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89,5 A neeting of the Executive Committee of the Federal Reserve Board Was held in 'aashington on Saturday, NoveMber 12, 1932, at 12:05 p. m. PFES=T: Governor Meyer Mr. Janes Lir. Magee Er. Morrill, Secretary Er. McClelland, Assistant Secretary Er. Wyatt, General Counsel. The Comnittee considered and acted upon the following matters: Letters dated November 3 and 10, 1932, from the Secretary of the '4(let'al, Reserve Bank of Ilew York, and telegrams dated November 3, 1932, from the Cll'a-illzen of the _oederal Reserve Banks of Kansas City and San Francisco, 41einhel" 4: 1932, from the Secretary of the Yederal Reserve Bank of Cleveland, 11°1ierlber 7: 1932, from the Chairman of the Federal Reserve Bank of Dallas, and II(Il'e*e1 '10: 1932, from the Chaiman of the federal Reserve Bank of Richmond 4111i t4eSecretarY of the federal Reserve Bank of Atlanta, all advising that ELt 11 Of the boards of directors on the dates stated, no changes were )444 ill the banks' existing schedules of rates or discount and purchase. ;Tithout objection, noted with approval. Gov 7e1e6raPhic reply to a telegram dated November 11, 1932, from Deputy ellaor R°411da of the Federal Reserve Bank of New York, requestin-, authority 44 adv.—4"ce in accordance with the provisions of section 10(b) of the ?ed.er rot t'lxleserve Act, as amended, to the Jefferson Trust Company, Hoboken, l'aey, in the amount of .85,000, for a period of 90 days, with interest &it tile 1.3 '.4e 017 5 1/2, per annum, and on the security of customers' collateral Cl bIliLling and loan notes with a margin of at least 25;';; Deputy GvItert. 110tez (31‘ 1440 II ztee,a. statin,7 that last week there was an absorption of one of the 1 bunks by another bank in that city which has resulted in a a"134° 02 deposits from the Jefferson Trust Company. The reply stated 39(3 11/12/32 tit -2- the Board authorizes the advance subject to the terms and conditions Isec°flunended, it being understood that the advance is in addition to that nade illidter the authority granted in the Board's telegram of Tune 6, and renewed in red,, eed amount as authorized in the Board's telegram of September 6, 1932. Approved. Telegraphic reply, approved by five members of the Board on November 8, fn vu a telegram dated November 5, 1932, from the Governor of the Federal ae8erve Bank of San 2rancisco, requesting authority for an advance in accordlice with the Provisions of section 10(b) of the Federal Reserve Act, as eolided, to the Old National Bank and Union Trust Company, Spokane, Washington, the amoUnt of ,:350,000, with interest at the rate of 5 1/2;-; per annum, and to -‹Rzre on November 9, 1932; Governor Calkins stating that this application \It 1114cle to cover advances already made to the member bank under a misunder%ai of the authority granted in the Board's telegram of August 9, 19:52, to 4 'avance not exceeding $2,000,000. The reply stated that the Board has d e- the authority _;ranted in its telegram of August 9, so as to authorize s 2ranci3c0 bank to advance to the national bank not exceeding -vt000 f"-„`- a period of three months, with interest at the rate of 5 1/27', 13el. --., 14 tula that the Board has ratified the action of the Federal reserve _ advances to the national bank maturing Yovember 9, 1932, not more than that amount. Approved. 101 Tele,. t-J--al)hic reply, approved by five members of the Board on November to a. teleaTum dated November 9, 1932, from the Governor of the Federal f -3a.n Francisco, requesting authority for an advance in ee .41-th the provisions of section 10(b) of the Federal Reserve Aet 397 ' 1/12/32 -3- tc) the Old National Bank and Union Trust Company, Spokane, Washington, of :19 000, with interest at the rate of 5 1/2;; per annum, and to mature 000 ' 1PebrliarY 9, 1933; Governor Calkins stating that the bank has advised that cke t the strained condition throughout the entire territory caused by un- 4s1.1411 Y low wheat, livestock, lumber, and other conmodity prices, it has been tulable to obtain expected seasonal liquidation of loans and that further declines in deoosits are expected in the next few months; also, that it is 1"eratood t° that the first advance made under this new commitment will be used retire the present 10(b) advances to the bank made under the authority 41'1:tecl in the Board's telegram of August 9, as amended by its telegram of lietriber 81 1932. The reply stated that the Board authorizes the advance atlbject to the terms and conditions recommended and to the understanding that the belik has no further eligible and acceptable assets to enable it to obtain &I(lecille:te Credit accomodations from the Federal reserve bank under any other 1*°V1sions of the Federal Reserve Act except section 10(a). Approved. Telegraphic reply, approved by three members of the Board on November ' It to teleGram dated November 3, 1932, from Assistant Deputy Governor -4ey se Of - the Federal Reserve Bank of New York, requesting authority to pur- r the Alpha National Bank, Alpha, New