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292
A meeting of the Executive Committee of the Federal Reserve Board was
held in
Washington on Thursday, May 18, 1933, at 10:30 a.m.
PRESENT:
Mr.
Mr.
Mr.
Mr.
Miller, Chainnan of the Executive Committee
Hamlin
Tames
O'Connor
Mr.
Ur.
Er.
Mr.
Er.
ALSO PRESENT:
Morrill, Secretary
McClelland, Assistant Secretary
Wyatt, General Counsel
Snead, Chief, Division of Bank Operations
Van Fossen, Assistant Chief, Division of
Bank Operations.
Mr. E. R. Black, Governor-designate of the Federal
Reserve Board.
The Committee considered and acted upon the following matters:
Letter dated May 11, 1933, fram the Secretary of the Federal Reserve
844:k Of New York, and telegrams dated
May 10, 1933, from the Chairman of the
43411'1 Reserve
Bank of Kansas City, May 11, 1933, from the Chairman of the
l*Eld
Reserve Bank of Riohmnnd, May 12, 1933, from the Secretary of the
klsral
Reserve Bank of Atlanta, and Law 17, 1933, from the Chairmen of the
44ral
Reserve Banks of Boston, Philadelphia and St. Louis, all advising
1114t1 at meetings
of the boards of directors on the dates stated, no changes
Wer"acle in the banks' existing schedules of rates of discount and purchase.
Without objection, noted with approval.
RePly on Law 11, 1933, to a letter dated
4 la
t.t.
As
May
6 from Er. Floyd R.
to the Governor, tendering his resignation to take effect
1.13e,sure of the
Board but in any event not later than May 15, 1933.
illeN31Y stated
that, in accordance with Mr. Harrison's request, the Board
'esignation as at the close of business
""Ilte 418 l
May
(113:141e(1 an exPression of the Board's appreciation of
15, 1933.
La..
The reply
Harrison's services
293
6/18/33
-244d regret as
to his resignation.
Approved.
Reply on May 13, 1933, approved by three members of
the Board, to a
letter dated
May 9 fronIM.r. Francis L. Fahy, Secretary to the Governor,
teaderints his
resignation as at the close of business on May 15, 1933.
The
telaIr stated
that the Board has accepted, with regret, the resignation as
Uurea.
Approved.
Letter dated May 13, 1933, from Lir. Newton, Chairman
of the Federal
ea
R
" Bank of
Atlanta, inclosing a copy of a resolution adopted by the
13°4ra °I' directors
of the bank at its meeting on May 12, 1933, accepting the
reeig-h—t.
ion of
Governor Eugene R. Black as Governor of the bank, effective
1415°11t4e assugPtion of his new duties as Governor of the Federal Reserve
11°11tcl* end
expressing the hope that the present trying and emergent conditions
shortly eo
far abate as to permit of the resumption by Governor Black of
44tlea as Governor of the Atlanta bank. The letter also stated
that the
teotQrs had
appointed Mr. W. S. Johns, senior deputy governor, as acting
fterllor Of
the bank, effective as of the date upon
which the resignation of
LO'zi
takes effect.
Noted.
kviaiort1481110randa dated May 11 and 13, 1933, from Mr. Paulger, Chief of the
(/f
Ettzolli
tteetve
xaminations, recommending the appointment of Messrs. John C.
ead Herbert H.
Hagler and their designation as assistant Federal
eXaMiners, with salaries at the basic rates of $2,000 and2,5130 per
414W14, re
sPectively, less the reduction of 15;).
294
5/i.s/33
-3Messrs. 2ranzoni and Hagler were appointed examiners for all purposes of the Federal Reserve Act, as
amended, and of all other acts of Congress pertainin;;
to examinations made by, for, or under the direction
Of the Federal Reserve Board, and were designated as
assistant Federal reserve examiners, with salaries at
the basic rates of 02,000 and .2,500 per annum,
respectively, less the reduction required by the Act
of March 20, 1933, now 15:J, all effective as of May
26, 1933, on which date they will assume their duties.
IlePlY on Lay 17, 1933, approved by four members of the Board, to a
d
aved le-Y• 10 from Mr. Austin, Federal Reserve Agent at Philadelphia,
l'equestin2;
approval of the designation as assistant examiners at the bank
Oft:essra. 'Henry 'J.
Evans, T. Carl Myers and Raymond L. Dorsch, with basic
8814zies at
the rate of
to be errective Lay
2,200, .2,400 and .;2,400 per annum, respectively,
15, 19;33, or as soon thereafter as the necessary arranijeY be
48ignations
to deductions
completed.
The reply stated that the Board has approved the
as requested, with basic salaries at the rates named, subject
in accordance with the share-the-work plan in effect at the
Approved.
IlePlY to a letter dated May 11, 1933, from 1,:r. Austin, Chairman of
the 1
,
ea
el'al Reserve Bank of Philadelphia, requesting approval by the Board
Or
the
de34glation of 1:essrs. Harry 1. Eichmann, Tohn K. Neeley, and Cyril
of
eraPloYees of the bank, as assistants to examiners in the examination
z30//le
of the
larGer member State institutions located in or near
1411"elPhia.
The reply stated that the records of the Board indicate that
°r 3.4111111Y 1, 1933, 58 employees of the bank, in addition to the regular
°r examiners and assistant examiners, were authorized to participate
295
5/16/33
-4-
he ezamination of State member banks, and that, in view of this situation,
the 8°ard will appreciate advice as to the need for the designation of the
th-The
additional annloyees referred to in the agent's letter.
Approved.
Reply on May 10, 1933, approved by three members of the Board, to
letters
dated May 6 from Mr. Strater, Secretary of the Federal Reserve Bank
°r
Cln—"la ds advising of the death on April 23 of Mr. C. L. Bickford,
4141ataut
Cashier at the head office, and of the appointment, effective May
16
'1933, of Mr. P. A. Br
, Assistant Cashier at the Pittsburgh branch, as
481114tant Cashier
at the head office, to succeed Mr. Bickford, and of Mr.
Bolthouse, manager of the currency and coin function in the money
ciellEtrttaent of the head office, as Assistant Cashier at the Pittsburgh branch
to
alleceed
Brown. The reply stated that, in accordance with the action
7
7
14 bY the
board of directors, the Federal Reserve Board has approved the
tties at the
basic rates of ::i;7,000 and 4,400 per annum (subject to
recilIcti°11 in accordance with the share-the-work plan in effect at the bank)
4ea
bY the
directors for Messrs. Brown and Bolthouse, respectively, in
el 4411W
Positions.
Approved.
Letter dated May 16, 1933, to Mr. Idoxtan, Chairman of the Federal
lieeel'76 Bank of
Richmond, approved by four members of the Board, referring
to 114
J.8
letter of April
29, 1933, and stating that the Board approved
ettlarie
8 at the rates of "1,620 and c)1,080, respectively, for Miss T.
Zli,
44bsth
Lucius and 1r. Thomas X. Glanville, employees of the Baltimore
-"lying salaries on January 1, 1933, in excess of those provided
296
5/18/33
-5r°11` 1/1 the
personnel classification plan of the branch for the positions
°ectipied.
The letter also stated that with regard to the salaries of em-
Plo yees in
the Reconstruction Finance Corporation custodian department,
Which it
appears are not subject to the percentage reductions applied to
salaries
Of other employees of the bank, the Board suggests that consideration be
given to the desirability of adopting a unifom plan of fixing basic
aalaries which
will
apply
to all employees of the bank.
Approved.
Telegraphic
reply on Lay
tIle 80
a`r(11 to U. letter dated Lay
Reaerv
r/link Of Chicago, stating
O L:ay
r
aPProved the employment
Q1)11e1Alor
taken
10, 1933, approved by three members of
a from Er. Stevens, Chairman of the 1?ederal
that the executive committee of the bank
of Mr. Ralph H. Buss as Assistant Deputy
rN4'.
trle Tederal ileserve Bank of Chicago; that the matter has been
ind
ividuallY with a majority of the directors; that it is proposed
t° eMploy
7.3uss as of Lay 15, 1933, and, at the meetint,,
, of the beard of
directors on
1,1alr 261
designate him Assistant Deputy Governor; and that
to
zqbject to
approval by the Federal Reserve Board, his salary is to be fixed
4t
the rate
of .8,550 per annum., effective Lay 15, 1c.)63. The reply stated
tilt the
'Board approves the sninry at the rate named, effective Lay 15,
1.33) with
the understanding that Er. Buss will assume his duties at the
beaaiv on
that date and, that
at the meeting of the board of directors on 1.".ay
Ile Will
be
designa ted Assistant Deputy Governor.
Approved.
4
asPlY on Llay 12, 1933, approved by three members of the Board, to
letter
(1.4.
