The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
A meeting of the Federal Reserve Board was held in the office of the Pederal Reserve Board on Tuesday, March 26, 1929 at 11:00 a.m. PAE6ENT: Governor Young Mr. Platt Hamlin Mr. Miller Mr. James Er. Cunningham Noell, Asst. Secretary Mr. LicClelland, Asst. Secretary The minutes of the meetings of the Federal Reserve Board held on March 23rd and 25th were read and approved. Application of the First National Bank of Smithville, Texas, for perto exercise general fiduciary powers, together with a divided report thereon by the Law Committee; Mr. Hamlin recommending approval of the application and Mr. Platt pointing out that, in his opinion, the bank is too small 44a until recently has been in unsatisfactory condition. Upon motion, the application was approved, Mr. Platt voting "no". Letter dated Larch 21st from the Secretary of the Federal Reserve Bank of 411eas City, advising of the establishment on that date of the following scheau,e of rates for purchases of bankers acceptances: 1 46 91 121 to to to to 45 days 90 days 120 days 180 days MO 411M 5 5 5 5 1/4;; 3/6",; 1/2% 5/6 Noted, with approval, Yr. James voting "no". Letter dated March 21st from the Secretary of the Federal Reserve Bank Of ew York, confirming action taken by the board of directors on that date With regard to the discount rate of the bank; the letter quoting the resolu- tio„ - adopted by the directors as follows: 300 3/26/29 "Voted, subject to review and determination of the Federal Reserve Board, to establish a rate of six percent for all rediscounts and advances, effective from the opening of business on Larch 22, 1929 and until further notice and superseding the existing rate but with the understanding that this action of the board of directors of this bank is predicated upon approval or disapproval by the Federal Reserve Board today." Noted. Telegram dated March 25th from the Deputy Governor of the Federal Reserve rates 8411k In New York, advising that following further market advances in bill "1/8t; to 1/4,0 on all maturities and substantial offerings of bills to the 4deral Reserve bank at rates 1/6p above those in effect, the following sched41e Of rates for purchases of acceptances was established: Bankers Acceptances: 1 to 45 days 46 to 120 days 121 to 180 days aepurchase Trade Acceptances - Noted, with approval, Jr.2 voting "no". 5 3/8A! 5 1/2,6 5 3/4 b1/2 53/4,; James Bank Telegram dated March 26th from the Governor of the Federal Reserve Of Boston, advising of the establishment today of the schedule of rates for 1/4rohase5 of acceptances made effective at the Federal Reserve Bank of Xew (3111v9 as quoted above. Noted, with approval, Yr. James voting "no". Reserve Bank Telegrams dated Larch 26th from the Chairman of the Federal Ohicago and "1;:arch 26th from the Governor of the Federal Reserve Bank of J.ouls, advising of the establishment, effective March 26th, of the followschedule of rates for purchases of bankers acceptances: 8 3/26/29 -3_ 5 3/8i; 5 1/22; 5 3/4 1 to 4b days 46 to 120 days 121 to 180 days Noted, with approval, Mr. James voting "no". Telegram dated March 26th from the Chairman of the Federal Reserve Bank of iuLiond, advising of the establishment today of the following schedule of rates for purchases of bankers acceptances: 1 to 45 days 46 to 120 days 121 to 180 days - 5 1/2 5 5/8 5 7/8;; Noted, with approval, Mr. James votinr, "no". The Governor reported that the reply of the directors of the Federal Re8er7a Bank of Chicago to the Board's letter of March 18th has been received ' 401 is being circulated. At this point, the Secretary of the Treasury joined the meeting and took the Chair. The Governor presented a letter dated March 25th from the Governor of the ?oda,. , "'l a Reserve Bank of Philadelphia, advising that at a special meeting of the ooard of directors of the bank today consideration will be given to the establishment of a rediscount rate of 6;=3; the letter transmitting a state°f the facts upon which the increase, if voted, will be based. There was a general discussion with respect to the credit situation and the l'esults of the policy which has been followed by the Federal Reserve System, -. The Ohairman and Yr. Miller both stated that they would have to leave the Meet -big early and, if, after their departure, advice should be received that the directors of the Philadelphia bank have voted to establish a rate of 3/26/29 -4- they wish to be recorded as voting "no". 1.r. T.illor also stated that if during his absence in Ler York the directors of that the 2ederal eserve Sank of Ohicaco should vote to ivicrease the rate of bank, he would be very definitely opposed to such action in view of recent dev elopments in Chicago. The Chairman and Lr. then withdrew from the meeting. Letter dated :..arch 23rd from the Chairman of the Yederal :,eserve F3ank of Cleveland Of advising that he :ould like to be away from his office for period ten days or two weeks, beginning :,larch 29th. Noted, without objection. -ieports of Executive Oon.mittee on letters dated :_arch 23ra from the vmPtroller of the currency, recommendin“. approval of salaries of „?2,700 and ' 6 °0 ( ) per annum for National Bank Examiners "Jilliam A. Nolan and Charles T. Cr, assimed to the Seventh and Tenth Federal Aeserve 9istricts; the 'ourdts ,;(-)ninittee also recorrnending approval. Approved. Aeport of Executive Committee on letter dated rarch 25th from the Comptrolle r to/ the '\;urrency, recommending approval of a salary of'43,000 per annum , National Sank Examiner Thomas J. O'Connor, assigned to the Second Federal aesa"ve District; the Board's Cornr..-Attee also recommending approval. 4proved. Letter dated Liarch 19th from the Deputy Avernor of the Federal rieserve !narket 44k Of New York, advising that there have been no changes in the open illvestent account since his _Letter to the Board of March 12th; the letter also revi . wing operations connected '- ;ith the ::_arch lbth financing of the Treasury. c?