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:10 4 Z /.1 4'114 A meeting of the 17edera1 Reserve Board was held in the office of the 4aera1 Reserve Board on Thursday, June 7, 1928 at 10:30 a.m. P32.1:T: PaSSEKT Governor Young Mr. Platt Mr. Hamlin Er. James Er. McIntosh Er. Eddy, Secretary Er. LCOlelland, Assistant Secretary Honorable Newton D. Baker Er. Wyatt, General Counsel Baker discussed with the members of the Board the matter reported 14 the memorandum from 1,1r. Wyatt presented at the meeting of the Board on krie 1st, namely, the request of the attorneys for the organizers of the 1)1'°13psed United ',States Foreign Financing Corporation that the Board permit 4148114 1ent of the articles of association and organization certificate filed 15 them with respect to the name, which might be changed to either "American (3re1gn Financing Corporation", "American ForeiFn Exchange Corporation" or c4'eign Financing Corporation". Yr. Baker stated that although his first l'eliction was to recommend that the Board not comply with the request, after 44'ther considering the matter and discussing it with Mr. Wyatt he believes that the important thing in the suit which the Board is defending is to have cle termined its discretion in the matter of granting charters under sect ion 26 ( a) Of the Federal Reserve Ect which decision should be clear cut and not illlaueuced by any outside factor such as the name of a proposed corporation. 4e „ 'therefore, recommended that the Board authorize its counsel to address 4 letter to the counsel for plaintiffs in the suit, agreeing to a stipulation to the effect that the Board, subsequent to the beginning of the proceedings, has , Upon application, reserved and approved the name "Fore147n Financing °°113orationu and that the pending case may -oroceed as thoa7h that name had been oric,i lyna -- applied for and approved. ..,fter further discussion, upon motion by 2,:r. Hamlin, it ;:as voted to adopt this recommendation. lIessrs. 'Baker and jyatt then withdrew from the meeti.1:-. 11 The Governor stated that duo to the absence of Mr. Miller he would postto a later data the special order for this meeting, namely, the matter ot dLioptinr: a resolution authorizing the Executive Committee, in the absence Of , - quorum conof the Board darin- the summer, to act for the Board in the Of its froneral business. The Governor also stated that he would bring up at a later date the l'ecommendations and actions submitted to the Board by the recent Governors' CtInference. June 1st The minutes of the meet inr of the 2ederal 2.eserve Board held on viElre read and approved, as amended. '17e1egrams dated June 6th from the Chairman of the Pederal neserve Banks °fPhilade1/2hia and 6t- Louis, advising that their boards of directors at schedules of Ille"inSz on that date made no changes in the banks' existing l'4tes of discount and purchase. jithout objection, noted with approval. 6th -,1(,ter approved on initials yesterdy, nanely, teleram dated. June fro, nt the Chairman of the ::'ederal ieserve Bank of Kansas City, advising that the , board of directors, Icocutive Jommittee of the Bank, under authority of the th 1/2, on all classes of day voted to estabiish a rediscount rate of q business day follo-Anc, that on 141e1 '01 all maturities, effective the first Whi eh approved by the 2ederal _eserve Board. . Les,,56 6/7/28 The rate of 4 1/2:J on all classes of paper of all maturities established by the Executive Committee of the Kansas City Bank, having been informally approved, effective June 7, 1928, was upon motion formally ratified. f: The Secretary called attention to the fact that the telegram from the Chairman of the Kansas City bank reports that the Executive Committee also voted to establish rates of 4 1/2p for purchases of government securities 4Mi bankers acceptances under resale agreement. 7iithout objection, noted with approval. Telegram aated June 7th from the Chairman of the Federal deserve Bank 0f R*ansas City, advising of the reasons for the action of the 2]xecutive QMmittee of that bank in voting to establish a rediscount rate of 4 1/2, as follows: "Replying your wire of :esterday, our rate action taken by Zxecutive Committee after consultation with all directors who could be reached and was based on the consideration that although credit conditions and practices in this district do not call for a hi'ther rate, general conditions in the district are so favorable his that an increased aiscount rate would have no bad effect. being the case, and believing that curtailment of purely speculative credits is desirable, we felt that this bank should not hold pack in the movement for higher rates taken by all the other Federal .