Full text of Minutes of the Board of Governors of the Federal Reserve System : Meeting Minutes, December 29, 1915, Volume 2, Part 2

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At a regular meeting of the Federal
Reserve Board held in the office of the Board
at 3:00 p. in. on December 29,
PITIZENT:
Mr. McAdoo, presiding

Yr. Williams

Yr. Hamlin

Mr. Warburg.

Mr. Delano

Mr. Harding

Yr. Miller
Mr. Willis, Secretary.
The minutes of the meeting of Tuesday,
December 28 were read and approved.
The minutes of the meeting of the Committee on Member and State Banks held at 12:30
p. m. on December 29, were read and approved and
the action therein indicated ratified.

Ac ord-'

ingly the following action on applications for .
fiduciary powers were ordered entered

Approved:
First National Bank, Perth Amboy, N. J.
State National Bank, Albuquerque, N. Me
Burnes National Bank, $t. Joseph,, Mo.




1123

City National Bank, Columbus, Ohio.
First National Bank, Anthony, Kansas.
Citizens National Bank, Lebanon, Ky.
First National Bank, Casey, Ill.
First National Bank, Bangor, Maine.
Atlantic City National Bank, At
City, N. J.
Jecond National Bank, Nashua, N. H.
First National Bank, Evanston, Wyo.
Farmers & :Ierchants National Bank, Lake
City, S. C.
Held for further report of examination:
National tate Bank, Elizabeth, N. J.
Farmers National Bank, Hillsboro, Texas.
Merchants National Bank, Massillon, Ohio.
First National Bank, Nanticoke, la.
First National Bank, Baltimore, Ed.
(Held for information regarding disposition of stock in Balti ore Warehouse
Company)
First National Bank, Clendenin, W. Va.
First National Bank, Fordyce, Ark.
Rockbridge National Bank, Lexington, Va.
Commercial National Bank, Shreveport, La.
First National Bank, Boone, Iowa.
jheffield National Bank, Sheffield, Alabama.
First National Bank, Nogales, Arizona.
Leavitt ,fc Johnson National Bank, Waterloo,
Iowa.
Broad Street National Bank, Trenton, N. J.
Ediston National Bank, Orangeburg, 6. O.
Mercnants National Bank, La Fayette, Ind.
National Bank of Montana, Helena, Mont.
First National Bank, El Paso, Texas.
(Held for information regarding loans
to officers and dirctors)
First National Bank, Corvallis, Oregon.

1124




Applications refused:
Seacoast National Bank, Seacoast, N. J.
Farmers National Bank, Colfax, Wash.
Palmetto National Bank, Columbia, S. C.
Colorado Springs National Bank, Colorado
Springs, Colo.
First National Bank, Corning, Ark.
First National Bank, Baraboom, Wis. •
First National Bank, Rochester, Ind.
Second National Bank, Lechanicsbarg, Pa.
Peoples National Bank, Winston-Salem, N. C.
First National Bank, Denver, Colorado.
City National Bank, Fort Smith, Ark.
Union National Bank, Columbia, S. C.
First National Bank, New Carlisle, Ind.
Fourth National Bank, Fayetteville, N. C.
On motion the application of the American
National Bank of Oklahoma City, Oklahoma, for one
additional share of stock in the Federal Reserve Bank
of Kansas City was approved.
On motion the application of the First National Bank of Como, Texas, for permission to reduce
their capital stock fifteen shares was approved.
On motion the applications for surrender
of stock in Federal reserve banks were approved as
follows:

1195

DISTRICT No. 2.
First National Bank
Citizens National Bank
First National Bank

Shares.
Hornell, N. Y. 30
Saratoga Springs
Y. Y.
68
Corona, N. Y.
75

DISTRICT No. 4.
First National Bank

New Richmond, 0.60

DISTRICT No. 5.
Citizens National Bank

Chester, S. C.

39

Toccoa, ;.1a.

60

DISTRICT No. 6.
First National Bank
DISTRICT No. 10.
National Reserve Bank
Konawa National Bank
No eta National Bank

Kansas City, Llo.204
Konawa, Okla.
18
Keota, Okla.
18

DISTRICT No. 12.
Citrus National Bank

.17.1xeter, Cal.

15

The Committee further recommended (and the
action was approved) that the Board suggest to Mr. J.
Z. Miller, jr., that he suggest that the State Banking Department of Nebraska make its calls for condition of State Banks at the same time as the Comptroller
of the Currency.




1126




A reduction of 015,000 in the capital
stock of the First National Bank of Como, Texas,
was approved.
Mr. McAdoo suggested the insertion in
the Annual Report of the Board of 4 paragraph relative to the effect of recent reductions in State
bank reserves, and a possible penalty to be applied by Congress for the failure of State banks
with lowered reserves to join the Federal reserve
system.
Yr. Delano, on behalf of the Committee
on Law, to which had been referred certain resolutions offered at the last preceding meeting of the
Board, offered the following resolution regarding
the tenure of office of officers of Federal reserve
banks:
MEREAS, it is in the interest of good
administration that the officers of the various Federal reserve banks shall have a
definite tenure of office, subject to renewal at a specified date; and
'WHEREAS, it is the evident intent of
the Federal Reserve Act that the Federal Re-

1127

serve Board shall exercise direct and
continuous supervision of the affairs
of the Federal reserve banks with a
view to maintaining an efficient and
economical administration thereof;
BE IT RE3OLVED, that the Federal
Reserve Board formally express its opinion that the officers and employees of
each Federal reserve bank should be subject to annual election or appointment
(unless a shorter term is specified) and
that the list thereof, with salaries,
should be submitted to the Federal Reserve Board at the beginning of each
year for its approval.

On being put to a vote the resolution was
declared carried.
Mr. Delano, on behalf of the Canaittee on
Law, to whom had been referred a resolution at the
last preceding meeting of the Board relating to the
personnel of the Advisory Council, presented the
following resolution:




MREaS, Section 12 of the Federal
Reserve Act provides for the establishment of a Federal Advisory Council with
power to confer with -the Federal Reserve
Board on general business conditions, to
make representations concerning matters
within the jurisdiction of said Board,
and to make recommendations regarding

1128




discount rates, rediscount business,
note issues, reserve conditions in the
various districts, the purchase and sale
of gold or securities by reserve banks,
open market operations by said banks,
and the general affairs of the reserve
banking system; and
WEEREAS, The Federal Reserve Board
has determined, after careful consideration, that the purposes for which said
Council has been established and the interests of the Federal Reserve System require that the members of said Council
should not be officially connected with
the Federal reserve banks and, therefore,
in a position to give to the Federal Reserve Board the benefit of their disinterested and unbiased advice:
Rhl IT RESOLVED, That it is the sense
of the Federal Reserve Board that governors,
or other officers of Federal reserve banks
should not serve as members of the Advisory
Council.
*As the election of Directors
•
has already taken place it is suggested
that this rule shall not apply as to Directors until January 1, 1917.
RESOLVED FURTHER, That a copy of this
resolution be sent to each Federal reserve
bank.
) For discussion*

On being put to a vote the resolution
was carried.
Mr. Delano proposed an amendment to the

•

1129

form of Circular 21 relative to the eligibility
of' certain persons for membership in boards of
directors stating that the new provisions as to
eligibility should not necessarily be enforced
against those now holding directorships.
On notion the amendment was adopted.
Mr. Delano offered the following resolution regarding the annual approval of salaries
of bank examiners:
WHEREA13, the 2ederal Reserve Act,
in Section 21, provides that the Poderal Reserve Board, on recommendation
of the Comptroller of the Currency,
shall fix the salaries of all bank
examiners and make report thereof to
Congress; and
WHEREAS, the Federal Reserve Board
has adopted the policy of annual review
of salaries of all officers and employees
of Fedeml reserve banks, be it, therefore;
RESOLVED, that the Comptroller of
the Currency be requested to submit annually a list of ilational bank examiners
and the salary recommended by him in each
case for approval of the Board.
After discussion the Secretary of the
Board was directed to get the opinion of Jouasel




1130




relating thereto and the subject was laid on the
table meanwhile.
Special orders for the day being taken
up the Board proceeded to the election of Class
"J" directors and the following were chosen:
New York: George Foster Peabody,
Er. Peabody to act as Vice Chairman and
Deputy Federal Reserve Agent for. the corning year in place of Mr. Starek.
Philadelphia: Er.. George W. Norris,
Norris to serve as Vice Chairman and
Deputy Federal Reserve Agent for the coming year; and Mr. Vance C. 1:cOormick.
Richmond:

Er. M. F. H. Gouverneur.

ransas City:

Mr. R. H. Malone.

The resignation of Er. a:. 0. Tenison
as Federal Reserve Agent at Dallas was accepted
effective when his successor qualifies.

The

Secretary of the Board was directed to express
to Er. Tenison the Board's appreciation of his
services.
The designation of Mr. Claud Catch as
Deputy Federal Reserve Agent at San Francisco was
terminated, this teruination to become effective
on the date of the designation of his successor.

1131

A letter from 1,r. J. 3. 'oran,

rosi-

dent of the Advisory Council, notifying the Board
of the statutory meeting of the Council to be held
on January 18, was read and referred to Yir. Delano
and Li.. W rburg as a special committee.
The draft of a letter suthoriins7 the
Federal Reserve Bank of Philadelphia to hold

5O0-

000, in warrants of the City of Schenectady was
approved.
The purchase of .:;200,000 additional Vermont warrants by the Federal Reserve Bank of Boston
was approved.
The question of the purchase of warrants
by the branch bank at New Orleans was referred to
the Committee on Investments.
The opinion of Jounsel with reference to
question of classification of acceptances was presented and the

ecretary directed to write a letter

embodyina its substance to LIr. . A. Bennett of the
American Exchange National Bank of New York, such
letter to be approved by the Comptroller of the




1132




Currency before transmission.
Papers relating to the issue of Gold
certificates, referred to :r. Delano, were returned and the same ordered filed.
A letter from Li.. William Woodward relating to the amendment of the Clayton Act was
read and ordered filed.
The auestion of designating new central
reserve cities was discussed and laid on the table.
The Secretary of the Board was directed
in publishing salary lists of Federal reserve banks
to give the data by number and amount of salaries
without names of recipients.
On motion the Board adjourned at 5:30 p.m.
to meet on Thursday, December 30, at 11:00 a.

Jecretary.
APPROVED s

1rman•