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;Th1 re t -Tir, A meeting of the Federal .eserve Board was held in the office of the Federal .ieserve Board on Monday, March 10, 1930 at 11:15 a.m. PRESEN2: Governor Young Mr. Platt Mr. Hamlin Mr. Miller Mr. James Mr. Cunningham Mr. McClelland, Asst. Secretary The minutes of the meetinp; of the Federal Reserve Board held on March 6th were read and approved. Matter approved on initials on March 7th, namely, application on behalf °f the Union Trust Company of Dayton, Ohio, for membership in the Federal 'ieserve Jystem and for 1600 shares of stock in the ederal Aeserve Bank of Cleveland, effective if and when it opens for business; the application hay'been approved subject to the re(7ular conditions of membership set out in aegulation H, Series of 1926, and to the following special conditions: "(1) On the date when the Union Trust Company opens for business, its paid-in and unimpaired capital shall amount to ,?1,500,J00 and on that date it shall also have a paid-in and unimpaired surplus of ,1,500,U00. "(2) The board of directors of the Union Trust Company of Dayton, Ohio, shall at their next meeting ratify the application made on behalf of this trust company for 1600 shares of the stock of the Federal deserve Bank of Cleveland, and the acceptance of conditions of membership imposed by the Federal Reserve Board, and the board of directors of this trust company shall by resolution accept such conditions of membership." Upon motion, the application was formally approved. Report of Committee on __:caminations on letter dated March 6th from the l'eaeral deserve Agent at Cleveland, requestin g permission to have a repreaentative make the usual credit investigation, without charge, of the Central Company, Cincinnati, Ohio, the ?earl Market Bank and Trust Company, eillcinnati, Ohio and the Char7rin Falls Banking Company, Chagrin I:ails, Ohio, 247 3/10/30 -2- at the time they are under examination by the State authorities; the Board's Committee recommending approval. Noted, with approval. Report of Committee on Salaries and Exrenditures on list submitted by the Federal Reserve Bank of Dallas showing one employee for wham the direotors of that bank authorized leave of absence with pay, on account of • illness, during the month of February, the total of whose absences since January 1, 1930 has exceeded thirty days; the Board's Committee recommending approval of the salary payment involved. Approved. Letter dated March 6th from the Assistant Federal Reserve Agent at New York, advising of announcement of plans for the merger of the Hobart Trust Company and the City Trust Company, both nonmember banks in Passaic, 11. J., with the Peoples Bank and Trust Company of Passaic, a member bank. Noted. Bond in the amount of 450,000, executed under date of March 1, 1930, bY Mr. Oliver P. Wheeler, recently appointed Acting Assistant Federal Reserve Agent at the Federal Reserve Bank of San Francisco. Approved. Bond in the amount of v100,000, executed under date of March 1, 1930, by Mr. Isaac B. Newton, Federal Reserve Agent at the Federal Reserve Bank of 3Sla Francisco. Approved. Report of Committee on Salaries and Expenditures, recommending approval °f action of the directors of the Federal Reserve Bank of Kansas City, in It"ing to authorize a contribution of not to exceed 41500 by the Denver 248 3/10/30 BraaCh toward the expenses of the national convention of the American Institute °f Banking to be held in. Denver during the summer. Approved. The Assistant Secretary then referred to the matter brought to the attention of the Board at the meeting on March 6th, namely, report by the Chairman Of the Federal Reserve Bank of Philadellohia of circumstances leading to the termination of the services of Mr. Frank W..LaBold as Assistant Cashier of the Philadelphia bank. He stated that in informally discussing the matter With the Board's Assistant Counsel he was advised that there is a possibility °I* a violation of the Federal Reserve Act in the activities of Mr. LaBold Dior to his dismissal. Upon motion, it was voted to instruct Counsel to prepare an appropriate letter to the Chairman of the Philadelihia bank regarding the matter. Memorandum dated March 8th from Counsel, recommending a subscription to the latest edition and all future editions of the Rand-LcNally Bankers 331-rectory for the use of his office in connection with Clayton Act work. Approved. The Assistant Secretary then submitted draft of a letter to the Governors of 411 Federal Reserve banks, transmitting one addressed to the Governor of the Board by the Undersecretary of the Treasury, outlining a suggested special Prcloedure for exchanging gold certificates of the old size still held by some °f the Federal Reserve banks and Federal Reserve Agents for new size certificates; the letter also advisiiv--: of a permanent plan now under discussion which wculd Provide for automatic credit in the Gold Settlement Fund for all redemptions t gold certificates and payment for new certificates issued by Gold Settlement 9 3/10/30 —1_ Fund check on the date of receipt. Referred to the Vice Governor with