-eserve banks, when our continuance of the lower rate might possibly interfere to some extent with the desired effect Of the increases by the other eleven banks." Noted. Telegram dated June 6th from the Federal Aeserve ..gent at Dallas, ad.that with the Board's permission he plans to be away from the bank tro,„ w June 13th until June 18th. 1;oted, without objection. Letter dated June 4th from the Federal Reserve Agent at St. Louis, advising that if the Board has no objection he would like to begin his regular a e-57 6/7/28 -4- vacation on June 11th. Noted, without objection. Letter dated June 4th from the Federal Reserve Agent at St. Louis, referto the action of the Board at its meeting on June 1st in approving paytient of full salary to Mr. J. M. Mitchell, an employee of the Memphis Branch chlring a leave of absence on account of illness granted him by the Execu- tive Committee of the St. Louis bank; the agent advising that the leave of absence granted by his committee was for a period of thirty days from June 3, 1928, rather than from May 3, 1928 as reported to the Board. Koted. fieport of Committee on Salaries and Expenditures on letter dated June 24a from the Federal Reserve .hgent at 3t. Louis, advising of the action of the 7axecutive Connittee of that bank in voting to extend for a period of thil'tY days from June 6th, with full pay, 13ave of absence on account of iii•riess previously , ;ranted Mr. J. ,. Rdnkleff, Controller at the bank; the 11°aI'd's Committee recommending approval of the salary payment involved. Itpprgved. liemorundum dDted June 1st from the Comptroller of the Currency, regard to the matter referred to him at the meeting on May 28th, liarne1 , armlication of the National City Bnnk of Lew York for permission to establish an additional brancli in Havana, Cuba, to be located at 2aseo rlarti 123 and to be kftown as the flaza de la Fraternidad Branch; the (31111)tro1ler stating that inasmuch as the National City Bank has displayed .1).11ity to manage its branches properly and has ample capital and reserve 11.58 6/7/28 -5- he oelieves permission should be rdven for the establishment of the additional branch applied for. After discussion, uoon motion, the following was ordered spread upon the minutes: "THE NATIONAL CIIN BANK OF NEd YaliK, having on or about 214y 61, 1928, filed an Application with this Board for the purpose of obtaining authority to establish a Branch in Havana, CUBA, to be known as its PLAZA DE LA FHATERNIDAD BRANCH, and the said APplication having been considered; and it arpearing that the said Application is properly made under the laws of the United States Of America and should be granted, NOW THEaEFORE, IT IS ORDEEED, that the said Application be and it hereby is approved, and that the said Bank be and it hereby is authorized to establish a Branch in Havana, CUBA, to be known as the PLAZA DE LA FRATERNIDAD BRANCH." liatter approved on initials on June 4th, namely, telegram dated June 2nd t17°111 the Assistant Federal Reserve Agent at San Francisco, recommendinr: ap13111 of an application of the First Security Bank, Pocatello, Idaho, for 1)eliMission to take over the First National Bank of Pocatello. Formally approved. Letter dated June Gth from the Julylty Uovernor of the Federal Reserve of New York, advisin- f instructions received from the Bank of France to ship to Paris (;old now being held earmarked for account of the Bank of 11`111 -Lee, agcrrer;ating noted. Letter dated June 6th from the Assistant Attorney General, requesting 411 e _ )ression of the views of the ;ioard as to the practicaDility of a sun74 ti -04 that a reulation be issued by the Board to all Federal ,teserve 1)411,4 condition made s und m3mber banks requirinr that each of the reports of • el roci,4 6/7/28 -6- by such banks shall contain a statement whether there have been any shortages, ellabezz.1,1Rments or other violations of the Federal criminal statutes committed "their respective institutions, not theretofore reported to the Board; the 4seistant attorney General stating that failure to report when so required Would in itself constitute a criminal offense under Section 5209, which would °17viata a difficulty experienced by the Department of Justice in prosecuting 41‘. officials for concealing and failing to disclose violations of Federal Referred to the Law Committee for report to the Board after consultation with the Comptroller of the Currency and the Federal Reserve banks. Zemorandum from Counsel dated June 4th referring to