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At a regular meeting of the Federal Reserve Eoard held in the office of the Vice Governor on Thursday, September 133 at eleven A. L. Present: Ur. !!ardinr, presiding, Mr. Hamlin, Mr. Warburg, ?!r. Williams, T'r. Delano, Mr. Willis, Secretary. Present also: T'r. George J. Sony, Governor, Federal Reserve PPnk of Richmond— The Board engaged in conference with Governor Seay with reference to the proposed quarters and general conditions of operation of the proposed Branch at Baltimore. raAfter careful consid, tion, the following resolution "as, on motion, adopted: WHEREAS: The Federal Reserve Board has examined certain plans and photographs of a building in Baltimore which it is proposed by the Federal Reserve Bank of Richmond to purchase for its Branch et, that point, and ':,HEREAF,, The Board is in agreement with the plan to purchase the said building and believer the price to be, on the whole, fair, Rnsuvp, That it ie the opinion of the Board that the Governor of the Federal Reserve Bank of Richmond should be assured of its disposition to authorize the purchase of the building at ,00,000, final action to that effect not being 240 token at this time because it is the opinion of the Board that an efrort should first be mnde to induce the State banks and trupt companies of Baltimore to accept membership in the System, or at all events, clearing membership, as a preliminary to the establishment of the Iranch or the purchase of a building, which would practically commit the Richmond Bank to the continued maintenance of such Branch. It was informally agreed that the Governor should trmimit to the Federal Reserve Bank of Richmond a letter toting the rub- stance of the foregoing resolution. Governor Seay then diacuesed with the Board the question of organization and staff as affecting the Richmond Bank during the coming month. Governor . ery having -ithdrn- n from the room, tha minutes of the meeting of the Poerd held on ' ,eptember 12 -ere read and on motion npprc vc d. On motion, Governor Harding was authorized to write a suitable letter to Governor Aiken of the Federal Reserve Park of Boston, relative to the,.paper of the Southern New Pnglnnd Telephone C discussed at the meeting of September 12, and ranking reference to the paper of public utilities companies in general. Discount rate sheets for the week tore presented and ordered filed, no changes being requested. application of the Texas City national Bank for power to reduce its capital stock from 100,000 to 50,000, recom- mended by the Comptroller of the Currency, ,las, on metion,, approved. Letters from the Federal Rnserve ranks of Richrrord and Philadelphia, relative to their treatment of reserve deficiencies, sgere pre33nted and the Secretary directed to maintain a complete file of such letters a.nd present them in tabulated form to the Board. . A letter fror, Federal eserve Agent Perrin, relPtive to the ontiblinhment of a Branch at Salt Lake City, dated September 7, was rend fo'r the info,--nation of the r'oard, and ordered passed to file. Covernor Harding presented a telegram from Covernor Van Zandt of Dallas, with reference to subscriptions of the Dallas Bank to the pondinq'issue of short term certific.ctes of indebtedness. The matter was placed in the hands of the Cov(rnor for a proper reply. A letter from the Firat Tational rank of Harrisonburg, with reference to the conversion of large legal tender notes into one dollar bills, was ordered investigated by the Secretary of the P‘oard. 7pon recommendation of the Committee on membership, the follwAng tate banks wore. ordered admitted to momber_rhip in the Federal Reserve System upon the conditions set forth in each case in the report of the Committee: St' Lawrence Trust Company, Ogdensburg, N. Y. Sault Savings Bank, Sault Sic. Narie, Lr. Delano presented a letter from Crvernor Miller of Kansas City, transmitting a letter from the First National Bank of Denver, relative to the payment of gold certificates in dealings with the United States Mint, asking that the Mint be induced to accept drafts on the Federal Reserve Bank of Kansas City. The matter was referred to the Comptroller of the Currency in conjunction with Mr. Delano. Governor Hardinr reed letter from rovernor Tither of Kansas City with r eference to the question of exemption from military service. No action was taken. Governor Hardinc, submitted to theBoard an opinion of Acting Attorney Ceneral dated Septemkr 10, 1917, addressed to the Secretary of the 7.'ren our', dealing with the question whether Ctate banks and trust companies becoming members of the Federal Reserve System thereby become subject to certain provisionsof Clayton Act to which they were not subject prior to entrance into the Federal Reserve System. This opinion was rendered in re- sponse to a request of the Federal Reserve Board transmitted under (1 ...te of August 2, 1917, to the Attorney General through the Secretary of the Treasury. The Attorney Ceneral holds that these provisions o tion 8 of the Clayton Act apply to mtion-1 banks and to State banks or trust companies organized or doing bu-iness in the District of Columbia but do not apply to State banks or trust cOmpnies under the laws of a State which become members of the Federal ReserA System. In substance the opinion which was read to the E,eard vas to the effect that whether or not Congress originally intended the 3a1d provisions of Section 8 to apply to State banks or trust companie 53 bec Q3inr- members of the Systew as banks operating under the lrms of the United States, any doubt on this subj cot moved by the positive provision 1S17, am iding the COrit sre- lined in the Act of June Cl, Federal Reserve Act, which declared that St•rte b,inks shall retain "their full el:al-ter and statutory rights" as State banks "subject to the provisions of this Act and to the regulations of the Foard made pursuant thereto". In view of this provision it was held that State member banks are free from the said restrictions imposed by Section 8 of the Clayton Act. On motion, mode and seconded, at (1) 'I:a:SOLVED - Thnt the Cover-nor be and he is hereby authorized to trans- mit a copy of this opinion to each Federal Reserve Dank. 2) That the Clayton Act Corernittee be and it is hereby authorized rind directed to adopt the conclusiort, of the Attorney General in passim. upon applications made under the Clayton Act, and thrtt such changes shall be made in the r.igulations and forms of the Loard as are necessary to make such regulations nnd forms consistent crith the opinion referred to. (3) That a report be made to the Board for its action of filly applications undtr the Clayton Act rahi ch have been refused on the assumption that Section 8 of the Clayton Act applies to State banks and trust companies which become menbers of the Federal Reserve Syst ea On motion, at 1155 A. M., the Board adjourned to rout on Tuesday, September 18, at ten A. M. APPROVED: Chairman. Secretary.
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