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... meetinr of the Executive Committee of the Federal lieserve Board WS held in the office of the Federal aeserve Board on Tuesday, duly 1 17th at 11 o'clock, a. m. RaE;SENT: Vice Governor Platt lir. Hamlin Mr. James Mr. Eddy, Secretary Mr. Noell, fIssistant 6ecretary. Telegram dated July 11 from the Chairman of the Federal deserve Bank Of Dallas advising that the Board of Directors, at their meeting on that date, made no change in the bank's existing schedule of rates of discount and turchase.. Without objection, noted with approval. Bank Letter dated July 12 from the Secretary of the Federal lieserve li on °I l'evi York advising that the Board of Directors, at their meeting thlly 12 adopted, the following schedule of purchase rates: Bankers' acceptances 1 to 120 days 5 and 6 months Repurchase Trade bills 4 lkk, 4 1/2 4 1/2d 5 p Government securities ,e1-.11rchcse 5 The letter also statea that no cir,n-es were made in the bank's existing lAnimum rates. aithout objection, noted with approval. Letter dated July 13 from the Chair-an of the Federal ,Aeserve Bank meeting on July Of Boston advising that the Board of Directors, at their : 13th adopted the following schedule Of rates for open market purchases 11 Executive Committee Looting 7-17-26 29 -2- Acceptances, 1-120 days, 4 1/4p 121-160 days, 4 1/2, bankers' acceptances, 4 1 Aepurchase government securities 4 1/2 trade bills Without objection, noted with approval. Letter dated July 13 from the Liovernor of the Federal Aserve :3ank Of Cleveland advisin that the Board of Directors, at their meeting on July 13, adopted the following schedule of rates for open market Durchases: Bankers' acceptances: 1 to 120 days 121 to 180 days Aepurchase Trade bills: Cleveland Iqew York 4 1/4,, 4 1/2d 4 1/2,0 4 1/2p 5 p Without objection, noted with approval. Telegram dated July 13 from the hairman of the Federal .eserve Bank Of _lichmond advising that the Executive Committee, at their meeting on that date, adopted the following schedule of rates for purchases of acceptances: Bankers' acceptances: 1 to 120 days 121 to 180 days 4 3/8,J 4 6/8 Without objection, noted with approval. ?eleRram dated July 12 from the Chairman of the Federal iieserve Bank Of s . Louis advising that the Board of Directors, at their meeting on that date, adopted the followin scheaule of rates for purchases of accentances: Bankers' acceptances: 1 to 120 days For longer maturities 4 1/4,c; 4 1/2,a dithout objection, noted with approval. -3- 7-17-28 Letter dated July 13 from the Secretary of the Federal aeserve Bank of Chicago advising that the Executive Committee of that bank, at its meeting on that date, voted to establish minimum .buying rates on bankers' acceptances as follows: 1 to 120 days 121 to 180 days •-4 1/4 4 1/2 'dithout objection, noted with approval. Telegram dated July 14 from the Secretary of the Federal deserve Bank of 1:,inneapolis advising that the Executive Committee of that bank, at its meeting on that date, approved minimum buying rates for purchases Of acceptances as follows: 1 to 120 days 120 to 180 days Repurchase Trade bills 4 1/4',,; -4 1/2 -4 1/2/J 5 dithout objection, noted with approval. Letter dated July 13 from the Secretary of the Federal Aeserve Bank of Kansas City advising that the Executive Committee of that bank, at its meeting on that date, adopted the following schedule of rates for purchase of acceptances: 1 to 120 days 121 to 160 days -4 1/4,; 4 1/2d 'aithout objection, noted with approval. Letter from hr. J. H. Case, Deputy Governor of the Federal deserve Bank of New York and letter from Governor Seay of the Federal Reserve Bank Of Richmond dated July 13, in compliance with the Board's request, stating reasons for the actions of the Boards of Directors of their banks in voting to increase the rediscount rate from 4 1/2 to 5. The above letters having been circulated among the members of the Board, were noted. Executive Cor.r2I1ittee 7:eeting 7-17-28 31_ -4- Report of Committee on Salaries and Expenditures on letter dated I/ July 11, Zro,a the Chairman of the 2ederal Reserve Bank of Dallas, requestin a ,),?roval of the action of the Board of Directors of that bank In granting to hr. Z. T. .mderson, a guard at the :lead Office, a leave of absence from June 1 to June 24, 1928, on account of illness with full pay; the Committee recommending approval. Approved. Report of Committee on Salaries and Expenditures on letter dated July 11, from the Chairman of the Federal Reserve Bank of Dallas, requesting the Board's approval of an increase in the salary of T. W. Rallmark, Issistant Lanager of the Service Department of that bank, from „;3,000 to 43,300 per annum, effective July 1, 1928, the Committee 11 . recommendinp; approval. il.pproved. Letter dated July 12 from the Deputy Governor of the Federal Reserve Bank of St. Louis requesting the Board's aprroval of a chann:e in transit time from two days to one day in items from Bt. Louis to Cleveland. 