Jersey, a tax note of the 11()1'°11g11 of Alpha in the amount of :6,000; the reply stating that the Board '11"bil(lrizes the purchase with the understanding that the note meets all reclitiree/Its of Regulation I] except as to the population of the issuing and that the amount of the note offered, to7ether with a note the el°411t of 6,000 already held by the New York bank, exceeds 25% of the t°t1 olltstal)ding warrants of the municipality. e 11/12/32 -4Approved. Telegram to Deputy Governor Rounds of the Federal Reserve Bark of York, replying to a letter dated November 10, 1932, from the 1,:anager of the Credit Depar tment of the bank, requesting authority to purchase from the l'Yolls National Bank, Lyons, New York, certificates of indebtedness of the °°11titY c/1: ''';aYne, New York, in the amount of 130,000. thegoara The reply stated that authorizes the purchase with the understanding that the certifi- 3 rneet all requirements of the Board's Regulation E except that the ' 814°1111t offered exceeds 25,, of the total outstanding warrants of the 4111ciPality, Approved. Telegraphic reply, approved by three members of the Board on rovember 7, t0 a tele Gram dated November 4, 1932, from the Governor of the Federal 11e4ellve 8 :of Boston stating that the executive committee of the bank had 411thorized, -44 advance under the provisions of the third paragraph of Section 13" tile Federal Reserve Act, as amended, to the H. T. Cushman Tianufacturing csr'r9EtIIY'11°rth Bennington, Vermont, in the amount of :4,325,000, 11_5,000 of is to be used to repay a personal advance made to the company to meet okIrre o perating expenses during the pendency of the company's application to thel'ederal reserve bank, by the President of the First rational Bfinh of 1:(411113e/L1,inkrton, which institution had previously loaned the company up to th Illthorized by section 5200 of the Revised Statutes; Governor Young *Ile" 41)Pr0va3 of the proposed advance by the Federal reserve bank, in with - ection 5 of the Board's letter of July 26, 1932. The reply eci tilat) With the understanding that the note of the H. T. Cushman '111.1rEtetilrin.-,; Company meets the requiremnts of eligibility laid down by the , 11/12/32 399 -5- 1417 and the Board's regule.tions and is acceptable to the Federal reserve bank fl'oril a credit standpoint, the Federal Reserve Board will Intel-Dose no °biection to its discount by the Federal Reserve Bank of Boston because of tile fact that a portion of the proceeds will be used for the purpose of 114Y1-11Z Of the existing indebtedness referred to. Approved. Telegraphic reply to a telegram dated November 4, 1932, from the (14\rel'llcir of the Federal Reserve Bank of Boston stating that the board of cl*ect°1 ' s had authorized the discount, under the provisions of the third 1141'Et1311 of section 13 of the Federal Reserve Act, of the notes of the 4 8. Clock Company, Forestville, Connecticut, up to a maximum of '7385,000 (111:1 the 8ecurity of a mortgage upon the maker's property, the execution of Ivhich will probably make it necessary for thecompany to retire during the c'r the advance by the Federal reserve bank, approximately.;135 000 of c(Itritael'elal Paper now. outstanding; that while the company believes that the 1141)ell "al be retired out of current receipts, the proceeds of the advances bY "iedera-1- reserve bank mic;h.t be considered as being used indirectly to : 4Y orl. er 'istin,'; indebtedness to other banking institutions; and that, there- :41-'cblral of the advance by the Board is requested in accordance with etlit)11 5 of the Board's circular letter of July 26, 1932. The proposed that, with the understanding that the notes of the Sessions the e°11111culY meet the requirements of eligibility laid down by the law and ceaN's regulations, and are acceptable to the Federal reserve bank from ateliclooint, the Federal Reserve Board will interpose no objection their alSe 1:11'°"eci t by the Boston bank because of the fact that a portion of rlay he used for the purpose of paying off the existing indebted- 400 11/12/32 ileso -6- referred to. Tho Secretary reported that Er. Hiller had requested him to inform the c)ther nembers of the Board, in case the matter came up during Er. Miller's ea3eence, that he felt that the Board should consider the question of the advisability of approving the use of a portion of the proceeds for the Pur11°8e or paying off the indebtedness represented by the outstanding notes of Vile clock compcuiy, for the reason that, although the infolnation received by hilirer the telephone from Governor Young which was embodied in a letter '1111secluelltlY received from Governor Young, indicated that the advance in this Darticiaar case could properly be approved, there was a possibility that it 17°1134 bee°1 a precedent which would result in attempts in other cases to relieve ewa-lercial bAnks of loans by transferring the indebtedness to the ?ecierl 4'eoerve bank. Mr. Nbrrill also reported that kr. Hamlin had re- U1 to inform the other members of the Board that he would approve the 4avatee. After discussion the proposed reply was approved. 