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4[92 ttl A Meeting of the Federal Reserve Board was held in Washington on "4612 Deceriber 6, 1932, at 11:20 a. m. IT:PRE,21 Governor Meyer Mr. Hamlin Mr. Miller . Tames Mr. Magee Mr. Mr. Mr. Mr. Morrill, Secretary McClelland, Assistant Secretary Harrison, Assistant to the Governor Paulger, Chief, Division of Examinations. Ur. L. B. Williams, Deputy Chairman of the Federal Reserve Bank of 444141 appeared before the Board in response to the Board's invitation /elitercley. illitete the He stated that Governor Meyer had discussed with him just Board meeting the information which the Board had received re- Llr• DeCamP's borrowings; that he had not been advised by Mr. 44til a few days ago of the latter's indebtedness to the Guardian 1414" CCIMArty of Cleveland, and that he felt greatly concerned over the kttter. Ile said that he felt the need for tire in which to give the various 14k1te 14 hie t the 101,4, matter further consideration and that there was a question because of the present banking conditions in Cleveland, as to 414 101181b1e results of the termination of Yr. DeCamp Is connection with the 44ekt teSerVe b ank at the expiration of his present term as Class C k cna 13e0araber 31, 1932. 11.r. William stated that he understood that i i,74r directors of the Cleveland bank, with the exception of Mr. Rdbert ) Class A director of the bank and a close personal friend of Mr. )lot been informed by Mr. DeCamp of his indebtedness to the " 414412 4,Lat company. The directors of the Federal reserve bank, Mr. tlAtturia a tt, kid $ -cave regarded Mr. DeCamp as a raan of sons ability, and he that, e° far as he knows, the bankers generally in the Cleveland district 4" P 12/6/32 -2- l'eel that the Aderal reserve bank has been well managed, that the member b L ' in the district have resorted freely both to the bank and the Federal zeaem,agent's department for assistance and advice, and that a change at t148 raight have a disturbing effect upon the banks. In response to an inquiry, LI'. `.iilliams stated that in his opinion was clearly at fault when he submitted a recommendation to the Reserve Board that no action be taken with regard to the membership or the the Guardian Trust Company of Cleveland without disclosing, to the Board raet that he was indebted to that institution. He also stated that, 11411111Y)he was not prepared at this time to suggest a successor to 1:r. ea.a.zro 1101-11d the Board decided not to reappoint him. Reference was then made to the indebtedness to the Guardian Trust 2ancher, Governor of the ,;'ederal Reserve Bank of Cleveland, tot he fact that the report of examination of the Union Trust Company m "'Level ' 8•11d, as of Liarch 31, 1931, indicates that on that date Governor 17ae indebted to that institution in the amount of .4,000, and that Nty Wernor :, 7 urlinden and former Assistant Cashier Stephenson were also '30teci, to 11111 it in the amounts of .21,200 and ,2;12,637, respectively. Kr. stated that he had not known until this morning, when he was adeci .Y Governor ir.eyer, of the indebtedness of Governor Fancher, Deputy 411rlinden or Er. Stephenson; that Er. Stephenson is no longer ctea vath the bank; and that, so far as he knew, the indebtedness of the% °I'l'icers had not been disclosed to any of the directors of the bank. 4tter a general discussion, during which LA.% jilliams advised the clkti N that he would be in 'Jashington again in connection with other business an-Y 01 next week, it was agreed that he should consider the matters 12/6/32 1111dez alscussion durin7, the interim, including the possibilities of finding 48111table successor for Er. .DeCamp, and meet again with the Board on next ar ThursdayLiz. Williams then reported briefly on the activities of the Banking tad 1%, 4-44ustrial Committee of the Fourth District of which he is chairman, eAer allich he withdrew from the meeting. alrinc the course of Er. Willians' discussion with the Board, 2'.r. tt ' neral Counsel, came into the Board room. The Board considered and acted upon the following natters: Reply to a letter dated November 23, 1932, from the federal Reserve * a- 'Richmond, advising that the first National Bank of Abingdon, 'itz,e1.41 -4) and the t1111104 dxst fationul Dank of Coeburn, Virginia, have been con- 81Y deficient in their reruired reserves for a period of six months. rIlle el)1Y 3tated that, in accordance with the agent's recommendation, the 174.1,(1 . 