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59 A meeting of the Federal Reserve Board was held in the office of the Federal Reserve Board on Friday, January 18, 1929 at 11:30 a. m. PRESENT: Governor Young Mr. Hamlin Mr. Miller Mr. James Mr. Cunningham Mr. Noell, Asst. Secretary Mr. McClelland,Asst. Secretary. The minutes of the meeting of the Federal Reserve Board held on January 15th were read and approved. At the suggestion of the Governor, it was voted to refer to the Federal Advisory Council the question of the ruling requested by the First Federal Foreign Investment Trust that the corporation's bills arising from installment resales of American automobiles in foriegn countries are a satisfactory basis for acceptance credits. Telegram dated January 16th from the Chairman of the Federal Reserve Bank of Boston, letter dated January 17th from the Secretary pro tern of the Federal Reserve Bank of New York, telegram dated January 16th from the Chairman of the Federal Reserve Bank of Philadelphia, telegram dated January 16th from the Chairman of the Federal Reserve Bank of St. Louis and telegram dated January 17th from the Chairman of the Federal Reserve Bank of San Francisco, all advising that their boards of directors at meetings on the dates stated made no changes in the banks' existing schedules of rates of discount and Purchase. Noted. Letter dated January 16th from the Chairman of the Federal Reserve Bank of New York, advising that he and Director Hough of the Buffalo Branch Will be in Washington on January 25th for a meeting at 10:00 o'clock. The 1/18/29 -2- 60 Governor stated that Messrs. McGarrah and Haugh are coming to Washington for the purpose of conferring with members of the Board regarding the salary recommended by the directors of the New York bank for Managing Director Schneckenburger of the Buffalo Branch, on which action has been deferred by the Board. Noted. Report of Committee on Salaries and Expenditures on letter dated January 15th from the Secretary of the Federal Reserve Bank of Atlanta, requesting approval of the action of the board of directors of that bank in voting to appropriate the sum of $6,850 for welfare and educational work through the Federal Reserve bank clubs at the head office and branches during the year 1929; the Board's Committee recommending approval. Approved. Report of Committee on Salaries and Expenditures on list submitted by the Federal Reserve Bank of Atlanta of employees for whom the directors of that bank approved leaves of absence with pay, on account of illness, during tile month of December, where the total of such absences since January 1, 1928 has exceeded thirty days; the Board's Committee recommending approval of the salary payments involved. Approved. Memorandum dated January 17th from the Secretary recommending approval by the Board of a request by the Federal Reserve Bank of Chicago for a change in the inter-district time schedule from Chicago to Portland, Seattle and Spokane from four to three days; the Secretary stating that tae changes have the approval of the Federal Reserve Bank of San Francisco. -3_ 1/18/29 Approved. In connection with the above matter, Mr. James called attention to the increased float being carried by the Federal Reserve banks and suggested that the increase might be due in part to recent changes in tae time schedule. After discussion, the Governor WaS requested to instruct the Chief of the Division of Bank Operations to study the matter and report thereon to the Board. Letter dated January 15th from the Assistant Federal Reserve Agent at New York, advising that the Tl'ade Bank of New York, New York City, on January 8, 1929, received special authorization from tae New York State Banking Department to exercise certain fiduciary powers. The Secretary stated that this matter is reported to the Board as a change in "the scope of the functions" exercised by the member bank within the meaning of the general condition under which it was admitted to membership in tne System. Noted, with approval. Letter dated January 16th from Mr. Wm. McC. Martin, confirming telegraphic advice on the snme date that tne board of directors of tne Federal Reserve Bank of St. Louis on that date unanimously elected him Governor of the bank and tendering his resignation as Class O Director, Chairman and Federal Reserve Agent; tae letter stating that tae directors of the St. Louis bank fixed his salary as Governor at $25,000 per annum, effective January 1, 1929, subject to the approval of the Board. Upon motion, it was voted to accept Mr. Martin's resignation as Class C Director, Chairman and Federal Reserve Agent at the Federal Reserve Bank of St. Louis and to approve for him as Governor of that bank a salary of $25,000 per annum, effective January 1, 1929, The Governor also