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540 A meeting of the Federal deserve Board was held in the office of the Federal deserve Board on Thursday, June 6, 1929 at 11:00 o'clock. PRESENT: Governor Young Mr. Platt Mr. Hamlin Li'. Miller Mr. Cunningham Mr. LcOlelland, Asst. Secretary The minutes of the meetings of the Federal deserve Board held on May 28th and 29th were read and approved. The minutes of the meeting of the Federal deserve Board held on June lat were read and approved as amended. The minutes of the meeting of the Executive Committee of the Federal 4sserve Board hell. on June 3rd were read and, upon motion, the actions recorded therein were ratified. The minutes of the meeting of the iederal deserve Board held on June 5th were read and approved as amended. Telegram dated June 5th from the Assistant Federal deserve Agent at Illiladelphia, advising that the board of directors at a meeting on that date ?nada no change in the bank's existing schedule of rates of discount and purchase. Noted, with approval, Mr. Platt voting "no". Telegram dated June 5th from the Chairman of the Federal deserve Bank cl St. Louis, advising that the board of directors at a meeting on that date 1114ae no change in the bank's existing schedule of rates of discount and nurchase. Without objection, noted with approval. Memorandum dated June 4th from the Director of the Division of esearch A -2- 6/6/29 and Statistics, recommending the appointment of Lr. Corliss E. Armstrong as iiesearch Assistant in the Division at an annual salary of „:2400, effective June 17th. Approved. Letter dated June 3rd from the Chairman of the Federal Aeserve Bank Of Kansas City, advising of the death on June 1st of :r. E. J. Murphy, one Of the 'Doard's appointees to the directorate of the Oklahoma City Branch. Noted, with regret, and referred to the Committee on District ,T10 for recommendation as to the appointment of a successor. Matter approved on initials on June 4th, namely, telegram dated June 4th from the Federal Reserve Agent at Atlanta, recommending the temporary designation of Mr. Fulton Saussy as Acting Assistant Federal Reserve Agent at the Jacksonville Branch during the currency turnover period. Formally approved. Report of Committee on Salaries and Expenditures on list submitted by the Federal Reserve Bank of Boston, of employees for whom the directors of that bank approved leaves of absence with pay, on account of illness, during the month of May, where the total of such absences since January 1, 1929 has exceeded thirty days; the Board's Committee recommending approval of the sal'Y payments involved. Approved. Memorandum dated June 4th from Counsel, submitting drafts of replies San to letters from the Assistant Federal Reserve Agents at PhiladelDhia and Francisco, inquiring whether the service of an attorney for a national bank, it addition to his service as a director of another national bank, comes 512 6/6/29 within the prohibitions of the Clayton 2ct; the proposed reply stating that the Board is of the opinion that an attorney is not an officer or employee Of a national bank within the meaning of the Clayton Act. Upon motion, the letters were approved. Memorandum dated June 3rd from Counsel, submitting copy of opinion of the Court of Appeals for the District of Columbia affirming the decision of the Supreme Court of the District of Columbia in the case of Charles L. Apfel et al V, Federal Reserve Board (the so—called Foreign Financing Corporation case) denYing a petition of the plaintiffs for a writ of mandamus compelling the Board to g4.ive approval to a corporation organized under Section 25 (a) of the Federal Reserve Act; Counsel stating that the petitioners may endeavor to take the case to the Supreme Court of the United States but that the chances are that the Supreme Court will refuse to hear it. Noted. The Assistant Secretary then submitted the proposed review of the month, Prepared by the Director of the Division of .esearch and Statistics, for the Jlale issue of the Federal Reserve Bulletin, which review on occasion is released to the press in advance of the publication of the Bulletin. Upon motion, it was voted to approve the review for publication in the Bulletin without advance release. Memorandum dated June 4th from Mr. Cunningham, submitting the following substitute for the tentative draft of a proposed Regulation "M", Series of by the 1929, prepared by Counsel in accordance with the resolution adopted 80ard on March 21st and on which action was deferred at the meeting on April letb: -4- 6/6/29 "REGULATION Li, SEREZ OF 1929. Loans, Discounts or other Credit Accommodations for L:ember Banks having Loans to Brokers or Dealers in Stocks, Bonds or other Investment Securities. Except with the permission of the Federal Aeserve Board, no Feleral Reserve Bank shall discount or rediscount any note, draft or bill of exchange for, or make any loan or advance to, or purchase any bills of exchange, bankers' acceptances, or government, State or municipal securities (under repurchase agreement or otherwise) from, any member bank which at the time (a) has outstanding loans to any person, firm, partnership, corporation, company or association, whose principal business it is to negotiate purchases or sales of or to 07:zrchase, sell or otherwise deal in, stocks, bonds or other investment securities (other than bonds or notes of the Government of the United States) either for his or its own account or for the acount of others, or (b) has outstanding loans to or deposits with any other bank, which at the time has oatstanding loans to any such person, firm, partnership, corporation, company or association." Mr. Cunningham stated that he does not request action at this time on the substitute regulation, which it was understood will lay on the table subject to call for future consideration. Report of Committee on Examinations on letter dated May 29th from the Federal Reserve Agent at San Francisco, transmitting an analysis of report Of a recent examination of the Bank of Rosalia, Rosalia, :iashington, which d iscloses