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ti7 A meeting of the Federal Reserve Board was held in the office of the Pederal Reserve 3oard on Monday, May 4, 1931 at 11:30 a. In. PRESENT: Governor Meyer Mr. Hamlin Taller Mr. James rir. Pole La% EcClelland, Assistant Secretary The minutes of the meetings of the Executive Committee of the Federal Re8erve Board, held on Anril 21st, 22nd, and 28th were approved, and upon 41"10119 the actions recorded therein were ratified. The minutes of the meeting of the Executive Committee of the Federal Reserve Board with the Conference of Governors and the Open Market Policy I Q°11ference, held on April 30th, were also approved. The Assistant Secretary reported receipt on May 1st of letter dated 41)ra 30th - from the Secretary of the Federal Reserve Bank of Mew York, e1lbilaittin3 a request of the board of directors that the Board reduce to 1 Iler cent the rate established by it as the minimum authorized buying rate for t4eIllIrchase of bankers' acceptances at that bank, and stated that in accordance 17ith the action taken at the meeting of the Executive Committee on April 30th, he tldvised the Lew York bank that the Board had voted to reduce the minimum bllyjal rate to 1 per cent. The Assistant Secretary then presented various matters which were Nasid ered by the Board and acted upon as follows: Matter approved on initials of the Executive Committee on May 2nd, 1141/1e1, or , telegram dated Lay 2nd from the Chairman of the Federal Reserve 3ank roquestin7 that the Board authorize a reduction in the minimum zed buYing rate on acceptances of the Chicago Bank to 1 per cent. Formally approved. 1 5/4/31 -2Matter noted with approval by the Executive CoNmittee on May 2nd, telegram dated Eay 2nd from the Chairman of the Federal 7,eserve Bank Chicatw, advising of the establishment of the following schedule of etrective buyins rates on bankers' acceptances: 1 to 45 days 46 to 120 days 121 to 160 days 1 1/4% 1 3/8% There being no objection, the informal action of the Committee was ratified. Idatters noted with approval by the Executive Committee on April 30th azd -e.Y 2nd, respectively, namely, telegram dated April 30th from the Secretary or the Federal Reserve Bank of ILinneapolis and letter dated April 27th from the Chair:an of the Federal Reserve Bank of Dallas, advising of the establish11t at those banks of the following schedule of effective buying rates on acceptances: 1 to 45 days 46 to 120 days 121 to 160 days Repurchase 1 1/4% 1 3/1 86 1 3/8i, There being no objection, the informal action of the Committee was ratified. latter informally approved by the Executive Committee on I:ay 2nd, 4 1 memorandum dated April 30th fm the 13oard's Examiner in Charge Eta en(11116) the appointment, effective 1:iay 16, 1931, of Er. Y. Fred English . Assistant ixaminer at a salary of 2,100 per annum. Formally approved. ilePort of Executive Committee on letter dated April 26th from the °°41Dtrall --4-er of the Currency, reco,traending approval of a salary of :,:;3,000 5/4/31 -3- flUm for National Bank Examiner Hugh I. Walker, assigned to the Fourth 4cleral Reserve District; the Board's Committee recommending amroval. Approved. Report of Committee on Salaries and Expenditures on letter dated 4' 1st from the Deputy Governor of the Federal Reserve Bank of Boston, ellbizatting list of employees for whom the directors approved leaves of absence 7144 :911Y, on account of illness, during the month of April, where the total of alleia absences since January 1, 1931, has exceeded thirty days; the Board's Cormlittee recommending approval of the salary payments involved. Approved. Report of Committee on Salaries and Expenditures on letter dated 4Pril 30th, from the Chairman of the Federal Reserve Bank of Chicago, reapproval by the Board of the establishment by that bank of a fund to be administered by a cammittee of officers appointed by the 401.rer"°r, for the purpose of making temporary loans to needy employees; the tkrA ' 4 8 Committee recommending approval. Approved. Letter dated April 30th from Congressman Homer Hoch, stating that he h ' 4114 been advised by the Crowell Elevator Company of Omaha, that it is Obtai 1431g money from New 'York on bankers' acceptance taper at 2 3/4r:.) and 37% klIti 1 , ' 41.4iring whether loans are being made through Federal Reserve banks titt "e rates, and if so, to what extent. Upon motion, the letter was referred to the Director of the Division of Research and Statistics for preparation of a reply. Letters dated April 27th and 26th from Deputy Governor Crane of PeA' 4ural Reserve Bank of New York, advising that on those dates the LtU 5/4/31 / -4- baalk earmarked .1,000,000 and $500,000, respectively, in United States gold °°1a for the Arr;entine Ambassador in Jashington, under the same terns as - previous transactions of this kind. Noted. Matter informally approved on April 30th, namely, telegram dated 411-1 30th from the Assistant Federal Reserve Agent at Chicago, requesting Elpival by the Board of the temporary designation of three employees of the as Assistants to Examiners in connection with the examination of the ele , tcaer Javings and Trust