power. Letter dated March 5th from the Federal Aeserve Agent at Kansas City, transmitting and recommending approval of an application of the three member banks in Muskogee, Okla. for termination of the designation of Muskogee as a reserve city. Discussion ensued of the statements made in the application end exhibits transmitted therewith, indicating that the volume of bank dePosits and the ratio of bank deposits to total deposits are substantially emaller in Muskogee than in may of the other reserve cities in the Tenth District, that several non-reserve cities in the district have greater bank deposits and higher ratios of bank to total deposits than are shown for Mnekogee and that there has been a steady decline in the importance of Muskogee as a banking center since it was designated as a reserve city. At the conclusion of the discussion, upon motion, it was voted that the designation of Muskogee, Okla., as a reserve city, be terminated as at the close of business March 15, 1930. Memorandum from Counsel dated March 6th, submitting draft of a letter to the Chairman of the Committee on Banking and Currency of the House of iiepreeentatives, with regard to E. A. 10036, a bill to amend the Federal .Lleserve 41°t, in accordance with a recommendation made previously by the Board, so as te enable National banks voluntarily to surrender the right to exercise trust Pluers and to relieve themselves of the necessity of complying with the laws (Iverning banks exercising such powers; the letter pointing out in some detail the d ifficulties which lead the Board to recommend the amendment, and transmittillg copies of certain correspondence on the subject. Upon recommendation of the Law Committee, the letter was approved and ordered transmitted. 250 3/10/30 _5_ Memorandum dated March 6th from General Counsel, submitting drafts Of letters to the First National Bank, Orland, Cal., Peoples National Bank, Zelienople, Pa., City National Bank and Trust Company, Miami, Fla., First Natimaal Bank of Lawrence County, New Castle, Pa., and the Citizens National Bank, Stevens Point, Wis., all of which have communicated with the Board in the past regarding the surrender of trust powers; the letters except that to the Citizens National Bank of Stevens Point, Wis., merely stating that the present law provides no method by which a National bank may surrender its trust powers and enclosing copy of the bill recently introduced to amend the law so as expressly to authorize the voluntary surrender of trust powers by National banks. The proposed letter to the Citizens National Bank of Stevens Point, Wis., also enclosed certified copies of certain papers filed with the Board by that bank in an effort to surrender its trust powers voluntarily, but expressed no opinion as to their legal effect, merely certifYing that they have been filed with the Board. After discussion, upon motion, the five letters submitted by Counsel were approved and ordered transmitted. Memorandum dated March 4th from the Board's Examin3r in Charge, subf itting report of an examination of the Federal Reserve Bank of Richmond 414 its branches, made as at the close of business February 5, 1930. Referred to the Committee on Examinations and Committee on District it5. Memorandum from Counsel dated March 7th an the matter referred to the LeW Committee at the meeting on March 6th, namely, draft of letter for the 251 11 -6- 3/10/30 3ignature of the Secretary of the Treasury in reply to a request made by the . Chairman of the Senate Committee on Banking and Currency, for an expression °f views regarding S. 3564, a bill to amend the provisions of Section 7 of the Federal Reserve Act regarding distribution of the earnings of the Federal Reserve banks; the proposed reply, revised so as to eliminate statements that the bill is "unsound" or "not sound", advising that the bill should not be enacted into law as it seems manifest that the results which would be reached would be . Unfair and inequitable and that the Treasury Department and the Board hope that some plan may be worked out whereby the practical difficulties in the weY of alarger return to member banks on their stock holdings in Federal Re. serve banks may be eliminated and that an equitable method of distribution 1/ tey be devised. After discussion, upon motion, the proposed letter was approved. Letter dated March 5th from the Chairman of the Federal Reserve Bank of 1Cew York, advising that during the week ending March 5th, there was no change ill the amount of Government securities held in the Open Market Investment AceoUnt,although the acccunt of the New York bank shows a temporary increase of 0.000,000 and ties amount to the bank's sales contract holdings against Government securi- .:A,o50,00a as compared with ,4,750,000 last week; the letter els° advisincr that the Government security market turned strong and active 411rtag the preceding few days, that since the first of the month the bill /11arket has reflected continued easing in money conditions and that bill operain New York resulted in a reduction of about ;i25,000,000 in System h°1(itnrs from the. previous week. Noted, 25 -2 3/10/30 -7- Letter dated March 6th from the Secretary of the Federal Reserve Bank Of Cleveland and letter dated March 6th from the Chairman of the Federal deserve Bank of Dallas, advising of the establishment on March 5th of the following schedule of rates for purchases of bankers acceptances: 1 to 120 days 121 to 180 days Repurchase _ - 3 5/8% 470 3 3/470 Without objection, noted with approval. Letter dated March 5th from the Secretary of the Federal Reserve Bank of Kansas City, advising of the establishment an that date of the following schedule Of rates for purchases of bankers acceptances: 1 to 120 days 121 to 180 days 35/87 33/4% Without objection, noted with approval. Telegram dated March 6th from the Deputy Governor of the Federal Reserve B4nk of New York, advising of a further reduction in rates by bill dealers and that the Federal Aeserve bank's effective rates on purchases of acceptances were being reduced to the following: 1 to 120 days 121 to 180 days Repurchase 3 1/2i; 3 3/4'A 3 1/270 Without objection, noted with approval. Letter dated March 6th from the Assistant Secretary of the Federal ReServe Bank of Now York, advising that at the meeting of the board of directors held aa that date it was voted to request the Federal Reserve Board to reduce to 373 the rate established by it as the minimum buying rate for the purchase °t bankers acceptances by the New York bank. During the discussion which ensued, the Governor reported on his visit ;53 3/10/30 to New York last week and presented a letter dated March 7th from the Chairman Of the Federal Aeserve Bank of New York, advising that at the meeting on March 6th consideration was given to the Board's letter of March 5th, suggesting the Purchase of not to exceed 450,000,000 of Government securities pending a meetof the Open Market Committee suggested for March 24th; the letter advising that the directors present at the meeting and the officers of the bank were Iltanimously in favor of making such purchases and the directors authorized the officers to proceed, in accordance with which action purchases of *40,000,000 hawbeen made from private sources and further purchases will probably be made for delivery during the statement period beginning March At the conclusion of the discussion, upon motion, it was voted to establish a minimum buying rate of 3,; for the purchase of bankers acceptances by the Federal deserve Bank of New York. Telegram dated March 6th from the Governor of the Federal Reserve Bank (Ilf Boston, letter dated March 7th from the Secretary of the Federal Reserve 400:k of Cleveland, and telegram dated March 7th from the Chairman of the Pederal Reserve Bank of Dallas, all advising of the establishment on the "tea stated of the following schedule of rates for pmrchases of bankerg acceptances: — 1 to 120 days 121 to 180 days — — Repurchase 3 1/27 3 3/4% 3 1/270 Without Objection, noted with approval. Telegram dated March 6th from the Secretary of the Federal Reserve Bank °f Chicago, telegram dated March 6th from the Governor of the Federal Reserve Al 3/10/30 234 -9- Bank of jt. Louis and letter dated March 6th from the Secretary of the Federal Reserve Bank of Kansas City, all advising of the establishment on that date Of the following rates for purchases of bankers acceptances: 3 1/2; 3 3/4% 1 to 120 days 121 to 180 days Without objection, noted with approval. Telegram dated March 6th from the Chairman of the Federal deserve Bank of Richmond, advising of the establishment on that date of the following rates for purchases of bankers acceptances: 1 to 120 days 121 to 180 days - 3 5 acai 3 7/8/; Without objection, noted with approval. Telegram dated March 6th from the Chairman of the Federal deserve Bank Of San Francisco, advising of the establishment of the following effective rates for purchases of bankers acceptances: 1 to 120 days 121 to 180 days Repurchase - 3 1/2-,; 3 3/4 3 3/44 Without objection, noted with approval. The Assistant Secretary called attention to the fact that the above telegram also advises that the board of directors of the San Francisco bank has voted to establish a minimum buying rate on bankers acceptances of 3 1/44. Upon mot ion, the 3 1/4::/.; minimum buying rate established by the San Francisco directors was approved. After further discussion, upon motion, the following resolution was a dopted: "The Federal deserve Board having approved a minimum open market buying rate an bills of 34 on request of the I 3/10/3o $ (3,55 -10- "Federal Reserve Bank of New York, the executive officer of the Board is authorized to approve effective buying rates for the other Federal Reserve banks not below the effective buying rate fixed at the New York bank." Telegram dated March 7th from the Secretary of the Federal Reserve Bank of Cleveland, advising that the board of directors at a meeting an that date made no change in the banks' existing schedule of rates of discount and purchase. :iithout objection, noted with approval. Memorandum from Counsel dated March 7th, submitting draft of reply to letter dated February 27th from the Assistant Federal Reserve Agent at New York, calling attention to the fact that the Manhattan Company of New York City, formerly known as the Bank of the Manhattan Company, which on November 22, 1929 filed written notice of its intention to withdraw from the Federal aeserve System, has increased its capital and surplus and inquiring whether Under the circumstances it will be necessary for the Manhattan Company to subscribe for additional Federal Reserve bank stock on account of this increase in its capital and surplus; the proposed reply stating that while the circumstances involved in the case are unusual, under the terms of the Federal Reserve ::ct it will be necessary for the Manhattan Company to subscribe for an additional amount of the capital stock of the Federal Reserve Bank capital or gar°f New York equal to 6/0 of any increase in the amount of the Plus of the Manhattan Company made prior to the time it actually withdraws fl'am the Federal Reserve System. Discussion ensued, during which attention was called to the fact that some months ago after transfer by the Bank of the Manhattan Company of its banking business to the Bank of Manhattan Trust Company and its con- 3/10/30 -11- 256 version into a holding company, the institution desired to withdraw immediately from membership but was advised that there was no legal authority for its voluntary withdrawal except after six months' written notice. It was also pointed out that the company is no longer engaged in a banking business and that in reply to a letter addressed to the Company by the Assistant Federal deserve Agent at New York, objection was raised in a letter dated February 26th to making application for any additional Federal Reserve bank stock. The discussion touched upon the practicability of cancelling membership of the nanhattan Company either on the grounds that it is no longer doing a banking business or on the grounds that it has not subscribed to Federal Reserve bank stock in proper proportion to its present capital and surplus. Mr. Wyatt, the Board's Counsel, was called into the meeting and, at the conclusion of the discussion, was requested to prepare a letter to the Manhattan Company advising that its reply to the letter addressed to it by the Assistant Federal Reserve Agent at New York has been referred to the Board which has reached the conclusion that the practical way out of the difficulty is for the Board to cancel its membership in the Federal Reserve System and the Board is prepared to do so unless the institution wishes to appear to show cause why such action should not be taken. Jigkoi3es OF STANDING COMMITTEES: Dated, March 6th, Recommending 7th, set forth in 10th, Dated, March 8th, Recommending as set forth changes in stock at Federal Reserve banks as the Auxiliary Minute Book of this date. Recommendations approved. action on applications for fiduciary powers in the Auxiliary Minute Book of this date. Recommendations approved. Dated, March 5th, Recommending approval of the application of Mr. Lynde Selden for permission to serve at the same time as director of the American Express Bank & Trust Company of the City of New York and as officer of the Chase National Bank of the City of New York. Approved. Dated, March 5th, Recommending approval of the application of Yr. Joseph C. Aovensky for permission to serve at the same time as director of the American Express Bank & Trust Company of the City of New York, as officer of The Chase National Bank of the City of New York and as director of the Hellenic Bark & Trust Company of the City of New York. Approved. 257 3/10/30 A_EFORT3 OF STAlIDING Dated, March 6th, Dated, March 6th, Dated, March 6th, Dated, March 8th, Dated, March 8th, -12- (Cont'd) ilecarnmending approval of the application of Mr. George E. Tribble for permission to serve at the same time as officer of the Florida National Bank of Jacksonville, Fla., as director of the Florida National Bank at Lakeland, Fla., and as director of the Florida National Bank at Bartow, Fla. Approved. Recommending approval of the application of /fa'. E. J. Nolan for permission to serve at the same time as director and officer of the Bank of America of California, Los Angeles, Cal., as director of the First National Bank of Beverly Hills, Cal., and as director of the Bank of America National Association of New York, N. Y. Approved, Recommending approval of the application of L:r. Albert D. Blauvelt for permission to serve at the same time as officer of the Long Island National Bank of New York, N. Y. and. as officer of the Douglaston National Bank of New York City, N. Y. Approved, Recormending approval of the application of Mr. Frederick a. Parisette for permission to serve at the same time as director of the Peoples National Bank of Newark, N. J., and as officer of the West Side Trust Company of Newark, N. J. Approved. Recorrmending approval of the application of Mr. Charles A. Kanter for permission to serve at the se time as director of the Union Industrial Bank of Flint, :.Iich.and as director and officer of the National Bank of Commerce, Detroit, Mich. Approved. The meeting adjourned at one o'clock. Giiwote,ilieed Assistant Secretary. Approved:
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