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FEDERAL RESERVE BOARD
Cctcl'Dl..
WASHINGTON
ADDRESS OFFICIAL CORRESPONDENCE TO
THE FEDERAL RESERVE soARD
StJSJECIJ.':
6~
192~).
St. 4672
F'.L.'1ct ic~1al :S:-:;t:Or. so ReT ::Jrt s.
D3ar Sir:
.?rom tir-u:: to ti;y; in recen"~ rr.:.:r.t::s ::_nfcra.:t} TLf:_]:_,s':;ic1s :1a\'3 t3en
rr.-a.J ·3 ·by- ~tar~ c us b;3_.nk cf·ficia.l s re gs_r -~ii Y'!.:j t .d.e q1; 9..l"t. s .;._..l;f :-~~1ct i.o::.c.1l :; XJ ar1 se
re:;or""s, f'o::"m :S, ~,n,~ in orJer tl::r::; tne -.vb:He ql:es+i.:n ::,:'::~1" cs thcr'')t-g~'lly
C.OL.siJer0d the Bo:..trd recentl:;- deci6?-d to ap~~-,:Jir:t u. cc:Y~nj:ttce c:f.' rs-;_J:";SS(Jntati-v""83 cf t"he !1ac;_r·o:.-- ·oe..r~r~s t-~ lr.::-.·?t v."i"~.}~rne:r;b~Srs 0-f t~s 13,.:...a.r~~:'s st.:1.:f'f tore--
'riev.·· tLs .i\.n1ctic:1al e::,ens--3 r3ror~-s 2r1d to rr~~r:e sue~ r-.~cc:-~.::~ . e:Ida.ticn-3 in
r-s f~. . r '1 t ~sr-? to t:..s it L·~i ('(:-:t see fit.
jr:1i s c.c:~n: it te 3 rr~·J t :1.t ~he: :-::c arC i s
OI~lc-:·s ~n Scpte·:r~oer 2.3 an~ 23, -8-rid o..:ftar ca.r.J=flllJ';t· re-.,:i,:::.~:ir~g ti1:3 r2J.<::rts
crnJ tT:J:- :.... es·-.-~lt·.::.; a.-:.:co~-rrplist-30 ti1rc:>uc:t t~1~r. it r,~ac:r~ed tDe ur:a:..'l~uic.r'J.S ccn-clc:.sion ;;Y,a~ t::.c ::·c--pJrt;; s::1o1.::.l<'l 'Je ~oLtiLued in a:_:-::;rcxi:,at lv th::ir rr3se::1t
:f:)IL~ b1.~ t t.l1a t t t.e .'l c Jl~.l d 1J e ?;o~·E.\V~.s t f~ i -~-; 1 i:f it:; ,1 ru~ c~ re ~-~-Ll..C8 ..-j in. size , e..:: so
t~1at ec;_2allv gocd r::s:.c.lt: CC'c:lr1 'o3 o·bt9inec1 b;.· s·:lm,ittil~£ ,~1~'8L sc;riarmuall_y insteG.c1 o:· ·T~art,'3r~~·,:.
J~l1e corr~~·;J_t'...;ee'::: ~e-p-:~rt, 2. cC~);-T o::.L. . 'N!1ic~1. is
enclo ::;ed, hs,s he en a-:c;>,~~::>c<'E:Jd c'.r t.~AJ.·..:~ So:-r~..i, ;_~.no re -,,...i sJ :_"i fcr~Ds _S for ~J.ss bcgirlllirlg 1:ext ;l'Jar "v\·i:_l 31lcrt2.:l t~-3 rrj_r_td~ 8.rj [:._ S'lJ!,;:~J:v fur!:.is'!-1ed tv 6ac1.i.
Fe ~:e ral res,:; rv·:; 1'- 'ink,
b:y t.i1~~ d-""'r:::r:itt~~;:; 3Jj.Cl .:.1r·':::ccv~r lJ:t
eo::1so:id::t"tiJr1 ir1tn c·:1L-:: i""Ge~li cf the
pr!?sent t.l-~~~5--fcJ..:-1 clas~lTice.tic.n of errlT::lo;·_-,-:-~es! 3a.l.J-ri~s, i.?., a.£:Sif:nsd
st:lf'f, eL:ploye·?s loa>J.eci or 0orrc'>vec1 (Dr. o,~ G:·.), an" ::xtl"D. help; the acnso :_ide.. t ion ·Jf tr in t i:1 s .·mG st 3.1: i or1G r_y ·.vi t h c. tnt~ r 211p:·l. i~" s, an~-.1 o:{=" t .:,; le~!iotle
with telecr::.rh; a1cl the elir i:",;1tion ryf scps,rat-' :i:ig-t"C'3·~ fo:r· c~::rt::1in i t·"nns
cf ex_oer.. sE: ·v~it:erevc;:r tt.~ c~L.OLcrl~~~ involve-1 arG rt::-1-::t-~iV;::ly· s·:T:J..ll, ~f\~;r ;~Xa:~~pl:J
c:1 tb.e :1e<..v fern~ t-h0 itGrcs of ·pcstl?2, sten'lgr:-.:.};_,·f:i~:~, ~-;t,:_:;:;::...i._;~t.irJ.f, r:-y~;;rti.n:e
an, ~Ptpp3 r rr~cn·3J'"', \i'i 1: i~:--~ prac t icL~~ll~l all ~s.s _ : s l)e i :~c l u6 _j d \Vi t !.1 "All
ot:-~er e:;x:,;sr-Jc:: s. 11
il:c:r.:- will, ~J.C'YJV3l", oe no cha:1gEO ire tL.3 to ca.l a.noLnt. of
8X})6D:.;es reporte0 i~cr a·:1:r 9Xf'3!1£,-=:; 'C.YlJ.t, Z:.rJ.d t.c.r3 =fi[.~..lr-;:;,a \A;i}l tt.. c;rc~for~ ·te
co:; ..rar2ble with t21osa r3ncrt8:1 at :r::re:.ent,
tr1e
The
eho.~e:~-cs
in forr.:· :E:
Bo.s.r.~
cor. sist
r.:.rir-~ci;:.·all~/
recol:.:·~;en3e,~
cf.'
tl~e
Vva: t<J r L. E:'l c)y 4
Se ._;ret.. r .'.~,
Enclost:.re ..
IEr'11ER TO CHAIB',:!AN OF LAGl; FEDE2AL .R!L.IFR7B B,.,N-~
CO?I:E;S TO GOVERNCRS ME 'IG c::ilT:::.;,.lKT C;? P~1)C~~DL:,F
:X:;;v::aT~EES
t
..
REPORT TO FE.DERAIJ RESF.:LVE BOLFC 0!.' s-c.:::cLiL CO!vll.iiT='EE o:ncE:::tNING
:E1TNGTIGNXL ~'=·~p·:ns:~ FE;:·O£i..t'f!.
At the request o::? tl1P 7ec'le!''.1.l Roserve Boa::--cl th-3 following met in Washington
September 25 an<'! 2g, 1925 as a special cOimnit.tae to consider what changes if <:m"Jr
\Vould Ce desira.ble in Forrn ~' Fu,.~.Jtiong,l ex:-r_·:er1se r""'nor.f.·
c,;,
v.
Mr. E. L. Smead and Mr. J. F. Herson
~.1r. M. J. Fleming of CleveJanC!
Mr. J. S. Walden cf Ricbmon0
J,!r, w. G. McCreac1y of Phi1adslp~ia
&·ir.· 1. R, Rour:cls of Ne•.v Y.Jrk
ni.~:ressnting ths
Fflderal Reserve Boaro
A:::'ter a lengthy discussion of t:-ne value and usa o.f the Fonr1 E functional
expense reports a:1c'l of the exhibit prepared by the
:fl()
clers.l B.eser-;re Bo arcl q_uarter-
ly it was the opinion of the con..'1;ittee: that w'nib such reports and G:x:hi'bi·lis are
of doubtful vah...a as a basis fJr comparing expen.acs ar. . d o_?arating efficiency at
the S•3Veral ba.'1.ks, it was nevertheless i'el t by all present th<:-:.t these reports
have made a valuable contribution. to th8 progran.; :for greater economy a..'lcl ef'ficiency in the operation of the banks and i t was tl:J view that the reports should bo
continued.
In this connection it was recognized that the repcrt3 give valuable
inf'orma.tion with respect to th2 C()St of op0rating the variovs functions and
services conducted by the Federal Reserve
S~rstsrr; en~iroly
a:p.:1rt i·rmn any vr.clue
they r:;s,y have as a basis for the corrrpe,rison o:f 3xren:ss by th? bcm.ic:l.
It waa
felt, however, that the report !'I could be son.ewhat sin,pl:ifiud .:m c1 recJuc0cl in <;iZ;e.
Tha committee mac.'le n. detailed
stuc'l~r
o:£' tl1e report, considering each 1rr.it
separately, with a view to eliminating a nur:b •.;r of '.;he c'le t-:dlf•d it0r::s of' expenses
wher'2l the
~r:ounts
alloc::tteo ware small.
It also recorrm.t..:ndecl the consolidation
of a few units with a view to rech:cing the nurriber c::' s:1cl:". ur.its.
Such changes as
have bean me.Cle will not require cha.nges in tho rr:mu::tl of' instru.ctions ancl will
not affect the comparison of the figures o:f futur,:;: psricos with those past.
s-~.
4672
• •
2
de :finite recornn.snoa t ions,
1. That t~e :-ep0rt hertS2.fter oe I rerared sem.i-a..'1nually instead
of quarterly,
2. That in preparine; tl:e exhibit o£' tl1esJ reports tte section at
ths fcot ot' each p3ge in which it nes been t:::e practice to
show the :f:igu.res of ear:-.h head office ovmbinecJ with its branches
"he eliminate c1 as it was f:l t th::1t these filjclre s W9rc o:f srr:al1
vah1e corr:pe.rJcl '.vith the work involv8ci in thair pra:'")aration,
It wes 8.lsc suggested that occasionally tLere be sc;.bmittec'l as a s'J.py.>lemer.tal report a
mer<:~
c'letaLlecl st:.1,teL:ent 1::1 comr;arable f'orm of the SY.penses
of some ono unit or 1i.:nctior:. ir..
whicr~
cc:r,,·r:::rative figures should be of value.
L •. S:r:eari
Herson
:vi. J. Flcrr:i r.g
W. G. McCreoc1y
t. R. Rounc1s
c
Walc1en, Jr'
J. "-'•
E
J,
"'
.L.
Corrn:i ttee,
St. l-/672.
@FedFRASER