Full text of Minutes of the Board of Governors of the Federal Reserve System : Meeting Minutes, February 17, 1925, Volume 12, Part 1

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A meeting of the Federal Reserve Board was held in the office of the
Pederal Reserve Board on Tuesday, February 17, 1925, at 11:05 a.m.
PRESENT:

PRESENT ALSO:

Governor Crissinger
Mr. Platt
Mr. Hamlin
Mr. Miller
Mr. James
Mr. Cunningham
Mr. Eddy, Secretary
Dr. Stewart, Director of the Division of
Research and Statistics.

The minutes of the meeting of the Federal Reserve Board held on
February 10th were read and approved.
Report of Committee on Salaries, Expenditures and Efficiency on
letter dated February 16th from the Comptroller of the Currency, recommend.approval of a salary of 42700 per annum for National Bank Examiner Albert
?• Harwood to be assigned to the First Federal Reserve District; the Committee
also recommending approval.
Approved.
Report of Committee on Salaries, Expenditures and Efficiency on
letter dated February 16th from the Comptroller of the Currency, recommending aEproval of a salary of c.3,000 per annum for National Bank Examiner Paul
I. Hotchkin to be assigned to the Second Federal Reserve District; the Committee
also recommending approval.
Approved.
•

Report of Committee on Salaries, Expenditures and Efficiency on

letter dated February 16th from the Comptroller of the Currency, recommendapproval of a salary of 42700 per annum for National Bank Examiner Aloysius
'40 Green to be assigned to the First Federal Reserve District; the Committee
4130 recommending approval.




Approved.

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Report of Committee on Salaries, Expenditures and Efficiency on
letter dated February 16th from the Comptroller of the Currency, recommending approval of a salary of c',3,000 per annum for National Bank Examinar
William P. Stillman to be assigned to the Second Federal Reserve District;
the Committee also recommending approval.
Approved.
Aeport of Committee on Salaries, Expenditures and Efficiency on
letter dated Februcry 16th from the Comptroller of the Currency, recommendlag approval of an increase from ,:i;.3600 to ‘:4200 per annum in the salary of
National Bank Examiner William 'g. Maloney and an increase from J)2700 to
93,000 per annum in the salary of National Bank Examiner Robert H. Matson;
the Committee also recommending approval.
Approved.
Memorandum dated Februery 14th from the Chief of the Division of
13a42.c Operations, transmitting and recommending

acceptance of the resignation

of Miss Dorothy Stoddard, junior technical clerk, effective February 28, 1925,
and requesting authority to employ another clerk, if necessary, at an annual
salary of not to exceed

1500.

Upon motion, the resignation of Miss Stoddard was
accepted and authority for the employment of a successor was granted.
Letter dated February 10th from the Secretary of the Open Market
Investment Committee, enclosing a statement of revised percentages of particiPation of Federal Reserve banks during the month of Febraery in System purchases of government securities and bankers acceptances.




Ordered circulated.

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2/17/25
Report of Committee on Examinations on letter dated February 10th
from the Federal Reserve Agent at St. Louis, transmitting and recommending
aPProval of the application of the Twelfth Street National Bank of St. Louis
for a reduction in its reserve requirements from 10

of demand deposits and

3% of time deposits to 7,b of demand deposits and. 3% of time deposits under
the provisions of Section 19 of the Federal deserve Act; the Committee also
recommending approval.
Approved.
Report of Committee on Examinations an letter dated February 9th
from the Federal Reserve Agent at Cleveland, transmitting and recommending
approval of an application of the Citizens Trust and Savings Bank, Columbus,
Ohio, for permission to establish a branch at Cleveland Avenue and Mock
Road in the city of Columbus; the Committee also recommending approval.
Approved.
Letter dated February 13th from the Vice President of the International Banking Corporation, New York City, advising of their intention to open a
branch of the Corporation in the city of Osaka, Japan, same time in April.
Noted.
Letter dated February 10th from the Chairman of the Federal deserve
Bank of Philadelphia, inquiring if there would_ be any objection on the part
Of

the Board to his leaving the bank about February 24th for an absence until

the first of April.
Upon motion, it was voted to interpose no
objection providing the Governor is expected
to be at the bank during the period of the
Chairman's absence.
Report of Committee on Salaries, Expenditures and Efficiency dated




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2/17/25

February 16th, recommending approval of the action of the board of directors
Of the Federal Reserve Bank of Atlanta at their meeting on January 9th in
voting to approve compensation at the rate of 40 per meeting for members
Of

the Building Committee of the Birmingham Branch not receiving a regular

salary from the Branch.
Approved, Mr. Miller voting "no".
Report of Committee on Salaries, Expenditures and Efficiency, recommendlog approval of the following salaries for officers and employees of the
Federal Reserve Bank of Dallas, submitted in letter dated February 11th from
thB Chairman of the bank:
Effective January 1, 1925
‘A0,000
B. A. McKinney; Governor
6,600
R. B. Colman, Cashier
6,000
E. B. Stroud,Jr.,Counsel
4,500
R. L. Foulks, Auditor
Fred Harris, Managing Director, Houston
6,000
Branch
Relations
Bank
Member
C. L. Childers,
2,700
Department
Effective February 1. 1925
White, Insolvent Banks DepartL.
ment
a. H. Alexander, Insolvent Banks
Department