1,.pproved. Letter dated July 9 from hr. F. E. Scobey, Jan lIntonio, tendering his resignation as a director of the San intonio Branch of the iederal Reserve Bank of Dallas, to become effective at the Board's pleasure. In this connection, the Secretary stated that Er. C. 0. Walsh, Chairman of the Pederal Reserve Bank of Dallas, will be in Washington on Thursday of this 17eek and suggested that the matter of a successor to hr. Scobey be discussed 1/ With zr. Walsh. Upon motion, hr. Scobey's resignation was accepted, and the matter of the appointment of a successor was referred to the Committee on District Lo. 11. -5- 7-17-28 Memorandum dated July 12 from Goldenweiser, Chief of the Board's Division of Reasearch and Statistics, stating that the delay in the puolication of the Annual Report of the Federal Reserve Board for 1927 has been due to the fact that a number of statistical series have been compiled for the entire life of the system and that in the future the report will appear much earlier in the year and ultimately the entire report will come out at the same time that the text is submitted to Congress; 1:r. Goldenweiser also stating that it is proc,osed in this report, to publish two sets of figures which have not appeared before relating to earmarked cold and to the volume of securities in the sstem's investment account and recommending to the Board the question of their :,-.1.0lication. in this connection, the secretary stated that the :alle-e- liroof of the 1927 re,:ort would be ready to send back to the Printer tomorrow and that ._,,oldenweiser would like to have the Board's approval for the publication of the new figures in the 1927 Annual Aeport. Upon motion, the recommendations of hr. ,oldenweiser were approved. Letter dated July.10 fronl the Chairman of the 2ederal Reserve sank 1 ect to the Board's Of Atlanta stating that their Executive Committee, sub;, approval, had approved bi11 of Dr. L. , 2,500 and C. Lamar for ; Messrs. Aandolph & Parker, General Counsel, for cA,000 for services rendered in connection with the assessment on the Havana Lr'ency by the Cuban Governent of taxes on the excess of ex:)orts over imports of United Btates al currency, which has been dismissed, and future tax exempted, by ?residenti decree; hr. Newton, in his letter, statinR' that Dr. Lamar rendered a bill ,e5,000 for his services in this matter and the Executive Committee -6- 7-17-26 considered it excessive, and took the matter up with Dr. Lamar, who agreed I/ to reduce the bill to ,)2,500. Upon motion, it was voted to approve the action of the Executive Committee of the Federal Reserve Bank of Atlanta in approving the bills of Dr. Lamar for 42,500 and Messrs. Randolph and Parker for z-,A,OUO. :lemorandum from Counsel dated July 10 submitting letter from Curtiss, Chairman of the Federal Jeserve Bank of Boston, in which he states that in elections of Class A and B Directors it frequently happens that ballots are sent in oy officers of the banks who have not been aathorizea to vote for such banks and that ballots are sent in by banks when no resolution of authorization has been received from such banks. Li'. Curtiss suggested that when the ilederal .TAeserve -r_ent discovers this, before the ballot is marked "Official" or "Hot official" I/ end placed in the locked ballot oox, it would be more equitable to return the certificate envelope to the bank to permit the vote to be DrOperly cast in accord.ance with the requirements if this can be done before the ballots close.. Counsel, in his 1:,emorandum, stated there iS no legal objection to the adoption of the suggestion made by Mr. Curtiss, but called attention to the fact that its adoption would require a slight change in the oresent uniforr:, oroce:.ure which requires the ederal 4eserve ....