'"oci 1Jay 9 from La-. Tohn N. Peyton advising formally of his
297
5/3433
-6-
"ceptance
°f the
of ap)ointment by the Federal Reserve Board as class C director
Federal Reserve Bank of Einneapolis and designation as chairman of
the 13°ctzd of directors of the bank and Federal reserve agent, and inclosing
44 '1n41-
-'""8 of office and a surety bond in the amount of 400,000 executed by
41'4 0111.ayB,
8
1933, as Federal reserve agent.
The reply stated that the Board
liPProved the bond,
and that it is understood that La.. Peyton will assume
his duties
at the Federal Reserve Bank of 1,Anneapolis on May 15, 1933. The
4-4y a150
acknowledged receipt ofl-r. Peytonts letter of May 10, 1933, in
which 1,
"e advised of the disposition of all of the bank stocks owned by him.
Approved.
Letter dated May 12, 1933, to Lir. Hamer P. Clark, Deputy Chairman
Of
'?ecleral Reserve Bank of Linneanolis, prepared in accordance with the
Eleti°11' te en at the meeting of the Lxecutive Committee of the Board on May
6) 19339 and
approved by three members of the Board, stating that, in
ec'126ction with
consideration by the Federal Reserve Board of the selection
OrP
iu
s,
irn of the board of directors and Federal Reserve
:j.1111eapo,:h
4zent ateytt)T1
the by-laws of the bank were reviewed and it was
110ted
that, altho
1-1311 the article relating to the executive committee proIrides that 4,_
?ederal reserve agent shall be a member of the committee,
It 4oes not
provide that in his capacity as chairman of the board of direc-
tol% he
shall also be chairman of the executive coramittee; that, in view
lEt-I"Liel/le'zi:Ir of the fact that the executive committee is authorized to
tlel'°1se
it
between meetings of the directors all of their powers, it seems
th0
to
'''ecleral Reserve Board that clearly the chairman of the board of
clil'ect°1'8 should be the chairman of the executive committee; and that, for
298
5/l8/33
-7-
the same
reason, it seems that in Section 3 of Article III the reference to
the slA
pervision and control of the board of directors should be extended to
include that
of the executive committee.
The letter referred to the action
taken by
the board of directors of the Federal Reserve Bank of Cleveland in
this
respect in connection with the appointment of Mr. Williams as chairman
of the
beard of directors, and stated that the Board believes that, upon
tratul
consideration of the matter, the directors of the Minneapolis bank
Will feel
that similar action should be taken with respect to the by-laws of
that
bank; that it would be appropriate to make the change at the next
t eetin,
Of the
board of directors so that it will take place as an incident
to
the
filling of the vacancy in the position of chairman of the board of
clireet
and that it will be appreciated if Mr. Clark will take the
r°atter,
"1
)with the other directors of the bnnk and advise the Board as to
the
eti°11 taken.
1.4
The letter also inclosed a memorandum showing the manner
eh the by-laws should be amended in order to carry out the suggested
"44ges,
Approved.
Telegraphic reply on May 11, 1933, approved by three members of the
113ar ) to a
letter dated April 28 from Mr. Walsh, Chairman of the Federal
11"erve Bank of Dallas, requesting an expression from the Board as to whether
the
blr,laws
of the branches of the bank should be amended so as to eliminate
the Drovision
for the office of Assistant Cashier at each of the branches, or
Viletheli at
amendment to the by-laws of the El Paso and Houston branches to
briIN them
in
conformity with the by-laws now in effect at the San Antonio
1111th would
be preferable.
The agent's letter also referred to the custom
299
5/18/33
-3at the
Houston branch, when a director made two trips to the branch office
On the
sare de,)), in
order to attend a board of directors meeting and an
execUtive
committee meeting, of paying to the director a separate fee for
elach
meetin;, and stated that, as the managing director of the branch has
been
instructed to arrange the meetings so that only one fee will be paid
Instead of
two, it is believed that a change in the by-laws of the branch
will not
be
necessarY• The reply suggested that the by-laws of the Houston
aria la
Paso branches
be amended so as to make the appointment of assistant
eaehiersat those
branches optional with the board of directors of the Fedezal
reserve bank., as
is provided in the by-laws of the San Antonio branch,
ard
stated that,
in view of the agent's statement that in the future only
°Ile fee
will be paid
to a director of the Houston branch Who attends
'leetinc,
,a Of
the board of directors and the executive committee on the sane
claY's
Change in
the by-laws of the branch with respect to this matter
11°1114 aPPear
to be reauired.
Approved.
ReplY on I.:ay lb, 1933, approved by three members of the
Board, to
letter
dated May 5 from 1;:r. Newton, Federal Reserve Agent at San Francisco,
Qcl\ri814C that
he has released Lir. S. L. Stewart, temporarily employed as
a
'llexalT.aner in
the Federal Reserve Agent's department, but that, subject
'° the
bein
-LIProval of
the Federal Reserve Board, TIr. Stewart's desimation is
Qoutinued without pay in order that his services may be
available
48.tely in
cue they should be needed.
114)t'oves
roz,
the
The reply stated that the Board
continuance of the designation of Mr. Stewart as an examiner
4 Period Or s
ix
months from May 15, 1933, provided he does not leave
300
5/18/33
-9the employ of the
Reconstruction Finance Corporation during that time,
°theli than to return to
the Federal reserve bank, and that it is requested
that,
IL the event
it is found necessary to recall Er. Stewart to the bank,
the
Board be
advised promptly. The reply also stated that the agent's
letter
indicates that, should the work in the examination department of
the hellit justify
enlarging the force of examiners, Er. Stewart would be
tendered 13- Permanent appointment, and requested that, in the event such
eetion
- -ecomes
necessary, the Permanent designation of Mr. Stewart as
eXaM4
—'4•11er
be
submitted to the Board for approval.
Approved.
Letter dated I.:ay 17, 1933, to Lir. Austin, ahairman of the 17ederal
ileeellve Bank of Philadelphia, approved by three members of the Board, statin
talat, in
'1) 1933,
or the
It
accordance with the recommendation contained in his letter of Eay
the 1_card
3
has approved changes in the personnel classification plan
haak to Provide
for a change in the title of the positions of
Qe.aio
e-xaminer" and "junior examiner" to "examiner", and of the position
°r4aszistant to
or
4iklrlior
atatea
examiner" to "assistant examiner", and for the new
clerk" in the credit department of the bank.
The letter also
that, with
regard to the salaries of employees taken on under the
811ere-the-work plan, which
it appears are not subject to the percentage
decikletlohs
e411141
be
applied to
salaries
of other employees of the bank, consideration
given to the
desirability of adopting a uniform plan of fixing
3alaries which
will apply to all amployees of the bank.
Approved.
Reeerve
Letter
dated May 12, 1933, to 1.1r. ia_lden, Controller of the Federal
44k or Di
--Lchmond, approved by three members of the Board, stating
.9(
5/18/33
-10-
that, in
accordance with the recomnendation contained in his letter of
'1933, the Board has approved changes in the personnel classification
LlaY 6
Plan- of the bank to
provide for a change in the title of the positions
41Lior ezaminer"
and "junior examiner" to "chief examiner" and "examiner",
respectivelY) and, for the new position of "assistant examiner" in the
eXarraning
department of the bank.
Approved.
Letter dated Lay 17, 1033, to Deputy Governor Helm of the Federal
Re8erv
uank of Kansas City, annroved by three members of the Board, statins
,
that, i
n accordance with the recommendation contained in his letter of 711y
51 1933
) the Board has
approved changes in the bank's personnel classification
I'Lan affecting the econstruction Finance Corporation Department as
`)11 the revised Pages of the Personnel classification plan inclosed
Ills letter.
Approved.
Letier
dated Flay 12, 1933, to Er. Walsh, Chaiman of the Federal
aUk of Jallas, approved by three members of the Board, stating
tat,
— accordance with the recomnendation contained in his letter of
A
1933
) the Board has approved a change in the personnel classificatiell
4-'
4111 of the El Paso branch to provide for the new nosition of "tynist"
14 the ao
°I-Inting and service department of the branch.
Approved.
RePlY en liay 12, 1933, approved by three members of the Board, to
letter
or chi
dated Lay 1 from Er. Young, Secretary of the 1J'ederal Reserve Bank
ca o) statin
that at the neetinv; of the board of directors on Aril
302
B/18/33
28
-11-
there was
authorized a contribution by the bank of 2,000 toward the
eXPenses of
the annual convention of the Nmnrican Institute of Barking to
be held in Chicago this year, and the payment of the expense, not to exceed
rlia 00 Per
person, of a dinner to the delegates to the convention from
°tiler Federal
reserve banks and branches.
The reply stated that the Board
41P111 the Payments involved in the action of the directors.
Approved.