3,300
3,000

Approved.
Eemorandam dated February 14th from the Committee on Salaries, Expenditures

44a

Efficiency, suggesting that the Federal Reserve Bank of Richmond be request-

to furnish the Board with the following information in connection with its
teqUost for authority to establish a branch in the southwestern portion of its
district:
(1) The character of branch which is proposed,
giving in more or less detail just what functions and
activities the branch will be expected to perform.




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_4,

(2) A budget covering the cost of installation of
the branch and an estimate setting out in as complete
detail as may be possible the number of employees required, the cost of operating the branch and the amount
of permanent investment requ.ired.
(3) An estimate of the reduction in expense and the
number of .employees at the home office which would follow
the establishment of the proposed new branch.
Upon motion, the suggestion of the
Committee was approved.
Memorandum dated February 16th from the Assistant Secretary, approved
1)Sr the Committee on Branches, recommending approval of By-laws of the Helena
Branch of the Federal Reserve Bank of Minneapolis amended to conform to the
B°arcle s regulations governing the appointmant of branch bank directors.
Approved.
Copy of letter dated. February 11th to Mr. Milton D. Ailes, President
c3t the Riggs National Bank of Washington, D. C. prepared by the Secretary
a•ccoriance with action taa'cen at the Board. meeting on February 10th, adthat the Board can not at this time answer the question relating to
'
tl azisactions in Russian rouble exchange in 1919 raised in a letter addressed.
to

r. Aides under date of January 31st by Shearman and Sterling, Counsel for

tbe
National City Bank of New York.
Upon motion, the above letter which was
approved on initials of the members on February
llth was formally ratified.
Memorandum from the Secretary with regard to letter dated February 9th
ibli°111 the Chairman of the Governors' Leased ',7ire Committee,, submitting proposed
4/404,4_
1/44-1231itS

to the Board's regilations governing the use of the leased wires; the

4el'etar;y' recommending approval of the anendmnts suggested by the Committee.




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.11.4C;)

Referred to the Executive Committee with
power.
Memorandum dated February 10th from the Secretary, approved by the Committee on Examinations, ou letter dated February 6th from the Federal Reserve
4gent at Atlanta, requesting that the Managing Director of the New Orleans
Branch be furnished with copies of reports of examination of national batiks
in the New Orleans territory for his confidential use and to be retained in
his confidential file; the Secretary recommending that the matter be referred
to the Comptroller of the Currency and that he be asked to advise the Board
whether or not, in his opinion, as a practical operating detail there is any
objection to the Managing Director of a full powered Federal Reserve Branch
ik keeping in his files for his own information and guidance in passing upon
applications of national banks for reserve credit, copies of the re:orts of
examination of national banks located in the territory served by the branch.
Upon motion, the recommendation of the Secretary
was approved.
The Governor then stated that the next order of business would be consideration of
the eleventh Annual Report of the Board covering operations for
the year 1924, copies of which in galley form were previously handed the individ441 metbers of the Board. Thereupon ensued a discussion of the various chapters
Of the Report during which several minor revisions were suggested to the Direct°r of the Division of Research and Statistics for incorporation in the report.
The Director inquired as to whether or not the Board wished him to edit
these sections of the report prepared by General Counsel and submitted through

4

the Law Committee.




Upon motion, it was voted that the Director of the
Division of Research and Statistics shauld edit the
entire report and that there be referred back to the
Law Committee for editing, in conjunction with the
Director, that section relating to the administration
of the Clayton Act.

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2/17/25

Mr. Hamlin then moved approval of the
report with the revisions suggested by the Board
and. with the understandirg that it will be released for publication on a date to be fixed by
the Governor.
Carried.
ry llth:Mr. James then submitted the following memorandum dated Februa
base my judg"For the purpose of getting information upon which to
made by Fedents
Agreem
hase
Repurc
ment on matters relating to "Sales or
ons:
questi
ing
follow
the
submit
eral Reserve Banks", I respectfully
or repurchase
(1) What is the legal status of the so-called sales
and sold by
bought
are
ances
agreements through which accept
Federal Reserve Banks?
that in the case
(2) Has not the Comptroller of the Currency ruled
hase agreement
repurc
nnaer
sales
such
of National banks making
d as loans?
treate
and
ered
consid
be
the transactions should
report of condi(3) Why should some "Recognized Dealers" in making
pledged
tances
"accep
show
Board
e
Reserv
tion to the Federal
transas security for Loans due Federal Reserve Bank" if these
Condiof
t
"Repor
see
ce,
instan
(For
actions are legally sales?
1924").
31,
er
Decemb
of
as
ation
tion of the First National Corpor
hase
not the buying and selling of acceptances under repurc
enable
banks
member
with
ated
affili
ations
agreement with corpor
l Reserve
these member banks to provide funds from the Federa
t showing
withou
ers
custom
their
of
t
benefi
Banks for the use aid
as acceptor?
direct liability, other than possibly the liability

(4) Does

mathod of
not the rates, as a rule, more favorable under this
borrowing than by straight rediscount?