13)rolre 130 11 t3n e 2 Letter to the Center Moriches Bank, Center Moriches, New York, bY four members of the Board on November 4, 1932, stating that the apProved the bank's application for membership in the 7ederal Re- 441zor1r8telal and for 75 shares of the capital stock of the Federal Reserve York subject to certain conditions set forth in the letter. Approved. Letter to the rock Haven Trust Company, Lock Haven, Pennsylvania, 411111„0,Ted, bY tour neLbers of the Board on November 7, 1962, statin7, that the „ea, tteee,, t4e pecie - ve Board has approved the bank's application for membership in 1'41 neoerve System and for 540 shares of the capital stock of the 401 11/12/32 -7- 1?ederal Reserve Bank of Philadelphia subject to certain conditions set forth it the letter. Approved. Letter to the -Tamers and Eerchants Bank, Huron, South Dakota, "c)Ired by three members of the Board on November 9, 1932, stating that the 'iatellaj- Reserve Board has approved the bank's application for membership in the Aderal Reserve System and for 67 shares of the capital stock of the FedRe3erve Bank of Einneapolis, subject to certain conditions set forth in the letter. Approved. Tel -egran to the 2ederal Reserve Agent at Chicago, approved by three keillber2 of the Board on November 10, 1932, requesting that he advise the 11114°18 Bank and Trust Company, Rockford, Illinois, that if that institutiola is converted into a national banking association with a paid-in capital or at e, 1--8 ' 200,000 within sixty days from November 10 the Federal Reserve 1131'cl 17111 1"3. ue to such national bank a permit effective on the date it is bY the Comp troller of the Currency to comence business as the I11111°1e 'Tatiana 4°t in Bank and Trust Company, granting it the right to act, when contravention of State or local law, as trustee, executor, adninistvt°1* ' re istrar of stocks and bonds, guardian of estates, assiee, receiver, °rpltllittee Of estates of lunatics, or in any other fiduciary capacity in which 4tehejQ S2 tru-t companies or other corporations which cone into competition Ilati°4a1 bank- are permitted to act under the laws of the State of the exercise of all such rights being subject to the provisions of 4441 aeserve Act and the regulations of the 7;'ederal Reserve Board. Approved. 402 11/12/32 -8-- Reply, approved by three me:2)e= of the Board on November 10, to a letter dated November 3, 1932, from the Federal Reserve Agent at Philadelphia l'e'Pc'rtill3 that the Ilechanics National Bank and Trust Company of 47 `Terselr, has been continuously deficient in its reruired reserves for six °)ath8. The rel4ly stated that in view of the information submitted, and in lec(31sc14111ce with the agent's recommendation, the Board will take no action in ti tter at this time other than to forward a copy of his letter to the Actinfa, r. " 012Ptroller of the Currency for the information of his office. The l'ePiy also reouested that the agent advise the Board, within a reasonable t e 48 to whether the bank has restored and is maintaining its recuired rezervas. Approved. Letter to the 2ederal Reserve Agent at Chicago, replying to Assistant 44era‘l Reserve Agent voungts letter of October 27, 1932, relative to the 17111,04 Were deficient reserves of the First National Bank, Little Rock, Iowa, originally reported to the Board on October 13, 1932. The Board's letter stated that, in view of the statement that the bank's reserve record cIlle to conditions which make it impossible to maintain the reruirec-, re- elblre8) the Board will take no action in the matter at this time other than to 1,01..17ria a ror eoDY of Nr. Young's letter to the Acting Comptroller of the the information aj. his office, it being noted that the Board Will be aavisea, Within a reasonable time, as to whether the bank has lat°recl aria 12 maintainin its recjiired reserves. Approved. approved by three members of the Board on November 7, to a ittyt-4. qatea October 20, 1932, from the 7ederal deserve Agent at St. Louis, 403 11/12/32 -9- "a further reference to the deficient reserve record of the Park Savings CMPany, Richmond Heights, Eissouri, which has continued from August 16' 1 With tile to September 30, 19'62. The reply suggested that the agent consult A)miaissioner of Anance of 11:izz-;ouri in an effort to obtain his °°013eration in impressing upon the management of the trust comDany the laeae83itY of compliance with reserve requirements and that pending receipt flu"ther advice from the agent, and in accordance with his recommendation, the (111.1'd Will defer action in the natter. Approved. Letter to the Federal lieserve Agent at ilinmeapolis, approved by three tikther2 4€e/lt • Of the Board on November 4, replying to Assistant Federal 2eserve Bailey's letter of October 15, 1932, reporting that the First National Of tone Lake, Wisconsin, has been continuously deficient in its re- ciliired reserves for ix months, and advising of the latest developments Itive to the unsatisfactory reserve records of certain other banks (111slY reported to the Board. The reply requested certain additional Illati0111 and the agent's recommendation as to the action which should be tEtket, b Y the Board with regard to the deficient reserves of the First National teaik Or Stone Lake, and stated that, in accordance with the agent's recom°11(1.e.ticri, the Board will take no action with regard to the unsatisfactory lerlrie records of the Citizens and Security National Bank, St. Tames, 1:4111bazota, the Drovers State Bank, South St. Paul, iiinnesota, and the First Nti Batik, Conrad, LIonta; n.a and that it is assumed the agent will continue Ic) keel) the Board advised with regard to these institutions and with regard tc) the rese e 117 records of the First National Bank, Swanville IJmnesota, and Natio Bank, Foley, Minnesota. Approved. 404 4112/32 -10- Telegraphic reply, approved by three members of the Board on November 411 to a 4. ue-Legram dated October 31, 1932, from. the Federal Reserve Agent at --411c1s00 inquiring whether the Board desires that he re-)ort as suspended v ae institutions in the Tuelfth Federal Reserve District which have celltlY suspended under a local moratorium. 4gent The reply requested that the submit a list of the banks referred to with a brief statement of the °f the moratorium in each case, and stated that in the meantime the 8110uld not be reported as suspended. Approved. Reply, approved by four members of the Board on November 11, to a lettex, A ated November 2, 1932, from the Federal Reserve Agent at Kansas City With te e.rd to the effective date of the discontinuance of the prosressive .14/41tY for deficiencies in reserves of member banks in the Tenth Federal 4"erle District. The reply stated that in view of the interpretation which ttlfabwL. placed on the action taken by the Board in discontinuing the Pen,alty in the Tenth Federal Reserve District as of October 1, 1932, ta.41)1)1..,ytri, to reserve deficiencies dating back to September 1, 1932, the -eciral Reserve Board has amended its Previous action so as to discontinue the Droa'ressive Penalty in the Tenth Federal Reserve District for (elericies in reserves of nenber banks occurring on or after September 1, Approved. lae ittera Letter to the Federal Reserve Agent at Cleveland, approved by three °f the Board on Novenber 7, 1932, with regard to the analysis of the 4.14)1 1 Of e:caminatien as of :lay 7, 1932, of the Peoples-Pittsburgh Trust '41Y) l'ittz;burch, Pennsylvania. The letter requested advice as to whether 405 11/12/32 -11- tlie institution has eliminated from its accounts the 3,360 shares of its own 8t(3e1 rePorted in the analysis as being held as part collateral to loans, or iniether Other collateral has been substituted for such stock, and suggested tilat44 view of the information contained in the analysis, the agent conthe advisability of discussing with the State banking authorities the cliti°n of approaching the management of the trust company for the purpose or dell. eloping its attitude toward a further reduction in its quarterly rat0. The letter also referred to previous correspondence with reger, u to the bank stock holdings of the Peoples Pittsburgh Trust Company; te'l that in the opinion of the Board the holding by a wholly owned 4Ubzidia17 of the stock of the First National Bank of Wilkinsburg, as 1114icted by the analysis, is not a compliance with the spirit of the ::ay, 1931' reement with the Board that the stock would be eliminated from the 118ete or the trust company; and requested the agent T5 comments on this 84 Ilea as advice as to the value at which the trust company carries ita 8t°ek investment in the First I:ational Bank of Pittsburgh, and its inIi the stocks of affiliated or subsidiary companies. Approved. Letter to the Federal Reserve Agent at Richmond stating that in view or tile o ondition of the Baltimore Commercial Bank, Baltimore, Earyland, as or bY the analysis of the report of examination of that institution Dtenber 26, 1952, it is difficult to see how the member bank would be ittatified in continuing the payment of dividends, and suggesting that the (1181-18e the matter with the Bank Commissioner of the State of 1:aryland, : 1' .4111 the Board what action is taken by him in connection therewith. The 4130 stated that the Board would be 31ad to know whether any other 406 11/12/32 -12- correct ive action has been taken or is contemplated by the bank commissioner. Approved. Letter to the Federal Reserve Agent at San Francisco, approved by tilree members of the Board on November 4, 1932, referring to the report of te el'edit investigation of the Albany State Bank, Albany, Oregon, as of kis 1932, and statinj that it appears that the transaction by which the 41611ab er barl': ao2 January 30, 1952, purchased certain assets and assumed the 4P(38it l iabilities of the First Savings Bonk of Albany has resulted in no 45.11-41 CIig in the character of the assets of, or in the scope of the Allleti0 112 e4erci3ed by, the member bank within the meaning of the general 441t1°Ta under which it was admitted to menbership in the Federal Reserve 11.8-ter'and that in view of this evidence, and advice that the transaction 111a effectod to meet an emergency which existed in the local banking 1..tilati°n ' the Board, in accordance with the agent's recommendation, will 14terp0se no objection to thc transaction. allbat4litial increase in the amount o 14 ti The letter also referred to the criticized items which has occurred Purchased from the First Savings Banl': and requested that the .1-tk"I) in close touch with the situation, arranging to participate in tixe 4 eZt ex amination with a view to renewing at that tire the suggestion of : 4 illel'ee'26 in the capital accounts of the institution to provide protection t --(litional deposits assumed from the First Savings Bank, and keeping t 84visek_k of any developments in the situation during the interim. Approved. Latter to Rawleigh Warner, Chicago, Illinois, approved by four 1.1,ci 4 the Board on November 4, 1932, inclosing a permit issued by the : er the authority of section 8 of the Clayton Anti-Trust Act cover111 t Vice as a director of the City National Bank and Trust Company, 111 bera 407 11/12/32 -13- licaC0) Illinois, as a director of the Drovers 'National Bank, Chicago, Illinois) and as a director of the City National Bank and Trust Company, Illinois. Approved. L?tter to the Acting Comptroller of the Currency, approved by four ebelis of the 3oard on November 4, inclosing a copy of a letter received 4"er date Of October 24, 1932, from Senator Millard E. Tydings calling ttellti°/1 to a criticism of the first National Bank of 2,berdeen, 1,:aryland, having in its files a copy of the permit issued by the Board authorsenator Tydings to serve as a director of the Baltimore Trust Company 1111(1"a d irector of the first National Bank. The letter to the Acting °°12110troller of the Currency stated that the Board has felt that it is not 4c8'''zal7 to 1)extlita; furnish individual banks with certified copies of Clayton Act that copies of the Board's letters transmitting such certificates 41'e zent to the banks involved and would seam to furnish sufficient evidence taEtt necessary permit has been granted, and that the natter is beinL; i*eqeht to the Acting Comptroller's attention because of the fact that, in Of the l'3 oard's Policy, the criticism referred to does not seem to be Approved. Telegraph. ) reply, approved by three members of the Board on November a tel. e gral dated November 3, 1932, from the Governor of the 7ederal ' I ve Bank of 1:inneaDolis requestin a ruling on the question whether the Dik14_e 6 by n '-' federal reserve bank of a tax anticipation note direct from -L-suill the , /leclex. 11-flicipality would be a purchase under the terms of section 14 of al Ileeerve Act, or whether it would constitute a direct loan to the 408 11/12/32 -14- 4-uucipality. e The reply stated that Federal reserve banks may legally pur- direct from the issuing municipality warrants which col,mly with the r'elelictnt provisions of section 14 of the Federal Reserve Act and the Board's Reaa,+, 1], but that the question whether they should do so is one of and if the Federal Reserve Bank of idnmeapolis contemplates such a 1311rQhn it is requested that before doing so the Board be furnished with " ts in the matter, to:;ether with the views of the bank as to the liecessity or desirability of the proposed action. Approved. 148m0rend dated November 9, 1932, from Assistant Secretary Noell that the Treasury Department desires to transfer Rachel Williams, Q411]rvz0/aan, from the Board's rolls to the Chief Clerk's roll of the Treasury 4PEIrtier1t and to substitute Eleanor Allison as charwoman on the Board's Nas at the same compensation; the Assistant Secretary reccmending approval. Approved. Letter, approved by three members of the Board on November 11, to C°rap troller of the Currency advising that in accordance with the l'"(31.1exiciat ion contained in his letter of November 8, 1932 64)1311°1re°' the Board has 2alary at the rate of )3,600 per annum for National Bank Examiner 14)1114 cs W e liecht, assigned to the Eighth Federal Reserve District. Approved. te 4131Y, approved by three members of the Board on November 9, to a aated iTovember 4, 1932, from the Governor of the Federal Reserve Bank Loui2, reDortin,; the employment in August, 1932, on a temporary basis With 4alazy t the rate of .A,500 per annum, of lir. 3. N. Vardeman, 3r., zit zl,:e ztier Of the Aire c t Loan Department of the bank, and the discontinuance " 49 11/12/32 -15- °this employment as of October 31, 1932; Governor Nertin stating that through 44. °Yersight Mr. VarderiArts employment was not reported previously to the The reply stated that the Board has approved the payment of salary to Vardeman at the rate of r)4,500 per annum during the period of his temporary 141118at, and requested that the Board be advised as to the exact date on the employment became effective. Approved. Report of the Committee on Salaries and Expenditures on a letter 4.Ette October 31, 1932, from the Chairman of the Federal Reserve Bank of 4414._11 r. ‘'cillesting approval of a salary at the rate of :)1,600 per annum for 41% L, -. Edwards who has been appointed to the appraised position of 411R rePresentative in the Insolvent Banks Department of the bank; the 13 Committee recommending approval. Approved. Iltlizorandum dated October 10, 1952, from the Fiscal Agent, recommend114( th" the Board authorize the payment of 699.17 to the Federal Reserve kaz or ni ezeitite:"eland to cover the expenses of, and allowances to, the six tt 4 ' 414Ateraber t 17ho were detailed by the Cleveland bank to assist the Board's in the examination of the Federal Reserve Bank of Chicago as of 17" 1932; the recommendation having been approved by three members tlie 13°4 n November 9. Approved. Metil°11andum dated October 31, 1932, from the Board's General Counsel 4 letter received by him under date of September 27, 1932 from t° D. Baker, suggesting a fee of ;)15,000 for the services rendered rl'cita N ovember, 1930, through September, 1932, in the litigation grow- 410 -16ing ()lit °f the failure of the First National Rank of New Bern, North Car014,..4"" and in other natters. The memorandum outlined in detail the 8ervi COs rendered by Mr. Baker and requested informal authority to advise . 11A1 er that the suggested fee is regarded as reasonable. After a brief discussion, the authority requested by Counsel was. Granted. —orandtxm dated October 51, 1932, from Er. Vest, Assistant Counsel, "".1nC that there be published in the next issue of the Federal Reserve 111111eti 11 .1.11 --2 the farm attached to the memorandum, the Board's recent ruling with re ard to the classification by a member bank as demand deposits of —"ea of deposit payable to other banks within thirty days; the ree ildation having been approved by three members of the Board on November .4932 . Approved. Letter to 1:12% Henry Hafner, Office Eamager of the Danahy Packing Y 'BUrfalo, New York, replying to his letter of October 26, 1932, aciareae ed to the Secretary of the Treasury, with regard to a charge imposed co nneeti 4-°11. With the collection of a United States postal money order. The ePly stated that this natter was taken up with the Federal Reserve Bank C)t ileW'Mrk which has advised that the charge represented messenger service T c'leetinc, , the item and was imposed by the State Trust ,Company of North Wettall New York, which collected and remitted for the order. The reply 1.4c) et4tea that., In. the circumstances of the case as outlined, the law does llot a.c1 the E a bank from , '7.ing a collection charge on an item of this kind w4e no action which the Federal reserve bank could take in eQtioli rewith. There was also submitted a proposed letter to the Gelleral, transmitting conies of Mr. Hafner's communication and 411 11/12A52 -17- tile letter addressed to the Board by Deputy Governor Sailer of the Federal Reserve Bank of rew York. Approved. Letter to the Chairmen and Governors of all Federal reserve banks, "°1red by three members of the Board on Yovember 7, 1.9, stating that as tile sc'ealled Glass Bill may be taken up again at the forthcoming session of 0011' re8s, the Federal deserve Board will be glad to receive any sug,7estions rearcling its provisions which the Chairmen and Governors may desire to 1111tit for the Board's consideration, together with their reasons for such Approved. Letter to the Governors and Federal Reserve Agents of all federal reserve stectin„:, bank3, approved by three members of the Board on T:ovember 5, 1932, that the Board's staff Lid the committee appointed by the Chairman °r tile Governor. 'Conference for the purpose of studying American acceptance j4letie and its development have outlined a tentative course of procedure itha 4o inG this study, and that as a part of this tentative procedure a bee ella'gested that the Governor of each Federal reserve bank transPl'oPer officer of each of certain member banks in his district • 11"e been engaged in the acceptance business a letter in one of the illci°sed with the Board's letter, together with forms of question11E11• ) 4411111e2 of which were also inclosed, to be filled out by such banks. lettel* stated that it has been suggested also that, in addition to the AT'orkstion gained through the replies to the proposed letters and through t, e-11°Ileea to the questionnaires, the Governors of the various Federal reserve be011,41 b oht btain helpful expressions of views throu-,h personal conferences '4 11111:e, --"--3 whose experience in the acceptance field in their respective 412 11/12/32 —18- 4stricts has given them a special knowledge of the subject. The letter rItrtller stated that the Board has not designated any members of the com.ittee but e. 4Pects that members of the Board's staff and the committee will jointly "70n the proposed study, with the Board's Secretary as the medium of lcutiou between its staff and the committee; also, that the inclosures Nberr ea to above were being transmitteu at this time so