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t) Fa.? 0 Ir. A meeting of the Executive Committee of the Federal Reserve Board 1148 held in Washington on Tuesday, October 11, 1932, at 12:10 p. m. PRESENT: Governor I ieyer Mr. Hamlin Mr. Magee Mr. Tiorrill, Secretary Mr. fleClelland, Assistant Secretary Mr. Harrison, Assistant to the Governor. The following matters were considered and acted upon by the C° Mittee: Letter dated October 6, 1932, from the Secretary of the Federal ReNn,e Bank of new York, and telegrams dated October 6, 1932, from the CalaArtlen of the Federal Reserve Banks of Eansas City and San Francisco, and C't0ber 7, 1932, from the Secretary of the Federal Reserve Bank of Cleveland, all Ici/lising that at meetings of the boards of directors on the dates stated 4° ell4nges Were made in the banks' existing- schedules of rates of discount 8.4c1 plArehase. Without objection, noted with approval. Tele GraDhic reply, approved by five members of the Board on October 6 1932, t0 a tele gran of that date from Deputy Governor Rounds of the Fed- erEti Rea elbve Bank of New York, requesting authority for the renewal, in the l'Ette '411°1111t °f •A6,000, for a period of ninety days, with interest at the 70 per annum, and on the security of miscellaneous collateral, 11°tea and domestic bonds with a margin of at least 25, of the adbY the Federal Reserve Bark of New York, in accordance with the 00141111118 thect Of SeCtion 10(b) of the Federal Reserve Act, as amended, to the IkIti°11a1 Bank, Cornwall, New York; Deputy Governor Rounds stating 11(liti°118 have not improved sufficiently to warrant repayment of the loari. The reply stated that the Board authorizes the renewal sub- 318 10/11/32 Ject to -2- the terms and conditions recommended. Approved. Tel-egraPhic reply, approved by five members of the Board on October to a telegram of that date from Deputy Governor Rounds of the :Le(lertll Reserve Bank of New York, roc-1u° tins authority for a renewal, in the zeduced amount of .482,942, for a period of ninety days, with interest at the rate °f 5 1/2, per annum, and on the security of miscellaneous stocks 8'41130148 and unsecured notes with a margin of at least 25%, of the advance rnacie uY the Federal Reserve Bank of New York, in accordance with the proO. section 10(b) of the 2ederal Reserve Act, as amended, to the ?e°131e8 Bank and Trust Company, Passaic, rew Jersey; Deputy Governor Rounds that the bank is experiencing continued withdrawals and is not in a 13°81ti°n to repay the loan at this time. The reply stated that the Board %Ithorizes the renewal of the advance subject to the terms and conditions nL15124ed. Approved. l'elographic reply, approved by five members of the Board on October to - -Letter dated October 6, 1932, from the Governor of the 7ederal Reterve 13 4111Z of Atlanta transmitting an application filed by the American Bank 414 Tr4 "C°4P1ny, New Orleans, Louisiana, for an extension for ninety days, 14 the l'educed amount of :A25,264.85, of the time of payment of the advanco to th -6 bank by the Federal Reserve Bank of Atlanta, in accordance with tha Aroviaione of section 10(b) of the 2ederal Reserve Act, as amended; the %ztkleio 4 be' desired to meet conditions very similar to those existing at the till° Doe ea 110 tie loan was originally made. The reply stated that the Board inter- Objection to the continuance of the advance without demand for pay- 319 10/4/32 -3-. Merit, in „ the reduced amount, TJayable on demand, with interest at the rate of 5 lk nwp, ,-- annum payable monthly, and requested that in the event the advance rePaid nor demPnd for payment made within ninety days from September 15 '1932, the matter should again be brouL;ht to the Board's attention with a "ateraent of the circumstances which, in the opinion of the Federal Reserve 844k. of A tlanta, justify the bank in continuing the advance without demand Parment. Approved. Tel eaTaphic replies, approved by three rnmbers of the Board on '34G(Iber 8, to telegrams dated October 7, 1932, from Assistant Deputy Governor 4chleY °f the Federal -Reserve Bank of New York, requesting authority to 134re44 Se from the Caldwell National Bank, Caldwell, New Tersey, :)30,000 of ta ZeVerme notes of the BorouLt of Caldwell, and from the First National 1361'tllt, t li:idland Park, New Jersey, ;25,000 of tax anticipation notes of the of Midland Park; the replies stating that the Board authorizes the with the understanding that the notes offered meet all requiretaeilts of Re gulation E except that the populations of the respective issuing 4141eipa1ities are less than 10,000 each and that the amount of the notes ofterea each case exceeds 25; of the total outstanding warrants of the The reply with regard to the purchase from the Caldwell 4t1°Aal stat u. that it appears that the notes of the Borough of Cald- IlellD4reha3ed from the national bank under the authority of the Board's tel e,r'reaa or 1711 Ally 6, etiler 19322 have been repurchased, and reouested advice as to such is the case. Approved. 