The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
A meeting of the Federal Reserve Board was held in the office of the Federal Reserve Board an Wednesday, November 6, 1929 at 11:00 a.m. PIEZENT: Governor Young Ir. Platt Mr. Hamlin lir. Miller Mr. James Mr. Cunningham Mr. McClelland, Asst. Secretary The minutes of the meeting of the Federal Reserve Board held an November 5th were read and approved. Telegram dated November 5th from the Chairman of the Federal Reserve Bank of San Francisco, advising of the establishment on that date of the following schedule of rates for purchases of bankers acceptances: 1 to 120 days 121 to 180 days Repurchase 4 3/4,1, -7 5p 4 3/4% Noted, with approval. Telegram dated November 6th from the Chairman of the Federal Reserve Bank of Philadelphia, advising that the board of directors at a meeting on that date made no change in the bank's existing schedule of rates of discount and yurchase. Without objection, noted with approval. Report of Committee on Salaries and Expenditures on list submitted by the Federal Reserve Bank of Philadelphia of employees for whom the directors of that bank authorized leaves of absence with pay, on account of illness, during the month of October, where the total of such absences since January 1, of 1929, has exceeded thirty days; the Board's Committee recommending approval the salary payments involved. Approved. 11/6/29 -2- o• Memorandum from Counsel dated November 4th submitting, in accordance with the action of the Board at its meeting on October 31st, draft of letter to the Secretary of the Treasury requesting that he transmit one addressed to the Attorney General of the United States,asking the opinion of the Attorney General on the question whether the Equitable Trust Company of New York City may establish an office in Detroit, Lichigan, for the performance of certain limited functions and continue to retain stock in the Federal lieserve Sank of ;AI" York. After discussion, upon motion, the letters submitted by Counsel were approved. The Assistant Secretary then reported that in accordance with the action of the Board at its meeting on November 4th a recommendation was requested from the Federal Aesefve Agent at San Francisco on the application of the Bank of Italy National Trust and Savings Association of San Francisco, for permission to establish a branch in London, England, and that the Federal Aeserve Agent has made a favorable recommendation which is concurred in by the Executive 0o7mittee of the Federal deserve bank. After discussion, upon motion, the following was ordered spread upon the minutes,. Lessrs. Janes and Cunningham voting "no": 'rUhereas, the Bank of Italy National Trust and Savings Association has made application, pursuant to the provisions of Section 25 of the Federal Aeserve Act, for permission to establish a branch at :o. 13 L:oorgate, London, E.C.2,1and; and it appearing that said application is properly made under the law and should be granted; 110:1, TIEREFOAE, IT IS ORDEA'..0 that the said application be, and it hereby is, anproved, and that the Bank of Italy National Trust and Savings Association be, and it hereby is, authorized to establish a branch at No. 13 :,loorcrate, London, :.C.2, ngland." 11/6/29 -3-- The Governor then advised the Board that the Comptroller of the Currency is preparing his annual report to Congress and that he may possibly incorporate therein a recommendation for elimination of the dual authority which now exists in granting charters and trust powers to national banks by plcin_(.7 the approval of trust powers under the Comptroller of the Currency. At the request of the Board, Lr. Pole joined the meeting and he was advised that the Board agrees with him that the grant lug of charters and trust ,po.7,ers to national banks should be vested in the same authority and that there would be no objection on the part of the Board to his making the recommendation he contemplates. He was advised, however, that Should the matter be referred to the Board by Congress, it would possibly take the position that the granting of charters to national banks should be subject to the approval of the Board, but that if Congress is unwilling to so legislate, the Board would prefer having the granting of trust powers placed in the hands of the Comptroller of the Currency, to continuance of the present dual responsibility. Mr. Pole then left the meeting. The Governor submitted an application of the Security National Bank of Brookings, S. D., for permission to exercise general fiduciary powers, approval of Which was recommended by the Federal Reserve Bank of Minneapolis on the basis of an examination made under date of February 19, 1929. He stated, however, that a subsequent examination on September 30, 1929 disclosed numerous criticisms o. the management of the bank for its apparent disregard of the national banking laws and the regulations of the Comptroller's office, as a result of which the Comptroller has written the bank that it will be placed on the list for special examination unless the law is strictly observed and existing un- 9 -4- 11/6/29 satisfactory matters are corrected. The Governor stated that ha, therefore, concurs