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95 A meeting of the Federal Pederal eserve -3oard was held in the office of the eserve 3oard on Thursday, January 28, 1926, at 11:10 a.m. PRESENT: Vice Governor Platt Mr. Hamlin Mr. Miller Mr. James Mr. Cunningham Mr. aldy, Secretary Mr. McClelland, Asst. Secretary he minutes of the meeting of the Federal Reserve Board held on January 26th were read and approved. Memorandum dated January 26th from the Chief of the Gold Settlement biviss -Lon, recommending the employment of Mr. P. J. ayan as extra man on the night force of the Division, to work in the absence of any regular night — forCO employees; compensation to be based upon the number of hours worked. Approved. Letter dated. January 25th from the Assistant Federal Reserve Agent at Cleveland, advising of the resiMation of Mr. James H. McClure, Examiner, eft. ective January 24, 1926. Noted. Telegram dated January 27th from the Bkw, hairman of the Federal deserve Of !3oston, advising that the board of directors of the bank on that 4telllade no change in the schedule of rates of discount and purchase in effeet at that bank. Noted, with approval. :leport of Committee on Examinations on letter dated January 25th, 18111. 1tting and recommending approval of an application of the Citizens 11841k of Festas, Mo., for approval of its action in absorbing the Festus t 96 Th -2- State Bank, a non-member bank; the Committee recommending approval. Approved. Report of Committee on Examinations on memorandum dated January 26th freqn the Comptroller of the Currency, recommending approval of an application °f The Interstate National Bank of Helena, Arkansas, for permission to reduce its capital stock from 4500,000 to .e250,000, on condition that the entire amount of the reduction be used in removing doubtful and slow assets, such assets to be trusteed for the benefit of shareholders at the date of reduction and none of the reduction to be returned to the shareholders in cash except a as realized from trusteed assets; the Committee also recommending pproval. Approved. Memorandum dated January 28th from the Assistant 3eCretary, with reference to letter dated January 21st from the Chairman of the Federal -leserve a.rik of San 2raneisco, advising of resolutions adopted by the directors that bank fixing fees and allowances to be received by the directors of the bank and its branches in connection with attendance at Board and Committee nieettngs; the /,ssistant ecretary calling attention to the fact that the only change from the existing allowances is that per diem of 415 per day will be allowed to directors residing beyond twenty-five miles of the meeting point rather than fifty miles as heretofore. Upon motion, the fees and allowances fixed by the directors of the an 2rancisco bank were approved. The 3ecretary then °resented the matter referred to the Comptroller 97 1 1/28/26 -3- 01 the uurrency at the meeting on January 26th, namely, application of the First National *Bank of West Point, Georgia, for permission to act as trustee generally, under Section 11 (k) of the Federal Heserve- iict; together with recommendation of the Law Committee that the bank be granted permission to act as trustee for bond issues only; the oecretary reported that the Comptroller of the Currency disapproved the granting of any powers to the bank due to its unsatisfactory condition. After discussion, Mr. Hamlin moved that action on the application of the bank be held pending the next examination. Uarried. Letter dated January 26th from Mr. A. B. Trowbridge, submitting stateMent in the amount of 4;1250 for services as consulting architect in connection with the construction of a building to house the Lake City 3ranch of the Federal Aeserve Bank of San Francisco; Mr. Trowbridge in his letter stating that he had been approached by Mr. James Inlis, Director of the Detroit 3ranch, with reference to his analyzing the needs of that branch for a buildlag before uongress is requested for authority to make the expenditure Inand inquiring whether it would not also be well to follow the same procedure in connection with the erection of a building for the Buffalo t3ranch of the Federal deserve Bank of New iork. After discussion, Mr. Hamlin moved that the Board approve the statement submitted by Mr. l'rowbridge for his services on the Salt Lake City building project, and that the Secretary advise Mr. 2rowbridge that the iederal Aeserve Bank of New /ork is acquiring an existing building for its Buffalo Branch in connection with which his services are not necessary, and further, that a committee of the 3oard is to investigate the proposition to erect a branch bank building at Jetroit before any steps are taken in that direction. Carried. 98 1/28/26 _ Letter dated January 27th from the Chairman of the Committee on Banking and currency of the ;louse of Representatives, requesting an exPression of the Board's views on House Joint Resolution 131 and Senate J°Int Resolution 44, to authorize the Federal Reserve Bank of i,ew lork to invest its funds in the purchase of a site and building now standing thereon for its branch office at Buffalo at a cost of not to exceed 9600,J00. After discussion, Mr. Hamlin moved that the Secretary prepare a letter to the Jhairman of the Committee advising that the Federal Reserve Board approves of the Federal eserve Bank purchasing the building in question and that the letter convey to the Chairman the information as to the value of the land and building, transmitted to the oard by the Governor of the Federal deserve bank of New /ork in his letter of January 21st. Carried. Letter dated January 25th from Mr. U. B. Lane, President of the Citizens and Southern Bank of Savannah, Ga., with reference to his conference with the Board on January 21st, regarding the application of his bank f0r Permission to establish a branch at Albany, Ga., which was disapproved by the Board on January 11th. After discussion, the Secretary was directed to acknowledge receipt of jar. Lane's letter and to advise him that the question of reconsideration of the action on his bank's appliclAion will be taken up by the 3oard at a subsequent meeting. Memorandum dated January 19th from Assistant Counsel, submitting draft °I. reply to letter dated January 11th from the Deputy Governor of the Federal 'leserve Bank of St. Louis, with reference to the Board's recent ruling re the eligibility for rediscount of notes of corporations represent- 99 -5- 1/28/26 ite borrowings to be advanced to subsidiaries; the proposed reply stating that the 30ard's ruling was not intended to modify in any way the provision c/f its Aegulation A which requires separate financial statements of corporations or firms closely affiliated with or subsidiary to the borrower. Upon motion, the proposed letter to the Federal Aeserve sank of St. Louis was approved and similar advice ordered transmitted to all iederal Aeserve banks. 3ank Letter dated January 22nd from the Chairman of the Federal Reserve member banks °t San irancisco, with further reference to his suggestion that Participating in elections of Class A and 13 Jirectors be furnished with a brief biographical sketch of each nominee to assist them in making a choice; the Chairman stating that he does not believe the ard's suggestion that than those biographical sketches be prepared by the nominating bank rather the Chairman of the Federal Aeserve Bank is practicable, in view of the fact that various banks nominating the same candidate might submit conflicting S ketches. Ijuring the discussion which followed, Mr. Miller suggested that this matter should be taken up by the Board with Mr. Isaac B. Newton when he assumes the duties as Chairman of the Board of Directors of the San Francisco bank. After discussion, the above letter was referred to the Committee on District 112. Letter dated January 21st from the Chairman of the Federal Reserve 844k Of an Francisco, submitting previous correspondence with the Board, of directors requesting a ruling as to whether the action of the board 100 1/28/26 -6- of a Federal deserve bank in accepting paper for rediscount deprives a Federal deserve Agent of discretion in accepting or rejecting such paper as oollatc3ral for Federal deserve notes. In this connection, the Secretary presented a memorandum dated January 28th quoting discussion of this subject at the Conference of Governors of the Federal deserve banks held in April, 1921. After discussion, the above matter was referred to Counsel for an opinion. Memorandum dated Jaruary 28th from the Division of Examinations, with reference to letter dated January 25th from the Assistant Federal deserve Agent at New York, advising that the Ilanufacturers and Traders Trust Company Of Buffalo at close of business January 22nd merged the Riverside National Bank of Buffalo; the memorandum calling attention to the fact that the Board's approval to this merger was not secured and that it constitutes a violation Of the Board's aegulations on the part of the Llanufacturers and Traders Bank. deferred to the Committee on Examinations. Letter dated January 25th from the Chairman of the Committee on Banking alld Currency of the House of depresentatives, requesting the Board's views 0/1 a proposal, discussed by the Board informally on December 30th with a comMittee representing the Association of State Bank Supervisors of the United States to amend Section 9 of the Federal deserve Act, so as to read as follows: "The Federal deserve Board, subject to the provisions of this Act and to such conditions as it may prescribe pursuant thereto, may permit the anplyinp; bank to become a stockholder of such Federal deserve Bank; Provided, however, that such conditions or rules or regulations pre- 101 1/28/26 .07.1/11, "scribed shall not limit or impair the charter or statutory rights and powers of such banks nor shall the Federal aeserve Board impose any conditions or restrictions other than those under which national banks shall operate." deferred to the Law Committee for preparation of a reply. llemorandum from Counsel dated January 26th, submitting replies of all l'eaeral Aeserve Banks to circular letter approved by the Board at the meeton December 29th, requesting information in connection with the ruling l'ENAested of the Board as to whether or not canned corn should be considered 4011-perishable readily marketable staple agricultural product within the Ineaning of Section 13 of the Federal Aeserve Act and the Board's Regulation with regard to the discount of sirl:ht and demand drafts secured by such Products; Counsel recommending to the Board that canned corn and other canned food products be not so considered and that the Federal Reserve banks be so 4d7ised. The Law Committee reported a division on the question, Mr. Platt oolacurring in Counsel's opinion and Mr. Hamlin taking the opposite vies. After discussion, Mr. Miller moved that all Federal Reserve banks be advised that in the opinion of the Board canned corn and other canned food are not to be considered non-oerishable readily marketable staple agricultural products which may be made the basis of sight or demand drafts under Section 13 of the Federal deserve Act. Mr. Miller's motion being put by the Chair was carried, Mr. Hamlin voting "no". deport of Committee on Examinations on letter dated January 22nd from th e Federal deserve Agent at San Francisco, transmitting and recommending IIPProval of an application of The American Bank of San Francisco for an exOf six months from February 3, 1926 of the period in which they may 102 —8— 1/28/26 establish the branch at Seventy-third Avenue and East Fourteenth Street, 4111and, approved by the Board on ?ebruary 3, 1925; the Committee also recomZencling approval. Approved. deport of Committee on Examinations on letter dated January 26th from the Federal deserve ,gent at Boston, transmitting and recommending approval A. I. for an °f an application of the Columbus Exchange Bank of Providence, extens ion until August 31, 1926 of the period in which it may establish the Providence, approved bl'anch at the corner of Charles Street and Branch Avenue, the Board on January 16, 1925; the Committee also recommending approval. 15 Approved. 27th from Report of Committee on Ixaminations on letter dated January he Federal deserve Agent at Aichmond, transmitting and recommending approval or to aPplication of the Bank of iunenburg, lenbridge, Va. for permission te'ke over the First National Bank of Kenbridge; the Committee also recommendapproval. Approved. Report of Committee on Salaries and Expenditures on letter dated of j841118.rY 25th from the Comptroller of the Currency, recommending approval 44 increase from ,6,000 to .„;6,3A per annum in the salary of iational Bank L)Eani. 'her V. H. Northcutt; the Committee also recommending approval. Approved. Report of Committee on Examinations on application made by the in the e°41 and iron National Bank of the City of Aw York for membership 103 1/28/26 -9- Federal Aeserve .ystem and for IWO shares of stock in the federal deserve Bank of ilew York on behalf of The Coal and Iron Bank of the City of New York, effective when the Coal and Iron National Bank converts into a state insti- tution for the purpose of merging with the Fidelity International 2rust UftPany, a member bank; the Committee recommending approval, effective if and When the coal and Iron National Bank is incorporated as a state bank, subject to the conditions of membership contained in the Board's iegulation H and to the further condition that the directors of the state bank will meet immediateafter incorporation and pass a resolution ratifying the action of the officers of the Coal and Iron National Bank in making the application on its behalf; the Committee also recommending approval of the subsequent merger of the Coal and Iron Bank with the fidelity international 1rust Company. Upon motion, the recommendations of the Committee were approved. 44121P_ITS OF STANDING COLMITTEES: Dated, January 27th, 28th, Dated, January 27th, Dated, January 26th, Aecommending changes in stock at federal eserve Banks as set forth in the Auxiliary -inute 3ook of this date. Approved. Aecommending action on applications for fiduciary powers as set forth in the tLuxiliary Minute Book of this date. Approved. iecommending action on application for admission of state bank, subject to the conditions stated in the individual report attached to the application, as set forth in the Auxiliary Minute 300k of this date. Approved. 2he meeting adjourned at 1:10 p 4PProved: Secre ary. Vice-Governor.
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