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217
BOARD OF G O V E R N O R S
OF THE
FEDERAL RESERVE SYSTEM
%
is
X-9732
WAS HIN GTDN
ADDRESS
OFFICIAL C O R R E S P O N D E N C E
TO THE
November 7, 1936
Dear Sir:
There is inclosed, for your information,
a copy of a letter, dated November 7, 1935, to
President Harrison, Chairman of the Presidents'
Conference, together with the inclosures referred
to therein, with respect to the fees and allowances paid to directors, and to the frequency of
meetings of Boards of Directors, Executive Committees, Discount Committees, and other committees of Federal Reserve banks.
Very truly yours,
Chester Morrill,
Secretary.
Inclosures
TO ALL PRESIDENTS
BOARD
X-9752-a
COPY
November 7, 3.956
Mr. George L. Harrison, Chairman,
Presidents' Conference,
c/o Federal Reserve Bank of New York,
New York, New York.
Dear Mr. Harrison:
Reference is made to the Board's letter of June 9, 1936,
(X-9614), requesting information with respect to fees, compensation and traveling allowances paid to directors of the Federal
Reserve banks and branches for attending board meetings, meetings of the executive and discount committees, and other meetings.
Attached are two memoranda submitted by the Chief of the
Board's Division, of Bank Operations with respect to fees and
allowances paid to directors and to the frequency of meetings
of boards of directors, executive committees, discount committees,
and other committees. Accompanying the memorandum on fees and
allowances are two tables compiled from the replies to the Board's
letter, X-9614, and accompanying the other memorandum is a table
on frequency of meetings, which is based on such information as is
available in the Board1a files. In tabulating the information on
these subjects it was not feasible to indicate fully by footnote
or otherwise the practice at each Federal Reserve bank and branch
and, accordingly, the information contained in these tables indicates only in general the practice followed at a given bank or
branch.
The Board will appreciate it if you will place the subjects
dealt with in these memoranda on the program for discussion at the
next Presidents' Conference.
Copies of this letter and the memoranda referred to • bove are
being sent to the Presidents of all Federal Reserve bcnks.
Very truly yours,
(Signed)
Chester Morrill
Chester Morrill,
Secretary.
Inclosures.
X-9752-b
Board of Governors
Compensation and travelingexpenses of Directors of Federal Reserve banks and
branches.
Mr. Smead
Replies to the Board's letter of June 9, 1956, (X-9614), regarding
fees and traveling expenses allowed directors for attendance at meetings
of the Board of Directors and of committees appointed by the Board have
been received from all of the Federal Reserve banks.
Replies to the
questionnaire sent with the letter have been tabulated and are summarised
in the two tables attached.
Fees Paid (Table I).
All of the head offices pay £20 as the fee
for attendance at board of directors' meetings.
Boston, New York, Phila-
delphia, Cleveland, and San Francisco pay a like amount for attendance
at meetings of executive and other committees, while the remaining seven
banks pay $10 for committee meetings.
St. Louis reported that no fee was
paid for attendance at committee meetings other than the executive committee.
Six of the head offices indicated that the specified foe for meetings
is paid even when two or more meetings are held on the same day, although
at two of these (Boston and San Fr.- ncisco)the full fee is not paid for
the additional meeting or meetings.
The Dallas bank expressed the opinion
that only one fee, the highest, nhould be paid directors attending two
or more meetings on the same day.
Fourteen branches pay CIO and eleven pay $20 for attendance at
meetings of the board of directors.
Fees ranging from $2.50 to $20 are
paid for attendance at committee meetings.
220
-2-
X-97S2-b
Per Diem Allowance to Directors Residing over 50 miles from Meeting Place (Table I).
The Board's letter of December 21, 1914, with
respect to fees, compensation and traveling expenses of directors, authorized the payment to directors living more than 50 miles from the Federal
Reserve banks of "$10.00 per day for every day they are away from home
on account of attendance, from the time they start until the time they
get back".
The letter also stated that "this makes a £10.00 per day com-
pensation in addition to the director's fee".
Table I shows that the per diem allowance at all of the head offices
is $10 except at San Francisco, where it is $15 and where the allowance is
based on a distance of 25 miles rather than 50.
However, at San Francisco,
and also at Dallas, no other payment is made for subsistence expenses.
At three head offices the per diem allowance is paid only for attendance
at board of directors' meetings and not for committee meetings.
At seven
of the head offices the per diem allowance is paid for parts of days
other than the meeting day utilized in attending meetings.
* Per diem allowances are paid at only eleven of the branches, and
at three of these such allowance is not paid for the day of the meeting.
Subsistence.
(Table II).
Directors are given lunch at the ex-
pense of the bank at four of the branches and at all of the head offices
except Boston, Philadelphia and San Frcncisco.
Non-resident directors
residing within 50 miles of the meeting place receive an allowance or
reimbursement for subsistence at two head offices and at eleven branches.
At all head offices, except Dallas, and at all branches, non-resident directors residing beyond 50 miles from the meeting place are given an
X-9732-b
allowance or are reimbursed for subsistence.
The exception at Dallas
apparently arises from the position taken in the Board's letter of April 25,
1929, to Chairman V.!alsh, in which it v,ras stated that the f'10 per diem
allowance authorized in the Bocrd's letter of December 21, 1914, as
referred to above, is in lieu of reimbursement for actual subsistence
expenses.
Of the thirteen head offices and branches that pay an "allowance"
to out-of-tov,n directors for subsistence expenses in lieu of reimbursement for such expenses actually incurred, the replies of six banks indicate that such allowances "approximate" actual expenses, in some cases
being based on average expenditures incurred by the directors.
The re-
maining bcnks that pay allowances in lieu of actual expenses report
varying amounts paid as follows:
New York, approximately $5; Atlanta,
hotel $5, meals $2 each (other than luncheon furnished by bank), and. incidentals $5} Kansas City, Denver, Oklahoma City, and Omaha, $10 per
round trip; and Buffalo, $10 when director is absent over night from
place of residence.
Transportation.
(Table II).
At six of the head offices and at
three branches non-resident directors residing within 50 miles of the
place of meeting are not paid for their transportation expenses.
At all
of the head offices and branches non-resident directors residing beyond
50 miles of the meeting place receive an allowance for or a reimbursement of transportation expense.
Comments of Reserve Banks Regarding Compensating: Directors.
The
Board's letter transmitting the questionnaire asked for suggestions with
221
respect to the method of compensating directors, particularly as to
whether the 50 mile radius mentioned in the Board's letter of December
21, 1914, was considered a satisfactory basis for per diem allowances.
The New York, Philadelphia, Richmond, Chicago, and St. Louis banks indicated that the 50 mile basis was satisfactory.
made no. comment in regard thereto.
Atlanta and Minneapolis
Boston stated that if the purpose of
the per diem allowance was to provide more compensation for a director
residing at a distance on the theory that it takes more time from his
ordinary activities, it might be simpler
to base the allowance on time
consumed, without regard to distance, and allow such per diem for any substantial part of a business day, such as one-half or more.
The Boston
letter also expressed the opinion that some measure of discretion should
be left to the Reserve bank in applying the per diem basis or determining allowances paid directors.
Cleveland suggested that the per diem
allowance apply equally to all directors.
Kansas City suggested that
some flexibility be permitted and that determination of the amount of
per diem and expense allowances paid directors who live within a fifty
mile radius be left to the Reserve bank since "in occasional instances
there are border line cases to which...a fixed limitation of 50 miles
should not apply".
Dallas favors discontinuing the per diem allowance
and substituting reimbursement of "actual traveling and living expenses
incurred" by directors from the time of leaving their place of residence
for the meeting until their return.
San Francisco stated that normally
50 miles would be a satisfactory figure but that the particular situation
might justify consideration of a lesser distance.
The San Francisco
-5-
X-9732-b
bank, with the approval of the Board of Governors, pays a per diem
allowance to directors situated more than 25 miles from the Reserve
bank, which allowance also covers subsistence.
Richmond suggested
that if any change is made in the matter of per diem allowances consideration might be given to basing the radius on the director's place
of business rather than his residence.
Miscellaneous Questions Raised by Reserve Banks.
suggestions or comments were made.
Certain other
Boston referred to the fact that the
Chairman was no longer a salaried director and will now be paid for directors' meetings and executive and State bank committee meetings and
should be paid also for other meetings, including consultations with the
officers.
At present the Boston bank pays a fee for attendance at meet-
ings of the board of directors, the executive committee and the Committee
on the Admission of State Banks and Trust Companies but not for meetings
of other standing committees or special committees.
raised whether the Board of Governors would
The question was
have any objection to the
Boston bank's establishing the same fees and allowances for all other committees as for the executive committee.
The New York bank requested that
the Board of Governors give consideration to the possibility of proposing
that the law be amended so as to permit payment of a fee to the members
of the Industrial Advisory Committee.
Philadelphia suggested that where
one of more days intervene between original and adjourned meetings, a
director should be entitled to the regular fee for each intervening day
when circumstances render it impracticable for him to make the trip to
and from his home in the interim.
X-9732-b
224
TABLE I.
FEES PAID FOR ATTENDANCE AT MEETINGS OF BOARD OF DIRECTORS AND
COMMITTEES AT FEDERAL RESERVE BANKS AND BRANCHES
(Source: Replies to Board's letter X-9614 of June 9, 1936)
Meetings of
: ExecBoard
: utive
of
: ComDirectors mittee
i
HEAD OFFICES
Boston
New York
Philadelphia
Cleveland
$20
20
20
20
$20 a/
20
20
20
: Per diem allowance to direcIs fee paid : tors residing beyond 50
for more : miles from meeting
2
than one i
:Paid for day:Paid if
•
meeting if {Amount : or days of :away from
: Other held on same I
: meeting? shome part
:
day?
;of additional day?
:
:
$20 b/
20 1
20
20
yes
yes
no d/
no
yes
yes
yes
yes
c/
yes
no
no
10 e/
10 e/
10
10
yes e/
yes e/
yes
yes
?
yes
f/
yes
$10
10
10
10
Richmond
Atlanta
Chicago
St. Louis
20
20
20
20
10
10
10
10
Minneapolis
Kansas City
Dallas
San Francisco.
20
20
20
20
10
10
10
20
10
10
10
20
no
yes
yes
yes i/
10 e/
10
10 h/
is y
yes e/
yes
yes
yes
yes
yes g/
yes
yes
BRANCHES
Buffalo
20
20
20
yes
none
— —
—
Cincinnati
Pittsburgh
10
10
—
no
no
none
none
—
—
Baltimore
Charlotte
10
10
no
no
10 e/
10 e/
no
no
Birmingham
Jacksonville
Nashville
New Orleans
10
10
10
20
10 k/
—
no
no
no
no
none
none
none
none
Detroit
10
—
10
no
none
Little Rock
Louisville
Memphis
10
10
10
10 1/
10 1/
10 1/
T"
.
no
no
no
none
none
none
—
—
Helena
20
7.50
?
10 e/
no
yes
Denver
Oklahoma City
Omaha
20
20
20
10 k/
10 k/
10 k/
yes
yes
yes
10
10
10
yes
yes
yes
yes gj
yes jg/
yes g/
El Paso
Houston
San Antonio
10
10
10
2.50
2.50
2.50
no
no
no
none
none
none
— -
Los Angeles
Portland
Salt Lake City
Seattle
Spokane
20
20
20
20
20
10
10
10
no fee
rnmmmim
5
5
— —
— —
— —
— —
20
20
20
20
20
k/
k/
k/
k/
k/
. ™
2.50
2.50
2.50
20
20
20
20
20
bJ One-half amount stated if meeting on
same day as meeting of Board of Directors.
b/ Meeting of Committee on Admission of
State Banks and Trust Companies
only.
One-half amount stated if meeting on
same day as meeting of Board of Directors or Executive Committee.
c/ No present case. Paid in former
years.
d/ Believes payment should be made.
no
no
yes
, no
yes
yes
yes
yes
yes
i/
i/
i/
i/
i/
15 y
15 y
• 15 y
15 y
is y
V
V
—
—
__
m
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
e/ Board of Directors' meetings only,
f/ Paid for each full day's absence from
home. Reactions! part of day isrotconsidered.
gj If all or substantially all of working
day.
h/ Includes subsistence.
i/ Maximum of $30.
X/ Place of business 25 miles or more from
place of meeting. Includes subsistence.
k/ Discount committee*
j/ Credit committee.
m/ Paid for each additional day absent
from home.
225
X-9752-b
TABLE II.
SUBSISTENCE AND TRANSPORTATION EXPENSES OR ALLOWANCES PAID
DIRECTORS AT FEDERAL RESERVE BANKS AND BRANCHES
(Source; Replies to Board's letter X-9614 of June 9, 1956)
Subsistence
Non-resiResident
dents resiDirectors ding within
50 miles
Non-residents residing beyond
50 miles
Transportation
Non-resiNon-residents residents residing beyond
ding within
50 miles
50 miles
Boston
New York
Philadelphia
Cleveland
none
lunch
none
lunch
allowance
lunch
none
lunch
allowance
allowance
allowance
allowance
allowance
none
none
none
allowance
allowance
allowance
allowance
Richmond
Atlanta
Chicago
St. Louis
lunch
lunch
lunch
lunch
lunch
allowance
lunch
a/
actual
allowance
actual
actual
none
allowance
none
a/
actual
allowance
actual
actual
Minneapolis
Kansas City
Dallas
San Francisco
lunch
lunch
lunch
none
lunch
sJ
lunch
allowance
allowance
none
a/
actual
actual
allowance
actual
actual
Buffalo
lunch
lunch
allowance §/ allowance
Cincinnati
Pittsburgh
none
none
none
none
allowance
allowance
none
none
allowance
allowance
Baltimore
Charlotte
lunch
none
actual
actual
actual
actual
actual
actual
Birmingham
Jaeksonville
Nashville
New Orleans
none
none
none
none
actual
actual
actual
actual
actual
actual
actual
actual
actual
actual
actual
actual
actual
actual
actual
actual
Detroit
none
none
actual
none
actual
Little Rock
Louisville
Memphis
none
none
none
actual
actual
actual
actual
actual
actual
actual
actual
actual
actual
actual
actual
?
actual
actual
actual
actual
HEAD UFFICES
sJ
£/
BRANCHES
Helena
Denver
Oklahoma City
Omaha
lunch
none
lunch
El Paso
Houston
San Antonio
none
none
none
Los Angeles
Portland
Salt Lake City
Seattle
Spokane
none
none
none
none
none
i
d/
i/
1
111
i
actual
actual
actual
allowance
allowance
allowance
actual
actual
actual
actual
actual
actual
allowance
actual
actual
actual
actual f/
actual
actual
actual
actual
actual
actual
actual
No such directors
e/ Expense reimbursed if warranted
Per diem allowance includes subsistence
by circumstances.
Per diem allowance paid directors whose
fj Allowance substituted in some
place of business is beyond 25 miles
cases when automobile is used.
includes subsistence.
g/ No instances have arisen.
If director is absent from home over night.
Bank would honor any such request.
X-9732-c
OFFICE CORRESPONDENCE
TO
Board of Governors
FROM
Mr. Smead
SUBJECT:
Frequency of meetings of
board of directors and
committees at Federal Reserve banks and branches.
The attached statement shows the frequency of meetings of the
boards of directors and the executive committees (discount or credit
committee at some of the branches) at the Federal Reserve banks and
branches.
The statement was compiled from the latest available in-
formation in the Board's files and therefore may not, in all cases,
be up to date.
The by-laws of a number of banks are in process of
revision and this, of course, may change the composition of committees and the frequency of meetings thereof.
Board of Directors.
Head Offices.
The Federal Reserve banks may be placed in three
groups as regards the frequency of regular meetings of the boards of
directors.
At the Federal Reserve Bank of New York meetings are
weekly; at the Federal Reserve Banks of Boston, Philadelphia, St.
Louis, Kansas City and San Francisco they are bi-weekly or semimonthly; and at the Federal Reserve Banks of Cleveland, Richmond,
Atlanta, Chicago, Minneapolis and Dallas they are held either monthly or every four weeks.
Branches.
The board of directors meets monthly at every branch.
Executive Committee.
Head Offices.
The directors of the New York bank voted on
X-9732-c
-2-
September 12, 1935 thet meetings of the executive committee be
omitted until the necessity therefore arose.
meets weekly at this bank.
The board of directors
At the Federal Reserve Banks of Boston
and Richmond meetings of the executive committee are held upon call.
Only one meeting of the executive committee at the Boston bank was
held between June 29, 1955 and July 22, 1936.
At Cleveland and
Minneapolis, meetings are held every 14 days, and semi-monthly meetings are held at Dallas.
At Philadelphia meetings are held on the
2nd, 4th and 5th Wednesdays of each month.
Weekly meetings are held
at Chicago and San Francisco, semi-weekly meetings are held, at
Atlanta, and meetings are held three times a
week at St. Louis.
Daily meetings are held at Kansas City.
Branches.
Ten of the branches, Cincinnati, Pittsburgh, Birming-
ham, Jacksonville, Nashville, Los Angeles, Portland, Salt Lake City,
Seattle and Spokane, have no committees.
At 11 of the branches,
Baltimore, Charlotte, New Orleans, Detroit, Little Rock, Louisville,
Memphis, Helena, El Paso, Houston and San Antonio, the executive
committee (or discount or credit committee) meets only on call.
It
is noted in this connection that no meetings of the executive committee have been called at Charlotte since the opening of the branch.
Semi-weekly meetings of the executive committee are held at the
Buffalo branch.
While daily meetings of the discount committee are
held at the Denver, Oklahoma City and Omaha branches, the director
on the committee who receives an attendance fee is not called unless
there are offerings to be considered.
328
-3-
X-3752-c
Discount Committees.
At the present time, the by-laws of 6 banks, Cleveland, Richmond,
Atlanta, Chicago, Minneapolis and Dallas provide for a Discount Committee and a letter dated March 4, 1956 from Mr. Case states that the
New York bank has a Discount Committee.
The Discount Committees at
the Federal Reserve Banks of New York, Cleveland, and Dallas are composed entirely of officers.
At the Federal Reserve Bank of Richmond, the Discount Committee
is composed of the President, Federal Reserve Agent (or, in his absence, an Assistant Federal Reserve Agent designated by him), and one
or more executive officers appointed by the President.
the Committee constitutes a quorum.
A majority of
The Committee meets on call.
The Discount Committee at Atlanta, which includes one director who
receives an attendance fee, meets daily.
The by-laws of the Federal Reserve Bank of Chicago provide for
a Discount Committee composed of 5 members (directors or executive
officers), which meets in the interim between Executive Committee
meetings.
It is understood that the Discount Committee at the Federal Reserve Bank of Minneapolis, which includes one Class "A" or "B" director, meets daily.
According to the by-laws the Discount Committee
has power to fix the time and place of holding its meetings and has
authority to pass on discounts, to buy and sell securities, and "in
general, to conduct business of the bank as allowed by law subject
229
-4-
X-9732-C
to the supervision and control of the Board of Directors and the
Executive Committee".
Other Committees.
From time to time the boards of directors of various banks appoint special committees such as a "Building Committee", and it is
understood that some banks have other committees, such as an "Audit
Committee" and a "Committee on the Welfare of the Staff11 which meet
at infrequent intervals.
Complete information regarding such com-
mittees is not available at the Board's offices.
230
X-9732-c
MEETINGS OF BOARD OF DIRECTORS OF FEDERAL RESERVE B A M S AND BRANCHES
AND OF THE EXECUTIVE COMMITTEE
(NOTE:
This statement was compiled from, latest available information
contained in by-laws and reportH of examination. A number of
the by-laws are in process of revision and this may change the
composition of committees and the frequency of meetings thereof.)
Banks
and
Branches
Board of
Directors
meets —
Boston
New York
Philadelphia
Bi-weekly
Weekly
Semi-monthly
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Every 28 days
Monthly
Monthly
Monthly c/
Semi-monthly
Monthly
Semi-monthly
Monthly
Bi-weekly
Buffalo
Cincinnati
Pittsburgh
Baltimore
Charlotte
Birmingham
J acksonville
Nashville
New Orleans
Detroit
Little Rock
Louisville
Memphis
Helena
Denver
Oklahoma City
Omaha
El Paso
Houston
San Antonio
Los Angeles
Portland
Salt Lake City
Seattle
Spokane
Monthly
Monthly
Monthly
Monthly
Monthly
Monthly
Monthly
Monthly
Monthly
Monthly
Monthly
Monthly
Monthly
Monthly
Monthly
Monthly
Monthly
Monthly
Monthly
Monthly
Monthly
Monthly
Monthly
Monthly
Monthly
a/
b/
c/
d/
e/
tj
g/
h/
i/
2/
Meets -
Executive Committee
Directors, including Chairman
and Federal Reserve Agent, but
excluding Managing Director
Number
For quorum
On call a/
V
2nd, 4th & 5th
Wednesdays of
each month
Every 14 days
On call
Semi-weekly
Weekly
Thrice weekly
Every 14 days
Daily
Semi-monthly
Weekly
2 or more
4 or more
4
2
3
2
5
2
4
5
4
3
2
4
5
5
2
3
3
2
2
1
2
3
Semi-weekly
No Exec. Com.
No Exec. Com.
On call
On call d/
No Exec. Com.
No Exec. Com.
No Exec. Com.
On call e/ f/
1
1
1
1
0
0
— —
•
sJ
sJ
On call h/
On call h/
On call h/
On call ?
Daily e/ i/
Daily e/ i/
Daily e/ i/
On call J /
On call y
On call j /
No committee
No committee
No committee
No committee
No committee
— —
•'' <n»
"
4
2 ?
Not over 3
Not over 3
Not over 3
2
1
1
1
2
2
2
2
?
?
?
?
2
0
0
0
1
1
1
—
•*• """
—mmrnm
11
"• B "
—
Only one meeting held between 6/29/55 and 7/22/36.
Directors voted 9/12/55 that meetings be omitted until necessity therefore arose
Additional meeting in January.
No meetings since opening of branch.
Discount Committee.
Meets daily provided there are offerings for consideration except those secured by U. S. Government obligations.
Meets at such times as shall be fixed by Detroit Board of Directors from
time to time.
Credit Committee.
Director receiving an attendance fee not called unless there are offerings
to be considered.
Meetings held when offerings are received except those secured by U. S. Government obligations or renewals of member bank collateral notes secured by
bills receivable.
@FedFRASER