The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
Form F. R. 131
BOARD □ F □□VERNDRS
or THE
FEDERAL RESERVE SYSTEM
Office Correspondence
To_______ The Files_______________
From_______Mr* Coe
Date .June 27, 1941
Subject:.
After correspondence with Mrs. Hamlin (see letters of May 25
and June 4* 1941) the items attached hereto and listed below’, because
of their possible confidential character, were taken from Volume 163
of Mr. Hamlin's scrap book and placed in the Board’s files:
VOLUME 163
(X-4657) T° Governors of all F.R. Banks re Bankers' Acceptances
drawn to finance the storage of cotton seed.
Page 1L
Memo to Mr. Hamlin from Mr. Van Fossen giving percentage distri
bution of Gross Earnings of the F.R. Banks.
Page 15
Letter to Mr. Hamlin from Assistant Federal Reserve Agent Breck
of F.R. Bank of San Francisco enclosing a chart of Compara
tive Loan Limits of National Banks and California Branch
Banks.
Page 43
Memoranda prepared by Div. of Research & Statistics for Mr. Hamlin
re Saving Arising Out of the Elimination of Exchange Charges.
Page 73
Report of the Chairman of the Open Market Investment Committee 9/10/26.
Page .72
Report of the Secretary of the Open Market Investment Committee
Meeting at Washington, 9/10/26.
Page 87
Earnings and Expenses of F.R. Banks - August 1926.
Page 93
Memo to Mr. Hamlin from Mr. Sinead re Havana Agencies of Federal Re
serve Banks.
Page 126
(X-4677) To all Governors of F.R. Banks - re question of whether
or not the F.R. Banks should discontinue the handling of socalled non-cash collection items.
Page 129
(X-4 6 7 2 ) Discretion of F.R. Agent in accepting or rejecting paper
offered as collateral for F.R. notes.
Page 139
I^y-Laws of the Federal Reserve Board.
h IP C
FEDERAL RESERVE B O A R D
X-4657
W A S H IN G TO N
A D D R E S S O F F IC IA L C O R R E S P O N D E N C E T O
T H E FEDERAL RESERVE B O A R D
August 24, 1926
SUBJECT:
Barkers 1 acceptances drawn to finance the
storage of cotton seed.
Dear Sir;
I am enclosing herewith for your information
a copy of a ruling which the Federal Reserve Board has
adopted with reference to the eligibility for rediscount
at Federal reserve hanks of hankers 1 acceptances drawn
to finance the storage of cotton seed.
Very truly yours,
D. R. Crissinger
Governor.
Volume 163
Page 3
To Governors of all F.R.Bankr
Enclosure:
#
X-4557-a
BANKERS' ACCEPTANCES DRAifa! TO FIUAUCE THE STORAGE OF COTTON SEED.
The Federal Reserve Board has been requested to rule upon the eligibility
for rediscount at Federal reserve banks of bankers' acceptances drawn to finance
tne storage of cotton seed under the following circumstances:
Certain cotton seed oil mills own warehouses which they propose to
lease to independent warehouse corporations under bona fide leases, the corpora
tions to assume full control and management of such warehouses and to operate them
as puolic warehouses which will be bonded and licensed under the United States
Warehouse Act. It is proposed that such prime seed as is received by the mills that is, seed which is in such condition that it may be safely stored for an in
definite period of time - will be stored by the mills in these warehouses until
it can be processed into various cotton seed products, and the mills desire to
finance such storage by means of bankers' acceptances secured by warehouse receipts
ior such seed. The owners of the cotton seed thus stored to have access to it at
proper times for purposes of inspection.
The Federal Reserve Board has heretofore ruled that cotton seed, when
stored under proper conditions, is a nonperishable readily marketable staple ag
ricultural product within the meaning of the Federal Reserve Act and the Board's
Regulation A; and that, therefore, a bankers' acceptance secured by a warehouse
receipt for cotton seed is eligible for rediscount at a Federal reserve bank, pro
vided the cotton seed upon which the acceptance is based is stored under such con
ditions as to protect it adequately from deterioration and provided the acceptance
complies in all other respects with the requirements of the law and-the Board's
regulations. This ruling may be found in the 1925 Federal Reserve Bulletin at page
737.
The Board has also had occasion to rule upon the right of member banks to
make acceptances issued against goods stored on premises owned by the owner of the
goods but leased to an independent lessee who issues warehouse receipts covering the
goods in storage. The Board held in this ruling published on page 634 of the 1918
Bulletin that if the promises in question were actually turned over to the lessee
on a bona fide lease, the lessee being independent of the borrower and having en
tire custody and control of the goods, a member bank could properly accept drafts
drawn against warehouse receipts issued by the lessee; but held further that the
borrower should not have access to the premises and should exercise no control over
the goods stored. Such drafts eligible for acceptance by member banks would also
be eligible for rediscount at Federal reserve banks, if of proper maturity.
Under the ruling of the Federal Reserve Board .just mentioned access to
the premises where the goods are stored is not permitted to the owner of the goods
for inspection or for any other purpose. This condition of the previous ruling
cannot be met in the storing of cotton seed. Due to the fact that cotton seed is
subject to deterioration from heating, cotton seed owners storing their seed in
warehouses are accustomed to visit these warehouses from time to time for the
purpose of inspecting the seed. In order, therefore, that bankers' acceptances
drawn to finance the storage of cotton seed may be eligible for rediscount, a
modification of the principle stated in the Board's previous ruling with reference
to the owner's access to the goods is necessary.
csr a consideration of these questions the Board now rules that cankers' acceptances secured 0 7 cotton seed stored in a
warenouse owned by the owner of the cotton seed but
leased to an independent public warehouse corporation
under bona fide lease, the corporation assuming ex
clusive control and management of such warehouse and
operating it as a public warehouse bonded and licenced
under tne United States Warehouse Act, may be eligible
for rediscount at a Federal reserve bank, although the
owners of the cotton .seed are permitted access to the
seed in storage at proper and reasonable times for the
purpose only of inspecting the condition of the seed,
provided tnat on all such occasions the consent of the
independent warenouse coruoration is first secured and
that tne owner of the seed or his representative is ac
companied oy a proper representative of the warehouse
corporation.
It snould oe understood that such acceptances must be of proper
maturity and must in all other respects comply with the pertinent provisions of
the Federal Reserve Act and the Board’s Regulation A* In addition, it is neces
sary tnat the cotton seed upon which such acceptances are based be stored under
such conditions as to protect it 3 .deciuately from deterioration.
# ^
_ ~^e Federal Reserve Board is informed that the Department of Ag
riculture is soon to issue a special regulation governing the storage of cotton
seed oy warehouses licensed under the United States Warehouse Act. This regula
tion, a tentative draft of which has been carefully considered at a conference
between representatives of the Department of Agriculture and the Federal Re
serve Board will, it is believed, provide adequate safeguards. If the storage of
cotuon seed complies with this regulation .which is to be promulgated by the De
partment 01 Agriculture, it will be deemed by the Board a storage under such
conditions as to protect the cotton seed adequately from the deterioration within
the meaning of this ruling.
The question whether bankers’ acceptances are desirable from the
credit standpoint is, properly, a question for determination by the Federal re
serve bank to which the paper is offered for rediscount rather than by the Fed
eral Reserve Board.
F orm
h
Office Correspondence
To
Date
August 2 8 , 1926.
- ^Subject:_____
Mr. Hamlin
From __Mr. Van Fossen
#
FEDERAL RESERVE
BOARD
0 ^
2— *H*S
In accordance with your request o f August 27 to Mr. Goldenweiser
v/e have had the percentage d istrib u tion of gross earnings o f the Federal
reserve banks compiled as given below:
PERCENTAGE DISTRIBUTION OF GROSS EARNINGS OF THE FEDERAL RESERVE BANKS
Federal
Reserve
Bank
Fjrom
discjounted
b I lls
1926
1925
(6 m os.)
From b i l l s
purchased in
open market
1926
1925
(6 m os.)
From
U. S.
se cu ritie s
1926
1925
(6 m os.)
From
a l l other
sources
1926
1925
(6 m os.)
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
S t. Louis
Minneapolis
Kansas City
Dallas
San Francisco
3 6 .4
5 0 .8
4 9 .4
47.3
78,9
4 4 .0
3 9 .1
4 0 .8
16.1
15.7
13.9
3 6 .6
3 6 .1
5 4 .0
58.3
4 9 .5
7 0.8
4 8 .5
4 4 .4
4 1 .3
15.8
25.5
15.8
36.7
4 5 .4
1 4.4
18.7
17.5
9 .9
3 5 .1
19.5
2 2 .1
30.6
2 3 .3
2 8.8
2 3.3
4 4 .5
18.1
14.1
1 5.2
12.8
3 4 .6
16.7
1 7.8
2 5 .6
16.2
22.9
19.3
13.9
2 9 .2
2 7 .0
3 1 .0
7 .1
17.9
3 3 .8
3 4 .6
4 7 .1
4 8 .4
5 1 .8
3 7 .6
12.5
2 4 .2
2 2.6
3 0 ,5
1 1 .0
13.3
3 2 .2
3 8 .2
4 7 .0
4 6 .9
5 5 .7
3 9 .2
4 .3
5 .6
4 .9
4 .2
4 .1
3 .0
7 .6
2 .5
6 .2
12.6
5 .5
2 .5
6 .9
3 .7
5 .0
4 .8
5 .4
3 .6
6 .7
2 .7
11.6
11.4
5 .6
4 .8
4 2 .3
4 4 .8
2 1 .8
20.5
3 0 .6
2 9 .2
5 .3
5 .5
Total
1924
1923
1922
1921
1920
Volume 163
Page 14
*ov**«r»«*T naruM *
4 1 .6
65 .0
5 2 .5
89 .2
82.2
14.9
18.5
1 1 .2
4 .3
12.2
3 8 .4
14.7
3 3 .0
5>•1
3 ♦9
F>.l
1..8
3'•3
1..4
3..7
Fe
d e r a l
of
R
e s e r v e
B
a n k
S an F r a n c i s c o
J o h n Pe r r i n
C h a ir m a n o f t h e B o a r d
and
F e d e r a l Re s e r v e A g e n t
November 6 , 1923.
Dear Mr. Hamlin;
Please re fe r to my le t t e r of October 18th, in reply
to yours o f October 9th , requesting figures showing communities
in C aliforn ia where there is a national bank and a branch o f a
state bank side by sid e , showing the differen ce in loaning
capacity to any one individual of both systems.
It has been brought to my attention that the tabulation
enclosed with my le t t e r would be more accurate i f it separated
the combined cap ital and surplus of. each o f the two large C a li
fornia branch banks into i t s two constituent p a rts: i . e . , that
a llo ca ted to the Commercial Department, and that allocated to
the Savings and Trust Departments, the loan lim itation s of
which are d iffe r e n t, as shown in Mr. Agnew’ s memorandum. This
d iv ision has accordingly been made and a revised table is en
closed for your use.
