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314 A meeting of the Federal Reserve Board was held in the office of the Federal Reserve Board aa Monday, April 18, 1927 at 11:15 a.m. PaE3ENT: PRESENT ALSO: Governor Crissinger Mr. Platt Mr. Hamlin Mr. James Mr. Cunningham Mr. Eddy, Secretary Mr. McClelland, Asst. Secretary Mr. C. C. Walsh, Chairman ) Federal _Reserve Mr. Lynn P. Talley, Governor) Bank of Dallas Governor Talley stated that Mr. Walsh and he came to Washington for the purpose of presenting to the Federal _Reserve Board, with the approval Of the board of directors of the Federal Reserve Bank of Dallas, matters relating to the functions to be exercised by the proposed San Antonio Branch, the territory to be served by the Branch, its personnel and housing arrangement. He referred first to the proposed operations of the branch, stating that 1.4_ "lb directors wished to establish at San Antonio a full power branch, exercising all of the functions now exercised by the Branches of the Federal Ileserve Bank of Dallas at Houston and El Paso. Following a brief discussion, Mr. James moved that the Board approve of the operation of the San Antonio Branch with full pavers as recommended by the Dallas directors. Mr. James' motion being put by the Chair was carried. Mr. James than moved that the Board tentatively approve for the San Antaaio Branch, By-laws similar to those governing the operations of the El Paso and Houston Branches. Carried. At this point, Mr. McIntosh joined the meeting. 315 4/18/27 -'2- Governor Talley then referred to the personnel of the proposed Branch r eviewing the action of the board of directors in voting to transfer Mr. 1.1. Cramp, naging Director of the El Paso Branch, to an Antonio in the same °opacity and at his present salary of $5,500 per annum, and to employ Mr. Cs B. Mendel as Cashier of the Branch at a salary of c;4,000 per annum, which had bean approved by the Board. He reported that the board of directors at their last meeting elected the following directors of the Branch: Mr. M. Crump, Managing Director, Mr, Ernest Steves, President Alamo National Bank, San Antonio, Mr. Franz Groos, President Groos National Bank, San Antonio, Mr. R. T. Hunnicutt, Vice President, First National Bank, Del Rio, Texas, - oneyear one year two years three years He stated that the directors at their last meeting also agreed to recommend to the Federal Reserve Board the appointment of the following as d irectors of the Branch: Mr. Reagan Houston, Vice President and General Manager of A. B. Frank Company, Wholesale Dry Goods, San Antonio. Mr. H. H. Rogers, President Travis Investment Company, San Antonio. Mr. F. E. Scobey, former Director of the Mint and President of the Scobey Fireproof Storage Company, San Antonio. Following a brief discussion, Mr. Platt moved that the Board appoint the following as directors of the San Antonio Branch for the terms stated: Mr. Reagan Houston, Mr. H. H. Rogers, Mr. F. E. Scobey, NO one year two years three years Mr. Platt's motion being put by the Chair was carried. 316 4/18/27 Governor Talley then referred to the territory to be served by the San Antonio Branch and stated that the directors of his bank propose to assiga to the Branch for the time being at least, subject to adjustment ta the event a sufficient number of banks at any given point should later elect to continue to be served by either the head office or the Houston Branch, the counties in Texas set out in the application for the establishment Of the branch filed by bankers in San Antonio and the surrounding country. Governor Talley than namad the counties, as follows, and stated that with the exe:. Iption of the first twenty, which are now in the Houston District, they are being assigned to the Branch from the head office territory: Bee Brooks Caldwell Calhoun Cameron De Witt Goliad Gonzales Hidalgo Jim Wells Karnes Eenedy Moberg Live Oak Nueces Refugia San Patricio Starr Victoria Willacy Aransas Atasoosa Bandera Bexar Blanco Comal Dimmit Duval Edwards Frio Gillespie Guadalupe HA5re Jim Hogg Kendall Kerr Kimble Kinney La Salle Llano Mason Maverick McMullen Medina Menard Real Travis Uvalde Valverde Webb Wilson Zapata Zavalda 1:4 1 4/18/27 Governor Tal;ey stated for the information of the Board the number of ba4ke. both member and nonmeMber, which would be assigned to the head office alui each branch under the plan proposed, the °meant of their subscriptions to Federal Reserve bank stock and the probable amount of their reserves with the Federal Reserve bank. 2ollowing a discussion, Mr. James moved that the Board approve the territory which the directors of the Federal Reserve Barik of Dallas propose to assign to the San Antonio Branch, with the understanding that adjustments in the branch territory may be made later. Mr. James' motion being put by the Chair was carried. Governor Talley then took up the question of temporary housinF: of the Brarra.. , a4 and submitted for the approval of the Board the action of the directors "the Federal Reserve Bank of Dallas