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17 A meeting of the Executive Cornittee of the ederal Reserve Board was held in the office of the Governor on Wednesday, July 14, 1926, at 11:00 a.m. PRESENT: PRESENT ALSO: Governor Crissinger Mr. Platt Mr. James Mx. Eddy, Secretary Mr. McClelland, Asst. Secretary Mr. McIntosh The Governor referred to Mr. Cunningham's f)robable prolonged absence from his duties due to illness and at his request Mr. James agreed to take over Mr. Cunninchamts memberships on the various uommittees of the Board. The Secretary then presented the following letters transmitted under date of July 12th, in accordance with the action taken by the 2oard at its meeting on July 2nd: "Dear Sir: The Federal Reserve Board has received your letter of July 6th, acknowledging its letter of June ;.)0th, advising that the hearing to be afforded you, under the Board's resolution of June 9, 1926, would be held in the office of the board on 1,:onday, July 19, 1926, at 10 o'clock a.m. am obliged to again inform you of a further postponement of the hearing to a date of which you will be advised later. Tire have, as you probably know, one member of the ,.3- ciard in :Airope; another is expected to sail within the next few days, and two are absent on account of illness. Jiy order of the rederal ileserve Joard. Very truly yours, .ealter L. Eddy, Secretary. 1,1r. Jos. L. Campbell, Deputy Govornor, Federal Reserve bank, Atlanta, Lreorgia." 18 7/14/26 -2- "Dear Mr. Newton: I an enclosing herewith, for your information and for the records of the Federal Reserve Bank of Atlanta, a copy of a letter I have written today to Mr. Jos. L. Campbell, advising him of the further postponement, to a date of which he will be advised later, of the hearing to be afforded him under the Board's resolution of June 9, 1926. By order of the Federal Reserve Board. Very truly yours, Walter L. Eddy, Secretary. Mr. Oscar Newton, Federal r'.eserve Agent, Federal Reserve Dank, Atlanta, Georgia. (Enclosure)" "Dear Mr. Black: The Board has found it necessary to again postpone the hearing to be afforded NI-. Campbell, under the Board's resolution of July 9th, and he has been so advised. Later on the Board will advise him of the date on which the hearing will be held. We have, as you probably know, one member of the Board in Europe; another is expected to sail within the next few days, and two are absent on account of illness. By order of the Federal Reserve Board. Very truly yours, Walter L. Eddy, Secretary. Mr. Eugene R. Black, ci/0 Atlanta Trust Company, Atlanta, Ga." Memorandum from Mr. James, doted June 25th, as follows: "I desire to present herewith a letter received this morning 'under date of June 24th from Dr. Sydney R. Miller, the physician 19 7/14/26 attending Mr. E. H. Cunningham, one of the Board members, who is now undergoing treatment at Johns Hopkins Hospital in Baltimore. "I should also like to present to the Board the following resolutions: "WBEREAS, the Federal Reserve Board, by means of a letter addressed to one of its members by Mr. Sydney R. Miller, the physician who is attending Mr. Cunningham, a member of the Federal Reserve Board, at Johns Hopkins Hospital in Baltimore, is advised that 'Hr. Cunningham is in need of a protracted period of treatment and complete rest and freedom from the wear and tear incidental to things in general", and "':iHEREAS, the other members of the Federal Reserve Board are in entire sympathy with the recommendations of Dr. Miller and appreciate thoroughly the desirability of having Mr. Cunningham follow the Doctor's instructions in these matters, and "lEFEAS, the work incidental to his duties as a member of the Federal Reserve Board can and will be taken care of by the other members during Mr. Cunningham's absence, "BE IT THEREFORE RESCLVED, that TA-. Cunningham be urged to devote all of his time and attention to the following out of the instructions issued by his physician, and that he be hereby authorized to absent himself from all official duties until such time as his physician gives full and unqualified permission for him to return to his office for work. "BE IT FURTHER RUSOLYED, that the Governor of the Federal Reserve Board be authorized and requested to address a letter to Mr. Cunningham conveying to him the sense of this resolution, and that he also send a letter to Dr. Sydney R. Miller, No. 1115 St. Paul Street, Baltimore, Md., advising him of the Board's action in this matter." Upon motion, the resolutions set out in Mr. James' memorandum were unanimously adopted. Letter dated July 6th from the Assistant Attorney General advising that there has been referred to the Bureau of Investigation of the Department of Justice for appropriate action at the earliest possible date the Board's letter of July 1st, requesting resumption of the investigation undertaken by the Department in December, 1924, at the request of the Board, of certain, alleged activities of 11r. J. A. fleCrary, one of the directors of the Federal Reserve Bank of Atlanta. Noted. 