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327 A meeting of the Federal deserve Board was held in the office Of the Federal Heserve Board on ?.uesde,y, April 6, 1926 at 11 o'clock A.M. PHESE172: Governor Criss inger Mr. Platt Mr. Hamlin Mr. Miller Mr. Janes Mr. Cunninjian Mr. McIntosh Mr. 1oe11, Assistant Secretary. Mr. McClelland, Assistant Secretary. Memorarslum dated April 5th from the Assistant Secretary, recorrnend— ing that .tobert Piper, messenger, be granted an extension of ten days sick leave, in additional to the usual thirty claws sick leave allowed by the '33.1:6-, on account of absence occasioned by injuries received while on duty. Approved. liemorandum dated April 1st from General Counsel requesting authority to employ a file clerk in his office at a salary of rr;1200 per 41141-1111; Counsel stating that his budget for the year includes an item of 3900() — to provide for the employment of an additional stenographer or rile Clark or both. Upon motion, the authority requested was granted. Liernorandum from Counsel, dated March 5th, on telegram dated March ora the Assistant Cashier of the Federal deserve Bank of San Francisco, ,Slig that there is being transferred to the Security Trust and Savings Los Angeles, 150 shares of Federal Reserve Bank stock held by the Citizens State Bank, Sawtelle, California, on account of the merger of those tv10 inst itutions; Counsel stating that the Federal .i.e:)- .erve Bank stock is 328 4/6/26 -2- tr ansferred by operation of law, but that the certificate of stock of the cozsolidating banks should. be surrendered and. a new certificate issued in lieu thereof in the name of the consolidated. institution. Noted with approval. ilemorandum from Counsel, dated April 1st, submitting and cormentilIC On opinion rendered recently by the Circuit Court of Appeals in the ease Of Crowell vs. Federal Jaserve Bank of Dallas. Noted. and ordered. circulated. Letter dated April 3rd from the Federal deserve Agent at Richmond, transmitting Auditor's re-port on a shortage of .„;7,200 at the Baltimore 81*.alleht the responsibility for which has been fixed upon r2e11er dalter 3/1Ycler; the Agent stating that at the next meeting of the Board of Directors °I* the Baltimore Branch, full details will be laid before that bocV, which 14 compliance with the law, will submit the matter to the District Attorney, 8.411clagh the bank is protected from loss by the bonding company and the exliPloYee has been dismissed. Upon moticrn, it was voted that the above matter should be reported by the Board. to the Department of Justice in the usual manner. Draft of circular letter to the Chairmen of all Federal reserve ban., 9 • requesting that they furnish the Board with a statement giving eerta111 S-oeCifi al information for all rnernber banks which were borrowing i'rota their respective Federal reserve banks during 1925, together with corn41e/its as to the reasons for such borrowing and the probable period of its ecktilluance. Upon motion, the proposed letter was approved as amended. 329 4/6/26 a.•081. aeport of Committee on Salaries and. Expenditures, dated I.:arch 31st, referring to the Board's action of February 16th in voting that the installation of a budget system should be recomerxled to the favorable uonsideration of the three Federal reserve banks which do not now have such all arrangement in effect; the Cormittee subnittin..7 and recommending approval Of a ferill of letter on the subject to the Governors of the Federal 2..ese:cve 13ailks Of St. Louis, Kansas City and Dallas. Appmved.. Report of Committee on Salaries and. Expenditures, dated April 1st, on the matter referred to it at the meting on Febru.ary 16th, namely, the' l ecenzaend.ation of the iTovember 1925 Conference of Governors that all 11°cIera1 reserve bars should absorb at least enough of the expenses of °13el ' ating their cafeterias so as to fu.rnish employees a lunch at not to eZeeea two-thinls of the out-of-pocket expense (i.e., cost of food. and. aei‘v.ice) of providing those meals, with the understanding, of course, that ill the discretion of the directors, this basis of charge might properly bp, tzlodified so as to net special circumstances; the Committee (1) recominellcliflg. that for the present, Federal reserve banks be authorized, to absorb 41:11)1'exirnate1y one-third. of the total cost of oirati:ck; cafeterias, as shown 111 the functional expense reports, and that the part of cafeteria ex1311se which is absorbed. by the Federal reserve banks should be treated as a c, -1'rent expense, rather than as a loss to be 'charged to profit and. loss t) ,a , erld of the year, and (2) submitting draft of letter to the Governor Of -`"ea Pedero..1 reserve bank, setting forth the above recommendation and. l'cillesting a statemnt outlining the plan under which cafeterias are being ed by his bank. 1 4/6/26 330 -4After discussion, lir. Hamlin moved approval of the recommendations of the Committee and the proposed letter to all Governors. 