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107 A meeting of the Federal Reserve Board was held in the office of the Board on Tuesday, February 2, 1926 at 11:50 a.m. PRESENT: Vice Governor Platt Mr. Hamlin Mr. Miller Mr. James Mr. Cunningham Mr. McIntosh Mr. Eddy, Secretary Mr. McClelland, Asst. Secretary The reading of the minutes of the meetingsof the Federal Reserve Board held on January 26th and February 1st was dispensed with. Memorandum dated February 1st from the Assistant Director of the Division t/f Research and Statistics, recommending the temporary appointment for a period °f three months, beginning February 8th, of Robert Nelson as messenger in the 11 Division with salary at the rate of 475 per month, to replace Raymond Collier Who has been transferred to the Library. Approved. Memorandum dated January 29th from the Chief of the Gold Settlement Division, submitting resignation of Mr. R. E. Lavoie, clerk on the night force of the Division, effective February 2nd, and requesting authority for the employment of an additional extra man for emergency purposes. Approved. Mr. Wyatt, the Board's General Counsel, then submitted a draft of a l'ePly to letter dated January 25th from the Chairman of the Committee on 8/Inking and Currency of the House of Representatives, referred to the Law e0111Mittee at the meeting on January 28th; the proposed letter expressing the Board's disapproval of a suggested amendment to Section 9 of the Federal Ileserve Act, to provide that conditions, rules and regulations prescribed 108 2/2/26 -2- the Federal deserve Board on state member banks applying for membership in the System shall not limit or impair the charter or statutory rights and pagers of state banks, and that the Board shall not impose azty conditions or restrictions Other than those under which national banks operate. After discussion of the proposed reply, copies of which had previously been furnished each member of the Board, the letter was approved with certain minor amendments. Upon motion by Mr. Cunningham, copies of the above letter, as amended, were ordered furnished to the members of the Board and to all Federal Reserve banks for their information. Report of Committee on Salaries and Expenditures on letter dated January 28th from the Comptroller of the Currency, requesting approval of a salary of 4'3000 per annum for National Bank Examiner Frank 7. Piper, to be assigned to the 10th Federal Reserve District; the Committee also recommending approval. Approved. Letter dated February 1st from the Secretary of the Federal Advisory °°114cil, advising that the next meeting of the Council will be held in VI8Ohington on Thursday, February 18th and requesting that topics for discussion at the meetingbe forwarded to him for distribution among the members of the e°114c11. Noted and referred to the Vice Governor preparation of a list of topics. for Letter dated January 28th from the Chairman of the Federal Reserve Bank °t New York, advising of the election of L:r. James S. Alexander, Chairman of the board of directors of the National Bank of Commerce in New York, as member cit the Federal Advisory Council from the 2nd Federal Reserve District for the ear 1926. Noted. 109 2/2/26 Letter dated January 28th from the Chairman of the Federal Reserve Bank Of New York, requesting the designation as Federal Reserve Examiners of Messrs. Js V. D. Stryker and Arthur Phelan, and as Assistant Examiners of Messrs. J. F. BYraa, A. P. Fallon, A. C. Guild and S. H. Stevenson, all of whom are employees °f the bank with no changes in salary involved. Approved. Report of Committee on Salaries and Expenditures on letter dated January 27th from the Chairman of the Federal Reserve Bank of Philadelphia, advising (If the action of the directors of that bank in granting leave of absence of llot exceeding three months from January 1st to Miss Barbara A. Beckman, an etployee of the Telephone Department; the Committee recommending approval. Upon motion, it was voted to approve payment of compensation to Miss Beckman during the leave of absence referred to. Report of Committee on Examinations on letter and telegram dated January 29th from the Federal Reserve Bank of Richmond, recommending approval of the action of the Bank of Hartsville, Hartsville, South Carolina, in consolidating "January 28th with the First National Bank of Hartsville; the Committee also recoMMending approval. After discussion as to the frequency with which consolidations of this kind are effected without the Board's approval, Mr. Miller moved that the Federal Reserve Agent at Richmond be advised that the Board before formally approving the consolidation desires to have a statement of the basis on which his bank recommends approval and that he be advised further that it is the opinion of the Board that at the time Of such consolidations a Federal Reserve Bank should be satisfied, on the basis of accurate information, that there can be no objection thereto. Carried. I 110 2/2/26 --4- Report of Committee on Examinations on letter dated January oOth from the Federal Aeserve Arent at 3t. Louis, transmitting and recommending