The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
,r A meeting of the Federal Reserve Board was held in the office of the 4deral Reserve Board on Tuesday, February 5, 1924, at 10:15 a.m. PRESENT: Governor Crissinr3er Mr. Platt Mr. Hamlin Mr. Miller Mr. James Er. Eddy, Secretary The Board received a committee consisting of Senators Phipps and Adams ().t Colorado, Congressman Vale, Governor Bailey of the Federal Reserve Bank of talasas city, Director Byrnes of the Federal Reserve Bank of Kansas City and 141'oetor Parks of the branch Federal Reserve Bank at Denver. The various members of the delegation informed the Board of their views with regard to the inadequacy of the present quarters of the branch Federal Reserve banks at Omaha and Denver, presented plans for the proposed buildings to house the branches and expressed the opinion that an expenditure in each etts Of not to exceed 50,;: would be sufficient. Governor Bailey stated Other things that in his opinion this amount would cover the entire exOf the buildings with the exception of the cost of building site, furni- ttl re and fixtures, and that the buildings proposed would provide in each case "Icient space to facilitate the handling of about double the present volume of business. At this point, the members of the delegation, with the exception of 4"errior Bailey, left the meeting and Governor Bailey discussed briefly with he Members of the Board the question of the appeal of the Burnes National Bank or St. Joseph, Missouri, from the recent decision of the Supreme Court of La sacluri that national banks in the State of Missouri could not exercise trust 1)0werelk Governor Bailey inquired of the Board to what extent the Federal 9 2/5/24 in the trial Reserve bank should participate in the expense of attorneys, etc. before tho Supreme Court of the United States. or Ur. Hamlin stated that it was his understanding that the Solicit C'eneral desired to represent the Government in this case, and in view of that that while the member tact, the Board expressed to Governor Bailey its opinion banks in Mssouri might retain special counsel in the case, the Federal Reserve 4.41t the permit of Kansas City should not participate in any expense, but should Solicitor General to handle the case in its behalf. also At this point, Governor Bailey left the meting and Mr. Miller withdrew from the room. on The minutes of the meeting Of the Federal Reserve Board held ?abruary 1st were read and approved. to insert By unanimous consent, Governor Crissinger was authorized the following statement in the minutes of the meeting held on January 31st, Pacific Southwest 114 sUPPOrt of his negative vote on the application of the TzlIst and Savings Bank for permission to establish branches at Santa Paula, 84ticoy and Fillmore: the appli"Governor Crissinger stated that he had voted against permission for Bank Savings & Trust est cation of the Pacific-Southw because Fillmore and Saticoy Paula, Santa at to establish branches by mems branche further of tion acquisi the ho does not believe in of a tion examina by , thereof sion supervi ber banks unless and until be given to character satisfactory to the Federal Reserve Board, can ties authori banking state the by s branche the applicant bank and its has he that a member; is it which of bank and by the Federal Reserve addiof g grantin the against voting been actuated by this reason in -Southwest tional branches to the Bank of Italy and to the Pacific tive on the affirma the in voted have Trust & Savings Bank; that-to favor of the in ination discrim a present application would have been of Italy; Bank the against as Bank Pacific-Southwest Trust & Savings Trust est -Southw Pacific the to that the granting of this permission of Bank the of s branche for field & Savings Bank opens up the whole s branche Italy of Bank for vote to Italy and that he reserves the right against inating discrim of n positio the that the Board may not be put in the Bank of Italy." 7 2/6/24 The Secretary then presented the following memorandum prepared by Dr, Stewart: "At a conference of the Federal Reserve Board, held on February 4, 1924, - Present: Governor Crissin,ser, Mr. Miller, Mr. Hamlin, and Mr. Platt - the Board's resolution of September 11, 1923, with .regard to showing the reserve position o.2 the Federal Reserve System in the form of separate ratios for notes and deposits, respectively, was discussed with a view to determining the date When it should be put into effect. It was moved by Mr. Platt and carried without a dissenting vote that the plan of stating' the reserve ratios separately for notes and deposits for the consolidated statement of the twelve Federal Reserve banks should be put into effect at an early a date as practicable and that the matter of fixing the precise date be left to the Governor with power." Upon motion by Ur. Hamlin, the above action was ratified and ordered incorporated in today's minutes on the assumption that the gold settlement fund was to be considered part of the deposit reserve. The Governor announced that the next meeting of the Open Ularket ItVestment Committee for the Federal Reserve System would be held in VlaShington on Friday, February 8th. Memorandum dated February 4th from the Committee on Salaries and %enditures recommending approval of an increase from ':1260 to 0.400 per 4444M, effective February 1, 1924, in the salary of Miss Catherine M. Burke, assistant chief telephone operator. Approved. The Committee on Salaries and Expenditures then submitted to the 4ard a letter dated December 26, 1923, from the Federal Reserve Agent at Dallas enclosing and requesting an expression of the Board's view with regard t° at account of expenses and compensation of Mr. R. L. Ball, in connection Ivith meetings of the Federal Advisory;Council and of the Board of Directors of the Federal Reserve Bank of Dallas, attended