The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
COUNTER!
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
W A L T E R
S H O R T H A N D
COLUMBIAN
S .
C O X
R E P O R T E R
B U I L D I N G —
WASHINGTON,
TEL.
D . C.
M.
8324
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
25 €
3
aH %
& sv
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
i think the Cheirgan o f thie aceting should
aecompeny them to aake the explanstion.
We. Somyt T n e t i e whet i sean, t h a t the Chosiraan
Should aceompeny the reculer coamittee that has been adires~
Ging the Board.
ise Se. Pol’:
t t le mot
mitties, exeept that the cha
t
S a r y i© have a nee cone
h
s senterense should
i
be ihe spokesman.
The Cheireweam:
Y o u herve heard the action, genilesenm
ie there any discussion?
(There wee nO distuesion.
f h e motion was put
UpPOR & Jen aml say vote and carried.)
ioe Cheiraent
f r e comalttce i e thereupon potified t o
eall upen t h e Sererve Board a n d aileait t h e matter t o then.
(Thoreupen ths committees, conzisting o f “&.
trom (Cheairaan o f t h e Gonfeorence),
i . G e e a r “ells,
cewyer ami Ge, Mevoagal, left ihe hearing reom te call apon
the Pederal seseorpve Board.)
ee Heterd: I
move that Govermer Aiken take the —
hay smd thet wo centioue the se@ting.
(She m o t i o n ȴ c a r r i e d . }
(fherenpes the mreting went inte inforaal diseusgion, which discussion ihe stenographer wes directed not t o
report. )
(After t h e lapse o f e n hour t h e consitice returned t o
e
hearing room
end “x.
Cironghee resumed the Chair.)
h
t
The Chairmen: G u n i l e w m ,
w e have submitted t o the
Pederal Reserve Hoard a l l o f the matters that v e agreed
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
ehnoala be aubmiited, ami they whli teke umicr aévisesent
ihe recesseminifion 1
r e p e r d t o mseahorahip i n ihe banking
evsecin tions #8 Subsitied further without clesussion t h e seacrandusa
in regard t o Circular Ne- L S eni regulationsiios. 2
to 6,
iatliusive.
He submitticd m e m e verbally t h e muibject. o f ihe
of checks o f fo@eoral reserve banks, the edjustment o f balamees, ond ihe definition o f the wor’ "pa".
W i t h o u t re-
Viewing the discussion, t h e result was a n invitetéon t o
this conference t o acet with the Federal Recerve beara i n
their beard room at G:50 o’ sleek tonigith, :
Govete exectly one hour t o the discussion o f the matter o f
hamiiing ¢hecscs o f fedural recerve banke and allied subjects-~- snd myinlag else.
i @xplained t h e t tiere were «
good sany unfinished
items o f business o n our program, e n d i f they P o n Sem t o
they could put « limit o n cur meeting tonight, but. ic give
usengugh tine te eller be «a fair expression of opinion by
ony governcr eho carmked t o spenk.om the subject; thet, w e
would t h e n like t o come back t o our room acd take u p our
| weguler program. T h a t seemed to amet their views, and 1t was
| agreed that inet wae the thing t o do.
i @Ell now ask Me. Aiken to mic a verbal report of
whet hes traemepired i n our abeenee?
Ur. Aliment
i n the ebsence of the commlites ve took up
the consideration o f Circular No. 7 7 eovering warrente, and
| it was saccest
t h a t w e inquire o f the Federal Reserve
Sead whether i m ithe sesoal paragraph o f paragraph @ sinict:
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
funcde ohewlée net b e included.
S i n k i n g funds a r e n o t
enumerated i m the indebtedmesa i n finding net debt i m tne
manicipelity.
T t wee suggested that w o make inquiry i n re-
gare t o iheat.
ceetéen 3, i n regard t o the limitation e f 25 per cent,
was left epeu for dlecussios.
These were ihe only suggestions i n regerd t o Circuler
Proposed ¢ircuiar No. Te, e s t o regulations relative
+© state benke and trust sempuntioes cubseribing for stock of
fotderal reserve banks, eat teken u p
The thmec parcpraphs o m page 1 were epproved.
