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FEDERAL RESERVE BOARD WASHINGTON July 29, 1924. St. 4170. address official correspondence t o the federal reserve board SUBJECT: Committee on Salaries, Expenditures and E f f i c i e n c y . Dear S i r : This l e t t e r i s t o advise you of a change i n the organization of the Board's committees whereby the Committee cn Econcny and Efficiency and the Committee cn S a l a r i e s and Expenditures have been consolidated i n t o one committee to be known as the Ccnmittee on S a l a r i e s , Expenditures and E f f i c i e n c y . This committee w i l l h e r e a f t e r deal with a l l matters formerly handled by the two committees. The new,committee i s composed of two members, Mr. Geo. R. James, and Mr. E. H. Cunningham. Mr. E. 1 . Smead of the Board ' s s t a f f has been designated, as secretary of the committee. In f u r t h e r i n g i t s work the committee w i l l in general be guided Ty t h e following: 1 - The individual boards of d i r e c t o r s of the several banks are responsible f o r the proper, economical, e f f i c i e n t and s a f e operation of t h e i r respective banks. I t i s not the purpose of the Board or i t s committee t o in any sense d i r e c t the operation of any bank, hit r a t h e r t o look d i r e c t l y to the d i r e c t o r s of the banks f o r s a t i s f a c t o r y r e s u l t s and you are, t h e r e f o r e , requested t o read t h i s ccmmunicaticn, and a l l others that may be subsequently forwarded cn the same subject, t o the d i r e c t o r s of your bank. 2 - I t i s t h e purpose of t h e Board, working through i t s committee, t o keep i t s e l f informed so f a r as possible as t o the comp a r a t i v e e f f i c i e n c y of operation of t h e banks and to make available t o the banks such information as i t has which w i l l be h e l p f u l t o them in t h i s regard. While i t i s appreciated t h a t the quarterly exhibits- of operating expenses do not i n many cases a f f o r d a t r u e basis of comparison between the banks and t h a t , t h e r e f o r e , the d i f ferences in the cost f i g u r e s as indicated ly these e x h i b i t s do not necessarily indicate t h e comparative e f f i c i e n c y of operations, the Board nevertheless believes that f u r t h e r e f f o r t should be made to reconcile these f i g u r e s . 357 S t . 4170. 2 3 - The Board i s intending to ask the next Governors' Conference' t o give serious consideration t o the matter of operating expenses and t o i*eq,uest t h a t the governors adopt at t h a t conference some plan f o r d e f i n i t e l y dealing with the subject of expenses with a view to securing the g r e a t e s t possible e f f i c i e n c y in the operation of a l l banks. Any such plan should, of course, make i t possible f o r the banks t o benefit from the experience of each other, and f o r t h i s reason i t might well include the carrying can of some portion of t h i s work through a committee of operating o f f i c e r s t o be nameet by the governors. 4 - While in the opinion of the Board the economical operation of the banks i s e s s e n t i a l l y an individual bank problem, the Board i s nevertheless charged by law with c e r t a i n d u t i e s of supervision and regulation, and i t believes i t t o be i t s duty t o see t h a t every bank is run in the most economical manner possible and t h a t the operations of the several banks are reasonably comparable. This l e t t e r is sent you at t h i s time in order t h a t you may, between now and the next Governors 1 Conference, be giving the matter consideration so that the conference may be able to formulate d e f i n i t e plans f o r a constructive program of g r e a t e r e con any and e f f i c i e n c y in the operation of the banks. Yours very t r u l y , Geo, R. Jarrjes, Chairman, Committee on S a l a r i e s , Expend i t u r e s and E f f i c i e n c y . LETTER TO GOVERNOR OF EACH FEDERAL RESERVE BANK.
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