approval C3f the application of the Federal 3ank and Trust Company, Little sock, Ark., for formal approval of its action in absorbing the First National Bank of liorth Little Aock; the Committee recommending approval. Approved. .ieport of Committee on Examinations dated January 29th on letter dated January 25th from the Assistant Federal _ieserve Agent at New York, advising Of the action of the Llanufacturers and Traders ?rust Company of Buffalo in tPrging the Aiverside National Bank of Buffalo as of the close of business aanuary 2 nd, and letter dated January 22nd from the Federal deserve Agent adv ising of the merger of the Central ?ark Bank of Buffalo with the llanufacturers and Traders Trust Company as of January 14th; the Committee recommending approval Of the consolidations. After discussion, 1;1r. James moved that the Federal Reserve Agent at New York also be advised of the Board's opinion that before consolidations of member banks are effected the Federal Aeserve bank of the District concerned should be satisfied on the basis of accurate infonmation that there can be no objection to the consolidation. Carried. Report of Committoe on Examinations on letter dated January 28th from tile Chairman of the Federal .deserve Bank of Kansas City, transmitting cor- l'ealxIliclence with the Commissioner of Finance of the state of :assouri, regardall examination of the Commerce Trust Company of Kansas City, the last ex614111at ion of which was made on October 25, 1924; the Committee recommending that the Chairman be advised that the Federal Reserve bank should procure a wi J 2/6t1 sufficient numb3r of examiners to make an indenendent exanination of the bank, rather than a credit investigation as suggested, and that the charges therefor should be assessed against the institution. ,,?.fter discussion, it was voted that the Board approve an examination of the Commerce Trust Company by the Federal .Aserve Bank of Kansas City and that the Committee on 2xamiaations be authorized to arrange for such cooperation as mau be necessary on the part of the Board's Division of Exanination. Letter dated February 1st from the Federal lieserve Agent at New York, a°171sing of authorization issued by the New York State Banking Department to the , .ianufacturers and Traders Trust Comnany of Buffalo for the establishmont Of a branch at 809 Tonawanda Street, Buffalo and authorization issued to the Ilechanics Bank, Brooklyn, N. Y. for the establishmlnt of a branch at 1505 J, Brooklyn, uton the consummation of a merger with the Mechanics Bank Of the Flatbush State Bank. Noted. Letter dated January 28th from the Secretary of the Federal lieserve 441c of IT= York, advising that the Board of Directors of the Bank on that Cia'te made no change in the existing schedule of rates of discount and purchase ill effect. Noted. Letter and telegram dated January 29th fram the Chairman of the Federal acIserVe Bank of Chicago, advising that the Executive Committee on that date O atabliShed a rate of C on open market purchases of trade acceptances, subject to the approval of the Board, but made no other change in the existing schedule Of rates of discount and purchase in effect. 112 2/2/26 -6- Upon motion, it was voted to .pprove a rate of 4/0 for open market purchases of trade acceptances by the Federal Reserve Bank of Chicago. Telegram lated Jazillary 28th from the Chairman of the Federal Reserve 1341lit of Kansas City, advising that the board of directors on that date mde II° change in the existing schedule of rates of discount and purchase in effect a't that bank, Noted. Report of Committee on Examinations on letter dated January 26th from the Federal Reserve Agent at Chicago, transmitting resolution adopted by the Of directors of the First Trust and Savings Ben.lc of Hammond, Indiana, , l'ecluesting approval of the action of that bank on January 2, 1926 in consoliclat -g With the First National Bank of Hammond; the Committee recommending 41315rcva1 in view of the fact that the Board was advised of the proposed con()11(lation at the time its application for mmbership in the ystem was ap- 1311/lied on December 29, 1925. Approved. Letter dated January 28th from the Governor of the Federal Reserve Bahl, Of Dallas, renewing his mzestion that a Consulting Counsel be employed he Federal .teserve System who could serve as a clearing house for legal -41)ation air:loac; the Federal Reserve banks and whose services would. be avail41, - 14. the avent a particular Federal Reserve bank desired to call upon him. Referred to the Law Committee. Letter dated January 26th from Professor O. E. 1. Sprague, replying to letter addressed to him in accordance with action taken at the Bm-Lrd. meeting 113 1\ 2/2/26 -7- on January 19th, with reference to the request made of the Board for informatl-'pt as to the =aunt of rediscounts and advances extended by Federal Reserve banks by years, since and including 1915, to member banks, grouped according to rL 'sources; Professor Sprague stating that compliance with the request seems inadvisable as it would involve a considerable amount of work at the various iieserve banks and the