Telegram
dated May 11, 1933, to Mr. Stevens, Federal Reserve Agent
Ett chicam,
approved by three members of the Board, stating that the Board
41)15lave8 the application of the Ida County State Bank, Ida Grove, Iowa, for
taellberalliP in the Federal Reserve System and for 29 shares of stock of the
l'eciez111- Reserve Bank of Chicago, subject to the conditions prescribed in
tie telegram.
Approved.
Telegxems dated
May 12, 1933, to the respective Federal reserve
agetts,
approved by three members of the Board, stating that the Board
4131roves the
applications filed by the following state banks for member41111) in the
Federal Reserve System and for Federal reserve bank stock,
ellbiect to
the conditions prescribed in the individual telegrams:
at_trie___91., Bank
Number of Shares
413ital
City Bank, Charleston,
West
Virginia.
162
41 agew
Savings Bank, Glasgow,
Mi
ssouri.
Federal Reserve Bank
Approved.
Richmond
90
St. Louis
303
5A8/33
-12Telegrams dated May 17, 1933, to the respective Federal reserve
agents
approved by four metbers of the Board, stating that the Board
"
t1W18 the applications filed by the following State banks for member13410 in the
Federal Reserve System and for Federal reserve bank stock, subto the
conditions prescribed in the individual telegrams:
Name of Bank
Number of Shares
Federal Reserve Bank
licIlawood Bank at
Pittsburgh,
Pittsburgh, Pennsylvania.
75
Cleveland
844k of Hartsville,
Hartsville,
T
ennessee.
30
Atlanta
Citizens Bank and
Trust Company,
Carthage, Tennessee.
18
Atlanta
Xeat, Condit
and Grout, Bnnkers,
Winchester, Illinois.
84
St. Louis
Approved.
Tele graphic
reply on May 17, 1933, approved by four members of the
4411, to a
letter dated May 0 from Mr. Case, Federal Reserve Agent at New
With regard to
the application for membership of The Southampton Bank,
S°14114/111/t°11, New York, and recommending that condition of meMbership
tlij4het'ed 18, as contained in the Board's letter of April 24, 1933, to the
tIllthe.14Pton Bank, be modified so as to permit the bank to reduce its surplus
t0
761°00 in order to provide for the eltmination of losses and depreciation.
'
l ePlY stated that
the Board amends condition nuthered 18 as requested
44a' aa set
out in the reply.
Approved,
Reply on May 12, 1933, approved by three members of the Board
letter
cle`ted May 10 from Mr. Case, Federal Reserve Agent at New York,
304
5/16/3,
,
-13-
l'ec°1kaellclillg an extension for 30 days of the time in which the Leonia Bank
and lin, 4.
-"u Company, Leonia, New Jersey, may accept the conditions prescribed
1).
rv,,a
for membership in the Federal Reserve System.
le
th4t, in
The reply stated
accordance with the agent's recomendation, the Board grants an
"'It8ien to June 12, 1933, and that it will be appreciated if the agent will
"
8e the
applicant institution accordingly.
Approved.
Teleram dated May 11, 1933, to Er. Stevens, Federal Reserve Agent
tit chi,
'
ago) approved by three menbers of the Board, replying to a telegram
4tea
Llay
11-1
from Assistant Federal Reserve Agent Young stating that a
oe the board of directors of the Iestern State Bank, Cicero,
Illino.
18' will be held on June 12, 1935, to consider the special conditions
or Merabersh ip
prescribed by the Board for the bank; that the bank has
l'eqq.ezted an
extension of the time within which it nay accept the conditions;
411d tilat it
is recommended that the time be extended to the date of the
41
'
0c-tors,
meeting. The reply stated that the Board grants an extension to
-11116 12, 1933.
Approved.
Teleraphic reply on May 12, 1955, approved by three members of the
13Qta`l
'cli t0 a
telegram dated May 8 from 1:;r. 4alsh, Federal Reserve Agent at
tliansmitting the request of the City Savings Bank and Trust Company,
41'eveport
Louisiana,that
its application for membership in the Federal
'erve
°Y3tem be held in abeyance until further notice, pending the
.&4 1Teeti
°Plans looking to further improvements in the bank's condition.
Tho
l*E411
Y
+
--aved
that the Board will hold the application in abeyance as
O5
5/18/33
'
leglaested.
Approved.
Telegrara dated Lay 12, 1933, to Er. Walsh, Federal Reserve Agent at
Dallas
aPProved by three members of the Board, referring to the Board's
telefc'relli of Llay 29 approving the application of the Atoka State Bank, Atoka,
°klahoirin
--`) for membership in the Federal Reserve System, and stating that it
41313°ar3 from recent developments, which have been discussed over the teleD1104e with
the Federal reserve agent and Governor EcKinney, that the
4111)1 0
i allt balik's capital may be impaired by depreciation in its investments,
aria the
Board feels that
any further action pertaining to the admission of
tib3 bank to membership should be deferred pending further consideration of
the s
ubjects but that the Board's telegram is not intended as an extension
or ti
1- -Line within which the bank may complete its membership and if it
cleeize
all e xtension beyond Lay 28, 1933, it should apply for such extension
14 t4
e 14sual manner. The tele€,Tam also requested that the agent advise the
aa DromPtly as possible, of the results of his investigations and
4
e otiati,
us With regard to the natter.
Approved.
130e,ra,
'444zas
Televaphic reply on liay 17, 1933, approved by three members of the
to a letter dated ',lay 9 from Lir. EcClure, Federal Reserve Agent at
J, requesting an expression of the Board's views regarding a pro-
ai)91ication for nembership by a bank which has recently secured agreedepositors representing more than 90
of its total deposits
11e/Tirk:
the bank of all
-'aividendswhi
1 liability on 15: of such deposits, but providing
4t aIl
I may be paid hereafter will be applied in pant
5/16/33
-15t° depositors
to the extent of their waived deposits.
,M)C
The reply stated that
the (3ard is not in a Position to express an opinion without complete infOrrtiOXi rocardin,;
the terms of the agreement and the condition of the
including its
liquidity and the character of its management, and that
it 18
felt
that counsel for the Federal reserve bank should first satisfy
41111881f as to the constitutionality of any State law which permits an agreetietit
c)11 the Part of a5 of the depositors to the waiver of a certain part
of
their
deposits to bind the non-assenting depositors. The reply further
e:ted. that if
in the opinion of counsel the State law is ccnstitutional.
Etricl the
c ondition of the bank, the character of its management and the
Drospe,
'
463 for its Dature growth are such that the agent and the membership
°°11.1.11ittee
of the Federal reserve bank would be willing to recoill.end the
413P1'°vEL1 of the application, the Federal Reserve Board, upon receipt of full
"Inplete
information, will be glad to give prompt consideration to the
rtlattez
"1.11u to afford
an opportunity for the withdrawal of the application
11
'it ahould
aPPear that favorable action cannot be taken thereon.
Approved.
Tele
At chi
gram dated I:ay 16, 1933, to /,:r. Stevens, Federal Reserve Agent
ePproved by four menbers of the Board, referring to the applica-
ticz
r the
Suburban Trust and Savings Bank, Oak Park, Illinois, for per-
withdraw imnediately from membership in the Federal Reserve
Yeteta
atcln,ot
The teler,ram stated that the Board waives the usual requirement of
4t118 notice of intention to withdraw and that, accordingly, upon
sqz,z,et,
cl
"
Or the Federal reserve bank stock issued to the Suburban Trust
Bank, the Federal Reserve Bank of Chicago is authorized to cancel
307
5/18/33
-16Such
stock and make a refund thereon.
Approved.
Letter dated May 12, 1933, to LTs. Stevens, 2ederal Reserve Agent
at chiuago, approved by three members of the Board, stating that the Board
has ewnsidered
the application filed by the National Bank of ilartinsville,
lane, ,
lor Permission to act in all fiduciary capacities authorized under
8eC tiOn 11„
-
of the Federal Reserve Act and that, while it appears that
c
andltion of the
institution is satisfactory and that its management is
caDable
)lii view of the
brief existence of the bank, the Board has deferred
action
°n the application
until after another examination of the institution
has be
-11 made, and it is requested that the agent so advise the national
bianki
Approved.
Reply on May 12, 1933, approved by three members of the Board, to a
letter
'&u(iressed by Er. J. R. Monroe of the legal division of the Recon8.4
'
11ct•
1°11 2inance Corporation to 1.x. Angfield, Assistant Counsel of the
tolkra
l'equect1flU an informal expression as to the attitude of the Board
eertadn amendments to the articles of incorporation of the Central
8
he
or o4k
d,
California, providing for authority to pay a dividend on
c3n1111°10, stock of that
bank.
(IllieTti°11 to the
The reply stated that the Board offers no
amendments if they meet with the approval of the
Finance Corporation and the payment of such dividend will
114 rea4lt in
violation
1)1;11Le
any of the conditionsof membership prescribed
311c1 accepted by the bank at tne time of its admission to
Illberehii) 1n the
Federal Reserve System.