-ent, as soon as a ballot is received, to check the signature on the sealed certificate envelope to see v:hether the proper officer has cast tne vote, and that in cases where an unauthorized officr had voted or the voting bank 11 .,(1 not authorized any officer to vote, the adoption of :r. Curtiss' the ballot saestion would. require that the sealed envelope containing I/ be returned to the member bank with appropriate explanation and if 7-17-28 -7- sufficient ti-le remained the member bank could then tae steps necessary 01) to remedy the matter and submit its vote in the proper manner before the ballots close. Upon motion, Er. Curtiss' recommendation was approved and the Secretary was instructed to prepare the necessary advice to the Chairmen of all Federal .leserve Banks. Memorandum from Counsel dated July 14 submitting letter from the attorneys for Er. Paul Klopstock and associates asking that the 4PPlicat1011 for reservation of title for a corporation proposed to be organized under Section 25 (a) of the Federal eserve ,ct be amended to read "Foreign Discount and Investment 2rust" instead of "Federal Discount 411a Investment Trust" in accordance with the Board's letter of June 19, 1928. Upon motion, the reservation of the title "Foreign Discount and Investment Trust" was approved. ) Memorandum from Counsel dated June 27 submitting letters from several national.banks in Pennsylvania with reference to the matter of blvestin small cash balances of trust estates in such a manner as to bri/1g in the maximum obtainable income for such estates on these balances. Upon motion, the memorandum from Counsel was ordered circulated. deport of Executive Committee on letter dated June 28 from the Secretary of the Federal Heserve Bank of liew York, enclosing application, dated June 25, 1928 from the Interstate Trust Company, Zew York, LT. Y. for permission to accept drafts and bills of exchange drawn upon it up to 100d of its paid up capital and surplus in accordance with the 1)r°7isions of Section 13 of the Federal _ieserve 1.ct; the Committee reoommerriing approval. ..pproved. 5 -8- 7-17-28 Memorandum from Jounsel dated July 12 submitting draft of an anlendment to 3ection 4 of the Board's Hegulation "K" so as to prohibit the use of the word "bank" in the title of any coreoration ort:anized under Section 25 (a) of the Federal deserve Upon motion, it was voted that this regulation be further amended so as to require that the titles of corporations organized under Section 25 (a) of the Federal Aeserve Act include the word "Foreign" or "International." Matter referred to iommittee on District . 9 at the meeting LlaY 28, namely, reoort of examination of the 2ederal Aeserve Bank of 1[Anneapo1is and its Helena Branch made as at the close of business - ouraary 15, 1928; the report calling attention to the fact that Of the total membership of 746 banks in this district, 274 banks are listed for special attention because of unsatisfactory condition, with 58 banks showing Capital i pairment and 91 showing impairment Of surplus; the Committee reported that this "emphasizes the necessity for tile Board adoptinc some 1:o1ic,;;-, but until such action is taken there is nothing to do but report to the Board '1,oted.'" Lemorandum from Jounsel dated July 9 submitting letters from Governor ,eory of the 1:ederal .eservo _Dank of _inneapolis and draft of nroposed re .)ly with reference to the oliuibility for rediscount at 4 Federal ,eserve Bank of the paper of ,eneral Mills, inc., which has beell organized for the purpose of buying the ousiness of the ,ashburnC*osby company and all of the companies affiliated therewith, together with one outside mill. Upon motion, the draft of letter prepared by Counsel was approved. -9- 7-17-28 deport of Executive Committee on memorandum from the ,,cting Comptroller of the Currency recommending that the application of the First iational Bank of Commerce of Tarpon Springs, Florida (consolidation Of the First i;ational Bank and Bank of Commerce and Trust Company of • Tarpon Springs, Florida) for permission to reduce its capital stock from 100,000 to „?75,000 be approved, such reduction to become effective if and when the First Lational Bank of Tarpon Springs and the Bank of Commerce and Trust Company of Tarpon Springs, Florida, consolidate, the Committee recommending approval. Approved. Letter dated July 11 from the Chairman of the Federal Aeserve Bank Of San Francisco, California, advising the Board that at a meeting of the Executive Committee held on July 10, there was presented a memorandum prepared by lir. Sargent, Assistant Federal Aeserve Agent, reviewing the condition of the Gunnison Valley Bank, Gunnison, Utah, and it was voted to recommend to the Federal lieserve Board