during the years 1920-1923 -4- /24 inclusive, the account totaling 03,543.07. After discussion, Mr. Platt moved that the Federal Reserve Agent be eaVised that the Board sees no objection to the statement rendered by Judge 1;all, if it is satisfactory to the Federal Reserve Bank of Dallas, Approved, Telegram dated February 4th from the Deputy Governor of the Federal Reserve Bank of Chicago, requesting the Board's permission to use their illecretion in discounting non-member bank paper for the First National Bank er Sioux City, Iowa, together with a telegram transmitted under date of ?ebruary 4th, on the initials of four members of the Board granting the Ipermission reouested to be used only as relief in an emergency directly affecting the member bank. Upon motion, the telegram transmitted on February 4th, was formally approved. Telegrmm dated February 1st from the Federal Reserve Agent at San Prencisco, requesting approval of the appointment of Mr. D. W. Henderson as aPecial assistant examiner, together with telegram transmitted under date "February 2nd on the initials of four members of the Board approving said 4141°Int1flent. Upon motion, the telegram transmitted on February 2nd, was formally approved. Letter dated February 2nd from the Chairman of the Federal Reserve knit Of Atlanta, requesting approval of the purchase by that Bank from the Citizens Pirst National Bank of Albany, Georgia, of 048,000. of warrants of he City of Albany, together with telegram sent out on February 4th as toilows: 2/5/24 "Your letter February 2. Board is not able from facts disclosed therein to pass upon merits of proposition your purchasing :,i48,00( municipal warrants from Citizens First National Bank of Albany. If purchase of warrants will relieve that bank in an emergency Board would suspend limitation subject to opinion of your Counsel as to legality of warrants. If however purchase is merely to enable Albany Bank to put itself in position to secure a city deposit of .:200,000 Board does not feel warranted in suspending limitation." - ram above auoted was Upon motion, the tele:J formally approved. Letter dated February 1st from the Secretary of the National Council Ilarketino t})e inviting members of the Board to be Cooperative/Associations Parmers No_ rIt at the National Cooperative IZarketing Convention to be held in Cton on February 7, 8 and 9. Upon motion, the Governor was requested, if possible, to accept the invitation. letter dated February 2nd from Congressman Scott Leavitt advising of Of a telegram from Honorable H. L. DeKalb of Lewiston, 1,:ontana, re- et that the Federal Reserve banks be more liberal in analyzing the 11411Leter of paper submitted for rediscount and not re,jlire additional col01 guaranty. Upon motion, a copy of Congressman Leavitt's letter was ordered transmitted to the Federal Reserve Bank of Minneapolis. Letter dated January 31st from the eederal -Joserve Agent at Boston regard to the practice of borrowers in the liecond Federal Reserve District rttliill" credit statements direct with the Federal Reserve Bank, rather th Monter banks, and stating that the proximity of the Boston District to he York District is such that the policy adopted places their at a disad\antage and embarrasses them through being 2/5/24 -6- considered too technical in their construction of the Board's ruling that .4nless a financial statement of the borrower is filed with member banks in 411 cases notes will not be eligible for rediscount with Federal Reserve tatks, Upon motion, a copy of Mr. Curtiss' letter was ordered transmitted to the Federal Reserve Bank of New York with request that they furnish the Board with a statement of the practice in that District. Memorandum dated February 2nd from the Comptroller of the Currency l'eoommending approval of the application of the First National Bank of liclultain Grove, Missouri, for permission to reduce its capital stock from C50 nn l'iv0 to 025,000. Referred to Committee on Ibcaminations. Letter dated February 2nd from the Chairman of the Federal Reserve Of Chicago requesting leave of absence until about March 15th. Approved. The Committee on Examinations presented a memorandum dated February 'as follows: It 1. the light of the many applications received, in what might be termed blanket form, through the Federal Reserve Agent at San Prancisco, and considering that all of these applications have apparently been passed upon and approved by the Federal Reserve Bank of San Francisco, it would be, in the judgment of the Committee on Examinations, advisable to establish definitely just what responsibility lies with the Bank of San Francisco in the inaking of those approvals. The Committee would like to know (1) Whether or not the Federal Reserve Bank and the Federal Reserve Agent at San Francisco have made through investigation as to the condition of the banks making application and also as to the condition of the banks that are proposed to be taken over and operated as branches.' 2/5/24 -7- (2) What consideration has been given to the facilities for examinations that will be satisfactory to the Board. (3) Has the Federal Reserve Agent at San Francisco given consideration to the question whether a considerable number of the branches applied for Should be approved at once or whether they should be approved one by one or in small groups extending over a period of several months of time so that they can be properly coordinated with the parent banks? (4) Has the question of the capitalization of the parent institutions been taken into consideration in relation to the admission of the many new branches applied for? (6) Is it, in your opinion, possible to agree upon a definite limit of the number of branches which any bank shall be permitted to maintain? Upon motion, it was ordered that the Federal Reserve Bank of San Francisco be requested to furnish the information desired by