View original document

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
l'ederal Reserve Board on Monday, October 12, 1931, at 11:15 a. in.
PRESENT:

Governor Meyer
Mr. Hamlin
Mr. Mier
Mr. James
Mr. Magee
Mr. Morrill, Secretary.
Mr. McClelland, Assistant Secretary.

ALSO PRESENT: Mr. Harrison, Assistant to the Governor.
The minutes of the meetings of the Federal Reserve Board held on
September 30,
October 1, 5, 8 and 9 were approved.
The minutes of the meetings of the Executive Committee of the FedOral

Reserve Board held on October 2, 7 and 9 were approved and, upon motion,
the a
etilons recorded therein were ratified.
,
;

1

The following matters were considered and acted upon by the Board.
Telegram dated October 9 from the Chairman of the Federal Reserve

1341,1,

or

Chicago, advising that at a meeting of the Executive Committee on

that
date, no change was made in the bank's existing schedule of rates of
%Qourit and purchase.
Without objection, noted with
approval.
Telegram and letter dated October 7 from the Chairman of the Federal
"e Bank of Philadelphia, advising that in order that the bank may be
41 4
POsition to purchase bills at current rates, the Board of Directors on
that

date established a minimum buying rate of 1% on bankers' acceptances
11P to gn

days, no change being made in the other rates in effect at the bank.




Upon motion, it was voted to approve
the minimum buying rate established by the
Philadelphia directors, and their action
in making no change in the other rates in
effect at the bank was noted with approval.

10/12/31

-2-

Letter dated October 9 from the Chairman of the Federal Reserve Bank
°D Boston confirming advice
of the action of the Executive Committee of the
in establishing a discount rate of 2 1/2% on all classes of paper of
411 maturities,
effective October 10, the letter stating that this action
Ilas c
onsidered desirable owing to the increase in the discount rate of the
Reserve Bank of New York, and that, if the rate were not increased
Itt the Boston bank, undue pressure might be brought on the district owing
to its close proximity
to New York.
Noted.
Telegram dated October 9 from Deputy Governor Kenzel of the Federal
Reserve Bank of New York, advising that in order to avoid the possibility
Of

4° extreme advances in bill rates and to relieve dealers and banks on
that d,÷
--e, the Federal Reserve bank purchased approximately 4a00,000,000 of
bi
lls at/
1 1,2% and that while the New York bank's effective buying rates
b
e 'very flexible until the market becomes settled, the following rates
Etre

"u nsidered as in effect:
Bankers' acceptances:
1 to 90 days
91 to 120 days
121 to 180 days
Repurchase
Trade bills

1 3/4%
2
%
2 1/2%
1 3/4%
2 1/2%

Without objection, noted with approval.
Telegrams dated October 0 from the Governor of the Federal Reserve

or

Boston and the Secretary of the Federal Reserve Bank of Atlanta, and

'dated October 10 from the Secretary of the Federal Reserve Bank of
Nvel
and, advising
that effective October 9 their schedules of buying rates
o4 bat
acceptances were increased to agree with the schedule established
e Federal Reserve Bank of New York on that date, with the exception of



284
10/12/31

—3.-

4 rate of 3% for the purchase of bankers'
acceptances under resale agreement
"the Cleveland
bank; the Governor of the Federal Reserve Bank of Boston
4180

advising of the establishment on October 9 of a rate of 2 1/2% on trade

bills and for the purchase of Government securities under agreement to
resell.
Without objection, noted with
approval.
Letter dated October 7 from the Assistant Treasurer of the United
States,

advising that his office received no applications from national banks

t°r the sale of
bonds, under Section 18 of the Federal Reserve Act, during
the quarter ended September
30.
Noted.
Reports of Committee on Salaries and Expenditures on lists submitted
bY the Federal
Reserve Banks of Atlanta, Minneapolis and Kansas City, of
elNaoyeee for whom the directors authorized leaves of absence with pay,
on
"e°11
"of illness, during the month of September where the total of such
4hel1ess
since January 1, 1931, has exceeded thirty days; the Board's
C°11131Littee recommending approval of the salary payments involved.
Approved.
Letter dated October 9 from the Chairman of the Federal Reserve
11441k Of Dallas, advising of the resignation on October 7 of Mr. B. A.
16e4/11neY as a member of the Federal Advisory Council from the Eleventh
?ea..
3. Reserve District, and of the appointment on that date of Mr. X.
H.
Fre
at t President of the Frost National Bank, San Antonio, Texas, as a mem—
her Of
the Council for Mr. McKinney's unexpired term.
Noted.
Draft of telegram to the Federal Reserve Agent at the Federal Reserve
°f Richmond, referring to his letter of October 10 and advising that




