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452 4 meeting of the Federal Reserve Board was held in. Washington on Tklesday, Ally 19, 1932, at 11:35 a. PRLSIM: 116 Governor Meyer Mr. Hamlin La*. James Mr. flagee Mr. Pole Mr. Mr. Mr. Mr. Morrill, Secretary McClelland, Assistant Secretary Harrison, Assistant to the Governor Wyatt, General Counsel. The Board considered and acted upon the following matters: Letter dated July 14, 1932, from the Secretary of the Federal Reaerve Bank of New York, and telegrans dated July 13, 1932, fran the chairOf the Federal Reserve Bank of Boston and July 14, 1932, from the Chairrlan of the Federal Reserve Bank of Richmond, all advising that at rneetines of the boards of directors on the dates stated, no changes were 1114d5 in the banks' existing schedules of rates of discount and purchase. Without objection, noted with approval. dRsply, aporoved by four ner:bers of the Board on Ally 16, to a letter ated July 1, 1932, from the Comptroller of the Currency recommend- aPProval of a salary at the rate of :)5,400 per annum for National EZaminer David H. Reiners, assigned to the Seventh Federal Reserve etrici., ') the reply stating that the Board has approved the salary e ndea. Salary and reply approved. Reports of the Committee on Sajaries and Expenditures recommendaPpl'otral of changes in the personnel classification plans at Federal eXI'ire banks as follows: 7/19/32 -2St. Louis: The creation in the Collateral and Collection Division, Reconstruction Finance Corporation Department of the head office, of five new positions, and a change in the titles of two positions; these changes being made necessary by expansion in the work handled for the Reconstruction Finance Corporation. Kansas City: The creation in the Fiscal Agent-Reconstruction Finance Corporation Department of the Omaha branch of the new position "Assistant Clerk in Charge." Recommendations approved. Letter dated July 7, 1932, from the Assistant Federal Reserve at Dallas advising of the death on Tune 14, 1932, of Er. George D. ?14/17, a director of the El Paso branch of the Dallas bank, and stating that the board of directors of the bank, at its meeting on July 7, eq1Dointed Mr. San D. Young, Vice-President of the El Paso National Bank, "€1 director of the El Paso branch for the unexpired portion of the term -"(- December 31, 1933, to succeed Mr. Flory. Noted. Telegraphic replies, approved by five members of the Board on 3111Y 14, 1932, to teleL;rams of that date from Deputy Governor Paddock of lederal Reserve Bank of Boston, requesting an extension to July 29, the ' 19321 clf the authorities previously granted by the Board to the Federal ae8e1"413 Dank of Boston to advance, in accordance with the provisions of eeti°11 10(b) of the Federal Reserve Act, to the Quincy Trust Company, Massachusetts, the Worcester Bank and Trust Company, Worcester, 1.1.4 ae'el1112etts, and the Peoples National Bank, Southbridge, Massachusetts, IOt to exceed .250,000, :1,000,000, and .;75,000, respectively, at a rate <:)(4. 7/19/32 -3- °t 5 1/2% per annum, and payable on demand; the replies stating that the Pederal Reserve Board extends the authorities to July 29, 1932, as requested bY the bank. Replies unanimously approved. Telegraphic reply, approved by five members of the Board on July 131 1932, to a telegram of that date from Deputy Governor Rounds of the "'ecleral Reserve Bank of New York requesting authority to make an advance, "cordance with the Provisions of section 10(b) of the Federal Reserve 4", to the Atlanta National Bank, Atlanta, New York, in the amount of lor a period of ninety days, at a rate of 5 1/2,', per annum, and on 45.00n " the S ecurity of miscellaneous collateral with a market value of :;7,378.75; the 1(ivance being desired to meet the withdrawal of school district de- D°81t5 The and the expected withdrawal of a relatively large individual deposit. -p-LY stated that the Board authorizes the advance subject to the terns 41ad co nditions reconrended. Reply unanimously approved. Telegraphic reply, approved by five members of the Board on July 16, to a telegram dated July 15, 1932, from Deputy Governor Rounds of the leclel'a-1 Reserve Bank of New York requesting authority to make an advance, iltecordance with the provisions of section 10(b) of the Federal Reserve 4") to the Bank of Depew, New York, in the amount of 45,000, for a period oriTiety days, at a rate of 5 1/2,73 per annum, and on the security of miscollateral and ineligible municipal notes with a margin of at 2,5 ; the advance being desired to meet the withdrawal of a large 1114bIleiPa1 deposit. The reply stated that the Board authorizes the advance 7/19/32 -4- stzbject to the terms and conditions recommended. Reply unanimously approved. Telegraphic reply, approved by five members of the Board on July 34) to a letter dated July 12, 1932, from the Federal Reserve Agent at Calioago, recommending