The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
529 A meeting of the Federal Reserve Board was held in the office of the Federal Reserve Board on Tuesday, December 28, 1926 at 11:00 PRESENT: 6.•Trl• Governor Crissinger Mr. Platt Mr. Hamlin Mr. Miller Mr. James Mr. Cunningham Mr. McIntosh Mr. Eddy, Secretary Mr. McClelland, Asst. Secretary The minutes of the meetings of the Federal Reserve Board held on December 10, 14, 15, 17 and 18, 1926, having been circulated among the members of the Board were upon motion approved. Mr. Mitchell, Chairman of the board of directors of the Federal Reserve Bank of Minneapolis, entered the meeting and discussed with the Board the custody function at the Federal Reserve Bank of Minneapolis, stating that for the time being the Minneapolis bank is not considering making a charge for the custody of securities but that it proposes to discontinue the safe keeping of securities not armed by member banks. He referred, however, to the fact that certain clearing houses in and about the 9th District were contemplating the imposition of a charge for the safe keeping function and that in the event such a charge were adopted it might be necessary for the Federal Reserve bank to consider the same course. Following the discussion, it was the consensus of opinion that as long as there is a question pending as to the imposition af a charge for the custody of securities by clearing house banks, no change in the existing practice af the Federal Reserve banks should be approved by the Board. Mr. Mitchell then left the meeting. Letter dated December 22nd from the Secretary of the Federal Reserve Bank of New York, advising that the board of directors on that day rade no 530 -2- 12/28/26 change in the bank's existing schedule of rates of discount and purchase. Noted. Telegram dated December 23rd from the Chairman of the Federal Reserve Bank of Kansas City, advising that the board of directors on that day made no change in the bank's existing schedule of rates of discount and purchase. Noted. 1:latter approved on initials on December 27th, namely, application of the City Na.tional Bank in Lincoln, .Nebraska, for original stock (240 shares) in the Federal Reserve Bank of Kansas City, effective if and when the Comptroller of the Currency issues a certificate of authority to commence business. Formally approved. I.Mter approved on initials on December 27th, namsly, telegram to the Governor of the Federal Reserve Bank of Minneapolis, authorizing the payment of the regular semi-annual dividend by that bank but advising that action With respect to charge-offs which the bank desires to make will be taken vrith- in the next day or so. Formally approved. Letter dated December 23rd from the Federal Reserve 2,gent at New York, advising that the City Bank Trust Company, Syracuse, N. Y., caiteraplates taking over the Bank of Onondaga, Onondaga Valley, IT. Y., and that he will forward later application for the Board's approval. Noted. Report of Committee on Examinat ions on letters dated December 22nd and 24th from the Federal Reserve lLgent at Chicago, with respect to and reconLliending approval of the establishment by the Detroit Savings Bank a31 12/28/26 of an additional branch office at the intersection of Chalmers and Harper Avenues, Detroit; the Committee rem ._ending approval. Approved. . Pierre Jay tendering his resigLetter dated December 22nd from'lc. nation as a Class C Director of the Federal Peserve Bank of Hew 'York, effective as of December :A., 1926. Upon motion by LT. IaLIlifl, Jr. Jay's resignation was accepted 'with regret. L'emorandum from Counsel dated Deceirber 22nd on letter dated December 7th from the Federal I-!eserve Agent at Poston, transmitting a request of the Fidelity Trust Company of 'Portland, Ile., that the Board waive a Special condition imposed upon the bank at the time of its admission to the Federal 1:eserve system and later amended, restricting the an-Jaunt of loans and investments for any one person, firm or corporation; Counsel stating that he 1:na,:s of no legal reason why the Beard Lay not waive this condition if it so desires. Upon _Lotion by TIr. Hamlin, it -was voted to waive the condition of membership referred to. - Temorandum from Counsel dated December 22nd, cubmittinr draft of rePly to letter dated December 17th from the Federal heserve Agent at Chicago, advising of the action of the board of directors of that 'tank in voting, sitject to the approval of the Board, to authori7.e the officers of that -bank to withhold the ajliflg of dividend checks to any and all member banl:s whose Coors have been closed for the period exceeding six months, until liquidating agents or receivers have been appointed and qualified tO wind up the affairs of such institutions; the r)roposed letter stating that in the opinion of the Board