(V-74 tilt/ 3/26/29 -5- The Governor was then called to the telephone, and upon his return reportd. that Governor Norris of the Federal Reserve Bank of Philadelphia advised him that the directors of his bank have voted to establish a rate of 6,-; on all classes of paper of all maturities. The Governor stated that upon inquiry by him, CrOvernor lorris advised that, in his opinion, it would be better for the Board to take definite action today approving or disapproving the rate, rather than take it under review. A discussion then ensued, during which 1:r. James moved that the Federal .eserve Bank of Philadelphia be advised that the Federal Reserve Board has received the advice that the airectors of that bank have established a rediscount rate of 6:3, with the request that their action be either approved or disapproved by the Federal Reserve Board today, and that the Board disapproves the action of the Philadelphia directors and has determined the rate of the bank to be 5o. Mr. Platt moved, as a substitute, that the rate of 64J established by the directors of the Federal Reserve Bank of Philadelphia on all classes of paper of all maturities, be approved, effective tomorrow, March 27th. Mr. Platt's substitute motion, being put by the Chair, was lost, the members voting as follows: Mr. Platt, "aye" Governor Young, "no" :Ir. Hamlin, "no" jr. James, "no" :dr. Cunningham, "no" The Assistant Secretary was instructed to record the Chairman and Mr. Miller also as voting "no". Mr. James' original motion ;"as then put by the Chair and carried, Mr. Platt votinc;. "no". 3/26/29 -6- 304 The Governor suggested that in case the Philadelphia bank should request an expression of the reasons for the Board's action, they be advised that the policy which was outlined by the Board in its letter to all Federal Reserve banks of February 2nd and in its public statement of February 7th, appears to be bringing good results and the Board, therefore, does not feel justified in approving an increase in discount rates at this time. Governor Young then communicated the action of the Board to the Governor of the Federal Reserve Bank of Philadelphia over the telephone, and upon his return to the Board room, stated that he also made an inquiry of Governor I:orris, in line with that made Di the Federal Reserve Bank of Chicago under date of March 18th, as to whether his directors are of the opinion that every reasonable practicable method has been employed and exhausted by his bank to protect its credit facilities against diversion into channels not contemplated by the Federal aeserve Act. Governor Norris replied, he stated, that although his directors are no longer in session, they discussed the matter during their meeting and feel that as the statement issued by the Board and other action taken by the System has had but temporary effect on the speculative security markets, the time has arrived for rate action. The Governor then presented a letter dated March 22nd from the Federal zles!rve Agent at Cleveland, requesting permission, under the Board's letter of January 26, 1929 (X-6223) to send one examiner into five state member banks 1 ex4 ?enneylvania for credit purposes at the time the institutions are oeing 441illad by the state authorities; the letter stating that in discussing lines Or much information crsciit, etc. with the department conducting the examination r)f general, but very essential character, is gained, but requesting, in view or the fact that the Federal Aeserve bank's participation in the examination is coMparatively slight that the assessment of expenses against the member banks be waived. 305 3/26/29 -7- After discussion, upon.motion, it was voted to permit the Federal Reserve Agent at Cleveland to use one examiner in conjunction with the state examination of the five member banks named in his letter, without assessing the costs ap:ainst the member banks. T3 OF ST.ANDING CM.11,IITTEES: Dated, March 25th, Dated, March 22nd, 25th, Dated, March Dated, 25th, March 25th, Dated, March 25th, Dated, 4)ated, March 25th, March 25th, Dated, March 25th, Recommending changes in stock at Federal Reserve Banks as set forth in the Auxiliary Minute Book of this date. Recommendations approved. Recommending action on applications for fiduciary pavers as set forth in the Auxiliary Minute Book of this date. Recommendations approved. Recommending action on applications for admission of state banks, subject to the conditions stated in the individual reports attached to the application, as set forth in the Auxiliary Minute Book of this date. Recommendations approved. Recommending approval of the application of Mr. Arthur J. Brady for permission to serve at the same time as director of the Gloucester National Bank, Gloucester, Mass., and as officer of the Federal National Bank, Boston, Mass. Approved. Recommending approval of the application of Yr. Paul M. aarburg for permission to serve at the same time as Associate Chairman of the Bank of the Manhattan Company, Mew York, N. Y., as Chairman of the International Acceptance Bank, inc., New York, N. Y., and as director of the First National Bank, Boston, Mass. Approved. Recommending approval of the application of 1.1r. George B. Patterson for permission to serve at the same time as director of the Bank of the Manhattan Company, New York, N. Y., and as director of the Central National Bank, Philadelphia, Pa. Approved. Recommending approval of the application of Mr. Daniel G. Wing for permission to serve at the same time as director of the First National Bank, Boston, Mass., as director of the Bank of the Manhattan Company, New York, N.Y. and as director of the French American Banking Corporation, New York, N. Y. Approved. Recommending approval of the application of Mr. F. Abbot Goodhue for permission to serve at the same time as director of the Bank of the Manhattan Company, New York, N. Y., as director and officer of the International Acceptance Bank, Inc., New York, N.Y. and as director of the First National Bank of Boston, Lass. Approved. 306 3/26/29 -8- '--1244.1 0UXS OF STANDIFG CO:.1IITTE33: (Contld) Dated, riarch 25th, Recommending approval of the application of 1:r. George Y. Shriver for permission to serve at the same time as director of the Bank of the Manhattan Company, New York, N. Y., as director of the Philadelphia National Bank, Philadelphia, Pa., and as director of the First National Bank, Baltimore, Md. Approved. The meeting adjourned at 12:15 p.m. 6(q4fia Assistant Secretary.
@FedFRASER