approval by the Board of the application of the Live Stock National Bank, Sioux City, Iowa, for permission to rediscount paper e ecluilled from nonmember banks; the reply stating that the Board authorizes ' the Federal Reserve Bank of Chicago, in its discretion, for a period of 814 months from Ally 14, 1932, to rediscount for the Live Stock National 13411k good and eligible paper acquired from or bearing the signature or indorsement of nonmember banks. !I The reoly also stated that it is the ni°n of the Board that no such paper should be rediscounted for the 44ti°rIal bank until it has first utilized all other paper in its portfolio hieh is eligible and acceptable to the Federal reserve bank for rediscount. Reply approved. Telegraphic reply, approved by three members of the Board on July 't° a letter dated July 7 and telegrams dated July 15, 1932, from the 15 1-?e(leral Reserve Agent at Chicago recommending approval of the application Of the City National Bank, Clinton, Iowa, for permission to rediscount IlDer acquired fronincmember banks; the reply stating that the Board 1111thor1zes the Federal Reserve Bank of Chicago, in its discretion, for a Derioa of six months from July lb, 1932, to rediscount for the City National 11e,1111c c)(3d and eligible paper acquired from or bearing the signature or Lick, 2eruent of the nonmellber banks listed in the agent's second wire of ' 3'111y The reply also stated that it is the opinion of the Board that -c4 paper should be rediscounted for the bark until it has first ' &6 , 7/19/32 -5- utilized all other paper in its portfolio which is eligible and acceptable to the Federal reserve bank for rediscount. Reply approved. Reply, approved by five menbers of the Board on July 14, to a 14E7110ra/4w:1 dated Tune 25, 1932, from the Comptroller of the Currency recomtaeliding aPProval of the application of the Ballston Spa National Bank, }3ellston Spa, New York, for permission to reduce its capital stock from 200,000 to 1.00,000 or less, through a reduction in the par value of the °Iltstanding stock of the bank from .1100 to per share or less, the 1)1141°8 capital to be immediately increased fran a00,000 or less to 2°°1000 by the sale of a sufficient number of Shares of stock at twice the Par value to provide for such increase and pramiam of corresponding e113431111t, the released capital and premium received from the sale of the new ' ""k to The be applied to the bank's undivided profits or a reserve account. "P-LY stated that, with the understanding that the reduction in capital be authorized by a vote of shareholders owning two-thirds of the toe,,k of th, national bank and that arrangements will be made whereby the "Etbiliti„ of the national bank for circulation outstanding will at no tjar, exceed the amount of its capital, the Federal Reserve Board approves the, r°1)02ed reduction in capital, under the plan submitted, subject to the ' rola °771n12; conditions: "1. That the capital of the bank shall not be reduced to an amount less than 50,000. • That the bank's capital shall be immediately increased to •200,000 by selling at twice the par value a sufficient number of shares of new stock to provide for such increase and a premium of a corresponding amount, such stock to be sold to persons or concerns who have knowledge as to the present condition of the bank and the use to which the released capital and the premium on the new stock are to be applied. 7/19/32 93 . That no part of the reduction shall be returned to stockholders, but that the released capital and such premium as is received from the sale of the new stock shall be transferred to the bank's undivided profits, or a reserve account, and such funds used to charge off estimated losses of ;:97,023, as shown by the report of examination of the institution as of Ianuary 30, 1932, if such estimated losses have not already been eliminated. "4. That the funds for the purchase of the new stock shall be on deposit in the bank in a special account for that purpose before the decrease becomes effective." Capital reduction and reply approved. Reply, approved by six members of the Board on July 14 to a letter 4ted 3-111Y 6, 1932, from the Federal Reserve Agent at Richmond with regard to aPParent violations of certain of the conditions under which the Peoples 138111z) Biahopville, South Carolina, was admitted to membership in the Fed- 81'81 Re erve System, which were indicated in the analysis of the report of elcallaination of that bank as of Tune 6, 1932; the reply noting that it has been sue;gested to the president of the member bank that formal meetings of the bank's 0 b ard of directors be held and minutes made of such meetings, 444 recpaestinc that the a.,-.r,ent obtain advice as to vb.:It definite action has beelt taken by the bank with regard to this suggestion and as to how *614(311tly it is proposed to hold such meetings. The reply also requested ce with regard