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42 A meeting of the Federal Reserve Board was held in the office of the Federal Reserve Board on Monday, January 16, 1928 at 11:00 a.m. PRESENT: Governor Young Mr. Platt Mr. Hamlin Mr. Miller Mr. Cunningham Mr. Eddy, Secretary Mr. McClelland, Asst. Secretary The minutes of the meting of the Federal Reserve Board held on 4411ary 12th were read and approved as amended. The minutes of the meeting of the Federal Reserve Board held on janilary 13th were read and approved. Telegram dated January 13th from the Chairman of the Federal Reserve Dallk Of Atlanta, advising that the board of directors at their meeting on that date made no change in the bank's existing schedule of rates of dist and purchase. Without objection, noted with approval. Memorandum dated January 16th from the Secretary, advising of the ' zs-alection of Messrs. P. D. Houston and P. W. Goebel, as members of the ederal Advisory Council during 1928 from the Sixth and Tenth Federal Res"ve Districts, respectively. Noted. Report of Committee on Salaries and Expenditures on letter dated jarIllarY 13th from the Chairman of the Federal Reserve Bank of Richmond, advising of the action of the directors of that bank in voting to extend tor* 4 period of thirty days from January 5th, with full pay, leave of allsellee on account of illness previously granted Miss Viola Barnes; the 43 -2- Board's Committee recommending approval of the salary payment involved. Approved. Matter approved on initials on January 14th, namely, letter dated j4Iluary 13th from the Comptroller of the Currency recommending increases 14 the salaries of National Bank Examiners as follows: R. M. Hodgson C. F. Smith Jacob Embry Paul Boardman L. C. Collins Charles J. Foster J. 0. Hoots H. B. Gilbert ,7,500 7“)00 5,100 3,000 3,900 4,000 5,500 3,900 to to to to to to to to rer annum 8,000 6,400 3,300 4,200 4,200 5,700 4,000 Vt It Vt Vi ft If Vt If If Formally approved. Telegram dated January 13th from the Federal Reserve Agent at 4e4P°1is, advising that it was necessary to extend from January 3rd to January 17th, the date of the hearing to be afforded by him to the First State Bank, Philipsburg, Yontana, in connection with the proceed.instituted by the Board regarding the continuance of that bank's Merribership in the Federal Reserve System; the Agent suggesting that the ClIlte of the hearing to be held before the Board in this matter also be tended from Oanuary 18th to January 25th. Upon motion, the suggestion of the Federal Reserve Agent was approved and the date of the Board's hearing in the above matter was fixed for January 25th. Report of Executive Committee on letter dated January 12th from he p Idelity Trust Company of New York City, applying for permission , 141Litior , bection 13 of the Federal Reserve Act, to accept drafts drawn upon it b, banks or bankers in foreiim countries or dependencies or insular 44 _3_ Nesessions of the United States for the purpose of furnishing dollar exchange; the Committee submitting a favorable recommendation from the Federal Reserve Agent at New York and recommending approval of the application. Approved. Letter dated January 14th from the Chairman of the Federal deserve 4131c of Atlanta, transmitting copy of a resolution adopted by the board Of directors of the bank at its meeting on January 13th, amending Section 4 Of A rticleI of the By-laws of the bank so as to provide for the election °f officers and the fixing of their salaries at the first meeting of the board of directors in January of each year. Noted. Letter dated January 14th from the Chairman of the Federal Reserve 844k Of Atlanta, advising that at the meeting of the board of directors of that bank held on January 13th there was rescinded the resolution adopted bY the directors at their meeting on December 9, 1927, and transmitted to tile Board in the Chairman's letter of December 10, 1927, requesting the beard to so amend its rules and regulations as to permit the selection "Uanagers of the Branches of the Federal Reserve Bank of Atlanta from °14te1de the personnel ol the directorates of such Branches and to render the Managers of the Branch Banks ineligible to serve as directors. Noted. Letter dated January 14th from the Chairman of the Federal Reserve 1144k of Atlanta, referring to directors elected to serve at the Branches of that Bank and advising that Mr. Li. S. Hecht, who was elected to serve at 17e-W Orleans, will either decline to qualify or will tender his resig- 45 -4_ tation, effective at the next meetinz of the board of directors of the Atlanta Bank, and that Mr. James E. Bouden, Jr., President of the WhitneyCentral National Bank, will be elected to succeed Mr. Hecht. Noted. Memorandum from Counsel dated January 6th, submitting draft of reply to letter dated December 31st from the Governor of the Federal Reserve Bkk of San Francisco, with regard to the interpretation of the term calendar month" as used in Section IV of Regulation D, Series of 1928; the proposed reply stating that in using the term "calendar month" in the 1410vision of the Regulation referred to, the Board intended it to mean 444r Of the months as adjusted in the present calendar and now construes It to have that meaning, which construction is believed to be justified 'jaw of the fact that it results in a material simplification of the z4ethod of assessing penalties for deficiencies in reserves. Upon motion, the proposed reply was approved. the Memorandum from Counsel dated January 12th with reference to katter to which attention was called at the recent conference of Federal ileserve Agents, namely, that Section 22 (b) of the Federal Reserve Act 1/rovide3 that no Examiner shall disclose the names of borrowers or the collateral for loans of a member bank to other than the proper officers Without first obtaining permission from the Comptroller of the Currency (/11 tram the board of directors of the bank, except in certain specified 4868; the