baltimore Branch; Counsel stating that the li tement, which provides for the custody of notes under dual control, is in . the same farm as the agreement recently adopted with reference to unissued notes lit the Charlotte Branch. Upon motion, it was voted to advise the Federal Reserve Agent that the Board has no objection to the arrangement at Baltimore, with the understanding that it may be modified or discontinued by the Board if at any time it should see fit. Letter dated December 13th from the Federal Aeserve Agent at Lian Francisco, 4tosnmending approval of an application of the Bank of Commerce, Oregon City, Oreg on, for permission to reduce its capital stock from 4200,000 to 4150,000; the Federal .deserve Agent advising that the reduction is approved by the State 34perintendent of Banks, and the entire proceeds are to be ,used to remove trcla the bank '50,000 of bad and doubtful assets to be selected by the 811Per1ntendent. Upon motion, it was voted to approve the reduction on condition that the entire amount thereof shall be used to remove criticized assets. Letter dated December 13th from the Comptroller of the Currency, 4comMending approval of an application of the First National Bank of Parlier, 411fornia, for permission to reduce its capital stock from 4100,000 to 461) nn '-‘10 on condition that no part of the reduced capital be returned to the %eholders of the bank, but that it be used to set up a surplus fund of 410n, 9vv0 and a reserve for bond depreciation of 45,000 and to charge out 1°48es on loans, banking house, furniture and fixtures and other real estate latea'egating 436,841.65. • Upon motion the reduction was approved subject to the conditions recommenied by the Comptroller of the Currency. -7- 12A8/30 11 The Governor, as member of the Committee on District No. 2, then recommended the appointment of Mr. Edward Griffith Miner, President of the Pfaudler C°111Pany, Rochester, New York, as a director of the Buffalo Branch of the licqeral Reserve Bank of New York, for a term of three years beginning January 11 1931. Upon motion, Mr. Miner was appointed a director of the Buffalo Branch for the term stated. The Governor then stated that a meeting of the ilacecutive Committee of the °Maarket Policy Conference will probably be held in Washington on the " 11111g of Saturday, December 20, 1930. ORT OF STANDING COLMITTES3: riated, December 15th, Recommending changes in stock at Federal Reserve Banks, as set forth in the Auxiliary Minute Book of this date. Recommendations approved. December 18th, Recommending approval of the application of Mr. John A. Stewart, for permission to serve at the same time as • an officer of the First nsconsin National Bank of Milwaukee, Wis., as a director and officer of the Sixteenth „lard State Bank, Milwaukee, Wis., and as a director of the North Avenue State Bank, Milwaukee, Wis. Approved. 1)eteci, December 18th, Recommending approval of the application of Mr. N. A. McKay, for permission to serve at the same time as a director of the Peoples Trust & Savings Company of Fort 4ayne, Indiana, and as a director of The Old National Bank of Fort Wayne, Fort Wayne, Indiana. Approved. tleted, December 18th, Recommending approval of the application of Mr. D. W. McMillen, for permission to serve at the same time as a director of The Old National Bank of Fort Wayne, Indiana, and as a director of the Citizens Trust Company of Fort Wayne, Indiana. Approved. 17th, The meeting adjourned at 12:50 p. m. Assistant Secretary. 41)Pliovea: Governor.
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