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9, t.1) A meeting of the Executive Committee of the Federal aeserve Board Was held in the office of the Federal aoserve Board on Tuesday, July 14, 1925, at 11:15 a.m. 71=T: Vice Governor Platt James Eddy, Secretary. 7resent Also: aenort of Committee on Examinations on memorandum dated_ July 9th 1.rom the Comptroller of the Currency., recommending approval of the application of the First National Bank of Lucas, 1:ansas, to reduce its capital stocfc from „,;50,000 to ,,25,000, on the condition that the unanimous consent of the shareholders is obtained to place ,10,003 of the reduction in the surplus account of the ban, and that the remaining )15,,..WO shall be Used. to charp:e off doubtful Pacer, any recoveries from 11 items charged off to remain as assets of the bank; the Committee recommending approval of the aoplication on the conditio ns stated by the Comptroller. Approved. aeoort of the Committee on Salaries, Expaaditures cn letter dated July 9th from the Comotroller of the Currency, recommen dapproval of a salary of ,2,700 per annum for :ational Bank Examiner Charles J. aitt (Junior Grade), to be assirmed to the Twelfth Federal aeserve District; the Committee also recolmending approval. Approved. aeport of the Committee on 'Salaries, Expenditures and Efficiency cn letters dated July 9th and 10th from the Chairman of the Board of Directors of the Federal aeserve Bank of Kansas Citj, requestinJ7 the approval of the Federal deserve Board of the action of the Executive L) 7/14/25 -2- Committee of the bank in employing Mr. R. 3. Hewitt as Special Agent to succeed J. C. Morrow, resitzned, to look after the rediscounts held by it endorsed by the closed First ITationol Bank of Musa, :ebraska, at a salary of .:13,300 per annum, payable in monthly installments; the Conriittee recommending approval. Approved. Report of the Committee on Salaries, 3xoenditures & :.!.fficiency on letters of July 9th and 10th from the Governor and Federal Reserve Agent at Dallas, requesting approval of the Federal Reserve Board of an increase in the salary of H. 3. Cherry, Chief of the Maintenance Division .of the Service Department of the bank from ,3,000 to :3,600 per annum, effective July 1, 1925; the Committee recommending approval. Approved. Bond of J. 'rank aehfuss, Acting Assistant Federal Reserve Agent at T.'hiladelnhia in the amount or „;50,J00.00. Approved. Draft of proposed letter to the Governors of all Federal reserve balls, advising of the amendment of the nInual of the Federal Reserve SYetem Leased 'lire Service, under the heading of "Instructions to Telegraph Operators", as follows: "Telegrams containing code words will bear a check or count indicating the total number of words in the message. Form telegrams such as geld settlements, Tend, Druid, Drummer, and others of like character should not bear • a check." Approved. 7/14/25 -3- Report of Committee on Salaries, Expenditures and Efficiency on letter dated July 3rd from the Federal Reserve Agent at San Francisco, advising that two Federal reserve bank examiners had been loaned to the State Banking Department of California to make special investigations in connection with the suit of the stockholders of the Valley Bank of Fresno against the State Banking Department, the Bank of Italy and the Pacific Southwest Trust and Savinr;s Bank, the salaries of the examiners being paid by the State Banking Department during the period Of their detail, and that the detail interrupted the work of the Examination Department of the Federal Reserve Bank to such an extent that it seemed advisable that the bank retain the services of Examiner A. B. liason for such length of time after June 30th as is necessary to adjust the schedule of bank examinations, the Federal Reserve Agent requesting in his letter that the Board approve of the extension of Examiner Mason's commission indefinitely or until his services will be no longer needed; the Committee also recommending approval on the assumption that the detail of the examiners to the State Department meets with the approval Of the Federal Reserve Board. After discussion of the advisability of Federal reserve bank examiners being loaned to State banking authorities for purposes other than participation in the regular examinations of state member banks, ;r. James moved that the Board approve of the extension of Examiner Mason's Commission as requested by the Federal Reserve Agent. Carried. 7/14/25 It was then moved that there be prepared and submitted to the Board at its next meetiner a letter addressed to the Federal aeserve Agent at San Francisco advising him that there is nothing in the records of the Federal Heserve Board which indicates that the State Banking Department has requested that there be detailed to it the services of Federal reserve )an.: - examiners for the purpose of making special investi?:ations in con,lection with the suit of the stoc:tholders of the Valley Bank of Fresno against the State Banking Department et al. and advising the Agent that the "loan" or detail of Federal reserve bank examiners to state banking departments should be made only for the purnose of assisting the state departrents in their examinations of state banks in accordance with the general plan of cooperation by Federal reserve banks with State banking departments. Carried. Memorandum from General Counsel dated July 10th recommending that the Board -mulish as a ruling in the forthcoming issue of the Federal aosorve Bulletin the suestance of its circular letter to all Federal lleserve Agents, X-4373, with regard to the elirjbility of an officer Of an insurance company for election as a Class B Dircctor of a Federal ,teserve Bank, and recommending also that the Board authorize the publi— cation in the Law Denartment of the August issue of the Bulletin a digest of state laws concerning the guaranty of bank deposits. After discussion, the Committee voted to authorize ,the nublication in the August issue of the Bulletin of the digest of state laws concerning the guaranty of bank dePosits, and. to withhold from publication in the Bulletin, until further consideration is given thereto, of any ruling on the subject of the eligibility of an officer of an insurance company for election as a Class B Director of a Federal reserve bank. Draft of letter to the Federal Reserve gent at J?11 ladil aclaiowledging receipt of letter addressed to the Board under date of Jlay 8th by the Assistant Federal eserve Agent, transmitting coyles 7/14/25 Of charts al Posters which the Philadelphia bank proposes be included in the Federal Reserve hxiiicit to be presented at the Fall Convention of the knerican Bankers Association at Atlantic City; the proposed letter to the , -euoral Reserve Agent expressinr7 the Board's view that the posters sucfesti-113 changes in the size and desin of currency notes and. advocatin:7 the renewal. of Federal reserve ban'-: charters are inappropriate material for ii°1 sion in any puolic made by a Federal reserve bank or oy the Feuer.:1 deserve System and reeuestia': the Federal deserve ,:,e':ent to -ive his aleeroval to all data interned for tacletsio_ in the exhieit before s.71b1fl1tti11'; SaLle to the Board. On motion, the -eroeosed letter to the Federal deserve Agent at 7hiladel.,:hia was approved. Letter dated July 9th from the Federal Reserve Ai:ent at Chicareo with reference to the,establishment of branches by state member banks located in the State of Michigan without obtaining the aperoval of the Federal deserve Board. After discussion as to whether or not under the :eF7alations of the Federal deserve 3oard, state member banks which had been admitted to the Sys tam prior to the existence of any rerAlations of ti4.e Board concernine. the establishment of brancaes could cc reeuired to secure the Board's permission for the estaulishi.T.ent of a branch under the terms of the -eueral condition that "except with the leermission of the Federal Reserve Board, such ban: or trust co meanu shall not cause or oermi t any change to be made in the general character of its assets or in the scope of the functions exercised by it at the time of admission to membership, such as will tend to affect materially the standard. maintained at the time of its admission to the Federal deserve System and. required as a condition of merbership", or under the terms of any similar condition imoseci on the bank at the time of its admission to manbershiu, the letter from the Fed- 39 7/14/25 -6- eral Reserve Agent at Chicago was, on motion, referred to Counsel with the request that Counsel advise the Board what authority it has under its general supervisory powers to require a nember bank to give notice to the Board when it desires to establish a branch, not on the theory that the Board can prevent the establishment of the branch, but on the theory that its establishment might have a bearing on the question of the desirability of continuing the membership of the bank in the Federal Reserve System. Letter dated July 10th from the Chairman of the Board of Directors Of the Federal Reserve Bank of aichmond, advising that the Board of Directors of the aichmond bank intended its resolution transmitted to the Federal Reserve Board in the Chairman's letter of June 12th as a formal request for a rehearing by the Federal Reserve Board, during the coming Autumn, upon the question of the establishment in the Carolinas Of a branch of the Federal Reserve Bank of Richmond. The Secretary was instructed to acknowledge receipt of the letter and advise the Chairman of the Federal Reserve Bank of Richmond that the Board will give consideration to the formal request of the Richmond bank for a rehearing. The Secretary was also instructed to docket the matter for a subsequent meeting at which all men:boors of the Board are present. Letters dated July 14th addressed to the various banking corporations doing business under agreement with the Federal Reserve Board under Section 25 of the Federal Reserve Act, requesting that they furnish the Board with reports of condition as of the close of business June 30, 1925, in accordance with the regular pm.ctice of the Board. Approved. 111Z2111_11_§ .7ANDING C012:172:1113: Dated July 14th. Recommending action on application for fiduciary powers as set forth in the Auxiliary Minute Book of this date. Approved. Dated July 14th aecommending action on apmlication for fiduciary powers as set forth in the Auxiliary Minute Book of this date. Held. Dated July 14th Recommending action on application for admission of state banks, subject to the conditions stated in the individual reports attached to the anplicatian, as set forth in the Auxiliary Minute Book of this date. Approved. Dated July 8th Recommendinp; approval of the application of 1:r. William S. Pettit to serve at the same time as director of the Rockaway Beach National Bank, aockaway Beach, New York City, as Vice President and Director of the National Bank of Far Rockaway, New York City, and as Director and Vice President of the Hewlett-Woodmere National Bank, ':;oodrriere, N. Y. Approved. Dated July 10th Recommending approval of the applicati on of Mr. C. W. McKeen to serve at the same time as director of the Merchants National Bank, Lawrence, Ky., and as officer and director of the National Bank of Topeka, Kansas. Approved. The meeting adjourned at 12:45 p.m. 4Piroved: Vice Governor.
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