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93 A meeting of the Federal Reserve Board was held in the office of the Federal Reserve Board on Wednesday, Tanuary 28, 1931, at 11:15 a. la. PRESENT: Governor Meyer Mr. Hamlin 1:x. Miller Yr. James Mr. Pole McClelland, Assistant Secretary. The Assistant Secretary presented various items of business which were considered by the Board and acted upon as follows: Matter noted with approval by the Executive Committee on January 26th, las4melY, telegram dated January 26th from the Governor of the Federal Reserve Bank of Boston, advising of the establishment by that bank of the following schedule of buying rates on acceptances: Bankers accentances: 1 to 45 days 46 to 120 days 121 to 180 days Repurchase Trade acceptances 1 1/2% 1 5/% 2‘;') 1 5/8% 2% There being no objection, the establishment of the above schedule at the Boston bank was formally noted with approval. Telegram dated January 27th from the 'Secretary of the Federal Reserve —A- of Atlanta, advising of the establishment of the following schedule of buir4 4-4ng rates on bankers' acceptances: 1 to 45 days 46 to 120 days 121 to 180 days Repurchase Without objection, noted with approval. 94 1/28/31 IP ( —2— Telegram dated January 26th from the Governor of the Federal Reserve Bank of St. Louis, and letter of the same date from the Secretary of the Federal Reserve Bank of Kansas City, advising of the establishment of the following schedule of buying rates on bankers' acceptances: 1 to 45 days 40 to 120 days 121 to 180 days Without objection, noted with approval. Telegram dated January 27th from the Secretary of the Federal Reserve Batk of hinneapolis, advising of the establishment of the following schedule Of buying rates on acceptances: Bankers acceptances: 1 to 45 days 46 to 120 days 121 to 180 days Repurchase Trade acceptances 2.7'7 Without objection, noted with approval. Telegram dated January 26th from the Chairman of the Federal Reserve 13arik of Richmond, advising of the establishment on January 27th, of the '1*011owing schedule of buying rates on bankers' acceptances: 1 to 45 days - 46 to 120 days 121 to 180 days Without objection, noted with approval. Report of Executive Committee on letter dated January 26th from the rje131-1tY Governor of the Federal Reserve Bank of Cleveland, requesting approval bY the Board, for reasons stated, of an increase of153 in the bank's contract 1/26/31 -3- with the Lyon Metal Products, Incorporated, covering the installation of steel lockers in the new Pittsburgh Branch building; the Board's Committee recommending approval. Approved. Letter dated January 27th from the Assistant Federal :ieserve Arent at New York, advising that the Marine Trust Company of Buffalo, a member bank, 48 of January 23, 1931, took over the offices and business of the Commercial Trust Comnany of Buffalo, New York, a non-member institution; that action being the result of steps taken by the local bankers because of the unsatisfactory condition of the affairs of the Commercial Trust Company. Noted without objection. Letter dated January 27th from the Assistant Federal Reserve Agent "New York, advising that S. Lunghino and Sons, private bankers, Rochester, NeW York, affiliated with the Commercial Trust Company of Buffalo, above referred to, have been taken over by the State Banking Department because of financial difficulties. Noted. Report of Executive Committee, submitting draft of reply to letter dated January 23rd from the Assistant Federal Reserve Agent at Chicago, t114Insmitting notice received on Tanuary 23rd from the Lowden Savings Bank, Lowden, Iowa, of its intention to withdraw from membership, with a request of the member bank that the Board waive the usual six month's notice; the proreply stating that it does not appear that any unusual circumstances e:O.st which make it advisable for the Board to waive the six months' regilirsment, and unless further information is submitted and a recommendation Made by the Executive Committee of the Chicago bank that the Board re- 1/28/31 -4- 96 consider this decision, the bank is authorized to cancel the stock held by the Lowden Savings Bank at the end of the six months period. Upon motion, the letter submitted by the Board's Committee was approved. Letter dated January 26th from the Director of Accounts and Statistics of the American Red Cross, requesting that the Board advise that organization of all failures reported to it of state and private banks in the United States. After discussion, upon motion, it was voted to furnish The Red Cross with the information requested, with the understanding, as in other cases, that it is forwarded without verification of the reports received and without responsibility on the part of the Federal Reserve Board for errors or omissions. Liemorandum from Counsel dated January 26th, with regard to a report by the Federal Reserve Agent at Philadelphia, that since the Board granted Rs A, Berwind permission to serve as a director of the Fourth Street National 13411k and of the Commercial Trust Company, both of Philadelphia, Pennsylvania, "ch of these banks has been involved in two consolidations, and T:r. Berwind's "rvice as a director of the consolidated bank has been continuous in each . e"e; the memorandum submitting draft of a letter to the Federal Reserve Agent Ett Philadelphia, advising that inasmuch as the continuance of lir. Berwind's "rvices will not, in the A ,ent's opinion, be incompatible with the public in terest, the Board has determined that it will take no action at this time 1° revoke the permit previously granted. 