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A meeting of the Federal _Reserve Board was held in the office of the Federal Reserve Board on Friday, January 7, 1927 at 11:00 o'clock a.m. PRESENT: Governor Crissinger Mr. Platt 1,r. Hamlin Mr. Miller Mr. James Mr. Cunningham Mr. Eddy, Secretary Mr. McClelland., Asst. Secretary The minutes of the meeting of the Federal Reserve Board held on January 4th were read and approved. Application of The Elizabethtown National Bank of Elizabethtown, Pa. for -permission to exercise general fiduciary powers; together with recommendation of the Law Committee that the application be approved effective if and when an increase in the bank's capital to at least te.-25,000 has been legally effected. Upon motion, it was voted to approve the above application effective if and when the bank's capital is increased to the amount stated. Letter dated January 6th from the Secretary of the Federal Reserve Bank of New York, advising that the board of directors on that day made no change in the bank's existing schedule of rates of discount and purchase. Noted. Telegram dated January 5th from the Chairman of the Federal Reserve Bank of Philadelphia, advising that the board of directors on that day made 40 change in the bank's existing schedule of rates of discount and lourchase. Noted, Telegram dated January 5th from the Chairman of the Federal Reserve no 13411k of St. Louis, advising that the board of directors on that day made 11 -2- 1/7/27 change in the bank's existing schedule of rates of discount and purchase. Noted. Telegram dated January 6th from the Chairman of the Federal Reserve -Bark at San Francisco, advising that the board of directors on that day Made no change in the bank's existing schedule of rates of discount and purchase. Noted. Matter approved on initials on January 6th, namely, letter dated January 3rd from the Comptroller of the Currency, recommending approval of itoreases in salaries of National Bank Examiners as follows: E. J. W. C. i. A. H. Gaugti L. Proctor W. LIcBryde F. Wilson M. Hodgson M. Steuart 8,000 7,500 3,900 6,000 3,900 - $10,000 8,500 8,500 4,200 7,000 4,200 - Formally arproved. Memorandum from the Secretary dated January 6th, advising that Yr. L° L. Rue has been re-elected as member of the Federal Advisory Council fliom the 3rd Federal Reserve District for the year 1927. Noted. Letter dated January 5th from the Assistant Treasurer of the United States, advising that no applications were received from National Banks ing the quarter ending December 31, 1926, for the sale of bonds under ' chll Section 18 of the Federal Reserve Act. Noted. Letter dated January 3rd from the Federal Reserve Agent at Kansas 12 1/7/27 Oity acknowledging the Board's letter of December 31st and advising that they Will be governed by the action of the Board in disapproving the payment of salary for the month of December to Mr. Walter Robinson who was relieved of his duties as examiner at the bank on December 1st. Noted. Letter dated December 31st from the Assistant Federal Reserve Agent at San Francisco, advising that the American Bank of San Francisco on December 27th opened in a temporary location at 7131 East 14th Street, Oakland, the branch approved by the Board on October 7th for 73rd Avenue aaa East 14th Street, Oakland. Noted. Letter dated December 30th from the Federal Reserve Agent at San Prancisco, requesting approval of the designation as Assistant Chief Zzaminer, affective Jaruary 3rd, of lir. Edward S. Jernegan, who has been clirecting the Failed Banks Departrent at the Salt Lake City Branch. Approved. Letter dated January 4th from the Assistant Federal Reserve Agent at Cleveland, with reference to the closing of the Peoples Bank Company, F1 ' azeysburg, Ohio, a member bank. "Toted. Report of Committee on Examinations on letter dated January 3rd *°111 the Assistant Federal Reserve Agent at New York, transmittin.2: and l'ec°111mendiag approval of an application of the City Bank Trust Company, Yracuse, N. Y. for permission to absorb the Bank of Onondaga and to 1/7/27 —4— operate same as a branch; the Committee recommending approval. Approved. Memorandum from Counsel dated January 5th, with reference to the matter referred to him for report on December 23rd, namely, recommendations °f the board of directors of the Federal eserve Bank of Dallas that the fee to be p-id Locke, Locke, Stroud and Aandolph, Counsel of the bank, be increased from :8,000 to ,9,000 for the year 1927 and that the retainer to be paid during 1927 to Lir. C. C. Huff, General Counsel, remain the same 48 during 126, namely, ,)1200; Counsel pointing out that a change in the legal arrangement between the Federal Reserve Bank and the firn of Locke, Locke, Straad and Randolph will result in a saving of „31100 per annum above the increase proposed in the finnis fee and recommending approval of the 111crease, but stating that he does not know enouji of the character of 1.1r. services to express any opinion as to the propriety of continuing to Pay him the nominal retainer of :,1200 per annum. the Lag In this ccnnection, Committee recommended approval of an increase from ,8,000 to .,;)9,000 ill the fee of the firm of Locke, Locke, Stroud and landolph but that the aervices of Mr. Huff as General Counsel be discontinued; the Committee stating that the Federal Reserve Bank of Dallas will be agreeable to such action by the Board. Upon notion by Mr. Hamlin, it was voted to approve an increase from 4A,000 to ‘;,9,000 per annum in the fee of Locke, Locke, Stroud and iiandolph and to advise the Federal Reserve Bank of Dallas that in the opinion of the Board the further services of Mr. Huff are not required. Carried. —5— 1/7/27 Letter addressed to the Governor under date of January 6th by Honorable Sol Bloom, Member of the House of Representatives from New York, with reference to certain recent charges of international control Of the Federal Reserve System. Upon motion by Mr. James, it was voted to refer the above letter to the Executive Committee with power to reply thereto. Memorandum dated January 5th from Mr. James, Chairman of the Committee on Salaries and Expenditures. advising that in accordance with the Board's request he conferred with the committee of directors of the Federal Reserve Bank of New York which was in -:ashington yesterday regarding the increases recommended by the directors of that bank in the salaries of Mr. Otto Y. TenEyck, Superintendent of the Bank Building,and Mr. Arthur S. Vincent, Chief Engineer, and was prepared to recommend approval of the salaries submitted by the New York directors. Mr. Platt stated that he concurred in this recommendation. Upon motion by Mx. James, it was voted to arprove i)9,000 to increases, effective January 1st, from : Eyck, and Ten of salary Mx. 10,000 per annum in the of Mr. salary the in annum per from 4i;6,500 to V7,000 Vincent. The Governor then submitted a letter addressed to him under date of January 6th by Mr. Clarence M. Woolley, Deputy Chairman of the Federal Reserve Bank of New York, with regard to the unanimous request raade by the Board informally of Mr. Owen D. Young that he resign his Present position as Class B Director of the Federal Reserve Bank of New York and accept from the Federal Reserve Board an appointment as Class 15 1/7/27 0 Director and Deputy Chairman of the bank; 11r. Woolley stating that after conferring with the other directors and officers of the New York bank Mr. You4g has stated that he will be glad to accept the Board's request to serve as Class C Director and Deputy Chairman, after he has had appropriate opPortunity to resign the office of Class B Director to which the member banks Of the District elected him. Following a discussion, Mr. Platt moved that Mr. Owen D. Young be appointed as a Class C Director of the Federal Reserve Bank of New York for the term ending December 31, 1929 effective upon his resignation as Class B Director, and designated as Deputy Chairran of the bank, effective upon the contemplated resignation of r:r. Woolley. Unanimously carried.. The Governor then presented a report seat to him by Mr. Case, Deputy Governor of the Federal Reserve Bank of New York, with reference to the Movement of funds in the New York Market over the end of the year 1926. Ordered circulated. Letter dated January 4th from Mr. William Kaufman, attorney of vit tsburgh, Pa. with regard to loans on Adjusted Service Certificates; the letter stating that Adjusted Service Certificates will not be good security for loans because in the exercise of discretion vested in him bY law the Director of the Veterans Bureau may refuse payment of such Certificates. Referred to Counsel. The Governor then presented draft of a letter to the Federal Reserve 4ellt at Kansas City, prepared in accordance with the recommeniation of the "mmittee on District 410 arproved by the Board at the meeting on January 4th, with regard to the necessity for the appointment of an examiner to 16 1/7/27 -7- succeed Mr. Walter Robinson whose services have been discontinued; the letter stating that the Board does not deem itself to be in a position to give advice as to the immediate needs or requirenents for examiners in the Federal Reserve Agent's Departnent but that the matter must be determined by him in the exercise of his own judgment and in the light O f his responsibilities. After discussion, Mr. Cunningham moved that the above letter be amended so as to advise Mr. McClure that "The Board believes that as a matter of principle you should have in your organization one thoroughly qualified examiner. The question of the eventual organization of your Examining Department can be left until the results of the survey that is now being made by the Board are at hand. In the meantime should you need additional help the Board has on its force a qualified examiner whom it would be willing to detail to you." Mr. Cunningham's motion being put by the Chair was carried and the letter as amended was approved. In this connection, the Governor reported that Mr. Gilbert,recently aPpointed by the Board as Supervisor of Member Bank Examination, had advised him of his need for the assistance of an additional examiner for the purpose of analyzing reports of examination of state member banks. Mr. James moved that the Board grant authority for the employment of any additional help needed by Mr. Gilbert, salaries of appointees, however, to be submitted to the Board for approval. Carried. Memorandum from the Board's Chief Examiner dated January 7th, submitd. commenting on report of examination of the Cannerce Trust Company 1/7/27 -8- of Xansas City, Mos made as of the close of business March 13, 1926 by the Pederal Reserve Agent at Kansas City with the assistance of examiners EMPloyed by the Board.. Ordered. circulated. The Governor announced. that Messrs. Joseph `"ayne, Jr, and. A. W. Sewall, directors of the Federal Reserve Bank of Philadelphia, would appear before the Board this afternoon with regard to the Board's action in disaPProving recommendations made by the board of directors of the Philadelphia ballk for increases in the salaries of Governor Norris and. Deputy Governor Rtitt. The Board then discussed further the question of the appointment Of a Class C Director, Federal Reserve Agent and Chairman of the Board Of Di motors of the Federal Reserve Bank of New York to succeed. Mr. Pierre jaY I t resigned, and the manner in which this appointment might best be de red. to Mr. Gates '3. McGarrah of Ni York City. Following the discussion, Mr. James moved that the Committee on District 42 be authorized to tender to Mr. McGarrah, in such manner as it rnau deem best, appointment as Class C Director of the Federal Reserve Bank of New York for the unexpired term ending December 31, 1928, and designation as Federal Reserve Agent and. Chairman of the Board. of Directors of the bank for the balance of the year 1927. Carried. STANDING COMMITTEES: Dated., Recommending changes in stock at Federal Reserve banks as set forth in the Auxiliary Minute Book 5th, 6th, of this date. Approved. 7th, January 4th, 1/7/27 IEPOS OF STANDING C013.1ITT.7.S: (Cont,d) Dated, January 3rd, Dated., Jamary 3rd, Recommending action powers as set forth of this date. Approved. Recommending action powers as set forth of this date Refused. on applications for fiduciary in the Auxiliary Minute 300k on application for fiduciary in the Auxiliary Minute Book The meeting adjourned at 12:30 ID. Secretary'. Approved: Govern or
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