On page &, "Applieetions for Admission”, paragraph 4,
Seetion a, i t wae voted t o wake the foliewing wswndment, # 6
thet the parecraph cheuld reads
"under culhorizatton o f a n affirzstive vote o f shareholders representing «
uajority o f ite shares,
t o wake ap=-
| plication t o the Pederel Reserve Boerd, through the chairman
of the foderal reserve b a n k i n the cictrici,
t o subseribe
for o m amount o f ectoek i n such fegeral resorve b a n k equal
at par t o 6 per cent of ite sapitel and surpiue.*
feetion B wae emended t o read a n follews:
"> make @ etatoment o f iis condition o n a form prepered
by the federal Reserve Board, accompanied b y a certificate
of the majoriitg, t u t i n n o cage less t h e n five o f its
| @irectors thet in their opinion the assets wore sctually
worth at least the values a s which they a pear i n such state-|
mont.“
“6 bmi gotten t o the bottom of that page i n tho con
Siceration
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
o f that matter when your comalttee returned.
SO y o u sugs s t theelinination e f para-e
SiROR T h e a t was mot brought t o « vote.
Gheirmans
i n e m t h e comideretion
o f Clreulear 7 3
Mead concluded with n o actien o n paxacraph € Of section 4.
(Informal Ciscussion follewsd wiki
negrepher was directed not t o report.)
i. TOlLig: i
weve a n i recormeng t h a t i b e words after
tim word “exereisins” i n S e e t i o n £ of paragraph ¢ be stricken
that t h e l e n g u e g e f o l lowing t h e t i n s e c t i o n 3
omd that the worl “now” b e inserted juet before the
Ti Chairmant
I t is proposed, i n considering this
cirtuler, thet there ehall
b e « new p
a g r a p h imoerted later
whieh will previde for that regulation.
it i s weved ani
f
paragraph C, ection 4, following the word “exercising”
o
at
be stricken out.
(The m o t i o n wa. p u t o m « yea and m a y Vole a n d
carried.)
tne Chairman:
b G @ you now wish t o sentinuwe threusgh the
a
circular o r t O <cheues sow the pahtiing I n Of par xt icraphe i n
ister portion o f the o f ailer
i #ivguld c a y thet w o pat the n e w p a r a g r a p h
4h umier t h e general hendime “Generel Provisions."
o n page
4.
The Chairman:
< % will w o w b e i n order f o r coansel t a
cictate t o the stenographer the paragraph t o be in wePrTtod
uncer “General. Provisions" o n page 4
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
i. Curtiss
A t t h e o m o f the secoml paragraph o n
3 should b e inserted tne following:
“%wech state tenks o r trust companies sduitted t o sembership shall not b e permitted t o excreise functions other
than were boing excreised a t the time o f ite sdmission,
without. obtaining the prier approvel o f the Federal Seserve
Board.”
ap. S o n y i
move that ihe lemguage s o dictated b y
Secretary Gurtis b e embodied a g an amemiment a t the end of
the secon! poragraph o n page 3 of Scguletion Mo. 7%.
, “ a . Prenchers I
fhe Cosirman:
second that epiion.
i s there any debate?
There w a e m o debate.
T h e motion was put o n a
yea end fiay voto ani carried.)
The Chairewan:
T h e next q<sestion is “Exaninetions",
paragraph 5, page 2.
“pe. BeCord: I
meve i h
w e past “Exmuimations’,
paragraph 5, without eny further conusnt.Tre Chairman:
i t . ic moved emi secomied that paragraph
S, heaving t o do with ceauimations, v e accepted i n its present
. form without aseniment.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
I s there eny further debate?
(There was n o debate.
f h e sotion was put o n a
yea and may vole ani carried.)
Me. iden: i
mow move that this conference adjourn.
(after @incussion the motion wa withdraw.)
a. Yold: I
move that we adjourn at six o'slock.
+ “ebougali: i
@ove ihat before sation i s taken o n
thet ootion w e get a n expression «cs t o hew far w w have —
and how for we have to go.
