William F. Whiting, Robert P. Lament - St. Louis Fed

V 1929

EXECUTIVE OFFICERS

President

Secretary of Treasury

Comptroller of Currency

Secretary of State

Secretary of War Secretary of Navy Secretary of Interior

Secretary of Agriculture Secretary of Commerce Sedretary of Labor Postmaster General Attorney General

- Herbert Clark Hoover (elected Nov. 1928, inaugurated March 4, 1929)

- Andrew V. Mellon (appointed March 4, 1921, served until Feb. 12, 1932)

- J. V. Pole (date of appointment Nov. 21, 1928, resigned Sept. 20, 1932)

- Frank B. Kellogg, Henry L. Stimson - Dwight F. Davis, James W. Good, Patrick J. Hurley

- Curtis D. Wilbar, Charles F. Adams

- &Ray L. Wilbur, Roy 0. We - William M. Jardine, Arthur M. Hyde - William F. Whiting, Robert P. Lament - James J. Davis - Harry S. New, Walter F. Brown - John D. Sargent, William D. Mitchell

r

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

1929U.S. GO VERNMENT

SENATE

Banking and Currency Committee

71st Congress

Republicans Democrats

NORBECK, Peter EDGE, Walter E. PHIPPS, Lawrence C. BROOKHART, Smith W. STEIWER, Frederick THOMAS, John GOLDSBOROUGH, Phillips Lee HEBERT, Felix TOWNSEND, John G., Jr. WALCOTT, Frederic C.

South Dakota New Jersey Colorado Iowa Oregon Idaho

Maryland Rhode Island Delaware Connecticut

FLETCHER, Duncan U. GLASS, Carter WAGNER, Robert F. BARKLEY, Alben W. TYSON, Lawrence D. CONNALLY, Tom BRATTON, Sam G.

Florida Virginia New York Kentucky Tennessee Texas New Mexico

_J


November

Republicans Democrats

McFADDEN, Louis T. STRONG, James G. LUCE, Robert FENN, E. Hart CAMPBELL, Guy E. LEATHERWOOD, Elmer 0. BEEDY, Carroll L. HOOPER, Joseph L. GOODWIN, Godfrey G. LETTS, F. D. WOLFENDEN, James CULKIN, Francis D.

Members whose names are Seventy-first Congress.

Pennsylvania Kansas Massachusetts Connecticut Pennsylvania Utah Maine Michigan Minnesota Iowa Pennsylvania New York

WINGO, Otis STEAGALL, Henry B. BRAND, Charles H. STEVENSON, William F.

(BLACK, Eugene) GOLDSBOROUGH, T. Alan PRALL, Anning S. CANFIELD, Harry C.

Arkansas Alabama Georgia South Carolina Texas Maryland New York Indiana

inclosed in brackets ( ) will not be Members of the

.1929U.S. GO VERNMENT

HOUSE OF REPRESENTATIVES

Banking and Currency Committee

70th Congress


1929 FEDRA -RESERV BOARD

Ex Offieto Membeiy

A. V. Mellon Secretary of the Treasury

Chairman J.W. Pole,

Comptroller of the Currency

Roy A. Young, Governor Edmund Platt,: Vica Governor

Adolph C. Miller Charles S. Hamlin George R. James Edward H. Cunningham

Secretary's OfficeWalter L. Eddy, Secretary

J. C. Boell, Asst. Secretary E. M. McClelland, Asst. Secretary

Fiscal A5t W. M. Imlay,.. Fiscal Agent

Division of Examination J. F. Herson, Chief

And Chief Federal Reserve .-Examiner

.Counael 'a OfficeWalter Wyatt, General Counsel

Divis on-of Research and Statistics E. A. Goldenveiser, Director

Carl E. Parry, Asst. Director Division Of Bank Operations

E. L. Snead,Chief

L


FEDERAL RESERVE SYSTEM FEDERAL ADVISORY COUNCIL

District No.

District No.

District No.

District No.

District No.

District No.

District No.

District No.

District No.

District No.

District No.

District No.

(Boston) Arthur M. Heard

(New York) Wn. C. Potter

(Philadelphia) L. L. Rue

(Cleveland) Harris Creech

(Richmond) John Poole

(Atlanta) J. P. Butler, Jr.

(Chicago) Frank 0. Wetmore, President

(St. Louis) W. W. Smith

(Minneapolis) Theodore Wold

(Kansas City) P. W. Goebel

(Dallas) B. A. McKinney, Vice President

(San Francisco) F. L. Lipman

Walter Lichtenstein, Secretary

1929

_ __ _ __ _ ~I


1929 FEDERAL RESERE SYSTEM

OPEN MARKET INVESTWNT COMITTEE

Composed of five Governors of Federal Reserve Banks:

Boston - W. P. G. Harding

New York - George L. Harrison

Philadelphia - George W. Norris

Cleveland - E. R. Fancher

Chicago - J. B. McDougal


1929

Governor - W. P. G. Harding

Deputy Governor

Chairman and Federal Reserve Agent

- W. W. Paddock

- Frederic H. Curtiss

Deputy Chairman - Allen Hollis

Federal Reserve Bank of Boston (Dist. 1)

OFFICERS

:r:- i-r-Yn~-?r~t~;c~--

i


1929 Federal Reserve Bank of Boston (Dist. 1)

DIRECTORS

Class A

RIPLEY, Alfred L. (Boston, Mass.) KENNARD, Edward S. (Rumford, Me.) CHAMBERLAIN, Frederick S. (New Britain, Conn.)

Term Expires Dec. 31

1929 1930 1931 (re-elected)

Class B

ALLEN, Philip R. (East Walpole, Mass.) BEMIS, A. F. (Boston, Mass.) BOWMAN, Albert C. (Springfield, Vt.)

1929 1930 1931

(elected) (re-elected)

Class C

CURTISS, Frederic H. (Boston, Mass.) Chairman and FR Agent HOLLIS, Alien (Concord, N.H.) Deputy Chairman MANCHESTER,- Chas. H. (Providence,R.I.)

1929 1930 1931 (re-appointed)


1929 Federal Reserve Bank of New York (Dist. 2)

OFFICERS

Governor - George L. Harrison

Deputy Governors - J. H. Case L. F. Sailer E. R. Kenzel

A. W. Gilbart L. R. Rounds

Chairman and Federal Reserve Agent - Gates W. Mc Garrah

Deputy Chairman - Owen D. Young


1929

I

Feder

CLASS A

TRIMAN, Bohrt H. (thae&ak

RUNKLER, alar (MHosick- Falls)

MITCHELL, Charles E. (New York)

CLASS B

WHITMARSH, Theodore F. (New York)

REYBURN, Samuel V. (New York)

WOODIN, William H. (New York)

CLASS C

YOUNG, Owen D. (New York)

WOOLLEY, Clarence M. (Greenwich)

McGARRAH, Gates W. (New York)

1929

1930

1931

1929

1930

1931

al.Reserve Bank of

DIRECTORS

Term Began

1/1/27

1/1/28

1/1/29

NEW YORK (Dist. 2)

1/1/27

1/1/28

1/1/29

1/13/27

1/1/28

1/1/29

Dec. 31 Term Ended

1929

1930

1931 (elected)

(reelected)

(Deputy Chairman)

(reappointed) (Chairman)

--


1929

OFFICERS

Governor

Deputy Governor

Chairman and Federal Reserve Bank

- George W. Norris

- William H. Hutt

- R. L. Austin

Deputy Chairman - Alba B. Johnson

Federal Reserve Bank of Philadelphia (Dist. 3)

Ci

'I


Federal Reserve Bank of Philadelphia (Dist. 3)

DIRECTORS

Tenm Expires Dec. 31

WAYNE, Jos.(Jr.) (Philadelphia Pa.) REILY, Geo W. (Harrisburg, Pa.) COSGROVE, John C. (Hastings, Pa.)

SEWALL, Arthur W. (Philadelphia, Pa.) DORRANCE, A. C. (Camden, N. J.) STOUT, C. F. C. (Philadelphia, Pa.)

AUSTIN, R. L. (Philadelphia, Pa.) Chairman and FR Agent JOHNSON, Alba B. (Philadelphia, Pa.) Deputy Chairman CANNON, H. L. (Bridgeville, Del.)

1929 1930 1931 (re-appointed)

1929

Class A

Class B

1929 1930 1931

Class C

(elected)

1929 1930 1931

I


1929Federal Reserve Bank of Cleveland (Dist. h)

OFFICERS

Governor - E. R. Fancher

Deputy Governors


Deputy Chairman

M. J. Fleming Frank J. Zurlinden

- George De Camp

- L. B. Williams

__ __-_ _

j


1929 2Federal Reserve Bank of Cleveland (Dist. t)

DIRECTORS

Class ATerm Expires Dec. 31

WARDROP, Robert (Pittsburgh, Pa.) SAMS, 0. N. (Hillsboro, Ohio) LAMBERTON, Chess (Franklin, Pa.)

1929 1930 1931 (re-elected)

Class B

CRABBS, Geo. D. (Cincinnati, Ohio) BUSH, S. P. (Columbus, Ohio) WRIGHT, R. P. (Erie, Pa.)

1929 1930 1931 (re-elected)

Class C

DeCAMP, George (Cleveland, Ohio) Chairman and FR Agent KNIGHT, W. W. (Toledo, Ohio) WILLIAMS, L.B. (Cleveland, Ohio) Deputy Chairman

1929 1930 1931 (re-appointed)

III I I I TL __ .


1929 Federal Reserve Bank of Richmond (Dist. 5)

OFFICERS

Governor

Deputy Governors

Chairman and Federal Reserve Agent -

George J. Seay

C.A. Peple R. H. Broaddus

William W. Hoxton

- Frederic A. DelanoDeputy Chairman


1929

JOHNSON, L. E. (Alderson, W. Va.) RIEMAN, Chas. E. (Baltimore, Md.) BRASWELL, Jas.C. (Rocky Mount, N.C.)

1929 1930 1931 (re-elected)

Class B

COKER, D.R. (Hartsville, S.C.) FISHBURN, J. P. (Roanoke, Va.) GRAHAM, Edwin C. (Washington, D.C.)

1929 1930 1931

(elected) (re-elected)

Class C

HOXTON, Wn. W. (Richmond, Va.) Chairman and FR Agent DELANO, Frederic A. (Washington, D. C. ) Deputy Chairman LASSITER, Robert (Charlotte, N.C.)

1929 1930 1931 (re-appointed)

Federal Reserve Bank of Richmond (Dist. 5)

DIRECTORS

Term Expires Dec. 31Class A


Federal Reserve Bank of Atlanta (Dist. 6)

OFFICERS

Governor

Deputy Governors


Deputy Chairman

- Eugene R. Black

- Hugh Foster Creed Taylor

- Oscar Newton

- v. H. Kettig


1929Federal Reserve Bank of Atlanta (Dist. 6)

DIRECTORS

Class A

WARE, G. G. (Leesburg, Fla.) YOUNG, H. Lane (Atlanta, Ga.) MELVIN, E. C. (Selma, Ala.)


1929 1930 1931 (re-elected)

Class B

SIMON, Leon C. (New Orleans, La.) McCRARY, J. A. (Decatur, Ga.) LEA, Luke (Nashville, Tenn.)

1929 1930 1931 (re-elected)

Class C

NEWTON, Oscar (Atlanta, Ga.) Chairman and FR Agent HARRIS, Geo. S. (Atlanta, Ga.) KETTIG, W. H. (Birmingham, Ala.) Deputy Chairman

1929 1930 1931 (re-appointed)

:__: ______.____ __E_~_

i


1929Federal Reserve Bank of Chicago (List. 7)

OFFICERS

Governor - J. B. Mc Dougal

Deputy Governors


Deputy Chairman

C. R. Me Kay John H. Blair

- W. A. Heath

- James Simpson

_ __ ____ ______;_ __~_


Federal Reserve Bank of Chicago (Dist. 7)

DIRECTORS


JOHNSON, E. L. (Waterloo, Iowa) REYNOLDS, George M. (Chicago, Ill.) ESTBERG, Edward R. (Waukesha, Wis.)

1929 1930 1931

MUELLER, obert (Decatur, Ill.) VOGEL, A. H. (Milwaukee, Wis.) CRAPO, S. T. (Detroit, Mich.)

1929 1930 1931 (re-elected)

Class C

SIMPSON, James (Chicago, Ill.) Deputy Chairman HEATH, W. A. Chairman and FR Agent (Chicago, Ill.) BALL, F. C. (Muncie, Ind.)