1:r. Hamlin's motion being put by the Chair was carried, lir. Liller voting "no". llemorandurn from Counsel, dated April 5th, sutrnitting, in accordance With instructions given by the Board on ::arch 23rd, drafts of letters to te Pederal .-',eserve Agent at Kansas City and the Meadow Grove State Bank, ,„ . 1:ead" Grove, Nobraska, advising of a hearing to be held before the Board at its offices in Vlashinston, at which representatives of the 2-.1eni)cr bank are requested to alopear to show cause why the institution should not be l'°(111.1 (aty (1 to surrender its stock in the Fedex-al eserve Bank of Kansas aria to forfeit all rights and privileges of membership in the Federal :e3erve System,because of its failura to maintain with the Federal 'Reserve }38412, the reserve required by the Federal iieserve Act; the proposed letters statin€ that in the event the mamber bank desires to waive its richt to al3Dear before the Board, it my appear before the Federal eserve Agent, oz , uate to be fixed by him, to present such evidence as it may care to have tr ananitted to the Federal Reserve Board, provided reasonable notice 941va11ce is given both to the Board and the Agent of intention to so 111)13ear, Upon motion by LIr. Hanlin, the proposed letters were approved, after April 27th had been fixed as the date for the hearing before the Board. Draft of circular latter to all Federal Reserve Agents, prepared in —.`alle0 with authority gr'anted by the Board at the meeting on April 2nd, t1111 ' , ' 7 that bej.nninf.7 with April 7th, weekly reports be furnished the 331 4/6/26 -5- B°arcl showing detailed figures of principal assets and liabilities for ee'cil reporting mentor bank; the reports to include each item for which figlires are received for mailer banks and also figures supplied from the boolcs Of the Federal reserve bank along the F_;eneral style of the Board's gla ar P 03:111 St. 51. The Governor stated that a letter had also been 13rePareci to the Federal Reserve Agent at New York, requesting certain 81)ecia1 info /mat ion desired under the resolution adopted by the Board on 1141'ch 4th, but recommended that this letter be not trananitted until after the weekly reports requested in the above circular have been received and ezarzilIed, Upon motion, it was voted to approve the proposed circular letter, as well as the recommendation of the Governor that the special letter to the Federal Reserve Agent at New Yol'ic be withheld for the time being. Lir. Cunninjiam then referred to the action of the Board on April 212cl referring to the Comittee on District #7, letter dated March 31st i'll°111 the Secretary of the Federal Reserve Bank of Chicago advising that 4t the last meeting of the Board of Directors of that Bank, Er. Arthur L. 01a°111 Confidential Secretary to the Governor, was appointed Assistant 2ecl'etalV of the Board of Directors, to act in the absence or disability th0 Secretary. Mr. Cunningham, on behalf of the Board's Committee, ellbrnitted verbally its recommendation that no change be made in the practice has prevailed at the Federal R - eserve Bank of Chicago, that the secretar.141 Staff should be taken from the Federal Reserve Agent's Department. After discussion, Mr. Cunningham moved approval of the Committee's recommendation. 4/6/26 332 The motion being nit by the Chair was carried, the members voting as follows: Mr. :liner "Aye" Mr. Janes "Aye" Mr. Cumninjian "Aye" Mr. McIntosh "Aye" Mr. Platt "ITo" Mr. Hamlin "No" Governor Crissinger "Not voting". After further discussion, Mr. Miller moved that a letter along the following lines be addressed to the Federal Reserve Agent at Chicago: "Receipt is acknowledged of Mr. White's letter of March 31st, advising that at the meting of the Board of Directors of your bank, held on Fridaz,r, March 26th, Arthur L. Olson was appointed Assistant Secretary of the Board of Directors, to act in the absence or disability of the Secretary. On reference to its records, the Board finds that Kr. Olson is now carried on the rolls of your bank as confidential secretary to the Governor. The Board., mainly for the reason originally stated by it in its 'Outline of Organization', X-840, has doubts as to the propriety of this appointment, aid I am therefore instructed to notify you that it is not yet ready to act upon it. You will be advised when the Board. has taken action." Mr. Miller's motion being nut by the Chair was carried, Messrs. Platt and Hamlin voting "No". 11r. Cunninjiam then reported that Mr. Cation, Managing Director of 1-1,""e Detroit Branch and maraber of the Building Committee, had called on hita 'I-is morning, and inquired regarding the em-oloyment of Mr. A. B. TI‘cm7b li--Ase ia as Consulting Architect for the Board in connection with the E*°ction of the Detroit building. He stated tint they wished to have Mr. ' ridge act with their local architects in the preparation of plans. Thereupon ensued a discussion as to the advisability of the Board employing Mr. Trowbridge as consultant, in connection with both the Detroit and Baltimore Branch bank building projects. Attention was called to the fact 4/6/26 -7- 333 that the joint resolution, S. J. Res. 61, just adopted. in Congress, provides for an expenditure of ,)600,000 for the Detroit building and. that the resolution pending, S. J. lies. 66, provides ;1,025,000 for the Baltimore building, and. that on the basis of Mr. Trowbridge's previous proTx)sal of a fee for his services, of 1,; of the amount authorized by Congress, such fee would amount, in connectioa with the Detroit and. Baltimore projects, to A6,250. Following a discussion, Mr. James moved "That in view of the Congressional resolutions to permit branch Federal reserve bank buildings at Baltimore and. Detroit, it is the sense of the Board that arrangements should be made to have Mr. Trowbridge act as consulting architect in the premises and that the Governor be authorized to open negotiations looking toward. the possible an-plovmait of Mr. Trowbridge, under this resolution". Mr. Miller sumestecl and Mr. James accepted an amendment to the above resolution, by which the following was added: "The total charges not to exceed 40,00.0 for both projects." Mr. Janes' motion as an ended being put by the Chair was carried, Governor Crissinvr voting "no". By unanimous consent, the Governor then submitted telegram dated 41)111 5th from the Federal Reserve Agent at San Francisco, replying to __ the „Boarcl's telegram of April 2nd, regarding the application of the Valley tanz. Of Phoenix, Arizona, for permission to establish a branch de novo at rescett; the Federal Reserve Agent's telegram reading as follows: branch "Suggest Valley Bank Phoenix be permitted to establish at Prescott with strict understanding that inasmuch as State Department is not prepared to make simultaneous examinations of head office and. branches the Federal eserve Bank in the future Will undertake to conduct according to boards regulations at least one such examination each Jear the cost of which must be 33,1 s4/6/26 -8- born by the bank. With number of branches now in operation we are prepared to conduct such an exanination of Valley Bank at a cost approximating two thousand.. In my opinion establishment of proposed branch will promote Public interest and convenience owing to recent failures at this point." Mr. Platt moved approval of the recommendation of the Federal Reserve Agent that the Valley Ba./f, of Phoenix be irnittod to establish a branch at Prescott with the strict understanding that the Federal Reserve Bank of San Francisco in the future will undertake to conduct at least one simultaneous examination of the institutions each year, the cost Of which must be borne by the bank. Mr. Platt's motion being put by the Chair was carried, Mr. James voting "no". The minutes of the meeting of the Federal Reserve Board. held on 413111 2nd. were read and a.pproved. -13.,-PiZg.,.4a3 OF STANDING CO:ZIITTEES: ted. - April 2nd. lecoramending changes in stock at Federal reserve banks, 3rd. as set forth in the Auxiliary Minute Book of this date. 5th Approved. a.tec1 A.pria 6th Aecommending action on applications for admission of State banks, subject to the conditions stated. in the Individual reports attached to the applications, as set forth in the Auxiliary liinuto Book of this date. Approved. The meeting adjourned at 1:00 P.M. ki,provea: Assistant Secretary. Governor.
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