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1 A meeting of the Federal Reserve Board was held in the office of the ?edam). Reserve Board on Monday, March 11, 1929 at 11:30 a PRESENT: Governor Young Mr. Platt Mr. Hamlin Mr. Miller Mr. James Yr. Cunningham Yr. McClelland, Asst. Secretary P-he minutes of the meetings of the Federal Reserve Board held on March 4t, 44 and 7th were read and approved. The Governor presented a letter dated March 8th from the Assistant begIty - Governor of the Federal Reserve Bank of New York, with reference to 4(h1cle received from the Reichsbank that an additional .4,8,526,417.44 of United . State 5 gold bars would be shipped to the Federal Reserve bank the following ' that if the strong demand for dollars continues in their market they "k the Federal Reserve bank to make an advance against this consignment; the , -Letter also stating that all Federal Reserve banks, except San Francisco, ed - Participation in the advance made against the previous shipment. Noted. The Governor then submitted the matter which was referred to him with Dower at the meeting of the Board on March 1st, namely, memorandum from Counsel Uted. Federal Reserve Agent ebruery 26th, with regard to recommendation of the ' at g0 that steps be taken by the Board to institute proceedings against 463 State Bank of Ellsworth, Ellsworth, Iowa, under Section 9 of the Federal zieserv e act for cancellation of its stock in the Federal Reserve Bank of ChiFederal 4104 forfeiture of all rights and privileges of membership in the 4,ese rye Q State Bank of Ellsworth, wYstem. He presented draft of letter to the 3/4/29 4141WA1.4.1_ .#4444, Iowa citing it to appear before the Board to show cause why its mem- -441) should not be forfeited due to its failure to comply with the provisions or condition of membership imposed upon it at the time of admission to the 4taM ” That except with the approval of the Federal Reserve Board there shall be change in the general character of your assets or broadening in the funcnow exercised by you such as will tend to affect materially the standard ' 114r taintained and required as a condition of membership". In the letter, it 114E/ P01nted out that the State Bank of Ellsworth has permitted large amounts et -4"esirable assets to accumulate with estimated losses sufficient to impair t capital to a large extent. The letter also stated that in the event the ham. -1' should desire to waive its right to appear before the Board, it may through 48 dill --'Y appointed representative or representatives appear before the Federal iteserv S Agent at Chicago on a date to be fixed by him to present such evidence 44 it ma --Y care to have transmitted to the Federal Reserve Board for its conalcisration, After discussion, upon motion, April 11, 1929 was fixed as the date for the Board's hearing in the above case and the proposed letter to the State Bank of Ellsworth and one to the Federal Reserve Agent at Chicago were approved. rlatter approved on initials on March 9th, namely, application of the Bteri 4 41g (1-9u00 b National Bank and Trust Company, New York, N. Y. for original stock shares) in the Federal Reserve Bank of New York, effective if and when tho ' 417aPtroller of the Currency issues a certificate of authority to commence •aliess• Formally approved. Letter dated March 7th from the Secretary of the Federal Reserve Bank of 3/11/29 -3- New York, telegram dated March 8th from the Secretary of the Federal Reserve 8411k of Cleveland, telegram dated March 8th from the Secretary of the Federal leBerve Bank of Atlanta, telegram clated March 8th from the Chairman of the Federal Reserve Bank of Dallas and telegram dated Larch 7th from the Chairman of the Peaeral Reserve Bank of San Francisco, all advising that their boards of IreQtor at meetings on the dates stated made no changes in the banks' exist- s0 -edules of rates of discount and purchase. 'aithout objection, noted with approval. Report of Executive Committee on letter dated March 9th from the Comptroller 0 r the Currency, recommending approval of a salary of .,3,000 per annum for 44tiohni --A Bank Examiner Walter N. Male, assigned to the Tenth Federal Reserve 1)letri ei.; the Board's Committee also recommending approval. Approved. Reports of Committee on Salaries and Expenditures on lists submitted by the Pederal Reserve Banks of Richmond and Dallas, of employees for whom the di8 Of ' those banks approved leaves of absence with pay, on account of ill- Urin the month of February, where the total of such absencessince Janu- al ' l 1929 has exceeded thirty days; the Board's Committee recommending ap11 of the salury payments involved. Approved. Letter dated March 8th from the Secretary of the Federal Reserve Bank Ot 1 tta, advising of the election of Mr. J. B. Ramsey, President of the ; Nashville 1.L 41 --on National Bank of Knoxville, Tenn., as a director of the 10r the term ending December 31, 1961. Noted. 0 -4- Letter dated March 7th from the Federal Reserve Agent at Richmond, retlag 14€ t8 approval of an amendment to the by-laws of the Charlotte Branch chang- meeting date of the Branch Directors from the second 2hursday to the third Tuesday of each month. Approved. Letter dated March 5th from the Deputy Governor of the Federal Reserve tioalt Of New York, with reference to the status of the open market investment acOt O thee System on that date; the letter also confirming advice.given to the GOve or over the telephone regarding government securities maturing March 15th are held for account of foreign correspondents and the inability of the 4stsial, to offer replacements out of its own portfolio. The above letter, having been circulated among the members of the Board, was noted. The Assistant Secretary then reported that under the authority granted it '41 Pei)rIlarY 25th the Executive Committee on March 8th approved an application by the 1111ois Merchants Trust Company, Chicago, Ill., on behalf of the Continental 14140i a Bank and Trust Company of Chicago, for membership in the Federal Reserve : 171cL for 84,000 shares of stock in the Federal Reserve Bank of Chicago, ef- tettiv e if and when the Continental Illinois Bank and Trust Company is authorized b47 the state authorities to commence business; said approval having been given tle°t to the regular conditions of membership set out in Regulation H, Series of 194, to the following additional conditions: Itl e That the Continental Illinois Bank and Trust Company, Chicago, Illinois, shall at the first meeting of its board of directors ratify the action taken in its behalf by the Illinois Merchants Trust Company, Chicago, Illinois, in applying for stock in the Federal Reserve Bank of Chicago and in accepting the conditions of membership imposed by the Federal Reserve Board, and the r zI11/ 9 board of directors of such bank shall pass a resolution accepting such conditions of membership. 2. That at the time you are authorized to commence business your proposed capital of75,000,000- and surplus of 465,000,000- shall be fully paid in." Upon motion, the action of the Executive Committee was ratified. Ileinerandum from Counsel dated :arch 6th, submitting draft of a letter to the Peiera, 4 Reserve Agent at Chicago, with reference to an advertisement by the Ogden latioal zv„ Bank Of Chicago, that it is a "government' , and a "Federal Reserve" bank; the letter pointing out the statement contained in the Board's circular letter of 461.. —"117 28, 1923 (X-3649) with reference to advertisements of national or state tottlber banks, and requesting the Federal Reserve Agent to advise the Ogden National of the the Board's position and to request it on behalf of the Board to discontinue e of the advertisement in question. Upon motion, the letter submitted by Counsel was approved. Lleram ,,ranclam from Counsel dated February 27th, with reference to the Clayton ktt 44110ations of LI.. Herbert P. Howell and Mr. S. Sloan Colt, involving the lel National Bank and Trust Company, New York City, and other banks, which NIzie 1/4favorably recommended by the Feueral deserve Agent at New York and on which 441°'1 bY the Board has been deferred; Counsel pointing out that Yr. Howell is not 4°148er"'Ikg the Bankers Trust Company of New York, the other bank listed in his 44114ttion, and it is, therefore, not necessary for the Board to take any action °11 the aPplicat ion. He stated, however, that according to advice received from / 1 4ieral deserve Agent, lir. Colt is serving the Commercial National Bank and i t4t °°111PanY ana the Farmers Loan and Trust Company, both of New York City, in 441%1 to the Tuxedo National Bank, Tuxedo, N. Y., and it vill, therefore, be co441,Ct r-Z' -6- lleclessary for the Board to determine whether or not it will grant his application. After discussion, upon recommendation by the Law Committee, it was voted to temporarily refuse Mr. Colt's application and to afford him an opportunity to present additional evidence in support of his application before final disapproval. The Assistant Secretary then presented memorandum from Counsel dated Decembar 1^ With reference to the action of the Board on December 4, 1928 in vot14g tha t. at -. an appropriate time it should recommend to Congress the enactment Of a , - 4mendment to the Federal 'deserve Act which would authorize the Board in its a4 4scretion to waive the requirement of six months' notice from state member banks voluntarily withdrawing from the Federal Aeserve System. After discussion, upon verbal recommendation by the Law Committee, it was voted that appropriate letters, requesting introduction of the necessary bills to amend Section 9, be transmitted to the Banking and Currency Committee of the Senate and House of Representatives, as soon as they are organized when the special session of Congress convenes on April 15th. Telegram dated March 8th from the Federal Reserve Agent at San Francisco, Sting permission under the Board's letter of January 26, 1929 (X-6223) on the 41113ject "Examination of Member Banks", to participate in a state examination of tl-"1-1 American Trust Company, San Francisco, the latter part of this week, to the e xtent of furnishing one Examiner to secure credit information with which to siz 1)Plement the State's report, without assessing costs against the bank; the llt adir4 , 4t41 ' that the arranp-ements for the proposed examination do not conI --4sng Simultaneous entry of head office and branches. Mr. James moved that in view of the provision Of the Board's letter (X-6223) reserving the right to -7 recognize certain unusual situations in vihich it would be advisable to authorize credit investigations, the Board grant permission to the Federal deserve Agent at San Francisco to send one Examiner into the American Trust Company of San Francisco for information that is desired by the Federal 1Wbe reported serve bank to supplement that which ties. authori by the state Discussion ensued during which Governor Young expressed the opinion that the granting of such permission would be contrary to the provisions of the Board's letter (X-6223) statinc7 that the Board can not waive the cost of an investigation contemplating anything covered in the following language which appears in Section 21 of the Federal Reserve Act - "Such examinations shall be so conducted as to inform the Federal Reserve Bank of the condition of its member banks and of the lines of credit which are being extended by them." Mr. Miller called attention to the fact that the proposed examination does not contemplate simultaneous entry of head office and branches. He stated that the Board has never rescinded its action, reported to the Federal Reserve banks under date of March 9, 1923 (X-3660) in adopting the principle "that hereafter all es examinations of member state banks and trust compani shall be conducted simultaneously, both as to the parent bank and each branch." A detailed discussion ensued, during which certain past members of the Board expressed a desire to review exaction of the Board on the subject of simultaneous James' Yr. aminations and by unanimous consent, action on motion was deferred until the meeting of the Board tomorrow. OP sil l:DING COMMITTEES: i)4tea liarch 1st, 8th, 9th, 14arch 8th, ry powers Recommending action on applications for fiducia date. as set forth in the Auxiliary Minute Book of this d. approve s ndation Recomme admission of a Recommending action on an application for in the individstate bank, subject to the conditions stated as set forth in the ual reports attached to the application, Auxiliary Minute Book of his date. aecommendation approved. )1 r, 3/11129 -8 X.gi STAMENG COYMITTEES: (Cont'd) Date tIsMarch 9th, Martin Aecommendincr approval of the application of Mr. C. D. the director of for permission to serve at the same time as and as Wash., Spokane and Eastern Trust Company, Spokane, Bank, Cheney, officer and director of the Security National Wash.Approved. approval of the application of Mr. Benjamin W. 4t811March 9th, 1 ecommending time as° director Guernsey for permission to serve at the same as director Mass., ';:ellesley, of the ellosley National Bank, as diand Mass., Brookline, of the Boulevard Trust Company, Mass. Newton, Company, rector of the Newton Trust Approved. The meeting adjourned at 1:15 p.m. OWge Assistant Secretary.
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