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A meeting of the Federal Reserve Board was held in the office of the Federal Reserve Board on Wednesday, January 16, 1924, at 11:25 a.m. PRESENT: Governor Crissinger Mr. Platt Mr. Hamlin Mr. Inner Mr. James Mr. Gunninjiam Mr. Eddy, Secretary The minutes of the meeting of the Federal Reserve Board held on January 15th were read and approved as amended. The Governor stated that special order of business would be consideration of the matter ordered circulated at the meeting an December 27th, namely, a memorandum dated December 18th from Counsel su7gesting a form Of letter to the Federal Reserve Agent at St. Louis in reply to his letter of October 22nd on the subject "Discount of Sight and Demand Bill Of Lading Drafts";the proposed letter stating that pending the issuance Of a comprehensive ruling or statement of policy on this subject, the Federal Reserve banks should use their discretion in passing upon the eligibility of bill of lading drafts offered for discount under the amendment of March 4, 1923, to Section 13 of the Federal Reserve Act. After discussion, upon motion by Mr. Hamlin, the proposed letter to Mr. Martin was approved. Letter dated January 1st from the Comptroller of the Currency, recommending an increase from .)5400 to 6.5o0 per annum in the salary of National Bank Examiner B. K. Patterson. Approved, effective Janmary 16, 1924. -2- 1/16/24 Chairman of the Federal Reserve Letter dated January 15th from the the directors of that bank Bank of Nov.' Yolk, advising of the action of by the Federal Reserve Club for In making an appropriation to be used the year 1924 amounting to 37,420. approved educational purposes for Approved. Federal Reserve Agent at Telegram dated January 15th from the of the American Bank of San San Francisco, transmitting the application e with the American Francisco for the Board's permission to consolidat over the branches of the Bank of Oakland, a non-member bank, to take the name and corporate American Bank of Oakland and to operate under isco; the Federal Reserve organization of the American Bank of San Franc tive Committee recommend apksent advising that both he and the Execu proval. Referred to the Committee on Examinations. ve Agent at Letter dated January 9th from the Federal Reser ssed to him by the Assistant Chicago, transmitting copy of a letter addre ding the Northwestern Finance Federal Reserve Agent at Detroit, regar g that it is "Officially Corporation of America which is advertisin recognized by the Federal Reserve Board". a Referred to Counsel for the preparation of letter of cen:mre. of the Federal Reserve Letter dated January 9th, from the Chairman Board limit the right of Federal Bank of Boston, sum;esting that the for Federal Reserve notes Reserve barks to pledge as collateral -3- 1/16/24 upon bills bought in the open market, such right to be exercised only the approval of the five members of the Board. Referred to Committee on Discount and Open Llarket Federal Reserve Letter dated January 14th, from the Governor of the Bank of Yew York replying to the Beard's letter of January 3rd, with refpayment erence to the liability of Federal Reserve banks in the event of Of bonds and coupons of Federal Land banks contrary to instructions. Referred to Law Committee. TreasLetter dated January 11th, from the Under Secretary of the County, InIlrY transmitting letter from the Associated Builders of Kings corporated, Brooklyn, New York, stating that banks in the Second Federal the reason Reserve District are discriminating against builders' paper for that they can not rediscount same at the Federal Reserve bank. Referred to Counsel for the preparation of a reply. Reserve Letter dated January 12th, from the Chairman of the Federal Bank of Chicago commenting upon general conditions in the Seventh Federal Ileserve District. Ordered circulated. and Letter dated January 15th, from the Chairman of the Banking Currency Committee of the House of Representatives requesting an expression Of the Board's opinion on H. R. 3227, a bill designed to amend Section 5202 Of National the United States Revised Statutes, referring to liabilities of -4- 1/16/24 Banking Associations. Referred to the Law Committee. Letter dated Janu ry 10th, from Mr. 77. 2. Adams of Salt Lake City with regard to the employJent by member banks of former managers or assistant managers of branch Aderal Reserve banks. Referred to the Law Committee. Letter dated January 11th, from the Governor of the Federal Reserve Bank Of St. Louis, replying to the Board's letter of January 2nd regarding the action of the Drovers' National Bank of East St. Louis, Illinois, in rediscounting paper emanating from non-member banks but not bearing the indorsement of such non-member banks. Referred to the Law Committee. Letter dated January 8th, from Mr. John W. Davis enclosing a state/tent 'of his account for services in the par clearance cases, amounting to Referred to the Law Committee, with instructions to the Secretary to prepare a memorandum of previous action by the Board in connection with the emuloyment of Mr. Davis. Letter dated January 11th, from the Assistant Attorney General, advising that the Grand Jury has failed to return an indictment against SidneY 3. Jalzman, a former employee of the Federal Reserve Bank of New York, for possible violation of the criminal provisions of Section 5209 of l evised Statutes. Noted. -5_ 1116/24 Letter dated January 9th, from the Assistant Attorney General, advising of the conviction of Edgar F. Hiatt, formerly President of the Dickinson Trust Company of Richmond, Indiana, a member bank, and stating that the attorney for the defendant raises the question whether a state bank or trust company has power to subscribe for stock in a Federal Reserve bank and whether Congress -exceeded its power in attempting to exercise control over such banks. Referred to the Law Committee. Letter dated January 15th, from the President of the Federal 44visory Council, advising that the next meeting of the Council will be held in 7,ashington on Monday, Febmary 18th, 1924, and requesting that the Board advise him of any topics which it would like the Council to discuss. Referred to the Executive Committee for preparation of a list of topics. Letter dated January 14th, from the Chairman of the Committee Om Banking and Currency of the Senate, requesting the views of the Federal Reserve Board with regard to Senate Joint Resolutions 3 and 51, authorizing the Federal Reserve Bank of Kansas City to invest ;"650,000 each it the construction of buildings for its branches at Denver and Omaha. Referred to the Committee on Branches. Letter dated January 15th, from the Deputy Governor of the .?ederal Reserve Bank of New York, enclosing copies of correspondence with the Reichsbank in Germany concerning the amount of German capital in the 1/16A4 United States and in other foreign countries. Noted, no action by the Board being necessary. Letter dated January 15th, from the Third Assistant Postmaster General with regard to the preparation of registered.matter for mailing, calling particular attention to the proper method of attaching address tags to sacks containing registered matter. Referred to the Secretary for investigation and report. Letter dated January 12th, from the Governor of the Federal Reserve Bank of Richmond, enclosing copies of a report of the officers of the Bank to the board of directors in the matter of the establishment of a branch in the southern portion of the District. Referred to the Committee on pranches. Lotter dated Oanu_ry 7th, from the Governor of the Federal Reserve Bank of San Francisco with regard to the legality of the acceptance by the National Bank of Commerce, .Seattle, Vihshington, of a draft of the clrahoma Specie Bank for the purpose of raising funds to finance the ezportation of goods. Referred to the Law Committee, Mr. Hamlin stated that in accordance with authority given him at the meeting yesterday he had communicated with Ur. Edmund P. Cohill, the °t Hancock, Maryland, who had signified his willingness to serve on bOard of directors of the Baltimore Branch of the Federal Reserve Bank -7- 1/16/24 Of Richmond. Mr. Hamlin moved that Mr. Cdhill be appointed a director of the both to him Baltimore branch and that notices of appointment now be sent and Mx. Matthai. Carried. The Governor then presented a telegram dated January 16th, from the Federal Reserve Agent at Dallas advising of plans for the Mexico, organization of the Albuquerque National Bank, Albuquerque, New With capital of c>500,000 and requesting Board's approval of procedure Whereby the El Paso branch will receive on deposit ,250,000 of new capital Pending issuance of charter and authority to begin business. Upon motion by Mx. Hamlin, it was voted to approve the arrangement subject to the aproval of Counsel. The Governor then brought up the matter held over at. the meeting ham: Yesterday, namely, the following resolution offered by Mx. Cunning "MERE/1_3 it is deemed desirable for the Federal Reserve Board to be in possession of the fullest possible information with regard to the officers and minor employees of the Federal reserve banks and Federal reserve branch banks and with regard to the official duties of such officers and employees, the work performed by them, and the salaries paid to them; and 1rnREAS, it is manifestly desirable to improve as far as possible the efficiency of the Federal reserve banks and branch banks and at the same time to bring about the strictest economy in the operation of such banks and branch banks; Board NOW, 2HEREFORE, BE IT RESOLVED by the Federal Reserve zed authori be tures Expendi and s that the Conraittee on Salarie ascerand empowered to make a complete survey for the purpose of banks reserve Federal various the taining the numberof officers of -8- 1/16/24 "and branch banks, the duties performed by such officers and the necessity for such services; the number of amployees of such banks and branch banks, the character of services they are rendering and the necessity for such service; and the total overhead expenses of the various Federal reserve banks and their branches; BE IT eURTHER RESOLVED that the Committee on Salaries and Expenditures is hereby authorized and empowered to employ such experts and other assistants as it might deem necessary for the purpose of procuring such data and information as will enable it to be fully informed on all matters involving the management, operation and expenses of the various Federal reserve banks and branch banks; B2 12 FUR2,21ER RESOLV2aD that the Committee on Salaries and Expenditures is hereby directed to make such recommendations as in its Judgment will improve the efficiency of the operation of such Federal reserve banks and branch banks and will be instrumental in brirgionzabout and maintaining the strictest economy commensurate with efficient service. BE IT FURTILR IrUSOLVED that the Committee on Salaries and Expenditures is hereby directed to report its findings and recommendations to the Federal Reserve Bcyaid not later than November 1, 1924." ILfter discussion, Mr. Hamlin moved that the resolutions offered by 11r. Cunningham be amended by adding a proviso that the Committee on Salaries and Ilbcpenditures shall incur no expense without the direct vote of the Federal Reserve Board. Mr. Hamain's motion being put by the chair ms carried, Mr. James not voting. Ur. Hamlin then moved that the Board adopt the resolutions as amended. Mr. Hamlin's motion being put by the chair was loot, the members voting as follows: 1/16/24 Governor erissinger, "no" Mr.. Platt, "no" Mr. Hamlin, "aye" Mr. Cunningham„ "aye" Mr. Miller not voting Mr. James not voting ZaORTS OF STAB:JUNI COLIMTTEvS: Dated, atnuary 16th, Reconnending changes in stock at Federal Reserve banks, as set forth in the Auxiliary Minute Book of this date. Approved. The meeting adjourned at 1:00 p.m.
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