285
10/12/31

—4—

the Board authorizes the Federal Reserve Bank of Richmond, in its discretion,
f(11
'a Period of six months, to rediscount for the South Carolina National
Elenk, Charleston, S. C., good and otherwise eligible paper acquired from or
beer'ing the simature or endorsement of the South Carolina State Bank.
Upon motion, the telegram was approved.
Draft of telegram to the Assistant Federal Reserve Agent at Chicago,
l*eferring to his letter of October 7 and advising that the Board authorizes
the Federal Reserve Bank of Chicago, in its discretion, for a period of six
tnolltha, to rediscount for the Bankers Trust Company, Des Moines, Iowa, good
Al
otherwise eligible paper acquired from or bearing the signature or
endorsement of
nonmember banks.
Upon motion, the telegram was approved.
Letter dated October 2 from the Governor of the Federal Reserve Bank
°t New York reouesting approval of a salary of 0.4,000 per annum for Mr. L.
Vier

xier Knoke, formerly an officer of the Irving Trust Company and experienced

°reign exchange and gold bullion transactions; the proposed salary having
bee,
" approved informally by the Executive Committee on October 8, effective

ir
nd when Er. Knoke assumes his duties with the bank.
Upon motion, the salary fixed by the
Board of Directors of the New York bank
for Mr. Knoke was formally approved.
Letter dated October 7 from the Chairman of the Federal Reserve
41/11c f
Boston reouesting approval of a retainer of

2,400 per annum, fixed

the Board of Directors of the bank, for Yr. Phillips Ketchum, who has

be
aPPointed Counsel of the bank to succeed Er. A. H. Weed, deceased.




Upon motion, it was voted to approve
the retainer fixed by the Boston directors
for Er. Ketchum.

CI)

10/12/31

-5.-

Reply, prepared in accordance with action taken at the meeting on
October 5, to letter dated September 19 from the Chairman of the Federal
Reserve Bank of Kansas City transmitting copy of resolutions adopted by the
13°4rd of Directors of the bank providing for several measures designed to
red
Operating expenses; the reply stating that the Board is cognizant of
the conditions which influenced the directors of the bank in the action taken
811d aPPreciates their keen interest in the affairs of the bank under the
c°11d tion8 with which it is now confronted; that the proposal for a general
cl°'41117ard revision of salaries presents a new question and one which the Board
'4°U1d like
to have an opportunity to consider thoroughly in all its aspects
ore reaching a conclusion thereon;
that the other proposals submitted
1117(31ve broad questions of System policy which likewise require careful
e°4sideration
from the standpoint of the System as a whole, not only on the
'
s of existing conditions, but from the point of view of the prospective
t1114 of Federal Reserve bank earnings and in the light of the provisions

of t
he

Federal Reserve Act for the conservation of earnings when these exceed

lequirements
for expenses and dividends; that the Board feels it would be
clew
1.rable to discuss
all of these questions at the next conference of
Gove,'lora and Federal Reserve Agents; and that in the circumstances the Board
hone
8 it

will be agreeable to the directors of the Kansas City bank to permit

them
to remain in abeyance pending the further consideration which the Board
ldars necessary and advisable in the premises.
The reply having been approved informally
by the Board on October 8, was, upon motion,
formally approved.
Application of the Potters Bank and Trust Company, East Liverpool,

) for membership in the System and for 528 shares of stock in the Federal
litaer
y° Bank of Cleveland; the application having been approved on October 10



t

10/12/31

L
)

by the
Executive Committee, effective if and when the assets and liabilities

°r

the Potters National Bank of East Liverpool are taken over by the

4P1ieant bank and its capital and surplus are fully paid in, subject to the
8Pec1al condition, in addition to those set out in Regulation H, that the
beak shall dispose of or otherwise secure any loan which may be secured by
Its 01,
in

stock.
Upon motion, the action of the Executive
Committee was ratified.
Report of Executive Committee on letters dated October 8 and 9 from

the Chairman of the Federal Reserve Bank of Richmond, advising of the appointrnent of Messrs. Hugh Leach, W. T. Clements and R. L. Cherry, respectively,
'
81Insging Director of the Baltimore Branch, to succeed 1.r. A. H. Dudley,
114eigted, as Managing Director of the Charlotte Branch to succeed Mr. Leach,
"
a
as Cashier at Charlotte to succeed 1,:r. Clements; also requesting approval
by the Board of salaries of 0.2,000, 47,500 and 0,000 per annum, fixed by

the directors for ±r Leach, 1.:r. Clements and Lr. Cherry, respectively.
Upon recommendation of the Executive
Committee, the salaries fixed by the
Richmond directors were approved.
Telegram dated October 9 from the Governor of the Federal Reserve
ilank. of New York piving further details with regard to the organization of
the
National Credit Corporation."
The telegram, having been brought to
the attention of the members of the Board
individually, was noted.
Telegram dated October 7 from the Governor of the Federal Reserve
/111/11,

of New York, advising of the action taken by the directors of the bank

14%)thorizing the officers, subject to the approval of the Federal Reserve




988
10/12/31
Board, to arrange a credit to the Bank of Finland by agreeing, for not more
the

three months, to purchase not to exceed 43,000,000 of eligible commercial

bills endorsed or guaranteed by the Bank of Finland, it to be understood that
11° renewals of the credit would be granted and that the authority would be
"
cised only if the Bank of France agreed to participate in the credit for
eX
flequilralent amount and that the credit would, if necessary, be repaid in
ld
'for the exportation of which the Bank of Finland would obtain assurances
tr°111 the
Government.

In this connection the Governor stated that subsecuent

t° the receipt
of the above mentioned telegram Governor Harrison advised him
that the
action of the New York directors was taken merely to authorize the
tl'icers to act should it be found desirable to do so before the next meeting
Ot the Board of Directors of the bank; that consideration of the matter has
bee
dropped by the New York bank, and that, accordingly, no action by the
Nteral Reserve
Board is required.
Upon motion, the telegram was noted
and ordered filed.
IkPCIRTS Op STANDING CUZUTTEES:
4ted, October

9
12

Recommending changes in stock at Federal Reserve banks,
as set forth in the Auxiliary Minute Book of this date.
Recommendations approved.
The meeting adjourned at 11:45 a. m.

O

5reA3G-it

4Proved:




knryt_ALSZ
Seceetary.

289

AUXILIARY MINUTES
(October 12, 1931.)

ch RePorts of Standing Committee dated October 9th and 12th, recommending
ellges in stock at Federal Reserve Banks, approved as follows:
A
Di4,s "ation for ORIGINAL Stock:
tr1ct Nb. 11.
Ofl
A. 'dank of Fort Sam Houston at San Antonio, Tex.
A 14
t, 44.cations for
SURRENDER of Stock:

Shares

v..terra Savings

and Bank Co., Minerva, Ohio. (Insolvent)
Irst State
Bank, Newton Falls, Ohio. (Insolvent)

0
1 4Lt4i4
L221t-Ilt.
"tonal Bank
of Leesville, Leesville, S. C. (V.L.Abs.
pi
bY South Carolina State Bank, Charleston, S. C.)
rst
National Bank, Sumter, S. C. (V.L.Abs. by South
Carolina
State Bank, Charleston, S. C.)
rat National Bank and Trust Co., Petersburg, Va. (Cons.
Of National
Bank, and Virginia National Bank)
kstrict No. 7.
Nati-otal
Bank of the Republic, Chicago, Ill. (V.L.Suc.
bY Central Republic Bank and Trust Co.)
/,,ers National
Bank, Trafalgar, Ind. (Insolvent)
"a National
Bank, Ottumwa, Iowa. (V.L.Suc. by Union
Bank and Trust Company of Ottumwa)
4-st
National Bank, Randolph, Iowa. (Insolvent)

69

69

105
114

219

36
150
696

510

7,920
20
150
27

8,117

30

30

720
Total

720
9,782

14o4
p'411Ct

-L'rrlera

No. 9.
National Bank, Bridgewater, S. Dak. (Insolvent)

P
I)i
i"Xlet

NO. 11.

National Bank, El Paso

Texas. (Insolvent)

crt„t3Z,,,V
(15)PeA,tT,tYr
)
Secretary.

k4roved: