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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.
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can be
The memorandum recommended that the resignation be
ed " of the close of business on June 23, 1933, and stated that
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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
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--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
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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.
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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
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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
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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
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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
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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
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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
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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
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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
!
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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,
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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
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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.
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