the action of the C s? 80erd at its meeting on June 1st in voting to require a new application - membership from the Peoples Savings and Dime Bank and Trust Company °•f Scranton, Pa., in view of its recent consolidation with the Lincoln l'ra st, Company of Scranton, a nonmember bank; Counsel stating that under the .B,me statute the Provident Trust Company, a member bank, located in 1)/I'laclelphia, recently consolidated with the Commonwealth Title Insurance 414 Trust Company, a nonmember bank, to form the Provident Trust Company °f?hiladelohia and that the Board may wish to require a new application Miembership from the institution as was done in the Scranton case. Upon motion, it was voted to request the Provident Trust Company of Philadelphia to file a new application for membership, advising the institution that this requirement is made as a precautionary step and requiring the bank to file merely the application itself and not the customary exhibits and supplementary information which are necessary in the case of an entirely new application. c-€0 -7- Memorandum dated June 5th from the Acting Comptroller of the Currency, IVerring to the action of the Board at its meeting on May 14th in approving 4114PPlication of the Bluefielu National Bank, Bluefield, W. Va., for permis8414 to reduce its capital from .250,000 to c1].30,000, as recommended by the Naltroller, on condition that there be removed from the bank doubtful assets 42,124.67 and assets estimated as losses amounting to ,42,840.64, uriting to alt°11 assets to be trusteed for the benefit of the shareholders at date of rethe Acting Comptroller stating that the bank does not desire to trustee the assets removed or to return the balance of the reduction to the auolders in cash but to carry the cash balance to surplus and to retain NI removed assets as the property of the bank. He recommended, therefore, that , 11(3 application be approved merely on condition that doubtful assets 410114ting to 42,124.67 and assets estimated as losses amounting to A2,840.64 be chargesA off by the reduction. After discussion, upon motion, the Board's action of Lay 14th was reconsidered and the application of the Bluefield National Bank was approved, subject to the condition reconunended by the Acting Comptroller in his memorandum of June 5th. Memorandum from Counsel dated June 4th .with reference to a recent devel ''°Pment in the case of the L. & N. .iailroad Company versus the Federal 444, --v-a Bank of Atlanta, which has been transferred to the Supreme Court Orm .) " /Itessee on a constitutional question, involving the validity and ett' °ctiveness of the Board's Regulation J; Counsel stating that he bes counsel for the Federal Reserve Bank of Atlanta and its Nashville are handling the case in a satisfactory manner and that he looks 6/7/28 -8- f°rward to a favorable decision. 1:oted. leport of examination of the Federal Reserve Bank of Cleveland and its made as at tLO close of business 4ril 21, 1928. Aefurred to the Jormittoa on District :1 -P0. (aS OF STANDING COMMITTEES: Dated, t June 2nd, Recommending changes in stock at Federal Reserve Banks 4th, as set forth in the Auxiliary Minute Book of this date. 5th, Recommendations approved. June 1st, Recommending action on applications for fiduciary powers 2nd, as set forth in the Auxiliary Minute Book of this date. Recommendations approved. ord, June 1st, Recommen,ing approval of the application of Mr. T. J. Summers for permission to serve at the same time as director of the First National Bank, Marietta, Ohio, and as director of the First National Bank, ammmerfield, Ohio. Recommendation approved. 1st, Recommending approval of the application of :r. John D. Allison for permission to serve at the same time as director of the First National Bank, Ralston, 2a., and as director of the Lycoming Trust Company, ,:illiamspoft, Pa. (Recommendation approved. 4th, Recommending approval of the application of -r. A. Alex Shuford for permission to serve at the same time as director of the First National Bank, Hickory, N. C., and as director of the Atlantic Bank and Trust Company, Greensboro, N. C. Recommendation approved. 4th, Recommending approval of the arpl ation of Mr. Edgar S. Hills for permission to serve at tie same time as director and Bank, Salt Lake City, of the Pacific Coast Joint Stoc he Deseret National Bank, Utah, as officer and director o Salt Lake City, Utah and as of vier and director of the De- et ,avings Bank, Salt L. c Jity, Utah. Recommendation appro meetinr;. ad;ourned at 12: Jocretary. Governor.
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