(5) Are

(6) Just what is meant by "Recognized Dealers"?
designation
(7) What are the qualifications requisite to obtain this
or distinction?
made?
(8) By whom and by what authority is the designation
is available for
(9) Is there any list of "Recognized Dealers" that
public inspection or information?
to Federal
(10) Can producers of staple commodities sell direct
hase
Reserve Banks (either on straight sale or under repurc




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2/17/25

-5"agreements) bankers' acceptances based upon such
commodities either individually or collectively
through cooperative marketing associations?
(11) Cannot the preferential rates that are applied on
bankers' acceptances be made available to producers
in some way?"
After discussion of the questions raised by Mr.
James, the Secretary was directed to furnish each member
of the Board with a copy of the memorandum and it was
voted that a special meeting to consider the subject of
repurchase agreements should be held on some future date
to be fixed by the Governor.
The suggestion was also made that copies of the
memorandum be sent to the Governors of the Federal Reserve
Banks of New York ,and Boston, and that arrangements be
made to have Mr. Harrison, Deputy Governor of the Federal
Reserve Bank of New York and the Board's Counsel present
at the meeting of the Board at which the questions are to
be considered for consultation regarding such legal questions
as may arise in connection with the discussion.

22PORTS OF STANDING COMMITTEES:
Dated, February 10th, Recommending changes in stock at Federal Reserve
11th, Banks, as set forth in the Auxiliary Minute Book
13th, of this date.
Approved.
14th,
16th,
17th,
Dated, February 16th, lRecomnoniing action on application for fiduciary
powers as set forth in the Auxiliary Minute Book
of this date.
Approved.
Dated, February 11th, Recommending action on application for admission
of state bank, subject to the conditions stated
in the individual reports attached to the applications, as set forth in the Auxiliary Minute Book
of this date.
Approved.
Dated, January 27th,
Recommending approval of the arplication of Mr.
Robert Baird to serve at the same time as director
of the Grand and Sixth National Bank, Milwaukee,
Wis., as director of the First Wisconsin National
Bank, Milwaukee, Wis., and as director of the First
National Bank, Wauwatosa, Vas.
Approved.




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APORTS OF STANDING COMMITTEES: (Cont'd)
Dated, February 9th, Recommending approval of the application of Ur.
J. W. Butler to serve at the same time as Vice President and director of the United States National Bank,
Galveston, Texas, as director of the First National
Bank, Marietta, Okla., and as director of the Texas
City National Bank, Texas City, Texas.
Approved.
Dated, February 10th, Recommending approval of the application of Mr.
Joseph G. Wolber to serve at the same time as director
of the Atorican National Bank, Newark, N.J. and as
director of the First National Bank, Montclair, N.J.
Approved.
Dated, February 10th, Recommending approval of the application of Mr.
Donald. E. Meek to serve at the same time as officer
of the Ashland National Bank, Ashland, 4., and as
director of the Kentucky National Bank, Catlettsburg,
Approved.
Dated, February 11th, RecommencUng approval of the application of Er.
Delos W. Cooke to serve at the same time as director
of the Foreman National Bank, Chicago, Ill. and as
director of the Seaboard National Bank, New York City.
Approved.
Dated, February 12th, Recommending approval of the application of Mr.
C. Q. Chandler to serve at the same time as director
of the First National Bank, Higgins, Texas and as
director and officer of the First National Bank in
Wichita,, Kansas.
Approved.
Dated, February 13th, Recommending approval of the amlication of Mr.
Chas. E. Albright to serve at the same time as director
of the Grand and Sixth National Bank, Milwaukee, Wis.
and as diractor of the First Wisconsin National Bank,
Milwaukee, Wis.
Approved.
Dated, February 13th, Recommending approval of the application of Mr.
Walter Kasten to serve at the same time as director
of the Grand and Sixth National Bank, Milwaukee, Wis.,
and as director of the First Wisconsin National Bank,
Milwaukee, Wis.
Approved.
Dated, February 16th, Recommending approval of the application of Mr.
Geo. A. Guild to serve at the same time as officer
and director of the Central National Bank of Topeka,




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2/17/25

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2.Z:117-OATS OF STANDING COMMI=Ea: (Cont'd)
Kanlas, as director of the First National
Bank of Hiaiatha, Kansas and as director
of the National Bank of Sabetha, Kansas.
Approved.

The meeting adjourn°

1:15 p.m.

tt
"414
""v

Secretary.
Proved: