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4 A meeting of the Federal Reserve Board was held in the office of the Federal Reserve Board on Thursday, February 20, 1930, at 11:00 a.m. PRESENT: Governor Young Mr. Platt Mr. Hamlin Mr. Miller Mr. James Mr. Cunningham Mr. McClelland Asst. Secretary The minutes of the meeting of the Federal Reserve Board held on February 18th were read and approved. Telegram dated February 19th from the Chairman of the Federal Reserve both Bank of Philadelphia and the Assistant Federal Reserve Agent at St. Louis, advising that their boards of directors at meetings on the dates stated made nO Changes in the banks' existing schedules of rates of discount and purchase. Without objection, noted with approval. Report of Executive Committee on letter dated February 19th from the C omptroller of the Currency, recommending approval of a salary of y3,000 per annum for National Bank Examiner Andrew M. Douglas, assigned to the Second Federal Reserve District; the Board's Committee also recommending approval. Approved. aeport of Committee an District 44, recommending the appointment of Lir. James Rae as director of the Pittsburgh Branch for the unexpired portion Of the term of Mr. Joseph B. Shea, deceased, ending December 31, 1931. The Governor stated that he concurs in the Committee's recommendation but that inasmuch as the chairman of the Board is a resident of Pittsburgh he thought it would be well to make the appointment subject to his approval. Upon motion, Mr. Rae was appointed director of the Pittsburgh Branch for the unexpired term ending December 31, 1931, subject to concurrence by the Chairman of the Board. 175 2/20/30 -2- Letter dated February 18th from the Acting Secretary of the Open Market Investment Committee, transmitting copy of the minutes of the meeting of the Canmittee held in Washington on January 28th and 29th. Ordered circulated. Letter dated February 18th from the Governor of the Federal Reserve Ilaalk of New York, transmitting the regular monthly compilation of the mnaunt of short-term funds held in New Yotk for foreign account as of January 31st, aggregating 42,514,093,000 Ordered circulated, Joint report of the Committee on Research and Statistics and the Committee on Salaries and Expenditures, regarding budgets submitted by the Federal Reserve Agents for the statistical and analytical functions at their respective banks during the year 1930; the Committees recommending approval of the individUs' budgets as set out bolas, aggregating 4484,601.00: Boston New York Philadelphia Cleveland Richmond Atlanta Chicago St. Louis Minneapolis Kansas City Dallas San Francisco $ 43,525 131,367 45,210 37,120 15,861 11,220 59,140 19,175 18,300 22,920 20,719 60,044 Approved. Memorandum dated February 20th from the Governor, referring to the pergranted. him at the meeting on February 12th, at his request, to refer to all Federal Reserve banks the question raised by the Deputy Governor of the l'eaeral Reserve Bank of Kansas City as to permitting nonmember country cor. -1 i'YO _IL -3- 2/20/33 l'espondents of city member banks to use cash letter forms of the city bank, list their iteno thereon, endorsing same with a double endorsing stamp, and forRard the letters to the city bank which in turn transmits them to the Federal Reserve bank without any clerical action other than picking up the total Of the letter. The Governor stated that after further consideration he decid- ed to postpone referring the question to the other Federal Aeserve banks,at east until after further correspondence with the Kansas City bank regarding ' it. Noted, without objection. Memorandum dated February 8th from Counsel, submitting,in accordance with the action taken by the Board on February 6th, drafts of letters to the °Ilairmen of the Banking and Currency Committees of the Senate and House of Re presentatives enclosing and recommending a proposed amendment to Section 13 °I the Federal lieserve Act to increase from fifteen to ninety days the maximaturity of advances which Federal Reserve banks are authorized to make t° member banks on their promissory notes secured by eligible paper. The Governor suggested that the Board recommend. a further amendment Of Section 13 so as to permit Federal Reserve banks to make advances to member banks,for a period not exceeding fifteen days,on their promissory notes secured by dePantures of the Intermediate Credit Banks having not more than six months to ran. He called attention to the fact that such six months' debentures are eligible for numhase by Federal Reserve banks and stated there would seem to be no reason why they should not be eligible as collateral to fifteen day notes. He also suggested that while the Section is being amended, it would be e 2/20/30 -4- -) well to state therein that fifteen day notes may be collateralled by 2reasury bills, as well as bonds or notes of the United States, as provided by recent legislation. After some discussion, Mr. James moved that the proposed letters to the Chairmen of the Banking and Currency Coamittees of the Senate and House of lepresentatives be changed so as to recommend also the amendments to Section 13 siu-gested by the Governor, and that the revised letters be submitted to the Board. Mr. James' motion, being it by the Chair, was carried, the members voting as follows: Governor Young, "aye" Mr. Platt, "aye" Er. Jnwes, "aye" Yr. Junningham, "aye" Mr. Hamlin, "no" Mr. Miller, "no" Memorandum from Counsel dated February 18th, with regard to an agreement executed by the Assistant Federal Aeserve Agent arid the Governor of the Fed.oral Heserve Bank of Cleveland, covering the custody of unissued Federal ileserve notes at the