A. meting of the Executive Committee of the Federal Reserve Board was

441 in the office of the Federal Reserve Board on Friday, Jitne 5, 1931, at

11:00 a, m.

PRESENT: Governor MeyerMr. HamlinMr. MillerYr. MageeMr. McClelland, Assistant Secretary.

The Governor presented draft of a letter to the Undersecretary of the

l'31117, prepared in accordance with action taken at the meeting yesterday,

"8inC that in the circumstances the Board suggests that it would be more

1111131'oPriate for the Treasury Department to designate as a member of the pro-

80d Federal Statistics Board, in addition to the Chief of its Section of

Nqn,-Licial and Economic Research, some other statistician of a Treasury Bureau,

er than a representative of the Board's Division of Research and Statistics.

boitg a discussion which ensued the letter was amended so as to advise also

4Lelif matters arise in which the Federal Statistics Board believes that the

Itte A,tance of the Director of the Board's Division of Research and Statistics

be helpful in the work, the Board, of course, will be glad to have its

bite

kkaAe,-"4 City and the Chairmen of the Federal Reserve Banks of Dallas and San

°tor take part in such discussions.

Upon motion, the letter as amendedwas approved.

The Assistant Secretary then presented various matters of business

Were considered by the Committee and acted upon as follows:

Telegrams dated June 5th from the Secretary of the Federal Reserve Bank

leveland and June 4th from the Secretary of the Federal Reserve Bank of

lAte-stated, no changes were made in the banks' existing schedules of rates

ei800, all advising that at meetings of their Boards of Directors on the

acRant and purchase.

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Without objection, noted withapproval.

Letter dated Tune 4th from the Manager of the Foreign Department of the

1?"Aral Reserve Bank of New York, advising of the release on that date from

tile gold deposit account of the Banco de la Nacion, Argentina, of 1,000,000

Otth .::1,500,000 of gold coin which was held subject to the order of the

kkfttine Ambassador.

Noted.

Letter dated Tune 4th from the Governor of the Federal Reserve Bank

Ot New York, advising that all of the Federal reserve banks have agreed to

Ll'ticipate in the credit arrangement with the Austrian National Bank, recently

41 '1'°"fed by the Board, and stating that in view of the fact that the maximum

4111c)1111t of bills which may be purchased under the arrangement is only slightly

oIrpn- 4v1,000,000, arrangements are being made to carry the total amount of

'43 Purchased in the account of the New York Bank and upon liquidation of

t4 a ecount to credit each Federal Reserve bank with its share of the

--44.8sion and discount.

Ordered circulated.

Lists submitted by the Federal Reserve Banks of Philadelphia, St. Louis

o3.4-1-as of employees for whom the directors approved leaves of absence with

account of illness, during the months of April and May at Philadelphia

month of May at St. Louis and Dallas, where the total of such absences

January 1, 1931, has exceeded thirty days.

Upon motion, it was voted to approvethe salary payments involved in the leavesof absence authorized by the directors.

Draft of letter to the Governor of the Federal Reserve Bank of New

Prepared in accordance with the instruction to the Assistant Secretary

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"the meeting yesterday, requesting more detailed information concerning ex-

leaves of absence with pay on account of illness, granted to certain

e411°10Yees of the bank, and reported in Yr. Gilbart's letter of June 1st.

After discussion, the letter asamended was approved and ordered trans-mitted.

Draft of letter to the Federal Reserve Agent at New York, prepared in

tecc)rdance with action taken at the meeting on June 3rd, requesting information

84 to the manner in which the New York State Banking Department examines the

th.4. ,Qepartments under its jurisdiction, and whether, in his opinion, the

em ef exemination is such that the reports reflect the character and

ity Of the management of the accounts for which the banks are acting in

414ciary capacities.

Amended and approved.

Memorandum dated June 4th from the Chairman of the System Committee

kileserves, suggesting that the Board send a copy of the Committee's report

114.4.1r 27th, on the subject of progressive penalties on deficiencies in

l'eeei'vee, to each Federal Reserve Bank for its information.

Noted without action.

At this point Mr. Wyatt, General Counsel and Mr. Vest, AssistantColjolsel

I joined the meeting.

)141NY 274.1_4.Q from the Division Manager of the A:merican Telephone and Telegraph

Proposing that the Federal Reserve Board agree to a new uniform clause

Memorandum from Counsel dated May 29th submitting a letter dated

contract with the company covering leased telephone and telegraphitzte

a 'Which would provide that the contract may be terminated immediately

tte living of written notice by either party; Counsel stating that there

4:ea

to be no sound reason why the company should object to the inclusion

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th-e new contract which will be executed the latter part of this month, of

the Present provision that the contract may be terminated either by the Board

by the company only by giving 30 days previous notice in writing, and

loramending that the Board advise the company that it does not care to accent

t4 new clause under which the necessity for advance notice would be eliminated.

After discussion, upon motion,Counsel's recommendation was approvedand he was instructed to verbally com-municate the Board's views to the Div-ision Manager of the American Telephoneand Telegraph Company.

the

4 -Lath and 22nd from the Cashier of the National Bank and Trust Company of

Memorandum from Counsel dated May 28th, submitting draft of letter to

Federal Reserve Agent at Chicago, transmitting copies of letters dated

I 11/4011, Iowa, and requesting comments on the statements made in the letters

With

4q(14'Lled, reports received from the Assistant Federal Reserve Agent at Atlanta

l'eGard to an alleged agreement or understanding with the National bank

reference to the granting of trust powers.

Upon motion, the proposed letterwas approved.

Memorandum from Counsel dated June 2nd, recommending that copies of the

wIt4l'easrd to Caldwell and Company and from the Federal Reserve Agent at

kLUis with regard to Caldwell and Company, BancoKentucky Company and A. B.

,<46/3041 Company, be furnished to the Attorney General for his information

kvisuch action as he deems advisable; also, that the Federal Reserve Agent

tq at.

thL°uis be requested to furnish certain additional information mentioned

reports submitted by him.

After discussion, upon motion,Counsel's recommendations were approved

and drafts of letters to the Attorney

General and the Federal Reserve Agent atSt. Louis in accordance therewith, were

approved and ordered transmitted.

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Mr. Wyatt then presented a memorandum, prepared by Mr. Vest under date

or Tune 3rd, submitting a letter dated June 2nd from Deputy Governor Kenzel of

t4 Federal Reserve Bank of New York with regard to a circular letter sent out

ill the firm of Schenkers, Inc., International Freight Forwarders, New York City,

reference is made to a plan, alleged to have been approved by the

44sra1 Reserve Board, for financing the distribution of American products in

tcyr,4.1.en countries; va.. Kenzel stating that he has been advised that the

4relattr letter was prepared by Mr. Georges St. Jean of the Federal Inter-

Banking Corporation to which institution Mr. Kenzel was referred for

et(111.18 of the plan.

In his memorandum Counsel called attention to the fact that on

4\14 11930, the Federal Reserve Board, under the provisions of Section 25(a)

or th e Federal Reserve Act, issued a prelnary permit to the Federal Inter-

44a1 Banking Corporation authorizing it to exercise only such powers as may

be 441cidental and preliminary to its organization but that the Board has not

Issued a final permit to commence business, and has not in any way expressed

41}14.0val of any plan of the corporation for financing foreign trade as stated

111+1."40 letter sent out by Schenkers, Inc., which is clearly improper and

1441.eading to the public.

A general discussion ensued withregard to the present status and Dowersof the Federal International BankingCorporation under the law, at the con-clusion of which la.. Wyatt was instructedto prepare and submit at the next meetingof the Board, draft of letter to theCorporation setting forth the facts whichhave been brought to the attention of theBoard, and requesting an explanation there-

of.

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kPORmq STANDING COM/LITTERS:

Ditte :Lime 5th Recommending changes in stock at Federal Reserve Banks,

as set forth in the Auxiliary Minute Book of this date.Recommendations approved.bated,

Xune 5th Recomending action on an application for admission ofa state bank as set forth in the Auxiliary Minute Bookof this date.

Recommendation approved.

The meeting adjourned at 12:15 p. N6

Assistant Secretary.

ed:

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(4ecutive00mtittee) EINUTES

(June 5, 1931.)

a Reports of Standing Committee dated June 5, recommendingtock at Federal Aeserve Banks, approved as follows:

kkijcation for ADDITIONAL Stock:

alcil:14LLIrsJLJ8ist National Bank, Waterloo, Ill.

411119_9„tions for 131TARE1DEA of Stock:

First National Bank,

(Insolvent)

1,414I.119.1.1ab_it41cUrity National Bank, 'Alford, Iowa.( Ins Cave nt"41,,Y County National Bank, Morris, Ill.

(Cons. with Farmers & Merchantsrational Bank.)

trict No. 8.

itichwood, Ohio.

411st National Bank, Columbia, Ill.(Decrease in surplus),

411trict No. 9.44I've National Bank, Anoka, /ann. (Insolvent)

Shares:

3

36

36

105

9

42

C-';

changes in

Total

k Report of Standing Committee dated June 5th, recommending411eatikb, an for admission to membership by the following state4ect to the conditions stated in the report attached to the

prOlrea:

Name Shares

State Bank of Newrans, New/lane, N. Y. 60

3

36

141

9

42228

action on aninstitution,application.

F. R. Bank

Now York

Assistant Secretary.

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