Yours very tr u ly ,
JOHN PERRIN,
Federal Reserve Agent,
A ssistant Federal
Volume 163
Page 15
The Honorable Charles S. Hamlin,
Federal Reserve Board,
Washington, D. C .
Enclosure
eserve Agent
COMPARATIVE LOAN LIMITS OF MOTIONAL BANKS AND
CALIFORNIA BRANCH BANKS (SEE FOOTNOTE ON PAGE 4)
. Maximum amount may lend to any one
.
borrower
i
Community
Total
;Difference in
.favor of
*•branch bank
35,000
5,120,000
3,600,000
: 8,685,000
0
0
•
•
Capital &
i Surplus
Addit ional,
if Secured
1
Unsecured
0
0
BAKERSFIELD
:
n /b of Bakersfield :
100,000
Bank of Italy (Coml) 12,800,000
7,200,000
"
"(S. & T.) :
CHICO
s
1st Nat*l Bank
:
135,000
Bank of Italy (Coml) 12,800,000
7,200,000
"
"(S. & T.) :
EL CINTRO
1st Nat *1 Bank
Pac*S*W*Tr.&S.Bk.
(Com'l)
(S. & T.)
:
::
:
:
:
10,000
1,280,000
None
:
25,000
3,840,000
3,600,000
.*
13,500
1,280,000
None
33,750
3,840,000
3,600,000
47,250
5,120,000
3,600,000
240,000
24,000
60,000
84,000
7,895,000
2,350,000
789,500
None
2,368,500
1,175,000
3,158,000
1,175,000
: 4,249,000
20,000
1,280,000
None
50,000
3,840,000
3,600,000
70,000
5,120,000
3,600,000
: 8,650,000
789,500
None
2,368,500
1,175,000
3,158,000
1,175,000
: 4,263,000
20,000
1,280,000
None
50,000
3,840,000
3,600,000
70,000
5,120,000
3,600,000
:
s 8,650,000
FRESNO
:
1st Nat'l Bank
:
200,000
Bank of Italy (Com*! 12,800,000
(S. & T.) s
7,200,000
Pac* S*'7.Tr.& Sav.Bk.
(Com*l)
: 7,895,000
(S. & T.) : 2,350,000
: 8,672,750
• •
HANFORD
:
200,000
1st Nat*l Bank
:
Bank of Italy (Com1! 12,800,000
7,200,000
(S. & T.) :
Pac* S.W.T. & 3* Bk;
(Cora'l)
:
7,895,000
2,350,000
(S. & T.) :
HAYWARD
1st Nat’l Bank
Bank of Italy
(Corn'l)
(S. & T.)
2,368,500
1,175,000
3,158,000
1,175,000
47,800
:
s
: 12,800,000
7,200,000
:
•
•
•
•
: 4,263,000
•
•
•
••
HOLLISTER
*
200,000
1st Nat*l Bank
*
Bank of Italy
s
12,800,000
(Com’l)
• •
7,200,000
(S. & T . ) :
789,500
None
4,780
11,950
16,730
•
•
•
•
1,280,000
None
3,840,000
3,600,000
5,120,000
3,600,000
•
•
: 8,703,270
•
•
•
20,000
50,000
70,000
1,280,000
None
3,840,000
3,600,000
5,120,000
3,600,000
•
•
0
0
:
0
0
:
0
0
:
:
8,650,000
COMPARATIVE LOAN LIMITS OF NATIONAL BANKS AND
CALIFORNIA 3RANCH BANKS (SEE FOOTNOTE Cl? PAGE 4)
:
:
:
Community
Capital &
Sumlus
Maximum amount may lend to any one
borrower
A dditional,
i f Secured
Unsecured
Total
s'
:
:D ifference in
sfavor of
: branch bank
LINDSAY
1st N a t 'l Bank
Pac.S.W.Tr.& Svg.Bk
(Com’ l )
(S.& T . )
125,000
12,500
31,250
43,750
7 ,8 9 5 ,00 0
2 ,3 5 0 ,0 0 0
789,500
None
2,3 6 8 ,50 0
1,1 7 5 ,00 0
3 ,1 5 8 ,0 0 0
1 ,1 7 5 ,0 0 0
4 ,2 8 9 ,2 5 0
LONG BEACH
1st N at'1 Bank
Pac.S.W .T. & S. Bk.
(S. & T . )
300,000
7 ,8 9 5 ,00 0
2 ,3 5 0 ,00 0
30,000
789,500
None
75,000
2 ,3 6 8 ,5 0 0
1 ,1 75,000
105,000
3 ,1 5 8 ,0 0 0
1 ,1 7 5 ,0 0 0
4 ,2 2 8 ,0 0 0
60,000
6,000
15,000
21,000
1 2 ,8 0 0 ,0 0 0
7 ,2 0 0 ,0 0 0
1 ,2 8 0 ,00 0
None
3 ,8 4 0 ,0 0 0
3 ,6 0 0 ,00 0
5 ,1 2 0 ,0 0 0
3 ,6 0 0 ,0 0 0
180,000
18,000
45,000
63,000
1 2 ,800,000
7 ,2 0 0 ,00 0
1 ,2 8 0 ,00 0
None
3 ,8 4 0 ,0 0 0
3 ,6 0 0 ,0 0 0
5 ,1 2 0 ,0 0 0
3 ,6 0 0 ,0 0 0
180,000
18,000
45,000
63,000
1 2 ,800,000
7 ,2 0 0 ,0 0 0
1,2 8 0 ,00 0
None
3 ,8 4 0 ,0 0 0
3 ,6 0 0 ,0 0 0
5 ,1 2 0 ,0 0 0
3 ,6 0 0 ,0 0 0
2 ,2 0 0 ,0 0 0
220,000
550,000
770,000
1 2 ,800,000
7 ,2 0 0 ,0 0 0
1 ,2 8 0 ,0 0 0
None
3 ,8 4 0 ,0 0 0
3 ,6 0 0 ,0 0 0
5 ,1 2 0 ,0 0 0
3 ,6 0 0 ,0 0 0
7 ,9 5 0 ,0 0 0
OROVILLE
100,000
1st Nat’ l Bank
Bank of Italy(Com’ l ) 1 2 .800,000
(S. & T.)
7 ,2 0 0 ,00 0
10,000
1 ,2 8 0 ,0 0 0
None
25,000
3 ,8 4 0 ,0 0 0
3 ,6 0 0 ,0 0 0
35,000
5 ,1 2 0 ,0 0 0
3 ,6 0 0 ,0 0 0
8 ,6 8 5 ,0 0 0
450,000
45,000
112,500
157,500
7 ,8 95,000
2 ,3 5 0 ,0 0 0
789,500
None
2 ,3 6 8 ,5 0 0
1 ,1 7 5 ,0 0 0
3 ,1 5 8 ,0 0 0
1 ,1 7 5 ,0 0 0
MARYSVILLE
1st Nat’ l Bank
Bank of Ita ly
(Com’ l )
(S. & T. )
MODESTO
1st Nat’ l Bank
Bank of Ita ly
(C om 'l)
(S. & T .)
NAPA
1st N at’ l Bank
Bank o f Ita ly
(Com’ l )
(S. & T . )
OAKLAND
Central Nat’ l Bank
Bank of Ita ly
(Com’ l )
(S . & T.)
PASADENA
1st N at’ l Bank
Pac. S.V/.T. & S. Bkx
(Com’ l )
:
(S. & T . ) s
<
t
t
8 ,6 9 9 ,0 0 0
6 ,6 57,000
6,6 5 7 ,00 0
t
t
4 ,1 7 5 ,5 0 0
- 3 -
:
:
,
{
:
i
*
« Maximum amount may lend to anyone
• ,
borrower
s
:
ft
0
»
A dditional,
Capital & .
i f Secured
.
. Total
i Surplus
a Unsecured
0
ft
0
15,000
1
21,000
6,000
60,000
•
•
*
Community
PASO ROBLES
P.R.Nat’ l Bank
Bank of I ta ly
(Com’ l )
(S. A. T. )
Pac. S .W. T. & S. Bk.
(Com 'l)
(S. & T . )
•
12,800,000 *
7,2 0 0 ,00 0
7,895,000
2 ,3 50,000
REDLANDS
1st Nat’ l Bank
Pac. S.W.T. & S. Bk.
(Com’ l )
(S. & T .)
SACRAMENTO
C a l. Nat’ l Bank
Bank of Ita ly
(Com’ l )
(S. & T. )
SAN JOSE
1st Nat ’ 1 Bank
Bank of Ita ly
(Com'l)
(S. & T .)
SAN PEDRO
1st Nat *1 Bank
Bank of Ita ly
(Com'l)
(S. & T .
Pac. S.W.T. & S.Bk.
(S. & T .)
120,000
1 ,2 8 0 ,00 0
None
3 ,8 4 0 ,0 0 0
3 ,6 0 0 ,0 0 0
5 ,1 2 0 ,0 0 0
3 ,6 0 0 ,0 0 0
8 ,6 9 9 ,00 0
789,500
None
2 ,3 6 8 ,5 0 0
1 ,1 7 5 ,00 0
3 ,1 5 8 ,0 0 0
1 ,1 7 5 ,0 0 0
4 ,3 1 2 ,0 0 0
30,000
42,000
12,000.
7,8 9 5 ,00 0
2,3 5 0 ,00 0
789,500
None
2 ,3 6 8 ,5 0 0
1 ,1 7 5 ,0 0 0
3 ,1 5 8 ,0 0 0
1,1 7 5 ,00 0
1 ,2 5 0 ,00 0
125,000
312,500
437,500
12,800,000
7 ,2 0 0 ,0 0 0
1 ,2 8 0 ,0 0 0
None
: 3 ,8 4 0 ,0 0 0
3 ,6 0 0 ,0 0 0
5 ,1 2 0 ,0 0 0
3,6 0 0 ,00 0
800,000
80,000
200,000
280,000
1 1 2 ,800,000
7 ,2 00,000
1 ,2 8 0 ,00 0
None
3 ,8 4 0 ,0 0 0
3 ,6 0 0 ,0 0 0
5 ,1 2 0 ,0 0 0
3 ,6 0 0 ,0 0 0
25,000
1 ,2 8 0 ,0 0 0
62,500
3 ,8 4 0 ,0 0 0
87,500
5 ,1 2 0 ,0 0 0
7 ,2 00,000
7 ,8 9 5 ,0 0 0 s
2 ,3 5 0 ,0 0 0
None
789,500
None
3 ,6 0 0 ,00 0
2 ,3 6 8 ,5 0 0
1 ,1 7 5 ,0 0 0
3 ,6 0 0 ,0 0 0
3 ,1 5 8 ,0 0 0
1 ,1 7 5 ,0 0 0
1 ,0 00,000
100,000
250,000
350,000
7,8 9 5 ,00 0
2 ,3 5 0 ,0 0 0
789,500
None
2 ,3 6 8 ,5 0 0
1 ,1 7 5 ,0 0 0
3 ,1 5 8 ,0 0 0
1 ,1 7 5 ,0 0 0
450,000
45,000
112,500
157,500
2 ,3 6 8 ,5 0 0
1 ,1 7 5 ,0 0 0
3 ,1 5 8 ,0 0 0
1 ,1 7 5 ,00 0
*
*
250,000
12,800,000
*
1
SANTA ANA
1st Nat’ l Bank
Pac. S.W. Tr. & Sav.