certification of a check without sufficient funds to cover; the Agent st%ting that under Section 9 of the Federal Reserve r.ct the state bank illaY be subjected to proceedings for forfeiture of its membership in the Sysand, inquiring what, if any, action he should take in the case. The Committee on Examinations recommended that in addition to inquiring into case, the Federal alla- reporting fully to the Board the circumstances of the dation to the Board as to its final Reserve Agent should make a firm recommen 5,24 6/6/29 -5- disposition. Upon motion, the recommendation of the Committee was adopted. Application of the First National Bank of Canon City, Colo, for permission to exercise fiduciary powers; together with a divided report thereon by the Law Committee, Mr. Hamlin recommending approval and Mr. Platt dissenttag because of the size of the bank which has a capital of Of 50,000 and surplus 425,000. Upon motion, the application was approved, Mr. Platt voting "no". At this point, Mr. F. H. Curtiss, Chairman of the Board of Directors of the Federal Reserve Bank of Boston, joined the meeting. He stated that his Board of Directors at its meeting yesterday carefully reviewed the credit situation in New England and reaffirmed its previous action in voting to establish a rediscount rate of 6%, with the request that he come to Washington for the purpose of acquainting the Board with conditions in the district and r equesting favorable action on the rate. He stated that a situation has been developing in the district since April 1926 which has been causing a great deal Of concern. From 1923 up to that time, he stated, there was a steady increase in deposits of member banks which, with a dull business situation 4134 a consequent shortage of commercial demand for credit, was used in the Plarchase of securities, Including governments, and. in loans against securities. Since April 1928, however, Mr. Curtiss stated, member banks in the district have lost deposits to the aggregate of about 4200,000,000 and with a falling bond market have been forced to rediscount heavily at the Federal Reserve ballks Practically all heavy borrowing, he stated, is due to the borrowing ;1)-10 -6- banks being over loaded with government and other securities which can not be disposed of except at a loss. The directors of the Boston bank feel that the Board's policies during the past several months have received good cooperation in the district, but there has been no improvement in the situation. At the same time, he stated, a heavier demand from member banks is expected Iii the near future. An increase to 6, Mr. Curtiss stated, would be expected to relieve the pressure on the Federal Reserve Bank of Boston, the reserves Of which have been averaging around 60, and transfer it to other districts where the Federal deserve banks are In a stronger reserve position. During a discussion which ensued, Mr. Curtiss referred to the probable need of relaxation in the credit policy of the System during the coming months and suggested that if an easing program is aecided upon purchases of government bonds would be helpful in relieving the pressure on banks in the position Of many of those in his district. ZigLPORTS OF STANDING COMBITTEES: Recommending changes in stock at Federal deserve banks as set forth in the Auxiliary Minute Book of this date. Recommendation approved. Dated, May 18th, Recommending action on applications for fiduciary payers June 3rd, as set forth in the Auxiliary Minute Book of this date. Recommendations approved. Dated, June 3rd, 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. Recommendation approved. Dated, June 3rd, Recommending approval of the application of Mr. Edwin G. Foreman, Jr., for permission to serve at the same time as director of the Foreman National Bank, Chicago, and as director of the South Side Trust and Savings Bank, Jhicago, Ill. Approved. Dated, June 4th, 341; 6/6/29 -7- ORTS OF STANDING CO:ailITTELS:, (Cont'd) Dated, June 3rd, Dated, June 3rd, Dated, dune 3rd, Dated, June 3rd, Dated, June 4th, Dated, June 4th, Dated, June 4th, Mr. Delos ":;. Cooke Recommending approval of the application of as director of the time for permission to Gerve at the same director of the as na, Phoenix National Bank, Phoenix, Arizo director of Seaboard National Bank, New York, N. Y., and as the Foreman National Bank, Chicaro, Ill. Approved. of the application of Lr. William val appro Aecommen.iing time as officer Boardman for permission to serve at the same Y., and as diof the Brooklyn Trust Company, Brooklyn, N. ond Hill, rector of the Richmond Hill National Bank, Richm N. Ye Approved. of the application of L:r. Horace K. val Aecommanding appro time as director Corbin for permission to serve at the same ny, Newark, N. J. and officer of the Fidelity Union Trust Compa ny, Elizabeth, N.J. as director of the Union county Trust Compa ide, N.J. and as director of the Hillside National Bank, Hills Approved. James 'W. Recommending approval of the application of Mr. time as disame the at serve to ssion Green, Jr., for permi ersville, N.Y. rector of the Fulton County National Bank, Lilov rdam, N. Y. and as director of the First National Bank, Amste Approved. Lr. Julien L. Recommending approval of the application of time as director same the at Eysmans for permission to serve and as diJ., N. on, Trent of the Trenton Banking company, Company, Trust and Bank nal rector of the Tradesmens Natio Philadelphia, Pa. Approved. Mr. Thomas D. Recommending approval of the application of time as officer same the at serve to Sullivan for permission delphia, pa. Phila ny, Compa Trust and director of the Northern Bank and Trust and as director of the Tradesmens National Company, Philadelphia, Pa. Approved. Mr. John It. Hoober AeCommending approval of the application of director of the as time same for permission to serve at the tor of the Eastern direc as and National Bank, York, Pa., Wes Na ionl Bank, York, Pa. Approved. he meeting adjourned at 1:15 Assistant Secretary. APProved: / 1,14 Governor./ Lii
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