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:,''',1 Ameeting of the Executive Comndttee of the Federal Reserve Board was. r' held in the office of the Governor on Wednesday, January 21, 1931, at 10:15 . a.. ra, PRESENT: Governor Meyer Mr. Hamlin Er. Miller Mr. James Mr. McClelland, Assistant Secretary. The Assistant Secretary presented various communications and reports, Which were considered by the Board and acted upon as follows: Telegram dated January 20th from Deputy Governor Kenzel of the Federal "erve ' Bank of New York, advising that a scarcity of bills in the market alld inability to supply the investment demand, led dealers on that date elUctantly to make a further reduction of 1/ in their rates on all tra turities. Noted. Memorandum dated January 19th from the Chief of the Division of Bank °13"ations, submitting statements of expenditures by the Federal Reserve banks l'() educational and welfare work, etc., during the month of December and for the twelve months ending December 31, 1930. Ordered circulated. Draft of resolution with respect to the continuance by Federal Reserve hethle. of group life insurance policies covering officers and employees who 4111re left their service because of disability, prepared by the Assistant aeel ' etarY in accordance with instructions at the meeting of the Board on Tan19th. After discussion, upon motion, the resolution was amended and adopted in the following form: "RESGLVED that it be the sense of the Federal Reserve Board that in any case where an officer or employee of a Federal Reserve bank, upon completion of a service of ten 1/21/31 -2"years or more, is retired because of illness or after having attained the age of 65 years, the „-Tederal Reserve bank may continue in force its group life insurance policy on such officer or employee under the disability clause of said policy, provided the consent of the company with which the policy is carried is obtained." Memorandum from Counsel dated January 19th, approved by the Law Committee, 8Uggesting that the Board issue to Mr. George E. Warren, who, on January 12th, 178 granted permission to serve at the sax e time as an officer of The Chase National Bank of the City of New York and as a director of the PirstStamford National Bank and Trust Company, Stamford, Conn., a permit also covering service by him as a director of The Chase rational Bank. Upon notion, the issuance of the permit suggested by Counsel was approved. Memorandum from Counsel dated Tanuary 17th 41 with regard to service by Wade H. Cooper as an officer and director of the Commercial National 44k, the Continental Trust Company and the United States Savings Bank, all Or r1 .lashington, D. C.; Counsel submitting draft of a letter to Lr. Cooper 4cl/rising that an application should be filed with the Board covering his a"vies of the Commercial National Bank and the United States Savings Bank, bIlt that in View of the information furnished by him with reference to the Continental Trust Company, the Board is of the opinion that his service ot this institution Comes within an exception of the Clayton Act, and it ill not therefore be necessary for him to secure the Board's permission to 8erve that institution. Upon recommendation of the Law Committee, the letter submitted with Counsel's memorandum was approved. l'emorandum from Counsel dated Tanuary 19th with reference to a request t4Ett tile Board permit 1;i.r. Lynde Selden, an officer of The Chase rational 134ht. -I' of the City of New York, to serve also as a director of the Equitable 1/21/31 Eastel:n Banking Corporation, a state foreign banking corporation, all of the capital stock of which is owned by The Chase rational Bank; Counsel 4dvising there is no legal reason why the Board should not z;rant the recuest. Upon recommendation of the Law Committee, the permission requested was granted. Memorandum from Counsel dated January 19th with regard to a request that the Board permit :essrs. Edwin R. Yiillianz and henry D. Nagel, officers Of the Chase rational Bank of the City of New York, to serve also as officers (31 'employees of The Chase Bank, a corporation organized under Section 25(a) Of the Federal Reserve Act, all of the capital stock of which is owned by tte Chase National Bank; Counsel advising there is no legal reason why the 8°ard should not grant the request. Upon recommendation of the Law Committee, the permission requested was granted. Report of Law Committee on letter dated January 6th from the Assistant lecleiral Reserve A:ent at San Francisco, transmitting and recommending approval °r 811 application of the Helper State Bank, Helper, Utah, for permission, Illider its conditions of membership in the Federal Reserve System, to exercise tr48t powers; the Law Committee also recommending approval. Approved. Idemorandu:m from Counsel dated January 19th, submitting draft of a letter to the Federal Reserve Agent at Chicago requesting further information with x'eb ,Ard to the ownership of the stock of -400dlawn Trust and Savings Bank of a state member bank, by the loodlawn Investment Company, an affiliated ihs titution. Upon recommendation of the Law Committee, the letter submitted by Counsel was approved. r; 7 1/21/31 Memorandum from Counsel dated January 19th with regard to agreements With the !ederal Reserve bank, executed by the ,Federal Reserve Agent at