6 Upon recommendation of the Law Committee, the letter submitted with COunsel's memorandum was approved. Memorandum from Counsel dated January 26th, submitting a letter from f, 7 1/28/31 4L1 -5- the Federal Reserve Agent at Philadelphia, calling attention to the fact that since the Board granted permission to Mr. Walter K. Hardt to serve as an .9-flIggr of the Fourth Street rational Bank and as a director of the .lest Philadelphia Title and Trust Connany, both of Philadelphia, Pennsylvania, these two banks have been involved in consolidations, and 1.r. Hardt is now aerving as a director of the Philadelphia National Bank and as an officer and director of the Integrity Trust Company, the two resulting consolidated institutions; the memorandum stating that inasmuch as the Federal Reserve lIgent at Philadelphia has advised that, in his opinion, the continuance of Ur Ti -ardt's services will not be incompatible with public interest, the Board IllaY issue a new permit covering Ni. Hardt's service of the two consolidated institutions. Upon recommendation of the Law Committee, it was voted to issue a new certificate to Lr. Lardt, and draft of letter to the Federal Reserve Agent at Philadelphia, submitted with Counsel's memorandum, advising accordingly, was approved and ordered transmitted. Memorandum from Counsel dated January 20th suggesting that the Board illeus a new permit to Mr. Paul S. Dick, covering service by him as a director Or the United States National Bank in addition to his service, approved by the Board on January 5, 1931, as an officer of the United States rational Eallk, as a director of the Citizens National Bank and as a director of the eelltral National Bank, all of Portland, Oregon. Upon recommendation of the Law Committee, it was voted to issue a nevi certificate to lix. Dick in accordance with Counsel's sukgestion. Lemorandum from Counsel dated January 26th, approved by the Law ecl raittee, with regard to letter from 2r. Carl E. Bailey, Prosecuting Attorney 1/28/31 -6- for the Sixth :rudicial District of the State of Arkansas, referred to him at the meeting on January 19th, requesting cooperation of the Board in a Proposed investigation of the facts leading up to the closing of the American Exchange Trust Company of Little Rock; Counsel recommending (1) that the Board request the Federal Reserve A(7ent at St. Louis to assign an examiner to assist 11r. Bailey in conducting his investigation of the affairs of the 4merican Exchange Trust Company and the affairs of any other member banks of the iilederal Reserve System; (2) in order that it may have adequate information on this general subject, that the Board also request the Federal Reserve Agent at St. Louis to compile and forward to the Board a report with regard to various phases of the natter; (3) that lir. Drinnen, who is now in St. Louis, be requested, to visit Little Rock and confer with the United States Attorney, the State Prosecuting Attorney and the officers of the Little Rock Branch, and report to the Board along certain lines laid down, and (4) that after Drinnen's renort is received, the matter be fully discussed with a view ge deciding whether the Board should take any further steps to assist in the Proposed investigation. ..;ith his memorandum, Counsel submitted drafts of letters alonr7 the lines recommended by him, to the Attorney General of the U/lited States, Senator Caraway, from whom a letter on the subject was also received, the ' 71ederal Reserve Agent at St. Louis, and Lr. Bailey. During the discussion which followed, James stated that he would be apposed to an examiner being sent from the Federal Reserve Bank of St. Louis to assist in the proposed investigation, and suggested that the Board send one of its own examiners to Little Rock for that purpose. At the conclusion of the discussion, it was voted to refer the entire matter to the Governor with power. At this point Governor Young, of the Federal Reserve Bank of Boston, 99 -7- 1/26/31 and Governor Harrison, of the Federal Reserve Bank of New 'Fork, who were in Washington on other business, were invited into the meeting, and an informal discussion of various subjects was engaged in. During the discussion, 1,1r. Miller left the meeting. Among other things, Governor Harrison reported that on yesterday the Federal Reserve Bank of New York sold an additional :j15,000,000 of Government securities purchased in December, leaving in its portfolio only A0,000,000 or the 145,000,000 so purchased; also that the directors of his bank felt that its sales from its own Portfolio should not exceed the total of the special Purchases, amounting to .145,000,000. He stated further that while the directors had not yet taken formal action, he believed they would vote to approve the report of the Open Market Policy Conference on January 21st. Further in 'the discussion, Governor Meyer referred to the procedure Meetin;.:s of the Open Market Policy Conference and it was agreed that it Would be an improvement over the present procedure if the initial meeting at such conferences would be a joint one with the Board, following which the Open Market Policy Conference could meet separately to formulate °Pinion and prepare a report, and then meet again with the Board for a disellssion of its recommendations. REPupm OF"STAFDING CGEMITTUS: 1)4ted, Tanuary 27th 28th 134ted, January 26th Recommending changes in stock at Federal Reserve Banks, as set forth in the Auxiliary Minute Book of this date. Recommendations approved. Recommending action on applications for fiduciary powers as set forth in the Auxiliary Minute Book of this date. Recommendations approved. 1/28/31 -8- c-AtA U REPORTS OF STANDING COMMITTEES (Continued) Dated, January 27th - Recommending approval of the application of 1,r. P. C. Willis, for permission to serve at the sane time as an officer of the Commercial rational Bank of Shreveport, La., and as a director and officer of the First National Bank, Gibsland, La. Approved. Dated, January 27th Recommending approval of the application of Mr. Ben Johnson, for permission to serve at the same time as a director of the first National Bank of Gibsland, La., and as a director and officer of the'Connercial National Bank of Shreveport, La. Approved. Dated, January 27th Recommending approval Of,the application of Yr. R. T. Moore, for permission to serve at the same time as a director of the First National Bank of Gibsland, La., and as a director and officer of the Commercial rational Bank of Shreveport, La. Approved. Dated, January 27th Recommending approval of the application of Mr. Horace M. Stone, for permission to serve at the same time as a director of the Lincoln National Bank & Trust Company of Syracuse, N. Y., and as a director of the First National Bank of Uarcellus, N. Y. Approved. The meeting adjourned at 1:00 p. in. Assistant Secretary Proved: "N AUXILIARY MINUTES (January 28, 1931.) Reports of Standing Committee dated January 27th and 28th, recommending chaages in stock at Federal Reserve Banks, approved as follows: AD.21Acations 1 for ADDITIONAL Stock: District No. 6. Sanford-Atlantic National Bank, Sanford, Florida. First National Bank, Uinter Garden, Florida. b istrict No. 7. First National Bank, Council Bluffs, Iowa. Pirst National Bank, Uatervliet,lachigan. Harris Trust and Savings Bank, Chicago, Illinois. Shares 3 1 4 6 13 600 619 District NO: 12. Citizens Commercial Trust & Savings Bank, Pasadena, Cal. 45 Total Allgcations for SURRENDER of Stock: bistrict No. 4. %lion National Bank and Trust Co., Cadiz, Ohio. (Cons. First National Bank, Fourth National Bank and Harrison National Bank of Cadiz, With the above bank) b istrict No. 5. st National Bank, Charlotte, N. C. (Insolvent) irst National Bank, Northfork, U. Va. (Decrease in surplus) bistrict Citizens Third National Bank & Trust Co., Greensburg, Ind. (Cons. Third National Bank and Trust Company, with the above bank) Pi rat National Bank, Mt. Pleasant, Iowa. (V.L.Abs. by Henry County Savings Bank) i strict No. 8. irat National Bank, Rogers, Ark. (Insolvent) 17illiavi1le Trust Co., Louisville, Ky. (Insolvent) i Ilistriat No. 9. J•rat National Bank, Hancock, Minn. (V.L.Abs. by Rancock National Bank) Diat • 41-Lurat National Bank, Berwyn, Okla. (Insolvent) ericen National Bank, Tonkawa, Okla. (V.L. Abs. by First National Bank in Tonkawa) 114 45 668 114 420 30 450 90 90 180 45 1.710 1,755 21 21 18 18 36 -2- 11 District No. 11. First National Bank in Electra, Texas. (V.L.Abs. by First State Bank of Electra) District No. 12. First National Bank, Eureka, Calif. (V.L.Abs. by Bank of America National Trust and Savings , Association) tirst National Bank, Flagstaff, Ariz. (V.L.Abs. by Arizona Central Bank) First National Bank in Berkeley, Calif. (V.L.Abs. by Bank of America National Trust and Savings Association) C41 Shares 60 60 360 33 285 Total 678 3,294 Aeports of Standing Committee dated January 26th, recommending action applications for fiduciary powers by the following banks: APPa0VED: DISTRICT NO. 1. MASSACHUSETTS: The Beverly National Bank, Beverly. (Supplementary) (Powers 5 to 9, inc.) DISTRICT NO. 5. NORTH CAROLINA: The Citizens National Bank of Gastonia. (3333) Assistant Secretary. 4PPray
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