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204. A meeting of the Federal Reserve Board was held in the office of the Fed- .1esei3O Board on Wednesday, February 27, 1929 at 11:15 o'clock. PRESENT: Governor Young Mr. Platt Mr. Hamlin Yr. Miller Mr. Cunningham Mr. McClelland, Asst. Secretary Governor reported a telephone conversation with Governor Harding of the xederal Reserve Bank of Boston, who advised that due to the fact that a bate clut)rum of the board of directors of the bank will be present at their inestillg today, he will not submit to them the recommendation referred to in his letter to the Board of February 25th, for the establishment of a 6;; rate ltemh.er bank collateral notes secured by government obligations. The Minutes of the meetings of the Federal Reserve Board held on Febru411 '12th and 13th were read and approved. The minutes of the meeting of the Federal Reserve Board held on February 14th were read and approved as amended. The 4 minutes of the meeting of the Federal Reserve Board held on February lstil e "r read and approved. The minutes of the meeting of the Executive Committee held on February 19th We re read and, upon motion, the actions recorded therein were ratified. 711a minutes of the meetings of the Federal Reserve Board held on February )t'111 21st, 22nd, 25th and 26th were then read and approved. The Governor then presented letter dated February 25th from the Governor deral Reserve Bank of Chicago, transmitting copy of a personal letter : t the Pe ° be ad ' Iressed to the heads of all borrowing member banks in Chicago, Detroit, 14 ' °161 and other important cities throughout the district, requesting their 2/27/29 -2- c'Perat in accordance with the recommendation of the Federal Advisory 41111i1, in meeting the present credit situation; Governor McDougal stating that be letters will also be addressed to certain non-borrowing banks, which will idertical except that they will contain a statement that the matter is being eithreit ted to district, even member banks in the financial centers throughout the th0 11g4 they may not be using Federal Reserve credit. Ordered circulated. Letter dated February 26th from the Governor of the Federal Reserve Bank Kemmerer, transmitting copy of a cablegram received fram Professor Who is head of a Commission which is now studying the Chinese monetary system, 41(111zir• ltig whether the Federal Reserve bank could invest ..0,000,000 or 410,000,000 14 bat kers acceptances for the Central Bank of China; together with copy of a 404 aA . ,Avising that the Federal Reserve bank will be glad to do so if the transaotiola Is to be an isolated one, in which case a commission of one-eighth percent Per .4411r4 continuing one would be charged,,but that if the investment is to be a 414 Reserve bank has with rt c/f a permanent relationship such as the Federal ot.hor f concerning --uign central banks, further information should be furnished • he Dra-sant status of the Central Bank of China. Noted. received The Governor then presented memorandum setting forth advice trc/k the Vice York City, that President of the National Bank of Commerce, New he air from ectors. of that institution are increasing their capital stock yvv() ivU U shareto 430,000,000, the additional 45,0.00,000 to be offered to 441, 1101, 8 at of commerce and Par; also that the directors of the National Bank he Q4 donsolidation, 411111bY Trust Company of New York have agreed to a 2/27/29 :Tr , aneS. Alexander to be Chairman of the consolidated bank, Yr. Charles H. 84bill to be Vice Chairman and LIr. William C. Potter to be President. The Gov- er"r advised that it has not yet been determined whether the consolidation is t° be under a 1;ational or State charter. Noted. APPlication of the First National Bank of Des Plaines, Ill. for permist axercise general fiduciary powers; together with a divided report there- Oriby 'Le Law Committee - Li'. Hamlin recommending approval and Li*. Platt stating that he, . - is not willing to approve because of the small size of the applicant barlac, After discussion, upon motion, the application was approved, Li-. Platt voting "no". Letter dated February 26th from the Comptroller of the Currency, advising t'tlet 10,rs. authette P. Gray, clerk-counter in the Federal Reserve Issue and Re- ckerflPtion Division, has been nromoted to the position of statistical clerk with 414 58 ; salary from „;1500 to „11600 per annum, effective February 27th. Noted, with approval. he Assistant Secretary then advised of the death on February 20th of iJ J. 1::alsh, telegraph operator in the Board's office, and reauested authort-„ , vu 1111 the vacancy at a salary of not to exceed .2,l00 per annum. Approved. The Assistant Secretary then referred to an inquiry received from Senator 411414a, 4 as to the conditions imposed by the Board on the Peoples Trust Company, "ic)ck, Lrk. when its application for membership in the System was approved cki Peb ry 19th. accepted by He stated that the conditions have not yet been OrV71 t<s;A.1 2/27/29 -4- the RPPlicant bank and include one that the bank should agree to reduce the "L "01 its slow assets and past due paper and make every effort to keep 4146 at a Minimum. After discussion, it was voted to advise Senator Caraway that the Board regards the imposition of conditions of membership as a confidential transaction between it and the applicant bank and would not feel free to acquaint him with the conditions imposed except with the permission of the bank; suggesting, therefore, that his inquiry be directed to the Peoples Trust Company. Eddy, the Board's Secretary, then entered the room and stated that . Ile '4 1)) Just been advised by the Federal Reserve Bank of New York that the kair, "t'acturers Trust Company of New York City has received certain bills drawn 41)04 .4 "by a banker in Brazil, with the request that they be accepted, for the ose of furnishing dollar exchange. He stated that although the bank la 411Xini, -"49 if possible, to accept the bills, the authority necessary under 8e0ti n 1, °-"of the Federal Reserve Act has never been secured from the Board. 40 ftir ther ' stated that the Federal Reserve Bank of New York is prepared to N10 approval of an application for the necessary authority, which will be d -y ethe member bank this afternoon. Upon motion, the Governor was authorized to approve the application upon receipt of advice of approval by the Federal Aeserve Bank of New York. 11401-tT OP STANDING COMMITTEES: bated. Recommending a change in stock in a Federal Reserve Bank as set forth in the Auxiliary Minute Book of this date. Recommendation approved. • btttata, February 26th, Recommending action on applications for fiduciary poNers 27th, as set forth in the Auxiliary Minute Book of this date. Recommendation approved. February 27th, 2/27/29 3 -5- OilTs ^vr STANDING ,j0KVITTEES: (Qont/d) 11/4tea, February 26th, Recommending action on an application for admission of a state bank, subject to the conditions stated in the individual report attached to the application, as set forth in the Auxiliary Minute Book of this date. ileconnendat ion approved. The meeting adjourned at 1:00 p.m. Assistant Secretary. 4143roved.:
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