308
5/18/33
-17Approved.
Telegrean dated May 12, 1933, to Mr. Hoxton, Federal Reserve Agent
Fticbmond, approved by three members of the Board, stating that, while
1111cler the law the proposed reduction in the capital stock of the Baltimore
CQ411116/rei51 Bank, Baltimore, Maryland, involved in. a tentative plan for the
e°1'ettilization of that institution, does not require approval by the FedReserve
Board, the Board has considered information submitted in
°Ille
"
t1010. with such tentative reorganization plan and, in the circumstances,
Will c)fter no objection to the proposed reduction.
that
The telegram also stated
it appears,
however, that the plan contemplates no assessment on the
11°1(iere or the stock of
the bank which will be exchanged for stock in the
Ileltitlore
eil'et, to
Commercial Company and it is assumed that consideration has been
the question of preserving for recourse, if necessary, the assess-
illetlt li
ability of the bank's old stockholders; that it is also assumed that
the
reopening of the bank
is conditioned upon ample liquidity and the
eli
nation of the
ttan of borrowed money prior to such reopening; that it
415e0s that
the old management under whoin the unsatisfactory conditions
delreloped
will be retained in the reorganized institution, and that it is
1441Z66, that
the agent has considered this matter fully. The reply further
t.crted,
9.1rt
borrowings of the present directors are in excess of the bank's
°11°11sci new
capital and that a number of such directors' loans are subject
to
oriticimn and it would seen that this and other matters commented upon
4415414 be
satisfactorily adjusted.
Approved.
•tj,el-ft
5/l8/33
-15Letter datedEay 12, 1933, to nr. Case, Federal Reserve Agent at
New york,
stating that it appears that the holding by the Bloomfield Bank
44dTrUst Company,
Bloomfield, New Jersey, of 96.5% of the stock of the
liatee
ssing Bank of Bloomfield disclosed by the analysis of report of exam1 "ion of
the former as of Novenber 5, 1932, may be a change in the scope
Of the rletber bank's
functions within the meaning of the condition under
which it was
admitted to membership in the Federal Reserve System, and that
it will be
appreciated if the agent will advise the Board in detail of the
tacFte i
nvolved in the investment by the member institution in the stock of
tileWatsessing Bank and of his views as to whether any action should be
t444 at
this time, either by the Board or the Federal reserve agent's
°trice)
CO1Th1jj01 with the matter.
The letter also requested detailed
11144"1/at1on regardi113 the relationship of the member bank with the Essex
Title
Guaranty and Mortgage Company, in the stock of which the member benk,
"e0N113.g to the
analysis of report of examination above referred to, has
1/1'esent
investment of .140,000, and which it is assume Is a conversion
Of
'41e Lossex
Title Guaranty and Trust Company in the stock of which the men-
bel'hattk had
an investment at the time of its admission to membership in the
Nisral
Reserve system.
The letter further suggested that the agent consider
//le Etqvis
ability of discussing with the Comrdssioner of Banking and Insurance
Or the
State of New Jersey the question of a further reduction in the company's
cillticlelicle, if not
an entire elimination thereof, advising the Board of the
NtIlte of
any such discussion and of any improvement whichmay be affected
114 the con
dition of the member bank.
Approved.
5/18/33
-19Reply on May 17, 1933, approved by four members of the Board, to
8' letter dated
April 27, 1933, from Mr. Case, Federal Reserve Agent at Mew
York,
which he referred to the Board's letter of April 13, and inclosed
Et letter
dated April 23 from the Chairman of the Bank of the Manhattan
a°111Dany, New York
City, stating that the institution is in the midst of an
e444allation by the Clearing House Association, and that it is planned upon
111; a report of the examination to make such charge-offs and
Etilocatiorla
1/11clel" the
to reserves as may seem proper.
The reply stated that while,
Provisions of one of the conditions of membership prescribed by
the Board.
und accepted by the bank, at the tire of its admission to member"1 the
Federal Reserve Systam, the bank agreed to make such arrangelaents or
adjustments of
its assets as, in the opinion of the Federal Reserve
13cktrcl, Would
be necessary on the basis of the reports of examination by the
8tEtearki
l'aet
that
denartient as of November 18, 1932, the Board, in view of the
the bank is now in process of examination by the Clearing House
Aeeociation, will await the completion of such examination before taking
trtY
rurther action
with regard to requirements as to charge-offs or
11110eation or
reserves. The reply also stated that it will be apnreciated
ir the
acent will forward to the Board an analysis of the Clearing House
ellhation
has
reoort, together -rith advice as to what action, if any, the
taken toward effecting charge-offs or providing reserves against
nay be subject to criticism in such report, and that in making
e'cli4z1 t1entE3
zholtld
Dti
follovzjng the examination the Bank of the Manhattan Company
keep ---,
mind the Board's usual policy of requiring an institution,
to its
admission to membership, to charge off, or otherwise eliminate,
311
5/1041/33
411
-20--
estimated losses and depreciation on stocks and defaulted bonds and on
"I*itiee other than those in the four highest grades as classified by a
ec()grtized investment
service organization regularly engaged in the business
Of
rattag
or grading securities.
Approved.
Letter dated May 17, 1933, approved by four members of the Board,
to
Austin, Federal Reserve Agent at Philadelphia, stating that, in view
or
the
information submitted by him, the Federal Reserve Board will take no
"ti°11 affecting
the membership of the Princeton Bank and Trust Company,
Princeton) New
by reason of the absorption by that institution of
XerseY'
ltearrillate, the Princeton Securities Company, but that it is requested
that
.414 agent require the bank to make an adjustment as soon as possible
the
°41‘rYing value of the proportionate interest in the securities company
7141°4Wae t
ransferred to the books of the bank on December 31, 1932, and
thet
the Board
approves the proposed request by the agent that the acquired
assets be
carried by the bank in a separate account and that such assets be
ligtlidated as
eteted
rapidly as possible without undue sacrifice.
The letter also
that the
Board will take no action at this time regarding the
4Nikisition by the
bank of 34 shares of its in stock through the absorption
the
assets of the Princeton Securities Company, although the bank should
be
acbrised that
such stock must be disposed of as soon as possible, and that
the Boerd
notes with approval the action of the agent's office in advising
the balik
that the Board does not look with favor upon commercial banking
itstitUtions engaging in
the business of selling mortgage loans to the
1311blis either
directly or through affiliated corporations, even though
414(41kortgages are sold without recourse.
Approved.
312
5/18/33
-21Letter to Mr. Austin, Federal Reserve Agent at Philadelphia, stating
tilat'in view of the info
tion submitted by him, it is apparent that the
alb80ntion of the V1anart State Bank, Wart, Pennsylvania, a nonmember, by
the wane
County Savings Bank, Honesdale, Pennsylvania, as of December 12,
431) has
resulted in no material change in the general Character of the
assets of,
or in the
scope of the corporate Dowers exercised by, the member
itstitUtion 'within the meaning of the general condition under which it was
aanlitted to
tenbership and that, in accordance with the agent's reconnendation, the
Board will take no action affecting the membership of the Wayne
Colltty
savings Bank by reason of the transaction. The letter elso stated that
it
seems
evident, however, that the condition of the member bank is one which
eella for
test
vigorous efforts to obtain prompt and material corrections, to the
extent Possible, of the many unsatisfactory features existing in
the
situation, and that the Board will appreciate being advised by the
4gelat's
office in this connection, and of any improvements effected either
tilzi°401
Personal contact with the bank's manRgement and directorate or in
e°oPeration with the
State banking department.
Approved.
Letter to Mr. Austin, Federal Reserve Agent at Philadelphia, prei•n ac
cordance with the action taken at the meeting of the Executive
C°113raittee or
the Board on May 10, 1933, with regard to the alternatives
k'olztoseci by
Mr. C. S. Noviha11, Vice President of the Pennsylvania Company
't(31'
Inatirances on Lives and Granting Annuities, Philadelphia, Pennsylvania,
111 1118
letter of May
1, 1933, in connection with the disposition by the
11°411a/117
Et
COrapany
of the stock of the Mein Line Trust Company of
313
5/18/33
-224L14°e, Pennsylvania.
The Board's letter stated that the first of the four
41te/ill tive suggestions submitted would not neet with the Board's approval
1560allse the
only
change in the existing situation which would result there-
ttaaLwould be the
elimination from the existing declaration of trust of the
IDI-sicln which authorizes the trustees to transfer and assign all of the
stock of
the flAin Line Trust Company held by them to the Pennsylvania
C°111138zY on such
terns and conditions as the trustees may stipulate; that, in
the li
of the statements made by L. Newhall, the fourth alternative,
Which con
templates the closing of the bank, would not seem desirable since
it Would
deprive the community of banking facilities which appear to be
Ilee ed,
and la..