in a recommendation of the Law Committee that approval of the application be deferred until the criticisms in the last report of examination have been cleared up to the satisfaction of the Comptroller of the Currency. After discussion, upon motion, the recommendation of the Committee was approved. The Governor then submitted a memorandum from the Comptroller of the Currency, replying to an inquiry addressed to him in accordance with the action of the Board on November 4th, recommending approval of the application of the First National Bank and Trust Company, Yankton, S. D., for permission to act as guardian of estates, assignee, receiver, committee of estates of lunatics or or in any other fiduciary capacity in which state banks, trust companies are permitother corporations which come Into competition with national banks that this ted to act under the laws of South Dakota; the Comptroller stating Reserve recommendation is made in view of the recommendation of the Federal has apparently Agent of Minneapolis and the fact that the applicant bank trator and properly administered the powers of trustee, executor, adminis Board. registrar of stocks and bonds, previously granted it by the The Governor stated that he concurs in the recommendation of the Federal Reserve Agent and the Comptroller of First the Currency and, upon motion, the application of the National Bank and Trust Company of Yankton was approved, Messrs. Miller and James voting "no". of reply Memorandum from Counsel dated November 5th, submitting draft Agent at New York, into letter dated November 4th from the Federal Reserve , which is to become purely quiring whether the Bank of the Manhattan Company present banking business a holding corporation after transfer of all of its member bank, which will then to the International .Acceptance Trust Company, a , may then be considered as in be known as the Bank of Manhattan Trust Company 80 -5- 11/6/29 liquidation within the meaning of Section 5 of the Federal Reserve Act and immediately surrender its Federal Reserve bank stock; the proposed reply advising to the contrary and stating there is no authority in the law for the voluntary withdrawal of the Bank of the Manhattan Company from membership in the Federal Reserve System except upon giving six months' written notice. The Governor stated that in becoming a purely holding corporation, the Bank of the Manhattan Company will materially change the character of its assets and the scope of its function within the meaning of the general condition of its membership in the System and the Board could immediately terminate its membership by expulsion for a violation of the general condition. He stated, however, that such action should not be taken by the Board unless agreeable to the Bank of the Manhattan Company. After discussion, the proposed letter to the Federal deserve Agent at New York, submitted with Counsel's memorandum, was approved, with the understanding that the Governor may informally take up the matter of termination of membership of the Bank of the Manhattan Company by expulsion* The attention of the Board was then called to the fact that the Federal Reserve Agent at New York, in his letter of November 4th, transmitted a communication from the International Acceptance Trust Company requesting permission to purchase the banking business and assets of the Bank of the Manhattan Company, including its branches. Upon motion, the permission requested was granted. The Governor then submitted the matter referred to him for recommendation at the meeting on October 31st, namely, memorandum from Counsel dated October 24th, submitting draft of a letter to the Governors of all Federal Reserve banks, requestincr, consideration at their next Conference of a question raised 81 -6- 11/8/29 by the Governor of the Federal Reserve Bank of Boston as to whether it would be inconsistent with the uniform policy on check collections, approved by the al Board on October 15th, for a Federal Reserve bank to take a pledge of collater for the specific purpose of protecting itself as agent in the collection of checks on a specific bank. Upon the Governor's recommendation, the proposed letter to the Governors of all Federal Reserve banks was approved. Report of 3xecutive Committee on letter dated October 28th from the Federal Reserve Agent at Chicago, with regard to an application of the Peoples National a reduction Bank and Trust Company, Chicago, Ill., an outlyinF institution, for statin its reserve requirements from 13d to 10,, of demand deposits; the Agent its applicaing that the national bank began business in April, 1929 and that Reserve bank pendtion has not been submitted to the directors of the Federal exception to its ruling advice from the Board as to whether it would make an must have been a member of ing that a bank applying for a reduction in reserves period of at least the Federal Reserve System and in operation as such for a one year prior to the date of such application. After discussion, upon motion, it was voted to advise the Federal Reserve Agent at Chicago that the Board will consider making an exception to its rule in this case, if recommended by the directors of the Chicago bank. dated November 4th The Governor then presented a memorandum from Counsel , requesting the submitting draft of a letter to the Secretary of the Treasury of rnmber banks views of the Treasury on the question whether certain deposits be classified as in the Hichmond and Jan Francisco districts may properly depositaries", "deposits of public moneys by the United States in designated -7 11/6/29 within the meanin of the Liberty Bond f,cts exempting such deposits from the reserve requirements of the Federal ileserve Act. In his memorandum, Counsel stated that in accordance with the instructions of the Board on September 19th, he conferred regarding this matter with the Presidents of the Iliggs National are Bank and the Commercial National Bank of 'dashinc:ton, whose institutions was involved in the inquiry of the Federal deserve Bank of _rtichmond and it understood that both would submit memoranda on the subject. althaurt a lengthy memorandum was submitted by the di Na advised that National Bank nothing opinion, subhas been received from the Commerical Nati3nal Bank and, in his y should no longer be mission of the question to the secretary of the Treasur delayed. At the sugr:estion of the Governor, the Assistant Secretary was instructed to advise President Donaldson of the Commercial National Bank that the Board's letter to the Secretary of the Treasury will be dispatched not later than November 12th, suggesting that if his institution wishes to submit any views on the question involved it do so before that date. r 2nd Memorandum from Counsel dated November 4th on letter dated Novembe arities from the Federal deserve Agent at Chicago, covering certain irregul tion, which at the Union Industrial Bank of Flint, Michigan, a member institu States District have not been brouht to the attention of the local United y ,-Aneral transAttorney; Counsel submitting draft of a letter to the Attorne Agent and draft mitting copies of the comunication from the Federal deserve to report the matter of a letter to the Felleral deserve Agent requesting him further details to the local United States District Attorney and to obtain the Department of Justice. and forward them to the Board for the information of Upon motion, the letters submitted by Counsel were approved. C.) 11/6/29 Letter dated November 6th from Mr. J. F. Hers on, tendering his resignation as Chief Examiner, effective at the pleasure of the Board, with the request that, if convenient, the date be fixed not later than November 30th. Upon motion, Ur. Herson's resimation was accepted, with regret, effective at the close of business November 30, 1929, and the Governor was requested to express to . him the Board's arpreciation of his long, conscientious and able service. The Governor then presented draft of a letter to the Attorney General, prepared by Counsel, following the Board's general practice, transmitting a report made by the Federal Reserve Agent at San Francisco of a possible violation of Section 5209 of the _ievised Statutes by Alex J. Smith, an employee of the Diamond Branch of the American Trust Company of California, a member of the Federal Reserve System. The Governor stated that the amount of the alleged embezzlement, approximating ten dollars, is so small, that unless there is same objection on the part of the Board the matter will not be reported to the Department of Justice. No objection was expressed, The Governor then submitted draft of a proposed letter to all Federal Reserve banks, with reference to the regulation regardin7 open market purnhases of Government securities adopted at the meeting of the Board yesterday. During letter, as and at his authorized the discussion, the Governor stated that the drafted, is not entirely satisfactory to him suirgestion action was deferred and he was to resubmit it after revision. itF,POATS OF S'2AIMING Dated, November 6th, Recommending a change in stock at a Federal Reserve bank as set forth in the Auxiliary Linute Book of this date. Recommendation approved, 11/6/29 -9- J.-1300':./T3 OF STAIDING COLIIITTEES: (Cont'd) Dated, Lovember 5th, 'Recommending action on an application for fiduciary peraers as set forth in the Auxiliary Llinute Book of this date. Recommendation approved. Dated, November 4th, .iecommending approval of the application of Mr. V. U. Hastings for permission .to serve at the sane time as director of the Commercial National Bank in Muskogee, Okla., as director of the First National Bank of Tahlequah, Okla., and as director of the First National Bank of Hulbert, Okla. Approved. of the application of Mr. C. I. approval 4th, Recommending November Dated, Norton for permission to serve at the sane time as director and officer of the Union 3tate Bank of Portland, Oregon and as director of the Jitizens National Bank of Portland, Oregon. Approved. Dated, November 4th, Recommending approval of the application of Mr. Charles A. Faircloth for penniss ion to serve at the sane time as director of the American National Bank of Pensacola, Fla., and as officer of the First National Bank of Tampa, Fla. Approved. The meetin5: adjourned at one o'clock. Assistant Jecretarj. Approved: Go-veTnor.
@FedFRASER