to the bank's compliance with the membership condition l'ecilliring Periodical approval of loans by the board of directors of the 14111k) and, further, as to what correction has been effected in the matter (11' the checks drawn by a company in which one of the directors of the bank le 14tarested and which are held in the bank's cash items. Reply approved. Reply, approved by five members of the Board on Xuly 18, to a 7/19/32 -7- letter dated July 6, 1932, from the Federal Reserve Agent at St. Louis rePorting that the First National Bank of Odin, Illinois, was continuously deficient in its required reserves during the period of six months ended 3-411e 15 1932; the reply stating that, in vie u of the information submitted, lir°111 which it would seen that the national bank is making an earnest effort to restore its reserves to the required amount, the Board is taking no 8 'ction in the matter at this time, other than to forward a copy of the lent's letter to the Comptroller of the Currency. The reply also recilleeted that the agent advise the Board within a reasonable time as to whether the bank has restored and is maintaining its required reserves. Reply approved. Letter to the Nyack National Bank and Trust Company, York Nyack, New $ approved by three members of the Board on July 16, 1932, referring to the b c''ange in the name of the Nyack National Bank, llyack, New York, to ' e LYack National Bank and Trust Company, and inclosing a certificate 811131iri1g the trust powers heretofore granted to the bank under its former 111(1 stating that the bank is authorized to exercise such powers 44del* its new name. Certificate and letter approved. Letter, approved by three members of the Board on Tuly 16, 1932, to thn 'anerican National Bank, Beaumont, Texas, which institution was rorme„ u. on June lb, 1962, through consolidation under the Act of November 7, 1918_ 'or the City National Bank of Beaumont and the American National 1341kra, Of Beaumont, under the charter and title of the latter; the letter tr bittinga. certificate of the consolidated bank's authority to exercise 7/19/32 -8- the fiduciary powers previously granted to the constituent national banks. Letter and certificate approved. Reply, approved by four menbers of the Board on July 16, to a letter dated Tune 29, 1932, from the Vice-President of the Bank of Rocknlle Centre Trust Company, Rockville Centre, New York, to the Deputy Cb alltroller of the Currency, with reference to obtaining a release of 1)011(18 Which the First National Bank of Rockville Centre deposited with the klIthorities of the State of New York in connection with the operation of its trust department, all of the business of which has recently been "ellined by the Bank of Rockville Centre Trust Company. The reply referred to the Procedure outlined in section 11(k) of the Federal Reserve Act and the Board's Regulation F with regard to the surrender of trust powers by a 114ti°1133- bank, and suggested that since the First National Bank of Rockville aelltre has been placed in voluntary liquidation, it would probably be more e itious and less expensive for the State authorities to satisfy themthat the bank has been relieved of all of its duties as fiduciary by roak their own inspection or examination of the bankts condition or by au oh other means that they may consider expedient, but that if the lle:tic3)3e1 bank finds it necessary to obtain a formal certificate from the Pedex. Reserve Board to secure the release of the securities, it should Droc,„ _ ed in accordance with the provisions of Regulation F. Letter approved. Letter to the Planters National Bank, Fredericksburg, Virginia, atat _ 4-`lig that the Board has approved the application filed by the bank t11/ 111 the Federal Reserve Agent at Richmond for permission to act, when 60 7/19/32 -9- 4c)t in contravention of State or local law, as trustee, executor, administrator, registrar of stocks and bonds, guardian of estates, assignee, zeceiver, committee of estates of lunatics, or in any other fiduciary 8.134eity in which State banks, trust comanies or other corporations which ec9Ile into competition with national banks are permitted to act under the 14178 Of the State of Virginia, the exercise of such rights to be subject tc) the provisions of the Federal Reserve Act and the regulations of the 1Pe ral. Reserve Board. Application and letter approved. Letter to the First National Bank in Sioux City, Iowa, stating that t he Federal Reserve Board has approved the application filed by the through the Federal Reserve Agent at When Chicago for permission to act, 'lot in contravention of State or local law, as trustee, executor, 4cIrairt-, lstrator registrar of stocks and bonds, guardian of estates, assignee, reee. lir") committee of estates of lunatics, or in any other fiduciary leitIr in which State banks, trust companies or other corporations which °c11rtha into competition with