(Com’ l )
(S. & T .)
SANTA BARBARA
1st Nat’ l Bank
Pac. S.W. Tr. & S a v.s
(Com’ l )
4
(S. & T . )
:
.D ifference in
.favor o f
-branch bank
7 ,8 9 5 ,00 0 i
2 ,3 5 0 ,0 0 0 :
789,500 :
None :
4 ,2 9 1 ,0 0 0
8 ,2 82,500
8 ,4 4 0 ,0 0 0
8 ,6 3 2 ,50 0
4 ,2 4 5 ,5 0 0
4 ,9 8 4 ,0 0 0
4,175*500
Comparative Loan Limits of National Banks with
CAPITAL AND SUBPLUS $100.000 to £200.000
and C aliforn ia Branch Banks in same towns
(As of January 1 , 1924)
Banks
Town
Bakers
f i e ld
n/ b
of Bakersfield
Bank o f I ta ly (Com’ l )
"
"
(S & T)
: Maximum amount May lend to any
_____ one borrower__________________
i
•
Capital
:
A d d itio n -:
and
:
: al i f
;
Surplus_» Unsecured
»Secured• Total
:
15,500
1 ,2 8 0 ,00 0
none
155,000
1 2 ,8 0 0 ,0 0 0
7 .2 0 0 .0 0 0
First Nat’ l Bank
Bank of I ta ly (Cora, l )
"
’*
(S & T)
Chico
F irst National Bank
Pac. S.W.Tr. & Sav. Bark
(Com’ l )
’•
"
(S & T)
Exeter
F irst Nat ional Bank
Pac. S.',7. Tr. & Sav. ]
(Com’ l )
N
"
(S & T)
Sec. Tr. & Sav. Barik,
(Com’ l )
n
"
" (S & T)
Glen
dale
14,400
1 ,2 8 0 ,0 0 0
none
100.000
10,000
7.8 9 5 .00 0
2 .3 5 0 .0 0 0
789.500
none
100,000
10,000
7 .8 9 5 .00 0
2 .3 5 0 .00 0
789.500
none
5 .4 7 5 .0 0 0
5 .0 5 0 .0 0 0
547.500
none
:
•
s
2 5 ,0 0 0 :
3 5 ,0 0 0 :
:
:
2 ,3 6 8 ,5 0 0 :3 ,1 5 8 ,0 0 0 :
1 ,1 7 5 ,0 0 0 :1 ,1 7 5 ,0 0 0 :4 ,2 9 8 ,0 0 0
:
:
2 5 ,0 0 0 :
3 5 ,0 0 0 :
:
:
2 ,3 6 8 ,5 0 0 :3 ,1 5 8 ,0 0 0 :
1 ,1 7 5 ,0 0 0 * 1 ,1 7 5 ,0 0 0 :4 ,2 9 8 ,0 0 0
:
:
1 ,6 4 2 ,5 0 0 :2 ,1 9 0 ,0 0 0 :
2 ,5 2 5 ,0 0 0 :2 ,5 2 5 ,0 0 0 :4 ,6 8 0 ,0 0 0
•
18.000
789.500
none
: 2 ,3 6 8 ,5 0 0 . 3,158,000*
1 ,1 7 5 ,0 0 0 ,1 ,1 7 5 ,0 0 0 * 4 ,2 7 0 ,0 0 0
s
18,000
s 1 ,2 8 0 ,0 0 0
:
none
45,OOo!
63,000s
3,840,000*. 5 ,1 2 0 ,0 0 0 s
3 ,6 0 0 ,0 0 0 !3 ,6 0 0 ,0 0 0 S8 ,6 5 7 ,0 0 0
789.500
none
140,000
none
180,000
*
:
*
:
•
0
4 9 ,0 0 0 :
:
:
2 ,3 6 8 ,5 0 0 :3 ,1 5 8 ,0 0 0 :
1 ,1 7 5 ,0 0 0 :1 ,1 7 5 ,0 0 0 :4 ,2 8 4 ,0 0 0
:
:
: 4 2 0 ,0 0 0 : 5 6 0 ,0 0 0 :
: 7 2 5 ,0 0 0 : 7 2 5 ,0 0 0 :1 ,2 3 6 ,0 0 0
:
:
:
:
4 5 ,0 0 0 ::
63,000*
14.000
Huntingt-Nat•1 Bank o f Huntington Pk.:
140,000
ton
: Pac. S.W.Tr. & Sav. Bank
7 .8 9 5 .0 0 0
Park
:
(Com'l)
2 .3 5 0 .0 0 0
(S & T)
Heilman Com’ l T r. & Sav.Bk
(Com’ l )
1 .4 0 0 .0 0 0
1 .4 5 0 .0 0 0
(S & T)
7 .8 9 5 .0 0 0
2 .3 5 0 .0 0 0
•
3 6 ,0 0 0 :
50,400*
3 ,8 4 0 ,0 0 0 :5 ,1 2 0 ,0 0 0 ::
3 ,6 0 0 ,0 0 0 :3 ,6 0 0 ,0 0 0 :8 ,6 6 9 ,6 0 0
•
Lemoore: First Nat’ l Bank
s: Pac. S.W.Tr. & Sav. Bank
.
(Com’ l )
.
(S & T)
: D iffe r : ence in
* favor o f
Branch
3 8 ,7 2 0 : 5 4 ,2 2 0 :
3 ,8 4 0 ,0 0 0 :5 ,1 2 0 ,0 0 0 :
3 ,6 0 0 ,0 0 0 :3 ,6 0 0 ,0 0 0 :8 ,6 6 5 ,7 8 0
•
•
144.000
12 ,8 0 0 ,0 0 0
7 ,2 0 0 ,00 0
:
:
3 5 ,0 0 0 :
i
t
•
•
180,000
Modesto. First National Bank
1 2 ,8 0 0 ,0 0 0
* Bank of I ta ly (Com’ l )
7 .2 0 0 .0 0 0
"
"
(S & T)
. American Bark, Oakland
250.000
(Com*!)
945.000
"
"
(S & T)
United Bk. & Tr. C o ., 3 .F .
3 ,3 6 5 ,5 0 0
(Com’ l )
1 ,6 7 4 ,6 0 0
.•
”
»»
"(S <5•b T
•
•
5
:
25,000
none
•
:
*
336,550
none
9
75,OOoi
472,500*.
0
10 0 ,0 0 0 ;
472,500 ,
509,500
:
:
1 ,0 0 9 ,6 5 0 .1 ,3 4 6 ,2 0 0 ,
837,250]* 8 3 7 ,2 5 0 ,2 ,1 2 0 ,4 5 0
Maximum amount may lend to any
borrower___________
t
i
s
t
s
t
j
0
•
:
: Capital
s
and
• Surplus
:
s
125,000
. 12,800,000
. 7,200,000
:
:
125,000
. 12,800,000
7,200,000
2 Differs Addition2 ence in
2
al of
2 favor of
s Unsecured 2
Secured
Total
2 Branch
•
:
12,500 \
31,250
43,750 !
.1,280,000 I 3,840,000
5,120,000 [
none j 3,600,000
3,600,000 [8,676,250
s
:
*
Town :
Bank
s
Merced* Far. & Mor. Nat*l Bank
j Bank ^of Italy (Com*l)
.
"
"
(S & T)
:
Monterey
First National Bank
Bank of Italy (Com1!)
t: "
»
(S & T )
t
j ______________ o n e
t
s
s
0
s
12,500
1,280,000
none
31,250
3,840,000
3,600,000
43,750 [
[5,120,000 !
3,600,000 *8,676,250
18,000
1,280,000
none
45,000
3,840,000
3,600,000
63,000 “
5,120,000 !
3,600,000 [8,657,000
12,000
1,280,000
none
30,000
3,840,000
3,600,000
100,000
12,800,000
7,200,000
10,000
1,280,000
none
25,000
3,840,000
3,600,000
First National Bank
120,000
Pac. S*W.Tr. <5fc Sav.Bk.
:
(Com*!)
7,895,000
"
"
(S & T)
2,350,000
•
Reed- .
ley
Reedley Nat’l Bank
120,000
Bank of Italy (Com*l)
12,800,000
"
"
(S & T) s 7,200,000
12,000
30,000
789,500
none
2,368,500
1,175,000
42,000 *
5,120,000 *
3,600,000 [8,678,000
•
35,000 I
5,120,000 [
3,600,000 .8,685,000
•
•
0
42,000 !
•
3,158,000 I
1,175,000 [4,291,000
*
12,000
1,280,000
none
30,000
3,840,000
3,600,000
10,650
26,625
789,500
none
2,368,500
1,175,000
11,000
1,280,000
none
650,000
none
27,500
3,840,000
3,600,000
1,950,000
1,500,000
Napa
.First National Bank
.
180,000
. Bank of Italy (Comfl)
12,800,000
:
"
"
(S & T)
7,200,000
•
Ontario Ontario Nat'l Bank
120,000
Bank of Italy (Com*l)
12,800,000
M
"
(S & T)
7,200,000
Oroville
First National Bank
: Bank of Italy (Com*l)
"
"
(S & T )
Redlands
Santa .First National Bank
:
106,500
Monica: Pac. S.V/.Tr. & oav. Bank
♦
(Com*l) . 7,895,000
"
"
(S
& T) . 2,350,000
:
t
•
Santa :First National Bank
;
110,000
Rosa . Bank of Italy (Com*l) ; 12,800,000
"
*
(S & T) : 7,200,000
:
•
• Merc. Tr. Go. (Com’l) : 6,500,000
•
"
"
(S & T) j 3,000,000
•
San
;
s
117,000
Mateo sNat'l Bank of San Mateo
s Bank of Italy (Corn'l) 212,800,000
t
"
"
(S & T) s 7,200,000
•
:
11,700
a , 280,000
s
none
2
l
29,250
3,840,000
3,600,000
42,000 ..
5,120,000 .*
3,600,000 [8,678,000
! 37,275
•
3,158,000
1,175,000
<
[ 38,500
5,120,000
3,600,000
.2,600,000
1,500,000
i
j 40,950
S5,12C,000
23,600,000
1
«
.
[4,295,725
2
2
.
.8,681,500
I
[4,061,500
2
2
s
28,679,050
•
•
: Maximum amount may lend to any
'
one borrower
•
:
#
*
:
0
•
•
•
•
Town
:
•
Bank
Tulare :F irst National Bank
Pac. S.W.Tr. & Sav. Bk.