that a hearing be held at the Salt Lake City Branch on the question of cancellation of membership, and that the bank be advised - (a) that the bank may take steps to restore the impairment of its capital; or (b) that it will,be given an oPportunity to make application for withdrawal of its membership; or (c) that steps will be taken to have its membership cancelled; also - ewton stating that the Gunnison Valley telegram dated July 16 from Mr. l Bank, Gunnison, Utah, is requesting additional advances including new names and asking the Board's advice in the premises. Upon motion, it was voted to send the following telegram to Mr. 1:ewton: 4c, 7-17-28 -10"Your telegram re granting further rediscounts to Gunnison Valley Bank. This is a matter for the determination of your Board of Directors. dould call attention to fact that until membership is terminated bank is entitled to all privileges and benefits of membership. Since you have asked our advice in this particular case our suggestion would be pending hearing at least, that you rediscount for the member bank any new paper that may be offered applying your general policies with respect to amount of line of accommodation, etc., and provided of course, the quality of pa;:er is satisfactory and considered self-liquidating without regard to member bank's endorsement." 'The Vice Governor then referred to the 3oard's action on July 10 ta adopting the following resolution: "After discussion, upon motion it was voted 'that a majority of the members present, provided that the number present be not less than three, may approve applications for increases in rediscount rates up to 5,) - this authority to continue until revoked.'" The Vice Governor stated that as there may not be three members on should Of the Board present at all times he thought the above resoluti be amended, and after considerable discussion the following resolution was presented by Mr. Platt and approved by the Committee, subject to approval by the board at its next meeting, statinic he had no Objection to the proceaure involve l but disapproved of an rate chani:es. WHEREAS: The Federal eserve Board at its reetin!. on July 10th approved the establishment of a rediscount rate of b per cent by the Federal eserve Bank of Chicago after full discussion, and '.71LER.L'A'45: The Board, having considered the question of possible increases to 5 per cent by action of the directors of the other eleven Banks, delep4ated to a committee of three by resolution authority to approve further increases to 5 per cent if and when they should be voted by the directors of the several Banks, and -11- 7-17-9c, WHER215: the aforesaid committee in pursuance of to this authority has since then approved increases d, i_chmon of Banks e Reserv l Federa the by 5 per cent New York and il.tlanta, and WHEEEAS: the establishment of 5 per cent rates by the remaining Reserve banks is a matter purely for regional determination, the approval of which may be considered an executive RESOLVED: or administrative act, THEREFORE, BE IT any That if within the next 30 days the directors of the of the remaining Federal Reserve Banks notify 3oard that they have established 5 per cent rates the Executive officer of the ,Board present at the time be and is hereby authorized and directed to notify such bank or banks of the Board's approval. ilgPO_iTS OF STANDING COITTEES: Dated, July 11th Recommending changes in stock at Federal Reserve 3anks tais as set forth in the Auxiliary Iiinute Book of date. Recommendations approved. pavers Recommending action on arplicptions for fiduciary date. this of Book ::inute as set forth in the Auxiliary Recommendations approved. -Oated, June 18th Recommending approval of the application of L:r. Geo. time as W. Bard, for permission to serve at the same and Pa., g, Readin Bank, director of the Penn National y, Compan Trust g Readin the of as director and officer Reading, Pa. Recommendation approved. Dated, June 18th Recommending o:pproval of the application of Ferdinand 2hun, for permission to serve at the same a1 Bank, time as director and officer of the Penn 1:ation Trust g Headin the of or direct as and Reading, Pa., Company, Reading, Pa. Recommendation approved. Dated, June 16th Recommending approval of the application of Li'. Philip time 3. _Lieber, for permission to serve at the same Pa., g, Readin as director of the Penn :ational Bank, g, Readin y, and as director of the .Reading Trust Compan 12th 13th 16th Dated, July 6th 13th Pa. Dated, ;Al 7th Recommendation approved; H. Recommending approval of the application oi r. as time same Belk, for permission to serve at the Bank, director of the : urchants and Farmers 1;ational National te Charlot Charlotte, 1.. C., as director of the the of or Bank, Oharlotte, II. O., and as direct -12- 7-17-28 aEPORT3 OF STANDING COMMITTEES (Continued): Dated, July 10th Dated, July 11th Dated, July 11th Dated, July 11th Dated, July 11th Dated, July 13th Dated, duly 14th Independence Trust Company, Charlotte, N. C. Recommendation approved. Recommending approval of the application of Mr. B. F. Schlesinger, for permission to serve at the same time as director of the Anglo & London Paris National Bank, San Francisco, Cal., and as director of the First i.ational Bank in Oakland, Oakland, Cal. Recommendation approved. Recommending approval of the application of Mr. Charles E. Robertson, for permission to serve at the same time as director of the First National Bank, Dunmore, Pa., and as director of the Anthracite Trust Company, 3cranton, Pa. Recommendation approved. Recommending approval of the application of hr. Muir, for permission to serve at the same time as an officer of the First National Bank, iarren, Pa., and as director of the American Bank & Trust Co., St. Petersburg, Fla. Recommendation approved. Recommending approval of the application of Mr. John T. Dillon, for permission to serve at the same time as director of the First National Bank, Warren, Pa., and as director of the :Eirine Trust Co., Buffalo, N. Y. Recommendation approved. Recommending approval of the application of Mr. John C. Cutler, for permission to serve at the same time as an officer and director of the Deseret National Bank, Salt Lake City, Utah, as director and officer of the Deseret Savings Bank of Salt Lake City, Utah, and as director and officer of the Pacific Coast ;:oint Stock Land Bank, Salt Lake City, Utah. Recommendation approved. Recommending approval of the application of hr. Louis N. Jacobs, for permission to serve at the same time as director and officer of the First National Bank, Exeter, Pa., and as director of the Kingston Bank and Trust Co., Kingston, Pa. Recommendation approved. Recommending approval of the application of Mr. M. J. Murray, Jr., for permission to serve at the same time as director of the First National Bank, Dunmore, Pa., and as director of the Lnthracite Trust Company, Scranton, pa •, Dated, July 14th Recommendation approved. Recommending approval of the application of Mr. Delmer Runkle, for permission to serve at the same time as an officer of the National City Bank, Troy, N. Y., as an officer of the Peoples National Bank, Hoosick Falls, N. Y. and as a Class A Director of the Federal Reserve Bank of New York, N. Y. Recommendation aoproved. 7.10 7-17-28 REPO2TS OF STANDING COMMITTEES (Continued): Dated, July 14th Dated, July 14th , approval of the application of Mr. Samuel Recommendinc; N. Rhodes, for permission to serve at the same time as director of the Media Title & Trust Co., Media, Pa., and as director of the Morton ilational Bank, Morton, Pa. Recommendation approved. Recommending approval of the application of Mr. Harry Burnley, for permission to serve at the same time as director of the Morton National Bank, Morton, Pa., and as director of the Media Title & Trust Company, Media, Pa. Recommendation approved. Recommending approval of the application of Mr. Perry R. Long, for permission to serve at the same time as director of the Media Title & Trust Company, Media, Pa., and as director of the Morton rational Bank, Lorton, Pa. Recommendation approved. Dated, July 14th Recommending approval of the application of Mr. Frank B. Rhodes, for permission to serve at the same time as director of the Media Title & Trust Co., Media, Pa., and as director of the Morton National Bank, ::orton, Pa. Recommendation approved. Dated, July 14th Recommending approval of the application of :r. Joseph Hallas, Jr., for permission to serve at the same time as director of the Media Title & Trust Co., :Media, Pa., and as director of the Lorton National Bank, Lorton, Pa. Recommendation approved. Dated, July 14th Recommending approval of the a heation of Mr. Harry J. Makiver, for permission to erve at the same time as director of the Media Title 6 2rust Co., Media, Pa., and as director of the Morto National _,ank, :_orton, Pa. Recommendation approve Lated, July 14th The meeting adjourned at p. m. Jecretary 4.pproved: Tice ,overnor
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