19330426_1120a_Minutes.pdf

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A meeting of the Executive Committee of the Federal Reserve Board

W" held in 'Jazhington on Wednesday, April 26, 1933, at 11:20 a.m.

Peaerai

°r tie

PRESENT: Mr. Meyer, GovernorYr. HamlinMr. EillerYr. Jams

Mr. Morrill, SecretaryUr. McClelland, Assistant 3ecrotaryMr. Harrison, Assistant to the Governor11r. Wyatt, General Counsel.

The Committee considered and acted upon the following natters:

Tel egram dated April 24, 1933,fromMr. Hoxton, Chairman of the

Reserve Bank of IZichmond, advising of the establishment on that date

rellminL' schedule of effective buying rates on bankers' acceptances:

1 to 90 days91 to 120 days121 to 180 days

Without objection, noted with approval.

Telegram dated April 25, 1933, to Mr. Newton, Federal Reserve AgentEttsan ,,

approved by four nambers of the Board, stating that the130ard

aPPreves the supplemental application of the Central Bank of Oakland,%lira

eL 3 for 1,590 shares of stock in the Federal Reserve Bank of San

8co, and that the telegram supersedes the telegram sent to the Federalteaezve

€t°ent on April 24, 1933, approving an application filed by the mem-ber _bank for 1,800 shares of Federal reserve bank stock.

Approved.

L:arlorandum dated April 13,()1 1933, franErs Goldenweiser, Director

sion of _esearch and Statistics, recomending leave of absence

IA.aa 'P417' for an additional period of two months from May 1, 1933, for

c4la v" in that division;r, an employeeher physician having

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4c1171sed that she will be able to return to work by July 1, 1933, at the

latest.

181

Approved.

Memorandum dated April 26, 1933, from Mr. Wyatt, reconmending the

el)pointnxnt of Yr. H. Lee Boatwright, Jr., as Assistant Counsel to the

?lidera"Reserve Board, with basic snlpry at the rate of 34,800 per annum,

erfective as of the date upon which Mr. Boatwright assumes his duties.

Approved.

M4 Miller, Chaimnan of the Committee on District No. 12, stated

tilet the conmittee desires to recommend the appointment of Mr. M. W. Smith,

1184111er of the Midland Elevators Company, Idaho Falls, Idaho, as a director

or the Salt Lake City branch of the Federal Reserve Bank of San Francisco,

45 aUcceed Mr. G. G. Wright, deceased.

Accordingly, Mr. Smith was appointed a directorof the Salt Lake City branch for the unexpired portionof the term ending December 31, 1934.

Reply on April 24, 1933, approved by four members of the Board, to

4 letter dated April 18 from Assistant Federal Reserve Agent Gettemy atBoato4

' requesting approval of the designation of Messrs. E. J. Stevens,W, 114

lutg and Percy E. Hoyle, anployees of the bank, as assistant examiners,

44d or the continuations for an additional period, of the temporary appoint-

MrR. W. Marr, as assistant examiner, with salary at the rate of

$16C) lonth. The reply stated that the Board approves the designation

Qr the three employees named, end of the continuance for an additional

15611°d or the temporary appointment of Mr. Marr, and requested advice as to

Whether the designations of the three employees are temporary or permanent.


41/26/33

Approved.

Reply to a letter dated April 18, 1933, from La.. Albertson, Secretary

°r the 2edera1 Reserve Bank of Atlanta, referring to the Board's letter of

4111,--') -4y36, and stating that developments during and since the bank

hclicicLY have nade it possible to abolish the position of "special custodian"

14 tile Reconstruction finance Corporation department of the New Orleans

b '4

rarl„,.The reply stated that, in view of the discontinuance of this

1)13s/t10-I,—I it would appear that a change in the personnel classification plan

°rthebranch to Provide for the oosition, as recomended in Er. Albertson's

letter"arch 13, 1933, is no longer necessary, and that,unless advice is

loeeiv"'` La 0 the contrary, no further action will be taken by the Board.

Approved.

Reply to a letter dated April 20, 1933, from Governor Geery of the

4cleral Reserve 3ank of :An/lea-polls, stating that the action of the board

clirectors of the Helena branch and the executive conndttee of the federal

Ile°erve Bank 02 7 inneanolis with regard to the Payment of additional compen-

41t1°11 to A. A. Hoerr, Cashier of the Helena branch, contemplated such

nt from the date on which jr. Towle, Eanaging Director of the branch,v/Ets

released to the 2eo1al Agricultural Credit Corporation, rather than

rls°111 ADzil 7, 1933, on which date the executive committee Considered the

114tter.The reply stated that, accordingly, the Board has approved the

Da.yrasrit

11°Grzi ora-- additional compensation at the rate of ,:,100 per month to La..

4' September 16, 1932, to the date on which Mr. Towle again assumeshla ,

malla3ing director of the branch. The reply also stated thatit

-Neara

from the Board's records that the leave of absence of three


eik

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14.°11tils Cranted by the executive cormAttee of the bank to L. Towle in

Deceather 1932, expired on Larch 16, 1933; that it is assumed that leave of

e.b8orice for anadditional period has been granted to 1:r. Towle; and that it

17111 be appreciated if Governor Geery will advise of the action taken in

thi8re ez.(1,

and when lir. Towle is expected. to return to the branch.

Approved.

LTemerandum dated April 13, 193, from the Committee on Salaries and

14Penaii.—11res, statin,,• that, in accordance with the Board's letter of

'c'erabey. ,- 00, 1932 (13-854), the Federal reserve banks have submitted state-

the name and annual salary of each employee on Sanuary 1,

933together with the salary on lanuary 1 of last year or the initial

skiaryif hired. after Ianuary 1, 1932; that these statements have been

3.Cainst the Personnel classification plans on file with the Board;ri

it is recommended that each Federal reserve bank be advised that

tlie salaries paid by it as of 3-anuary 1, 1933, as shown on the respective

at8 i'llrnished the i3oard, have been noted with approval and, also, that

tile renewing. 'natters be called to the attention of the respective Federal

bankz:

(1) At the Federal Reserve Banizef Philadelphia andCleveland no deductions are being made from the salaries

additional employees under the share-the-work plansclapted by the banks, althouct. the Board advised these

u/Etnks that it assumed such deductions would be rnade.

(2) The Cleveland salary list slims a Reconstruction

,----t-Lce Corporation Department which is not provided for in1-1.0 bank's personnel classification plan.

(3) The Cleveland bank should submit revised pages of

ita Personnel class ific ati on plan to provide for the pos it ion

" "tin assistant Federal reserve agent at its branches.


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(4) /To percentage reductions were applied by the Fed-eral Reserve Bank of Richmond to the salaries of employeesassigned to the Reconstruction Finance Corporation unit,although such reductions were applied to salaries of allOther employees (except special cases) who received in ex-cess of , 720 per annum.

(5) More than 200 employees of the Federal ReserveBank of San Francisco were receiving higher salaries onJ'anuarY 1, 1933, than on January 1, 1932, and that as thisnumber represents approximately 40 of the total number ofenPloyees in the System as a whole receiving higher salaries°n January 1, 1933, it would appear that the salary policyof the during 193L! was somewhat out of line with that

d by other Federal reserve banks.

(6) With a view to obtaining uniformity in titles ofexaminers whose appointnents are apl)roved by the FederalReserve Board, the personnel classification plPrs of certain?auks should be revised so that the titles used will belimited to "chief examiner," "examiner," and "assistantexaminer."

(7) At sone of the banks an employee was transferred(1

('1)

the year to a position having a lower salary rangethan the position occupied by the employee on January 1,1.:932, with the result that the salary paid on January 1,

is in excess of the maximum salary for the positionoccluoied.

Letters to the Chairmen of the various Federalreserve banks, submitted by the Committee on Salariesand Expenditures in accordance with, its reconnenda-tions, were approved.

Telegram dated April 25, 1933, ton!. Stevens, Federal Reserve AgentEvt chi

140proved by four members of the Board, stating that the Board has4Droved

the application filed by the Farmers State Dank, Belvidere, Illinois,rorrae,

the fecier8hiP in the Federal Reserve System and for 120 shares of stock of

Reserve Bank of Chicago, subject to the conditions prescribed in

the tele

Approved.


AT

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Reply on April 25, 1930, approved by four members of the Board, to

Etletter dated April 21 fm hr. Hexton, Federal Reserve Agent at Richmond,

trEkusta"

4 4. tin3 the request of the Lynchburg Trust and Savings Bank, Lynchburg,

for an extension of 30 days in the time within which it may

cille-41*Y for membership in the Federal Reserve System; the bank having advised

that ." 18 not ready to act definitely on the conditions of membership imposed

bY the oard. The reply stated that the Board grants the extension and re-

that ,tne Lynchburg Trust and Savings BsTik be advised accordingly.

Approved.

Letter dated April 24, 1933, to the Washington 'National Bank,

Washini,,ton, approved by three neybers of the Board, stating that

the Dn,-41:u has approved the bank's application for pernission to act, when

Act i,-- con

travention of State or local law, as trustee, executor, adminis-tlator' registrar of stocks and bonds, guardian of estates, assignee,

Zeeive

I comndttee of estates of lunatics, or in any other fiduciary

Nqcity in which State banks,

in competition with national banks are Permitted to act under the

the State of Washington, the exercise of such rights being subjectto t4

e 131'°visions of the Federal Reserve Act and the regulations of the Fed-

Board,erea.

trust compapies, or other corporations which

Approved.

Letter dated April 24, 1930, to hr. Newton, Federal Reserve Agente.t c,

kEkbt j'alleisco, approved by four members of the Board, stating that it is

4°"tecl the analysis of the report of examination, as of September 21,1.32' or the

Commercial Security Bank, Ogden, Utah, that the bank has an


n at this time, either by the Board or the Federal reserve agent's

°trice., in connection with the matter. The letter also requested that the

4get forward to the Board a copy of a current report of condition of the

ri can Investment Corporation which owns 1,458 1/3 shares of the stock of

tb c°mmercial Security Bank and such information as may be available with

l'e ard to the condition of the other banks controlled by the corporation,

V3 a$ advice as to any corrections or other improvements made by the

°cIrlItilercial Security Bank in the features of its condition which were sub-

ject to criticism in the report of examination above referred to.

Approved.

Draft of a letter, prepared in the Treasury Department for the

re of the Secretary of the Treasury, to the Chairman of the Committeeo

Banking and Currency of the senate, replying to his request for a report

bY the ry Treasu_ Department on S. 806, "a bill establishing the Bank of the

United c;tates,owned, operated, and controlled by the Government of the United

tatea; defining

the scope and manner of its operation; defining the powers

of the persons charged with its management; creating a board of

and for other purposes." The reply referred to objectionable

Isestures of the bill and stated that the Treasury Department is opposed to

its ellactment.

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4/26/33-7-

investment of ,8,000 in the stock of the Bear Lake State Bank, Paris, Idaho;

that itaPPears that this investment is contrary to the provisions of one

cf the conditions under which the bank was admitted to membership; and that

it Aqill be appreciated if the agent will advise in detail of the circum-

taxless surrounding the investment and his views as to what action should

be take

4igtat4

'4":"

clirsetors;

Approved.


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The following statement to the press, issued by the Secretary of

l urY on April 25, 1933, was presented for the record:

"Secretry ;Toodin today called attention to the facttht urider the provisions of the President's Order of April

forbidding the hoarding of gold coin, gold bullionand';old certificates, persons who aan gold coin, goldbullion or gold certificates are required to deliver theirholdi ngs to a Federal Reserve '3ank, branch or agency, or toanY nember bank of the Federal Reserve System, on or beforenext LIonday, Lay 1st, 1953, except as provided in certaincases specified in the Order. A fine of 10,000 or tenYears tmprisonment, or both, nay be imposed as the penaltyfor failure to comply with the terms of the Order.

"Gold in reasonable amount, actually required for usein industry, profession or art, is excepted from the orderto deliver on or before Iday 1st. An exception is alsoalloued in the case of gold coin and gold certificates inan amount not exceeding ::100 belonging to any one person,814(1 in the case of gold coins having a recognized specialvalue to collectors of rare and unusual coins.

