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A meeting of the Federal Reserve Board was held in the office of the Gc)ve rnor on :;ionday, November 12, 1928 at 11:45 a.m. PRES:TT: The 0f Governor Young Mr. Platt Mr. Hamlin Mr. Miller Mr. James Ir. Cunningham Mr. Eddy, Secretary Mr. :,,:cClelland, L.sst. Secretary Governor stated that in accordance with the understanding at the meet- the Board on November 10th he communicated over the telephone this morn- l147With the President of the First Federal foreign investment Trust regarding the e°11sideration which the Board has been giving to the question of the pro131'illItY Of the use of the term "Investment Trust" in the titles of corporations ()I'llirlized under Section 25 (a) of the Federal Reserve Act. He stated that he . Was .Aqvised by . Tisman that although at the time the corporation was organwas anticipated that it would engage in the business of an investment triast , as a matter of fact its activities have developed more along the lines Of ri Ilancing the export of commodities and their distribution abroad. Mr. Lielma In expressed the opinion that the corporation would be willing to consider 4 cha in title and stated that he would take the matter up. The Governor then stated that in view of the attitude of Mr. Lisman as reported above, he feels he is in position to suggest a change in title to the organizers of the proposed "Foreign Discount and Investment Trust" which he will do. The Governor then reouested authority to refer to the Conference of Federal R, 8-'" Agents which is now in session the memorandum which he presented at the Illeeting of the Board on November 7th on the subject of the granting of trust %wers to National banks. 11/12/28 -2- Upon motion, reference to the Conference was approved. Letter dated November 9th from the Deputy Governor of the Federal Reserve -- Of Ransas City, requesting a ruling by the Board on the question raised by the uoard's Examiners regarding certain notes rediscounted by the Federal Res- ellre B anK, not supported by financial statements, partially secured by chattel 1°1Ign. the D on live stock with the balance secured by growing sugar beet crops; ePlItY Governor stating that the paper in ouestion is the most liquid in the Distrir.4. and that it is felt that if the Federal Reserve bank were to insist up- (14 financial statements in connection therewith, it might encourage some member to depart from their general custom of requiring mortgages and base future ' 4aya4 ces on statements only, which would result in a weakening of the paper for their was called °7111 purpose and for the purpose of rediscount as well. 2.ttention to fact that under the Regulations of the Board financial statements need borrower's 11°t be required by the Federal Reserve bank if the aggregate of the (3bligat1ons is less than 10,, of the paid-in capital of the member bank and is less Ulan .,.5,000. Upon motion, the Governor was authorized to inquire Of the Kansas City Bark whether the loans mentioned are less than 10,, of the member banks' capital and in no case exceed „;5,000. Letter dated November 10th from the Governor of the Federal Reserve Bank or .ai- ;11Mond, transmitting copy of a letter from 1dr. D. a. Coker, Class B Di" ttbr Of the bank, from South Carolina, regarding banking and agricultural ebn(titions in his immediate locality. Ordered circulated. Reserve Bank Letter dated November 8th from the Governor of the Federal 263 11112/29 "Dillies, transmitting copies of correspondence with reference to action taken toward a reduction of the borrowings of the National Bank of Commerce, Houston, Texas, Ordered circulated. The Governor then expressed the opinion that it would be advisable to Make arrangements for an audit of the Gold Settlement Fund. Noted, without objection. Reports of Committee on Salaries and Expenditures on lists submitted by the Federal Reserve Banks of Cleveland and Atlanta, of employees for whom the directors of those banks approved leaves of absence with pay, on account Of illness, during the month of October where the total of such absences since jah arY 1, 1928 has exceeded thirty days; the Board's Committee recommending ePProvs1 of the salary payments involved. Approved. Memorandum from Counsel dated November 9th, approved by the Law ComtIttee, with reference to the action of the Board on September 5th in advising *' Venn M. Howell that it believes it would be incompatible with the public 14terest to approve his Clayton Act application, and further, that it believes the Pablic interest requires revocation of the permit previously granted him; the memorandum submitting a letter to Mr. Howell advising that it will accc*c/illgly be necessary for him to sever his connection with the American 44thern Trust company of Little Rock, Ark. or with both the First National 1144It Of Junction City, Ark. and the First National Bank of Batesville, Ark., btxt that in view of the short time until the end of the year, when the an4141 election of directors of the banks he is serving will take place, the 264 11/12/28 Board will not require him to sever his connection with any of the institutions luktil January 1, 1929. Upon motion, the proposed letter was approved. Matter approved on initials on November 8th, namely, telegram to the ?sclera', Reserve Agent at Chicago in reply to letter dated November 3rd inquir- i4g as to the validity of a nomination for Class A Director of the Chicago 4111kMade on a certificate of nomination which was not furnished by the Chair" 41 of the Bank, but which follows the wording of the standard certificate ex°Eqpt that the name of Mr. E. Estberg is printed in as the nominee; the tele- IlaPhie reply stating that in the opinion of the Board the use of the certifi°ate mentioned should not De regarded as illegal and the nomination should be accepted as valid. Upon motion, the telegram was formally approved. The Secretary then presented the application of the First National Bank "Kainfield, Ind. for permission to exercise general fiduciary powers, and 411ed attention to the fact that while two members of the Law Committee, 1181384. Hamlin and McIntosh, recommend approval, Mr. Platt, the third member, reccIlluands refusal in view of the fact that the capital of the bank amounts to but 25,000. Upon motion, the application was approved, Mr. Platt voting "no". Memorandum dated November 9th from the Director of the Division of fteeen -rch and Statistics, recommending the appointment of Mr. Charles E. rarl 'as Research Assistant in the Division, at a salary of ç2,500 per 82 441141, affective December 1, 1928. r-20;) 11/12/28 Mr. Miller advised the Board that Mr. Varlez is not an American citizen and expressed the opinion that it would be inadvisable, unless in very exceptional circumstances, to employ other than American citizens in the Division, the work of which consists largely of the study of foreign and International problems. A motion to approve the appointment being rut to a vote was lost on a tie, the members voting as follows: Governor Young, "aye" Mr. Platt, "aye" Mr. Hamlin, "aye" Mr. Miller, "no" Mr. James, "no" Mr. Cunningham, "no" The minutes of the meetings of the Federal Reserve Board held on October 3°th and 31st and on November 7th and 10th were then read and approved as eirlierldedo The Secretary then supplemented the report made by him at the meeting °4 November 10th of a telephone conversation with the General Counsel of the Pefieral Reserve Bank of New York and stated that during the course of a sub- Conversation he was advised that it may be possible for the Federal ite v e Bank of New York to secure copy of a voluminous report which it is 421derstood is in the files of the Attorney General of the State of New York relating to practices Of a real estate mortgage firm in which certain of the ereanizers of the proposed Straus National Bank and Trust Company of Lew York City .are interested and that an effort will be made to secure the report for the Board. RTS OF STANDING COLMITTEES: 4ed, November 7th, Recommending action on applications for fiduciary powers as set forth in the Auxiliary Minute Book of this date. Recommendations approved.
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