in voting to authorize the lease of space bi the Frost National Bank Building and in the Rational Bank of Commerce Buildillge Governor Talley stated that under this authority arrangements have been tnade to lease, at a monthly rental of c;500, vaults and space in the Frost 4ti°nal Bank Building sufficient to care for the Cash Department of the Branch and. 2100 square feet of space in the National Bank of Commerce Building t° be used to house the balance of the organization, for which will be paid a 111°11thlY rental of seventeen cents per square foot or approximately 4350, mak4g a total annual rental for temporary housing for the branch of about 0.0,200. After discussion, upon motion by 11r. James, it was voted to approve the temporary housing arrangements submitted by Governor Talley. Governor Talley then referred to the fact that the temporary quarters ilk ' -4 -5- it the Frost National Bank Building can be obtained for a period of not longer that twelve months. He stated that a committee appointed by the directors Of the Dallas bank very carefully canvassed the situation in San Antonio with l'espect to securing permanent quarters for the Branch and that the committee was of the opinion that suitable permanent quarters are not available under lease and wcnad either have to be purchased outright or erected by the Dallas 15441 " He then read the Committee's report and submitted for the arproval of the Board the following alternative proposals approved by the Dallas directors: (1) An offer of 4250,000 cash for the present banking house and site of the San Antonio National Bank, located on the north side of West Commerce Street in San Antonio, approximately 94 feet wide by 160 feet deep, at Commerce and Crocket Streets, upon the condition that possession of said premises mould be given the Federal deserve Bank of Dallas not later than May 1, 1928. (2) In the event the offer to be submitted for the San Antonio Bank property is declined, acceptance of a proposition of the Smith Brothers Properties Company for a site 100 feet on Villetta Street by 100 feet on Garden Street (an extension of Navara) at ,?750 per front foot. Governor Talley also advised the Board of an offer made by the Smith 13r(Ithers Properties, in the event the Federal Reserve Bank did not desire t0 P4rehase tho site at Villetta and Garden streets, to erect a building tIlereM. in accordance with plans ard specifications furnished by the Federal lies°rve Bank, such building to be leased by the Federal Reserve Bank over a tellIc4 Of years as quarters for the San Antonio Branch, with an option to lourchas, " He stated that in the opinion of his directors this proposal would itvelve too great an expense on the Federal Reserve Bank and was rejected for that reason. 319 4/18/27 -6- Governor 2alley stated that in view of the fact that the offer of 0250,000 authorized for the San Antonio National Bank property was based upon the Federal Reserve bank's understanding that the site contained 15,040 square feet ( 94 x 160), he felt that if it is now thought desirable to acWire that property, an offer of a lesser amount, say .225,000, should be Made fn view of the fact that a survey of the property shows it to contain an areu of only 13,600 square feet (85 x 160). He also stated that if the Board approved the purchase of the San Antonio National Bank property, possession of which can not be obtained until December 31, 1928, the Federal lleserve bank miaht possibly be able to arrange for extension until that date of the lease to be taken on temporary quarters in the Frost National Bank Building. Mr. Platt then moved that the Board approve of the Federal Reserve Bank of Dallas making an offer of not to exoeed :225,000 for the building now occupied by the San Antonio National Bank, possession to be acquired not later than December 31, 1928. After a brief discussion of Yr. Platt's motion, the Board, at 1:00 13•114. recessed until 2:30 p.m. At 2:30 p.m., the meeting reconvened, all who attended the morning session being present except 11r. McIntosh. The Secretary read the motion made by Mr. Platt immediately precedadiournment of the morning session, and after a further discussion, lIr s Cunningham moved as a substitute for Mr. Platt's motion that the Board re onsider its action of February 23, 1927, in approving the application Of the directors of the Federal Reserve Bank of Dallas for permission to establish a branch at San Antonio. 320 _7_ V18/27 The Governor stated that while he did not care to rule an the matter, he personally was of the opinion that Mr. Cunnincham's motion was out of order in view of the actions already taken by the Board and particularly those at the meeting this morning in giving its approval to the functions to be exercised by the proposed branch and the territory to be served, in appointing directors, and in tentatively approving by-laws, which actions in his °Pinion, established the branch and that to be effective the motion should be to discontinue the branch. He stated that he desired the views of the members of the Board on this question. It was the general consensus of Pinion that Mr. Cunningham's motion should be entertained. Thereupon, Cunninghamts substitute motion was pat by the Chair and lost, the members vot1n,7 as follows: Mr. James, "aye" Mr. Cunningham, "aye" Governor Crissinger, "no" Mr. Platt, "no" Mr. Hamlin, "no" Mr. James then stated thst he was in San Antonio at the time the Oha imaa and Governor of the Federal Reserve Bank of Dallas, together with Direotor Frost, inspected the various properties referred to in the Committee report submitted by Governor Talley, and that he concurred in the vim ox-, Pressed. by Governor Talley that permanent quarters for the branch are not available at this time nnic!ss purchased outright or erected by the Dallas " He stated that he felt that it was inadvisable to house the branch 1)41 ill t emporary quarters if it would be necessary to separate the various flIZetions in different locations. 8ll°1111 He stated that in his opinion the Board the lease reconsider its action at the morning meeting in approving C)-1 4/18/27 or Of -8.8- temporary quarters, and that the branch should not be opened until permanent quarters are available. He stated he would favor approval of the purchase of the San Antonio National Bank property at a price not to exceed 4225.000, or in the event that property can not be obtained at the figure mentioned, the purchase of the Smith Brothers property and the erection of a building thereon. Thereupon ensued a discussion, during which Yr. Platt stated that he was of the same opinion as lir. James. He thereupon withdraw his motion made at the morning session that the Board authorize the Federal Reserve larik of Dallas to make an offer of not to exceed „225,000 for the building . Ilow occupied by the San Antonio National Bank. Thereupon, 2,1r. James submitted and moved adoption of the following: VHEREAS, at a meeting of the Federal Reserve Board on February 19 9 1J.927, there appeared before the Federal Reserve Board a representative of the San Antonio Clearing House Association, who, on behalf of said association, presented a petition for the establishment in San Antonio of a branch of the Federal Reserve Bank of Dallas, in which Petition it is stated among other things that 'there is no desire upon the part of the banking fraternity in San Antonio itself, and certain! -Y not upon the part of bankers in the proposed district outside of he City of San Antonio, to inveigle the Federal Reserve Board into he establishment of a branch at San Antonio with the idea of immediateor ever bringing about a large permanent investment in real estate, °uildings, furniture, fixtures, etc.,' and further that 'we wish further to assure the Board in a formal way that the bankers of San Antonio and the business element generally In San Antonio will be glad Of the !Pportunity to co-operate in their efforts to assist in furnishing ''easonably priced quarters, to be equipped by a very moderate allolsance for furniture, fixtures, etc.'; WHEREAS, at a meeting of the Federal Reserve Board on February 23 lon., the members of the Board voted to authorize the establishVII Of a branch of the Federal Reserve Bank of Dallas at San Antonio, having in mind the statements contained in the petition of the ' an Antonio Clearing House Association, and the thought that quarters suitable for housing the branch could be Obtained in San Antonio on 4 satisfactory rental basis for a term of several years or during a 9 (1..4)Kd2 4/18/27 ..9.. "period of reasonable length in which it could be determined whether or not the branch should be continued; WHEREAS, the Chairman of the Board of Directors and the Governor Of the Federal Reserve Bank of Dallas have advised the Federal Reserve Board that with the co-operation of bankers and others in San Antonio they have been able to obtain options on certain rental space for a Period of twelve months, and that a proposal has been made to the Federal 2eserve Bank of Dallas which involves the erection of a building by certain interests in San Antonio for lease to the Federal Reserve Bank of Dallas over a period of years; WH22ZA3, said Chairman and Governor have advised the Federal aeserve Board (1) that the quarters which can be obtained upon a rental basis can be had for a period of only one year and the Brace is contained in two se2arate buildings; (2) that in the opinion of themselves and the directors of their bank the annual rental rate which would of necessity have to be charged for a buildim7 erected for the San Antonio Branch by any outside interest, would, over a comparatively short term of years, equal the amount for which property could at this time be acquired and a building erected by the Federal Reserve Bank itself, and that, therefore, in the opinion of the directors of the bank such a rental proposition is not good economy; and (3) that in their opinion and in the opinion of the directors of the Dallas bank, suitable permanent quarters in which to house the branch can not be obtained