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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:
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