presented a letter dated January 16th from Mr. Martin, advising that in accordance with an informal suggestion of the Board, following 62 1/18/29 -4- the meeting of tne ooard of directors of the St. Louis bank held on January 16th each director present at the meeting was asked to express himself as to whom, in his opinion, was best fitted for appointment as Class C Director, Chairman and Federal Reserve Agent at the bank; Mr. Martin stating that each Director present, with the exception of Mr. Rolla Wells, expressed the opinion that Mr. Wells is tae best fitted man and that taey would like very much to see him receive the appointment. The Governor submitted draft of a letter to Mr. Martin advising that Mr. James will be in St. Louis in the very near future and will endeavor to complete the appointment as quickly as possible. After brief discussion, upon motion, Mr. James was authorized to tender to Mr. Wells appointment as Class C Director of the Federal Reserve Bank of St. Louis for the term ending December 31, 1930, and designation as Chairman of the Board of Directors and Federal Reserve Agent, for the year 1929, at a salary of not to exceed $20,000 per annum. The Secretary then submitted, with the approval of the Committee on Salaries and Expenditures, the following salaries recommended by the board of directors of the Federal Reserve Bank of Minneapolis for officers at that bank and the Helena Branch for the year 1929: HEAD OFFICE: W. B. Geery, Governor B. V. Moore, Deputy Governor Harry Yaeger, Deputy Governor F. C. Dunlop, Controller Gray Warren, Cashier L. E. Rast, Asst. Cashier H. I. Ziemer, Asst. Casnier H. C. Core, Asst. Cashier A. R. Larson, Asst. Cashier Andreas Ueland, Counsel (Allowance for office expense) FROM $22,500 12,500 10,000 7,000 5,500 4,000 4,800 4,800 4,200 5,000 4,000 TO $25,000 14,000 11,000 7,500 5,500 4,500 5,500 5,000 4,800 5,000 4,000 -5- 1/18/29 HEAD OFFICE: (Contld) Curtis L. Mosher, Asst. F. R. Agent F. M. Bailey, Asst. F. R. Agent HELENA BRANCH: R. E. Towle, Managing Director H. L. Zimmerman, Cashier A. A. Hoerr, Asst. Cashier T. B. Weir, Counsel FROM $7,000 6,500 TO $7,000 7,000 6,500 4,000 3,000 3,600 6,500 4,000 3,000 3,600 After discussion, upon motion, the salaries recommended by the board of directors of the Minneapolis bank were approved. The Secretary called attention to advice contained in the letter from the Chairman of the Minneapolis Bank, submitting the above salaries, of the reelection of Mr. Theodore Wold as member of the Federal Advisory Council from the Ninth Federal Reserve District for the year 1929. Noted. Letter dated January 14th from the Chairman of the Federal Reserve Bank Of Minneapolis, with further reference to the increase from $4,500 to $5,500 per annum recommended in the salary of Mr. Oliver S. Powell, Statistician in the Federal Reserve Agent's Department, on which. the Board deferred action; the Chairman stating that the increase has been unanimously approved by the Board of Directors of the bank which urges that the matter be reconsidered and the proposed salary approved by the Board. A discussion then ensued during which it was the consensus of opinion that the salary of $5,500 proposed for Mr. Powell would be out of line with the salaries paid for similar services at other Federal Reserve banks of comparable size, and that the Federal Reserve Bank of Minneapolis should be advised that the Board does not feel that it can approve a salary in excess of $4,800 per annum for Mr. Powell. Following the discussion, upon motion, the matter was referred to the Committee on District #9. -6-. 1/18/29 Letter dated January 15th from the Governor of the Federal Reserve Bank • Of Chicago, written in reply to an inquiry made by the Board on January 12th as to the duties and responsibilities of Mr. Arthur L. Olson, recently elected Assistant Controller of the Chicago Bank and for whom an increase in salary from $4,500 to $4,800 per annum was recommended; the letter pointing out that Mr. Olson is also Assistant Secretary of the Bank and listing various duties to be performed by him as Assistant Secretary and Assistant Controller. A discussion ensued, at the conclusion of wnich Mr. Cunningham moved tnat the Board approve for Mr. Olson the salary of $4,800 per annum recommended by the directors of the Federal Reserve Bank of Chicago. Mr. Cunningham stated that he made tills motion very reluctantly and would reluctantly vote in favor of the increase. Mr. Cunningham's motion being put by the Chair was carried, the members voting as follows: Governor Young, "aye" Mr. Hamlin, "aye" Mr. Cunningham "aye" Mr. Miller, "no" Mr. James, "no" Letter dated January 15th from the Foreign Trade Securities Company, Ltd., requesting a further extension for a period of thirty days of the Board's approval and reservation of the title "Foreign Banking and Investment Corporaton" for the corporation which it is proposed to organize under Section 25 (a) of the Federal Reserve Act. Upon motion, the extension was granted for a period of thirty days from January 25th. Memorandum from Counsel dated January 14th, with reference to an inquiry by the Continental Bank and Trust Company, Chicago, Ill., whether pecans in the shell stored in independent warehouses constitute a readily marketable Staple within the meaning of the Federal Reserve Act and the Regulations of 1/18/29 -7- tne Board, and whetner bankers acceptances secured by independent warehouse receipts for pecans in the snell may be considered as eligible for rediscount With the Federal Reserve banks; Counsel submitting draft of a letter to the Deputy Governor of the Federal Reserve Bank of New York regarding the request, as well as letters to the Secretary of Agriculture and the Federal Reserve Agent at Chicago on the question of tne marketability of pecans. Upon motion, the letters submitted by Counsel were approved. Letter dated January 15th from the Governor of the Federal Reserve Bank Of New York, transiAtting minutes of the meeting of the Open :larket Investment Committee held on January 7, 1929. Ordered circulated. In accordance with the statement made by him at the meeting on December 21st, Mr. Cunningham then presented a memorandum on the subject of qualifications and compensation of employees of the Federal Reserve Board, in connection With which he submitted the following resolution: "BE IT RESOLVED BY THE FEDERAL RESERVE BOARD that the Governor is hereby authorized to appoint a conLittee, consisting of the Governor as Chairman, and two other members of the Board, who are directed to make a study of the employment situation under the Board in order to determine the efficiency of the service being rendered, and whether, considering the present cost of living, any adjustments in the compensation paid individual employees, should be made BE IT FURTHER RESOLVED that the committee is hereby requested to make a full report of their findings, together with any recommendations wnich they deem advisable, to the Federal Reserve Board, not later than June 1st, 1929." After discussion, the resolution submitted by Mr. Cunningham was made special order of business for a later meeting at which more members of the Board are present. Report of Executive Committee on memorandum dated January 15th from t4a Comptroller of the Currency, recommending approval of an application of _8- 1/18/29 the City National Bank in Miami, Fla., for permission to reduce its capital from $1,000,000 to $500,000, on condition that no money be returned to the Shareholders, that the capital stock be immediately increased back to $1,000,000 and taat unsatisfactory assets amounting to $700,000 then be charged off the books but retained as the property of the bank; the Board's Committee also recommending approval subject to the conditions suggested by the Comptroller. Approved. On behalf of the Committee on District #2, the Governor then submitted draft of a proposed letter to the Deputy Governor of the Federal Reserve Bank of New York, with further reference to the application of member banks in Albany for the termination of the designation of Albany as a reserve city; the letter concluding with the statement that the Board has decided to deny the application, believing that proper legislation is the only method by which reserves of member banks can be determined so tnat all banks will be treated equitably, but that if such legislation does not develop, the Board will use its best efforts to see that certain other cities throughout the United States are raised to a comparable basis with Albany. The Governor stated that he wished merely to present the letter at tnis time, and at his suggestion action was deferred. REPORTS OF STANDING COMMITTEES: Dated,, January 15th, Recommending changes in stock at Federal Reserve Banks 16th, as set forth in the Auxiliary Minute Book of this date. Recommendations approved. 17th, 18th, Dated, January 17th, Recommending approval of the application of Mr. Louis D. Ricketts for permission to serve at tne same time as director of the Valley Bank, Phoenix, Ariz., and as 67 1/18/29 -9- agyoRTs OF STANDING COMYITTEES: (Conttd) director of the Los Angeles-First National Trust and Savings Bank, Los Angeles, Cal. Approved. approval of the application of Mr. Arthur Recommending Dated, January 17th, permission to serve at tne same time as for Lougee L. Beacon Trust Company, Boston, Mass., the of director and as director of the Merchants National Bank, Salem, Mass. Approved The meeting adjourned at 12:45 p. m. Vk7/04earreed Assistant Secretary. Approved: 11
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