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58 A meeting of the Federal Reserve Board was held. in the office of the Peideral Reserve Board on Tuesday, January 25, 1927 at 11:45 a.m. PRESENT: Vice Governor Platt Mr. Hamlin Mr. Miller 1:r. Janes Mr. Cunningham Mr. Eddy, Secretary Mr. McClelland, Asst. Secretary Mr. Miller stated that Mr. Harrison of the Federal Reserve Bank of New Yo zit had. advised. him that Governor Norman and. Mr. Lubbock, one of the directors of the Bank of England, are expected to arrive in Washington today and wish to see the members of the Board while they are here during the next few days. The minutes of the meeting of the Federal Reserve Boazd held on January 19th were then read. and uron motion were approved, with the ex"Pti-en of the entry relating to the employment of 1,1r. M. D. Smiley which was ordered brought LID before the Board. upon the return of Governor Criss inger. Memorandum dated. January 20th from the Director of the Division of Itesearch and Statistics, with reference to the action of the directors of the El Paso Branch at their -meeting on Januaw llth "in voting, subject to the approval of the Executive Committee of the Federal Reserve Bank of Dallas, to make public a report submitted. at the meeting by the Managing Director of the Branch containing a survey of banking and business conditions ill the Branch territory; the Director stating that the statement is a (pod lpieoe of work and that there would be no harm in publishing it except for a 11 rew sentences which he recommended be eliminated. Upon motion, it was voted to approve publication of the statement with the changes suggested. by the Director of the Division of Research and. Statistics. 59 1/25/27 -2- Letter dated January 21st from the Federal Reserve Agent at Chicago, adViSing of a recent meeting of the Legislative Committee of the Indiana Bankers Association at which steps were taken to have presented before the Present session of the Legislature a bill covering reserve requirements in that state, in which will be incorporated also provisi on for the interchange Of information between the State Bank Commissioner and the Federal Reserve banks. Noted. Memorandum from Counsel dated January 18th, with reference to the aloPlication of I:1r. Edward E. Braun for remissi on to serve at the same time as director of the First National Bank, The First Trust and Savings Bank aad the Liberty Trust and Savings Bank, all of Chicago; Counsel calling attention to the fact that :Ir. Brown is also serving The First Trust Joint 8toak Land Bank of Chicago and The First Trust Joint Stock Land Bank of Dallas and recommending that the application be held until the Attorney 401aera1 of the United States renders an opinion which has been requested (311 the question whether a Joint Stock Land Bank should be considered to be 4 "bank" within the meaning of the Clayton Act. Upon motion, Counsel's suggestion was approved and a letter to Mr. Brown advising accordingly was ordered transmitted. Letter dated January 19th from the Federal Reserve Agent at Chicago, With further reference to tho recommendation of the Detroit branch directors that the Farmers State Savings Bank, Bay City, Michigan, be required to withtll*aw from the Federal Reserve System; the Federal Reserve Agent advisin g of 0artain changes in the directorate of the bank and stating that it is probably 60 1/25/27 -3 a wise plan, under the conditions, to let the matter remain in statu quo Pending further information. Noted, without action. Report of Committee on District 49 on memorandum dated December 210th from the Secretary, with reference to amendments to the By-laws of the Helena Branch of the Federal Reserve Bank of minreapolis; the Committee recommending approval of the Secretary's. suggestion that the Board approve certain new amendments submitted by the Minneapolis bank and at the sane time give deftnite approval to those amendments which were tentatively approved at the meeting on December 14th. Upon motion, it was voted to definitely approve the various amendments to the Branch By-laws referred to in the memorandum. Letter dated January 20th from the Chairman of the Federal Reserve 8ank of Dallas, requesting reconsideration by the Board of its action of Jaauary 7th in voting that the services of Mr. C. C. Huff, who for several rears has been retained by the Dallas Bank as General Counsel at a fee of v4200 per annum, should no longer be necessary and in withholding approval °f the continuance of the retainer; together with a memorandum from Mr. 4aIlle5 advising that after discussing the matter with the Federal Reserve 41.e'llt* Governor and Counsel of the Dallas bank while there a few days agO he has reached the conclusion that the best interests of All will be served by the reappointment of Mr. Huff for the year 1927. Upon motion by Mr. Hamlin, it was voted to reconsider the Board's action of January 7th and to approve the payment of a retainer of ii11200 to Mr. Huff as General Counsel for the year 1927. 01 61 11 1/25/27 -4- Memorandum from Counsel, dated January 21st, approved by the Law Committee, on the matter referred to the Committee at the meeting on January 13th, namely, letter dated December 28th from the Federal Reserve Agent at Dallas with reference to the desirability of attempting to have enacted in the states of Texas and Arizona legislation covering the investment of trust fluIds by barkl in those states; Counsel, for reasons stated, expressing the °Plnion that the advisability of undertaking to secure state legislation of the kind proposed seams doubtful. Upon motion, it was voted to concur in Counsel's opinion and to advise the Federal Reserve Agent at Dallas accordingly. Memorandum from the Comptroller of the Currency dated January 20th, With refere nce to the action of the Board in disapproving trust application In the Farmers National Bank of Belford, Pa. Noted, in view of the fact that the Board has already in the usual course advised the bank of its action. Memorandum from Counsel dated January 18th, submitting draft of rePlY to letter dated January 10th from the Deputy Comptr oller of the %Tronaa, reques ting an opinion as to whether a national bank in Pennsylvania 44thorize d to exercise trust powers may deposit funds of its trust departta its commercial department upon condition that it first set aside in its trust department United States bonds or other securities approved bY the Board, or whether it must deposit such funds in another bank in accordance with the laws of the state of Pennsylvania; the reply stating that national banks may, if they wish, carry uninvested trust funds in their commercial departments upon first depositing proper securities in 62 1/25/27 their trust departirents and can not be compelled by the State Authorities to comply with the requirements of the state law in this respect. Heferred to the Law Committee. Memorandum from Counsel dated January 13th, approved by the Law Committee, 011 the natter referred to the Committee at the meeting on December 23rd, name1Y, letter dated December 9th from the Governor of the Federal Reserve Bank Of Dallas, with reference to the construction of the word "agricultural" in the third paragraph of section 13 of the Federal Reserve Act permitting the redi scount of sight and demand. drafts. Ordered circulated. Memorandum from Counsel dated January 19th, approved by the Law ComMitts°9 on the matter referred to the Committee at the meeting on January /3th, namely, recommendation of the board of directors of the Federal Reserve 1/44k of Chicago for an increase from si;6,000 to 0.0,000 per annum in the salOf Mr. Charles L. Powell, Counsel of the bank; Counsel recommending apPI'eval of the increase. Cunningham called attention to the motion made by him at the meeting on January 13th "That the Board approve the increase from 45,000 to ',;26,000 per annum recommended in the salary of Mr. J. H. Blair, Deputy Governor, which was made with the understanding that it would be permitted to lay on the table pending report by the Law Committee regarding the recommendation for an increase in Mr. Powell's salary. He aaked unanimous consent to withdraw the motion. Upon motion by Yr. Janes, by unanimous consent, Mr. Cunningham was authorized to withdraw the notion in question. Mr. Hamlin then moved that the Board reconsider its action of December 22, 1926 and approve an increase from ,0,000 to Q10,000 per annum in the salary of Mr. Powell. Carried. 1/25/27 -6- The Secretary then referred to a request made verbally of the Governor ct the Board by Honorable James G. Strong, member of the House of Representatives, that the Governors of all Federal Reserve banks and the members of the Federal Ad-visory Council be furnished with conies of certain su7r;ested amendments to II* a. 7895, and requested to forward to the Board at an early date a full and fl'allk expression of their views as to the desirability and practicability of the legislation proposed by the bill and the suggested amendments thereto. Thereupon ensued a discussion, following which :Mr. Miller moved that the Vice Governor address a letter to Congressman Strong referring to the request made by him of the uoveraor of the Board inviting cooperation of the Governors of the Federal Reserve banks and the members of the Federal Advisory Council in redrafting H. R. 7895 and replying in the absence of the Governor that the Board deems the request one with which it can not with propriety comply. Carried. :Tr. James then requested that there be made srecial order for one Qle'''Y this week the subject of the future functioning of the Havana Agency or the Federal Reserve Bank of Atlanta, recommendations for which by the C°rrani ttee on District 48, were tentatively approved by the Board on January 12th. Upon motion, the matter of the Cuban Agency was made special order for a meetin7 to be held on Thursday, January 27th. Letter dated January 20th from the 3ecretary of the Federal Reserve Of ,ew York, advising that the board of directors on that day made 1() '"Ilre in the bank's existing schedule of rates of discount and purchase. Noted. 64 1125/27 -7- Telegram dated January 19th from the Chairman of the Federal Reserve Ba411t of Philadelphia, advising that the board of directors on that day made 11° chatig'e in the bank's existing schedule of rates of discount and. purchase. Noted. Telegram dated January 20th from the Chairman of the Federal Reserve Bank Of San Francisco, advising that the board of directors on that day made 11° Change in the bank's existing schedule of rates of discount and purchase. Noted. Telegram dated January 24th from the Federal Reserve Agent at San Pl ' alicisco, transmitting an inquiry from the American Trust Company as to the Board.'s action on its application for permission to take over the Bank of Se48alit0, together with its branch at Tiburon, and its application for 1)"Missi on to establish three de novo branches in San Francisco, which at the Illeeting on January 4th was referred. back to the Committee on Examinations. The Secretary called attention to the fact that the application of the American Trust Company for branches at Sausalito and Tiburon, and the motion made by Mr. Miller at the meeting on January 19th are special order of business for tomorrow's meeting, and following a discussion Mr. Cunningham moved that the matters be taken 1.133 today. Carried. The Vice Governor then presented for consideration the following 111c)ti011 Illade by Mr. Miller at the meeting on January 19th: • "That in accordance with the precedent established. by the interpretive ruling of the Board. of December 2, 1924, to the effect that the cities of Oakland, Berkeley and Alameda are territory contiguous to the city of San Francisco, within the meaning of the Board's Regulation 'H', the Board now rule that the city Of Sausalito is territory contiguous to the city of San Francisco; the city of Sausalito sustaining substantially _ 65 s 1/25/27 -8"the same relation to the city of San Francisco as the cities of Oakland, Berkeley and Alameda." Mr. Miller's motion being put by the Chair was carried, the members voting as follows: Mr. Mr. Mr. Mr. Mr. Platt, "aye" Hamlin, "aye" Miller, "aye" James, "no" Cunningham, "no" Mr. ClInningham then moved that the application of the American Trust Company for permission to take over the Bank of Sausalito and its Tiburon Branch and to establish branches in their premises be denied. *Mr. Cunningham's motion being put by the Chair was carried, the members voting as follows: Mr. Miller, "aye" Mr. James, "aye" Mr. Cunningham, "aye" Mr. Platt, "no" Mr. Hamlin, "no" Mr. Miller then moved that the Board approve the application of the American Trust Company, for permission to establish de novo branches at Twentieth Avenue and Irving Street, Fillmore and California Streets and in the Fairmont Hotel, San Francisco. Carried. Uemorandam dated January 20th from the Board's Chief Examiner, submitting 44d recommending acceptance of the resigration of Mr. John F. Prahl, as Federal leserlre Examiner, effective at the close of business January 25th, and regilesting authority to fill the vacancy at a salary not exceeding that paid Upon motion, Mr. Prahl's resignation was accepted effective January 25, 1927, and the authority requested was granted. 66 1/25/27 -9- Letter dated January 18th from the Chairran of the Federal Reserve Bank of Cleveland, advising of officers elected to serve at that bank and its branches for the year 1927. Noted. Letter dated January 22nd from the Federal Reserve Agent at Cleveland, 114vising of the resignation of Mr. P. J. Faulkner as Assistant Federal Reserve 4ftat at the Cincinnati Branch as of January 31st. Accepted. Report of Committee on Salaries and Expenditures on letter dated. jalluarY 22id. from the Chairman of the Federal Reserve Bark of Cleveland, acIvistag of the resignation effective January 31st of Mr. John P. H. Brewster, As • alstant Cashier of the Cincinnati Branch, and requesting approval of the 414wtag salary adjustments, effective February 1st, mule necessary by prototions to fill the vacancy caused by Mr. Brawster's resignation: Bruce Kennelly, Assistant Cashier R. G. Johnson, Assistant Auditor P. J. Faulkner, Manager Discount Department „.3950 to y4200 3000 to 3300 3300 (no increase) Upon recommendation of the Committee, it was voted to approve the salaries set forth above. ileport of Committee on Salaries and Expenditures on letter dated rY 18th from the Chairman of the Federal Reserve Bank of Atlanta, reapproval 'of a salary of 5400 per annum, effective January 1, 1927 J. B. Tutwiler who has been re-elected Assistant Cashier of the 4111.t• 'the Committee recommending anproval. Approved. t,„ 67 1/25/27 -10- Report of Committee on Salaries and Expenditures on letter dated January 18th from the Chairman of the Federal Reserve Bank of Atlanta, l'squesting approval of a salary of $4200 per anamm, effective January 15th, 1927 for Mr. V. K. Bowman, former Chief Clerk in the Discount Departnent Of the bank, who has been elected Assistant Cashier; the Committee recom- mending approval. Approved. Report of Committee an Salaries and Expenditures on letter dated JallUary 22nd from the Secretary of the Federal Reserve Bank of Atlanta, t 7600 for welfare and l'equesting approval of appropriations totaling ;"i Educational work through the Federal Reserve bank clubs at the head office six' branches during the year 1927; the Committee recommending approval. Approved. Letter dated January 20th from the Chief Clerk of the Treasury DIsPartment, recommending an increase from .1500 to 44680 per annum in the salary Of Miss Catherine Burke who is carried on the rolls of the Board as Assistant Chief Telephone Operator; the Board's Secretary also recommend111g approval of the increase. Approved, effective February 1, 1927. Letter dated January 22nd from the Chairman of the Federal Reserve 4nk of Atlanta, advising that the next regular meeting of the Atlanta boa),A -- will be held at the Birmingham branch on ',larch 11th, the date of the f°11111a1 opening of the new branch building. Noted, without objection. 1/25/27 -11- Letter dated January 17th from the Assistant Federal Reserve Agent at San Francisco, advising that on January 18th the American Trust Company Of San Francisco moved to a permanent location at 7228 East 14th Street, Oakland, the branch which has been operated at 7131 East 14th Street. Noted. Reoort of Committee on Salaries and Expenditures on letter dated January 20th from the Federal Reserve Agent at St. Louis, requesting approval of the action of the Executive Committee of that bank in voting to extend for thirty days from January 20th, with full pay, leave of absence granted Miss Clara Gross of the Fiscal Agency Department; the Committee recommending approval. Upon motion, it was voted to approve payment of full salary to Miss Gross during the leave of absence granted her. Report of Committee on Examinations on letter dated January 20th from the Assistant Federal Reserve Agent at New York, recommending approval Of an application of the First Trust and Deposit Company, Syracuse, N. Y. for permission to establish a branch at 1510 West Genesee Street, Syracuse; the Committee recommending approval, effective if and when approved, by the State Banking Del:artment of New York. Upon motion, the recommendation of the Committee was approved. Report of Committee on Examinations on letter dated January 20th from the Federal Reserve Agent at Philadelphia, recommending approval of the consolidation of the Colonial Trust Company and the Peoples Bank and 1/25/27 -12- Trizst Company, both of Philadelphia; the Federal Reserve Agent statinp: that the consolidatio-n will be effected under the title "The Colonial Trust Company" with main office at 20 South 15th Street, the present main office Of the Peoples Bank and ?rust Company, and that all other offices of the Peoples Bank and Trust Company and the Colonial Trust Company will be retained as additional offices. The Committee recommending a -oproval, it '..zas upon motion voted to approve the consolidation. PZPORTS OF STANDING COMMITTFES: Dated, January 19th, 20th, 22nd, 24th, Dated, January 24th, Recommending changes 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 Linute Book of this date. Approved. Dated, January 24th, Recommend in approval of the application of Mr. F. A. Weiss for permission to serve at the same time as director of the Holston National Bank, Knoxville, Tenn. and as director of the First National Bank, Lenoir City, Tenn. Approved. Dated, January 20th, Recommending approval of the application of Mr. 7/m. H. Avant for pe rajas ion to serve at the same time as director of the Merchants National Bank, Indianapolis, Ind. and as director of the Indiana Trust Company, Indianapolis , Ind. Approved. Dated, January 22nd, Recommending approval of the application of Mr. Joseph A. Skinner for permission to serve at the same time as director of the First National Bank, Boston, Mass. as President of the Hadley Falls Trust Company, Holyoke, Mass. and. as director of the Springfield. Safe Deposit & Trust Company, S-pringfield, Mass. Approved. Dated, January 22nd, Recommending approval of the application of Mr. Homer Gage for permission to serve at the same time as director of the First National Balk, Boston, Mass. and as director of the Merchants National Bank, Worcester, Mass. Approved. 70 1/25/27 -23- The meeting adjourned, at 1:30 p.m. Vice avernor.
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