national banks are permitted to act under the 'the State of Iowa, the exercise of such rights to be subject to 1417 °I then of the Federal Reserve Act and the regulations of the Federal 11"er1te Bold. Application and letter approved. Letter to Mr. W. C. Thompson, Vice-President of the French American Corporation, New York City, New York, approved by three members of the 130 4rd on July 16, acknowledging receipt of his letter of July 13, 1932, 111g that at a meeting of the board of directors of the corporation on Of - -10that date, ::r. Paul Duran was elected a director to replace Lr. I:aurice Silvester, who was not reelected at the annual meeting. Noted. Reply, approved by six members of the Board on July 14, to a letter dated July 7, 1932, from the Federal Reserve Agent at Dallas, stating tillvt the amendment to section 8 of article TV of the by-laws of the San branch, in the form suggested in the Board's letter of Tune 8, 1932, liebeen adopted by the board of directors of the branch and formally t a' l)r°ved. by the board of directors of the Dallas bank, and requesting ad7ies of the Board's anproval of the amendment. The reply stated that the 13(341 ' (1 approves the amendment as adopted. Reply approved. Reply, approved by five members of the Board on July 16, to a l'ettC dated June 27, 1932, from the Federal Reserve Agent at Philadelphia 14(111irin2 whether the Lycoming Trust Company, Williamsport, Pennsylvania, ilc:1111(1 be required to maintain reserves against certain "collateral certifie" iaSUed to its customers as evidence of amounts paid to the company to acure loans made to such customers and to be used only for paying the 1144 or renewals thereof and Cor no other purpose; the reply stating that it la the opinion of the Board that the amounts evidenced by such certifiQzk't;ea fall within the nrinciple of the ruling published in the Federal Re11111etin for 1931 at page 538, with respect to deposits received by illejliber bank;3 in connection with certain "personal loans" and, accordingly, Q°174%titute uep osits within the meaning of section 19 of the Federal Reserve 4Qt :1(ain.s.t which reserves should be maintained. Reply aoproved. 7/19/32 -11Rep1y, approved by six members of the Board on July 14, to a letter dated July 6, 1932, from Mr. A. E. Duncan, Chairman of the Board Of the Commercial Credit Company, Baltimore, Maryland, with further regard tc) the eligibility of the paper of factors engaged principally in the tetilo business in New York City; the reply stating that the Board is at any time, upon request of apy Federal reserve bank which may 81-re its opinion, to consider information concerning the purpose for 114leh the proceeds of the paper of the Comiercial Credit Company are used Which. 'nay tend to establish the eligibility of such paper for rediscount 11tder the Provisions of the Federal Reserve Act and the Board's regulations. he reply further stated that it is the Board's view that a discussion of the of Paper of other companies not engaged in the same line (IrbIleilless is not helpful in determining the eligibility of the paper of the 0 -0Mmercial Credit Company. Reply approved. Reply, approved by three members of the Joard on July 16, to a letter Oer dated June 15, 1932, from the Chief Clerk of the Bureau of the Of the Department of Commerce, requesting, for inclusion in the (It'll. 4 e-18-1 register of the United States, an up-to-date list of the officers 13:1cletarfl -`4131oyees of the Federal Reserve Board occupying administrative and 4Perlri sorY Positions and their salaries; the reply stating that inasmuch ' th(> - -Law providing for the publication of the register relates to "persons °c1%Ipiri —11C administrative and supervisory positions in each executive and lal departrent of the Government, including the District of Columbia, C, 'Iallection with which salaries are paid from the Treasury of the United k`ItEkte the '" and in view of the fact that the members and employees of 0,3 7/19/32 -12- do not occupy positions in any executive or judicial department of the C*Ternment and the further fact that, under the Federal Reserve Act, all exPtanses of the Federal Reserve Board, including salaries of its members slid its employees, are paid from assessments against the Federal reserve hanks, it seems clear that the Federal Reserve Board does not come within the Provisions of the law referred to and that, in these circumstances, the list requested is not being submitted. Reply approved. Memorandum dated July 5, 1932, from Mr. Vest, Assistant Counsel, discussing in detail various questions regarding the application to the l'ecleral Reserve Board of the provisions of the so-called National Economy Public Act No. 212. The memorandum, having been previously circulated among the members of the Board, was noted. The Secretary then stated that Senator Walsh of Montana had reglIs8ted, for use in a speech to be delivered before