19311113_Minutes.pdf

A meeting of the Executive Committee of the Federal Reserve Board

Wes held in the office of the Federal Reserve Board on Friday, November 13,

1931, at 11:35 a.

PRESENT: Governor Lleyerlir. MillerMr. Liagee

Morrill, SecretaryMcClelland, Assistant Secretary

Mr. Harrison, Assistant to the Governor.

The Governor stated that at the meting of the Board of Directors of

the Federal Reserve Bank of New York which he attended yesterday, there was

di8cussion of the question whether the Federal Reserve banks should follow

the recent reductions in dealers*

ill the effective buying rates of the Federal Reserve banks and there was also

CliSCUSSiOri in regard to the

PlIrchas

that he

k'esent

Federal intermediate

rates on bills by corresponding reductions

extent to which the Federal Reserve banks should

credit bank debentures. The Governor stated

understood that the directors reached the conclusion that in the

circumstances it would be undesirable

11'11's banks' effective buying rates to follow

for reductions in Federal Re-

closely the reductions in

48z1lerst rates, as such a procedure might result in the necessity for

trarae,L.Late increases in case the market changed and dealers' prices moved up-

The Governor also stated that he understood that it was the consensus

°t the directors of the Federal Reserve Bank of New York that it would be

desi,"le for the Federal Reserve banks to cooperate with the Federal inter-

'"e credit banks as far as possible, through the purchase of their

clebehin,—res, with the understanding, of course, that every reasonable effort

'444 be made by the banks and their fiscal agent to dispose of their

clebeb+,.-"'Ll'es elsewhere in the market at reasonable interest rates.

The following matters of business were presented and acted upon by

th'ulaMittee:

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

11/13/31 -2-

Letter dated November 12 from the Secretary of the Federal Reserve

leadc of New York and telegram dated November 12 from the Chairman of the

Federal Reserve Bank of Richmond, both advising that their boards of directors,

Ilt eetings on that date, made no changes in the banks' existing schedules of

rates of discount and purchase.

Without objection, noted withapproval.

Lists submitted by the Federal Reserve Banks of Cleveland, Richmond

Kansas City of employees for whom the directors authorized leaves of

ctheence with pay on account of illness during the month of October, where the

t"81 of such absences since Ianuary 1, 1931 has exceeded thirty days.

Upon motion, the salary Paymentsinvolved in the action of the directors

were approved.

Memorandum from Assistant Secretary Noell recommending that the Board

4131arove an extension, from October 31 to November 10, of the sick leave

el'anted to Essex Banks, a messenger assigned to the Otis Building, who

l'eetuned his duties on the latter date.

Recommendation approved.

Letter dated November 6 from the Chairman of the Federal Reserve Bank

or'•.allas requesting approval by the Board of the appointment of Mr. Thomas

3.el'rers0n Holmsley to the appraised position of special representative in

the loan department of the bank at a salary of $1,800 per annum.

Upon motion, the salary recommended

was approved.

Reports of Committee on Salaries and Expenditures and Committee on

1)18tl'ict rib. 8 on letter dated November 4 from the Chairman of the Federal

ltee '-"e Bank of St. Louis, requesting approval, effective November 16, 1931,

°r "aaries of 38,000 and $7,000 per annum, respectively, for Yr. John T.


tiAttliNI 4.;

11/13/31 -3-

who has been appointed Managing Director of the Louisville Branch to

elleceed Mi. 77. P. Kincheloe, resigned, and Mr. Charles A. Schacht, who has

been appointed Cashier of that branch to succeed Mr. Moore; the Board's

Cormitteeerecommending approval of the salaries in question.

Approved.

Draft of letter to all Federal Reserve Agents, advising that the

l'ederal Reserve Board will send the Federal Reserve Bulletin without charge

dul'ing 1932 to all State bank examiners who desire to receive it.

Upon motion, the proposed letterwas approved.