that the agents and e°11e111°* "night have an opportunity to give some thought to the subject and be ipre Pared to discuss it as one of the topics at the meeting on rovember 432, ,De, 40re steps are taken to carry out the plan. Approved. Letter to the Governors of all Federal reserve banks except Kansas C14* ialc inC a copy of a letter addressed to the Kansas City bank by a Inspector, calling attention to a ruling of the Second Assistant -Qatt.Plater eXPress general that there would be no objection to checks being forwarded if not accompanied by a letter. The Board's letter stated that cash letters or similar form letters of transmittal covering such hipIrleirt2 are regarded by the Post Office Department as "letters" within the k Il , or the ' ',private express statutes", but that the ruling indicates t1141 theze will be no objection to incicoinc with the checks a list prepared a'cl4liJk; machine provided such list is not written on a form containing -ti.**4etions or other communications, although whether or not it would be hltai ble to date the adding machine list does not appear from the ruling. Approved. Letter dated November 3, 1932, from the Chairman of the board of e tox.C the li'ederal Reserve Bank of New York, stating that following b the flew York Clearing House recommending to it renbers that they 11/12/32 -19- iciPate in the share-the-work movement the board of directors of the batk '°"-10Pted a resolution establishing, subject to the approval of the Federal Re rve Board With respect to the provision affecting salaries, a share-theP1 -Lan Providing for a reduction equivalent to one-half day per week in the tine of each employee at the head office during the six months period begi/Inie ee, 1:ovember 16, 1932; for the employment on a temporary basis of such 4071 laPloYees (estimated at approximately 125) as the officers of the bank tlasr nece28ary or advisable in order to put into effect and to carry on the viox: of the bank without loss of efficiency in operation, and for a Uc (Illinc; that period of 4 c)rrleers and in the salaries of all of the present employees at the head office. The resolution adopted by the directors also Provided for the submission of the plan to the directors of the BtQfalo branch of the Federal Reserve Bank Of New York with the suggestion that theY c onsider the desirability of Participation by the branch in the movement. The 84 1`e- the-woricthe °tiler Secretary reported that Miller had requested him to inform tierabers of the Board, in case the matter came up during Mr. cibelice) that he would vote in favor of approval of the salary adjustmnts 1llv°11Ted in the New York bank. The Secretary also reported that he had been Nileated b y Hamlin to state that while he was in favor of the share-thePlan. 111 the aan. Principle, he would vote against the salary reductions involved The Secretary said that Er. Hamlin felt that if the plan were 'Icic'lltsci tie 4(iciltional Et1/4 ot NAorte submitted by New York the expense of the employment of the people should be borne by the bank out of its accumulated surplus, - Upon. the exis tinz employees. Assistant Secretary EcClelland that, in a later teleohone conversation with him, Er. Hamlin had 414 11/12/32 -20- 8t"ed that the Federal reserve bank Should absorb at least one-half of the cost or the salaries of the additional employees. After discussion, it was decided to interPose no objection to the plan as submitted by the Federal Reserve Bank of liew York, and to approve the salary payments involved in the temporary employment of additional employees. Letter dated November 3, 1932, from the chairman of the I?ederal Reserve 13k'4 r Ihil)---adelphia submitting for the Board's consideration a share-the-work 13111aPproved in principle by the board of directors of the bank with disl'etl0 11* in the officers to put it into effect if and when they deem it adIrizable• The plan provided for a reduction of one-half day per month in the 17()ritinc; til]le of each employee of the bank which would make pos ible the em111°I1eilt of 25 additional people, the added expense to be net by deductions or Per month from salaries of 4,000 per annum or less, ."2 per month from ealries between .:,;1,000 and .:12,000 per annum, betWeell .:)2,000 - nd per month from salaries ,000 per annum, 45 per month from salaries between )000 E14d A2,000 per annum, and .150 a month from salaries over 42,000 per The S ecfetary referred to the apparently inequitable operation of the Alaz that it provides for disproportionate deductions from the salaries " k4ioed employees in the various grades and stated that Ir. tiller had that, in his ooinion, careful consideration should be given to this NLttlre oi the plan before it is approved by the Board. ILI'. Morrill also telteci thett Hamlin's objections to the New York Plan applied also to the After discussion, the Secretary was requested to discuss with the Chairman of the Federal Reserve Bank of Philadelphia while he is in Washington next lieek the matter of the apparent inequities in salary deductions under the proposed plan. 11/12/32 -21- Letter dated rovember 5, 1932, from the Chairman of the Federal Ileeerve Bank of Cleveland replying to the Board's letter of October 26, 1932, With regard to the employment of extra People by the bank in connection with te activiuies of the Banking and Industrial Committee of the Fourth Federal R"erve D istrict; Jr. DeCamp's letter outlining in detail the considerations Which led to these additional employments and, particularly, to the employtlent of lir. Earle E. Liartin for the Banking and Industrial Committee and 1-T. Hauck for the share-the-work movement, and stating that the failure t° l'equest approval of the salaries fixed for these two employees was an (311erq C;lit on the part of the bank. The Secretary reported that Ir. Hiller had requested him to inform te 11 °tiler members of the Board, in case the matter came up duringnr. ab eelice, that he was prepared to join with them in approving the payment of 841a1" ,f involved in the employment of Er. Eartin in view of ill'. DeCamp's Nla/iation of the services rendered by Mr. Martin, but that as to the employ4rIt Of Hauck in connection with the share-the-work movement, while he 17otaq offer no objection to the payment of Mr. Hauck's salary up to date, he elt that the share-the-work movement was an activity outside of the scope °r the DI-Irpozes for which the Banking and industrial Committoes were °1‘1111a113r aDDointed by the Governors of the Federal reserve banks; that the ileezve Bank of Cleveland had only the same general interest in the Of the share-the-work movement that other banking corporations 141[%t 4,11 7e; and that in hi opinion the employment of Lr. Hauck was not 41a()115.1)11r " thin the authorized functions of Federal reserve banks for which Nellclitures could properly be made. Lea'. Morrill also reported that Mr. 11114114c1 stated that he would join the other members of the Board in 11/12/32 -22- IIIPIvik; the salary pa Hauck nts already made by the bank to 1:essrs. Eartin and that he would accept the jucigaent of the other members as to eMte a„, Which should be taken by the Board as to future payment of salaries to tileae employees. After discussion, the Secretary was requested to advise the Chairman of the Cleveland bank that the Board approves the salary payments already made to Messrs. liartin and Hauck but that it still has under consideration the matter of future payments of salary to these employees, and that its decision will be cormunicated in due course. The Secretary was also requested to take this natter up with Jr.1 DeCamp when he is in 'dashincton next week and to brill,: forcefully to his attention the necessity of securing advance approval by the Board of any proposed expenditures by the bank where such approval is required by law or where the Board has requested that such approval be obtained before the expenditure is made. Letters addressed to iJr. Hamlin by the Chairman of the Federal 411k Of Richmond on October 20 and Lovember 10, 1932, with rec;ard to tie eorisideration being given by the board of directors of the bank to readl e11te in the salaries of employees; the later letter statinq, that it now that to a the special committee appointed to consider the matter is horizontal reduction of salaries and that the committee report 13 to be /41.4 submitted at the December meting of the board of directors 11° further than to recomrmnd some economies in special cases. Noted. IlePorts of recommending Standi11,:; Comittee dated November 9, 1932,. 4.11DrorEti Of the following changes in stock at Federal reserve banks: lee.tio etri et nos for is 3U111111IIL: of Stock: (ILItez l ati-onal Bank, Leominster, I:ass. 1.113°11rent) Shares 270 270 4-17 11/12/32 4111-112n5 for SURIMIDER of Stock: (Cont'd) uistrict 2 lz;?nroe National Banl-, ionroe, N. 7. (Insolvent) 'Iratational Bank, Plainfield, N. J. (Cons. of the 1Pourth ational Bank and First National Bank of Plainfield, N. j.) 3* 'Llrst 81D-5—bounty National Bank, Tyrone, Pa. (C°118, of the Jirst National Bank and Blair County :.ational Bank & Trust Company) Shares 48 516 564 180 180 300 51 351 41 41 t trict Le. 7. chants National Bari: & Trust Co., Battle 41,21'eek, (Decrease in surplus) }Tational Bank, Lewisville, Ind. (Insolvent) 4.8trictl..-Te. a. ITational Bank, Chaffee, idssouri. (Insolvent) 1et IT°. y. ii-1 ,t-717tioxifz—tr; Bank, .o_azee, Linn. (Insolvent) C —, —r ;..82ens N ational Bank, WessinLton, S. D. (1113°1vent) ; 111 24 24 48 19 Total 19 1,473 '10. 12. -tratillz1TinTank, Scappoose, Oregon. (Insolvent) Approved. Report of Standing Committee dated November 12, 1932, recommending 4131)1.01mi of the following Clayton Act application: 4:i. de Bretteville, for permission to serve at the sar title k74 director of the Bank of America National Trust and or flCa Association of San Francisco, California, and as director 64e Bank of America of San Francisco, California. Approved. Thereupon the meeting adjourned. 41)toireci: Secreta Gove or.
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