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24.0 A MeetinL; of -.Gh Lhxecutive Committee of the :lederal Reserve 73oard was held in the office of the Jederal _deserve Board on ;.onday, iecerJber 29, 1930, at 11:15 a. 1-16 PRESENT: Governor Meyer Mr. Hamlin flr. :Liner James Mr. 1..cC1el1and, Assistant Secretary. Teleram dated December 27th fram the Secretary of the Federal Reserve Dank of Chicago, advisin - that at a meeting of the Executive Connittee on December ;6th no change was made in the banl:'s existing schedule of rates of discount and ourchase. iithout objection, noted with aoproval. Letter dated December 26th from the Chairman of the .ederal ..serve :Bank Of .:ansas City, advising of the establishment of the followin 1 13111.1in schedule of rotes on bankers' acceptances, effective iecember 24th: 1 to 120 days 121 to 130 days 1 3/4 2, Without objection, noted with approval. Lemorandum from Counsel dated Decc:foer 23rd subr:ittin and recommending "ceotance of the resignation of .rs. Vivian B. Rhodes, a stenographer in his office, as of December 31st; the memorandum also recommending the appointlent of tr'.1 rs. Grace L. Costinett to fill the vacancy at a salary of 4,800 Per annum, effective January 1, 1931. UTion recommendation of the Law Committee, it was voted to accept the resignation of T.-rs. ilhodes, effective December 31, 1930, and to alyDoint Mrs. Grace L. Costinett at a salary of :1,800 per annum, effective January 1, 1931. Report of Committee on Salaries and Expenditures on letter dated December Z7th from Deputy Governor Cilbart of the ;ederal leserve Thank of :1ew York, 12/29/30 -2- s emrequesting approval of an adjustment in the salaries of the two physician attendance, Ployed by the bank, resulting from a change made in their hours of recommendeach to receive a salary of .2,400 per annum; the Board's Committee ing approval. Approved. Report of Committee on Salaries and Expenditures on letter dated December requesting 23rd from the Controller at the rederal Reserve Bank of Richmond, plans at the approval by the Board of changes in the personnel classification recommendBaltimore and Charlotte Branches of the bank; the Board's Committee ing approval. Approved. Report of Committee on Salaries and Expenditures on letter dated December 22nd from the Secretary of the Federal Reserve Bank of Chicago, submitting the leaves of tames of three employees of the bank for whom the directors approved 21st absence with pay, on account of illness, during the period from November to December 18th, where the total of such absences since January 1, 1930 has salary exceeded thirty days; the Board's Committee recommending approval of the Payments involved. Approved. dated Memorandum from Counsel dated December 27th with regard to letter of San Francisco, pecember 18,.1930 from the Chairman of the Federal Reserve Bank of the bsnk submitting copy of a resolution adopted by the board of directors and Governor, authorizing an agreement entered into by the Federal Reserve Agent of unissued eoPy of which was also enclosed, covering the custody of a stock ecleral Reserve notes at the Los Angeles Branch; Counsel's memorandum advising that the agreement entered into is in accordance with the arrangement previously approved by the Board. -3- 12/29/30 Upon recommendation of the Law t Committee, it was voted to approve draf Vran San the of man of letter to the Chair ranmemo el's Couns with d cisco Bank, submitte n ctio obje no has d Boar the dum, advising that the at plan the of t to the establishmen od that Los Angeles Branch, it being understo re the requi to t righ the Board reserves the nued onti disc or fied modi arrangement to be fit. see ld shou if at any time it man of the Federal Reserve Bank Letter dated December 24th from the Chair as a member of the local school Of St. Louis inquiring whether the service F. lluthsteiner, recently appointed board of Tell City, Indiana, by Mr. W. rary to ctor of the Louisville Branch, is cont by the St. Louis Bank as a dire political or public office the ruling of the Board that persons holding of Federal Reserve banks; Mr. Tames cannot consistently serve as directors is not a violation of the Board's expressing the opinion that this case the Chairnan of the St. Louis Bank be ruling and Er. Hamlin recommending that or not, in his opinion, the office in requested to advise the Board whether question is a political one. After discussion, upon motion, it was voted to advise the Chairman at St. Louis ve that while the Board is inclined to appro as ner stei Huth Er. of the continued service l a member of the local school board unti d woul it , term nt prese the expiration of his from ion opin of on essi like to have an expr s bank the board of directors of the St. Loui be would ice serv such as to whether or not d's Boar the of it spir inconsistent with the ruling. of the letter prenared by Mr. Miller then submitted a revised draft er of December 13th, replying to lett Counsel and submitted with his memorandum rve Agent at Dallas in Which the dated November 15th from the 2ederal Rese ces under which a state member bnnk question was raised as to the circumstan em, particularly in a case where May be expelled from the Federal Reserve Syst 12/29/30 -4- the conditions reflected in the examination reports, if applicable to the bank 'at the time it applied for membership in the System, would undoubtedly cause its application for membership to be rejected, although no violations of the Federal Reserve Act, the regulations or conditions of membership are apparent; the proposed revised reply stating that the Board is of the opinion that where a state member bank, subject to the general condition of membership, has pernitted a large part of its assets to change from good solvent loans or investments to loans or investments which are slow, doubtful and of little value and has permitted its financial condition to deteriorate to such an extent as to affect materially the standard maintained at the time of its admission to the Federal Reserve System, there has been a change in the general character Of the bank's assets within the meaning of the provisions of the "general condition"; that whether or not there has been a material change in the general Character of the assets is one of fact to be determined in the light of all the circumstances involved in such cases; and that it is the view of the Board that where a member bank is in a generally unsatisfactory condition as to the state of its assets it will usually be found to have been guilty of violations Or the provisions of the Federal Reserve Act, and before recommending expulsion Of a state member bank in such a case, the Board would prefer that the Agent investigate and base any recommendation upon such violations rather than upon 4 violation of the general condition of membership. After some discussion, upon motion, the revised draft of letter to the Federal Reserve Agent at Dallas was approved and ordered transmitted. At this point Mr. Pole joined the meeting, at the request of the Governor, Who then presented an application of the Dallas Bank and Trust Company, Da1la5, Texas, for membership in the Federal Reserve System and for 765 shares of 12/29/30 -5- stock in the Federal Reserve Bank of Dallas, approval of which is recommended by the Federal Reserve bank, subject to the regular conditions of membership set out in Regulation H, Series of 1930. He called attention, however, to the fact that the Board's sub-committee recommends that a further special condition Of membership be imposed, reading as follows: "Except after applying for and receiving the permission of the Federal Reserve Board, you will not exercise the powers which you have under your charter,'To guarantee stocks, bills of exchange, bonds and mortgages and other securities; 'To guarantee the fidelity and diligent performance of their duty by persons or corporations holding places of private or public profit or trust, in all cases where individual bonds are not required by law; 'To guarantee or become surety on any bond given by any person or corporation, and to reinsure or guarantee any person or corporation against loss or damage by reason of any risk assumed by insuring: the fidelity or the diligent performance of duty of any such person or corporation, or by guaranteeing or becoming surety on any bond; 'To act as surety and guarantor of the fidelity of employees, trustees, executors, administrators, guardians or other appointed to or assuming the performance of any trust, public or private, under appointment by any court or tribunal, or under, contract between private individuals or corporations; also on any bond or bonds that may be required to be filed in any judicial proceeding; also to guarantee any contract or undertaking between individuals or private corporations, and the State and municipal corporations or counties, or between private corporations and individuals." The Governor stated that the application for membership is filed in connection with a proposal of the applying bank to purchase the assets and eume the liabilities of the Dallas National Bank, approval of which is also recommended. Mr. Tames explained certain matters by reason of which he feels the tIPPlication should not be approved by the Board. After discussion, upon motion, it was voted to approve the application of the Dallas Bank and Trust Company for membership in the Federal Reserve System and for 765 shares of the stock in the Federal Reserve Bank of Dallas, subject to the regular -6- 12/29/30 conditions of membership set out in Regulation ii and the special condition above quoted. On this motion 1*;:r. Tames voted "No." Upon motion it was also voted to approve the application of the Dallas Bank and Trust Company, for permission to purchase the assets and assume the liabilities of the Dallas :lational Bank. Upon motion by la.. Hamlin, it was then voted to ratify the actions previously taken by the Executive Committee at this meeting. The next order of business being the budget of the Board for the year 1931, Er. lames called attention to the fact that the leave of absence with Pay, granted by the Board