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4,-15 A meeting of the Federal Reserve Board was held in the office of the Federal ileserve Board on Wednesday, :,:ay 15, 1929 at 12:00 o'clock noon. PRESENT: Governor Young :Ar. Hamlin Mr. Miller :Ir. Cunningham Er. Pole Mr. McClelland, 2:sst. Secretary The Governor stated that the meeting was called particularly to consider action Of the directors of the Federal Reserve Banks of Boston and Philadelphia IXIVoting to increase the rediscount rates of those banks. He stated that a meeting of the full Board will be held tomorrow and suggested that in the meanthe action of the Boston and Philadelphia directors be taken under review, whiCh he understands is satisfactory to them. Letter dated May 8th from the Chairman of the Federal Reserve Bank of B(Ist°n. confirming telegraphic advice on that date and quoting the following Ileeolution adopted by the board of directors with respect to the discount rate Of the bank: "VOTED that the action with reference to the discount rate taken at the directors' meeting on April 24, 1929 be and the same is hereby reaffirmed and that, subject to review and determination of the Federal Reserve Board, a discount rate of 6,) on all classes of paper of all maturities be established for this bank, effective the first business day following that on which approved by the Federal Reserve Board." After discussion, upon motion, it was voted that the Federal Reserve Bank of Boston be advised that the Federal Reserve Board has received the advice that the board of directors of that bank has established a rediscount rate of and that the Board has taken the matter under review and auring the interim has determined the rate of the bank to be 5. Telegram dated May lbth from the Assistant Federal Reserve Agent at l'4114cle1phia, advising that the board of directors of the bank to day voted to 4'76 5/15/29 -2- establish a rediscount rate of 66 on all classes of paper of all maturities, effective the first business day following that on which approved by the Federal Reserve Board; this action to be held in review by the Federal Reserve Board until :,:ay Z4th and not approved unless and until a similar rate is approved for the Federal Reserve Bank of New York. After discussion, upon motion, it was voted that the Federal Reserve Bank of Philadelphia be advised that the Federal Reserve Board has received the advice that the board of directors of that bank has established a reand that the Board has taken the discount rate of 6 during the interim has determined and review under matter be 5;;. to bank the of the rate The minutes of the meeting of the Federal Reserve Board held on Lay 9th were then read and approved. The minutes of the meeting, of the Federal Reserve Board held on May 13th Were read and approved as amended. Telegrams dated May 10th from the Secretary of the Federal Reserve Bank of Cleveland, May 10th from the Secretary of the Federal Reserve Bank of Atlanta and 44Y 9th from the Chairman of the Federal Reserve Bank of San Francisco, all advis4 41ag that their boards of directors at meetings on the dates stated made no harIP;ee in the banks' existing schedules of rates of discount an'i purchase. ilithout objection, noted with approval. Telegram dated May 13th from the Secretary of the Federal Reserve Bank of -"eapolis, advising that the board of directors at their meeting on that date ril4cle no change in the bank's existing schedule of buying rates; the Board having alreaclY been advised of and approved action of the directors regarding the rerate. Noted. 5/15/29 - Telegram dated May 11th from the Chairman of the Federal Reserve Bank of l alleas City, advising that no meeting of the board of directors of the bank was held on that date due to inability to secure a quorum. Noted. Letter dated May 9th from the Secretary of the Federal Reserve Bank of New York, advising that the board of directors at their meeting on that date 141de no change in the bank's existing schedule of buying rates, but quoting the following resolution adopted by them with respect to the discount rate of the bank: "VOTED subject to review and determination of the Federal Reserve Board, to establish a rate of six per cent. for all rediscounts and advances, effective from the opening of business May 10, 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. Letter dated May 10th addressed to the Vice Governor by the Chairman of the Federal Reserve Bank of New York, advising of discussion, just prior to the vote taken by the directors of the bank on May 9th to establish a rate °t €-410 Of the various factors which in the minds of the directors make an in111 the rate necessary; the Chairman referring to the letter which the °41"(1 addressed to the bank under date of May 1st and stating that it was part°1' the very reason that the Board has emphasized in that letter that the '14reotors have urged upon the Board the need for an increase in rate since 4111"44rY 14th, The Secretary also presented another letter dated May 10th from the 478 5/15/29 ) Chairman of the New York bank, replying to the Board's leiter of May 