Tsie Chidrmans A
I umfiorstand
P
w e have covered
any Other open market. transactions.
purcnase o f mitionai b a n k ecceptsconpiancas
S i a t
o f banks other
a than national banks;
sy
e e e m e r
SAB AORS S A F
He
e
x e Facei «
E e c h e b l y
e
ee G E E & B O G «
* conmoragad
demand
nL o e motice and protest
e
©
aleo make
PER as
fa
éiecuge
JOG
a
t
*
tostate bank seubersid) f h e r e i c aleo tho question fe
of digcount rates which w e bave slrceady diveupeed rather
wy discuss
2 Se
eF
a
the federal res@rve banke o n various
miter:
o f interest, which w e sorteinly ought t o develop a t
inia meting es one of the resulte of cur meting heres that
16 BOm0 reguler menus of keeping the other eleven benks in
Ya
*
procedure miintained i n any ome bank.
=
K e
started that by the interchance of cirmilars end this is a
subject that ve cen very well. afford te spend « few aoments
Oke
Tne L a s t
ie
t h mubicaet
Peceral Reserve B o a
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
o f p o n d ing
wLih.
T h e -@ is also « revtoasendation that a ruling b e
modo by the federal Reserve Board s s t o vhat sonsiltutes a
time éoposit.
T h e r e i s alw t h e subject o f purchasing
actounting records, recommended b y the organization coeamitLoe.
a i m there j e the question o f whother v e should col-
lect notes for other federsl reserve banks; the qestion o f
the form of the nome; t h e relation of the sub+treasury and
the relation of the clearing hous« im connestion with collection charges, ami the question e f the payment o f bank
cxaminers selected b y the federal reserve agents for bank
oxemination.
The Ghairaan: i
would like t e make a general recom-
meondation, i f sescome cares t o put es motion t o that erfeet,
to @ brief tabuleted
fora b y topics, mumbered a n d Lettered, instead o f the fora
in which it. now appears i n Cireules Ss, 75, o n d that t h e
Governors goncrolly recoasemd t o the Pederel Heserve Beard
thet the regulations o f i e Board b e rexiueed t o thet forn
of headings and divisions e f toples covered p y ihe regula=tions, i n such a way @ @ that i t is mechenfeally simple t o
arrive o t e n understanding o f the reilations.
i@. Prancher: i
a. Wold:
uke @ motion t e thet effect.
f f seeorm! thet motion.
The Chairman:
* h e motion has b e o m made a n d seeonied,
i nave stated it.
i s there any diacussion?
(There was n o discussion.
T h e sotion was put
& yea oni nay vote, and carried.)
86 Chairmen: G o v e r n o r Wells, o f St+ Louis, oske that
the Seeretery read « communication which he had received
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
f r o m the president e n d t h e coume<l o f a n important trust
company i n hic district, bearing upen the s u b ct of siate
bank snmaberahip.
T h e letior will b e reed, anm@, with the
epprevel o f the covernere vill. b e o r d e r e d : p a r t o f
the record o f the acting.
(The letter referred t o ie a z follows:)
"Henorauble Holia Yells, Governor,
Federal Reserve B a n k o f Saint 1
Pollowing o u r verbal inte reéheuge,
ive you & senorandum i n writing o f my views a s t o otete
benks e n d trust companies cntering t h e F e d e r a l Reserve A s -
sociation, i have t o say?
In section 9 of ithe A c t thore i s a n express provision
that State benks and trust companies may become member
banks. Senator Aldrich's bill, as originally presented,
aid n o t permit State banks a n d trust companics t e enter.
fhe argument wes made s o strong t o him, ond t o the 4onctary
Comission, t h a t h e ehanged h i s bili s o a s t o permit State
banks and trust companies t o c o m in. T h a t , o f course,
moant State banie emi trust companies a s t h e y wore-<<- or~
ganized under t h e laws o f the several States, necessarily
with different sharter powers, ami the recersal Reserve Act
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
provides e v e n that State beanie that m a y b e insorporsted
ia: m e y come inseotion 9 provides x
x = = x = "The Grgenization Con-
or ihe Pederal Reserve Seerd, uxier such rules and
regulations as it may proseribe, subject to the provisions
Pas section, a a y permit applying bunks", ete., t o become
Under t h i s , there ony
that t h e rales and r e
G
a
n make a n y anid
at tne discretion a m i ploasure
oF ithe Soarmd, and that “subjeet t e t h e previstions o f this
scetion” s o r e l y aeams thet t h e p ovieions e f the scetien
following have t o be part o f the rules a n d regulations; o r
Be “ h t WOR s o e m 1 O b e the preper cenctruetion,
that all the rules ond rogulations head toe be such es were
rectical i n their essential features, limited b y
visions o f this sactice
t h e rules a n d regulstions b e i n g
morely t h e incidentel things t h e t were nueecese ary t O a n order-
ly aman carrying out of the things euthorized.
28 Second? e
r
o f Section 9 provides that the
“eceral Seserve Bonrd s h a l l "“steablish by-laws f o r the goner=
eeting
al gocermacnt o f ite conduct i n m a k b e m upon applications made
state tanks” mud ete., a n d then says, “such by-laws
41 require applying benke, not organized under the federal
to couply
Reserve, atid.
Capital réqui«ments, a z
suvmit t o the examination and regula<
tions prescribed b y t h e federal Recerve Board” ,<<— ithe rest
of thet paragraph merely ccfining whet was meant b y capital
requircuent.
a
y construction o f the matter i s that, i n
cd
uenitoning these throe things t o be covered b y ithe by-laws,
Congress intomied that those three -cneral restrictions
Gheuld b e all thet epplied t o epplying state banks a n d trust
companies, s m i that ithe direct expression o f them excluded
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
2 Boge
bidity
P r e ee pe)
-eetricLions
worision t i s
wk A s t a i i
apple
t o sexber Ranke
L7uSt c o m p
ee
sats
Servo D o a r n a s wil. 3
tions a m i r e s i r i
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
power
i n waking r u l c e ,
c e d i r e l y beyond g
i+.
C u i t i o n tea
these mentioned i n ihe act, them the state banks ami trust
eompanice cannot, cafely corms Into this oystem—— becouse when
¥ er once in, there i c a o wey t o get cui, ané ihey might
be subjact t o rules, regulations anG restrictions o f o n
extreme ueture, o f which iney hed n o Emowlecdge when thoy
came in, a n c whieh rules, regulations a n d restrictions c o u l d
be changed a t the will o f the Sederel Segerve Hoard.
the amidenusl bank i s protected agelnet this easy change,
beesuse the Satioml m a k act i e all provided f e r b y Act
changed txeept b y amendment through
enoiher act of Congress.
iftim “ederal ecerve Hoard will construe the Federal
CSePvG A C G G B t h e theory thet Songress intended t h a t state
DAES cil truct companies, a g they exlel or may hereafter
exiet, unior thoir charter posers, as expressed im the yaerying lows o f the ceveral itates, can eome inte the Federal
LeSSIVG uyStem, subject only to the previtions o f this seetion (?)}, then the state banke ami trust csoupandes will
knee where they stend, ami thers will be, 1 ikink, n o eirri-
culty i n bowing a scerdial cooperation o m their part i n atteining the full fruition o f the Federal Reserve Act.
Ne damage thet t can coe could w e f r o m this construe- |
tion, begemse titre are cxprese repiriotions i n that section
aS {) rocerves ami e g itel, Limitation o n loans, prohibition
ageinst purch sing its oun stock, o r withdrawing o r impairing espitel, o r paying uncerned dividends, and then there
is ziven the full ami complete right d
exemination, the
Seme a f existe for a mtional bank. t h e r e f o r e , t h e Besorve
Soard, through its proper agencies, would be in position to
| 806
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
thet the estate bank on@ trust COmpany Was, a t ihe t i n e
into iho Fecerad Reserve System, end
institution, o p e r a t
pos eS PRS
ip
repel ved
Lime B L A S
e t e
ecerve
cimirass:
eyey
S
ve
S 8 e4 ry G 8 bPae
gh
O
2." ¥ 4
—
a
publication
of
£e% she P e r r y s
Wit
b i e r
e S
PeeErvse
further ¢ r a s i n e t i o n c f t h e
at this meetings end that e a c h o : >
Gircetiy
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
t o the
poverners
On t h e p r o p o s e d
s
CEE ee
e Re i
e
& *
bg
ae
iemy T
uae L i o n .
8
cil
#%
e
uz
:s i g i
s i i% OEY
W
.