320 10/11/32 -4- Teleeraphic reply to a letter dated October 3, 1932, from the Pecielbal Reserve Ao.ent at Richmond transmitting, with the favorable recomraellclatthn of the executive committee of the Richmond bank, the application 't —"qt,la Carolina National Bank of Charleston, South Carolina, for an tictensi,, " n for another six months of the permission previously granted by tile 13 (/ rd to rediscount paper bearing the signature or indorsement of the Sc4th CAI, —(3-Una State Bank, a nonmember; the reply stating that the Board e telids for a further period of six months from October 12, 1932, the 1tilOr -'Y eranted to the Richmond bank, in its discretion, to rediscount the 81 national bank, good and eligible paper acquired from or bearing ture or indorsement of the nonmember State bank. Approved. 1.932 Renevial bond in the amount of .;100,000, executed on September 30, 3.°11n R. lAtchell as Federal Reserve Agent at the Federal Re- '13Y -ye B of lanneapolis. Approved. the 4e1, 'demo randum dated October 10, 1932, from Lir. Leo H. Paulger, Chief 1.viaion of Examinations 4 e tile °4th I llrgUerite QrI7 recommending the employment as his C. Idaynard, with salary at the rate of :„2,100 appointment to be effective as soon as -Crs. I.:aynard takes of CIffiCe. Approved. on Salaries and Expenditures on a letter ceci°e:::::t371::e::::imttte: Chairman of the Federal Reserve Bank of il-lIkla 1.equesting DI approval Of a change in the personnel classification 411 Of the bailk to provide for the new position of "Assistant Custodian" 321 10/11/32 -5_ 14 the Rec onstruction Finance Corporation Department of the bank; the 8(3arata Committee recommending approval. Approved. Replies to letters dated October 3, 1932, from the Federal Reserve w e.t -Q-1-Las reportinG that the First National Bank, Harlingen, Texas, 4111 the -u-Lrst National Bank, Perryton, Texas, were continuously deficient iii their required reserves for the period of six and six and one-half res pectively, ending September 15, 1932; the replies stating that Of the information submitted and in accordance with the agent's recortae ndations, the Board will take no action in the natters at this time °Iblker than to forward copies of the agent's letters to the Acting Comptroller °t the Cu rrency for the information of his office. The letters also recilleeted that the agent advise the Board, within a reasonable time, as to 174ether the bj have restored and are maintaining their required reserves. Approved. RePlY to a memorandum dated September 27, 1932, from the Acting °°k)ttolier Of the Currency recap:unending approval of the application filed bY the Pirat National Bank of Lavonia, Georgia, for permission to reduce 114a Qapital from a() °°° to :)50,000, the funds thus released to be returned t(3the ehareholders; the reply stating that the Board approves the proposed 4dLlAction with the the understanding that the reduction will be authorized by Vote Of shareholders owning two-thirds of the stock of the national bank °4 condition that or before the reduction becomes effective the liabilities he national bank for circulation outstanding will be reduced to an e‘14°1111t 40t in excess of 5090°°' Approved. 322 10/11/32 -6- Reply, approved by three members of the Board on October 7, to a 1*(3tter dated 3eptember 28, 1932, from the Governor of the Federal Reserve Belik°f0hicago, stating that incidental expenses of the Banking and Committee of that district, aggregating :,1305.87, had been ab8°rbed by the band:, and that, with a view to cooperating with the committee to the fullest possible extent, the Governor had agreed, subject to the concilrzeziee Of the board of directors and with the understanding that the 2edve Board in Washington would be fully apprised, to furnish the lesei ' rlittes suitable quarters in the bank building, to assign to the committee rl ' (YZ the banjos organization such help as circumstances would warrant, and to derray theexpenses involved in the employment of some assistance from t4 The reply referred to the Board's letter of September 21, 1932, to the chairman Of the Federal iieserve Bank of Boston and to the practice or isielv In that letter as having been adopted by the Federal Reserve Bank in connection with the expenses of the Banking and Industrial C°Iitrilittee to Ithich 110 that district, which it is believed is entirely practicable and reasonable objection can be made. The letter stated that in the il'el.411-staticee , If in the judgment of the directors of the Chicago bank the e lE3tiN. , ao_ ne 1)ern 1 of the bank is not adequate for the purpose and it should be()1118 liece88arY to incur additional expenses for the employment of help in 1\1-rt4„Etxlee of the Purpose for which the Banking and Industrial Committee 114a €11313(31/Itea, the enoloyments involved should be handled either under the 111%()Irieloils or the existing classification plan if applicable or as appraised 1)%itioris which mu3t be covered by the submission in advance of the specific l'e%liellae.tiorl of the board of directors and approval by the Federal Reserve 11°41I(1 11"°re the payme nt of the salaries involved would become effective. .3 ,32, 10/11/32 -7Approved. Letter to 1. 7- Karl E. Prickett, National Bank Examiner, apnroved by thzele '"uJers of the Board on October 4, 1932, and letter to 1,1r. W. Zr. Evans, Assit ant Federal 2eserve Agent at Dallas, approved by three members of the Boara °4 October 8, 1932, with regard to the examination of the Paris and 1,:ezico CitY offices of The Chase Bank as of the close of business October 15, 1932. The letter to Ir. Prickett referred to the authority granted to him 151r the Board on September 5, 1930, to examine the Paris offices of The Chase Ilk alld stated that he is further authorized, if in his judgment it is adto do so, to use such members of the auditing force of The Chase Bank or 8j1d14 .111‘1)°8e etocq With the Chase National Bank as may be made available to him for the 'aithOut that the comnensation from the 7ederal Reserve Board, it being under- accebtability of the work of these auditors rests entirely Prickett; that such assistance if utilized will be confined to the haicai uavt of T-ih u e:.camination with test checks on the work performed by a4cliters being made by L. Prickett, and that all reconcilements will be 11"kecl by him. The letter also stated that, if in the judgmnt of Yr. 4.Ott, the assistance which can be Obtained from the sources mentioned 14 liot slIfficient or r(4, satisfactory he may arrange, under procedure outlined, tile e411310Yment of ' l01% outside accountants from a firm of recognized standing Deriods as he may deem necessary. The letter to Yr. Evans inclosed -44leeioll aut horizing him to conduct for and on behalf of the Board an btlailltitic311 of the :Texico City office of The Chase bank as of the close of Q am : x aaa °A October eolee 15, 1932, and outlined in a general way the natters to be et bY the exa mination. The letter also renuested that when the report ellAEltion is forwarded to the Board, 1,7r. Evans also return for 10/11/32 -8- 1111cellation the txmorary commission issued to him. Letters approved, together with a letter to the Federal Reserve Agent at Dallas also approved by three members of the Board on October 8, inclosing the letter to I:r. Evans and stating that the expenses incurred by the latter in conducting the examination are to be reimbursed to the Dallas bank by the Board, 77h1ch will assess them against The Chase Bsnh in connection with the expenses incurred in examining Other offices of the institution. Tele graPhic reply, approved by three members of the Board on October 7, to a , J-etter dated October 6, 1932, from the Governor of the leederal R 4e1N Betn. of New t)at York, stating that the National Bank of Hungary has advised its free rezerves foreign exchange holdings are practically exhausted and its sc reduced that their present use for repayment of any part of the elledits to the National Bank of Hungary which expire on October 18, 1932, 17141k entail Grave risk for the bank and seriously endanger the maintenance the lAt°111a1 vulue of the Hungarian currency, that