question having been discussed by the Federal Reserve Agents connection with a request made by a receiver of a member state bank 46 1/16/28 -5- for certain information obtained by a Federal aeserve Examiner which rewas complied with after consultation with the Comptroller of the ClIrranoY who expressed the opinion that he did not have authority in the matter. In his memorandum Counsel recommended that no action be taken by the Board as the matter called to the attention of the Agents' C°11ference is not considered of sufficient importance to justify an attaMIA to secure an amendment to the Federal aeserve Act. Noted. At this point, Mr. McIntosh joined the meeting. The Law Committee then submitted draft of a letter prepared by C°11hsel under its direction, addressed to the Attorney General of the Unit ed States for the signature of the Secretary of the Treasury, setting forth the views of the Board, which had been reouested by the Attorney Gerle Of ral, with respect to a proposed amendment to Sections 5208 and 5209 the ,ievi sed Statutes making any violation of either of these Sections fel°nY instead of a misdemeanor. After discussion, the proposed letter was approved in the form submitted by the Law Committee. "Incrandum from Counsel dated January 5th, with reference to the right 0-1 lir. Frank 0. Jetmore under the Clayton Act to serve the Chicago Title and Trust Company of Chicago, Ill, in addition to the First National and the First Trust Joint Stock Land Bank, both of Chicago, and the Trust Joint Stock Land Bank of Dallas, Texas; Counsel in his mem1411 e xpressing the opinion that the Chicago Title and Trust Company %Nes within the prohibitiohs of the Clayton Act and that 1:.r. Jetmore must, 47 1/16/28 -6t herefore, sever his connection with one of the four institutions named etili obtain the permission of the Board to serve the other three. in con- rleation with the above, all members of the Board's Law Committee submitted memoranda expressing doubt as to the applicability of the Clayton Act to 44 institution such as the Chicago Title and Trust Company which conducts Ile general banking business. After discussion, the above memorandum was referred back to the Law Committee with the request that the subject thereof be further discussed with the Board's Counsel. :aeport of Executive Committee on the matter submitted to the Committee at its meeting on January 11th, namely, letter dated January 6th from the Chairman of the Federal Reserve Bank of New York with respect to the de°f the directors of the New York bank to further reduce the cost of Meals served in the bank's cafeteria through the absorption by the bank T of an additional 425,000 of cafeteria expense; the bank during 4111114 the pest two years having absorbed an average of 4'58,000 per annum in Ilecor_ dance with a request contained in the Board's letter of April 16, 1926 (X-4579), although the Board on November 17, 1925 had approved of the r W York bank absorbing annually cafeteria expense of not to exceed " ,OO. Upon recommendation of the Executive Committee, the proposal of the New York directors was approved. liqMorandum dated January 16th from the Assistant Secretary, requesting au thority for the purchase of an adding machine for use in the Gold Utti -ement Division at an estimated net cost of 4566.25. Approved. 1/16/28 -7- Telegram dated January 12th from the Federal Aeserve Agent at San Francisco, recommending approval of an application of the Citizens National Bank of Los Angeles for permission to exercise general fiduciary powers. - the above telegram, the Secretary submitted a memorandum from the Board's Sub-committee recommending approval of the application, which recomZeridation is concurred in by the members of the Law Committee. Upon motion, the application of the Citizens National Bank was approved. The Governor then reported a telephone conversation with Deputy G°vernor Jase of the Federal Aeserve Bank of New York, during which he was 4(ivised that the Open :Market Investment Committee under authority granted bY the Board on January 12th has sold government securities until a point has been reached at which further securities will not be absorbed by the Inarket except at a reduced price. The Governor reported advice given him Mr• Case that the reduction in the System's investment account has alcaused considerable discussion in :ew York and that it is now profor a day or t;,;,o to withhold further offerings of securities. An informal discussion of the situation then followed during which the Governor was authorized to advise Yr. Case that the Board is in sympathy with the proposal reported by the Governor, but does not, of course, favor any prolonged departure from the program recommended by the committee and approved by the Board on January 12th. 11 OF STANDING COMMITTEES: 4ted, January 14th, 4te(1, January 14th, Recommending changes in stock at Federal Aeserve banks as set forth in the Auxiliary Linute Book of this date. ecommendations approved. Recommending action on application for admission of a state bank, subject to the conditions stated in the individual reports attached to the application, as set forth in the Auxiliary Minute Book of this date. aecommendation approved. 49 1/16/28 -8- 11-41222S OF STANDING COMMITTEES: Cont'd Dated, January 12th, Recommending approval of the application of Mr. Orville H. Bullitt for permission to serve at the same time as director of the Central National Bank, Philadelphia, Pa. and as partner of the firm of private bankers of W. H. Newbold's Son and Company, Philadelphia, Pa. Recommendation approved. Dated, January 14th, Recommending approval of the application of Mr. H. Arnold Pierce for permission to serve at the same time as director of the National Bank of Fredonia, N. Y. and as director of the Lackawanna National Bank, Lackawanna, N. Y., Recommendation approved. The meeting adjourned at 1:20 p.m. Secretary
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