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448 A meeting of the Federal Reserve Board was held in the office of the Federal Reserve Board on Thursday, May 15, 1930 at 12:00 o'clock noon. PRESENT: uovernor Young Mr. Hamlin Mr. Miller Mr. James Mr. Cunningham Lr. McClelland, Asst. Secretary The Governor referred to the suggestion made at the meeting yesterday by Governor Harrison of a meeting soon of the Open Market Policy Conference or the Executive Committee of the Conference. He also referred to the ap- parent intention of the New York bank to initiate in the near future a poll- CY looking toward further ease of the credit situation through purchases of Government securities. He expressed the opinion that a meeting of the Open Market Policy Conference would probably be advisable in order that all Federal Reserve banks may be informed of the program which the New York bank seems to have in mind and stated that if the members of the Board have no objection he will call a meeting for Wednesday, May 21st. Discussion en- sued during which some members of the Board expressed doubt as to whether any benefits will accrue from an open market meeting at this time unless some definite recommendations are to be submitted and that they personally would be opposed to any program of Government purchases. Other members, however, agreed with the Governor that all Federal Reserve banks should be kept informed of possible future developments. Mr. Hamlin moved that a meeting of the Open Market Policy Conference be called for Wednesday, May 21st. Mr. Hamlin's motion, being put by the Chair, was carried, the members voting as follows: 5/15/30 -2- 111 Governor Young, "aye" Mr. Hamlin, "aye" Mr. Miller, "aye" Mr. James, "no" Mr. Ounningham, "no" Mr. Cunningham stated that, in his opinion, it is yet too early to have a conference to discuss purely the question of a further easing of the credit situation, although it might be vary advisable to have one not later than the middle of July. Letter dated Liay 12th from L:r. John S. Wood, accepting and expressing his appreciation of appointment by the Board as Class C Director, Chairman and Federal Reserve Agent at the Federal Reserve Bank of St. Louis; I:a.. Wood stating that he will be glad to qualify for, and assume office as soon as the Comptroller of the Currency feels he can be released from service in that Department and that he understands the Comptroller will confer with the Board relative to the matter of designating a definite date. Noted. Report of Committee on Lxaminations on letters dated May 13th from the Federal Reserve Agent at Chicago, requesting permission to have representatives of his department make credit investigations, without charge, of certain State member banks listed, at the time they are under examination by State authorities; the Board's Committee recommending approval. Approved. -emorandum dated May 13th from Counsel, submitting draft of letter to Mre iavleigh darner, with regard to his application for permission to serve at the same time as director of the Central Trust Company, The Drovers National Bank and The Drovers 2rust and Savings Bank, all of Chicago, Illinois, and as director of the City National Bank and Trust Company, Evanston, Ill.; 77c:: -3- the letter stating that the Board can not grant its permission to anyone to serve more than three banks coming within the provisions of the Lllalyton and that it will permit him to serve any three of the banks included in his application, provided he severs his connection as a director of the fourth bank set out therein. Upon motion, the letter submitted by Counsel was approved. Memoranda from Counsel dated May 14th on the matter referred to him at the meeting on May 2nd, namely, memorandum from the Board's Examiner in Charge, regarding irregularities of xr. Edward W. aeese while an employee Of the Atlantic Corporation of Boston, Massachusetts; Counsel submitting drafts of letters to the Attorney General of the United States and the Commissioner of Banks of the State of Massachusetts reporting the facts of the case. Upon motion, the letters submitted by Counsel were approved. Memorandum from Counsel dated May 14th, submitting draft of telegram to the Federal Aeserve Agent at Cleveland, with regard to withdrawal from membership of the Peninsula Banking Company, Peninsula, Ohio; the telegram stating that the Board is unwilling to waive six months' notice of intention to withdraw by any State member bank unless unusual circumstances are involved in the case which make it desirable to do so, and requesting that he furnish the Board with a full statement of the reasons for the recommendations made by his office that the six months' requirement be waived in the case of the bank named. Approved. 45t -4- 5/15/30 7th from the Report of Committee an Examinations on letter dated Lay ting and recommending Assistant Federal Reserve Agent at St. Louis, transmit St. Louis, approval of an application of the Guaranty Bank and Trust Company, of demand for a reduction in its reserve requirements from 10,, to 7;0 Reserve Act; the deposits under the provisions of Section 19 of the Federal recommending apCommittee submitting a divided report thereon - Mr. Platt the proval and :Jr. Cunningham reporting that he is not willing to approve application. ion acA discussion ensued centering particularly upon the corporat total deposits, counts carried with the applicant bank amounting to 67;,, of its and the fact that 80, of the total corporation deposits are concentrated in three acoounts. At the conclusion of the discussion, upon motion, it was unanimously voted to deny the application. held on May The minutes of the meeting of the Federal Reserve Board 14th were read and arproved. Discussion ensued regarding the procedure outlined by Governor York Bank, in Harrison at the meeting yesterday to be followed by the New this country. connection with the pending issue of reparations bonds in States, The proposed letter to the Attorney General of the United Board in the matter, requesting an opinion as to the responsibility of the en which no action was taken at the meeting an April 22nd, was again brou-ht before the Board, and Mr. James submitted the following motion: "Whereas, the Bank for International Settlements has come into existence since the enactment of th3 Federal Reserve Act and obviously Congress has not given any con- 452 5/15/30 -5- "sideration to its relationships with American institutions, particularly, the Federal Reserve System; Be It Aesolved, That the Federal Reserve Board ask the Attorney General of the United States for an opinion as to what its responsibility is in the premises." Mr. Hamlin submitted the following, as a substitute for the motion made by :Ir. James: "Whereas, Governor Harrison of the Federal Reserve Bank of New York, on Lay 14, 1930, stated to the Board that if any request should come from the Bank for International Settlements asking whether the Federal Reserve Bank of Lew York dissents to an offering in the United States of reparations bonds, he would prepare a cable and letter which he would submit to the Federal Reserve Board for approval or disapproval, and that if the Board Should disapprove such cable and letter they would not be sent; "Be It Resolved, That the following proposed reply of the Federal Reserve Bank of New York to such request, be submitted to the Federal Reserve Bank of New York by way of suggestion: "The Federal Reserve Bank of New York has the honor to acknowledge the receipt of your cablegram asking whether it dissents to the proposed offering in the United States markets of the reparations bonds referred to. In reply I would say that the Federal Reserve Bank of Nev York does not dissent, for the reason that under the Federal Reserve Act it has no power to pass upon such securities as a condition precedent to their offering in said United States markets. Its failure to dissent, therefore, should not be construed either as an approval or disapproval of the terms, conditions, or worth of such securities, or as a waiver of any of its lawful powers to take necessary action at any time to protect the credit stability of the United States." The two motions were discussed further, but no action was taken. REPORTS OF STANDING CM.idITTEES": Dated, May 13th, Recommending approval of the application of Mr. Bernard Miller for permission to serve at the same time as director of the New Jersey National Bank and Trust Company, Newark, N. J., and as director of the Nest Hudson County Trust Company, Harrison, N. J. Approved. 53 5/15/30 RETOBTS OF STANDING COWITTEES: (Cont'd) Dated, May 13th, Becommendiag approval of the application of Mr. Isaac E. Sexton for permission to serve at the same time as director of the Everett Trust Company of Everett, Massachusetts and as director of the Winchester National Bank of Winchester, Massachusetts. Approved. The meeting adjourned, at 1:30 p.m. ow wow., Assistant Secretary. Approved:
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