The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
68 A meeting of the Federal deserve Board was held in the office of the Federal aeserve Board on Tuesday, January 19, 1926, at 11:40 a.m. PRESEKT: Governor Crissinger Mr. Platt Mr. Hamlin Mr. Miller Mr. James Mr. Cunningham Mr. McIntosh Mr. Eddy, Secretary 'Tr. McClelland, Asst. Secretary The minutes of the meeting of the Federal Reserve Board held on January 16th were read and approved. The Governor stated that Mr. M. 3. Lane, Chairman of the Board of the Citizens and Southern Bank of Savannah, Ga. had requested an opportunity to appear before the Board on January 21st with reference to its recent action ill disapproving an application of that bank for permission to establish a branch in .Albany, ja. Matter approved on initials on Janwtry 18th, namely, application of the Virginia National Bank of Norfolk, Va. for permission to exercise general fiduciary powers; the application having been approved on the basis of the l'ecommendation of the Federal Reserve Agent contained in his telegram of that date. Upon motion, the application was formally approved. Matter approved on initials on January 16th, namely, telegram dated January 16th from the Federal .Aeserve Agent at St. Louis, with reference to the desire of the Federal Bank and Trust Company of Little Hock, Arkansas, t° take over the First National Bnk of North Little Rock; the Agent recomlnellding approval on condition that all loans on stock of either bank be 69 1/1W26 -2- eliminated or otherwise secured at once and that the banking house and fixtures account of the First National Bank be eliminated within one year in a manner satisfactory to the State Banking Commissioner. Upon motion, it was formally voted to grant the Board's approval to the consolidation. Memorandum from Counsel dated January 16th, with reference to the 8(3ard's recent action in approving an application of Mr. W. S. McLucas for Dermission to serve at the same time as director of the Army National Bank (3t Ft. Leavenworth, Kansas, and as President and director of the Commerce 'Nat Company of Kansas City, Mo.; Counsel stating that Mr. McLucas has ad118 :1 he is also serving as Chairman of the Board of the Commerce Trust Co1111344Y and recommending that the Board waive its requirement for a new apIalcation in this case and send Mr. McLucas a formal certificate of consent Ilting him permission to serve as officer and director of the Commerce • .TIllat Company. Upon motion, Counsel's recommendation was approved. Memorandum dated January 19th from the Chief Examiner, recommending tIllq the temporary appointment of Mr. J. F. Furbershaw be made permanent 171t h the title of Assistant Examiner at a salary of $2400 per annum, effect- January 16th; the Chief Examiner stating that the salary recommended has 11 be prwided for in his budget. Approved. Memorandum dated January 16th from the Chief of the Division of Bank °De r4tions, advising that in accordance with the Board's authority of January lath Ilre. Edith M. Zobel and Miss Helen C. Clark have been anployed as comptometer 70 1/19/26 -3- operators for a period of not to exceed three months, Mrs. Zobel at a salary of 41200 per annum, effective January 13th, and Miss Clark at a salary of c„;1300 per annum, effective January 16th; the Chief of the Division stating if at the expiration of the three month period Miss Clark's services have proved satisfactory it is his intention to have her appointment made Permanent. Noted. Memorandum from Assistant Counsel dated January 19th, with reference to bond in the maunt of 410,0,000 executed under date of January 15th by George DeCamp, Federal aeserve Agent at Cleveland; Counsel recommending aPProval of the bond' and submitting a form of letter to Mr. DeCamp suggestthe paument of premium on the bond covering the period from January 8th, .°11 Which date Mr. DeCamp took office, to January 15th and that the company be advised it is understood the bond covers his activities as Federal Aeserve Agent beginning January 8th. Upon motion, Mr. DeCamp's bond and the proposed letter to him were approved. Telegram dated January 18th from the Secretary of the Federal Reserve Banl, --' Of Minneapolis, advising of rates of discount and purchase in effect at that bank. Noted, with approval. deports of Committee on District --10 and Committee on Salaries and 4-4altures, dated January 18th, on letter dated January 14th from the C11411*nlan of the Federal ieserve Bank of Kansas City, advising of the reof Mr. 71. J. Bailey as Governor of the Bank with salary at the P11 1/19/26 -4- rate of ., 25. Board; the Com00° per annum, subject to the approval of the mittees recommending approval of the increase in Governor Bailey's salary from ,)20,000 to „125,000 per annum. Approved. deport of Committee on Salaries and Expenditures on letter dated jaallarW 15th from the Chairman of the Federal Aeserve Bank of Boston, requesting approval of an increase from 455J0 to „i6,000 per annum in the salary °f Mr. Wm. D. mcdae, manager of the Bank Examination Division, and an increase from (4500 to „ZOO° per annum in the salary of :Jr. aobert A. 7:arren, employed in the Statistical Division; the Committee recommenaing approval of the i ncreases. Upon motion, the recormendation of the Committee . was approved. Draft of letter to the Chairmen of all Federal deserve Banks, advising cr the ruling of the Board, made at the meeting on January 11th, that member bankS in process of liquidation, either under voluntary or involuntary proeeedings, may not participate in the election of Class A and 3 directors of ?ecieral Aeserve banks. Approved. Draft of letter to all Federal deserve Agents submitting code words, effective February 1st, for use in telegrams exchanged with the Board reschedules of and changes in rates of discount and purchase in effect t) at the banks. Approved. 72 1/19/26 -5- Matter referred to the Law Committee at the meeting on January _, memorandum from Counsel dated January 13th with reference 13th, namely to suit brought against the Federal deserve Bank of San Francisco by the Idaho Grimm Alfalfa Seed Growers Association, in which verdict against the Federal deserve bank was rendered by the United States District Court and Sustained by the United States Circuit Court of Appeals; Counsel in his Memorandum discussing the various aspects of the case, in connection with the t . rlal of which before the Supreme Court of the United States the Federal Reserve Bank of San Francisco has employed Honorable Newton D. Baker, with the s_ uggestion that the expenses of his employment be pro-rated among all Pederal deserve banks; Counsel also submitting a letter to the Governors of all other Federal deserve banks advising them of the nature of the case 4/11i inquiring whether or not they would be willing to bear a pro-rata share e'r the expense of 1.1r. Baker's employment. Upon motion, the proposed letter was approved and ordered transmitted. Memorandum dated January 14th from the Secretary, prepared in accord44ce with action taken by the Board at the meeting on January 13th, submitt1lle an estimate of 415,000 in expense and from six weeks to two months in time , In connection with the compilation of information requested by Mr. H. Part)._ "r .11i5 as to the amount of rediscounts and advances made by Federal '10 "banks since and including 191b for all member banks grouped accorder to resources into certain classes listed. After discussion, Mr. Miller moved that the Governor comnunicate with Professor 0. M. W. Sprague, who is employed by the Board's Division of aesearch and Statistics, 73 j 1/19/26 -6- and inquire of him what additional information he thinks it is desirable that the Federal Aeserve Board should have in order to keep a more accurate line on the operations of member banks and soecifically whether he believes it would be desirable for the Board to have information as to the amount of rediscounts and advances made by Federal eserve banks by years to member banks grouped according to resources. Mr. Miller's motion being put by the Chair was carriod, Hr. James voting "no". The Governor then presented letter dated January 16th from the Governer c)f the Federal eserve Bank of New York, advising that it is his intention to leave New York on Friday, January 22nd, for a leave of absence extending about the first of March and stating further that he expects to visit ?AlrOpe thcs year some time around the first of April; the Governor suggesting that if convenient to the Board tha Spring Conference of Governors be held "Me time during the month of March. Noted, and March 22nd approved as the date for the next meeting of the Governors' Conference. The Governor stated that he had attended the meeting of the Open 2aarket Investment Committee held in New York on Monday, January 18th, and reP°rted that the Committee had discussed the question of disposing of the 415°,000,000 of short-term Government securities which it acquired during the latter part of December for possible resale this month. He stated that the Committee felt, in.view of existing market conditions and of the fact 4t there are about :,65,003,000 of securities in the open market invest" et account which mature next March, th_t it is not advisable to sell the nnn 1--y,000 of securities immediately, but that developments in the situation 811°111a be closely watched and action taken at such time as developments dis- 74 -7- 1/19/26 Close the desirability of selling. The Governor also reported that the Committee had discussed the matter of the large volume of bills offered by dealers in Boston and. acquired by the Federal deserve Bank of Boston, and that it was the sense of the ComMittee that all purchases of bills made iJederal deserve banks in cities outside of New York in excess of the pro rata shares of the purchasing banks, should be allotted proportionately to all banks participating in the open market account. He stated that the reas on for the bills being offered out of New York in Boston was the method Of buying bills in Boston. Bills are only bought in the New York market from member banks, while at Boston, if bills are offered to the member banks, say, at 3 5/8th, and they are not taken by the member banks, then practice has been to take such of the bills as the Federal deserve 13411k of Boston desires at 3 1/2. This method of buying opened a direct let into the Boston bank instead of going through member banks and paya commission of 1/8th to the member banks for endorsing and. handling the bills. The method in Boston eliminated this and gave the profit of 1/8th to the brokers. He stated that Governor Harding said he was without Pewer himself to make an agreement about changing this policy, but Governor liard.itu'; advised that he would take it up with the directors of the Boston ballk and advise them of the views of the Open L'Aarket Committee and that he believed. he could bring about an adjustment with the directors. The Governor then formally presented to the Board the following cic'ctIments which he had previo -asly circulated among the members for their 1/1e0 75 1/19/26 -8(1) Letter dated January 15th from the Governor of the Federal Reserve Bank of New York, reviewing financial conditions since the first of the year and submitting an analysis of changes in the New York money market over the year end. (2), Reports submitted at the meeting of the Open Market Investment Committee yesterday by the Chairman and Secretary of the Committee. (3) Report submitted at the Open Market Investment Committee meeting yesterday by the Deputy Governor of the Federal Reserve Bank of New York, with reference to the increase in the amount of foreign bank accounts held by the Federal Reserve Bank of New York, in which all other Federal reserve banks participate. Noted. The Governor then submitted a report dated January 19th, by the Special e°11xlittee consisting of Messrs. Miller, Platt And James appointed at the Board meet. llg on September 8th, submitting copies of a proposed revision of the byA 143 of the Board. Upon motion, copies of the proposed by-laws were ordered distributed among the members of the Board and the matter was made special order of business for a meeting to be held on January 26th. uF STANDING COTZTITTEES: Ditteci, January 18th, bEtted., January 19th, 134tea, January 19th, bkt January 19th, Recommending changps in stock at Federal Reserve Banks, as set forth in the Auxiliary Minute Book of this date. Approved. Recommending action on applications for fiduciary powers, as set forth in the Auxiliary Minute Book of this date. Approved. Recommending action on application for fiduciary powers as set forth in the Auxiliary Minute Book of this date. Ordered held. Recommending action on application for fiduciary powers, as set forth in the Auxiliary Minute B•ok of this date. Refused. The eting adjourned at o'clock. jtpi3roveta: Secretary.
@FedFRASER