Pittsburgh Branch recently authorized by the Board; Counsel expressing the opinion that the agreement should be signed by the Federal ..teserve Agent himself, that it should disclose that the Governor °f the bank has been authorized by his board of directors to enter into the contract and pointing out that to be in accord with the Board's aro oval of the arrangement the agreerent should provide that the dispatch of the message giving the control combination should be considered as a delivery to the Federal lieserve bank of the amount of notes shown by the records of the joint custodians to have been placed in the released chest or chests. He submit- ted draft of a letter to the Federal lieserve Agent transmitting and requesting execution of a new agreement covering these points. , 2/20/30 f„) -5Upon motion, the letter submitted by Counsel was approved. llamorandum from Counsel dated February 18th, with regard to a bill in equity filed against the Federal Reserve Bank of Atlanta and the :leceiver Of the First National Bank of Dublin, Ga., in the United States District /14;onrt for the Northern District of Georgia, by depositors of the First National Bank, asking for the return to the Aeceiver of certain real estate mortgages and bonds having an aggregate value of .1,225,259, which the Federal Aeserve bank holds as collateral to the indebtedness of the national bank - amounting orir-inally to ,610,408 but reduced by December 3, 1929 to 289,933; Counsel recammending that special counsel be not retained to represent the 6ystem as a whole in this case unless it is lost in the trial court and it becomes necessary to appeal it, and also, that he be authorized to confer with counsel for the Federal Aeserve Bank of Atlanta in reference to the case and to attend the trial in order to keep in close touch with all devolopments. After discussion, upon motion, it was voted to approve Counsel's recommendations. Aeport of Committee on _]xaminations on letter dated February 13th from the Federal Aeserve Agent at Philadelphia, transmitting an application of the Bank of Auburn, Auburn, Pa., which the Board on February 10th, 1929 authorized to hold ten shares of stock in the National City Bank of New York acquired withOut prior approval by the Board, as required by Condition No. 3 of its memberShip, to hold an additional 190 shares acquired by the bank since that time, also without securing the Board's permission; the Committee recommending that the Board support the position of the Pennsylvania banking authorities that no c 2/20/30 additional stocks are to be purchased until the consent of the Department has been obtained, and that the stocks now held must be disposed of without undue delay. Discussion ensued during which the Governor pointed out that not only miJit action by the Board, compelling the Bank of Auburn to dispose Of the stock acquired result in difficulty for the institution, but that the violation of its conditions of m.mbership is the second an the part of the bank. He suggested that the Board should cite the bank to show cause Why its membership in the Federal Reserve Jystem should not be forfeited. Mr. Cunningham stated that although he concurred in the recommendation of the Committee on Examinations he would move that the matter be taken up by the Governor with the Federal deserve Agent at Philadelphia, and inquiry made of the Federal ,deserve Agent as to whether, in his opinion, there is any reason why proceedings looking to the cancellation of membership should not be instituted against the 3ank of Auburn. Mr. Cunningham's motion, being put by the Chair, was carried. The Governor then advised the Board of arrangements being made by him for a meeting of the full Board tomorrow at 11:30 o'clock, at which special consideration aill be given to the Annual deport of the Board for the year 1929, the application for the establishment of a Branch Federal deserve Bank at Wichita, Kansas and a letter from the Deputy Chairman of the Federal deserve Bank of New York regarding the salary of the Governor of that bank for the year 1930. Aig2OHTS OF STANDING COMITTEES: Dated, February 19th, 20th, Recomending changes in stock tFederal deserve banks as set forth in the Auxiliary Minute Book of this date. Recommendations approved. 180 _7- 2/20/30 Si2POATS OF STARDING COLMITTEES: (Cont'd) Aecommending action on an application for fiduciary powers as set forth in the Auxiliary Linute Book of this date. ecommendat ion approved. 17th, decommending approval of the application of :r. J. Clyde Miller for permission to serve at the same time as director and officer of the Lonongahela Trust Company of Homestead, pa., and as director of the First National Bank of Homestead, Pa. Approved. 17th, Aecommending approval of the application of i r. Ed Hart for permission to serve at the same time as director of the First National Bank & Trust Company, Muskogee, Okla., and as director of the Citizens National Bank of Okmulee, Okla. Approved. ecommending approval of the application of _r. 17th, G. V. L. :fickerham for permission to serve at the same time as director and officer of the Monongahela Trust Company of Homestead, 2a., and as director of the Hays National Bank of Hays, Pa. Approved. 18th, Aecommendino; approval of the application of Lr. S. Sloan Colt for permission to serve at the same time as officer of the National City Bank of New York, New York and as director of the Tuxedo National Bank of Tuxedo, New York. Approved. Dated, February 18th, Dated, February Dated, February Dated, February Dated, February The meeting adjourned at 12:15 p.m. 6°&:Z/ifeegekai Assistant Secretary. Approved:
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