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, . ••••J I t In accordancq with the action of the Board taken at its meeting on December 13th, a special meting of the Federal Reserve Board was held in the office of the Federal Reserve Board on Monday, December 17th at 10:30 a oze Governor CrissinL;er Er. Platt Mr. Hamlin Er. Miller Er. James Er. Dawes Er. i- !kidy, Secretary PRES= id.50, BY INVII011: Governor Strong, Federal Reserve Bank, Haw Yoii Chairman Jay, Federal Reserve Bank, New York PRESENT: he 3-overnor presented. a letter dated. December 14th, addressed to him by -fle Chairman of the Federal Reserve Bank of New York advising that at a held on that date the C.irectors of the bank had discussed the matter Of Participation in the program term conterm)lating the purchases and sales of short ..30vernment securities, suggested by the Open Market Investment Committee 141aer the terms of the Board's resolution of December 3rd, and that while the,, had voted to participate in the purchases and sales and are in full an --cord with the general purpose for which such purchases and sales would. be Made, they are impressed with the necessity of an anpropriate public lAcization concerning the whole aabject of OTen market operations and 17%110/It some such public explanation may wish to reconsider their decision to Participate in the plan. The Governor then stated that he had invited Messrs. Strong and Jay to mot with the .Board in order that the members might have first hand -L'tion regarding the attitude of the board of directors of the New 'Zoriz liank in this matter. 12/17/23 After a full discussion of advisability of publicity such as that suaTested by the Yaw York directors, and the form which any statement issued by the Board mi:ht best take, Mr. Harain moved: "It is the sense of the Board that some statement on Open Market policy be made in the January issue of the Federal Reserve Bulletin", Carried, Mr, Miller voting "no", :he Governer appointed Mr. Hamlin as a committee of one for the Board to cooperate with Messrs. Strong and Jay in the 7reparation of a form of statement to be submitted to the Board later, 4t this point, Messrs. Strong and Jay withdrew from the meeting and the Belrd proceed d with its regular business, The reading of the minutes of the last meeting was dispensed with. In accordance with the action taken at the meeting on December 15th, the Governor appointed Messrs, Hamlin, Mill:r and Cunningham as a special corn nIttee to consider the pension plan recommended to the Board by the Pension CoMmittee of the Governors' Conference and to report thereon to the Board, eport of Committee on _aamimtions on th matter referred to it on the meeting of December 13th, namely, telegram dated December 12th f'rom the 2ederal Reserve -'2ent at San Francisco, with respect to the proper procedure in connection with the merger on December 51st of the - ells-Fargo Nevada ITational Bank and the Union Trust Company, both of San Francisco; the tittee.recommending approval e the procedure outlined in a mmorandum dated beoember 15th, from the :oard's Division ofxamination. Upon motion, the report of the Committee on l!bcaminrtiens was arproved, 12/17/23 _3- Memorandum dated. December 11th, from the Comptroller of the ellrrency, recommending approval of the application of' the Farmers and Merchants National Bank of DeLeon, Texas, for permission to reduce its capital stock from 0100,000 to C50,000. The application having been approved on December 15th by the initials of four members of the Board, • that action was, upon motion, formally ratified. Report of Committee on Salaries and Expenditures, on letter dated. December 13th from the Chairman of the Federal Reserve Bank of Richmond, recommending approval of the application of that bank for authority to close its books at the end of' the year, to pay a dividend and to make certain charges against current net earnings. Upon notion, the recommendation of the Committee Salaries and cpenditures -,-;as approved.. on Report of Committee on Salaries and. Expenditures, on letter dated December 7th from the Chairman of the.Federal Reserve Bank of San Francisco, recommending approval of the application of that bank for authority to close its books at the end. of the year, to pay a dividend, and to make certain charges aeainst current net earnings. Upon motion, the recommendation of the Committee on Salaries and 11cpenditures was approved.. Report of Committee on Salaries and Iixponditures, on the proposal cf the directors of the Federal Reserve Bank of New York, to make ad.ttist11lents, ranging from :",:50 to 0100, in the salaries of 2648 employees of the bazat receiving salaries not in =:cess of ?)5,000 per anraim, the adjustments 12/17/23 tota1ing -4- 1.136,060 and to be retroactive to January 1, 1923; the Corraittee recommendin alTroval o the adjustments proposed. Upon motion by :Jr. Hamlin, the report of the Cormitt ee on 3alaries and '2apenditures was approved, Mr. Milli-Jr vet ii "no", this point, Mr. James left the meeting. Draft of letter to the trust officer of the First Nat ianal Bank of Belleville, Illinois, replying to his letter of December 7th, and transmittinC a certified copy of the fiduciary certificate issued to that bank under ' late of December 13, 1918, and statinc that while the Board is advised of 110 law of the state of Illinois Which would prohibit the exercise of trust (:)I ' lers therein by national banks, the bank should consult with it s 1 ocal attorney re -arding the matter. Upon mot ion by Mr. Hamlin, the proposed letter was aLoproved. Letter dated December 12th, from the Chairman of the Federal oserve Of Mew York, advisin.2; of the appointment by the board of directors of that bark of Messrs. LicDou_al, Ilamsdell and Kumphrey as directors of the 1311ffalo branch, ind recommending that the Board appoint as its :uota Messrs. 110e.pfer, Cole and Smith. Llr. Miller moved that the number of directors of the Buffalo branch be from seven to five, effective January 1, 1925. Carried. Upon motion, the letter from Lir. Jay was referred to the Comndttoo on rominat Ions. -5- 12/17/23 Letter dated December 12th, from the Chairman of the Federal Reserve Bank of Dallas, advisin,; of the appointment by the board of directors of that bank of flessrs. Coleman, Gossett and Bryan as directors of the Houst on branch and riessrs. Miss, Hurd and 77il1iams as directors of the 21 Paso branch, a/la recommending that the Beard rearpoint its :)resent directors on both boards. Referred to Committee on Nomirnt ions. Letter dated December 12th, from the Secretary of the Federal Res- erve Bank of Cleveland, advising of the appointment by the board of directors Of that bank of Messrs. Braun, Mellon and DeC',:]1) as directors of the Pitsbranch and Messrs, Duluis, Lee and Eanning as directors of the Cincinnati branch. Noted. Letter dated Deceniber 13th, from the Chairman of the Federal Reserve 1)arlic of Richmond, advisins' of the wTointment by the board of directors of that btInk. of Messrs. Dudley, Mlcox and Osborne, as directors of the Baltimore branch. Not ed. At this point, ::r. James returned to the meet in;. Letter dated December 14th, from the Federal Reserve L:;ent at Richmond, advisin3, that subject to the approval of the Board he has reappointed 11"srs. Fry and Lee as Assistant Federal Reserve 2[,:,ents at the head office, arld 1,:essrs. Duley and Donahue as Lssistant and Actin2; Lssistant Federal Reserve Agents at the Baltimore branch. • 12/17)23 - 3- Mr. Miller stated that he thow;ht it advisable for the Committee on Branches to investi ;ate the mtt,er of the discontinuance of Assistant Federal Reserve 1, ;ants at branches of banks whose reserve Lositions are such tiiat they can carry as issued a sufficient stock of Federal Reserve notes at the branches without unally depleting their reserves. Upon motion, the letter from Mr. Heaton was referred to the Committee on Branches. Letter dated December 11th, from the Federal Reserve agent at Dallas, adV that subject to the approval by the Board he has reappointed Messrs. nail and Reordan as Assistant Federal Reserve Agents at the head office and J. Evans as Acting Assistant Federal Reserve 1._:;ent to serve during Reordants tenTnorary detail to the ;a :as° branch. Upon motion by Mr. Miller, the above mentioned appointments by Mr. Talley were approved. At this point, Mr. Cunningham entered the meeting. Memorandum dated December 14th, from Counsel on the subject "Rediscount Of l'aPer for Ineligible Mon-member Banks at Increased Rates", submitted in accOrdance with action taken at the Board meeting on November 27th and memorandum clated December 15th on the subject "Rediscount of Paper for 'nen jble MenBanks at Rate Borne by Such :aper", re.juested by the Board at its meet°II December 11th. Upon motion, Counsel's memoranda were ordered circulat The Governor brought up the matter 'ordered circulated at the meeti Decenber 11th, namely, mzmorandum from Counsel dated December 4th, reomt4etclik; cint..1 refusal of the a_i,lication of Mr. E. S. 7e1ch for permission to ael ' ve at the same time as director of the Old Colony Trust Company and the --11a1 Union Bank, both of Boston, Massachusetts, said rocomendation having tile al) royal of the Law Committee. ) 12/17/23 -7- Upon motion, Counsel's recommendation was ap]Toved and the alication was finally refused. Letter dated December 15th, from the Federal Reserve ....7ent at tlanta re.olyin:-; to the Board's tele, ;ram of December 13th, with re:ard to the application of the 2anners Bank of Pelham, Georgia, for permission to establish a branch at Sale City, Georgia, and transmitting the additional information requested by the Beard. Referred to the Committee on Examinations. The Governor brought up the special order of business - report of the Cor.imittee on -Ixaninations on the matters referred to it at the meetin7 on D ece.nber 13th, namely, three letters dated December 12th, from Mr. M. C. Iailott, Counsel for the Bank of Italy, renewing that bank's applicationsfor D011mission to establish branches at htsonvi11e, LenL; Beach and Santa Maria, °alifornia; the Committee recTnmendin7 that the arplications be voted upon bY the Board without further comment or investigation by Committee. r. James called attention to the followin - letter addressed to the 40vernor of the Board by the President of the Bank of Italy under date of Jalluary 23, 1922: "Your letter dated the Eighteenth of this month has just been transmitted to m.e by Hon. John Perrin, Chairman of the Board and Federal Reserve A-;ent of this District. In compliance with your refluest, permit me, on behalf of the Bank of Italy, to give the Pederal Reserve Board, through you, our formal assurance that the future action of the Bank of Italy with respect to the acluisition of interests in other banks will be in strict accord with the ter.ns of the following Memorandum of Agreement, which is hereby accepted by way of supplement to Membership Condition IT°. 8, viz: 'The Bank of Italy agrees that for the future, it will not either directly or indirectly, through affiliated corporations or otherwise, ac ,uire an interest in anothir bank in excess of 20 per ce-lt of the I , I —0— 12/17/23 'capital stock of said other bank, nor directly or indirectly promote the establishment of any new bank for the purpose of acuiring such an interest in it, nor make any encagement to acquire such an interest, without first having received the approval of the Federal .7,eserve Board, following an application on a form Lp22roved by said Boy. rd1"0 Tho application of the Bank of Italy for permission to take over the Boalk of atsonville and the 7htsonville Savings Bank and to convert them into a branch of the Bank of Italy at 7atsonville was considered and Mr. Ramlin moved approval of the application. Er. Hamlin's notion being put by the chair, the members voted as follows: Governor Crissinspr, ayCr, Mr. Platt, "aye" Er. Hamlin, "aye" Er. James, "no" Jr. CunnirOlam, "no" Er. Dawes, "no" Ur. Inner not voting he chair announced that the vote had resulted in a tic and Ur. Hamlin's 1°10tion to approve the application was lost. _Jae application of the Bank of Italy for permission to take over the 1 Illerican Savings Bank and the Golden State Bank, both of Long Beach, Cali" and to convert thorn into branches of the Bank of Italy was consider,°CI and Lir a Platt moved approval of the application. Er. Platt's motion being put by the chair, the members voted as follows: 12/17/23 -9.. Governor Crissinspr, "aye" Mr. Platt, "aye" Mr. Hamlin, "aye" :Jr. James, "no" Mr. Ounnimliam, "no" Mr. Dawes, "no" Mr. Miller net voting The chair announced that the vote had resulted in a time and that MI. 1141t's motion to a7.prove the application was lost. The application of the Bank of Ltaly for 1;ormission to es-.ablish a branch do nave at Santa Maria, California was considered and Mr. Harilin Illoved approval of the application. Er. Hamlin's motion being put by the chair was lost, the members voting as follows: lir. Hamlin, "aye" Governor Crissiner, "no" Mr. Platt, "no" Mr. Mr. Mr. :r. James, "no" Cunningham, "no" Dawes, "no" Miller not voting 17.r. Hamlin, In explanation of his vote stated that he had originally believed that the Bank of Italy had violated the agreement that it entered the Board, but that as it appeared the preliminary negotiation . 1702, e made subject to the a-nl)ropval of the Board, he believed that to be a fair C$111.01 liance with the a 'reemont. La'. James stated that he did not concur with Mr. Hamlin in his con- f In explanation of his having "not voted", Plirn, 4 Miller stated he was -"a4ng the course vthich he had since the Board had adopted the branch bank 12/171.23 -10- resolutions of rovember 7, 1923, and principally for the reason that the nlearling and the application of the resolutions of November 7th were not Clear to him and that, therefore, the majority of the Boardw•iiich adopted theta was presumably in the best Tiosition to know what the resolutions '..:cre Intended to accomplish and ho:; to apply them to specific cases. Mr. Miller stated that Jle vote on the Bank of Italy applications riOw diseloss that there was a division among the majority which had, voted for the resolutions of November 7th, with the result that the affirmative negative votes of the Board on the Bank of Lalyts applications had resulted in a tie. He stated that that is an unfortunate and unsatisfactory P°2ition in which to leave things, and save notice that he would ask for a ' l econsiderat ion of the Bank of Italy's t lenS at tomo.Tow's meeting. The chair ruled that Mr. Piller could make a motion that the Board ' l econsider its action with respect to the Bank of Italy's applications at the /fleet ing t °morrow. Govermr Crissinger stated that he had cast his vote in favor of the titLtsenville and Long Beach applications because he thought it unfair for the Board to refuse those applications in view of the fact that it has ;- ranteti branches to other banks in ,,alifornia since the adoption of the resolution 14 Yin- dovm its policy. he felt it The Governor stated further that he voted "aye" be- as not right to put the Board in the position of being par- tiq• to other banks as c.,,ainst the Bank of Italy, and ,hat he had voted a-aiLst the Santa IZ.ria applicat ion because it was a branch de nova and was not im-. 1417/23 -11- portant under the policy adopted by the Board. COLIMME2S: Dated, December 15th, Dated, December 17th, 17th, 17th, 17th, 17th, Dated, December 14th, Dated, December 14th, Recommending Changes in stock at Federal Reserve banks, as set forth in the Auxiliary Minute Book of this date. Approved. Recommendin(; action on applications for fiduciary pol,ers as set forth in the Auxiliary Minute Book of this date. Approved. Recommendin's approval of the application of Ur. Albert M. Creighton to serve at the 5=0 time as director and Vice President of the Central National Bank of Lynn, 17,assachusetts and as director of the National Shaumnt Bank, Boston, Lassachusetts. Approved. % Recommondiws approval of the application of Charles E. Bunting to serve at the same time as director of the Northern national Bank and of the Summit Trust Company, both of Tole o Ohio. Approved. The meeting adjourned at 12: Secretry. %roved:
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