the Montana State Banker — Association on July 21, 1932, information as to the loans which 114yebeen made under the provisions of sections 10(a) and 10(b) of the ?ecie rea Reserve Act. Mr. Lorrill stated that he had advised Senator WQ...T 4 8 has ri„ secretary, through wham the request was made, that this information Yet been made public by the Board and that it would, therefore, be lies888-17 to Present the request to the Board. Discussion ensued as to the desirability of publishing the information Periodically and as to compliance with Senator Walsh's request. At the conclusion of the discussion, the Secretary was authorized to inform Senator Walsh's secretary as to the total amount of advances made 7/19/32 -13under section 10(b) of the Federal Reserve Act as shown by the mail re-Ports received from the Federal Reserve Banks up to yesterday (no advances having been made to date under section 10(a)). At this -point the Chairman joined the meeting. Reference was made to the amendment to section 13 of the Federal Reserve Act contained in section 210 of the new Unemployment Relief and Con struction Act, H. R. 9642. Peated It was suggested that, in view of the re- statementswhich are being made that business is unable to obtain MeqUate credit accommodations, it would be advisable to request the 11.11-(3us Federal reserve banks to make a canvass of their respective distIliets and ascertain what the situation actually is. A general discussion ensued, at the conclusion of which it was decided to address a letter to the Governors of all Federal reserve banks stating that it is the desire of the Board - ederal reserve banks, in cooperation that the 2 with the banking and industrial committees of the various Federal reserve districts and such other agencies as they nay select, should make a survey with the view of ascertaining the extent to which there may be demands for loans which are not being net by other banking institutions, and which could be properly made by the Federal reserve banks under the provisions of the amendment to section 13 above referred to; also, requesting that there be reported to the Board weekly the results of such surveys, and, if there is a need for loans of the character referred to, what steps have been or are being taken in each district to meet the situation. Reports of Standing Committee dated July 14, 15, 18 and 19, 1932, approval of the following changes in stock at Federal reserve 14414: 6, rj -14A -.D.ZLica.tion for ORIGINAL Stock: District No. 5. Bank of Wilson, Wilson Shares N. C. A 14 1L-Lcation for ADDITIONAL Stock: District No. 12. Carbon Emery Bank, Price, Utah. An Lications for SURIMLER of Stock: :Li-strict No. 1. Trust Company, Cambridge, Lass. (Insolvent) -84.e Deposit National Bank, New Bedford, llass. (Decrease in surplus) at National Bank, Northampton, ITass. (Decrease in capital) ct No. 2. .'lzet National Bank, South Glens Falls, N. Y. InS0lvent) 4.81 National Bank, Davidsville, Pa. (Insolvent) 90 90 18 18 210 225 30 465 60 60 27 27 Diat Clark National Bank, rorthfork, W. Va. (Cons. Of the *First National Bank. and Clark National ()„ BlInk of Northfork, under the above title) '431.1d National Bank, Towson, Maryland. (Decrease in surplus) &.ti31' No. 7. e,l'ark-Kenwood National Bank, Chicago, al. kinsolvent) ellawood NatioDal Bank, Chicago, Ill. ,,,100 (Insolvent) 64toek. National Bank, Woodstoak, Iii. (V.L.Abs. ikt,blir American National Bank of Woodstock) , 19,118.1 Bank of Woodlavm„ Chicago, Ill. (Insolvent) Ae0 Trust Company, Chicago, Ill. National Bank izak Insolvent) qte t National Bank, Riverside, Ill. (Insolvent) : e . t111 1e1(3. Savings Bank, Greenfield, Iowa. (Insolvent) National Bank, 71aquoketa, Iowa. (Insolvent) National Bank in Vinton, Iowa. (Insolvent) , e!,1\1° ' Yi,•-u-Lonal Bank, Staples, Minn. (V.L.Abs. by -uirst National Bank of Staples) 66 30 96 600 180 36 240 900 41 26 90 60 2.173 20 20 7/19/32 —15Shares Cations for SURRENDER of Stock: (Cont'd) zirst National Bank, Arlington, Nebr. (Insolvent) 19 6tate NationAl Bank, Terrell, Texas. (Insolvent) First National Bank, Clarksville, Texas. (Decrease in surplus) Citizens State Bank, Frost,Texas. (Decrease in surplus) 60 19 39 -.. District ...1"2!__ 14igno1ia Park National Bank, Burbank, California. 63 (V.L.Terminal) "eat Hollywood First National Bank, West Hollywood, s 103 Angeles, California. (Insolvent) 54 fl B ernardino National Bank, San Bernardino, California. (Insolvent) 180 Total 297 3,271 Approved. Report of Standing Committee dated Tilly 12, 1932, recomending Et131)°va1 of the following Clayton Act application: flr. Robert B. Palley, for permission to serve at the same tIme as director of the Llerchants National Bank of Indianapolis, Indiana, and as director of the Indiana Trust Company of Indianapolis, Indiana. Approved. Thereupon the meeting adjourned. C.Z716."1— ecretary.
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