Full text of Minutes of the Board of Governors of the Federal Reserve System : Meeting Minutes, November 23, 1932, Volume 19, Part 2

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4[53
A meetins of the 2
- ederal Reserve Board was held in Washinyton on
Ile(4438claY, November 23, 1932, at 11:40 a. m.
PRESENT:

Governor lleyer
Irx. Hamlin
Mr. :::iller
Lir. James
Mr. Magee
Mr. Morrill, Secretary
MeCt,lelL,nd, Assistant Secretary
Harrison, Assistant to the Governor
Mr. Wyatt, General Counsel.

The mdnutes of
the meetings of the Executive Committee of the Tederal
ae
'
lerlre Board held on 1:ovember 2
and 3, 1032, were approved and the actions
reeor„
`te(i therein
were unanimously ratified.
The Board then considered and acted upon the following matters:
Te
leCrtua dated November 22, 1932, from the Chairman of the Federal
ileaerire 13ank
of 3oston stating that the board of directors, at its :aeeting
()II that (late,
liade no change in the bank's existing schedule of rates of
cila°1111t and Purchase.
.dthout objection, noted with anprovul.
ilem°randa dated November 21, 1932, from the Chief of the Division o2
1111: °De
raLi°11-9 transmitting and recommnding acceptance, as of 17overther 23,
4462
Of the
resj-iation of
C. 1. Fears, an employee on the ni;;ht force
the Go,
J-C1 Settlement Fund and reconnendirY; the appointment, as of 1-ovember
1,%52
(31b1:
-. r. Harold B. Richardson, with compensation at the rate of '1.50,
on
- Per night, de,Ysnding upon the hours of his service.
Approved.
1,:emn
-randum dated November B, 1932, from the Chief of the Division of
,144,
4
-L. N3erii

recorram3nding the appointment of Mr. "Edwin R. Millard as a Fed-

e exexainer with salary at the rate of :,4,500 per annum, the appoint-




11/z-5/32

OM.
•

tent to
become effective as soon as Lr. nillard takes the oath of office.
Upon motion, it was voted to annoint
'Allard as an examiner for all purposes of the
Federal Reserve Act, as amended, and of all other
acts of Congress pertaining to examinations nade
by, for, or under the direction of the Federal Reserve Board, to designate him as a Federal reserve
examiner, and to fix his salary at the rate of
4,500 per annum, all effective on the date on which
lir. illard takes his oath of office.
On this notion Er. L:iller voted "no", for
reasons explained in a statenent of the Secretary of
the Board which is included in the files.
Letter to the Federal ileserve Agent at Philadelphia, approved by five
111411381*e Of the Board on ,7ovember 22

1932, requesting that he advise the

4111t 144tional Bank of 1Joodstown, New Jersey, that effective if and when its
e43)1t1 has been
increased to at least .,;100,000, the Federal Reserve Board has
ellite(1 it the ri-fht to act, under the
provisions of Section 11(k) of the
.'eecier
41 Ileserve Act, when not in contravention of State or local law, as
tteet eXecutor,
administrator, registrar of stocks and bonds, guardian
cie3t4tea, ao3ignee, receiver, committee of estates of lunatics, or in any
other
ridue
tarY capacity in which State banks, trust companies or other
°r1)cz4tions
Which come into competition with national banks are permitted
tl) et 140,er
the laws of the State of New Jersey, the exercise of all such
be4 _
'
-4C subject to the -oravisions o. the Federal Reserve Act and the
4-441 tions
Of the Federal Reserve Board. The letter also recluested, in
4411 1°1/ with the Pronosed absorption by the First National Bank of the

C°14tv
- -rust Company, the commercial department of which holds particiktiota
ill Individual mort ;age loans in which trust funds held by the company
ueela
Dr-0`rr
--lieste(1, that the agent call the national bank's attention to the
.L 10
ve

11

Of eection 11(k) requiring that national banks exercising trust




455
11/23/32

-3-

1)°
"
1"
6" shall segregate all assets held in any fiduciary capacity from the
elleral assets
of the bank and the Board's ruling that the investment by a
11 t
1°Ilial bank of trust funds and funds of the commercial department in
iprticiPatiolls in the same mortgages does not conform to the recluirements of
4etion 11(1:).
Approved.
Letter to the Federal Reserve Agent at Chicago, approved by five meraber8 or the
Board on 1;ovember 22, replying to Assistant Federal Reserve Agent
"to
411gts letters of
november 3, 4 and 16, 1932, with regard to the Pincon.ning
&tate
iehigan, which filed a notice of its intention to

vlithdrart from
inembership on I Ay 7, 1932, and, accordingly, could have
"t"teci w
ithdrawal on november 7.
1.t10t to
114Z)

ata

The rcply noted that a plan of reorgani-

correct the unsatisfactory condition of the institution is under
tha.t the agent has si' i-fied his willingness to
grant the bank thirty

t14'4 ill W
hto mak.0 the necessary corrections, and stated that the 71loal-d
1144 tlo
ob
jection to the procedure which is being followed. The reply also
titEtteci titlt
Is assumed that the 2ederal reserve agent will be careful to
C the bank the impression that it may be required to effect a with-

Ora

mambershil) pursuant

to the notice previously given; also, that in

it is de:Arable in cases of this kind to suggest to the bank

t
ho
but

withci
to

Withdraw fron membership in accordance with the notice of
that under the law a State meraber is not required to effect such
raay abandon the notice of intention to withdraw if it desires

O.

Xoproved.
Letter dated November 22, 1932, Iran the Chairman of the Federal Re-




11/23/32

_4_

456

8el
'
ve Bank of Philadelphia, referrinr; to his letter of November 3, with
reard to the share-the-work plan previously authorized by the board of
clirectorz 02

the bank and stating that it is now proposed to calculate the

cil*Ictions to be made from the salaries of the present officers and employees
°Ib the bank. on
the income tax principle; the deduction on all salaries of
'4000 or
less to be not more than 1.95,; in the discretion of the officers
the bank; on salaries between

2,000 and .5,000, not more than 2.25; on

4aalIes between

t-5,000 and cA2,000, not more than 2.6; and on all salaries

4E'
4 4a2,0oo, not

more than 3.255.

The letter also stated that the modified

1141171°Ixid be submitted to
the executive committee of the bank at its meeting
to

Y 44d if approved by the committee the Board would be so ad7i ed by
teIeCrexa.

After discussion, the Secretary was authorized, upon receipt of advice from the Chairman
Of the Philadelphia bank that the revised plan
had been approved by the executive committee, to
inform the Chairman that the 7ederal Reserve Board
Interposes no objection to the Dian and approves
the salary payments involved in the employment of
the additional temporary employees contemplated by
the plan; L.r. Hamlin voting "no".
The
1111111

Governor then stated that he had discussed with Ni'. L. B.

DePutY Chairman of the Federal Reserve Bank of Cleveland and
4e

ell o2 the Bunking and Industrial Committee of the Fourth Federal Re-

the eraployrnent by the Federal iieserve Bank of Cleveland of
"

as Office Lanager for the share-the-work movement, and

kttller
:
11iams will call on the telephone on Friday of this week for a
1*

Le4e1132ion of the matter, following which the Governor will discuss
“ith the
Board.
Th
° question was then raised as to the appointment by the Board of




4r7

11/23/32

_5-

Cle188 C directors and branch bank directors for the terms beginning
Tanuary
1, 1933, and the designation of the Chairmen and Deputy Chairmen at Federal
reserve banks for
the coming year.
It was decided to make this natter the special
order of business at a meeting to be held on a date
to be fixed by the Governor of the Board following
his return on December 3, 1932, from a visit to some
of the western Federal reserve banks.
There was then presented a nencrandum prepared by the Boardts
bivis
ien ef 1xam1nations under date of 7Tavember 23, 1932, calling atter..tion
t

44_

wie fact
that the report of examination of the Guardian Trust Company,
Clevela
Ohio, as of February 29, 1932, discloses that the bank holds in
aszets
(1) a note in the amount of 344,201 signed by Lessrs. A. T. Dean
72. R.

rancher, Governor of the Federal aeserve Bank of Clevelsnd, (2)

te in
the amount of

ilerte

signed by L:r• George Do Camp, Chairman and

Ileserve Agent at
the Federal Reserve Bank of Cleveland, and (3) a

I/1 the amount of 2a,300 siGned by
Vtilliara Taylor, Chief National
4;z,11,-A
L-4-4er for the Fourth "Tederal fleserve District. A general discussion
eklileci au
which attention was called to the expiration on December 31,

1032

' Or

the appointment of Er. DeCamp as a Class 0 director and of his

tier'
, by the 3oard as Chairman and Federal Reserve Agent.
At the conclusion of the discussion, the
Secretary was requested to communicate with Kr.
DeCamP and to request him to came to Washington
on l'onday, November 26, 1932, for a meeting at
10:30 a. mi.. with the Comnittee on District No. 4,
and to be orepared to give the committee full inwith regard to his indebtedness to any
TIlerlber or nonmenber bank.
The :3ecrotary was also re_uested to bring
to tho
attention of the Acting Comptroller of the
Currency the loan to Chief rational Bank Examiner
TaYlor as reported in the report of examination of
the Guardian Trust Company.




458
11/23/ 2

-6-

Reference was then made to the cuestion whether an appropriation
oe Iflade by Federal reserve banks of an anount estiated at .75,000
to co
"
'
1 the cost of a Federal Reserve System exhibit at the Century of
=.4cpo5ition in Chicago in 1933.

The unanimous opinion was again

'
reaaed that the proposed expenditure
is not justified and the cluestion
1441

n4
-alsed as to the advisability of a less pretentious exhibit.

The

40etazY
stated that the Director of the Division of Research and Statistics
1,41,
verv
4 8 rongly of the opinion that the federal Reserve System .should not
4tteii111+,
a1Ythin3 other than an exhibit of the highest type.
At the conclusion of the discussion, it was
determined to be the consensus of the members
present that the federal reserve banks should
abandon. all plans for an exhibit at the Century
of Progress Exposition and the Secretary was requested to advise the 7ederal reserve banks accordingly.
Telegram dated November 23, 1932, from the Governor of the Federal
13441z

clAth of 3oston statin,; that the advance made by the Federal Reserve

or

Boston under
authority Previously granted by the Board to the Peoples
tiorialEth

Southbridge, flassachusetts, in accordance with the Provisions
atiori 1.0(b)
of the Federal Reserve Act, is still outstanding in the

4°111it or
vt)0,0oo; that the local conditions are about the sane as at the
the
advanee was
originally made and that the board of directors of the
tictat
'
11
subject to the approval of the Federal Reserve Board, had
ea

)1..c1411

the

continuance for a Period of ninety days of advances in

ee with section
10(b), up to a maxirnim of ,fl5,000, with interest at

Z',11-te 0

r 5 1/2:) per annum.
r
The Secretary was requested to advise Governor
1°ung that the Federal Reserve Board interposes no
ob jection to the continuance in the amount of 330,000
40/17 outstanding of the advance made to the member bank;




459

11/23/32

-7that the Board authorizes an additional advance in
accordance with the provisions of section 10(b), in
the amount of ,A5,000, with interest at the rate of
5 1/2,', per annum, payable on demand; and that in the
event the advances are not repaid nor demand for payment made within ninety days from this date, the natter
should again be presented to the Board with a statement
of the conditions which, in the opinion of the Federal
reserve bank, justify the continuance of the advances
Without demand for repayment.

Telegram dated November 23, 1932, from the Governor of the "ederal

,
ass

-"e Bank Of Boston referring to the Board's telegram of June
2, 1932, and
that
the Berlin National Bank, Berlin, New Hampshire, is again

etatirt

ilIC for rediscount the note
of the Fidelity Savings Bank of Berlin,

111 the
that

°tint of ,)10,000, secured by United States Governme
nt securities;

bkk vtolad

the Berlin National Bank has eligible paper, the Federal reserve
nuch prefer to have the noe of the nonmember bank secured by

7e4 eD,:t b ands and that
as the nonmember bank would suffer substantial

'
eeontiellaed

elled to dispose of the bonds at the Present time, it is
that the Board authorie the di- count of the note.
The Secretary was requested to advise Governor
Young that the Board interposes no objection to the
discount for the Berlin National Bank of the note
of the nonmember bank referred to, under the authority
canted in the Board's telegram of 3-lane 2, 1932.

Thereupon the meeting adjourned.

4D1) 01,,ea




Secretary.