Newhall states that it would give rise to severe criticism
or the
Pennsylvania Company; but that either the second alternative providing
the declarat
ion to the stockholders of the Pennsylvania Company of a
(141elella
consisting of the stock of the 1.1ain Line Trust Company, or the third
t-lternative
providing for the sale of the stock to outside interests, would
be
4cceptab1e to the Federal Reserve Board, provided that it is carried out
wit4i4 a
easonable time in such a way as not to retain in the Pennsylvania
C°k10.ftty,
directly
or indirectly, any interest in or control of the lain Line
C°111PanY, althouch the second alternative would not be satisfactory if
th6te were
coupled with it any arrangements by which the stockholders of the
Ylvatia Company
would be prevented from transferring the stock of the
114111 Line
Trust Company freely mid without any restriction whatsoever and
iltil°4t
at
the same time
transferring their stock in the Pennsylvania Company.
liThe letter also
stated that it is believed that the Pennsylvania Company
414" than the
Federal Reserve Board should decide whether the second or
t41
"alternative
should be adopted, and that when the company has reached
314.
5/18/33
-23Et dei'inite decision
and has advised the Board, it ',All be glad to consider
thecluestion how rauch tii:D should be allowed for the consumation of the
Eul 8'doPted by the Pennsylvania Company.
The reply further stated that as
the 8Ge°11(1 01' third alternative is acceptable to the Board, it would not
seem ne
c"sary for Lir. Newhall and Er. Eason, Chairman of the Eain Line
Cork)any to come to Washington, as suggested by Er. Newhall, for the
134113Q
"or discussing the matter with the Board.
The Federal reserve agent
17" el-s o requested to transmit a copy of the letter to .12Lr. ITewhall and to
ellaeavor to
ootain from the Pennsylvania Company prompt advice as to the
4etien
"idea upon with respect to the matter.
Approved.
Letter dated Lay 11, 1933, to Er. Newton, Federal Reserve Agent at
'Itianta,
approved by three members of the Board, referring to the analysis
or
report of
Eta or
examination of the Trust Company of Georgia, Atlanta, Georgia,
October 31, 1932, and to the agent's letter of December 31, 1932,
e to the
Principal criticisms of the institution and stating that the
lIce.rd is
Zecl„„,
comp
e
ntirely in accord with the criticisms of the examiner and the
reserve arent relative to the syndicate operations of the trust
Y in the
stock of the Coca-Cola Company and the Continental Gin Company;
tlit it is
assuined that, in. accordance with the advice received from the
()I'licerri of
the trust company, the practice of participating in such
0
1)eZations has
been discontinued; and that the Board feels that the trust
D4riy, if it
has not already done so, should take appropriate steps as
a°04 as
practicable to reduce sub °tent ia.11y the large concentrations in
thee° and
ether
eormnon stocks, and to correct its books so that they will
r)1A 0-
5/18/33
-24-
show the
liability of the trust company for its proportionate part of the
8z1101Jxt
borrowed by the syndicate.
The letter also stated that the large
doPoslt of
:
,,;6,000,000 made by the 2irst liational Bank of Atlanta in the
e
°InPanY appears to be more in the nature of a loan than a deposit and
faX in excess of
the legal loaning limit of the national bank; that the
illzestnent
Of a large proportion of these funds in speculative comon stock
also
an unsound
Practice; and that it is suggested that the agent dis118.8 this excessive
loan with the chief national bank examiner of the
ciltriet with the
view of enlisting his cooperation in the correction of
this
Unsatisfactory feature of the trust company's condition.
The letter
suGcested that the agent have an examiner participate in the next
eZezlination of the
trust company and that the Board be advised in detail of
provQaent effected in the conditions which were subjected to
eritie t
in the last report of examination, together with the agent's
ndat ions
and requested that the iloard be furnished with
a complete
ee'PY or the
report of the next examination in addition to the customary
thezeof.
Approved.
Letter dated Llay 11, 1933, to the Comptroller of the Currency,
k131)1
'
°11`ed by
three members of the Board, enclosing a copy of the letter to
the :Tecierea
Reserve Agent at Atlanta, above referred to, in connection with
the
Qriticized natters disclosed in the report of examination of the Trust
°Ilr of Georgia
and stating that the Board's letter is brought to the
4ttentiOn of the
Comptroller of the Currency for the reason that one of the
114'1°1' l'iticiards
relates to the large deposit of .)6,000,000 of the Arst
316
3/3433
-25-
NEtti°11a1 Bank of Atlanta in the Trust Compary of Georgia which is regarded
beinC 'More in the
nature of a loan than a deposit; that it will be noted
that
the trust
company has been engaged in certain investnnnt operations
Which are
not in accord with sound banking Practices; and that the information is
referred to the Comptroller for whatever action he nay desire to
t ke in
the premises.
Approved.
Letter to the Comptroller of the Currency, replying to a memorandum
dated
APril 12, 1933, from the Acting Comptroller and to a memorandum dated
1.-.sy 10
from LIT. Gough, Deputy Comptroller, relative to the proposed
-- in the capital stock of the Patapsco National Bank, Micott
from .,)100,000 to .50,000.
The reply stated that while the Board
la ill
sY111PathY with tile desire on the part of the depositors and others
the bank to reorganize its affairs, it feels, in view of the
e*Q141stan
—Ce8 referred to in the letter, that it cannot properly grant its
11111)rov,
1
-4. Of the proposed reduction in the capital stock of the bank as a
Deal cyp
the c
ontemplated plan of reorganization.
Approved.
Letter dated Liay 10, 1933, to Fir. Wood, Chairman of the Federal Reof St.
Louis, commenting upon the various natters referred to
14 the
1-'312°rt of examination of the bank made by the Board's examiners as
t the close or
eliq the Boarats
to the Et
business on Tanuary 28, 1933, and reeuesting that the report
eirt ionletter, as well as the chairman's reply thereto, be brow-lit
tt
of the directors of the bank and that the Board be advised
().1
'their conrents
on the findings of the examiners.
-26Ap-or oved.
Letter to the Comptroller of the Currency referring to the cableam
receiv-,
by him under
date of :.:arch .12, 1936, from I:r. Prickett, National
hnk
.
in which He advises that the London office of the International
Bezati
n C°rPeration is inactive and that he does not think the results to be
e'c°1111)lished would justify the expense of an examination.
The Board's
letter stated
that in view of this information and the advice received by
B°E1I'd from the
International Banking Corporation that the activities of
its London
office are confined principally to the acceptance of bills drawn
011 them by various
branches of the National City Bank of New York, and that
the
London branch
has no dealings with the public and its assets consist
IllaInlY of
cash and due from banks, the Board will not require an examination
°I' the London
branch at this tine and will appreciate it if the Comptroller
°f the CurrencY will so advise -Cr. Prickett.
Approved.
Reply on ,'air
16, 195'), approved by four members of the Board, to a
letter
St
dated 118.y 5
\food, Chairman of the Federal Reserve Bank of
from
L01115 ,
replying
to the Board's letter of April 29, 1953, (::-.7425), on
the
subject of
indebtedness of officers and anoloyees, and calling attention
to a
resolution adopted by the board of directors of the hank on Nay 20,
3431) to
the ei?F'ect
that officials and erployees of the St. Louis bank and
its
branches must
not borrow from member banks within the Eighth Federal
ile4ez`Ve
District. The reply stated tint it is noted that the resolution
4131141'entlY
Provided only that officials and employees of the bank and its
rauat not
borrow from member banks in the Eighth Federal Reserve
)
4 k.,
5/18/33
-27'strict. that the
views expressed in the Board's letter of April 29 were
llot 00,,p.
-4.1ned in their application to rember banks in the district, but referred
t° 411Y indebtedness
which might be incurred (except for current bills for
°I'dinarv
Personal and household expenses), contemplated that reports should
be 1114de to the
Board of Directors, and referred to connections of officers
fld
emPloyees with business concerns; and that, in the circumstances, it is
113t clear to the Board
whether all aspects of its letter have received the
ec'lli(leration of the directors of the bank, and, if not, it is assumed that
they v7111 'Qe [-riven careful consideration and the Board advised as to the
ation taken
inall these respects.
A bpi- ov ed.
Re13
-. 1Yon May 13, 1933, approved by four members of the Board, to a
le tter
Uated,
April 24 from Deputy Governor McKay of the Federal Reserve Bank
c) Chicago raising certain questions with regard to the assessmont of
loorialties for
deficiencies in reserves which do not appear to him to be
Nlly
covered by the Board's telegrams of March 30 and April 8, 1933.