the Committee. The Law Committee reported on the matter referred to it on the eti on January 15th, namely, preparation of a letter to the Secretary of 1kt reply to his letter of January 3rd quoting a cablegram from the Qoteril or General of the Philippines with regard to the establishment at h, of a branch of the Federal Reserve Bank of San Francisco; the Comt ee recommending that the Secretary of War be advised (1) That the Board has no power to establish a branch in the Philippines as they are not in any Federal Reserve district; (2) That if any bank in the Philippines Should become a member bank of, e.g. the Federal Reserve Bank of San Francisco, a question mould arise as to whether the Twelfth Federal Reserve District was not ipso facto extended to the Philippines but that the Board does not decide this moot question; (3) That no agency can bp established in the Philippines a8 they are not a foreign country; 2/5/24 (4) That the Board would suggest that consideration of this matter be postroned until the permanent status of the Philippine National Bank is determined. Upon motion, the Law Committee was directed to prepare a letter along the linos suggested.. J1-1.3 Law Committee reported on the matter referred to it at the meetins. On February 1st, namely, revision of draft of letter to the Chairman of the Reserve Bank of Richmond replying to hic letter of January 24th with l'ee;ard to the establishment of branches by the New Bern BankiLz and 2rust C°Mpany of New Bern, North Carolina; the revised letter stating that inasmuch the branches established by the New Bern Banking and Trust Company do not abh '4-0-rently tend. to affect materially the standard reouired of it as a condittot of membership, the Board has no objection to their establishment. 'Upon motion by Mr. Platt, the proposed. letter was approved, TIrs James voting "no". Hamlin then brought up the matter referred to the Committee on 1:4c. , `onanations on February 1st, namely, the application of the Union Trust Corm-v"ny of irovidence, H. I. ;or permission to establish a br.1.-th at CentreR. I., which appliCation has been approved by the Federal Reserve 411k Of Boston and by the Bank Commissioner of the State of Rhode Island, Hamlin moved that the Board afprove the application of the Union Company to establish a branch at Centreville, but that this approval 11()t include the arplic tions to establish branches at Woonsocket, 1Towport, which should be received and placed on file. Hamlin's motion being put by the chair was carried. esterly 2/5/24 The Governor then braught up the matter of salary increases proPosed by the Directors of the Federal Reserve Bank of Philadelphia for the assistant cashiers of that bark, which increases were the subject of a Oonferenee between the Board and a committee of directors of the bank held on January 12th. After discussion, LIT. Hamlin moved final disapproval of the increases Proposed. Carried. The Governor then requested action by the Board with regard to the subject of this morning's conference, namely, the amoumt of expendi- tIlrOS for the erection of buildings at Omaha and Denver. Upon motion by Mr. Hamlin, it was voted that the Board should approve an expenditure in each case of not to exceed 550,000. Report of Committee on Clcarings on matter referred to it at the meeting on January 30th, namely, letter dated January 26th from the 4o vernor of the Federal Reserve Bank of Kansas City replying to the 13°41 ' 1's letter of January 17th with regard to the complaint of the Howells 2t4te Bank of Howells, Nebraska, against the collection of cash items (1111Na on it through another bank in that city; said letter calling attenti°11 to the fact that checks of the Howells State Bank bear the legend "not 1114131s through the Federal Reserve banks, and branches or agents, nor ei)ress Company or post-office"; the Committee recommending that the 1418ition of the Federal Reserve Bank of Kansas City in the matter be up14'1(1 with the suggestion that if the Howells State Bank agrees definitely 2/5/24 -10- to remit at par and to withdraw all checks containing the legend "not Payable through the Federal Reserve banks", it would probably be wise to Bead their checks direct. Upon motion, the report of the Committee on Clearings was approved. 4t -0O3 OF STANDING COMITTEES: Dated February 4th Recommending changes in stock at Federal Reserve Banks as set forth in the Auxiliary Minute Book of this date. Approved. Ikted February 5th Recommending action on applications for fiduciary powers as set forth in the Auxiliary Minute Book of this date. Approved. Illted February 5th Recommending approval of the application of Mr. A. 1.1. Baldwin to serve at the same time as director of the First National Bank, Wetumpka, Ala., as President and director of the First rational Bank, Montgomery, Ala., and as President and director of the First Joint Stock Land Bank, Montgomery, Ala. Approved. Recommending approval of the application of Mr. John D. Ormrod to serve at the same time as director of the Emaus National Bank, Emaus, Pa., and as director of the Lehigh Valley Trust Company, .Allentown, Pa. Approved. Recommending appruval of the application of Ur. Wm. Jo Crosson to serve at the same time as director of the Richmond Borough National Bank, Stapleton, N. Y., as director of the Tottenville National Bank, Tottenville, N. Y., and as director of the Yariner Harbor National Bank, Mariner Harbor, N. Y. Approved. Recommending approval of the application of Mr. Matthew S. Sloane to serve at the same time as director of the Nassau National Bank & Peoples Trust Co., both of Brooklyn, N. Y. Approved. Recommending approval of the application Mr. John B. Ford, Jr., to serve at the same time as .rector of the Merchants National Bank and as direc of the Detroit Trust Co., both of Detroit, Mich. Approved, meeting adjourned at A Secretary.
@FedFRASER