1st with regerd to the borrowings of certain member banks in the Second Federal Reserve %strict and requesting further and fuller cooperation in the Board's policy °f Preventing the misuse of the discount facilities of the Federal Reserve SysThe Secretary stated that copies of this letter have already been distr ibuted among the members of the Board. A discussion of the two letters en- siled during which "r. Cunningham presented draft of a letter to the Chairman °f the New York bank regarding them, and Mr. Hamlin stated that he also has Prepared a letter to the New York bank in considerable detail which he wishes to revise further before presentation to the Board. It was voted that copies of Mr. Cunningham's and 14r. Hamlin's proposed letters be furnished to each member of the Board, subject to call for consideration at a later meeting. The Assistant Secretary also presented letters dated May 13th from the ChSirllan of the Federal Reserve Bank of Cleveland, May 9th from the Chairman Of the Federal Reserve Bank of aichmond, May 11th from the Chairman of the srs1 Reserve Bank of Atlanta, May 7th and 10th from the Chairman of the 4deral Reserve Bank of Chicago, May 8th from the Chairman of the Federal 418serve Bank of St. Louis and May 10th from the Chairman of the Federal Reserve 41111C Of San Francisco, all in reply to the Board's recent letters to the re813e0tive banks requesting further and fuller cooperation by the Federal Reserve beak 8 and member banks in preventing the misuse of the discount facilities of the, rederal Reserve System. Copies of all of the above letters having been furnished to the members of the Board, they were noted without action at this time. 5/1s/29 The Assistant Secretary also presented a letter dated May 11th from Mr. " 411es who attended the meeting of the board of directors of the Federal Reserve 13614k of Atlanta on May 10th at which the Board's letter to that bank of May 2nd was discussed. Noted. Letter dated May 14th from the Deputy Governor of the Federal Reserve 1/1111k of New York, advising that there has been no change since April 30th in the Open market Investment Account, except for repurchase by the Federal ReBank of St. Louis of q3,000,000 of the ;i;6,000,000 of government securities which were being held temporarily in the System account; the letter also stating that the Federal Reserve Bank of Kansas City has requested the sale of 42,000,000 of its short term certificates and notes. Noted. Letter dated May 10th from the Governor of the Federal Reserve Bank of Ilsw York, advising of progress being made in their efforts to secure reports *Qm member banks and bankers in that city showing the amount of funds held bY them for account of foreign clients; the letter stating that before writing othA% -' Federal Reserve banks, as suggested by the Board, it is felt that it °1114 be well to wait until they have had some further experience in New York. Ordered circulated. Bonds in the amount of ;50,000 each, executed by Messrs. Charles H. IIYatt arid. R. L. Honeycutt, recently designated as Acting Assistant Federal aese.m. "s Agent's for temporary periods at the Baltimore and Charlotte Branches, re Pe Qtively. Approved. Ar\ L-5,r(ik 5/1s/29 -.6— Letter dated May 9th from the Governor of the Federal Reserve Bank of 44 York, advising that the resignation of Mr. W. W. Schneckenburger, Managing DI rector of the Buffalo Branch, has been accepted as of May 15th and that Mr. Robert M. O'Hara, Manager of the Bill Department of the New York bank,has been de.aignated as Managing Director of the Branch for Mr. Schneckenburger's unexpired term ending December 31, 1929. Noted. Report of Executive Committee on letter dated May 10th from the Compt'01 ler of the Currency, requesting approval of a salary of ,4,000 per annum t°11 National Bank Examiner Pleasant V. Miller, assigned to the Tenth Federal lieserve District; the Board's Committee also recommending approval. Approved. Reports of Committee on Salaries and Expenditures on lists submitted 11 the Federal Reserve Banks of Richmond, Cleveland and San Francisco, of el11131°Yeee for whom the directors of those banks approved leaves of absence With Pay, on account of illness, during the month of April, Nhere the total or allch absences since January 1, 1929 has exceeded thirty days; the Board's C°Inmittee recommending approval of the salary payments involved. Approved. Letter dated May 13th from the Assistant Federal Reserve Agent at New Yor, advising that the merger of the Municipal Bank and Trust Company of New Yor6 with the Bank of United States, New York, under the name of the latter, bee, '44e effective at close of business May 11th. Noted. 8/15/29 -7- I Report of Committee on Examinations on letter dated May 10th from the 4deral Reserve agent at St. Louis, recommending approval of the exercise of tIc ' llet powers by the United States Bank of St. Louis, if and when authorized bY the Commissioner of Finance of Missouri; the Board's Committee also recomnlelicling approval. Approved. Letter dated May 10th from the Chairman of the Federal Reserve Bank of " 8 Louis, advising that the annual conference of the directors and officers that tank with the directors of its Branches will be held an June 5th, and ltlflg the members of the Board, at least the members of tbe Committee on District 4r, 0 to attend the meeting. Referred to the Governor. Letter dated May 11th addressed to the Secretary of the Treasury by the ?resident of the Chamber of Commerce of the United States, transmitting f°1711141 COpy of the resolution regarding the credit situation which was adopted at th 0 annual meeting of the Chamber on May 3rd. Noted. Draft of letter to the Commissioner of the Public Debt, Treasury De- 1411411ent, advising of plans approved by the Board for the maintenance of reterbstocks of unissued Federal Reserve notes of the new size at certain Federal Reserve Banks during the turnover period, including the temp-4 elVointment of Acting Assistant Federal Reserve Agents; the letter statthat if and when the designations of Acting Assistant Federal Heserve Agents bkolt 8 effective the Board sees no objection to the Treasury Department approving 5/15/29 -8- the establishment of reserve stocks of United States issues at the Branches /allied., the custody of which, according to the agreement reached at the recent CilrrencY Conference, is to be under an arrangement identical with that in oft the head offices, namely, under joint control of a representative of the bank and the Federal Reserve Agent. Upon motion, the above letter was approved. Letter dated May 13th from the Commissioner of the Public Debt, Treasury DsPartment, requesting approval of the designation of Mr. John T. Simmons of the Division of Loans and Currency as second alternate vault clerk represent14g the Board, tu connection with the custody of reserve stocks of Federal Ileserve notes at the Bureau of Engraving and Printing vice Yr. Joseph W. Bowie. Approved. Memorandum dated May 9th from the Secretary, with respect to considerst144 by the recent Currency Conference of the suggestion that during the period °f issue of the new size currency each Federal Reserve bank cancel and send e(lt to Washington, for redemption, all currency issues of other Reserve balks of the old size, regardless of the condition of the notes involved; the Secret„ concurring in the recommendation of the Conference that the cancellation or ;'ederal rieserve notes 9f other Federal Reserve banks which are fit for further ci rculation, on a definite date prior to the date of issue of the new size, be left to the express wish of each issuing bank. Upon motion, the recommendation of the Currency Conference was approved. Letter dated May 13th from the Assistant Federal Reserve Agent at Atlanta, sax, ieing Of plans of the Federal Reserve Agent for the custody of reserve stocks 483 5/l5/29 -9- °f unissued Federal Reserve notes and, if necessary, United States issues, aurtcg the period of turnover of the new sized currency, including the tem" 15 ar7 appointment of Acting Assistant Federal Reserve Agents at the Branches; the letter stating that if the plans are agreeable to the Board the appointments "Acting Assistant Federal Reserve Agents will later be submitted to the Board for definite approval. Upon motion, it was voted to advise the Assistant Federal Reserve Agent that the Board will approve the temporary designation of Acting Assistant Federal Reserve Agents at the Branches of the Federal Reserve Bank of Atlanta, in accordance with the plan submitted. ldemorandum frum Counsel dated Lay 13th, advising of a decision rendered by the United states Supreme Court in the so-called :;orcester County National Bank 418°, which, while not passing upon the constitutionality of the statute pro174414g for the consolidation of a state bank with a national bank under the letter - I s charter, held that it was not the intention of Congress in enacting thj statute to attempt to pass specific appointments as trustee, executor, etc. from the state institution to the consolidated national bank but that the sts14. --ulate merely gives the consolidated national bank the legal capacity to act 114 sUch trust matters upon being reappointed. Noted. Uemorandum from Counsel dated Lay 9th, submitting, in accordance with the a of the Board at its meeting on may 8th - drafts of letters to the za e State Bank and Trust Company of San Antonio, Texas, and to the Federal —fla Agent at Dallas, citing the member bank to appear at a hearing before the t °11rd for the purpose of showing cause why its membership in the Federal aeserv e System should not be forfeited on the ground that it has violated the 484 5115129 -10- t eXknerel condition of membership imposed upon it, in that it has sold and disP°sed of substantially all of its assets. Upon motion, the letters submitted by Counsel were approved and ordered transmitted after 'Wednesday, June 12th, had been fixed as the date for the hearing. llemorandum from Counsel dated Lay 9th, submitting applications by the ilaticnal City Bank of New York for permission to establish branches in the eitY of Guatemala, Republic of Guatemala and in the city of San Salvador, 4iePablie of El Salvador; Counsel stating that the applications are in proper " f rn and he knows of no legal reason why they should not be arproved. in this clIZaection, the Assistant Secretary presented a memorandum dated May 13th from the Comptroller of the Currency, recommending approval of the applications. Upon motion, the following were ordered spread upon the minutes: "THE NiaIONAL CITY BANK OF NEW YORK, having on or about May 9, 1929, filed an Lpplication with this Board for the Purpose of obtaining authority to establish a Branch in the CITY OF GUATEMALA, REPUBLIC OF GUATEKALA, Lind the said Application having been considered; and it appearing that the said APplication is properly made under the laws of the United States Of America and should be granted, NOW, THEREFORE, IT IS 010E10), 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 the CITY OF GUATEMALA, REPUBLIC OF GUAT-RJ%1ALA." "THE NATIONAL CITY BANK OF NEV YORK, having on or about May 9, 1929, filed an Application with this Board for the Purpose of obtaining authority to establish a Branch in the CITY OF SAN SALVADOR, REPUBLIC OF EL SALVADOR, and the said APplication having been considered; and it appearing that the said Application is properly made under the laws of the United States of America and should be granted, NOW, THEREFORE, IT IS OADEHED, 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 the CITY OF SAN SALVADOR, REPUBLIC OF EL SALVADOR." "7" 5/15/29 -11- Letter dated May 9th from Honorable Newton D. Baker, replying to a letter addressed to him in accordance with the action of the Board on May 7th end advising, in reply to the Board's inquiry, that he concurs in the opinion expressed by the Board's General Counsel in his memorandum of March 7th on the subject of the power of the Board to enforce the principles regarding the Proper use of the credit facilities of the Federal Reserve System 1611 down in the Board's letter of February 2nd to all Federal Reserve banks, and that he is .satisfiedwith the concurrence he expressed to the Board, and with the °Pinion he expressed to the Board as set forth in the minutes of the meeting °f the Board held on May 3rd. With his letter, Mr. Baker returned an excerpt flic/la the minutes of the meeting on May 3rd sent to him by the Board, with a allggested revision thereof setting forth his position somewhat more fully. By unanimous consent, the Assistant Secretary was directed to revise that portion of the minutes of the meeting of May 3rd which was sent to Mr. Baker, in accordance with the suggestions made by him. Draft of reply, prepared by Counsel, to letter dated April 29th from the Pederal deserve Agent at Boston, inquiring whether the provisions of the ClaYton Act apply to certain corporations served by Mr. John H. Macomber, who cleaires to serve, with the permission of the Board, The First National Bank, The First National Corporation and the Harris-Forbes Trust Company, all of 011. Massachusetts and the Harris Trust and Savings Bank of Chicago, Ill.; 11° " the letter stating that Harris, Forbes & Company, Ltd. of London, England, 44111e. Forbes & Company, Ltd. of Montreal, Canada, Harris Safe Deposit Company Qt Chicago, Ill., the N. M. Harris and Company of Chicago, Ill., Warren Institu"021 for Savings of Boston, Massachusetts and Harris, Forbes Companies of Boston, .±(3k.) L 5/15/29 -12- "e8aohusetts do not come within the prohibitions of the Clayton Act, but reqUesting further information regarding Harris, Forbes & Company of New York, Harris, Forbes & Company, Inc. of Boston and Harris, Forbes Corporation of liew York. Upon recommendation of the Law Committee, the letter submitted by Counsel was approved. Memorandum from Counsel dated May 9th, submitting draft of letter to Cornelius Doremus, regarding his application to serve at the same time as officer and director of the First National Bank of Garfield, N. J., and as o fficer and director of the First National Bank and Trust Company, Ridgewood, j4, which is to be formed by the consolidation of the First National Bank and the Ridgewood Trust Company, both of Ridgewood, N. J.; the letter stating that the Board will not at this time issue the permit desired but that if the clla aolidation referred to takes place within a reasonable time and at the time the c ircumstances involved in the application have not materially changed, the 130ard will approve the application. Upon recommendation of the Law Committee, the letter was approved. RTS OF 6TANDING COMMITTS; 134ted, May 10th, 13th, 14th, 15th, Datea, May 9th, B4ted, May 9th, Recommending changes in stock at Federal Reserve Banks as set forth in the Auxiliary Minute Book of this date. Recommendations approved. Recommending action on an application for fiduciary powers as set forth in the Auxiliary Minute Book of this date. Recommendation approved. Recommending action on an application for admission of a state bank, subject to the conditions stated in the individual reports attached to the application, as set forth in the Auxiliary Minute Book of this date. Recommendation approved. The meeting adjourned at 1:30 p.m.
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