The
l'eTly
stated that the
loard.Ts telegram of April 8 advised the Federal reSO e
bEtriks that the
Board would interpose no objection to the non-assessment
pe/izilties for
deficiencies in reserves of member banks from March 1 to
11
15
e'lls08 where member banks did not have an adequate opportunity to
tore
de-eicient reserve balances to amounts reouired by section 19 of the
eqe
ileserve Act and that, accordingly, assessment of penalties for
l'eeeti\re (lefi
ciencies of menber banks located in reserve cities for the week
arch 16. is
not required if, in the opinion of the Federal reserve
1) 4k) e4eh banks did
not have an adequate opportunity to restore their
314 9
5/16/33
-28reserves for the week to the re(luired level.
The reply also noted
tha:t certain unlicensed member banks in the Seventh Federal Reserve District
llave not o
,-)ened special accounts with the Federal reserve bank for the
clepocit o2
tho proceeds of segregated new deposits or have not maintained
in ail&
accounts balances sufficient to cover the amount reruired as reserve
sitch new deposits and that Er. ::aKay recommended that penalties be
not
a'a8essed in such cases, because these banks were not advised until April
11
to the
requirement for reserves against such deposits and in all cases
or thi8 killd the banks had sufficient funds in their reserve accounts with
t48 2e4eral reserve bank to cover the reserve required on the segregated
ne
clePosits, and stated that, in the circumstances, it is the Board's view
t44t Peaalties should not be assessed in these cases.
The reply further
bcite(1 that the
Board interposes no objection to the non-assessment of
Derlelties incurred by
the newly admitted member banks referred to in L:r.
letter on account of deficiencies in reserves which were due to
1111.1114erstaildin{:; or misinformation as to the reserve requirements and which
(111‘reci prior to the time that correct advice as to the reserve recuirement
174
rIlrIliShed to such
banks.
Approved.
Letter
dated4
%.e
134111
or
1.1ay 11, 1933, to Governor Harrison of the Federal Re-
New York, prepared in accordance with the request made at
t4""t14'.; of the
wxecutive Committee of the Board on May 9, 1933, and
:1131)1reci' by three
members of the Board, referring to the Board's letter of
2Q) 1933) with reard to the account maintained by the Federal Reserve
-41t Or 1York with the Bank for International Settlements, and stating
5/18/33
-29-
that as the
records of the Board do not show that any reply to this letter
448 been received, the
Board will appreciate it if Governor Harrison will
a4718e it Bally in
response to its letter, or, if a reply has been transraittea
Previously, the Board
will appreciate receiving a copy thereof for
it.8
consideration.
Approved.
Letter to Lr. Winthrop W. Aldrich, President of The Chase Bank,
Nev77k. J1 r Yaw 7cw1:, replying to a letter dated ::ay 10, 1933, from the
Cezh ier
02 the bank statinc that, due to the bank's inability to acquire
el'Iltable
premises for the purpose, it has not yet opened the agency in the
Chinatown section
of New York City, the establishment of which was approved
bY the 3°arcl in its letter of Decenber 15, 1932, and requesting an extension
mozitits of th,,,?, tine within which the agency may be established.
Nay
The
stated that, in
accordance with the request, the Board extends to
1)"eillb er 15, 19;,-3.2:,,
the period within which the proposed agency may be establishe(1) z3ubje0t to
conditions (a) and (c) set forth in the Board's letter
or 1)ecerabor 15, 1932.
Approved.
Letter dated May 13, 1933, to L. Newton, Federal Reserve Agent at
414
approved by three members of the Board, replying to Er.
4t'elltt8 letter of May
1 inclosing a certified copy of an amended agreeIlent betwee4 ,,e
li'ederal reserve agent and the Federal Reserve Bank of San
0.
411 laC° C°1feri1-
the custody of unissued Federal reserve notes at the
el
"
, 3a1t Lake City and Portland branches and advising that the
l'e()Illtic)11 adopted by the directors authorizing the execution of the agree-
)
C
21_
5/16/33
-30-
illerit had been amended to conform to the changes made therein as suggested
illthe3c)ard's letter of April 14, 1933.
iieserve
The reply stated that the Fed-
Board has no objection to the establishment of the arrangenent
Pr0v1ciecl in the agreement for the custody of unissued Federal reserve notes
at the ,
uranches named, with the understanding that the Board may require
the au.,
4.- gement to be modified or discontinued whenever it may deem it
tc11118able to do so.
Approved.
RePlY on nay 11, 1933, approved by three members of the Board, to
a
letter
dated IT 3 from Er. Stevens, Federal Reserve Agent at Chicago,
4Q1Zowlecif,.
'
,1ng receipt of the Board's letter of 1.ay 1, 1933, with regard to
the
"Ipeed4re to be followed in connection with possible violations of the
°141°11
118'114
and stating that there are a few cases in the district involvin
whicil are
closed and that it is assumed that, until such time as they
l'e°13ened,
nothing need be done about the matter.
The reply stated that,
e'itil°11/th it is not felt that applications are necessary in the cases rere ed
in the
agent's letter at this time, it would nevertheless seem
to
11)111'(3131
'
1Elte to proceed in the manner indicated in the Board's letter of May
1
that 41,_
"'Ito. persons involved may be advised of the necessity of obtaining
if they
e wish to serve such banks when they are reopened and in
whel
'e the agent feels that he is not prepared to recomnend the approval
'I'Dlications
that such parsons be advised of that fact.
Approved.
1?eci.
Let+
.er dated May 10, 1933, from Mr. Crane, Deputy Governor of the
e--rlie Bank of New York, stating that all participants in the
6)C-14-1
5/18/33
-31-
4*Illsbank credit
have agreed to an interest charge of 4;; per annum on the
82413114t
of the credit
outstanding during the period from March 4 to April
13
'19331 on which
latter date the credit was repaid, and that interest at
til'at rate
has been paid by the Lieichsbank.
Noted.
IlePlY to a letter dated May B, 1933, from flr. Burgess, Secretary
Or the
Opea flarket
Policy Conference, transmitting a copy of a tentative
araft of
the minutes of the meeting of the Open Market Policy
Conference
held in/
ashin,
,,ton
,
on April 22, 193'0. The reply suggested a change in the
lOçt
to the
last paragraph of the tentative draft with regard to the meeting
or the
conference
Which has be,
'leetillg of the
With the Board, and called attention to the consideration
e;iven by the Board to3 the three resolutions adopted at the
Conference.
Approved.
Letter dated May 17, 193:J, to Mr. Paul Bestor, Farm
Loan Commissionel%) al3131'°ve(1 by three members of the Board, referring to the recent conIrelitl°1.1 between Messrs.
Carson and Cagle of the Federal farm Loan Bureau
11(1';a1"Int CeUnsel Vest of the 'Federal Reserve Board, from which it is
4114(31‘24.
°°c1 that the aia
Loan Commissioner desires that checks in payment
(1r
al or
interest on loans made Pursuant to the provisions of section
4 °I' the Act ,
Laij 12, 1936, the Agricultural lielief Bill, be made payable
t°
'2441M Lo::
prope_ay
in
u
sioner or to his field agent and deposited by such
indorsed, directly with the Federal reserve bank of the
which such agent is located in the general account of the
the United States for credit on the books of the Treasurer to
C109
5/1EV33
-32the
'
-'count of the Farm Loan Ccunissioner, subject to the provisions of the
18411rY DePartment circular
176; and also that checks drawn by
4141icants for such
loans, in payment of expenses of appraisals or other fees
arld
cornmissions incident to the making of the loans, be deposited with the
Icieral reserve bank under the same arrangement but for credit to a special
accoUnt of
the Farm Loan Commissioner on the books of the Treasurer of the
$tates.
The letter stated that in order to ascertain whether the
3ev°ral 2ederal
uncler the
reserve banks would have any objection to handling items
arrangaments described, the Federal Reserve Board comunicated by
Wize with
each Federal reserve bank and is advised that none of the Federal
l'el"re banks has
any objection to the handling of items under the arrangerr4artts
described, except that the Governor of one bank has advised that it is
to :make a
commitment for the bank without knowing some of the details,
1)14
that it is
the desire of the bank to cooperate in every way, and that,
1r the
"
coUnt becomes so
active as to create a large amount of additional
e:q)elase,
it is
assumed that the Farm Loan Cormis loner would be in a position
414 be wil,.n,
to reimburse the Federal reserve bank.
Approved.
°I1 LIEw 10, l9, approved by three members of the Board, to
4
letter
dated April 26 from the Acting Clerk of the Committee on Banking
4144 ClIrrency
of the Senate inclosing a letter from I:essrs. Hawthorne,
*t€tr(Irci
Pitts of Alexandria, Louisiana, stating that that firm represents
tilehelaer 02
,I.lezariazia,c::::::iadbonds issued by the Lutual Loan and Investment Company
by a mortgage under which the Interstate Trust and
111"1411
Co.mpany of New
Orleans is trustee; that the firm is desirous of
321
obtaini_
4-"G" from the trust company the names of all the bondholders in order
th" the y inglY communicate with them with a view to making arrangements to
Plic)teet the
bondholders interests; and that the trust company has refused
top,
,urnish the names.
The rely stated that while the Federal Reserve Board
Derforas
certain duties of a supervisory character with respect to member
heilks of
the 2edera1 Reserve System, it is not within the scope of its lawAli
functions to undertake to detemine the rights of the parties in a
3ituation such as
above described or to remire a member bank to take any
acti°11 with respect
thereto; that the subject is one which appears to be
'.(311'1.1ecl by the applicable local law; and that, in the circumstances, the
is not in a Position
to advise regarding the matter.
Apnroved.
Reilly on May 10, 1933, approved by three members of the Board, to
4 letter dated
Anril 21 from Senator Lorris Sheppard Quoting a communica-
2rell, Honorable
Learance
Nathan Adans of Dallas, Texas, advocatinr- the direct
or
checks through banks instead of through the gold settlement
1\114
. The reply
stuted various reasons why, in the opinion of the Board,
the
aaoption of the
su >7eJ tion would not be advisable.
Approved.
Reply on May 13, 1933, approved by three members of the Board, to
letter
dated 1.14._
y 2 from Assistant Secretary of the Treasury Douglas, recIllestirl
,
that
there be Prepared far the signature of the Secretary of the
TZeaz41,11.
report to the Chairman of the Comvittee on Banking and Currency
or
the
Senat with
regard to S. 1539 a bill to amend Section 13 of the
_
11e A,
R--''Te Act, as amended, with respect to rediscount powers of Federal
25
-34Ileeerv° bankThe reply enclosed a draft of a proposed letter to the
C1141r-nan of the I3ankirig and Currency Cormittee of the Senate for the signatUre of the
Secretary of the Treasury, statin:- that under the provisions of
the
bill the
Federal Reserve Board would be authorized, for two years after
its e-,
ctaent, to permit any Federal reserve bank, during such periods as
the T1,
-yard Might determine, to
discount obligations of any State, county,
cliztrict)POlitical subdivision or municipality, including irrigation,
cirainarLe and
recltion districts, for any individual, partnership or
ccz,poration, including the body issuing such
obligations, when they have a
tlaturity from
the date of discount of not exceedin,
_; six months and are
issue(' in
anticipation
of the collection of taxes or of the receipt or
atIreci r
evenues.
The proposed letter also called attention to subsection
(b)
Section 14 of the ITederal Reserve Act and stated that, for the
l'easons
outlined In the letter, it is believed that the discount in sub-
8t4tial amounts
of ob1i2;ations of States and their political subdivisions
rair:ht serious,_
the runction
:
imPair the ability of the F
- ederal reserve banks to perform
thererore, .s
i
for which they were created, and the Treasury Departr_ent,
oPposed to the enactment of the bill.
There was also
Illelit ecl a similar
report dated i.lay 13, 1933, approved by three menbers
the (:)Eirci.
and 8if7ied. by the Secretary of the Board, to the•.;hairrilan of
tile Be.tithip.
N
d Currency Coirraittee of the Senate, in response to a request
eived
from the
Committee under date of ',lay 1, 1933.
-Acting Clerk of the
Approved.
the 1,1,ect, —randUm to -LI.. Steven B. Gibbons, Assistant to the Secretary of
'"11.17, with regard to a proposal of Lir. Tinian. C. Safford, Vice
P.2e
5/3-8/33
-35President o2 the
Western and Southern Indemnity Company of Cincinnati, Ohio,
that
the Federal Reserve Act be amended so as to extend the privilege of
recliscountin:: at the Federal reserve banks to life insurance companies
licensed for the
purpose by the Secretary of the Treasury.
The memorandum
c)illined reasons why the
Federal Reserve Board considers the proposal to be
761'Y
Material departure from the fundamental purposes of the Federal
Res°r1le Act and
stated that to add this function to their already heavy
bl"Lens might seriously impair the ability of the Federal reserve banks to
Ibt°11/11 the
functions for which they were created.
Approved.
There was then presented for the record the following expression
ItcloDte(i
bY the Federal Advisory Council at its meeting on Tay 16, 1933:
"The Federal Advisory Council desiresto place on its
ree°rds this minute expressing its great satisfaction and
7
1 atification in the way the general situation has been
21Ded by the President's leadership and by the action of
411e . Con:7,ress
in passinL; so promptly the emergency banking
C1slation of I:arch 9, 1933.
the :The
"The reollenin of sound banks has contributed largely to
of public confidence. A careful survey shows
the whole banking situation is steadily improving. In
al
"of the successful results of the constructive measures
far undertaken the Council has given careful consideraon to the wisdom of enacting further banking legislation
session of the Congress and has discussed especially
s.
-1-63l and H.R. 5593 (the Glass and Steagall bills).
The
the many constructive features
eMb odied . Council recognizes
0
,
in the two bills mentioned such as the divorcement
tl affiliates from banks, the regulations as to qualificaze°112 for directorships, the limitations placed upon officials
thrvin with companies handling investment securities, and
The Council believes that many of these provisions
ifeelntet.
ed into law will be beneficial to the country.
327
5/34/33
-36.
"On the other hand, the Council questions the advisability of Preventing in the future banks from participating
in long term capital financing. The Council would point
Out that
with the complete elimination of banks from all
tYpes of underwriting it is likely to prove impossible to
Place at the disposal of commerce and industry the funds
needed for the progress of industrial development in this
country. There are sinply not available outside of the
banks sufficient accumulations of capital to handle the
financing
and refinancing required.
"Above all else, the Council is vigorously opposed to
•
Principle of the guarantee of bank deposits as provided
f°r in the bills under consideration. It believes that
"en as an emergency measure such a step is both unnecessary
at the
present time and doomed to failure in practice.
the
"The Council realizes and admires the faithful and conscientious study that distinguished members of the Congress
I. ave.given to the banking problems, but it ventures to ask
View of there being an entirely new administration in
,
11? DePartnent of the Treasury and a new Governor of the
42ueral 'Reserve Board whether it night not be wise to allow
nese new financial authorities more time for a still more
Ilorough study of the situation and the formulation of
Policies based thereon."
flz. Lorrill
presented a memorandum dated Kay lb, 1935, from Er. 1. A.
4'116) Chief of the Statistical Division of the office of the Comptroller
01
CUrrency, attaching
a copy of a resolution adopted by the Senate
C°11ittee °n Banking and Currency requesting the Comptroller of the Currency
t° ObtEtin for the Committee information as to the number and aggregate
118'1e/ices of
all deposit accounts of national banks segregated as follows: (a)
118'4"Is 11°t exceeding 12,5OO, (b) over
'2,500
and not exceeding ,:15,000, (c)
and not exceeding .;10,000, (d) over ,10,000 and not exceeding
and ,e‘
k ) in excess of ,)50,000; Kr. Kane stating that, in accordance
111*t11 this r
onuest,
0
zlnation
telegrams
were sent to 41,8311 national banks requestingthe
as at the
close of business on Ilay 13, 1933.
L:r. Lorrill raised
328
5/18/33
-37the
question whether the Board desired to obtain the same information from
State
member banks.
After discussion, the Secretary was requested
to send a telegram to all Federal reserve agents
asking that they obtain the same information from
State member banks by telegraph and forward it to
the Board by air mail.
RePlY to a letter dated Eay 17, 1933, from Assistant Secretary of the
l'reastirY Doucias
, stating that, during the recent banking emergency in
17ashinton, a
large amount of Federal reserve notes of the Federal Reserve
84111
'
,:e or
ilichnond, Chicago and New York was paid to the local banks by the
Tzeasurer of
the United States; that, with the return of more nearly normal
bealkinr,;
conditions in the community, these notes have been returned to the
Trectall-rer of the
United States, resulting in an accumulation of over
\40)000,000 of
such
notes; that the Treasury holds .12,200,000 of notes of
te
P'ederal Reserve
Bank of Richmond which are still in the original sealed
l'aes; that
9800or circulated notes may well be disposed of; that
14 f,
'0111'erence with
representatives of the Federal Reserve Board it has been
.allestecl that
the sealed Packages be returned to the Bureau of Engraving
cl.rtine
and placed in the reserve vault of the Federal Reserve Board, and
thal the '91800,000 of circulated notes be redeemed in the usual manner; and
that it
will be
appreciated if the Board will advise prorptly if this proCe(1111,
12
,
factory to it, as it is desired to receive credit in the
Z%Ul'el"s account
for the notes before the end of the current week. The
inclosed a
copy of a letter addressed by the Board to the Comptroller
°r
041,:celley,
bY
r2reasurer
requesting that arrangements be made for the return today,
Of the United States to the custody of the Comptroller of
329
5/1a/33
the
Cul
'
rencY at the Bureau of Engraving and Printing, of the ,A2,200,000 of
Federal reserve notes of
the federal Reserve Bank of Richmond held by the
Tree
surer which are still in the original sealed packages as received
from
the Dux__
't't1 o
ngraving and Printing, and stated that with regard to the
ts9)6()°
'
°°() of circulated notes it is understood that the Treasurer of the
Utited
States has made arrangements to have these notes redeened in the usual
rilariner) and that
the Board sees no objection to such action.
Attention was
ea-lied to the
fact that the adoption of the proposed procedure in returning
the PEtekaF,'ed notes of
the federal Reserve 3ank of IZichmond to the Bureau of
111PT,n
--411111 and Printing has been requested by the Richmond bank.
Approved.
14
LIamor
A
Lalln
Of
dated :.:ay 17, 193.i, from lIr.Smoad. Chief of the Division
OPerations, stating that, in view of the provision in the Dmergency
'
:°rtgage Act of 1933 making all coins and currencies, coined or issued
by 0„
Una
er the authority of
the United States, legal tender for all debts,
13111:11.10 0
r Private, it
is reconrended that the following changes be made in
tiler
I"klY press
Statenient showing the condition of Federal reserve banks:
4:
(1)
eu*ine amounts
now shown against the items "Reserves other than gold"
cash" into one item "Other cash", (2) change the item
%te
'
l lieserves,, to
"Total gold reserves and other cash", and (3) change the
44acIra
m
item "Ratio of total reserves to deposit and federal reserve note
combined"
and
41,10 1.0
to "Ratio of total gold reserves and other cash to
Federal reserve note liabilities combined".
The memorandum
Illended that the text accompanying the statement to be issued today
Q°11tili the followinc
statement regarding the changes:
5/16/33
:3,10
-39-
"Following the passage of the Act of May 12, 1933,
Inak1lk7 all coins and currencies, coined or issued by or
under the authority of the United States, legal tender
for all debts
public and private, amounts formerly rePorted against items 'Reserves other than gold and
'
Lion-reserve cash' have been cambined and are now shown
aminst the item *Other cash', and the item 'Total gold
reserves and other cash' has been substituted for 'Total
r
eserves'."
Attention
was called to the fact that under the provision of law
above T.
-eferre(1 to, Federal reserve notes and Federal reserve bank notes are
leCal t nd
e --er and are therefore lawful money and eligible as reserves against
clep°8its •
Ied.eral reserve banks, and the Question was raised as to whether
"ILL reSerVe notes held by the issuing bank and Federal reserve bank notes
be •
included as reserves in the item "Other cash" in the revised state-
1)111.11/1
the discussion, Mr. O'Connor left the meeting.
At the conclusion of the discussion, the reendations contained in 7 -r. Smead Ts memorandum
were approved, with the addition to the revised
statement of an explanatory note that the item
'Other cash' does not include Federal reserve
11"es or a, bank's own Federal reserve bank notes."
The Secretary stated that it is expected that the Board's Annual
operations for the year 1932 will be received from the printer
tO QrOw
11101111nC and he recomrended that the report be released to the press
Presentation to the Speaker of the House of Representatives tomorrow.
Approved..
Gove,err,
or filack stated that he desired to recormiend to the Board that,
iTzlediately, Mr. E. E. LicClelland, Assistant Secretary of the Board,
be
°:1311oi
a2 Assistant to the Goveinor, with the understanding that if and
.2fzi
5/3-8/33
whet G,
'
vernor Black leaves the office of Governor, Er. McClelland will be
l'"1313°Inted to hia
present position of Assistant iecretary.
Er. McClelland was appointed Assistant to the
Governor, effective immediately, in accordance with
Governor Black's recommendation.
1"1'• -orrill stated that, in order to fill the position of Assistant
See et
l''
arYnlade vacant by the appointment of Mr. ilcClelland as Assistant to
th"°Vernor, he desired to recommend to the Board the appointment of Lr.
S.
Denter as Assistant Secretary, to perform all of the duties heret(31'c)re Performed by Lir.
McClelland as Assistant Secretary, with the undert111111L
'th", if and when Ex. McClelland is reappointed as Assistant
Seex*etarY
the Board, Mr. Carpenter will be retained in his present
1/Qait
loa 14 the
Secretary's office.
Carpenter was appointed Assistant Secretary,
effective immediately, in accordance with Mr. Eorrill's
reconmendation.
In connection with the above appointments, the
question was raised as to whether there should be a
chanL;e in the salaries now being paid to 1 essrs. V,cClelland
and Carpenter, and the matter was deferred for further consideration.
Gevernor Black stated that he had just received advice from
1 7t,04,
'
ederal Reserve Agent at Atlanta, of the sudden death yesterday of
" ilar(i
Albertson, Assistant Federal Reserve Acent at the bank.
Noted with regret.
Z'eQ
1-ePorta of Standing Committee dated May 11, ro, 15 and 18, 193'6,
A 111"4111-e: aoproval
of the followini; chanes in stock at -,Federal reserve banks:
Ill t . vafor ORIGINAL stock
Shares
D. n2°11 C°11"Y National Bank, 'dindsor, Vermont.
4
1441tiorlal-3ank at Massillon, Ohio.
36
36
150
150
332
5/1e/33
-41lications for ORIGINAL Stock:
Shares
(Cont'd)
pjAtrict IT0, 7,
r
-Bark in Burlington, Burlington, Iowa.
•kaga lid
69
-City National
270
Bank, Chicago, Illinois.
zirst
National Bank in Colfax, Iowa.
18
Nationai Bank of Park Rapids, Minnesota.
ADDITIONAL Stock:
41-1-EII4.11t No.
2.
NaT.
"
73i—'—
lal Bank, Islip, New York. (Increase in
caPital)
357
18
Total
18
461
57
57
tastrict No.
7.
Old
Second
National
Bank, Aurora, Illinois. (Increase
in c
Cl
apital)
24
tizerla
Nationa.1 Bank, Decatur, Illinois. (Increase
IA capital)
60
beititrict ric.
11.
itY
National Bank in ',Iichita Falls,
Texas.
(increase in
240
ca.pital)
Il
iottriQt No. 12.
4
at
National Bank, Park City,
Utah.
hah(
4
reEta e in
14
capital)
--4;11gton. National
Bank: Vancouver, Washington.
atetease in
30
capital)
Total
A
84
240
44
425
411"ttiona for
SURRENDER of Stock:
NationE71 Bank & Trust Company, Hartford,
0°A14
ii
(Decrease in
capital)
latziet
Pit,
4,
No. 5.
Natio
,vent)I Bank, Hampstead, Earyland.
13-1katri
Firet-c L. No. 7.
180
180
81
81
hr1\41t!"°1:411 Bank, Black River Falls, Wisconsin.
Pea
°14-;:11c• bY First State Bank of Black River
,ich raerged with Jackson County Bank
4v4,1,1e za-Laewhk
River Falls, Wisconsin, nonmember)
60
by'41
4:4',,„ National Bank,
Wausau, Wisconsin. (V.L.Suc.
rst American State Bank of Wausau,
540
nonmember)
600
333
5/15/33
—4-2-
A1D.Plioations for SITRIt.1,11)Ell of Stock:
(Con.t'd)
Shares
IT°k°rnis National
Bank Nokonis, Illinois. (Insolvent)
el'ikee. National
3aril
'
c, St. Louis,
(Insolvent)
Lowell Bank,
St. Louis, I:issouri. (Insolvent)
District No, 9.
Zest
Hef-JET—dfae Bank, East Helena, Liontana.
(Insolvent)
/11)13triet No.
11.
all
County National
Bank, tiemphis, Texas.
Necrease In surplus)
"lzens State
Bank, Richardson, Texas.
(Decrease in capital and surplus)
I)
ceistriet No. 12.
60
150
180
390
39
39
9
9
18
1,440
Total
1,440
2,748
4*al
Natfonal dank
(Insolvent)
Oakland, California.
Approved.
IlePorts. of Standing Committee dated Hay 13, 1933, recommending
41)Droval
cia
t
the following Clayton Act applications:
Scott P. Ennis, for penaission to serve at the same time
ulfector of the Bank of America National Trust and Savings
of San Francisco, California, and as director of the
°I* Erlea of San Francisco, California.
Liz.
Arthur
xle3molds, for penaission to serve at the same
•
director and officer of the Bank of America National Trust
Savi11C';s
ciirect
Association of San Francisco, Thlifornia, and as
an1 officer of the Bank of America of San Francisco,
lto
az
X. :Paul 'Alder, for permission to serve at the same tirB
Aaz04ector of the Bank of &Erica National Trust and Savings
,.e
i°n of San Francisco, California, and as director of the
c)'4 Aluerica of San Francisco, California.
as
A.ppr owed.
Thereuoon the meeting adjourned.
ADD
Ve
Secretary.
Chairman, Executive Comit tee.
@FedFRASER