1929 1930 1931 (re-appointed)

Class A

Class B

(elected)

i


Federal Reserve Bank of St. Louis (Dist. 8)

OFFICERS

Governor - illiam Mc C. Martin (appointment effective January 16)

Deputy Governor


0. M. Attebery

- Rolla Wells

Deputy Chairman - John W. Boehne

1929_ ___;_____ ___


1929 Federal Reserve Bank of St. Louis (Dist. 8)

DIRECTORS

Class A

LONSDALE, John G. (St. Louis, Mo.) NAHM, Max B. (Bowling Green, Ky.) MARTIN, John C. (Salem, Ill.)

Class B

PERCY, Le Roy (Greenville, Miss.) vacancy PLUNKETT, W. B. (Little Rock, Ark.)


1929 1930 1931 (re-elected)

1929

1931 (re-elected)

Class C

BOEHNE, John W. (Evansville, Ind.) Deputy Chairman WELLS, Rolla (St. Louis, Mo.) Chairman and FR Agent DILLARD, Paul (Memphis, Tenn.)

1929 1930 1931

(appointed) (re-appointed)


1929Federal Reserve Bank of Minneapolis (Dist. 9.)

OFFICERS

Governor

Deputy Governors

Chairman and FederalReserve Agent

Deputy Chairman

- W. B. Geery

- B. V. Moore Harry Yaeger

John R. Mitchell

- Homer Clark


Federal Reserve Bank of Minneapolis (Dist. 9

DIRECTORS


BASSETT, J. C. (Aberdeen, S. Dak.) FARUP, Karl J. (Park River, N.Dak.) LEEMAN, Paul J. (Minneapolis, Minn.)

1929 1930 1931 (re-elected)

Class B

HOLTER, N. B. (Helena, Mont.) OWEN, John S. (Eau Claire, Wis.) MYERS, Paul N. (St. Paul, Minn.)

1929 1930 1931 (re-elected)

Class C

MITCHELL, John R. (Minneapolis, Minn.) Chairman and FR Agent CLARK, Homer P. (St. Paul, Minn.) Deputy Chairman McCORMICK, Geo W. (Menominee, Mich.)

1929 1930 1931 (re-appointed)


Federal Reserve Bank of Kansas City (District 10)

OFFICERS

Governor - W. J. Bailey

Deputy Governor


Deputy Chairman

- C. A. Worthington

- M. L. Mc Clure

- Wm. L. Petrikin

1929_I_ ____ _1______ __~_

1


1929

Federal Reserve Bank of Kansas City (Dist. 1D)

DIRECTORS

Class A

MULLANEY, E. E. (Hill City, Kans.) PARKS, C. C. (Denver, Colo.) SPONABLE, Frank W. (Paola, Kans.)


19291930 1931 (re-elected)

Class B

PHILLIPS, L. E. (Bartlesville Okla.) BYRNE, Thos. C. (Omaha, Nebr.) BERNARDIN, J. M. (Kansas City, Nebr.)

1929 1930 1931 (re-elected)

Class C

McCLURE, M. L. (Kansas City, Nebr.) Chairman and FR Agent BRASS, F. M. (Grand Island, Nebr.) PETRIKIN, Wm. L. (Denver, Colo.) Deputy Chairman

1929 1930 1931 (re-appointed)

_I____________________~____~__~_I I

J


1929Federal Reserve Bank of Dallas (Dist. 1)

OFFICERS

Governor - Lynn P. Talley

Deputy Governors -


R. R. Gilbert R. B. Coleman

C, C. Walsh

- Clarence E. LinzDeputy Chairman


1929


SMITH, Howell E. (McKinney, Tex.) FROST, J. H. (San Antonio, Tex.) PATRICK, W. H. (Clarendon, Tex.)

1929 1930 1931 (re-elected)

Class B

CULBERTSON, J. J. (Paris, Tex.) MILAN, J.R. (Waco, Tex.) CLEVELAND, A. S. (Houston, Tex.)

1929 1930 1931 (elected)

Class C

LINZ, Clarence E. (Dallas,Tex.) Deputy Chairman PERKINS, S. B. (Dallas, Tex.) WALSH, C. C. (Dallas, Tex.) Chairman and FR Agent

1929 1930 1931 (re-appointed)

Federal Reserve Bank of Dallas (Dist. 11)

DIRECTORS

Class A


1929Federal Reserve Bank of San Francisco (Dist. 12)

OFFICERS

Governor - J. U. Calkins

Deputy Governors


Deputy Chairman

Wm. A. Day Ira Clerk

- Isaac B. Newton

- Walton N. Moore


Federal Reserve Bank of San Francisco (Dist. 12)

DIRECTORS


RAMSAY, T. H. (Red Bluff, Calif.) VAWTER, Vernon H. (Medford, Oreg.) McINTOSH, C. K. (San Francisco, Calif.)

1929 1930 (elected) 1931(re-elected)

Class B

DOHRMANN, A. B. C. (San Francisco, Calif.) SESNON, Wm. T. (Soquel, Calif.) COX, E. H. (Madera, Calif.)

1929 1930 1931 (re-elected)

Class C

NEWTON, Isaac B. (San Francisco, Calif.)Chairman and FR Agent 1929 MOORE, Walton N. (San Francisco, Calif.)Deputy Chairman 1930 SPROULE, Wa. (San Francisco, Calif.) 1931 (re-appointed)

i


1929 January 26 LEGISLATION

\,

- -- --- \--~-- i~.i---rr.-~,, __.- IL44L


i

The first proviso to section 8 of the Act of October 15, 1914 (Clayton Act), exempting mutual savings banks from the prohibition against interlocking directorates, was amended to exempt also joint stock land banks and other banks doing noncommercial business. (45 Stat. 1536, Ch. 581.)

Source: Supplement to statement on Evolution of Banking Legislation by Walter Wyatt, October 26, 1939. Exhibit G

F-

1*

1929 March 2 Interlocking directorates. LEGISLATION

-- --

i


1929 June 17 Treasury bills and certificates of indebtedness. LEGISLATION

The Secretary of the Treasury was authorized to issue a new form of Treasury obligation to be known as "Treasury bills", and the Act provided that wherever the words "bonds and notes of the United States" or certain similar phrases were used in the Federal Reserve Act they "shall be held to include" such Treasury bills and also certificates of indebtedness. This, in effect, amended sections 13 and 14, and authorized Federal Reserve banks to rediscount notes secured by Treasury bills or certificates of indebtedness; to make short-term advances to member banks on their promissory notes so secured; and to purchase in the open market Treasury bills and certificates of indebtedness. Prior to this enactment, certificates of indebtedness of the United States were considered eligible for the purposes stated and in this respect the new law was merely a specific statutory confirmation of the existing practice. (46 Stat. 19, Ch. 26.)

Source: Supplement to statement on Evolution of Banking Legislation by Walter Wyatt, October 26, 1939. Exhibit G


1929

The Stock Exchange did not officially close after the 1929 Panic though

on October 31, 1929 it did not open until noon while on November 1

and 2 it did not open at all because trading was so heavy. It also

remained closed on Saturdays during November (the 9th, 16th, 23rd, and

30th), again because of the heavy trading. However, all these days of

remaining closed were done for the convenience of member firms who were

finding it impossible to keep their records up to date because of the

volume of transactions. The Stock Exchange resumed its practice of

being open on Saturdays starting with the first Saturday in December.


1929 August 1929

(See also 1928 - Jan.1928 to

Open Market Operations

Discount Rate

FEDERAL RESERVE SYSTEM

May 1929)

POLICY ACTION

Apparent Intent - Restrictive

- Buying rate on bankers' acceptances reduced. Restrictive effect of discount operations moderated by free purchases of bankers' acceptances during autumn to assist seasonal financing of agriculture and trade.

- Raised from 5 to 6 percent at New York.

Surrounding Circumstances - Industrial production, factory employment, and pay rolls at high levels; earnings of corporations at record volume; capital issues numerous and large; speculative credit at banks increasing rapidly; rates charged by banks higher than at any time since 1921; loans to brokers and dealers in securities and stock prices at unprecedented levels.

Source: Joint Committee on the Economic Report Monetary Policy and the Management of the Public Debt (Patman Report) 1952, Page 218.


1929 October 1929 to December 1930

Open Market Operations

Discount Rate

Surrounding Circumstances

FEDERAL RESERVE SYSTEM POLICY ACS5Si

Apparent Intent - Expansionary

- Bought $560 million of Government securities, of which $120 million were bought in 2 days at most critical phase of stock market crash. Buying rate on bankers' acceptances reduced sharply.

- Reduced successively from 6 to 2 percent at New York; from

5 to 3 percent at Boston and Cleveland; from 5 to 31/2 percent at other Banks.

- Recession in industry; commodity and stock prices dropped sharply; private lenders called loans to brokers; bank credit liquidation started. Actions aimed at preventing complete collapse of security markets and money panic, and

at making credit easy to facilitate business recovery.

Source: Joint Committee on the Economic Report Monetary Policy and the Management of the Public Debt (Patman Report) 1952, Page 218.


1929 LITIGATION

4.304. Board aindispen ble:*eaf t:~ --uit against Federal Res, serve bank.-In a suit to enjoin a Federal Reservl nk ~fr& restricting the supply of credit available mia.aatigb t purposes by engaging in open kmarket operations, from raising the rediscount rates, and from .ciqfully coercing member banks to call collateral loans made to their

rs by refusing to rediscount paper for such member banks, it was held l ince the Federal Ream e Board was specifically authoriked to regulate open market transactions, to review-*d' determ count rates and to make reports as to condition in the Feder System, and since the Fedet Bsereservi ltt was aqgovernment under the direction of the Board, the Board was therefore ani peisab ie party to the suit an tb "should be dismissed for nonjoinder. Raichl v. Federal Reserve Bank of New York, 34 Fe

1rJia the mabove case with respect to dis' ; 14 as to open market operations, see 1 lOl


1929 LITIGATION


LTIGATIONI

11.642. Rigft4o s&ession after 1927 amrn te SoqAIy, which had been appoipted by the Probate o as upder a will, was consolidated with a natie~i~ ank md ttco ao d national bank, which had been propevy authori ed ise poeMrs, applied to the Probate Court fgthe allowance of its accun executor. , oill0onsolidat.io.^' been hacted uIder the pr the Act of November 7, 1918, as u edy Ey tie Act of 1927, providing that 1h cases of c , the cons ed atonal bank should hold and'enjoy the sna alfarigltl, .a opety, franehisesand interest, inclidi 'nright of wecesaiw as trustee, executorivor other fiduciary am, in the sam€~nner and to the same extent as was held and eoyed byA,~jhate ~toation, but that no such consolidation should be in contraven~We of State Iaw'The Supreme Judicial Court of Massachusetts hel~ha4jthe igeral statute contemplated that the original appointext 0 , a State trust company was to continue in the consolidated national beak, wholly unaffected by the fact that the State trust company had ceased to exist, and that, as so interpreted, the provision was in contravention of the State law and contrary to the State al Federal Constitutions; that, in the absence of its appointment by the Probate Court, the consolidated national bank had not succeeded the State trust company as executor under the will and, accordingly, its application for the allowance of its account should be denied (263 Mass. 444, 162 N.E. 217). On appeal to the Supreme Court of the United States, that court held that the Federal statute was constitutional but that, in view of the State law, the effect of the statute in,

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

MassachuieW MER-obly imd State abani to

oee o trust co the tional bank; t necessary for the national I wW appointmentw4If iXm .! Accordingly, ,the

n o e was Armed and the cse was remandedr4o the obateCourt f- a t ai snak as executor de "n tort. iante Wrcester National 27S U. S. 347 (1929).

L29BuL nm 407. ( 2- r--

---


a case, a person desi~ting a coxrpotof with knowledge. thaVt1b* tust is whom the stockholders of the tio*. affairs. In the presen Worcester National _ dminister tW -us ing the State First National Ba M,6 --tu 79P, ~

LITIGATION

unde~l*ectf trust.~ tuseeunder z

1 ,6Iith, of Nove*W :.7e natio4~

S by tbo~p'erW

sAt5IEx ctarte h=thori% to

p oint-


LITIGATION

-to issue ublic state.nt.-Z'he t Ut Federal Reslm

riWmn. .rej? o f ind sad

g l s in t= rli--=" "r~

ol

NOTE -See also 11.100. *,.

o -the plaintiff, was held q~rC s Bat*Tof


LITIGATION

S13.602. Funds of drwee i a. -- hjrt t4o claim of Reserve bank.-.. State bank were sent direct toi bai of Ri mond, pursuaM to an agreeme'i b 1t The drawee bank cbarge4e ecks o he drawers and remitted to the Federal Reeer bank drefts a bank in which the drawee had funds on detpaos. yayrnt of tha f was refuse by the depository bank altheugh itrad-sufficient ifnds belonging to th&eiAwee bank to pay such ar the Fe RBoterve bank, as intervener in. a suit to settle th draie bank, pied a claim to establish a preference an t lid ta aft. t was held that the drawee bank was the a aof the !i nk fo letion and remittance of the checks in tion; that therefre a t -,Mcreated as to the funds on deposit in the ; a Federal Reserve bank should be prefer a nee of such ftds over general o.edite s. of Mlen, 108 W. Va 12, 150 S.E. 137

aurc


LITIGATION

1.642. unds'f fa bank not increa- by tran Checks dn upon a Stae i de th bank forc lection by the Federal Reserve Bank Rihm rancI bank remitted therefor drafor and Nes' York. All of th forthe rea that before they were preetted fo re bank had closed its doors. Tfireupon, the iled its obplaint against the recel9r of the te stabish a preferred claimn against the assets of that bank. It Wis eld t~ltafiasmuch as the funds of the baik were not increased by t 'i r dtions in question and the only"iilt was to substitute ioe creditS f6r another, the plaidtff was not entitled to be prefe 4 over the other lditors of the bank; and, accordingly, the demurrer to the plaintiff's complaint w~i ed and the complaint dismissed. In re South (Ca~~l iQjto., 150 S.C. 25, 147 S.E. 653 (1929). -


LITIGATION

13.801.kxediscuntoi efigib14'i ttitt=nd4 .ry-In a suit ibenjoin a Fee re bank fro engaging in opsm. e__mraiing s'ediscoun ae a*-wo

gibU ~ was held that, a an indisaale a~~ nd sims. PAntth bill must be dis~ As di e*tw~mhel tt that the Federal erve bi; iy ediscount eig MM wer of member ba# wich ot rediced loans upona securities, constituted a oifngu .. he ber banks was without foundation. In #0s co it te gut .hat the Federal Reseve banksmw not ru* eigible paper sinee the stgfr is merely., i Uive Wiaomw%#erequire a Federal

erve bank to discount uzaless so wdered the Federal Reserve ~ard. Raichie v. Federal RAeerve Ba~nk do Yok, 34 Fed. (2d)

NotbW, point. decided in this cawe, see 4M#0; 11.168, 1.100; 14.100; 14. Ap toright*otjpidral Reserve bank to decline to discount eligible accept-


LITIGATION

I f9"0 "Vlidity of operations designed to reduce '8ters' loans. -In suit to enjoin a Federaeserve bank from enga n open

ke4 Iwadsactibns, from raising the rediscount rates, and f linredisco nt eligible paper, it was held that einicthe Federale

Board, an indispensable party, had not been oied, the hili h : d. (See 4.304.) As dictum, however, it Vp. hels#iat te erve banks are specifically authorised to ai and sell in t*

op that the discretion of the Fedeal Reserve banks in deterSmiing wter to engage in open market operations is not subjectJto judicial review, and th aU .Kldeirt Reserve bapk proceeds i ,g faith through open perations and control of discount rates to brig ablt .'mdutkers' dlns, it commits no legal wrong.

^i^7e" .'Wa Reserve Bank 61 New York, 34 Fed. (2d) 910 (C.C.A.


LITIGATION

OZ - -Judcial review of "Weoimun es.-In a suit to enj| h a ral 'lk nk from engaging in open-ii 'erations,, from

ri g the redimduntw ate, and fromadeclinincount.elable pIO e it was held that si~u he Fed4pretserve Board, an indispensable .ty, had not been joinedptMbilUl Mhi be dismissed. (See 4.304.)' dic

tum, however, it .e held thatthe Federal Reserve ibanks are ecifi

cally authori ed by law, ject to review and determination aC the

Federal B- e orad, to dt, time to time rates o1 discount;

that iis for eaeh' eda r nk, under the supervision of the

Board,i determine wh a reasonable rate of redisc nt; that

it wodj be un en-market sales and discoel rates be

subjc to judici re Reserve bank proceeds

in good faith thro g*lm tol of discount

rates to bring ahut a r o1rs' I c 1 c tte.no legal

wrongI RaichZe r. Federal weset Bank of N .Yosid Fed. (2d) 9101C.C.A. 2d W __


1929 LITIGATION

4,1929 BuLLETiN 0, ''


LITIGATION


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William F. Whiting, Robert P. Lament - St. Louis Fed

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