Full text of Minutes of the Board of Governors of the Federal Reserve System : Meeting Minutes, August 30, 1927, Volume 14, Part 3

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meeting of the 3xecutive Committee of the Federal Heserve Board
was held in.the office of the Governor on ;.Li.esday, August 30, 1927 at
11:30 a.m.
PiESE1IT:

Governor Crissinger
r. James
Lir. Cunn inf2:hara
licintosh
Lir. Eddy, Secretary
Mr. 'McClelland, Asst. 3ecretary

Telegram dated Aup;ust 25th from the Chairman of the 20,31.,,..1 ieserVe
Bank of iiansas City, advising that the board of directors at their meeting
On that date made no change in the bank's existing schedule of rates of
discount and purchase.
i:oted, with approval.
Letter dated Au3ust 25th from the .1.ssistant Secretary of the Federal aeserve Bank of Now York, advising that the board of directors at
their meeting on that date made no change in the bank's existing schedule
of rates of discount and purchase.
1;oted, with approval.
Telegram dated August 26th and letter dated AUP;ust 27th from the
Chairman of the 2oderal :leserve Bank of Chicago, advising of the action
Of the board of directors of that bank at its meeting on

uLust 26th in

voting that the bank's present rediscount of ,) should be continued.




Thereupon ensued a discussion, following which
James moved that the action of the directors of the
Federal 2eserve Bank of Chicago, with respect to the
rediscount rate in effect at that bank, be not approved.
Mr. James' motion being put by the Chair was
carried by the affirmative vote of all members
present at the meeting.

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1:emorandum dated 4'Luust 26th from the Secretary, advising that the
Comptroller of the Currency has increased the salary of his private secre. E. Kimball, from

tary,

2600 to ,2900 per aanum, effective September

11 1927, an anniversary of his appointment.
i;oted.
:eport of Executive Committee on lettor dated

Ausust 27th from the

Comptroller of the Currency, recommending approval of an increase from
,2700 to

,000 per arnum, in the salary of National Bank Examiner J. H.

-oberts; the Committee also recommending approval.
Approved.
-eport of Committee.on Salaries and Expenditures on letter dated
August 27th from the Federal ieserve Lent at St. :Louis, requestin7 apl)roval of the action of the Executive Comiittee of the bank in voting to
sacteud for a period of 30 days from August 27, 1927, leave of absence on
account of illness granted 1,:r. R. B. Niese, ::anger of the Custody Department of the Llomphis Branch; the Board's Committee recommending approval of
the salary payment involved.
-pproved.
Telegram dated lAlcust 27th from the Federal .‘ieserve Agent at San
Francisco, advising of the death on that date of Mr. William Duling, one
Of the Board's appointees to the airoctorate of the Spokane Branch.
iloted, with regret and referred to the Committee
on District ,p12 for recommendation as to the appointment
of a successor.
The Secretary was regaestel to communicate regarding
Committee,
the above matter with Kr. Killer, Chairman of the
who is now in California.




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Aepoct of Committee on Salaries and -xpendiLures on letter dLted
4ug1st 22nd from the Governor of the Federal deserve Bank of Dallas,
With reference to an expenditure

of ,316.50 made by the Jan Antonio

Branch for membership of the Managing Director in the San .intonio Casino
Club; the Board's Committee recommending approval of the expenditure.
Approved.
Letter dated August 24th from the Governor of the federal .:,eserve
11‹
.

_

2.1chmond, submitting an estimate of the cost of vault equipment

fof the branch to be established at Charlotte.
Noted.
tatter a-oproved on initials on August 26th, nanely, telegrarhic
reply to tele:-xam dated August24th from the federal jeserve Agent at
.6an 2rancisco, with reference to arranements being made for simultaneous
examination of the Security Trust and Savings Bank of Los Angeles and a
roquest of the State Banking Department that the 2ederal .leserve bank
consent to be billed for copies of the report of the examination in order
to reimburse the state department for extra expense in connection with
simultaneous entry of the bank and its branches; the telegraphic reply
approving the absorption of the expense referred to and also participation
ta'the examination by the Federal Reserve Agent's examiners as outlined in
his telegram.
Upon motion, the telegraphic reply was formally
approved.
.:2he Governor then submitted a proposed statervmt for the press
containing an advance release, for publication in the morning pars of




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September 1st, of the Review of the Month which will appear in the Jeptember issue of the Federal Reserve Bulletin.
Upon motion, the proposed review, which has
previously been studied by the individual members,
was approved for publication.
Letter dated August 25th from the Governor of the Federal Reserve Bank
Of Uew Yor, suggesting that the regular 1'3.11 conferences of Governors and
Federal deserve Agents be held this year in October rather than november
and requesting to be advised of dates which will be satisfactory to the
Board.

After discussion, it was voted to fix the week
of October 24th. for the conferences, the Federal Reserve
Agents to meet October 24th, 25th and 26th and the Governors
on October 26th, 27th and 28th, with a joint conference
on October 29th.
Letter dated August 26th from the Vice President and Treasurer of
the First Federal Foreif4n Investment Trust, New York Gity,tranamitting
detailed information required by the Board's Regulation K in connection
with an

issue

made by the Corporation on August 1, 1927 of ,;2,000,000

Of ifiVO year 5,; gold notes.

_teferred to Jounsel.
Memorandum from Counsel dated August 19th, a-ooroved by the Law
Committee, submitting a proposed revision of 1 '.3 fom of applicL.tion
for surrender of stock provided under Jub-divL;ion (b) of ,;ection 2 of
the Board's Regulation I, revised so as to slim; clearly that it is intended ?.(pr use by receivers of insolvent state member banks as well as
Solvent national banks.




Upon motion, the revised form was approved.

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6/30/27

"LemoranIza from Counsel dated August 17th, with reference to the
action of the 3oard on July 12th in requesting his 'office to prepare and
submit in due course the maation contemplated by the resolution adopted
by the Board on July .Gth, with ret;ard to purchases and sales of forei7n
bills of exchange and acceptances; Counsel requesting further information
as to the character of the regulation which the Board desires his office
to prepare.
After discussion, it was voted to defer action
on the above matter until a meeting of the Board.
L:emorandum from the Secretary dated August 26th, submitting letter
dated August 20th from the Governor of the Federal aeserve Bank of aichmond,
replying to a letter which the Board addressed to the Federal Aeserve Agent
at aichmond under date of August 19th with regard to the condition of the
Farmers Bank and Trust Company of Forest City, N. O. as disclosed by recent
examination of that bank.

,:ith his memorandum, the Secretary also submit-

ted an analysis of the condition of the bank prepared by

Gilbert,

Supervisor of l'ixaminations, with which Lir. Gilbert submitted the followbig recommendation:




"In view of the apparent seriousness of the situation,
it is believed by this office that the board of directors
by the Federal
of this bank should be formally not
aeserve Agent, by letter, of the persistent violations of
the Federal Aeserve Let and called upon to show cause why
the bank should not be expelled from the System. :Pending
action of the Board. on the question of expulsion, it is .
recommended by this office that the Federal .eserve Agent
be instructed to make another examination within the next
thirtj days and to direct his examiners to enter into negotiations with the directors, looking to the reduction to
proper limits of the bank's extended condition and the
excessive lines of credit to directors, officers, employees
and their enterprises. It is also recommended in this

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"connection that the services of
Black be loaned to
Hoxton as was done in the case of the Dalelia (11innesota) State Bank."
..iifter discussion, it was voted to approve
Gilbert's recommendation quoted above.
.Libmoranlum from Counsel dated Auust 25th, submitting draft of letter
to the .1.ssistant Federal aeserve ,ent at Dallas,
with reference to the
surrender and
cancellation of Federal deserve bank stock allotted to the
St

tate Bank of Norman ee 2 Texas and the First State Bank of Seminole,

-as, due to the expiration of the charters of those institutions; the
Proposed letter submitting a form of application to be used in connection
v/ith the surrender of stock.

H 47)

Upon motion, the letter submitted by Counsel was
approved,
liemorandum from Counsel dated

ugust 19th with r3gard to an inquiry

received from Honorable ::orris Sheppard, United States Senator from 2exas,
with regard to an amendment to the Federal

eserve _et which would make

eligible for rediscount sight and demand bills secured by shippin

doca-

Ments coverinP: the domestic shipinent of any non-perishable readily marketable staples whether aricultural or non-a;ricultural, and also siht
44(1-de:-.1and drafts secured and accamranied by shi2pin-: documents and foreit;:a bills of exchange coverinp; foreign shipments of readily marketable
taPles; Counsel stating that the matter has been taken up with the
Gov er:lor
hEl"

of the Federal aeserve Bank of Hew York, from whom the 3oard

received a letter with respect to the practical effect of the amendment

'
l eferred to, but that no action by the Board on the matter seems necessary at




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this time.
-oted.
idemorandum dated Lauast 13th from the Jecretary, submitting and sumters received from the Governors of the various :ederal heserve
marizing let
‘
banks with respect to the practice being adopted by certain bunks of making
a Charge of twenty-five cents on checks drawn against insufficient funds,
on which question a ralino: by the ,oard was requested by the Governor of
the Federal

eserve 73ank of linnea-oolis, in. whose district the charge

is beinc- made a7ainst the bank which sends the item, rather than ar;ainst
the drawer of the check.
.Ordered circulated.
1oranthim dated ..al:_-Ast 26th from Counsel, submitting copy of letter
from Honorable lewton J. Baker, with respect to the handlin - by the Federal
Reserve Bank of Ltlanta of checks bearing the notation "Payable in :ew York
.2]xchange at current rates" which are being used by certain banks in the
Sixth Federal _Leserve District; Counsel advising that the Federal .ieserve
Bank of .,„tlanta is declining to handle the checks in (2estion and is returntar: them to the endorsers and stating that no action by the 'oard appears
- to be necessary for the present.
..oted.
McIntosh then brou-rht up the matter which was referred to the
Law Committee at the meeting on

ugust 24th, namely, the application of

the First rational Bank of Perry, Fla. for .-)ermission to exercise fiduciary pgaors.

He stated that he believed the arplication should be approved

and that the bank has a capital of ,;50,000,surplus ,A0,000 and undivided




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profits of a -Tro;cimatoly .ui15,000.

lie stated, however, that 'Messrs. Hamlin

and Platt, tho other members of the Committee, do not favor approval of the
application, believing that the Board in acting upon applications of national banks in Florida for permission to exercise trust powers should conform
to a ruling made some time ago by the Oainmissioner of Banking of the state
Of Florida requiring a capital of ,e100,000 and a paid-in surplus of 50,,;
for the chartering of trust companies in that state.
Following the discussion, it was voted that the
above matter be taken up as special order of business
on aiesday,. on which day a quorum of the Board will be
present.
12
- .90 L2, 037 3TANDLGii0:17,a1v2;:t:E3:
2
Recommindimg changes in stock at Federal Heserve
banks as set forth in the Auxiliarj :Amite Book
of this date.
Recommendat ions approved. •
nding action on applications for fiduciary
iiecomeDated, August 24th,
25th, powers as sot forth in the Auxiliary Minute Book
27th, of this date.
Recormondat ions approved.
29th,
approval of the ,application of :;:r.
:aecommendinp;
Dated., .Lutrz,ust 26th,
for permission to servu at the same
Kuser
L.
John
time as director of the Liberty National Bank,
How York, H. Y. and as director of the Fidelity
Union Trust Company, Newark, ii. J.
.aecormendat ion approved.
approval of the application of Mr.
ilecommendbv;
Dated, ust 24th,
Joseph ;;I. Henderson for rennissiOn to serve at the
same time as director of the National Bank of lit.
National
Airy, Philadelphia, Pa. and as director of the
Bank of Olney, Philadelphia, pa.
iieconmend.ation approved.
approval of the application of Mr.
Jiecounending
Dated„wgust 29th,
W. 0. Washburn for permission to serve at the sathe
time as director of the Peoples National Bank,
Edwardsville, Pa. and. as director of the Miners
r)atak of ':iilkes-Barre, Pa.
:iiecomrnendation approved.
of Mr.
Lw.,11st 29th, ..iecommonding approval of the application
at the
servo
to
permission
for
Herrick
Parmely

Dated, .:'al.p.ust 29th,




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REPO_ATS 03

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135

00.72.:L22-ZES: (Cont'd)

same time as director of the Union ?rust Company,
Cleveland, Ohio, as director of the Ohio-lennsylv,ania
Joint Stock Land Bank, Cleveland, Ohio and as director
of the ilarriman National Bank, New York, N. Y.
commendation approved.
Dat d 11.111,11s t 29th, _.ecounendinc; approval
of the application of :Li-.
ArthUr H. '3eibig for permission to serve at the
same time as director and officer of the United
Bankin; and Trust Comrany, Cleveland, Ohio, as director
and officer of the New York Joint S
. tock Land Bank,
Now York, N. Y. and as director of the Ohio-Pennsylvania
Joint stock Land Bank, Cleveland, Ohio.
Aecommendation opproved.
Dated, x'.ugust
29th, Recommending approval of the application of 1../r. J. C.
LcHannan for permission to serve at the same time as
director and officer of the Central National Bank,
Cleveland, Ohio and as director of the Ohio-Pennszylvania
Joint 3tock Land Bank, Cleveland, Ohio.
Recommendation approved.
Dated, August 29th, ..ecommending approval
of the application oflir. W. H.
Yeastin,
;
- for permission to serve at the same time as
President and director of the Commercial Savings Bank
and Trust Company, Toledo, Ohio and as director of the
Ohio-Pennsylvania Joint Stock Land Bank, Cleveland, Ohio.
Aecommendation approved.
Dated, 4Lugust 29th, _iecommendinr; approval of the application of Br.2. V.
Litchell for permission to serve at the same time as
director of the Union Trust Company, Cleveland, Ohio and
as director of the Ohio-Pennsylvania Joint 5tfock Land
Bank, Cleveland, Ohio.
Jecommendation approved.
Datea, . -ugust 29th,
ecommending aporoval of the application of Lr. O. N.
Sams for permission to serve at the same .time as director
of the Ohio-Pennsylvania Joint Stock Land Bank, Cleveland,
Ohio and as Class
director of the 17ederal deserve Bark,
Cleveland, Ohio.
_tecommandation approved.
Bated 2
Alugust 30th, Recommending approval of the application of 12.r. Samuel
L.
::.cCune for permission to serve at the ame time as director
of the United Bankinc; and Trust Comp' j, Cleveland, Ohio,
as director and officer of the Ohio ,3ansylvania J9int Stock
Land Bank, Cleveland, ans direct r and officer of the Nea
York Jo'
,ock Land
New vo
N. Y.
imendati
)proved
•

4




:lc

etinc: adjourn