Dallas, Ill'oviding for the custody of unissued Federal Of eserve notes at the branches the bank, Counsel stating that the agreements are substantially in the t°rm approved by the Board with one exception, and submitting draft of a telegram to the -Pederal eserve agent advising of the approval of the establish- Illent of the custody arrangements at the branches in accordance with the plan eltbmitted, provided that each of the agreements is reexecuted so as to omit therefrom the following words in the fifth paragraph thereof - "containing a 811Pr1y of Federal Reserve notes actually placed therein for the accomplishment Olb the purposes of this contract and"; the proposed telegram also advising that the Board reserves the right to require the arrangement at any one or all of the branches to be modified or discontinued if at any time it should see fit. . Upon recommendation of the Law Committee, the arrangement was approved with the conditions set out in the telegram submitted by Counsel, whidh was ordered transmitted. Memorandum from Counsel dated January 14th, submitting draft of letter t0 the Cashier of the Ventnor City National Bank, Ventnor City, Y. With reference to an inquiry whether the bank in a case where it is acting 48 eo-trustee and co-executor with a state trust company may permit the t1.4et company to be custodian of the greater Portion of the funds of the "tate; the proposed reply stating that there is no requirement in the DI ' ovisions of the Federal Reserve Act or the Board's regulations dealing with the particular question raised, and discussing other rec,uirements of the law and regulations relative to trust activities of national banks. 1/21/31 -5Upon recommendation of the Law Cormittee, the letter submitted by Counsel was approved. Memorandum from Counsel dated January 17th, submitting draft of reply to a letter from Hon. Louis T. McFadden, requesting comment on a communication from ij.r. Jerome Lewis of Yakima, Washington, referred to him by Congressman John W. Summers, on the subject of bank failures caused by the licoumulation of non-liquid loans and suggesting particularly that, where necessary, the management of banks temporarily be turned over to a Federal "ricer and restrictions nut on withdrawals of funds already deposited with the idea of keeping the banks open and at the same time protecting new deposits; the proposed reply advising that the sugestions cannot be followed Under the existinc4 law, and that the Board does not care to commit itself 40rinitely at this time as to the merits of the legislation which might be 811g8ested to accomplish the purposes desired. Upon recommendation of the Law Committee, the proposed letter was approved. Memorandum from Counsel dated January 14th, with further reference to the Proceedings instituted by the Board to determine whether the membership 14 the FedOral Reserve System of the First State Bank of Abernathy, Texas, 811°111d be terminated; the board of directors of the Federal Reserve Bank of )De.).las having recommended, after consideration of testimony submitted at a heA,4 --Lng before the Federal Reserve agent on December 10th, and the record of the bank since that date, that the institution be given a further reasonable '"--''talnity to demonstrate its ability to comply with the provisions of the ?ederal 'Reserve Act. 'A.th his memorandum, Counsel submitted drafts of letters to the First State Bank of Abernathy and the Federal Reserve Agent 1/21/31 -6- at Dallas advising that the Federal Reserve Board will defer making a final decision on the question whether the membership of the bank should be terminated,until 'Tune 17, 1931. Upon recommendation of the Law Committee, the letters submitted by Counsel were approved and ordered transmitted. Replies received from the various Federal Reserve agents to a circular letter sent to them under date of January 2, 1931 (X-6788), requesting that thcY advise the 13oard of state member banks in their respective districts which Were not examined, either by state authorities or their own examiners, during 1930) and what steps are contemplated to secure a prompt and satisfactory eZamination of any bank reported; all the replies, with the exception of the ote from the A;-,;ent at Cleveland, advising that banks not examined during 1930 Will be examined early in the year 1931. two In the Cleveland District, however, banks, namely, The Cleveland Trust Company and The Guardian Trust Company, " 13 11 of Cleveland, Ohio, were reported as being scheduled for examination during the it half of the current year. After some discussion, the Governor stated that he would take up with Governor Fancher, who is here attending the meeting of the Open Narket Policy Conference, the question of the advisability of securing a more prompt examination of these institutions. "-SOF STANDING- COMITEMS: 11"ecif Xanuary 21st Recommending approval of the application of Er. T. C. Ainsworth, for permission to serve at the same tire as an officer and director of the United States National Bank of Portland, Oregon; as a director and officer of the Central National Bank of Portland, Oregon, and as a director and officer of the Citizens National Bank, Portland, Oregon. Approved. 1121/31 -7- The neeting adjourned at 1 p. 1116 Assistant Secretary APProved:, /1, /CAGover
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