data when compiled would serve no definite purpose of the Board, and further, that in the absence of detailed explanation Lighly -1s1eading inferences would be based upon information of this character. After discussion, Mr. James moved that Mr. H. P. from whom this request was received, be advised that the compilation of the data would involve a considerable expense and that the value of the material to the Board when completed would not seem to justify the expenditure. Carried. The Vice Governor then presented resolutions adopted at a meeting of l'ePresentatives of sixty country manber banks in central and northern Minnesota l'ecillesting the elimination of the par clearance system of the Federal Reserve ballizs, and requesting further that country member banks be permitted direct l'ePresentation on the Federal Reserve Board. Noted. Letter dated January 28th from the Federal Reserve Agent at San Francisco, acivising that he has nevar received a copy of the Stenographer's report of the hearing on the subject of branch banking held before the Board on September 12, la„ and requesting that he be furnished with a copy. Approved. Letter dated January 25th from Y.T. John1J. Barton, Chairman of the 114 2/2/26 American Bmokers _Issociation Committee on "Ton-cash Items, submitting an azalysis of replies to the questionnaire on the subject of the continuance O] non-cash collections function of the Federal aeserve banks submitted by the Committee to all member banks. After discussion, it was voted that a copy of this letter and enclosures be forwarded to the Committee on Voluntary Services of the Governors Conference for their comments. Hamlin then submitted memoranda with res-pect to the duties and l esponsibilities of the Chairman and Federal aeserve Agent at a Federal ' lieserve bank, together with an analysis of a letter on this subject addressed to him by Mr. William Sproule, Class "C" director of the Federal aeserve Bank °f San Francisco. lIr. Hamlin also submitted letters on the same subject from r• MoC. Martin and Mr. John Perrin, Chairmen and Federal aeserve Agents at the Federal Reserve Banks of St. Louis. and San Francisco, respectively. :Ir. Miller stated that he had been giving considerable thought to this question, and expressed the opinion that some definite expression with regard to the matter should be made by the Board preferably at the time some now appointee is about to assume the office of Chairman and Federal aeserve Agent, having in mind the fact that Mr. Isaac B. Newton will assume that office at the Federal Reserve Bank .of San Francisco on March 1st. Following the discussion, it was voted to refer 4 2 :Ir. Hamlin's memoranda to the Committee on District 4 meeting a at Board the with the request that it submit to to be held on Wednesday, February 10th, suggestions for a definite statement of the Board's position with ros-oect to the above question. Memorandum dated January 29th from the Chief Examiner, submitting report Of examination of the Shaumut Corporation of Boston, as at the close of business 2/2/26 —9- 115 1:ay 22, 1925. Referred to the Committee on Examinations. aeDort of Examination of the Federal Reserve Bank of Philadelphia,. as at the close of business May 2, 1925. Referred to the Committee on Examinations and Committee on District 3. Report of Examination of the Federal Reserve Bank of Boston, as at the close of business May 16, 1925. Referred to the Committee on Examinations and Committee on District 41. Report of Examination of the Federal Reserve Bank of :ew York and its Buffalo Branch, as at the close of business May 29, 1925. Referred to the Committee on Examinations and Committee on District 42. 0 S OF KIDDING C0=ITTE3S: Dated, January 29th, 30th, Recommending chnnces in stock at Federal Reserve Banks, as set forth in the Auxiliary Minute Book of this date. Approved. Dated January 28th, Recommending approval of the application of Mr. C. R. Burrell for permission to serve at the same time as President and Directer of the National Bank of North Kansas City, North Kansas City, Mo., and as Vice President and Director of the Home Trust Company, Kansas City, Approved. Dated, January 29th, Recommending approval of the application of Mr. :dgar Palmer for parmission to serve at the same time as Director of the Hanover National Bank, :Tau York City and as Director of the 1st National Bank, Princeton, N. J. Approved. Dated, January 29th, R- ecommending approval of the application of Mr. H. Otto 7ittpenn for permission to serve at the same time as Director of the 1st National Bank, Hoboken, N.J. as Director of the :Terchants National Bank, Jersey City, N. J. and as Director of the 1st National Bank, Jersey City, N. J. Approved. 116 2/2A6 132 -2.X 10 -10- OF STANpING COLITITTS: (Contid) Dated, Febru.ary 1st, Recommending approval of the application of Lire Theodore Swann for permission to serve at the same time as Director of the 1st National Bank, tolniston, Ala. and. as Director of the 1st National BF1211c, Birmingham, Ala. Approved.. The meeting adjourned at 1:15 p.m. Vice-Governor.
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