the withholding of dividends as proposed 12/28/26 -4- 532 is not in accord with law end the F oard therefore does not approve. Upon motion, the proposed letter was approved. ilemorandum from Counsel dated December 8th, with reference to the recomendations of the recent Conference of Federal Reserve Agents with regard to securing the surrender of Federal Reserve bank stock by national banks vrhich have discontinued business, but have not gone into liquidation in accordance with law; Counsel submitting draft of a letter to the Comptroller of the Currency (1) requesting that whenever possible under the law he notify a national bank which has ceased to do business but which has not gone into liquidation that it must go into liquidation in accordance with law or else a receiver will be appointed; and (2) requesting his Opinion with respect to the proposed a.mendments to Section 6 of the Federal Peserve Act and Section 5220 of the Revised Statutes, which would give the Comptroller of the Currency authority to appoint, a receiver far a national bank which has discontinued its banking opeiations for a period of sixty days but which has not gone into liquidation as provided by law and which would also authorize the cancellat ion of Federal Reserve bank stock held by such a national bank when a receiver has thus been appointed. Upon motion, the letter submitted by Counsel was approved. Report of Committee on Salaries and Expenditures dated December 21st on the subject, of salary recoramenc3Ltt ions for employees of the Federal Reserve Bank of New York, submitted in accordance with the salary plan of ,that bank which was approved by the Beard on January 12, 1q26; the Committee recem,lending approval at all proposed transfers of employees from One grade to another, the maximum salary of which is in excess of ;,2, 500, 12/28/26 -5- and submitting without recomzendat ion u_djustments in the salaries, without changing the grades, of cer-L-in employees no:: receiving a salary of • 5,000 or more per annum, and increases in the c ompensat ion of certain employees occupying so-called appraised positions vthich do not fall within any of the grades approved in the salary plan. Upon motion by Jr. Hamlin, it vras voted to approve all changes in grades of employees of . the New York bank as recommended by the Committee. Upon motion by Jr. Hamlin, it 170.13 voted to approve an increase in the , salary of Mr. Henry Z. Persons, Examiner, from 5,300 to )5,800 per annum. Upon motion by Er. Platt, it 1711.S voted to approve an increase in the salary of Jr. ',Ira. G. Simpson, Chief of the tmamining Division of the _mating Department, from • G,000 to :,6,256 per annuli. Upon not ion by Jr. Platt, it was voted to approve an increase in the salary of Mr. George J. Ferguson, Chief of the 1:econciling Division of the .tuditing Department, from ,r5,000 to 5,250 per annusa. Upon motion by Mr. Hamlin, it was voted to approve an increase in the salary of Jr. Willi= Scott, Chief of the Foreign Department, from 05,200 to ::,5,500 per annum. Upon motion by Cr. Hamlin, it was voted to approve an increase in the salary oc Mr. Iobert H. Morgan, chief of the Loan -pplic at ion Division of the Credit and Discount Depirtment, from $5,000 to ::;5,500 per annum. Upon motion by Jr. Hamlin, it was voted to approve an increase in the salary of Mary .1. Crawford, Chief of the 'edical Division, from $6,000 to $6,300 per annum, the ;embers voting as follows: Governor Cris singer, "aye" Mr. Platt, "aye" 1,1r. Hamlin, "aye" Mr. Cunningham, "aye" Mr. Ailler, "no" Mr. James,"fto" Hr. McIntosh, "no" 534 -6- 12/28/26 Thereupon ensued a discussion of recomendations for increases in the salaries of Hr. Otto ;7. TenEyck, Superintendent of the Bank Building, and Mr. Arthur S. Vincent, Chief Engineer, from 09,000 to 10,000 per annum, re1 per annum, and from6,500 to .>7,000 spectively. Following a discussion, Mr. McIntosh moved that Beard approve continuance of present salaries of the pending report by the Secretary of employees these the Board as to salaries paid for similar services in comparable buildings in New York City. Er. McIntosh's mot ion being put by the Chair was unanimously carried. Letter dated December 23rd from the Deputy Governor of the Federal Reserve Bank. of New York, requesting approval of the trarrfer , effective January 1, 1927, of it'. John C. wagner from the grade of elevator mechanic, with salary at the rate of %5 per week, to that of foreman elevator mechanic, with salary at the rate of `',50 per week; this change being made necessary by the resignation of Hr. ;Tinian. V. Clifford, who has been employed as foreman elevator. mechanic. Approved. then submitted a memorandum addressed to him under date of December 24th by the 4xcting Director of the Division of Research and Statistics, with reference to the work being done by It. Carl Snyder, Statistician at the Federal Reserve bank of New York, and its effect on the research work of the Federal Reserve System as a whole; the Acting Director concurring in a recommendation made by Mr. Stewart, former director of the Division, in a memorandum to the Board in June 1925, that the New York bank should be advised that its present work in long time trends, production and trade should be either d'iscontinued or greatly curtailed. 12/28/26 535 -7- Fol1ving a discussion, Mr. Miller moved that the r ec women dat ion of the f or Lie r Direct or of the Division of Research and Statistics, concurred in by the present Acting Director, be approved by the Board and that it be the sense of the Board that work in long time trends of production, trade, etc. at the Federal reserve banks be discontinued and that the services of Mr. Carl Snyder in the Federal Reserve Agent's Department at New York be discontinued at the end of the year 1927. Mr. iTiller's motion being put by the the Chair was carried, Messrs. Platt and Hamlin voting "no". Mr. Diller then moved that ing a suitable letter of advice be referred to the Secretary of Acting Director of the Division Statistics. the r-Atter of draftof the above action the Board and the of Research and Carried. Llemorandura dated December 22nd from the Committee on Salaries and Expenditures, with regard to budgets submitted by the Federal Reserve Agents for the statistical and analytical functions at the Federal Reserve banks during the year 1927; the Committee recommendirg approval of .budgets in the following amounts: Boston New York Philadelphia Cleveland Richmond Atlanta Chicago St. Louis Minneapolis Kansas City Dallas San Francisco _ _ - `;,:.44,980 117,964 45,000 39,710 15,330 11,100 60,000 17,986 19,980 20,521 19,600 50,000 Upon motion, it was voted to adopt the recommendations of the Committee and to approve budgets for statistical and analytical work at the Federal Reserve banks in the amounts listed above. 536 -8- 12/28/26 Letter dated December 24th from the Deputy Governor of the Federal Reserve Bank of New York, confirming his telephone advice of December 23rd that the directors of that bank wish to withdraw their recommendation for an increase from 03,800 to „.15,000 per annum in the salary of Roy Furman who was to have been appointed Manager of the Credit Depart- ment; the letter transmitting a report of irregularities discovered in the credit files due to Mr. Furl-An t s activities and stating that he has been relieved of his duties in the De:iartment and is now engaged in making a special study, and further, that a copy of the report has been sent to the United States District Attorney, as disclosing a possible violation of Section 22 of the Federal Reserve Act and Sections 5208 and 5209 of the Revised Statutes. After discussion, Mr. Miller moved that the above letter be v.clalowledged with the statement that the Board notes that Llr. Furman has been relieved of his regular duties and is of the opinion that he should be relieved of all duties at the Federal Reserve Bank of New York and immediately removed from the salary roll of the bank. Mr. Miller's motion being put by the Chair was carried. Letter dated December 24th from the Chairman of the Federal Reserve Bank of Chicago, requesting an expression of opinion by the Board as to the advisability of including in his /rinual Report a discussion of bank failures in the 7th District during the past year, both member and nonieiuber. After a discussion, the Secretary was directed to request the Federal Reserve Agent at Chicago to submit to the Board a manuscript of the matter he desires to include in his report. Memorandum dated December 17th from the Chief of the Division of 537 12/28/26 Bank Operations, with regard to the desire of the Governors of the Federal Reserve Banks of Philadelphia and Richmond to continue :,ublication in their Annual Reports to stockholders of a detailed statement of the expenses of the banks by functions. After discussion, L. Hamlin moved that in view of the fact that the l'hiladelphia and Richmond banks are the only ones desiring to publish this information, the Board interpose no objection to those banks including in their Annual Reports to their stockholders a statement of expenses by functions and arrange during the coming year to have these functional expenses computed in such a manner as would permit of their publication by all Federal Reserve banks at the end of 1927. Mr. Hamlin's motion being put by the Chair WU s carried, 1,,:Tr. James voting "no". REPORTS OF STi‘.11DING CO:TIETTEEE1): Dated, December 24th, 27th, 28th, Recommending changes in stock at Federal Reserve banks, as set forth in the Auxiliary Minute Book of this date. Appr eyed. The meeting adjourned at 1:00 p.m. Secreta-r7y Lpproved:
@FedFRASER