Draft of reply to a letter dated November 5 from the Vice-President

°t the First Farmers and Merchants National Bank, Troy, Alabama, containing

84 assurance of the trust committee of the bank that the affairs of the

tl'Ilst department will be properly managed and free from criticism in the

rtIturel and requesting that the Board give further consideration to the

ballk's confirmatory application for trust powers; the proposed reply stating

that while the Board is pleased to receive the statements contained in the

letter, it still feels that it should not take favorable action on the

al3P11cation until after it has been demonstrated throuc4 another examination

that the trust department is being properly conducted and that there are no

c'llditions remaining therein which are subject to criticism, and that,

theref°re, as stated in the Board's letter of November 3, further considera-

ti°11 °f the application will be withheld until after receipt of the report

t the next examination of the bank.

Upon motion, the proposed letter

was approved.

Draft of reply to a letter dated November 5 from the Federal Reserve

-.4 at Dallas reporting that the First National Bank, Hale Center, Texas,


11/13/31

has been continuously deficient in its reserves since March 15, 1931, but

Ilecommending, because of the fact that the deficiency has been due to con-

entirely beyond the bank's control, that no action be taken regard-

the matter at this time; the proposed reply stating that the Board

c°11cura in the Federal Reserve Agent's recommendation and is sending a copy

°this letter to the Comptroller of the Currency for the information of his

orrice.

Upon motion the proposed letterwas approved.

Letter dated November 5 from the Federal Reserve Agent at Dallas

rePorting that the First rational Bank, Durant, Oklahoma, has been deficient

in its required reserves for the period April 16 to October 15, 1931,

11/c348ive, and recommending, because of the failure of the bank to regard

letters written to it by the Federal Reserve Agent and the Chief rations,

8alkk Examiner concerning the matter, that the Comptroller of the Currency

be requested to address the bank directly with regard to the importance

" it8 naintaining its reserve position; draft of letter to the Comptroller

r3t the Currency, advising that the Board concurs in the Federal Reserve

jle"'s recommendation and suggesting that, if he feels such action is de-

ellte.ble under the circumstances, he address a letter to the First National

8atk •in accordance therewith; and draft of letter to the Federal Reserve

4eett enclosing a copy of the letter to the Comptroller of the Currency.

Upon motion, the proposed letters

were approved.

Ilemorandum from Counsel dated November 7, calling attention to a

letter addressed by the Assistant Attorney. General to all United States

4tt0rneys on the subject of delays in disposing of criminal cases under


11/13/31 -5-

Fede ral banking laws; Counsel recommending that additional copies of the

letter be secured and transmitted to all Federal Reserve Agents for their

information. Counsel also submitted drafts of letters to the Attorney

G"eral and to all Federal Reserve Agents in accordance with this recommend-

ation.

Upon motion, the proposed letterswere approved.

Letter dated November 7 from the Federal Reserve Agent at San Fran-

enclosing copy of a letter received by him from Mr. Harold L. Reed of

Cc/II:IC-1 University inquiring whether the bank has adopted the policy during

the Past year of not issuing gold certificates; the Federal Reserve Agent

stating that the inquiry is referred to the Board as it involves a System

rnstter. In this connection, it was reported to the Committee that upon

l'sceipt of Mr. Newton's letter inquiries were made of all other Federal Re-

sal"ve banks and it was ascertained that they had received similar inquiries

and had made direct replies.

After discussion, upon motion, it wasvoted to advise the Federal Reserve Agentat San Francisco that other Federal Reservebanks have not regarded the inquiry as aSystem matter, that their direct replieshave been brief and general in character,stating that gold certificates are alwayspaid out on demand and in most cases in aboutthe same volume as they are returned to thebank from circulation, and to suggest, with theassumption that the same situation has prevailedat the Federal Reserve Bank of San Francisco,that the Federal Reserve Agent reply to Ijr.Reed along the same lines.

In connection with the discussion of the foregoing matter, attention

11" directed to the Board's letter of Lay 5, 1925, addressed to all the

'1'411 Reserve banks in which the request was made that inquiries received

hYthem involving matters of System interest be referred to the Federal

l*ve Board for consideration of the character of reply which should beDigitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

373

11/13/31 -6-

1Q4de from the point of view of the System as a whole. It was noted that

the Federal Reserve banks other than San Francisco appeared to have over-

looked this request, and consequently the Board authorized the Secretary

in acknowled:ing the receipt from the various banks of conies of their

l'ePlies to Er. Reed's inquiries, to call their attention to the circular

l a.Y 5, 1925, and to request that, in the future, inquiries of this or

44Y other character involving policy or procedure of all the banks or the

System as a whole be submitted to the Board for consideration before

l'etAies are made thereto.

It was also decided to bring the subject of the Board's letter of

5) 1925, to the attention of the next conference of Chairmen and

Q-overnors.

Reports of Standing Committee dated November 11 and 12 recornaending

Ill'Proval of the following changes in stock at Federal Reserve banks:

'-44-19.1.2..tions for ADDITIONAL Stock: Shares I,),istrict No. 7.4'irst National Bank, Converse, Ind.

)11,strict No. 12.'lilted States National Bank, Eugene, Oregon.

1 ons r SURRENDER of Stock:ikstrict No. 2.

1,elvidere National Bank, Belvidere, N.J.irat National Bank of Great Neck at Gre

Station, N. Y. (V.L.Abs. by Great Ye1T, Company, Great Neck, N. Y.),'41onal Mohawk Valley Bank, Mohawk, N.

1, (Insolvent)e°Ples National Bank, Blairstown, N.J.

ket •

t National Bank, Orbisonia, Pa. (Insolvent)

1

9

1

9Total

(Insolvent) 120at Neckck Trust

Y.120

90

10

(Insolvent) 45 375

84 84


11/13/31 7 -

for SURREanTIR of Stock: (Cont'd)ictN

-nrst National Bank, Toledo, Ohio. (Decrease in surplus)Pirst National Bank, Lynchburg, Ohio. (Insolvent)4chanse National Bank, Pittsburgh, Pa. (Insolvent)

District No. 6.Citizens Banking Conpany, Eastman, G . (Insolvent)

ILtptN(4 7.Pint National Bank, Belvidere, Ill. (V.L.Abs. by

Second National Bank of Belvidere)

°gden National Bank, Chicago, Ill. (Insolvent)West Side-Atlas-National Bank, Chicago, Ill. (Insolvent)117°'n County National Bank, Rock Rapids, Iowa. (Insolvent)National Bank of Sidney, Iowa. (Insolvent)Pirst National Bank, Reed City, Mich. (Insolvent)C°11111e1eial National Bank & Trust Co., St. Toseph, rich.

P. (Insolvent)zIrst National Bank, Fennimore, Wis. (Insolvent)

-uxrst National Bank, Lake Village, Ark. (Insolvent)11,,Irst National Bank, Carterville, Ill. (Tnsolvent).,;i•tY National Bank, Herrin Ill. (Insolvent)

t National Bank, Brunswick, Mb. (Insolvent)'ulrat National Bank in Versailles, Mo. (Insolvent)

'ecurity National Bank, Mbbridge, S. Dak. (Insolvent)

r8t National Bank, Coats, Kans.(V.L.Abs. by Coats, State Bank, Coats, Kansas.)'Iret National Bank, Auburn, Nebraska. (Insolvent)

%atiejoii''I•rst National Bank, Clint, Texas. (V.L. Terminal)

r31313t • -4:1rat National Bank, Baldwin Park, Calif. (Insolvent)

Approved.

The meeting adjourned at 12:45 p.

41111roved:

Shares

30039990

72

66150150606081

24040

4548603622

35

2151

18

30

1,329

72

847

211

35

72

18

30Total 3,073


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