Company, Indianapolis, Indiana; the Assistant 13414 Reserve Agent having since advised, in his letter of I:ay 1st, that ' " l1 8r8. C. T, Laibly, M. B. Smith and Henry B. Tesmer have been designated. Formally approved. Letter dated April 30th from the Chairman of the Federal Reserve Ballk Chicago, advising that the 3oard's ruling of April 28th, with ret° the establishment by state member banks of branch offices authorizea bY a recent Iowa statute, is not being communicated to member banks in th '4 state except upon inquiry, but that it has been forwarded to the Iowa tfite ' 11 anking Superintendent, to whom applications for such branch offices tralet be ronde. Noted. Letter dated April 30th from the Federal Reserve Agent at Richmond, ' 11L?, that the Putnam County Bank. of Hurricane, West Virginia, previously ed to the Board for continued reserve deficiencies, has maintained the 4(11A trAA While reserve through two consecutive computation periods, and that the case is one which requires careful watching, he is of the opinion tl"ere , is nothing in the situation calling for action by the Federal Ileaerir 6 8oard at the present time. -5Noted, with approval. Memorandum from Counsel dated April 23rd, on which action was deferred at the meeting on April 29th, with regard to the recluest of the Peluasylvania Comoany for Insurances on Lives and Ciranting Annuities of Illi ladelphia, that the Board reconsider its ruling that the bank, since its c°1°-solidation with the Colonial Trust Company, is subject to a condition of nieinb"shi.1) imposed upon the latter institution, requiring the consent of the 4ederal Reserve Board prior to the purchase of stock in any other bank or till "company. After some further discussion, the memorandum was referred to lir. Hamlin for the purpose of taking up with Counsel certain legal phases of the matter. Matter approved on initials of Executive Committee on April 30th, IlarilelYs reply to telegram dated April 30th from the Federal Reserve Agent at s inquiring whether the Board would interpose any objection to that bank rizing the Senate Sub-committee which is conductinL; a banking investiga1°14 'to Publish as an appendix to the rL.port of its hearings, the replies "ftaitt A eu. 01, the Dallas bank to nuestionnaircs received from the Committee, other "Jan those marked confidential; the telegram to Er. [alsh stating that the B °et'rd has no objection. Formally approved. Iiiemorandum from Counsel dated April 24th, calling attention to the l'4ot ti1—+ n , 81nce the Board granted permission to 1:r. Isaac E. Scott to serve (la director of the Peoples Savings and Trust Company of Pittsburgh, the 148't ---Lonal Bank of Pittsburgh and the rational Bank of Viest Virginia, ithe, qAteit, est Virginia, the trust company has consolidated with the 5/4/31 Pittsbu611r _l_ -6Trust Company to form the Peoples-Pittsburgh Trust Company, in turn has since consolidated with a number of other banks; the Memorandum submitting draft of a letter to the Federal Reserve Agent at Cleveland requesting a detailed statement as to the extent, if any, to which th° "neolidations in which the Peoples-Pittsburgh Trust Company has partici13eted have affected competition between that institut ion and the First 114t1.°11a1 Bank of Pittsburgh, or other institutions which meabers of its il()Ird of director s nay be serving under permits previously granted by the BOard . Upon recommendation of the Law Committee, the proposed letter was approved. Demorandum from Counsel dated April 29th calling attention to the %ot that ,, appears from an investigation of the Board's records that the Peder el Reserve Banks of Boston and Richmond are now assessin progress g ive 13e441ties against their member banks for deficiencies in reserves without having obtained authority from the Board as contemplated by Section IV(c) "Reulation D. With his memorandum, Counsel submitted drafts of letters to the Boston and Richmond banks suggesting that they now renuest the Board t°11)1411Y to prescribe progressive penalties for their districts; and recoinmended (1) that the Board request the Committee on Reserves to make a eDecial study and report as to the effectiveness and desirability of assessin g l*ogressive penaltie s for deficiencies in reserves, since seven banks are now '1°14e 809 while five are not; (2) that upon receipt of such report the Board 1111e11(1 re gulation D so as to either (a) abolish the progressive penalty or, (b) Make it mandatory and uniformly applicable to all Federal Reserve lietriets; and (3) that in order not to prejudice the handling of the ellae or LlIcas V. Federal Reserve Bank of Richmond, the Board postpone until .."7" •, q, 5/4/31 7041. after the litigation is terminated any consideration of the Question Whether the Federal Reserve banks which have assessed progressive penalties without obtaining proper authorization from the 7ederal Reserve Board should reithurse their member banks. Upon recommendation of the Law Committee, and after discussion, the proposed letters to the Boston and Richmond banks were approved, and it was voted to request the Committee on Reserves to make a study and report in accordance with Counsel's recarnaendation. Report