. "In a final effort to acquaint the public with the re-quirements of the President's Order, and the criminalPenalties provided for violations of the Order, the TreasuryDePartment is forwarding to every post-office and banking

intended for

institution a printed notice, in the form of a poster andpublic display, setting forth the Executive

°I'aer in Dail. Persons having gold coin, gold bullion orgold certificates should acquaint themselves with the exact'terms of the Executive Order.

"To facilitate the identification of gold certificates,84 dist inguished from other currency, the Treasury points

that Gold Certificates may be identified by the words4°1d Certificate' appearing thereon. In the case of gold?ertificates of the small-size currency, which were first_Issued in 1929, the title 'Gold Certificate' appears on theloace of the certificate, and in the case of gold certificatesOf

tile large-size currency, (the issue of which was discon-b:inueked in 1929), the title 'old Certificate' appears on the. The serial number and the Treasury seal on the face of

s GOld Certificate are printed in yellow. while Federal Ro-

be rotes and United States I:otes are redeemable in (,)old and

,r a provision to that effect, they are not 'Gold Certificates'-"`' are not, therefore, required to be surrendered."


4/26/33 188-9-

ILt this point Dassrs. Snead and Goldenweiser joined the meeting.

Governor 1,:eyer stated that he had talked over the telephone this

tier/ling with Governor Harrison of the Federal Reserve Bank of New York, who

"ed that he felt it would be desirable, in connection with the current

(31111ne by the Treasury Department of 4500,000 000 of Treasury notes, for the

'Y8t%u to increase its holdincs of Government securities in the open market

"count today by 1;40,000,000 or 450,000,000, so that the increase will appear

ill the weekly statement of condition of Federal reserve banks published tonor-

11, and that it will be appreciated if the Board will consider the resolution

(IdoPted at the meeting of the Open Ylarket Policy Conference on April 22, 1933,

1111th°11.4ing the executive committee of the conference to arrange with the

SecretarY of the Treasury from time to time to purchase up to 4,000,000,000

Gcvernment securities to meet Treasury requirements.

Governor Meyer stated that while the resolution appears to contemplate

11"Ileas direct from the Treasury to enable it to meet its requirements, Gov-

ernorlierrison had stated that it was not the intention of the conference that

1311rehaees should be so limited. He called attention to the fact that, entirely

esideJ.Isonl this Point, the Treasury offering has been over-subscribed by more

that, ,1400,000,000 and stated that he had advised Governor Harrison that, in his

°Pinto

zlerve2Yetem at this time; that it would be preferable for the department to

ket

that

a) the Treasury Department does not need the assistance of the Federal Re-

the issue ,Athout any assistance from the Federal reserve banks; and

' in the present situation, he questions the advisability of purchasing440,00

toviard

inereasinf, its holdings of securities. Governor Meyer also stated

that TT11(ler Secretary of the Treasury Ballantine had discussed the matter

St htm

0,000 or 450,000,000 as an indication of the attitude of the System

and Governor Harrison yesterday and today, and is inclined to


,411)

4/26/33-10-

189

raver the suggested purchase, although he appears to have no strong feeling

in the matter, but that, so far as he knew, the Secretary of the Treasury,

110 is still confined to his home by illness and had talked the matter over

vlith Mr. Ballantine, had expressed no opinion concerning it.

A discussion ensued, at the conclusion of which

the Governor was requested to advise Governor

Harrison that the Board does not think it advisable

to make any change in the System holdings of Govern-

ment securities this week, and that action on the

resolution of the Open Market Policy Conference has

been deferred.

There was some further discussion of the two other resolutions adopted

bY the„upon :_arket 2olicy Conference at its meeting on April 22, and it was ex-

ill'e3sed as the consensus that the Board should approve the resolution instruct-

t he executive committee of the conference to work out a system of allot-

Met of existing holdings, as well as new purchases of Government securities,

with a view to arriving at a more equitable relationship of reserve percentages

c3t the Aderal reserve banks, with the understanding that the system, when

vic3rke'l °lit, Will be submitted to the Board for its approval.

In connection with the resolution adopted by the conference looking

a authorization of the executive committee to shift maturities in the

8Ystemaccount as conditions in the market or requirements of the Treasury

E1PPear to make that advisable, the suggestion was made that a limitation

be ni—aced on the length of the maturities of Government securities which

be placed in the open market account. Some of the members stated that

the, ,1/0111d like to consider this point further.

Accordinly, Governor 1.:eyer was requested to advise

Governor Harrison that action on the last mentioned resolu-

tion has been deferred, but that the Board is in agreement

With the proposal embodied in the resolution instructing

the executive committee of the Open Market Policy Confer-

ence to work out a new system of allotment, it being under-

stood that the new system will be submitted to the Board before

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190

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The Secretary stated that the proposed letter to the Attorney

General trananittinr; the report of the investigation made by the Board's

Divisi n0 of Examinations in the Fiscal Agency Department of the Federal Re-

314."7e Bank of Chicago, and related documents, has been approved by the

al31)13/11tiva members of the T3oard and it is understood that it is to be held

tor ,Q41Proval by the Secretary of the Treasury upon his return to the office.

It wEv.ao;reed that this Procedure should be followed.

ReP0rt5 of Standing Connittee dated April 24 and Z5, 1933, ream-

approval of the followinG Chan-es in stock at Federal reserve banks:

Ap-'e"ions for ORIGLTAL Stock:

District No. a ----114ti°11a1 nank of Tulsa, Oklahoma.

a,,,,_istrict No. 11.National Bank in Brenham, Brenham, Texas. 30

Total

Shares

A Etti -le tric t .7?:111s. for ADJIT IOLAL Stock:aser, i°

-11d 1-ati0nal Bank, Connellsville, Penna.(Increase in capital, partly offset bydecrease in surplus)

tDiztric

1Te.tional Dixon, Illinois. (Increase inellPital, Partly offset by decrease in surplus)

)141tIjitItt! 1-3%)./L.M1122TDER of Stock:

4.111 and Trust Company, Philadelphia, Penna.(Declmase in surplus) 795

1)14.

liatiPEET.I7B , Coon Rapids, Iowa. (V.L.Suc.Pirst State Bank of Coon Rapids, nonmember) 33

4,800

60

60Total

4,800

304,830

60

60120

795


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3.1eat ions f or MIRE= of Stock: (Cont Id)8.

41tric SavinGs Trust Company, Richmond Heidats,„ laiesouri. (Insolvent)university City Bank and Trust Company, University

City, Lissouri. (Insolvent)

„IrAq.I'let No. 10.rirst National Bank, North Bend, Nebraska.

(Insolvent)

4.1rat National Bank, Knox City, Texas. (V.L.Abs. by8. 11\T•tietzteinoaisn StBi,aantecHan k of Knox City; nonmember)

Rio Grande, Texas. (V.L.Abs. byr.The first State Bank and Trust Company of Rio'2' aricle nonrember)

Llistriet No. 12.41xstAt

1Tat10181 Bank, Redondo Beach, California. (V.L.8. by Bank of Anerica. National Trust and

-417111ge Association, San Francisco, California.) 180at National Bank, Linnton, Oregon. (V.L.Abs. byThe United States National Bank of Portland,

Citieree°11°) 18zb°113 National Bank, Portland, Oregon. (V.L.Abs.„7 The United States National Bank of Portland,`'regon..) 240

Total

Shares

72

78

42

30

15

19/

150

42

45

4381,503

Approved.

Reports of Standing Committee dated April 24 and 25, 1933, recom-

aPProval of the following Clayton Act applications:

title VT. S. Hammons, far permission to serve at the sameas director and officer of the Portland National Bank ofPo land,1%4

, LIaine and as director of The Mimi Beach First'mitt° 'nal Bank, LiEuni,Beach, Florida.

.11r. C. B. J'aphet, for permission to serve at the same tine43-rector of the Harrisburg National Bank of Houston, Texas,

director of the National Bank of Commerce of Houston,-keze.e.

Approved.


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Thereupon the meeting djo ed.

0-1.AASecretary..


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19330426_1120a_Minutes.pdf