19330526_Minutes.pdf

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A 'fleeting of the Executive Committee of the Federal Reserve Board

"se heldin ',1ashington on Friday, May 26, 1933, at 11:30 a.m.

PRE:).LIIT: Mr. Black, GovernorMr. HamlinMr. Miller

Mr. Morrill, SecretaryMr. Carpenter, Assistant SecretaryMr. McClelland, Assistant to the Governor.

The Governor stated that, in accordance with the action taken atthe raeeti

of the Executive Committee yesterday,he had infonned Governor

lierrison, upon receipt of advice -that the board of directors of the Federal

Reeei've Bank of New York had taken action to reduce the discount rate of the

15411k tO 2 1/2,,,p that the Board approved for the bank a discount rate of

2 1/2% Per annum for all rediscounts of eligible paper for member banks

1111(ler the provisions of sections 13 and 13(a) of the Federal Reserve Act

"Winces to member banks under the provisions of the eighth paragraph

c3r section 13 of the Federal Reserve Act, effective May 26, 1033.

r_ In this connection, there was presented a letter dated May 25,r°ra

Ur. Sproul, Secretary of the Federal Reserve Bank of New York,e°Arirra,n

the advice given to Governor Black over the telephone of theEtctio4 teizen

at the meeting of the board of directors on May 25 to reduceciiseount

rate of the bank from 3„: to 2 1/2 , and stating that, in

Elc"rdebce with the usual custom, the rates at the bank for trade bills

1111rePtIrchase agreementscilliectol% to 2 1/2c: j.

on GoverrinEnt securities had been reduced by the

There being no objection, the reduction in thel'Eltes at the New York bank on trade bills and re-Purchase aeements on Government securities wasnoted With approval.

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

362

can be

The memorandum recommended that the resignation be

ed " of the close of business on June 23, 1933, and stated that

5/m/33

There was was then presented a telegram just received from Mr. Stevens,

Chairman of the Federal Reserve Bank of Chicago, stating that the board of

direct__u-ca of the bank, at its meeting today, voted to establish a discount

rate of 3%, effective the first business day following that on which

aPProved by the Federal Reserve Board.

The rate of 3%, established by the board ofdirectors of the Chicago bank, was approved, effec-tive May 27, 1933.

Governor Black stated that Governor Young of the Federal Reserve

13811k of Boston had advised him that, following the reduction in the dis-

Coll" rate at the Federal Reserve Bank of New York, the board of directors

Of the Federal Reserve Bank of Boston will undoubtedly take action withinthe

44uxt few days to reduce the discount rate of the Boston bank to 3%.

Accordingly, Governor Black was authorized,Upon receipt of advice of such action from theFederal Reserve Bank of Boston, to advise thatthe Board approves for the bank a discount rateof 3%.

Memorandum dated May 26, 1933, from Mr. Smead, Chief of the

or Bank Operations, submitting the resignation of Mrs. Libbie S.

itt' as Secretary to the chief of the division, to take effect at theelose

Of business on June 20, 1933, or as soon thereafter as she

leased from duty.

eceaPt

18 Plaby,--ad to fill the vacancy created by the resignation of Mrs. Hittsoon as

a satisfactory successor is found.

Accepted.

it

as


5/26/33

363

--Reply on May 25, 1933, approved by four members of the Board, to

(1 letter dated I:ay 19 from Mr. Austin, Federal Reserve Agent at Philadel-

Phia, oUtlining the circumstances which make it desirable that additional

erilD1°Yees of the Federal Reserve Bank of Philadelphia be authorized to

as3ist the bank's examiners in the examination of some of the larger state

Illenlber institutions located in or near Philadelphia. The reply statedthat, in

With therequests contained in his letters of lIay 11 and nay 17, 1933, the

eard has aPproved the designation of the seven eivloyees listed in thoselettezs

to assist examiners. The reply also stated, in response to the

IsiCetion contained in the agent's letter of May 19 that he as agent of

thaB(Iara designate employees as temporary assistants with prompt advice

to the Board of the designations made, that the Board feels, in view of the

re°'llireraent of the law that examiners be selected or approved by the Fed-

e411 Re8e.rve Board, that there should be no change in the present procedure

" obtai,ithe approval of the Board prior to the designation.

Approved.

ele3ram dated May 25, 1933, to Mr. Stevens, Federal Reserve Agent

Qaieapproved by four nenbers of the Board, referring to a mano-tEttictuz.

ated ITV 24, from Deputy Governor libicay in which reference was madete the

view of the situation outlined by la'. Austin and, in accordance

ctirezr1:1)05

ecl aPPointment of Mr. Alfred T. Sihler as Assistant Deputy

the Fiscal Agency Department of the Chicago bank, and which

(llesteci

rer

Sihler in that position. The telegram stated that, with the under-

that the matter has been discussed with the individual members of

approval by the Board of a salary at the rate of :1)8,550 per annum


be a

5/26/33-4-

tile board of directors of the Federal Reserve Bank of Chicago and that they

are favorable to and will make the appointment at the meeting of the board

or directors on nay 26, the Federal Reserve Board approves for Lir. Sihler a88,18.1,

Y at the rate of .8,550 per annum, effective as of the date upon which

8811illes his duties.

Approved.

Telegrams dated Lay 25, l93, to the respective Federal reserve

Ete'lltst approved by four members of the Board, stating that the Board

aPProves the applications of the following State banking

illernbershil) in the Federal Reserve System and for Federal reserve bank stock,

atibject to the conditions prescribed in the individual

Name of Bank

Waterbury Trust Company)Waterbury, Connecticut.

°13.1)les State Bank, Bloomer,Wie cons in.

teie e

11.4111-1 that the Atoka State Bank, Atoka, Oklahoma, has determined to

1314(3aecilte its application for permission to convert into a national banking

Illatitiltion and that it has discontinued

Humber of Shares

300

18

Approved.

RePlY on T,:sy 25, 1933, approved by four

institutions for

telegrams:

Federal Reserve Bank

Boston

Einneapolis

members of the Board, to a

t

era dated I.Iay 17 from Mr. Walsh, Federal Reserve Agent at Dallas, ad-

e ecleral Reserve System

or tits information, the

abandoned, and will take

its efforts to obtain membership

as a State bank. The reply stated that, in

Board will consider the application as havin7,

no further action with regard thereto.

Approved.


5/26/33-5-

365

Telef_;ran dated Eay 25, 1933, to Mr. Stevens, Federal Reserve Agent

" 0hica0, approved by four nembers of the Board, replying to a letter

ci"e(il aY le from Mr. Young, Assistant Federal Reserve Agent, recomrending

al by the Board of a proposed transaction by which the Farmers StateBeni, -

-) rielvidere, Illinois, a member institution, will assune a portion ofthe " r1,-'Posit liabilities and acquire certain of the assets of the Peoples

State 1„'Jank of Belvidere, a closed nonrember bank. The reply stated that

it ieqnderstood that the transaction will not result in the acquisition

Of arlY b ranches by the member institution or in any change in the scope ofits cor,,

-vorate Dowers or the functions exercised by it, and that, on thebaeis

Of the infornationin

which the transactiont° be taken over,

TherePlY also stated

l'E'Elllat in any change in

the 18'178 of the State of

r8teras bIlt suggested

froM counsel on

the

Reply on MayEt letter

dated lalY1341t1)

With which.

e.trectoq in the

N443Ylvania.

%trectiens and

he

submitted by "Ir. Young with regard to the manner

is to be effected and the character of the assets

Board interposes no objection to the transaction.

that it is assumed that the transaction will not

the corporate

Illinois

that the

existence of the member bank under

which

agent,

will affect its membership in the

if he has not already done so, obtain

Point.

Approved.

25, 1933, approved by four members of the Board, to

this

18 from Mr. Austin, Federal Reserve Agent at Philadel-

inclosed information with regard to the improvements

condition of the Berks County Trust Company of Reading,

The reply stated that the Board is pleased to note the many

improveraents made and promised in the condition of the bank


366

5/26/33

484 result of the recent conferences which the agent's office has had with

the directors of the bank, and that it is noted that the board of directors

or the Philadelphia bank concurs in the conclusion of the executive

e(mulittee that the trust company should be permitted to continue its present

°Dereting arrangement with the reserve bank until another examination canbe illnA--qe, at which time it is hoped such additional improvements will have

bee%m rade as to warrant favorable consideration of a new application by the

trust°°mPany for membership in the rederal reserve System.

Approved.

Letter dated May 25, 1933, to the Comptroller of the Currency,

41DPr°76(3. hY four members of the Board, referring to his memorandum of

1147 12' 1933, recommending approval of the application of the Fishkill

"41141 Bank of Beacon, ilew York, for permission to reduce its capitaletock +.-

I'M *150,000 to $100,000; to change the par value of the sharesft wi

Y4-00 to (**50 each; and immediately to increase the capital stock from§10 n' to 415 by selling 1,000 shares of new common stock of a par

value450 each for 4150 a share, crediting the released capital and the

Prermainr*100,000 on the new stock to surplus or undivided profits for

the Pur-oeeOf charging off losses of 43,525.50 and depreciation of

4• The reply stated that the Board approves the proposed reduction

ililder the Plan submitted, subject to the conditions set forth in the reply.

Approved.

bV .

meMb era of the Board, replying to a letter dated May 15, 1933, fromkt,youlle,

Letterto Stevens, Federal Reserve Agent at Chicago, approved

Assistant Federal Reserve Agent, inclosing certain data in


367

contemplated an actual elimination of the account from

of the bank either throucti a charge-off as indicated in the con-

the establishment of a valuation reserve which accomplishes the

4ttlle PlIrPose 83a charge-off in that such a reserve is applied as a

clecilleti°11 from the asset account in question and would not appear in the

1)1/blished statements of condition of the bank. The letter requested the

IgeZt t,- 'wise the bank that the Board will expect compliance with the

4ition referred to either by effecting an actual charge-off of the asset,

th e establishment of the valuation reserve referred to above, and toevivi8e

eotarrielie

-7_

eclIllection With the reduction in the capital stock of the Uptown State Bank

Ol'OhicaL;o, Illinois, which was approved by the Board in its telegram of

41411 28, 1933. The letter stated that the Board does not consider the

c6.:tioll of a specific reserve for the purpose of taking care of the 0.86,002Of losses

8411k elS a

tO Zeduce

5/26/33

estimated in the account due from the Fidelity Trust and Savings

compliance with the condition under which the bank was permitted

its capital stock, and requested that the agent advise the bank

tilat the condition

Ile assets

) or

the Board as to the action taken by the bank in the natter.

Approved.

Letter dated May 25, 1933, to the First Capital State Bank, Iowa

we's approved by three members of the Board, advising that, effec-

ella when the First Capital State Bank is converted into a national

"eociation and is authorized by the Comptroller of the Currency to

e 1)1181p nass as the First Capital National Bank of Iona City, Iowa, theeaeral

beh irReserve Board approves

Of euthe application filed by the State bank on

ch national bank for permission to act, when not in contravention


5/26/33

Or State or local law as

_8_

trustee, executor, administrator, registrar of

rp

tocks and bonds, guardian of estates, assignee, receiver, comittee of

estates of lunatics, or in any other fiduciary capacity in which State banks,

.*1113t companies or other corporations which come into competition with

1 ti01/ial banks are permitted to act under the laws of the State of Iowa, the

e4eliciso of all such rights being subject to the provisions of the FederalRese

-"e Act and the relations of the Federal Reserve Board. The letter

altatsA' also that, after the conversion becomes effective and the Comptroller

or e a,'4-crency authorizes the national bank to commence business, the board

or dictors should adopt a resolution ratifying the action taken in its

11°1111' bY the State bank in making application for permission to exercise

ti8t Powers, and requested that a certified copy of the resolution so

e'cl013ted be forwarded to the Board.

Approved.

Tele graphic reply on May 25, 1933, approved by three members of

the 8Qal'(1, to a telegram dated 'Jay 23 from Er. R. S. Becht, Chairilan of the

41bernia National Bank, New Orleans, Louisiana, referring to the Board's

Latt°'' 't 1..4,Y 19, 1933, in which authority was granted to the national bark

t° eercise trust pouers, and stating that the bank is being offered trustee-

111.1)8 in connection with bond issues of thoroughly reputable concerns but

1711 foreclosure Proceedings may become necessary to protect the bond-

to ' 11(1, while the bank is anxious to act in these cases, it desires

within thc general policy of the Board and would appreciate advice

Q°111111.11C the matter. The reply referred to the fact that, in approving

tll'a hank's application for trust powers, the Board stated that it felt that


369

5/26/33

iti5

the bank is tendered any trusts now held by the Hibernia Bank and Trust

C°11112 nY, it should carefully scrutinize the condition of these trusts and

811°111d not accept any of such trusts which might be detrimental to its

14terest3, and felt particularly that it should not accept the trusteeship

r(111' issues of the Hibernia rortgage Company which was coidmented upon in the

(141ille1''s report of April 18, 19. The reply also stated that the Board

Presume _a the trusts referred to are not those of the Hibernia ro t_age

Yi that the responsibility for accepting trust business of any

clicter, whether from the old bank or new accounts, must rest entirely

With th,- officers and directors of the bank; and that the Board cannot in

skraalc

e Pet" uPon the merits of any individual trusts accepted by the bark.

Approved.

Reply on May 25, 193'0, approved by four members of the Board, to a

letterdated April 20 fromrir. Case Federal Reserve Agent at New York,

inelesirig a letter dated April 10 from the Chairman of the Bank of Man-hett44 company,

New York City, with regard to compliance by the companywith the

condition of membership prescribed by the Board that, as soon as

/31tElcticable and not later than July 1, 193,), the company shall dispose of

ell stock which it holds or may acquire in the County Trust Conpany, ;Tbite

New York, and the Corning Trust Company and the North Side State114111/4,

both of Corning, New York.

EIDDectra that the B

The reply stated that, inasmuch as it

of Manhattan Company has negotiations pending with

B. Houghton for the disposal of the two banks in Corning, New

alla will have an answer from Mr. Houghton on or before the first of

the Board feels that it should defer action on the reauest of


5/26/33

therude efrorts which have

beenrd..bayouldthe Boa

thethe

County Trust CompanY

12Q'3cribed by the Board, and that

(leVelop the matter with

clate. In this

tIle Possibility that

Which the bank might

iteell' a justification

beell requested.

ership relating to the

it should be pointed out

eeettred by it, does not constitutethe bealk

should continue4°°11 as it is

practicable

r

g

!

-10-

the Bank of 1.1anhattan Company for an extension of tire within which to

cli8Pcee of the stock of the two ban, until it has been advised of the

decision of La% Houghton, and that upon receipt of this information the

matter will be given further consideration by the Board. The reply also

stated that before

llattazCompany that

Which the companY

White Plains, New

giving consideration to the request of the Bank of Lan-

the Board extend until July 1, 1954, the tire within

may dispose

York,

of the stock of the County Trust Company,

like to be informed fully as to

company to dispose of the stock of

in accordance with the condition of membership

it will be appreciated if the agent will

the bank and advise the Board in detail at an early

connection, the reply also advised that the Board feels that

legislation might be enacted at son e future date under

retain the County Trust Company as a branch is not in

at this time for granting the extension

The reply also added that with

which has

regard to the condition of

bank's stock owned or held by it as collateral,

that the charging off of such stock, or of loans

a correction of the situation and that

its efforts to effect the necessary correction as

to do so.

Approved.

etter dated law 25, 1933, to the Chairman of the Committee oneuv

Currency of the Senate, approved by four meMbers of the Board,


is)• , ...„I1„.

5/26/33—11—

l'ePlYin?, to a letter dated May 13 from the Acting Clerk of the Committee

reclue"ing a report on S. 1639, a bill to establish a Federal Credit Union

SYsteln and for other purposes, and on S. 1640, a bill to amend section 13

c) Federal 2eserve Act by authorizing Federal reserve banks to receive

clePcsits fram credit unions. The reply reviewed the provisions of the two

bills referred to and stated that, for the reasons outlined in the letter,the pederal

Reserve Board does not favor the enactment of S. 1640 or the

131t°17181°118 of S. 1639 which have to do with the Federal reserve banks.

Approved.

Reply on May 25, 1933, approved by four maribers of the Board, to

-- addressed to the Secretary of the Treasury under date of May 1,

tioard. lawd1. not feel justified in approving a change in the law which would

111111t areduction in the present requirements. WIth regard to a

stl esetiorlOf the State bank that the amount of capital required of member

be4k8 shoUld not be based on the size of the city in which it is located()4 the eniount

of deposits which the bank may have, the reply stated

thcct the ctIPIt l now recuired by law is the minimum required capital and,the cleposit3 of a

bank increase, it should, of course increase its4131tal.

1.933) ,dongressman Ray P. Chase and referred to the Federal Reserve Board

r(IrrePlY) With regard to letters received by Congressman Chase from the

State Bark of Linneapolis, Minnesota, concerning the capital

l'ecItlired of State banks for mambership in the Federal Reserve System. The

l'eferred to the Acts of March 4, 1923, and February 25, 1927,

-ibetalizing the capital requirements for membership and stated that the

8 t0 maintain at all times a proper and safe ratio between its


3725/26/33

Divia4.Lon of Bank Operations, reconnending approval of the request of the

Pederso--4 Reserve Banks of New York and Cleveland for a reduction from two

-12-

e"l and deposits so as to afford adequate protection for its depositors.

Approved.

Menorandma dated May 23, 1933, from La.. Snead, Chief of the

(laYs tm-- one day in the interdistrict tire schedule for cash items from New

York 4-1/4"4 aloma.ltmad and from Cleveland to New York; the recommendation having

beenby three members of the Board on May 25, 1933.

Approved.

RePort of Standing Committee dated May 25, 1933 recomaending

4111 °Ire" °t the following change in stock at a Federal reserve bank:4

lioation for ORIGINAL Sttroo Shares

'ajltella National Bank, Mena, Arkansas. 33

Approved.

Thereupon the meeting adjourned.

4proyea:

33

Secretary.


19330526_Minutes.pdf

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