of Executive Committee on letter dated kora 28th from the 11troller of the Currency, recimending approval of the application of 3Pringfield Chanin National Bank and Trust Company of Springfield, l'Ets8 1/ for Permission to reduce its capital from ';1,500,000 to 750,000, e°ndition that the capital be immediately increased to ',1,000 000, which 111.81. €lee shall be paid in in cash before the reduction is effected, and thEit netead of settinr, up a reserve account of .1,325,000, as proposed by the) ) that amount of unsatisfactory assets, including those classified 48 lo 88es in the last reoort of examination, be immediately charged off. Upon recommendation of the Executive Committee, the aPplication was approved subject to the conditions recommended by the Comptroller of the Currency. .Report of Executive Comnittee on memorandum dated April 29th from the 4 lUg Comptroller of the Currency, recommending approval of the 411311ellt1on of the Axst hational Bank of Montgomery City, Missouri, for 13111181.0:4 to reduce its capital from '.P5,000 to t4eritille amount of the reduction, together with t°tIll Of 50,000 on condition that 5,000 from surplus, a 30,000, be used to eliminate all losses set up by the Examiner, erltire depreciation in the investment account of the bank, all doubtful „ 5/4/31 -a- Paper, and to effect a slight reduction in the paper classified as slow. Upon recomendation of the Board's Committee, the application was approved subject to the conditions recommended by the COMtroller. Letter dated April 28th from the : Federal Reserve Agent at 1:ew York, c°131enting on the barkinr„, situation in the Second Federal Reserve District (141111C recent months. The letter having been previously cir— culated among the members of the Board, was noted. 1 'flIIPopa, s ST.L;IDITZ C011=IZ: Ipated, April 28th 29th 30th I'laY 1st 2nd 4th Recommending changes in stock at Federal Reserve Banks, as set forth in the Auxiliary Minute Book of this date. Recommendations approved. Etted, ray let ated idey 1st J3Ette rkly Iktea Lar 1st 4th Recommending approval of the application of Mr. Chas. H. Loucks, for permission to serve at the same time as a director and officer of the First National Bank of Scottdale, Pa., and as a director of the National Bank and Trust Company of Connellsville, Pa. Approved. Recommending approval of the application of Mr. F. W. MacKenzie, for permission to serve at the sane time as a director of the Chevy Chase Savings Bank of Washington, D. C., and as a director of the Second National Bank of Washington, D. C. Approved. Recommending approval of the application of Mr. 1.1. X. Murphy, for permission to serve at the sane time as a director of the Chevy Chase Savings Bank of Washington, D. C., and as a director of the District National Bank of iashington, D. C. Approved. Recommending approval of the application of 1:.r. T. 4. Synnott, for permission to serve at the same time as a director of the First National Bank of Glassboro, IT. J., as a director of the Camden Safe Deposit and Trust Co., of Camden, 1. J., and as a director of the Real Estate Trust Company, Philadelphia, Pennsylvania* Approved. 1 -9The meting adjourned at 12:40 p* NeWow Assistant Secretary Al) Proved: G (‘. error 'CI AUXILIA.BY MINUTES (May 4, 1931) 4aports of Standing Committee dated April 28th, 29th, 30th, May 1st, 2/4 4104. 4th, recommending changes in stock at Federal Aeserve Banks, approved 48 follows: 4111Apation8 for ORIGINAL Stock: 1r8t National Bank in Cowgill, Missouri. istriet N 9. 4rst National Bank in Anoka, Minnesota. ADDITIONAL Stock: triot 0n5 f01 !/1 , 1 11ingham National Bank, Framingham, lass. ivAteboro National Bank, Wolfeboro, N. H. elliton Trust Company, Newton, Massachusetts. Shares 21 21 36 Total 36 57 ls i ii,!4k of Kalamazoo, Kalamazoo, Michigan. 'Lr8t National Bank & Trust Co., Mn Arbor, Mich. 60 24 96 180 21 60 Total 81 261 30 30 licat ons for SURAZSDEA of Stock: 1,striet &rat National Bank, Worthington, -d. Va. (Insolvent) 1),Iatriat No. 6. v Irdt National Bank, La Pine, Ala. (Insolvent) 'kVe tUnipka iietumpka, Ala. (V.L.Abs. by First :eizilmational Bank of detumpke) allgo National Bank, Fitzgerald, Ga. (Insolvent) Th i)istri ct No. 7. 41rat N ational Bank, Roakwell, Iowa. (Insolvent) at National Bank, Oakford, ill. (V.L.Abs. by 6tate National Bank of Petersburg, Ill.) rl°aZt State Bank. Highland Park, Mich. (V.L.Abs. b 4r10.- 4.'4. galand Park State Bank) Tit ra & Merchants National Bank, Roseville, Ind. krsi-‘: v L'Abgt. by National Bank of Monmouth, Ill.) ziational Bank, Davenport, Iowa. (V.L.Abs. by vlitot Savings Bank & Trust Company) 144 ? trlot No. Irat 44ational Bank, Sesser, Ill. (Insolvent) -‘ Bank, Ullin, Ill. (Insolvent) 21 27 135 183 21 18 180 45 360 624 30 19 49 5/4/31 -2_ Shares Security National Built, Hope, N. Dak. (Insolvent) 18 18 triat•0 P rat National Bank, Pawhatka, Oklahoma. (V.L.Suo. by Citizens-First National Hank) 66 . 66 ienzers National Bank, Hillsboro, Texas. (7.14.8uo. by Central Bank & Trust Company) 75 75 2 41 Natiaaal Bank in Los Angeles, Calif. (V.Literminal) 360 Total du 1 4' 360 1,405 Assistant Secretary. %roved:
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