(COIE’ I )
"
"
(S & T)
: Capital
:
and
: Surplus
s
s
s
j
:
:
0
0
t Unsecured
150,000
15,000
7 ,8 9 5 ,00 0
2 ,3 5 0 ,0 0 0
789,500
none
:
Addition*
al if
:
Secured :
3 7 ,5 0 0 :
t
j
:
D iffe r ence in
: favor of
Branch
s
s
Total
0
0
52,500*
*
2 ,3 5 8 ,5 0 0 :3 ,1 5 8 ,0 0 0 *
1 ,1 7 5 ,0 0 0 1,175,000* 4,280,500
s
Wat sonv ille
Fruit Growers N at*l Bank
Bank of I ta ly (Com'l)
"
”
(S & T)
Wilmington
First National Bank
Pac. S.W.Tr. & Sav. Bank
(Com 'l}
»
»
» ( 3 & Tj
•
•
s
120,000
1 2 ,800,000
7 ,2 0 0 ,00 0
12,000
1 ,2 8 0 ,0 0 0
none
120,000
12,000
7 ,8 9 5 ,00 0
2 ,3 5 0 ,00 0
789,500
none
30,000
42,000:
3 .8 4 0 .0 0 0 5,120,000s
3 .6 0 0 .0 0 0 3,600,000s 8,678,000
30,000
42,000 s
s
2 ,3 6 8 ,5 0 0 3,158,000s
1 ,1 75,000 1,175,000s 4,291,000
:
FEDERAL RESERVE B O A R D
W A S H IN G T O N
A D D R E S S O FF IC IA L . C O R R E S P O N D E N C E T O
TH E FEDERAL RESERVE BO ARD
September 2, 1926
CEP-fs
Mr. Charles S. Hamlin,
Mattapoisett, Hass •
Dear Mr. Hamlin:
In response to the attached memorandum from
Miss Laning, we have assembled the best figures that
v;e have been able to obtain. Phey are given in the en
closed statements.
As regards your second question, we are pre
senting two sets of figures which largely explain them
selves .
Of the "free balances'* given in fable II, the
part of tikire held in Ilew York City is not definitely as
certainable, because banks do not report separately
amounts due from New York. Cn June 30, 1912, National
banks in New York reported $542,000,000 due to other
National banks.
.
The enclosed calculations and comparisons make
no allowance for the factor of vault cash held in 1926,
or for street loans for out-of-town banks on either date.
Phe figures have been carefully prepared, and
they come as near to v/hat you want as I believe can be
done, but they have not had the benefit of examination
by Mr. Goldenweiser, who will not be back from his vaca
tion until next lues day.
Very truly yours,
f
fcL A S u ^ j
Carl E. Parry,
v
Division of Hesearch and statistics
Enc.
Volume 163
Page 43
Form* No. 131.
f\rr*
r*
FEDERAL RESERVE
Office CorrespolUence^ —
T o ____ Mr. Golciexaveiser
Subject:..
f ate Sept. 1#m
....................._
•
From_ Miss. ianing.
'
-— 84«6
Dear Mr. Goldenweiser:
I
have just received a letter from Mr. Hamlin, who is at Mattapoisett,
Mass, this week, requesting that you prepare for him a report containing,
as nearly as possible, the following information. It might be well to send
this to him by sj;ecial delivery from your office so that he will be sure to
receive it before he leaves Mattapoisett:
1.
Approximate amount saved to the business of the country
by eliminating of exchange charges. I have heard
one estimate of 200 millions. Is this excessive?
2.
Amounts deposited by country and Reserve City banks with
their Mew York correspondent banks•
(a)
Just before the enactment of the Federal Reserve
Act, divided between
1.
(b)
Mr.
today of
required
day. He
Reserves.
2.
Excess reserves.
Same today - excess reserves.
Hamlin says that what he wants is a comparison between 1912 and
excess reserves deposited with Mew York banks, and also what the
reserves were for country and reserve city banks in 1912 and to
suggests that you Mdo the best you can.”
Sincerely yours,
M. LAMING-
SAVING ARISING OUT OF THE ELIMINATION OF EXCHANGE CHARGES
The chief economies resulting from the present method of clearing and
collection are not subject to ready quantitative statement.
They are; first,
the greater speed with which collections and transfers are made and the
greater frequency of settlements, both having the effect of reducing the
loss of interest on collections and remittances in transit and of reducing
the credit risks involved in the collection process; second, more direct
routing of collection items, resulting in a marked reduction in the work of
handling collection items; and third, the elimination,to a very considerable
extent, of the oost and risk of actual gold shipments.
The saving to the business of the country arising from the elimination
of exchange charges can at best be but roughly approximated.
Since they have
resulted in part, however, from the development of the par collection system
and the process of mailing settlements through the gold settlement fund, for
interdistrict transfers of funds, we may use figures relating to these as the
basis of a rough guess.
Transfers through the gold settlement funds in set
tlement of daily clearings aggregated approximately #110,000,000,000 for the
year 1925.
Under the method of effecting settlements obtaining prior to the
operation of the Federal reserve clearing and collection system, these trans
fers would have involved exchange charges.
If we assume, for sake of illus
tration, an exchange charge of 10 cents per #100, the cost would have approxi
mated $110,000,000.
The exact cost of operating the gold settlement fund,
which should be subtracted from this amount, is not available, but I am in
formed that it would not be in excess of #1,000,000— probably nearer #500,000.
Exchange charges have also been eliminated for items (not included in
the above total) the collection of which, although confined to a single dis-
t r i c t , involves settlements between points s u ffic ie n tly distant from each
other as to have involved exchange charges under the old system.
TABLE I
R E S E R V E S 0 ? N A T I O N A L B ANKS
(Amounts in thousands of dollars)
t June 50. 1926 ; June 14. 1912
Country "banks
Required reserves.• •
Total legal reserves
Excess reserves
456,749
487.705
50.954
508,589
560.568
51.779
Reserve city "banks (including St. Louis)
Required reserves..................
Total legal reserves............
Excess reserves................
451,098
452.745
1,647
515,925
525.150
Country and reserve city "banks (including
S t . Louis)
Required reserves..............
Total legal reserves...............
Excess reserves...........
887,847
920.448
52,601
1,022,514
l,Q8a«4g.Q
60,984
T A BLE II
N A T I O N A L B A N K S — B A L A N C E S W I T H C O E E E S P O N L E N T BANKS
(Amounts in thousands of dollars)
rJuno SO. 1926:June 14. 1912
Country banks
Balances with approved reserve agents and count
ed as reserve..............................
Less excess reserves (see Table I)...*****
Balances with approved reserve agents and re
quired as r e s e r v e ...........
Total balances with approved reserve agents....
Excess balances with approved reserve agents..... .
Balances with banks other than approved reserve
agents.........•............... ..... ....... .
Total "free balances''with other banks.............
Per cent of gross deposits.........
291,262
__
----------------------------------------------
239,483
493.613
254,130
30,954
765r070
796,024
8.5/b
151.306
405,436
•
Heserve city banks (including St. Iouis )
Balances with approved reserve agents and count
ed as reserve..............................
Less excess reserves (see Table I).......
Balances with approved reserve agents and re
quired as reserve........ . ..... .... ......
Total balances with approved reserve agents....
Excess balances with approved reserve agents......
Balances with banks other than approved reserve
agents................... .....................
Total "free balances" with other banks.............
Per cent of gross deposits................... .
Country and reserve city banks (including St. Iouis )
Balances v/ith approved reserve agents and count
ed as reserve............................ .
Less excess reserves (see Table I).......
Balances v/ith approved reserve agents and re
quired as reserve............... ...........
Total balances with approved reserve agents....
Excess balances v/ith approved reserve agents......
Balances with banks other than approved reserve
agents.... ...................................
Total''free balances'1v/ith other banks.............
Per cent of gross deposits....................
—
234,198
9f205
•'f>
,v
•
1,647
607.286
608,933
9 . M
224,993
285.296
60,303
331.712
392,015
15.7S6
525,460
60.984
32,601
1.372.356 ..
1,404,957
8.9fo
464,476
778r909
314,433
483.018
797,451
13 .l/o
Changes Since last Meeting
Open Market Account:
In accordance with the decision at the last meeting of the committee
on August 17, the special investment account has been reduced from 270 million
dollars to about 210 million dollars.
Of this amount 39 million represents
sales to the Treasury and 21 million sales to a foreign correspondent, exactly
offsetting gold imports.
The net result of these operations was, therefore, to
take out of the money market the amount of funds represented by the securities
sold to the Treasury, which were paid for by withdrawals from depositary banks
throughout the country.
Federal Reserve Credit:
The result of these sales was to increase the direct borrowing by
member banks , and bills discounted on Septanber 7 amounted to 611 million com
pared with 535 million dollars on August 18 and 639 million a year ago.
Total
bills and securities of the System on Septanber 7 were 1,187 million, a figure
which has been reached or exceeded several times this year and which is about
the same as a year ago, whereas they have as a rule this year been exceeding
last year's figures by about 100 million dollars.
The following table shows the
bills and securities of the Systan on August 18, Septanber 7 this year, and
September 9 a year ago.
BILLS AND SECURITIES - FEDERAL RESERVE SYSTEM
(millions, of dollars)
Sept. 9. 1925
Bills
Bills
U. S.
Other
Total
Discounted
Purchased
Securities
Securities
Bills & Securities
Volume 163 - Page 73
Aug. 18. 1926
Sept. 7.1926
10
535
254
360
3
611
261
311
4
,190
1,152
1,187
639
214
32 7
2
It will be seen from these figures that the result of the open market
sales has been to shift to the member banks the responsibility for a somewhat
larger proportion of the total amount of Federal Reserve credit now outstanding,
which should presumably have the effect of subjecting future extensions of
member bank credit to a closer scrutiny and making present discount rates moro
effective.
Money Rates:
The combined result of these recent open market sales, the continued
influence of the increase of rate of the New York bank, and increasing fall de
mands for credit, are shown in a considerable increase in money rates, as indi
cated in the following table.
MONEY RATES AT NEW YORK
Commercial Paper
Bills(90 day)
March Certs- & Notes
F. R. B. of N. Y. rate
Sent. 9. 1925
Aug. 17, 1926
Sept. 8. 1926
4 1/4
3 1/2
3.26
3 1/2
4 1 / 4 - 4 1/2
3 5/8
3.42
4
4 1/2
3 7/8
3.40
4
We are thus entering the Fall with a rate structure substantially
higher than a year ago-
Five of the Reserve Banks are also operating with a
higher discount rate than was the case a year agoMember Bank Credit:
Total loans and investments of reporting member banks on September 1
were higher than at any time since June 30 but maintained about the same increase
over the previous year, as has been the case for some months past, an increase
which is not out of line with the usual year to year increase in the volume of
credit to keep pace with the growth in population and trade.
In the past month
there has been an increase in commercial loans and in loans secured by stocks and
bonds, partly offset by a decrease in investments.
Total loans on stocks and
bonds are slightly larger than at any time this year with the exception of
January 6 and June 30-
4
3
#
Business and Financial Situation:
Business continues to be maintained at a high level, with few evidences
of weakness.
There has recently been some decrease in the amount of contracts
and permits arranged for new building construction.
This reduction will probably
influence next year*s construction rather than construction for the balance of
this year, which promises to be maintained at a high level.
In the main business
continues to be conducted in conservative fashion and there is little evidence of
overproduction or of speculative tendencies outside of the security markets#
The business public appears to be critically-minded to observe any unwholesome
tendencies in the business situation, as may be indicated by the recent unwilling
ness of the public to purchase bonds from the G. L» Miller Company and their con
sequent failure.
Further evidence may be found in the critical attitude toward
the extension of terms for installment selling, in the continuance of hand to
mouth buying, and in the stability of prices of other than agricultural commodi
ties-
It is difficult to discover any grounds for serious business disturbance
in the Immediate future*
Even in the stock market, where speculative operations
are most in evidence, the tendency is clearly toward a careful selection of
stocks on the basis of earnings and fundamental, values and the trading is of much
more substantial character than it was a year ago-
An excellent argument can be
made in justification for much of the recent rise in stock prices.
OPEN MARKET POLICY
While it is clear that we are now at a high level of business and
financial activity, and that we are in a situation where the influence of the
Federal Reserve System should be toward caution and conservatism, there does not
appear to be any emergency situation.
The present volume of discounts, and the
present rate structure now constitute a considerable restraint on further exten
sions of member bank credit.
As the usual Fall needs for additional credit make
themselves felt there will be a steady increase in the burden of indebtedness
upon member banks, and money rates are likely to continue higher than a year ago.
A further
sale of
4 1*
sec u r i t i e s at t h i s t i m e w e l d i n a l l p r o b a b i l i t y b e
HP
followed by an increase in money rates which would makr it difficult ‘to aVo*c*
rate increases at a number of the Federal Reserve Banks.
Before such action were
taken there should be careful consideration of its probable effect upon financing
of the crop movement, agricultural prices, and the international relationship of
•
£
money rates and gold movements.
-V
The special investment account is now down to
about 200 million dollars and a further dissipation of ‘*bis portfolio would leave
the System with little control over +<he market in case of some future emergency.
In the light of thes-g various considerations it would appear to be wise
to defer further open market action for the present until there is a chance to ob
serve the effect on the situation of the causes now operative and to observe fur
ther the tendencies in the volume and quality of credit as the Fall season advances.
REPORT OF THE SECRETARY TO THE OPEN MARKET INVESTMENT COMMITTEE MEETING
__________________ at Wa s h i n g t o n , Se p t e m b e r 1 0 . 1926_____________ _ _
Following the action taken by the Committee at its last meeting
August 17 , 1926 to make certain reductions in the System Account through
the sale of Third Liberty Loan bonds to the Treasury Department and short
term securities to foreign correspondents the following transactions, in
addition to the sales of $7,337,000 to foreign correspondents approved at
the last meeting, have taken place:
Sales of $15,000,000 1927 Treasury Notes to other Federal reserve banks.
Purchases in lieu thereof of a like amount of Third Liberty Loan
4 l/4/£ bonds, thereupon selling to the Treasury Department
$39,425,500 Third Liberty Loan 4 1/4J# bonds#
Sales to foreign correspondents consisting of
$
490,000 September 15, 1926 Treasury Notes
12,972,500 December 15, 1926 Certificates of Indebtedness
These sales, which were made without replacement, have brought the total
System Account holdings at the close of business September 8, 1926 to
$209 ,975,000.
A special allotment of bankers acceptances since the last meeting
amounting to $3,679,000 v/as made from the portfolio of the New York
bank to
the Federal Reserve Bank of Atlanta to replace maturities in their special
April 16 allotment of bills.
The Federal Reserve Bank of St. Louis which, on account of its re
serve position, discontinued participation in System bill purchases for one
week during the latter part of August made a further request September 4
that allotment be discontinued until further notice*
Figures shown on statement attached (Exhibit "B") reflect the dis
tribution to all participating banks of System purchases of bills from
Volume 163 - Page 79
•
2
January 4 to September 1, 1926 , inclusive;
the overages and shortages shov/n
thereon have since been adjusted in the usual manner.
Attached are the following exhibits;
(a )
Statement showing participation of Federal reserve banks in
System Special Investment Account and Classification of
issues held in the account by maturities.
(3)
Statement showing purchases of bankers acceptances from
January 1 to September 1, 1926 and the amount each bank
has received in excess or short of its pro rata share
under the apportionment plan put into effect January 4t
1926.
(C)
Statement showing earning asset holdings of all Federal
reserve banks September 1, 1926 as compared with pre
vious week; also weekly average of earning asset hold
ings from Decanber 31, 1925 to September 1, 1926 as
compared with corresponding period 1925 and entire year
1925.
V
Exhibit "A"
STATEMENT SHOWING PARTICIPATION BY FEDERAL RESERVE BANKS IN SYSTEM
SPECIAL INVESTMENT ACCOUNT AND CLASSIFICATION OF ISSUES HELD
_________ SEPTEMBER 7, 1926 IN THE ACCOUNT BY MATURITIES_________
Holdings by Maturities
Holdings
3oston
New York
Philadelphia
$
9,204,000
55,393,000
5,165,000
Cleveland
13,860,000
Richmond
6,109,000
Atlanta
0
Chicago
27,541,500
St* Louis
14,409,500
Minneapolis
9,368,500
Kansas City
18,893,000
Dallas
19,388,500
San Francisco
30.643.000
Totals
$209,975,000
September 15, 1926
$ 59,395,000
Dec ember
15, 1926
44,380,500
March
15, 1927
76,878,200
December
15, 1927
29,321,300
$209,975,000
Exhibit "B"
PURCHASES OF BANKERS ACCEPTANCES FROM JANUARY 4 TO SEPTEMBER 1 , 1926 AND AMOUNT
EACH BANK HAS RECEIVED IN EXCESS OR SHORT OF ITS PRO RATA SHARE
_____________ UNDER APPORTIONMENT PLAN PUT INTO EFFECT JANUARY 4 . 1926______________
B i lls
Acquired
(Net)
Boston
$ 81,107,000
B ills E ntitled
to Acquire
$
7 4 ,924,000
B ills Over
Pro Rata
Share
B ills Short
Pro Rata
Share
$6,183,000
0
249,352,000
251,839,000
0
2,487,000
8 3 ,1 3 6 ,0 0 0
85,627,000
0
2 ,4 9 1 ,00 0
106,719,000
107,031,000
0
312,000
Richmond
54,961,000
55,248,000
0
287,000
Atlanta
52,083,000
51,882,000
Chicago
149,467,000
149,846,000
0
St# Louis
46,3 2 0 ,0 0 0
4 6 ,320,000
0
Minneapolis
44,2 7 9 ,0 0 0
44,545,000
0
266,000
Kansas City
63,689,000
6 4 ,220,000
0
531,000
Dallas
4 4 ,5 3 4 ,0 0 0
44,545,000
0
1 1 ,0 0 0
San Francisco
9 6 .7 1 2 .0 0 0
9 6 .3 3 2 .0 0 0
380.000
$ 1 ,0 7 2 ,3 5 9 ,0 0 0
$ 1 ,0 7 2 ,3 5 9 ,0 0 0
$6,764,000
New York
Philadelphia
Cleveland
Totals
2 0 1 ,0 0 0
0
.379,000
0
0
$6,764,000
These figures r e fle c t purchases a llo tte d on b asis of regular percentages but
do not include inter-System sales from portfolio#
EXHIBIT ■C"
8TATB2CENT SHOWING EARNING ASSET HOLDINGS OF AIL FEDERAL RESERVE BANKS SEPTEMBER 1 , 1926 COMPARED WITH PREVIOUS WEEK AND SEPTEMBER 2, 1925; ALSO WEEKLY
__________ AVERAGE OF EARNING ASSETS FROM OCCEMBER 31, 1925 TO SEPTEMBER 1, 1926 AS COMPARED WITH CORRESPONDING PERIOD 1925 AND ENURE YEAR 1925_________
(ooo Qmi tte d )
M inneapolis
Kansas City
D allas
Cleveland
A tlanta
St. Louie
Richmond
Chicago
San Fran.
Nev York
P h ila d elp h ia
Boston
B i l l s Discounted
•
*
- Aug, 25
Sept 1
Net Change
B i l l s Purchased
"
"
6,565*
- Aug* 25
Sept 1
Met Change
- Aug. 25
Sept 1
Net Change
Weekly Average o f Earning Assets
Dec. 31, 1925 t o S ep t. 1, 1926
Corresponding p e r io d 1925
Net Change
Deo. 31, 1925 to Sept. 1, 1926
E n tire year 1925
Net Change
Comnarison o f Earning A ssets
September 1, 19 2^
September 2, 1925
10,638
10,486
152-
Net Change
Net Change
17,444
22,839
5,395*
Government S e c u r it ie s - Aug* 25
"
*
Sept 1
T ota l Earning Assets
•
m
m
#39,499
46,964
67,581
79,389
11 , 808 *
81,272
83,167
1 ,8 9 5 -
81,272
93,459
1 2 ,187 -
79,389
67,961
11,428*
#140,059
176,243
36,184*
43,849
33,191
10,658 -
60,266
60,713
447*
244,174
270,147
25,973*
269,056
279,904
10,348 -
269,056
287 ,133
18,077 -
270,147
279,403
9 ,2 5 6 -
#49,850
45,611
#38,105
33,467
4 ,6 3 8 -
4 ,2 3 9 -
18,879
19,028
149*
2 0 ,4 5 4
20,369
8591,183
87,008
4,1 7 5 -
8 9,559
81,307
8,252+
89,559
85,078
4,481*
87,008
86,79 4
214*
'
26,484
27,398
914*
35,214
34,986
228-
99,303
95,851
3 ,9 5 2 -
104,746
109,969
5 ,2 2 3 -
104,746
113 ,904
9 .1 5 8 -
95,851
104,672
8,8 2 1 -
* 45,347
47,649
2,302*
12, 707
12,557
150-
7,842
7,741
101-
65,896
67,947
2,051*
60,558
53,330
6,728*
60.558
54,734
5,324+
67,947
65,678
2,269*
#48,600
50,166
1,566*
2 6 ,5 4 5
29,88 4
3,339*
1 ,9 9 5
1,883
112-
77,840
82,633
4,793*
73,422
41,424
31,998*
73,422
56,548
16,874*
82,633
63,482
1 9 . 151 +
#36,424
39,266
#73,604
69,993
3 ,6 1 1 -
2,842*
8,417
8,569
35,191
36,529
1,338*
152*
21,216
20,979
50,175
50,730
237-
555*
158,970
157,252
66,057
68,814
2,757*
1 ,7 1 8 -
62,746
50,290
150,617
130,218
12,456*
20,401*
150,617
138,045
62,746
55,936
12, 572*
6,310*
68,814
68,737
15 7 ,2 5 2
1 1 7 ,3 9 4
77*
39,858*
8UMMART TOR SYSTEM
B i l l s d iscou n ted fo r veek
B i l l s purchased fo r veek
Government s e c u r it ie s f o r veek
T ota l earning a ss e ts f o r veek
Weekly average o f earning aeaets D e c .3 l/2 5 to S * p t .l/2 6
1/26
1925
# 55,710*
1,135
2,253
52,322*
100,735*
#14,060
16,218
2,158+
11,789
11,778
11-
17,527
17,377
150-
44,376
46,373
1,997*
36,569
35,377
1,192*
36,569
37,271
702-
46,373
43,808
2,565+
#12,716
12,341
37514,513
14,355
158-
30,729
30,167
562-
#22,610
25,261
2,651+
12,246
11,356
890=22,877
21,752
1 .1 2 5 -
5 7 ,9 5 8
5 7,733
56,863
58,369
1 ,0 9 5 -
636*
65,285
50,299
53.248
42.249
14,986*
10,999*
65,285
57,293
53,248
49,024
7,992*
56,863
59,593
2 ,7 3 0 -
4,224*
58,369
48,692
9,677*
#49,764
64,969
14,305*
2 6 ,5 5 2
2 5,997
55542,284
41,781
T otal
«
570,638
626,348
55,710*
254,616
253,481
1 ,1 3 5 321,217
318,964
503-
2 , 253 -
118,600
131,847
1,150,171
1,202,493
13,247*
112,889
101,198
11,691*
112,889
109,866
3,023*
131,847
119,875
11,972*
52,322*
1,159,967
1,059,232
100,735*
1,159,967
1,138,2 91
21,676*
1,202,493
1,126,089
76,404*
.. 1
w
EARNINGS AND EXPENSES OF FEDERAL RESERVE BANKS
AUGUST lQ 2 o. Total earnings of the Federal reserve
hanks in August were ;j35»000 le s s than in July, but
more than $’4 00,000 above earnings in August la s t year.