—
ae ae ee
P o g
S E G
Wa
= % fe
ge
Si
tod i n
m a y
and
G e
hereby
ercereé
eis
eserve
£67
p r “ok
wishing t o join the
application to the Cosptrelier
poruiesion to convert itself inte «
mational
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
{dj
required t e
erters
GOmduct
SO
oe
i t e bucky :
trade
C c hai c h s
in
a g ye n
ie
8%
5 LR
PC.
ninission to the
t
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
5
Lo
B a detie
yey aCy
e
i:aDome
Oo eF
r
ome
o ae
l e4
pete ofAe
sy
svayey t
TPCEES che. Ay oh
OF
atbt t r e
Ge
t n&
t£
ie
t i n e Gee
#
is
1
Fee ue
— s
a
é
h s
o
e4
wd
tA sa O d
h i=
Sih ite
P e : wis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
4a
R
266822055
e r
A DGPRT
B C CE AON O R II AE LN OPE
tanta MRR A
A N N E
s i e :o
SS
Le J ,
S
x s
g ty © 44re :
aC o t ?e 2 2e ;F
6a
3 r
f o
v i o l a t i e
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
State bank o r trust ogepany which desires edmis2icn L o the e c e r a i Headrve cyetem will b e required:
{u)} v a d e r sucLoerisation o f ite Lirecctora, 1 6 make apPlicotion t e the Pedepel Recerve Suard, through t h e
Chohimaan o f ine becerg] Keserwe G a n k I m the Listrict,
Lo Subscribe for e n emownt o f eteck i n euch Federel
Heeerve Bank equel a b par t e G2 o f its expital and
hurplua.
3} 2 0 make & Statemont o f ita soncition, o n a form
prepared b y the Federal Reecrve Coaml, accompanied
by & cortificate o f not Lees than
o
f ite dGires-
tore thet i n their opinion t h e assests a r e actually
2 @t least t h e values « t which they appear i n such
Staten.
(o>;
t e furnish e certified copy of ite charter ani
any suenmdmente thoreto, together with a susuary there+
of, howling t h e powers whieh i t i s s o w oxcrceicing a n d
time powers which i t is not mow exercising.
EXAMINATION.
oe T h e Pederal Keserve Doom,
i n conjunetion «ith the
Federal Resérve Senk of the disirict, sither through the lecal
ote te Sanking Depertiaent, o r otherwise, w i l l cauge o n emuain-
ation t o be m d e o f the applying tank, after which the Federal
gecopve Board, with a etatement o f the opision of the Governor
ond t h e Fecucral Reserve Agent, u p o n the fmllowing points:
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
“hethey 218 capitel and surplus cre unimpaired.
veether ite aanmnagement i s catjefraetory.
Concerning the ¢harectear o f ite depesits.
Conctrming ithe character of its loans and invest~-
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Wie
Tie C h o i r o e n t %
ili. m o w r o a d i n t e i h e r e c o r d «
5
o
y
ah M A P
S
e
F e g
S E H
g e r s z
s
e
e
*
P F s
«
Vice President's office D e c e m b e r Tenth,
Nineteen
Poarteen.
ae, James B . iebougel,
Hew Ylliard cotel,
Wasrdn- toms b e C e
Dear 1 . Seomagels
am Sryant hes brought « setter t o ay attention Loday
whdeh I think ought t o b e discussed a t your meting, a n d
that i s the reserve thet such banks a s the Pullman Trust and
“eVings Dank will be required to cerry if they cowe inte the
Federal Reserve System.
the Pullen Trust ema Sevinge Deni, a s you know, hag n o
Geposits wade byether banks and does not act i n the sapasity
of a reserve agent for anybody. T h e r e are a large number
of the Suailer State Genke i n Chicago i n the same s f tuation,
a8 y o u ynoew better then i a.
The fullaas Beuk bee Geposits o f sbout jfagQ0O O05, o f
@WRLCh [2,800,400 are tavings deposits and ~1,6%O,250 gubject
‘te Sheek.
i f they were t e enter the federel Reserve cystem
hey would therefore b e required t e carry a n idle reserve
of
rbout 4 1 0 0G
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
i m place o f the idle reserve o f 2278,000
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
RAE A Hah le BE ee ay ad
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
g
e
d
+“enge
Ee
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
i &
OP a kbe
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
+
6
l a r e f e ‘&
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis