The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
A meeting of the Federal Reserve Board was held in the office of the Federal Reserve Board on Wednesday, August 26, 1925, at 11:45 a.m. P:IESENT: Governor Orissinger Mr. Platt Mr. Miller Mr. Cunningham Mr. McIntosh Mr. Eddy, Secretary The reading of the minutes of the meeting of the Federal Reserve Board held on August 25th was dispensed with. Report of Law Committee submitting memorandum from Counsel dated August 15th, with reference to the application of the First National Bank, is Oneonto, Ala., for general ficLaciary powers; Counsel stating that there no legal reason why the application should not be approved anu Mr. Platt, on behalf of the Law Committee, stating that in his opinion the Board should not give trust powers to so small a bank, having only 425,000 capital, even 11' the state laws permit. After discussion, upon motion by Mr. Miller, it was voted to disapprove the above application, Governor Crissinger not voting. Report of Law Committee on memorandum of Counsel dated Auegst lbth, With reference to the application of tne First State Bank and Trust Company, Columbus, Miss., for permission to exercise trust powers if and when converted into a national bank unaer the title of "First National Bank of Columbus"; Counsel recommending that the application of the First State Bank Trust Company be approved effective if and when the bank has converted into a national bank, the permit being issued in the name Of the national Dank, and. Mr. Platt, on behalf of the Law Committee, also recommending approval. Approved. 123 -2- 8/26/25 Letter dated August 24th from the Deputy Governor of the Federal Reserve Bank of Boston, advising of the resumption of the sale of cable transfers by the Bank's Havana Agency, upon advice from the Agency's counsel that its operations are exempt from the provisions of the recent Cuban tax law. Noted. Draft of reply to letter dated August 10th from the Federal Reserve Agent at San Francisco, with regard to the simplification of r'• separate reports of condition covering branches required from state member banks; the proposed reply stating that the combined reports showing condition of the head office and all branches are all the Board requires except on special occasions and that if the bank feels it necessary for their own purpose to have a brief report showing the condition of the head office and each branch, the Board will interpose no objection to the furnishing of such information by member banks on a special form to be prepared by the Federal Reserve bank. Upon motion, the proposed letter was approved. The Secretary then reported that in recent correspondence with the Federal Reserve Bank of Atlanta regarding the revolving currency fund Of $2,000,000, deposited with the First National Bank of Miami, Fla., the Federal Reserve Bank has occasionally referred to the fund as an agency. Upon motion, it was voted that a letter be addressed to the Feaeral Reserve Bank of Atlanta, calling its attention to the fact that the currency fund at Miami is not to be considered as an agency. 8/26/25 Memorandum uated August 19th from Mr. Janes, member of the Committee on Examinations, with reference to the action of the Board on August 6th, in approving an arplication Of the Farmers Bank, Pelham, Ga., for permission to establish a branch at Sale City, Ga., in connection With which the Federal eserve Bank of Atlanta was directed not to advise the Pelham Bank of the Board's action until the Federal aeserve bank was satisfied that the institution is in condition to extend out of its awn resources the pankinc: accommodation required uy the resiuents of Sale City ana surrounding community; Mr. Janes submitting letter from the Chairman of the Federal aeserve Bank of Atlanta on the subject and recommend ing that permission for the establishment of the branch be held, in abeyance until such time as the Farmers Bank of Pelham shall have reduced its reuiscounts and Dills payable materially ana demonstrated its ability to be 01 SOM3 real service to the community in ana adjacent to Sale City. After discussion, 7.1r. McIntosh moved the Board's action of August 6th in approving the application of the Farmers Bank of Pelham for permission to estauLish a branch at Sale City be reconsidered ana that the application be held in abeyance in accordance with the above recommendation. Carried. Draft of telegram to tne Federal deserve Agent at San Francisco, who is Chairman of the Federal eserve Ai7onts' Conference, advising that the Board desires to meet the wishes of the Agents in the matter of the Fall Conference and inquiring as to the kind ann time of conference desired. Approved as amended. f*7 • 1 -4- 8/26/25 Letter dated August lath from the Chairman of the Federal Reserve Bank of Atlanta, transmitting blue prints ana specifications of the proposed builaing for the Birmingham branch and stating that while the Building Committee of the bank has approved sage and recommended approval to the Board of Directors of the Bank, no action in the matter was taken at the last meeting of the directors because of lack of quorum. The Secretary then presented a letter dated August 14th from Mr. A. B. Trowbridge, Consulting Architect, stating that he has given thorough consideration to the plans ana specifications and is unable to approve a number of features and submitting copy of a report to the local architects, also dated August 14th, containing criticisms and suggestions regarding the plans and specifications; the Secretary stated that a copy of this report had been forwarded to the local architects and that the Deputy Chairman of the Federal Reserve Bank of Atlanta had been advised by him, unrier authority of the Governor of the Board, that the Board will not give consiaeration to the plans and specirications until the Board of Directors of the Federal Reserve Bank of Atlanta have passed upon same in the light of criticisms and suggestions contained in Mr. Trawbriage's report. Upon motion, the above letters and report were ordered circulated. Memorandum dated August 20th addressed to Mr. James by the Secretary Of the Board, with regard to memorandum of the same date from the Chief of the Division of Bank Operations on the subject of the quarterly statement of deficiencies in reserve balances of member banks; the Secretary suggesting 8/26/25 -5- that an arrangement might be worked out whereby the reserve banks would report cnronic cases or deficiencies to the Superintendent of Banks in the various states aria to the Comptroller Of the Currency, arter an unuerstanuing has been reached witn tnese officials tnat they will promptly communicate with the airectors of the banks concerned, and suggesting that tne matter be aiscussed at cue Fall Conferences of Governors and Pectoral deserve Agents. Upon motion, it was voted that the above suggestion pe placed upon he programs ror tne Conferences. Letter uated August 17th from the editor of "Successful Farming", Des Moines, Iowa, with regara to tae credit status or agricultural cooperative associations. Upon motion, it was voted that the Secretary should have prepared a memorandum covering the various phases of the question referred to, for submission to the Board, following which it can be uetermined whether or not the memorandum should oe made puolic. Letter aated August 17th rrom Messrs. Cramer and Goraon, Attorneys, Cincinnati, Ohio, requesting certain inrormation with regara to the purcnase by the Federal Aeserve Bank of Clevelana or a ouilaing site in Cincinnati from tne Union Central Lire Insurance Company or Cincinnati in connection with a contemplated suit against that comxany ey Mr. David J. Dickson, a real estate agent of that city. After discussion, Mr. :liner moved that a copy of the above let er be transmitted to the Federal Aeserve Bank of Cleveland anu that particular inquiry rererence to a statement contained therebe maue in tnat title to tne property purchased by the Federal Aeserve Bank of Cleveland in Cincinnati has been carried in the name 01 Mr. William Aeehl as trustee. Carried. 8/26/25 -6- After farther discussion, it was voted that a letter to Cramer and Goruon be prepared for submission to the Board stating that upon proper application, the Boaru stands ready to furnish any information it has in connection with the transaction. Draft of letter to the Federal deserve Agent at philaaelphia, advising ot the action of the Board at the meeting yosterua6r in approving salary increases for Messrs. /alker, Deitz ana Donnelly, members or the Bank's examining force, a/la advising further that in the opinion of the Board both the number and expense Q examiners at the Philaaelihia bank are excessive ana out of line With the examining aepartnents at other comparable Federal deserve banks, in vieW of which opinion the Board was reluctant to approve the increases in question. Thereupon ensued a discussion durihg which the Governor stated that in his opinion the comparisons contained in the above letter were not fair for the reason that tne Federal deserve Bank oI Philadelphia conaucts more tnoraagh and more numerous examinations than the other Federal deserve banks, and that, as he saw it,une only criticism against the examining work or the bank was that it aid not assess the state member banks examined to the rull extent. Following the discussion, Mr. Miller moved that the above letter be revised so as to state that the B9ard from such evidence as it has before it, does not believe tnat the Federal Reserve Bank of Philadelphia is yet collecting sufficient assessments on account of its examinations. Carried. Draft of letter to tne Federal deserve Agent at San Francisco, prepared in accoraance with action caken at the meeting yesterday, with reference to tile request oi the dank for approval of a six months' leave of absence with hall pay ior Mr. Ernest C. Marmara, Assistant Cashier, who has previously -01 8/26/25 -7- been granted three months' 'leave with full pay on account of illness. After discussion, Mr. Miller moved that the Board adopt a ruling that leaves of absence with salary for officers a.nd employees of Federal Reserve banks should never be granted for periods of more than three months and that applications for leave in excess of two months will be approved only on the affirmative vote of five members of the Board. Carried. Mr. Miller then moved that the Board reconsider its action of yesterday regarding the application for leave for Mr. ::ailliard. Carried. Mr. Miller then moved that the Federal Reserve Bank be advised that the 3oard will approve, if recommended, leave of absence for Mr. Eailliard with half Pay for the month of September. Carried. Mr. Platt moved that the ruling just adopted be placed on the program for discussion at the Fall Conference of Governors and Federal Reserve Agents and become effective after consideration by the Conferences. Mr. Platt's motion being put by the chair was lost, Mr. Platt voting Mr. McIntosh then reported that during his visit to the Pacific Coast rumors had reached him, in connection with the closing of the Ladd and Tilton sank, Portland, Ore., that the institution had been in an insolvent condition for a period of four or five years with losses aggregating y9,000,000 in total loans of ,,;)14,000,000 and that examinations participated in by Examiners Of the Federal Reserve Bank of San Francisco had failed to disclose this condition. 8/26/25 -8- After discussion, Mr. Miller moved tnat the Governor aduress a letter to the Federal Reserve Bank of San Francisco, setting forth the facts in. the above matter as reported by the Comptroller of the Currency, with a view to determining the official and personal responsibility or any deficiencies in Federal Reserve examinations of the Ladd and Tilton Bank, the nature 01 the examinations or credit investigations participated in or made by the Federal Reserve bank, unuer whose supervision such examinations were made and requesting copies of the reports of such examinations. Carried. Letter dated August 18th from the Chairman ot the Federal Reserve Bank Of Atlanta, submitting report by a special committee appointed by the directors of that uank to consider the feasibility of reducing the activities of the Bank's branches am agencies, without affecting their usefulness and of conaucting as much business as possible at the home office thus minimizing the expense of the branches mu agencies to the greatest possible aegree; the Chairman also submitting copies of surveys oi the various branches and agencies made by a sub-committee. Oraered circulated and referred to the Committee on Branches. The Governor then presented the matter ordered circulated at the meeting on August 6th, namely, memorandum of Counsel dated August Ord with reference to the right of a Federal Reserve bank to charge the reserve account of a member bank with paper held unaer rediscount prior to the maturity of such paper. After discussion, it was voted that a copy of the above opinion be forwarded to the Federal Reserve Bank of Atlanta, which Dank is alleged to have so charged the reserve account of the Unaka and City National Bank, Johnson City, Tenn. • ) Q. r -9- 8/26/25 Letter dated August 15th from the Assistant Federal Reserve Agent at Boston, transmitting and recommending approval of an application of the Quincy Trust Company, Quincy, Mass., for an extension until October 1st Of the period in which the bank may accept conditions of membership imposed Upon it by the Board. Upon motion, the extension was granted. Letters dated August 18th and 22nd from the Chairman of the Federal Reserve Bank of Atlanta, advising that the Peoples Bank and Trust Company, Bell Buckle, Tenn., against which the Board on July 31st ordered the institution of proceedings for the forfeiture of membership because of a reduction in capital from .25,000 to ;45,000, wishes to remain a member of the Psderal Reserve System subject to the conditions imposed on banks originally admitted to membership with a capital of 015,000, and submitting form of resolution to be adopted by the Board of Directors of the bank applying for such continuation of membership. The Secretary stated that the Board's Counsel has reported the resolution in proper form and that the Board may, if it desires, permit the continuance of membership by the bank upon adoption Of the resolution. After discussion, Mr. Platt moved that the Board entertain from the Peoples Bank and Trust Company an application for the continuation of its membership with a capital of c4;15,000. Carried. Mr. Miller then stated that he wished to give notice of the following 41) 8/26/25 suggested amendment to the by-laws of the Board, in accordance with the provisions of the by-laws that copies of amendments shall be delivered to each member of the Board at least seven days prior to the meeting at which they are considered - "No authorization for the expenditure of money for the 'construction of any Federal Reserve Bank or branch building shall be made except on the affirmative vote of five members of the Board at a meeting called for that purrose with not less than two weeks, notice." REPORTS OF STANDING COMMITTEES: Dated, August 20th, Recommending action powers as set forth cif this date. Approved. g action Recommendin 20th, August Dated, powers as set forth of this date. Ordered held. g action Recommendin 20th, August Dated, powers as set forth of this date. Refused. on applications for fiduciary in the Auxiliary Minute Book on application for fiduciary in the Auxiliary Minute Book on application for fiduciary in the Auxiliary Minute Book The meeting adjourned at 1:30 p.m Secretary. Approved:
@FedFRASER