17111 take no action in these natters at this tire other than to for4 Copy of the agent's letter to the Acting Comptroller of the Currency 4 1:)-t01,e 41tormation of his office. The reply also re .uested that the agent th e Board, within a reasonable tine, as to whether the banks have cl and are maintaining their respective reserve requirements. Approved. Letter to the federal Reserve Agent at San Francisco, approved by tietve 4 --s of the Board on December 5, replying to Assistant Federal Reeellt Jargent's letters of November 16 and 17, 1932, reporting that City ktional Bank of Huntington Park, California, was continuously tlet, ' .°1exIt -fl its required reserves during the Period from 'Larch 16 to vnt ' 41)oz, 41 1932. The renly stated that in view of the information sub- ' or, 12/6/32 ktted, and 1 .11 accordance with the recorvendation of the agent's office, tile Board will take no action in the matter at this time other than to torw4rd a copy of ::r. Sargent's letters and inclosures to the Acting °c`raDtroaaer of the Currency for the information of his office. requested The reply that the agent advise the 73oard, within a reasonable time, as to whether the bank has restored and is maintaining its reciuired reserves. Approved. Letter to the federal Reserve Agent at Chicago, approved by five rlerl)el ' Of the 3oard on December 5, 1932, with reference to the analysis 'ePort of examination as of July 11, 1932, of the Pigeon State Bank, idichigan, and to Assistant Federal Reserve Agent Young's letter of 110 °1111)er 10, 1932, reporting developments in the bank since the date of the tlatiorl. The Board's letter requested, in view of the information sub- that the agent consider the advisability of discussin:, with the titli".1°Iaer of Banking of the State of Michigan, preferably prior to a 4°Niecl vi 8it of a representative of the federal reserve agent to the nem- het b the necessity of financial assistance being. :given to the bank by t11) 811azeholders or directors. Approved. Letter to the Federal Reserve Agent at Minneapolis, approved by tIlte lellIbers of the Board on December 5, 1932, replying to Mr. Bailey's '`tter °I SePtember 26, 1932, with regard to the improvament effected in the ticm 0J- the Park City State Bank, Park City, Montana, since the date ,, -4amination on July 20, 1932. The reply requested certain additional °114e•ti -cla with -r-ogard to a loan in the amount of )5 000 to one of the (Itt e.Qt 8 Tlhich is not considered to be adequately secured, and as to the 4[96 12/6/32 -5- ilaProvement effected in the condition of the member bank since its letter or. SePtetiber 20, 1932, to the Superintendent of Banks of the State of lioztana. Approved. Relay, approved by five members of the Board on December 5, 1932, to • letter dated lovember 9, 1932, from the Federal Reserve Agent at Dallas, tererr,_ 4.ng to the proceedings instilited to determine whether the memberShip or fte J1rst State Bank of Lorenzo, Texas, should be terminated, and stating that "e member bank has fulfilled its promise to restore its reserves and tle,t its required reserve balances have been maintained since October 11, 44. 14's i'alsh also stating that the bank is still in an extended and e'llY unsatisfactory condition and that the State examiner has expressed litention. to renuire a change in management and to examine the bank zt4t latlY until its affairs show a satisfactory improvement. The reply t, aat in view of the infomation submitted, and in accordance with the recommendation, the Board has again deferred a decision on the 4 whether the membership of the :first State Bank should be terminated, dex. tta taat the institution may have a further onnortunity to demonstrate tf to comply with the Provisions of the Federal Reserve Act and ge 3.0Et 1.(1' regulations. The reply also requested the agent, upon completion cYt clbcz,rai examinntion of the member bank, to forward to the Board an the report, together with a recommendation of the beard of eot or the Federal reserve bank in the matter; also, that he keep the ,,,ilt.tIrrently advised of any material changes which may take place in the ktto Of the institution in the interim, and submit a recolmendation e4Y action which should be taken in the light of such changes. Approved. 1VG/32 -6Letter to the Federal Reserve Agent at Boston, replying to his letter of ::evember Li-, 1932, with further regard to the application of the qoun ' e8tor National Bank, Gloucester, Lassachusetts, for permission to eleteise fiduciary 'oowers. The reply stated that the Acting Comptroller 11Q(117.1-2ed that, in his ()Pinion, there is no reason why action on the 41111e4ti0n should not be deferred until the reaort of another examination tit 7,,ebalik has been received, and that, accordingly, action has been de°Y the Board. N)c)rt The reply also requested that, upon receipt of the of examination, the agent furnish the Board with an analysis thereof 4141118 1.. ecomtaendation as to what action, if any, should be taken on the bkik, application. Approved. aePly to a letter dated December 2, 1932, from Deputy Governor 11.1e of the Federal Reserve Bnilk of New York, advising of the steps terl bY the bank under the share-the-work plan which became effective on "°'lettlber 192. The reply noted that 127 temnorary employees have been ror a period of six months; that in order to carry on the work of baailt. Without resorting to increased hours of labor, it will be necessary tN „ e'Ne about 20 additional employees on the same temporary basis; and G aggregate salary liability on account of these approximately 147 N.114131 tillod emnloyees may exceed by a few thousand dollars the amount made e for such employments by the 4c); deduction during the six months • l'om the salaries of all officers and employees. Approved. elegraphic reply to a letter dated December 2 and telegram dated t 61 1932, from the Governor of the Aderal Reserve Bank of Atlanta, 498 1N/32 -7-- l'equeetink-; authority for a further continuance for sixty days, without knarld for payiaent, in the amount now outstanding, of the advance nade to the 48°ria Savings Bank and Trust Conpany, Atlanta, Georgia, under the allthc3ritIr granted in the Board's teleL;rans of Tune 15 and Septenber 9, 1932, 114 4ecordance with the provisions of section 10(b) of the Federal Reserve "amended, with interest at the rate of 5 1/2 011 per annum, and payable ) with interest payable monthly; Governor Black stating that the ituation exists at the Present tile as at the tire of the last renewal. reply stated that the Board interposes no objection to the further con- Of the advance subject to the terms and conditions recomended, and that 14 the event the advance is not repaid nor demand for payment made 171th1n s.y iz t days from December 12, 1032, the natter Should again be brought to the °aru attention with a „,tatement of the circums tances which, in the %11(34 °I' the 7ederal deserve Bank of Atlanta, justify the further continklee (31' the advance without demand for paynent. Unanimously approved. 4144a Governor I..eyer then referred to the request made of him by Senator e.t the bearings before the Banking and Currency Committee of the Senate o4 1. 29, 1932, on Senate bill 4115, that he suggest a constitutional 'ket4 11400 : 1 °2 bringing about the establishment of a unified system of banking 14tekt iona1 supervision. He stated that, in accordance with that re- " e ts '.iyatt, General Counsel, has submitted, under date of December 5, /11 °Pinion on the constitutionality of legislation providing a unified : 141 hankinr. system for the 'United States, and he presented, for the kti,11 kkiti el'`Ition of the Board, drafts of letters to the chairman of the Senate Ile" 11 1 %urrency Committee and to Senator Glass, transmitting copies of 499 i j 1216/32 tu, - °Pinion , ,Juring the ensuing discussion, certain amendments to the proposed lett„8, aere suggested, and Mr. Hamlin stated that before the letters are snUtted, he desired an opPortunity to review certain parts of counsel's Thereupon the meeting recessed and reconvened at 3:50 D. m. with the — Qtulue attendance as at the morning session except that Er. 2aulger was 110t 431"esent. There were presented drafts of letters to the chairman of the ke,t e•Banking and currency Committee and Senator Glass, amended in accordance 1/1 11 t), --e 84.-c,gestions made at the morning session; the letter to the chairman oi e B• eIlkinc and Currency Committee stating that, if desired, additional • the opinion submitted by Counsel will be forwarded for the inforOr the other menbers of the committee. After a brief discussion, the amended letters were approved. Lir. Hamlin stated that, While he approved the letters above referred to, he may wish to advise Senator Glass in a personal letter that, in view Of counsel's opinion, it is also apparently within the power of Congress to renuire that all State banks shall become members of the Federal Reserve System. c:11% The Governor then stated that Lir. L. B. Williams, Deputy Chairman the ll'ederal deserve Bank of Cleveland, had called at his office just t° -th15 session and had discussed further the c,uestion of the reap'loint- 4eq oz. DeCamp as a Class C director and chairman and Federal reserve ‘411t 6't the Jederal deserve Bank of Cleveland. Governor Ebyer stated that y 4ms feels it will require some ti:'e for him to reach a conclusion 41e --er, and that he had advised 1:r. Williams that, while the Board is 00 or tile °Pinion that it should reach 'a decision as soon as possible, it tIlaires that he take the tine necessary to enable him to submit a carefully kmaidered recommendatiOn• Thereupon the neetinc adjourned.
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