the National Bank of 44441'7141e re quested a further renewal of these credits in full for a period °I* till'ee Months endinLn; 1933, and that the board of directors of the New York bank, at its meeting on October 6, voted, subject to the approval ileserve or t40 ?eae,,i 13' Board, the of2icers of the bank to arrange ::, to l for a peri he N,tewa renew period not exceeding three months of the bank's particiill the credits, provided the other principal participants in the credits 1--,e171ae s:ctena their Participations. The reply stated that the Board offers soot,,onto the action of the directors, it being understood that the re41714 17111 be nade upon Qte(litz. the same terms and conditions as govern the existing Approved. Teleon, --e'Phic reply to a letter dated October 10, 1932, from the Governor 325 "/11/32 the Aderal lieserve Bank of New York stating that the Austrian National 8 11aB requested that the central bank credit to that institution be rein full for a further three months on the existing terms and conditions, in that, in view of the continuing difficulty of its foreign exchange --1 zePayment of any part of the credit is impracticable at this time, 0 -h the proposed renewal would carry with it the provisions incorporated " ' 11, the last Previous renewal that the credit would be repaid if and when the 1\111(1 resulting from the loan to the Austrian Government, now under negotiation, 41'e 1114eed at the disposal of the Austrian Government or of the Austrian B The letter also stated that at the meeting of the executive °°1°aittee of the I board of directors of the New York bank, held on October 10, 1'41784 voted, e tile o subject to the aoproval of the _federal Reserve Board, to auth- f.ficers of the bank to arrange for the renewal, for a period not eteeedik; three months, of the bank's participation in the credit to the '1112trian liationa1 Bank which expires on October 17, 1932, provided the other DzIalipal participants in the credit likewise extend their participations. The a-ed that the Board offers no objection to the action of the cll. reP1Y ett Ilectors be ta4cie or the New York bank, it being understood that the renewal will Upon the same terms and conditions as govern the existing credit. Approved. iteDlY to a letter dated September 30, 1932, from the attorneys for the Iktiotai 1y 1; Dank of Lew York, New York City, stating that delays have bee4 er*31-41tered `47itzerilici, and in the opening of the Proposed branch of the bank at Geneva, that the bank desires that the period within which the ::i cish r:: under the authority of the Board's order of April : s te t: 13 ee Y: ,, : b 11Z ninety days beyond October 29, 1932. The reply 326 10/11/32 -10- 8t4ted that the Board has extended the period within which the National City °I 'New York may establish the proposed branch in Geneva, Switzerland, 1141;11 Xalltla-ry 27, 1933, and inclosed a certified cony of the following order Or the Pederal Reserve Board granting the extension: "°RDER EXTENDING PERIOD WITHIN WHICH THE NATIONAL CITY BANT<: OF 11.1W YORK MY ESTABLISH A BRAUCH IN THE CITY OF GENEVA, REPUBLIC OF SWIT7E1TLAED. "WHEREAS, the Federal Reserve Board, by an order adOpted at a meeting held on the 29th day of April, 1932, allthorized the National City Bank of New York, in accordance v.lith the Provisions of Section 25 of the Federal Reserve Act, lo establish a branch in the City of Geneva, Republic of 37itzerland, upon condition that the authority thereby plated be exercised and that said branch be actually estabshed and opened for business on or before October 29, 1932: it now appears desirable that the period wit"ln Which the said branch may be established under the ''U4110rity conferred by said order should be extended; "NOW, THEREFORE, IT IS ORDERED that the said order Dted by the Federal Reserve Board on April 29, 1932, be, u it hereby is, qualified and amended so as to provide .! ZAu.at unless the authority granted by said order is exercised nd the proposed branch in the City of Geneva, Republic of it zerland, actually is established and opened for business 011 or before Tanuary 27, 1933, all rights granted by said il tscler shall be deemed to have been abandoned and the authora,. It, r "erebY granted shall automatically terminate; but if 0;" °ranch shall be established and opened for business on Newbefore January 27, 1933, the said National City Bank of proi rk may operate and maintain the same, subject to the ' — 8ions of Section 25 of the Aderal Reserve Act." r Approved. Cilicular letter to the Governors and :ederal Reserve Agents at all 171 41 reserve banks, statin;2; that a meeting of the Agents and Governors th t4 1,1, 19: Fed.eral Reserve Board has been called beginning on T.Tonday, I:ovember 4, and e :ctending over such period as may be deemed necessary at the (love e letter l'urther stated that it is understood that the Chairmen of 1'4°1'8 Conference and the Conference of .federal Reserve Agents will 327 10/11/32 -11- suggesti0ns as to the program for this meeting after consultation with tile 'various Governors and Federal reserve agents, and the Federal Reserve will supplement the program by any topics that it may desire to bring 413 far d iscussion at the meeting. Approved. The Secretary then re-Ported that the federal Reserve Agent at Olevead called him on the telephone and advised that he has now received a reDart 01 a recent examination of the Guardian Trust Company of Cleveland a/Ici ha S hade a review of the banking situation in Akron, Ohio, that there are Zeveral 4' aspects of the situation in Cleveland and Akron which he believes di be --seussed orally with the Federal deserve Board, and that if it th e al)l)roval of the Board, he or Assistant Federal Reserve agent letehe will corcto Washington some time next week for that purpose. The Secretary was requested to advise DeCamp that members of the Board will be glad to meet with him or Mr. Fletcher on Wednesday, October 19, 1932, at 11:00 a. m. Report a of Standinz, Connittee dated October 7 and 10, 1932, recom- aDlaroval of the following changes in stock at 2ederal reserve banks: A ie.*. -on for Shares ORIGIhAL Stock: let Ira. City IT 7. m-alrial Bank and Trust Company, '41cag0, 3,000 3,000 Illinois. A 1, 4-ketiotle for t IDDITionz 1)4111)11i Stock: • (liePosfi Trust Company, Harrisburg, Pa. 'ease in. li'lrat -11 1, el capital and surplus) laitional Bank, Canton, Pa. (Increase in 1413 e Pertly offset t b d decrease in n tr.? -ket 180 24 14 stxrpiusraili , Union City, Tenn. (Increase 2 204 1°/11/32 -12- AD.Pli t• for 1-)ITOAD -7AL Stock: ( Cont'd) District1To. O. (-Cont 'd) Talrlor National Ban1:1 Campbell ville, Kentucky. (Increase in surplus) Shares 3 Total 5 209 ilooro f_SURIIIIDLii tor of Stock: 110. 0na Bank, Derry, N. H. (V.L.Abs. by 3izat National Bank of ',Jest Derry) Diatrict •Btizat ,latior.al Bank, Thomasville, Ga. (Insolvent) 1)e4. t*Ir 311NP114La-a1 ))18trie • Bank, Leland, Ill. (Insolvent) • 44 44 60 60 30 30 a. at.,1"'”ionaiBtix,St. Louis, lassouri. 1)00,,`"•-u.Suc. by Guaranty-Plaza Trust Company) Indiana v-Lte''rla,-,all National Bank, Princeton, 1714.a.'t''ease in surplus) al Bank, IurT. ray, Kentucky. (Decrease in P11,‘1 -,S .!:111Tation)111) ITationai Bank, 1,1indsor, :issouri. (Decrease slirDlus) kat ?ia rlct -elity state Bank, Aurora, Nebraska. (Inso ent) 1) a•tiler,, 11 :_let '-'41°11 State Bank, J'unction, Texas. (Decrease in alltratle) T3 , ,exas. T (Decrease in 0tt„,1311)111s) tloIial \ ichtar').1us -Tails, Texas. (Decrease 216 15 20 15 266 39 39 60 9 120 Total 189 623 Approved. 148 Ileic)(3rt3 of Standing Committee dated October 7 and 8, 1932, recommend4141zevAl — or the following Clayton ,let applications: ! LI Mr, n orzle,:* 1I• Odin, for permission to serve at the same tine z`Ltnaiesot`'x ' er the Larquette National I3an1, Iiinneapolis, e`' as director of the Camden Park State Bank, Minneapolis, ' 0/11/32 -13- Minnesota, and as director of the Chicago-Lake State Bank, Miz neapolis, Minnesota. 114 E. S. crones, for permission to serve at the same time as officer of the Marquette National Bank, Minneapolis, . 141,tnesota, as director of the University State Bank, Minneapolis, !,ilintesota and as director and officer of the Chicago-Lake State • Linneapolis, Minnesota. F. F. Zander, for permission to serve at the same time :n• officer of the Marquette National Bank, Minneapolis, Minnesota, :!tg ss director of the University State Bank, Minneapolis, id ln.neeota. , Mr. Harry A. Wheeler, for permission to serve at the sane time notirector of the First National Bank of Chicago, Chicago, Illinois, .7,1c.,L as director of the Darcantile Trust and Savings Bank, Chicago, Approved. Thereupon the meeting adjourned. `tgox- (Alf Secretary.
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