An increase of $50,000 in earnings from discounted
b i l l s as compared with July was offset! by a corres
ponding decrease in earnings from purchased b i l l s and
U. S. se c u r itie s, while miscellaneous earnings f e l l
o ff $3 5 , 0 0 0 .
Current expenses in August aggregated
$ 2 ,2 3 0 ,0 0 0 , as compared with $ 2 , 3 0 1 ,0 0 0 in the month
preceding and $2,223,000 in August la s t year.
3 MONTHS ENDING AUGUST. During the f i r s t eight months
of the year, earnings totaled $3 0 ,^ 6 8 ,0 0 0 or $U,6 9 2 ,0 0 0
hove the to ta l for the corresponding period la s t year.
About 9 0 $ of th is increase is due to larger earnings
L'rom discounted b i l l s .
Current expenses (including the cost of Federal
reserve currency) amounted to $1 8 , 2 7 2 ,0 0 0 during the
eight-month period, a decline of $2 9 3 ,0 0 0 from the
corresponding period la s t year.
A fter providing for a l l current expense and
dividend requirements, the balance of net earnings on
August 31 wo.s $ 7 ,352,000 as compared with only
$ 2 , 6 3 0 ,0 0 0 on the same date la s t year.
Volume I63 - Page 87
s t
. 5087
U*.
Z 0 N ? I
PENT, 1JLk
EARNINGS AND EXPENSES OF FEDERAL RESEF'
*
Not fo r publication
Federal
Reserve
Bank
From
d is
counted
b ills
Month
of
E a r n i n g s
From pur
From
chased b i l l s
other
and U. S.
sources
secu rities
August
Total
Current
ex
penses
..JUST 1926.
,
J
IS>26
Annual . .e
Current of current net Current
net earn?
earnings c
net
ings to
average
earnings
p aid -in capital Aug. 31
*
J
A*
f St * 50£7
...
1926
Balance available fo r de
Dividends preciation allowances, sur
ac c iiue d p lu s, franehise tax, e tc.
to
On Aug. 31
On July 31
Aug. 31
Year
j
Per cent
9 .3
$333,133
2 9 4 ,5 5 6
9 -7
2,443,041
1 6 5 ,4 3 7
1 0 7 ,45b
1 0 .3
3 4 0 ,0 7 5
2 0 0 , 0 O5
1 3 9 ,4 6 7
7,250
a 7 , i 2s
1 1 4 ,9 0 2
53.S47
5,272
2 5 3 ,7 7 0
159,461
2 6 9 ,5 7 2
3 0 ,7 4 2
119,503
8 8 ,6 9 3
v^^eapol is
44,423
Kansas City
Dallas
$1214,648
i 9 2 , 699
$ u ,9 5 5
$ 2 2 9 ,3 0 2
$159,544
$ 6 9 ,7 5 3
New York
512,372
313,453
2 7 ,0 0 2
8 5 2 ,8 2 7
553,271
Phil adel phi a
155,312
1 1 3 ,2 0 }
3,90s
272,923
Clevelana
U K , 373
182,106
4 3 , 591*
Richmond
15^,599
57,279
Atlanta
1 6 1 ,6 5 1
Chicago
St• Louis
^pK-on
San Francisco
TOTAL:
Aug. 192 6
July 1926
Aug. 1925
$ 3 4 9 ,0 9 6
1 ,3 7 2 ,7 2 4 -
$484,087
$4 5 8 ,2 7 7
1 , 0 6 4 ,3 1 7
9 4 7 ,7 2 2
933,957
4 5 0 ,0 3 6
4 5 3 ,9 2 1
4 0 5 ,0 3 9
1 2 .1
1 , 0 5 0 ,0 7 9
537.124
510,955
447,188
1 0 2 ,2 2 6
1 9 .8
6 9 3 ,5 7 9
241,912
456,667
304,861
1 2 7 ,7 5 7
1 2 0 ,0 1 3
2 9 .8
9 9 s, 680
1 9 5 ,9 5 5
002,725
701,602
455,775
3 2 0 ,1 2 9
1 o5 ,646
1 1 .7
1 , 5 3 3 ,6 0 7
0 5 2 ,3 2 5
881,279
790,580
10,505
218,701
1 1 3 , 39 c
104,811
23-5
7 1 9 ,0 1 0
205,394
5 1 0 ,6 1 6
4 3 2 ,11 5
9 0 ,6 7 1
15,637
1 5 0 ,7 3 1
9 0 ,4 1 2
6 0 ,3 1 9
2 2 .8
3 1 3 ,4 9 9
1 2 5 ,8 6 7
1 9 2 ,6 3 2
147,590
43,121
141,297
2 6 , 6 so
2 L1 , 0 9 S
1 3 3 ,6 6 3
77,**35
21.7
7 1 3 ,5 6 5
1 6 9 ,0 2 4
544,541
Us e , 069
6s , 4 i 7
1 0 6 ,9 8 1
7 , 63 s
1 2 3 ,0 3 6
9 6 ,1 7 4
8 6 ,8 6 2
2 3 .9
617,45s
171,480
4 4 5 ,97s
300,521
1 6 3 ,5 9 1
2 0 0 ,9 0 9
1 3 ,4 4 9
3 3 5 ,9 4 9
1S 6 ,9 6 s
2 6 .1
1 , 3 3 0 ,4 1 0
333,230
9 9 6,580
3 5 1 ,7 6 1
1 , 3 4 5 ,9 7 1
1 , 7 9 ^ ,3 0 5
1 , 5 9 9 ,9 4 3
1 ,7 4 8 ,7 1 2
1 ,7 9 3 ,9 9 4
1 .5 5 3 ,5 2 4
2 0 6 ,6 3 2
3 , 8 0 1 ,3 1 5
3 ,3 3 6 ,4 6 7
3 ,3 3 8 ,4 2 4
2 , 2 7 9 , 76 s - 1 5 2 1 ,5 4 7
2 , 3 0 1 ,3 9 4 1 5 3 5 ,0 7 3
2 , 2 2 3 ,3 3 9 1 , 1 6 5 ,0 3 5
1 4 .5
1 4 .7
1 2 , 1 9 6 ,0 6 5
4 ,8 4 3 ,7 7 °
7,352,298
6 , 4 4 6 ,9 4 5
1 1 .8
7 , 2 1 1 ,5 2 2
U ,521,836
2 , 6 2 9 , 6s6
2 , 0 4 4 ,6 2 5
FEDERAL RESERVE BOARD
^DIVISION OF BANK OPERATIONS
C. .
SEPTEMBER 10, 1 9 2 6 .
x
•
242,668
1 3 ^ ,9 5 7
193,931
I
Office Correspoi ence
To ’
i r
Hamlin
FEDERAL RESERVE
BOARD
• 13 ^
Date. September 15, 1926.
Subject:___ Havana
Agencies of Federal
7/e have been asked by Mr. Goldenweiser to reply to your memorandum
o f September 10 regarding the operation o f the Havana Agencies.
The Boston Agency was established on September 1, 1923, and you w ill
note from the attached statement that fo r the 3-year period ending August 31,
1926, the earnings on cable transfers bought and sold amounted to $ 2 1 2 ,4 5 0 .4 3 ,
and during the same period the operating expenses of the Boston Agency amounted
to $ 4 3 ,6 0 7 .9 9 , leaving a net operating p r o fit to the Boston Bank o f $ 1 6 8 ,8 4 2.4 4 .
lhe A tlanta Agency, which was established on the same date as the Boston Agency,
reported operating expenses during the three-year period of § 8 5 ,6 7 4 .9 9 . These'
fig u r e s, however, do not include the cast o f printing the Federal reserve notes
shipped to Cuba, nor the shipping charges on such currency, which during the
f i r s t year o f the agency’ s operation amounted to $33,358 and were estimated by
Atlanta at the end of November 1924 to run normally about $32,000 a year. This
would make the t o ta l expense o f operating the Atlan 1aAgency during the 3—year
period approximately $18 5,0 0 0. This fig u r e , however, would probably be increased
to over $200,000 because o f the large amount of currency shipped to Havana during
the recent run on the Havana banks.
I t is evident, therefore, that the earnings,
of the Boston bank during the three-year period have not been su ffic ie n t to pay
to ta l operating costs including the cost o f currency o f the two agencies. The
fa c t, however, should not be overlooked that the Federal reserve notes and other
United States currency furnished to Cuba by the Federal reserve banks, whether
d ir e c tly or in d ire ctly , have been paid for by the Cuban banks, and the only way
that such payments can be made to the Federal reserve banks without reduction
o f our own circu latin g stock is through borrowings of member banks, which of
course increase the earnings o f the Reserve banks.
A ll of the Federal reserve notes paid out by A tlanta in Cuba have
been in exchange for gold, in so far as A tlanta is concerned, and such gold,
of course, has in the main been deposited with the Federal reserve agent as
c o lla te r a l secu rity for the notes so paid out. From the la tte r part of
September 1923 u n til about the end o f that year, however, the borrowings of
member banks in the Atlanta d is t r ic t were very heavy, reaching as high as
$ 8 7 ,0 6 7 ,0 0 0 , and during th is period the A tlanta bank had to use a portion of
the gold received in exchange for notes paid out in Cuba to maintain it s
reserves against dep osits, assuming, in accordance with the Board's ru lin g,
that the reserve banks should maintain th eir lega l required reserves against
notes in circu lation and treat any deficiency in reserves as being a deficiency
in the reserve against deposits. There were a lso some days in December 1925
and January o f this year when the Atlanta bank found i t necessary, because of
large open-market purchases, to use a portion o f the gold received in exchange
for notes paid out in Cuba as a part of i t s required reserves against d ep osits.
Volume 163
Page 93
0J>r«aw«fK*r •« n r r in j wvttjm
-
2
-
At the present time, with borrowings at the Atlanta Federal reserve bank: at
§ 4 8 ,0 0 0 ,0 0 0 , which is r e la t iv e ly high, the reserves of that bank are about
§7 0 ,0 0 0 ,0 0 0 in excess o f reserve requirements or considerably more than
s u ffic ie n t to re tire a l l of it s notes in circu lation in Cuba, estimated as
§6 0 ,0 0 0 ,0 0 0 .
I f the Atlanta bank should adept the p o licy of issu in g no more
Federal reserve notes in Cuba and of redeeming notes now outstanding when
received, both i t s note circu lation and it s gold reserves would gradually
decline. This decline in gold reserves, however, on the basis of present
conditions would not go so fa r as to bring the bank’ s reserve ra tio down to
anywhere near the 40$ minimum, and there would be slig h t p o s s ib ilit y o f the
bank finding i t necessary to rediscount with other Federal reserve banks
unless conditions in the A tlanta d is t r ic t should so r a d ic a lly change that
manber banks would more than double the amount of their borrowings from the
reserve bank.
In fact i f the Atlanta bank were now to redeem a l l o f i t s
notes in circu la tio n in Cuba in gold i t would s t i l l have a reserve ra tio
of about 58 per cent and an excess reserve of over §3 7 ,0 0 0 ,0 0 0 .
EARNINGS AID OPERaTING EXPENSES OF HAVANA, CUBA, AGENCIES,
ESTABLISHED SEPTEMBER 1, 1923.
EARNINGS ON TRANSFERS (FEDEFAL RESERVE BANK OF BOSTON)
Sold in Havana payable in
United States
1923
1924
1925
1926*
Total to
aug. 31,1926
Sold in United
States - payable
In Havana
$ 1 7,269.00
2 5 ,907.50
26,953.00
4 9 ,980.25
$ 7 ,2 0 0 .0 0
2 1 ,6 8 2 .6 8
16,778.00
46,680.00
120,109.75
92,340.68
Total
$24 ,4 6 9 .0 0
47,590.18
4 3 ,7 3 1 .0 0
96,660.25
212,450.43
K •
v
'4
%
%
OPERATING EXPENSES
Boston
Agency
1923
1924
1925
1926*
Total
A tlanta
Agency* *
Total**
$ 8 ,7 9 6 .4 0
13,648.23
13,366.43
7 ,7 9 6 .93
$ 1 1 ,2 6 4 .0 7
34,995.86
2 1 ,9 1 4 .1 3
17,500.93
$20,060.47
4 8 ,6 44.09
3 5 ,280.56
25,297.86
4 3 ,6 0 7 .9 9
85,674.99
129,282.98
•TO August 31, 1926.
••Exclusive o f the cost of Federal reserve notes and shipping
charges thereon to and from the agency which amount to
approximately $32,000 a year.
In the considerations which have been given
durxng tae past two years to the question of whether
or not -che Federal reserve banks should discontinue the
handling of so -ca lle d non-£is,sh co lle ctio n items, con
siderable opposition has„*developed to the continuance
of the service as at present, that i s , without charge
and without lim itation as to items payable at stre e t
addresses.
i
4
>
_ Ihe provisions o f the Federal Reserve Act
a u t h o r d o not require the Federal reserve-banks
to handle
.cash itemsf and the inauguration o f the
function we
the re su lt of an order by the Federal
•Reserve Boarlx< but ra,ther at i t s suggestion. The Board
’wishes to sn test to the Federal reserve banks that each
bank exercise i i a own oj^tion as to the co lle ctio n of
non-cash items at street addresses, but continue the
co lle ctio n of .^ p -c a sh items c o lle c tib le at banks.
Very "cruly yours,
fpst
~i»
Crissinger,
Governor.
"
L
*
AwflL
#
jr i
•
FEDERAL RESERVE BOARD
X-4672
WASHINGTON
A D D R E S S O F F IC IA L C O R R E S P O N D E N C E T O
T H E FED ERAL RESERVE B O A R D
September 23, 1926.
SUBJECT:
D iscretion of Federal Reserve Agent in accepting or
r e je ctin g paper oifered as c o lla te r a l for Federal
reserve notes.
Dear S ir:
m
The question has been raised whether the action of the
Board^of Directors of a Federal reserve bank in accepting paper
for discount deprives a Federal Reserve Agent o f discretion in ac
cepting or re je ctin g such paper when offe re d as c o lla te r a l for Fed
eral reserve notes.
The Board has given careful consideration to
this matter and the conclusions which i t has reached may be set out
. as follow s:
,
Under the terms o f Section 16 o f the Federal Reserve
Act, tne Federal Reserve Board, acting through the Federal Reserve
Agent, is charged with the r e sp o n sib ility of determining in each case
wne . er an application by a Federal reserve bank for Federal reserve
notes should be rejected or granted in whole or in -p a r t.
It is clear
hat tne Board is empowered to exercise i t s discretion in passing upon
the d e s ir a b ility o f c o lla te r a l tendered as security against the issue
of Federal reserve n otes. This discretion is ord in a rily exercised
through the Federal Reserve Agent to whom the c o lla te r a l is offered .
In order that Federal reserve notes may always be f u ll y protected by
co la te r a l security o f proper kinds and amounts, i t i s important that
the function of passing upon such c o lla te r a l security should not be
exercised in a perfunctory manner but i t should be performed with
care, and i t should not be assumed that a l l paper discounted by a
Federal reserve bank co n stitu te s, without further examination as to
i t s quality or goodness, acceptable c o lla te r a l for the protection of
Federal reserve notes.
.
® ie
'that a Federal Reserve A-gent as a member o f the
Executive^Committee o f a, Federal reserve bank may have participated
in admitting a p a rticu la r piece o f paper to rediscount by the bank
in no way precludes the exercise by him of independent judgment as
to the d e s ir a b ility o f such paper when i t i s tendered as c o lla te r a l
for the issue of Federal reserve notes.
V o l u m e 163
P a g e 129
/L /i
' i
M
*4> I
»Mf?v W*** *
.
. - 2 -
X-4672
#&4
> 1
T’
ne federal Reserve Board expects Federal reserve
at all times^ to _see to it that all Federal reserve not
183 * *7 them t0 ^ ir respective hanks are fully protected
prop^. collateral ^
U e d with them, and that in any cases
where collateral +•
vo them is deemed unsatisfactory in
quality or amo^Jlit, it sna±.
rejected and other collateral
asked, end the matter of ^
-hall be reported to
the Federal Reserve Boaru.
ts
•ours,
J
*gsp&-
To a1-^ ^e^-eral Reserve Agents.
'h
ib.
h
i
t
■■
..
•
iV 7
l
L
a
4678
(Superseding X-4545)
BY-LA^S OF THE FEDERAL RESERVE BOARD
EFFECTIVE SEPTEMBER 23, 1926.
Article 1.
The Chairman.
The Secretary of the Treasury, as Chairman of the Board, shall
preside at all meetings when present. In the absence of the Chairman,
the Governor shall act-as presiding officer. In the absence of both the
Chairman and the Governor, the Vice-Governor shall preside, and in the
absence of all three such officers, the remaining member of the Executive
Committee shall preside.
Article 11.
The Governor'.
Sec. 1. The Governor of the Federal Reserve Board shall be the
active executive officer thereof; subject, however, to the supervision of
the Board and to such rules and regulations as may be incorporated herein
or may from time to time, by resolution, be established.
Sec. 2. The Governor shall have general charge of the executive
and routine business of the Board not specifically assigned under the by
laws or by resolution of the Board to any individual member or committee
thereof, and shall have supervision of the Board’ 3 staff.
Sec. 3. The Governor shall be an ex-officio member of all
Standing Committees of the Board.
Article 111.
The Vice-Governor.
Sec. 1. In the absence or disability of the Governor, his powers
shall be exercised and his duties discharged by the Vice-Governor, and in
the absence or disability of both of these officers, such powers shall be
exercised and such duties discharged by the remaining member of the
Executive Committee; in the absence or disability of all members of the
Executive Committee the powers and duties of the Governor shall be exer
cised by the senior member of the Board present.
Sec. 2. It shall be the duty of the Vice-Governor to cooperate
with the Governor in the administration of the executive business of the
Board.
Volume 163
Page 139
-2
X-4678
(Superseding X-4545)
Article IV.
Secretary and Assistant Secretaries.
Sec. 1, The roard shall appoint a Secretary and one or more as
sistant secretaries.
Sec, 2. The Secretary shall keep an accurate record of the proccedi lies o.i the Board and shall conduct such correspondence cud perform
such other duties as may "be assigned to him by the Governor or by the Board.
In the aosence or disability of the Secretary, the duties of that office
■^V, by direction of the Board, be performed by an assistant secrotary.
Sec. 3. The Secretary shall have custody of the seal and, acting
under the authority oi the Board, sha.ll have power to affix same to all in
struments requiring it. Such instruments shall be attested by the Secre
tary.
Sec. 4. The assistant secretaries snail each perform such duties
as may oe assigned to them from time to time by the Board or by the Secre
tary.
Article V.
assistant to the Gove n o r .
Sec. 1.
the Governor.
The Board may authorize appointment of an Assistant to
Sec. 2. The Assistant to the Governor shall perform such duties
rs shall be assigned to him by the Governor.
Article VI.
The Executive Oommi11 ee .
Sec. 1. There shall be an Executive Committee of the Board con
sisting of three members, which shall include the Governor, Vice-Governor
and one of the appointive members of the Board. The appointive member of
the Committee shall be nominated and elected at a regular meeting of the
hoard. Members of the Board shall serve as far as practicable in rotation
and for approximately equal terms. The presence of three members shall be
requisite lor tne transaction of business by the Executive Committee, and
action shall be taken only on unanimous vote of the Committee.
Sec. 2. In the absence of the Governor and Vice-Governor the ap
pointive member of the Executive Committee shall act as Chairman and shall,
with two other appointive members of the Board present in Washington to be
chosen by him in the order of their seniority, exercise the powers and dis
charge the duties of the Executive Committee. In the absence of all three
- 3 -
X-4678
(superseding X-4545)
regular members of the Executive Committee the three remaining appointive
members of the Board, provided there be three in Washington, shall act as
an interim committee and exercise the powers and discharge the duties of
the Executive Committee, the senior member acting as Chairman.