unless purchased or erected by the Federal Reserve bank; :ITEliEAS, upon further consideration of the matter, the Federal Reserve Board does not believe that it would be advisable to house the branch in temporary quarters necessitating separation of the various functions in different locations; and '.11MEAS, the Federal Reserve Board concurs with the directors Of the Federal Reserve Bank of Dallas in the opinion that it would not be good economy to accept the offer made by San Antonio interests to erect a building and lease same to the Federal Reserve bank over a term Of years; THEREFOaE BE IT RESOLVED: That the Federal Reserve Board reconsider the action taken at the meeting this morning in authorizing the Federal Reserve Bank of Dallas to acquire temporary quarters in the Frost National Bank Building and the National Bank of Commerce Building for the operation of its San Antonio Branch; BE IT FIRMER RESOLVED, That the Board approve of the directors Of the Federal Reserve Bank of Dallas submitting an offer for the pur?has° of the San Antonio National Bank Building of not to exceed 225,000, the Federal Reserve bank to secure possession not later than December 31, 1928; BE IT FIDTHER RESOLVED, in the event the San Antonio National Bank Building can not be secured at a price of ',225,000, that the Board approve of the Purchase by the Federal Reserve Bank of Dallas Of the Smith Brothers property at the corner of Villetta Street and Garden Street (an extension of Navara), 100 feet square, at $750 per front foot; 323 4/18/27 -10- "BE IT FURTHEa RESOLVED, in the event that the Smith Brothers Property is purchased that the Board authorize the Directors of the Federal Reserve Bank of Dallas to proceed with the erection of a building thereon, provided that the total expenditure covering building, vaults and complete equipment shall not exceed „,3175,000, and that final plans, specifications and bids shall be submitted to the Federal Reserve Board for approval; BE IT FURTHER RESOLVED, That the branch of the Federal Reserve Bank of Dallas at San Antonio shall not be opened until permanent quarters are available; and BE IT FURTHER RESOLVED, That the Federal Reserve Board, by the actions sat out above, in no way relinquishes its right to discontinue the said branch at San Antonio at any time When in its judgment such discontinuance is deemed advisable." Mr. James' notion being put by the Chair was unanimously carried. Mrs Hamlin then moved that the tarts of the directors of the San Antonio 31144M4, appointed by the Board at the meeting this morning, shall not begin Until the branch is opened for business. Carried. The Secretary then submitted the following proposed telegram to the Pederal Reserve Agent at San Francisco, prepared by Counsel: "Your wire April 12. Referring further to consolidation of United Bank and Trust Company and French American Bank, question as to retention of branches depends in part on whether consolidated bank must for present purposes be considered new bank or merely continuation of constituent institutions. This involves a concounsel struotion of California law and you are requested to have opinion an prepPre for the Federal Reserve Bank of San Francisco in the matter for submission to the Federal Reserve Board. Also Please state reasons for your view that a new arplication for membership not required and that branches may be retained. Kindly invite interested barks to file brief on these questions if they so desire." Mr. James moved approval of the telegram. Mr. James' notion being put by the Chair was carried, the members voting as follows: Mr. Hamlin, "aye" Mr. James, "aye" Mr. Cunningham, "aye" GoverJor Crissinger,"no" 7 r. Platt, "no" 2., 1)‘711 4/18/27 -11-- The Governor then presented draft of a letter to the Governor of the Federal Reserve Bank of Richmond, advising of the action taken by the Board at the meeting on April 15th with reference to the proposal of the board Of directors of that bank to purchase the so-called Foster property adjointheir main bank building. He stated that before forwarding this letter he wished to bring to the attention of the Board letters dated April 15th from the Governor and Chairman of the Richmond bank with further reference to the matter. After discussion, the proposed letter to Governor Seay was approved and ordered transmitted. Governor Talley then referred to a discussion had at the last meetOf the board of directors of his bank regarding the advisability of that bank adopting the practice now followed by the Federal Reserve Banks Of Boston and Richmoni of holding annual meetings of their stockholding lember banks. He stated that the directors instructed Chairman Walsh and hilmself to discuss the matter with the Board while in Washington. Following a discussion, Mr. James moved that the Board interpose no objection to the Dallas bank's instituting the practice of holding stockl dors' metings. Carried. The meeting adjourned at 3:45 ‘ItittQ ‘ Secre ary. APPrOyed: 1
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