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. A. meeting of the Executive Committee of the Federal Reserve Board 7148 held in the office of the Federal Reserve Board on Wednesday, March 11, 1931, at 11:30 a. in. PRESENT: Governor Meyer Mr. Hamlin Mr. Miller Mr. James Mr. McClelland, Assistant Secretary. The Assistant Secretary presented the following communications and xlePorts Which were considered by the Board and acted upon as follows: Memorandum dated March 7th from the Comptroller of the Currency ad- of the resignation of Lirs. Maude Williams, money counter in the Pede ' 141 Reserve Issue and Redemption Division, effective at the close t business March 8, 1931. Noted. Report of Committee on District No. 11, submitting draft of reply to lettex dated March 7th from the Federal Reserve Agent at Dallas report- 14€ e°11tinuous average reserve deficiencies on the part of the First Iletiolial Bank, Rotan, Texas, for six consecutive months ending February 1.5th; the Proposed reply advising that the Board will be guided by the 4ge/xt/e re commendation that it take no action at this time, noting that he Will again address a communication to the institution with regard to the IWPcrtance of maintaining its required reserves and will advise the lloarla further in due course. Upon motion, the proposed letter was approved, as amended. Melltorand= from Counsel dated March 10th submitting drafts of a letter to ellra a the Deputy Governor of the Federal Reserve Bank of New York 1)r°1)(1/sed circular letter to all other Federal Reserve banks, r 3/11/31 -2- advising against the acceptance of "continuation certificates" as receiPts for the payment of oremiums on bonds covering Federal Reserve agents 414 assistant Federal Reserve agents; the proposed letters (1) pointing out tla t the standard form of bond aoproved by the Board runs for an indefinite Pel'iod and that a modification of the provisions of the standard bond through the acceptance of yearly continuation certificates, might have the effect t jeopardizing or complicating the enforcement of the liability of the surety c°L1PanY on the bond, and (2) advising that if a continuation certificate has hell heretofore accepted with regard to any bond now outstanding, a new bond ' 40111a be executed in each such case. After discussion, upon motion, the proposed letter to the Deputy Governor of the Kew York bank was approved, but, pending reply thereto, action on the proposed circular letter was deferred. Memorandum from Counsel dated i.:arch 7th, submittin7, drafts of letters tOth e Attorney General of the United States and the Federal Reserve Agent City with respect to possible violations of the criminal provi- store. 0r the revised statutes referred to in the report of a recent examina- tion. 1114de by state authorities of the State Bank of Winfield, Kansas. After discussion, upon motion, it was voted to defer any report to the Attorney General until after the alleged irregularities can be further investigated during the course of an examination of the member bank which is to be made by Federal Reserve examiners in the near future. l' emorandum from Counsel dated Yarch 7th submitting draft of letter tile Federal Reserve Agent at Dallas, with regard to stock in the Citizens Nte B ale 'of 1.emphis, Texas, held by the President of the member bank as Etakijai Eltl*ator of an estate to which the bank has a loan outstanding; the ) Proposed letter advising that while it may not be said that the transaction technically violates the prohibition of law against a state member be'llic ts lending on or purchasing its own stock, it is contrary to the spirit of the statute and should be adjusted. After discussion, upon motion, Counsel's memorandum and the proposed letter to the Federal Reserve 217;ent were referred back to the Law Comittee for further consideration. Telegram dated March 10th from the Assistant Federal Reserve Agent at Dallas innuirin: (1) as to the ri::ht of the Federal Reserve bar to pay iliterest at the rate of one-half of one per cent per month since the date its last dividend to the First State Bank, Spearman, Texas, whose °11111tarY withdrawal from membership becomes effective on March 22nd, in llie ' 71 of the fact that the earnings of the Federal Reserve bank at the present tje 840w an operatinc): deficit and (2) requesting advice as to the Board's triter Pzetation of what corsitututes the book value of Federal Reserve bank atoek. After discussion, upon motion, it was voted to advise that since payments of dividends out of surplus heretofore have been authorized, under an opinion previously received from the Attorney General of the United States, the Federal Reserve Bank of Dallas is authorized until otherwise advised, to pay interest at the rate of one-half of one per cent per month from the date of the last dividend to withdrawinq, member banks out of surplus when current earnin.7s are not sufficient. It was also voted to advise the Assistant Federal Reserve ',gent at Dallas that under existim7 circumstances the, ruestion of what constitutes the book value of Federal Reserve bank stock is an academic one on which the Board is not prepared to rule. 3/11/31 ) -4- REPORTS 02 ST21],DIiG C01.1.ar=S: Dated, Iarch 11th Recommending changes in stock at Federal Reserve banks, as set forth in the Auxiliary nimute Book of this date. Recommendation approved. The riBetini7; adjourned at 12:30 p. Assistant Secretary 4DProved: _ (Paeoutive Committee) AuxILLIay ILLITTES (larch 11, 1931.) 4 Reports of 3tanding Committee dated :.:arch 11th, recommending changes ' 4 stock at Federal :Reserve Banks, approved as follows: Lications for SILLAEITDal of Stock: Shares M)Ples Banking & Trust Co., Elizabeth, N. J. (Insolvent) 360 360 .3..tSt Rational Bank in Miami, Fla. (Insolvent) at Bank of Wilkes, Washington, Ga. (Insolvent) 600 96 696 24 Total 24 1,080 Dia tlat ro. 9. 'lrat ITational Bank, Kenmare, 1. Dak. (V.L.Abs. by Xeamare liational Bank) Assistant Secretary. 41 ) Proit
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