to its Secretary, 1.:r. Walter L. Eddy, expires at the close of business December 31, 1930. He moved that the Board extend Hr. Eddy's leave of absence with full Pay far a period of six months. During the discussion which ensued it was brought out that the leave of absence began on June 1, 1929, and :;r. Hamlin moved as a substitute for iir. Tames' motion, that the Board extend Er. Eddy's leave of absence with full pay, until Hay 31, 1931. Hr. Hamlin's substitute motion being the Chair was carried. by put The other officers of the Board were then reelected for the year 1931 and their salaries fixed as follows: E. M. L1cClelland J. C. Koell W. H. Tml ay Walter Wyatt George B. Vest B. H. Wingfield E. A. Goldenweiser E. L. Smead F. J. Drinnen Assistant Secretary TY ft Fiscal Agent General Counsel Assistant Counsel TY Director, Division of Research and Statistics Chief, Division of Bank Operations Examiner in Charge 7,000 5,000 12,000 7,000 6,000 12,000 12,000 9,000 The individual budgets of the several divisions of the Board's organization for the year 1931, including salaries of employees, and the combined ) -7- 12/29/30 budget for the year, aggregating f818,550, as follows, were then considered and upon motion, were approved: Personal Services ,)641,490.00 Non-Personal Services: Supplies and l'aterials Subsistence Expenses Transportation Expenses Communication Service Pt., Eng., Bdg., etc. Heat and Light Rents - Building Rents - Equipment Repairs - Equipment Equipment Special and fliscellaneous Non-Personal Services Total Complete Total 5,950.00 50,650.00 24,300.00 12,700.00 53,600.00 1,000.00 16,215.00 60.00 810.00 9,100.00 2,675.00 :)177,060.00 818,550.00 Eemorandum dated December 22nd from the Board's Fiscal Agent, recommending, on the basis of the budget for the year 1931, that to cover expenses for the first six months of the year, the Board levy an assessment on the Federal Reserve banks of eighty-one thousandths of one per cent (.00081) of their total paid-in capital and surplus as at the close of business December 31, 1930. Upon motion the following resolution was adopted: "WHEREAS, under Section 10 of the act approved December 23, 1913, and known as the Federal Reserve Act, the Federal Reserve Board is empowered to levy semi-annually upon the Federal Reserve banks in proportion to their capital stock and surplus an assessment sufficient to pay its estimated expenses, including the salaries of its members, assistants, attorneys, experts and employees for the half-year succeeding the levying of sudia assessment, together with any deficit carried forward from the preceding half-year; and "WI IREAS, it appears from estimates submitted and considered that it is necessary that a fund equal to eighty-one thousandths of one per cent of the total paid-in capital stock and surplus of the Federal Reserve banks be created for the purpose hereinbefore described,exclusive of the cost of engraving and Printing of Federal Reserve notes; Now, therefore, -8- 12/29/30 "BE IT RESOLVED, That pursuant to the authority vested in it by law, the Federal Reserve Board hereby levies an assessment upon the several Federal Reserve banks of an amount equal to eighty one thousandths of one per cent (.00081) of the total paid-in capital and surplus of such banks as of the close of business December 31, 1930, and the Fiscal Agent of the Board is hereby authorized to collect from said banks such assessment and execute, in the name of the Board, receipts for payments made. Such assessments will be collected in two installments of one-half each; the first installment to be paid on January 1, 1931, and the second half on larch 1, 1931." The minutes of the meeting of the Federal Reserve Board held on December 22nd were read and approved as amended. The minutes of the meetings of the Federal Reserve Board held on December 23rd and 27th were read and approved. The minutes of the meeting of the Executive Committee held on December 26th were read and approved and upon motion, the actions recorded therein were ratified. REPORTS OF STANDING COMITTEES: Dated, December 27th. Dated, December 27th. Dated, December 27th. Recommending approval of the application of Mr. Holcombe G. Johnson, for permission to serve at the same time as a director of the Commercial National Bank, Washington, D. C., and as a director of the Washington Loan and Trust Company, Washington, D. C. Approved. Recommending approval of the application of 7:r. Tames H. Baden, for permission to serve at the same time as a director and officer of the Commercial National Bank, Washington, D. C., and as a director of the Mount Vernon Savings Bank, Washington, D. C. Approved. Recommending approval of the application of la". Emmett C: Davison, for permission to serve at the sane time as a director of the Commercial National. Bank, Washington, D. C., and as a director and officer of the rount Vernon Savings B-n, Washington, D. C. Approved. IL 12/29/30 -9- (7) The meeting adjourned at 1:00 p. ra. ez/./(y.taceexed Assistant Secretary. Approved
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