Sec.3. It shall be the duty of the Executive Committee to re
view and submit drafts of important correspondence involving the expression
of opinions or decisions of the Board, and to prepare and make recommenda
tions governing the conduct of the Board’s business.
Sec.4. The Executive Committee shall also have charge of all
matters appertaining to the internal organization of the Board, and shall
make recommendations from time to time on this matter. It shall also pre
pare annually a budget of proposed expenditures.
Sec.5. In the absence of a quorum of the Federal Reserve Board
and for the transaction of business requiring action during the absence of
such quorum, the Executive Committee is authorized to transact business
which can be transacted in accordance with established principles and
policies of the Board and to perform such additional duties as may be spe
cifically delegated to it from time to time by instruction of the Federal
Reserve Board.
The Secretary of the Board shall serve as Secretary of
the Executive Committee.
Article VII.
Standing Committees.
In addition to the Executive Committee there shall be the fol
lowing Standing Committees, appointments to which shall be made by the Gov
ernor, subject to the approval of the Board.
Sec.l. Law.
To the Law Committee shall be referred for study and re
port all questions of a legal nature. To this Committee shall also be as
signed the preparation or revision of the Board’s regulations, contemplated
amendments to the Federal Reserve Act, applications under the Kern amend
ment to the Clayton Act, and applications for the exercise by national banks
of trust powers.
The General Counsel shall serve as Secretary of the Cornmittee.
Sec. 2.
Examination.
To this Committee shall be referred all questions re
lating to the examination of Federal Reserve or member banks including ad
mission of state banks and permission to establish and operate branches.
The Chief Examiner shall serve as Secretary of this
Committee.
-4-
Sec. 3.
X-4678
(Superseding X-4545)
Research and Statistics.
This Committ.ee shall have charge of all investigations
of an economic and statistical character authorized by the Board and shall
supervise the work of the Division of Research and Statistics and the prepa
ration and publication of the Federal Reserve Bulletin. This Committee
shall also have supervision of the statistical and publication work of the
Federal Reserve Banks.
The Director of the Division of Research and Statistics
shall serve as Secretary of this Committee, or in his absence the Assistant
Director shall so serve.
Sec. 4.
Salaries and Expenditures of Federal Reserve Banks.
To this Committee shall be assigned all recommendations
from Federal Reserve Bank3 for changes of salaries and other expenditures.
This Committee shall make reports with respect to charge-offs and franchise
tax of Federal Reserve Banks.
The Secretary of the Board shall serve as Secretary of
this Committee.
Sec. a.
District Committees,
To each Federal Reserve Bank and District shall be as
signed a Committee of not less than two members of the Federal Reserve 3oard.
It shall be the duty of each Comijiittee to keep itself informed by corres
pondence and visit of the affairs of the Bank and the condition of the
District, and make investigation and report on all questions appertaining
to the operation of any Federal Reserve Bank or tho condition of any Federal
Reserve District that may be referred to it by the Board.
These Committees
shall also aid the Committee on Salaries and Exoenditures with information
regarding personnel of the respective Federal Reserve Banks of which they
have charge. These Committees shall also make recommendations to the Board
for the appointment of Directors at Federal Reserve Banks and Branches.
Article Vlll.
The Fiscal Agent and Demi tv Fiscal Accent.
^ Sec. 1. The Board shall appoint a Fiscal Agent and a Deputy
fiscal Agent. The duty of the Fiscal Agent shall be to collect and deposit
all moneys receivable by the Board with the Treasurer of the United States,
to be placed in a special fund established on the books of the Treasurer
for the Federal Reserve Board. The Deputy Fiscal Agent shall perform the
duties of the Fiscal Agent during his absence or disability.
Sec. 2 . The Fiscal Agent and Deputy Fiscal Agent shall each exe
cute a separate bond with surety satisfactory to the Board.
^
Sec* 3. Paymei^s of expenses and other disbursements of the
Board shall be made by the Fiscal Agent unon proper vouchers out of moneys
-5-
w X-4678
(Superseding X-4545)
advanced to him "by requisition and warrant out of tno special fund and
placed to his official credit with the Treasurer of the United States as
provided by Section 5 of this Article. In the absence of the Fiscal Agent
payment of expenses and other disbursements shall be xtiade by the Deputy
fiscal Agent upon proper vouchers out of moneys advanced to the Fiscal
■agent oy requisition and warrant out of the special fund and placed to his
c,J licial credit with the Treasurer of the United States as provided by Sec
tions 5 and 6 of this article.
Sec, 4. The Fiscal Agent shall prepare a quarterly account in
such form as shall be approved by the Comptroller General of the United
States and, after approval by the Governor, such quarterly account shall be
submitted to tne General Accounting Office. Such account shall cover pay
ments of expenses and other disbursements made by both the Fiscal Agent and
the Deputy Fiscal Agent.
Sec. 5. The Governor shall, when necessary, make requisition on
the Treasurer of the United States for the advance of such sums to the Fiscal
Agent as may be necessary from the Federal Reserve Board fund.
Sec. 6. The Deputy Fiscal Agent in making disbursements of the
Board upon proper vouchers out of the moneys advanced to the Fiscal Agent
shall sign against funds to the official credit of the Fiscal Agent with
tne Treasurer of the United States
£he name of the Fiscal Agent by him
self as Deputy Fiscal Agent.
Article IX.
Gold Settlement Fund.
and
Federal Reserve Agents* Fund.
All funds deposited by or for account of the respective Federal
Reserve Agents in the Federal Reserve Agents1 fund of the Federal Reserve
Board and all funds deposited by or for account of the respective Federal
Reserve Banks in the Gold Settlement Fund of the Federal Reserve Board
shall be held on deposit with the Treasurer of the United States and shall
be subject to withdrawal only by chock of the Federal Reserve Board signed
by the Secretary or an Assistant Secretary and countersigned by the Governor
or acting executive officer of the Board.
Article X.
Requisition for Delivery.
of
F ederal Reserve STotes
Requisitions upon the Comptroller of the Currency for the delivery
-6-
X-4678
(Superseding X-4545)
of Federal Reserve notes to the respective Federal Reserve Agents shall
he made oy the Secretary or nssistant Secretary in response only to re
quests made by the Federal Reserve Agents to the Board'for such notes,
i.oe Secretary or Assistant Secretary shall submit daily for approval to
the Governor or acting executive officer of the Board a schedule showing
tne amount oi each denomination of Federal Reserve Notes requisitioned by
aim for the account of each Federal Reserve Agent.
Article XI.
The Seal.
The following is an impression of the seal adopted by the Board.
SEAL.
Article X U .
Counsel.
Sec. 1. The Board shall appoint a General Counsel whose duty
it shall he to advise with the Board, or any member thereof, as to such
legal questions as may arise in the conduct of its business; to prepare,
at the Board’s request opinions, regulations, rulings, forms and other legal
papers and to perform generally such legal services as he may be called upon
by the Board to perform.
Sec. 2. Subject to the direction of the Governor, the General
Counsel shall have authority to correspond directly with the Counsel of
the various Federal Reserve Banks and to request their opinions as to the
interpretation of the local laws of the States included in their respective
i;ederal Reserve Districts. Copies of all such correspondence shall be furn
ished to the Board for its information.
Sec. 3. Whenever it may be deemed advisable, the Board may ap
point one or more Associate or Assistant Counsel, or ono or more Assistants
to Counsel* The duty of such Associate or Assistant Counsel shall be to
assist the General Counsel in the performance of his duties and to perform
the duty of the General Counsel in his absence. The duty of such Assistant
to Counsel or Assistants to Counsel shall be to assist the General Counsel
in the performance of his duties.
Sec. 4. The Board may appoint $rom time to time Consulting Counsel,
who may be attorneys at law engaged in outsjLde practice.
-
7
-
X -4 6 7 8
(Superseding X-4545
Article Xlll.
Meetings.
Sec. 1. Five members of the Board shall constitute a quorum for
the transaction of business.
Sec. 2. Stated meetings of the Board shall be held on such days
of the week and at such hours as the Board by a majority vote may fix from
time to time.^ One meeting day each week shall be set apart for consideration
oi tne following matters, advance notice of not less than two days being
sent to members of important questions to be taken up at the meeting:
Discount and open market matters;
Approval of expenditures and salaries;
Establishment of Federal Reserve Branches,
Agencies, Currency Stations;
Permission for establishment of member
bank branches;
••
Amendment of Board*s rules and regulations; 1 ^
Xew policies or changes of policy;
Such other major matters as may be reserved
for consideration at the weekly meeting.
^
i
^ Sec. 3. Special meetings of the 3oard may be called by the Chair
man or Governor or upon the written request of three members of the Board.
Sec. 4. At all meetings of the Board the following shall be the
order of business:
(1) Reading or inspection of the Minutes of the last
regular meeting and Minutes of meetings of the
Executive Committee.
(2) Report of the Governor.
(3) Report of the Secretary.
(4) Reports of the committees or members on assigned
business.
(5) Unfinished business.
(6) New business.
Sec. 5. No vote shall be taken or motion made by the Board at a
meeting or conference when others than the members of the Board and its Sec
retarial staff are present.
Article XIV.
#
Absences.
. Sec*
Absences of appointive members of the Board shall as far
as practicable be arranged so as not to interfere with the expeditious con
duct of the Board’s business in Washington.
X-467S
(Superseding X-45 5)
Article XV.
1 ^
» b3 i
-te
the
its .
same ^
give in
missal.
Board, or
e Sec
and G-cneral Qounsol,
c
-isthe
aor,
nor
ninutes
■r
•u porm
n of
3o\nt 3.
sis u.nit
oermitl
. any of the '
2.
ITc
. nts shal.
w- «mie , the press exo*
the
policy or des eruptive of its a vtion except as author.
vr*
,210 Board. Such statements shall he issued only in wr
and whe
athorised and approved they shall he issued through the
the &
d t or such other officer or member of the Board as may he
v ical'
mated.. While each member of the Eoard must determine for himself
t\„
ty or necessity of expressing publicly his individual opinion on
ar>1, members shall not quote publicly the opinion of other members
®
which have not formally been passed upon by the Board.
‘ec. 3. There shall be published monthly, a bulletin to be kswjwn ’
as "The Federal Reserve Bulletin", which shall be the official periodical
ortun or publication of the Federal Reserve Board.
Sec. 4. No resolutions of a personal character, except upon the
death of a member of the Federal Reserve Board while serving as such, shall
appear in any publication of"the Federal Reserve Bdhru.
Article XVI.
Amendments.
These by-laws may bo[amended at any regular meeting of the Board
majority vote of.the entire Board, provided that, a copy of such amend
s slia.ll have been delivered to each member at least seven davj prior to
5& meeting.
@FedFRASER