20 V14/26 Letter dated July 8th from the Secretary of the Federal Reserve Bank Of New York, advising that the Board of Directors of the bank on that day considered and made no change in the existing schedule of rates of discount and purchase. Noted. Telegram dated July 9th from the Secretary of the Federal Reserve Bank of Cleveland 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 July 8th from the Chairman of the Board of Directors Of the Federal Reserve Bank of Richmond 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 July 9th from the Secretary of the Federal Reserve Bank of L.tlanta 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 July 7th from the Chairman of the Board of Directors of the Federal Reserve Bank of Dallas 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. Letter dated July 7th from the Chairman of the Federal Reserve Bank Of San Francisco advising that the Board of Directors of the bank at its meeting on July 1st voted to extend leave of absence previously granted 21 -5- 7/1V26 Mr. L. C. Pontious, Deputy Governor, for two months without pay, beginning July 1st. Noted. Letter dated July 1st from the Chairman of the Federal Reserve Bank of San Francisco, advising of the appointment of r. F. C. Bold, formerly Chief Clerk and Acting Assistant Cashier at the Head Office, as Assistant Cashier, effective July 1st, to succeed flr. iudie McRitchie, transferred to the Los Angeles Branch as Assistant Manager. Noted. Letter dated July 7th from the Federal Reserve Agent at New York inquiring whether there would be any objection to his being absent from the bank for about a month and a half beginning about the middle of September. Discussion ensued as to what officers of the bank would be present during Mr. Jay's contemplated absence and as to whether Governor Strong, who is in Europe at the present time, will have returned before Mr. Jay's departure. Following the discussion, the Secretary was directed to secure information on these points. Report of Committee on Salaries and Expenditures on letter dated July 10th from the Secretary of the Federal Reserve Bank of Cleveland requesting approval of the action of the Executive Committee of that bank in voting to authorize the employment of a printer, at a salary not to exceed ;3,600 per annum, to manage a printing department to be installed in the bank; the Committee recommending approval. Approved. Report of Committee on Salaries and Expenditures on letters dated June 18th and June 23rd from the Chairman and Governor of the Federal 22 -6_ 7/14/26 2eserve Bank of Boston, resoectively, advising of the action of the directors Of that bank in ratifying his action in granting, with the Board's approval, a tm months' leave of absence with full pay to Mr. C. A. Bissell, clerk in the Credit Department, and in approving the following increases in salaries effective July 1st: Mr. L. 7. Sweetser, Assistant Cashier, „i;6,500 to 47,000. Mr. Frank c;. Lrilbody, Manager, Accounting Jivision, .„:3,000 to v3,300. Mr. ,,alter F. Farrar, Assistant Manager, Discount Division, v3,300 to 3,600. The Secretary then read, the following memorandum submitted by Mr. Platt and concurred in by r. James: "It seems to 1110 that Governor Harding and Mr. Curtiss have made out a clear case for the increase of .300 asked for 'Walter i. Farrar, Assistant Manager of the Discount Department, the Manager of the department having been assigned other duties, so that additional work falls upon 1,:r. iarrar. "The case for Mr. Liilbody's increase of v300 does not appear quite so clear, but it is clear that increases to assistants below the 42,500 limit, as in the case of Mr. Gramstorff, may occasionally make advisable a small mid-year increase to the head of the department as in the case of Mr. "If the plan of interchanging with other Assistant Cashiers the supervision of operating departments is new, or if Mr. aweetser has but recently been put into the plan, and with success, I think the case for his increase as an exception is a good one. "The record of the Joston bank for economy, I understand, is good. covernor Ilarding is constantly seeking some way to develop men who can be trusted with supervision and to combine duties in such a way as to save money in the long ran. My own feeling is that where the number of mid-year increases does not ran above three or four in an institution like the boston bank, and whore the reasons given indicate recent changes of duties we should consider that they come fairly under the exception indicated in our circular letter of Aunust 9, 1922. it seems to me that it would be very difficult, if not actually impractical, to carry on organizations of the size of these Reserve banks without some mid-year adjustments among the deuartment heads and their assistants. "Perhaps we should, for our own guidance, endeavor to put in writing some statement of just what we will regard as 'exceptional cases where adjustment may be necessary.' We have, of course, already recognized that resignations, and the necessary promotions made 23 7/14/26 -7- "necessary to fill vacancies, provide 'exceptional cases.' It seems to ma that we should also recognize shifting of responsibilities and duties incident to trying new plans of supervision. It can't be expected that the senior officers and directors of a large ban‘c should foresee at the beginning of each calendar year all the shifting of responsibilities that may take place during the year. If the changes asked for bear some relation to changes of duties, if only a few cases are submitted and if the amounts asked for are small and do not involve the senior officers I think we should usually approve on t -re theory that the cases are exceptional, with a letter in each case calling attention to the letter of August 9, 1922, and stating that the Board is willing to regard it as exceptional on the representations made." Thereupon ensued discussion as to whether or not the increases recommended should be cmasidered as "exceptional cases" within the meaning of the Board's letter of August 9, 1922 (X-5500), in which it is stated that "it is expected by the Board that salaries approved for more than ,2,500 will obtain throughout the year, except in exceptional cases where adjustments may be necessary." Following the discussion, 21r. Platt moved that the cases of Llessrs. Sweetser, cAlbody and Farrar be considered as exce-[:tional and that the increases recommended for than be approved, effective July 1st. arried. 1::r. James then moved that the Secretary be instructed to prepare for submission to the Board a statement of that the Board in future will consider as exceptional cases warranting mid-year increases in salaries of employees of Federal reserve barfts, along the lines of the last paragraph of the memorandum above quoted. uarried. Telegram dated July 12th to the Federal Reserve Agent at Atlanta, advising that the Executive Committee is inclined to look favorably upon an application of the Citizens and Southern Bank of Savannah, Georgia, to take over the Bank of :ast Point, Georgia, and to oiperate it as a branch, if and when the application is formally presented to the Board. Upon motion, the telegram was formally approved. Letter dated July 12th from the Assistant Federal Reserve Agent at Philadelphia, advising that on July 10, 1926, the Fidelity 1rust Company 24 -8- 7/14/26 and the Philadelphia Trust Company, both of Philadelphia, consolidated 's the Fidelity-Philadelphia Trust Caapany. Noted uithout objection. Letter dated July 8th from the Federal Reserve Agent at St. Louis, advising that the Fidelity Bank and Trust Company, -Jemphis, Tennessee, has entered into a liquidating agreement with the Exchange Bank and Trust Company of 1-,1aphis. Noted. Letters dated July 8th from the Chairman and Governor of the Federal Reserve Bank of Cleveland with further reference to the donation of '250 made by that bank to the Chamber of Commerce Military Committee. After discussion, upon motion by Mr. James, it was voted to approve the donation referred to. Report of Committee on Salaries and Expenditures on the matter referred to it at the meeting on July 7th, namely, letters dated July 3rd from the Governor and Secretary of the Federal Reserve Ranh of Chicago with reference to the action of the Executive Committee of that bank in voting to subscribe to the extent of 01,000 to the Credit Justice Fund of the National Association of Credit Men; the Committee recommending approval of the subscription. Approved. Memorandum from Counsel dated July 2nd, submitting draft of letter to the Federal Reserve Agent at Kansas City with reference to the recent appointment of Mr. E. J. Julick as Assistant lcent at the Oklahoma City Branch, which was approved by the Board as a temporary measure until such time as the bank could he advised of the Board l s position with reference 25 -9- 7/14/26 to the appointment of Assistant Federal Reserve Agents at branches at which unissued Federal reserve notes are carried; Counsel with his memorandum also submitting draft of a letter to all Federal Reserve Agents on the subject of the necessity for Assistant Federal Reserve ,:Agents at branches where unissued Federal reserve notes are carried. Upon motion, the letters submitted by Counsel were approved. Lemorandum from Counsel dated July 7th, with reference to various Clayton Act applications on which the Board has deferred action pending a probable amendment to the Clayton Act contained in the so-called McFadden Bill, which failed of passage at the last session of Congress; Counsel recomaending that action on the applications listed be no longer suspended, but that they be now taken up and disposed of in the usual manner as soon as practicable. Upon motion, the sugr,estion contained in the memorandum was approved. Memorandum from Counsel dated July 9th on the matter referred to the Law Comittee on July 2nd, namely, letter dated June 28th from the Governor of the Federal Reserve Bank of Dallas with reference to possible violations of the Federal Reserve Act and the Revised Statutes in the Caanercial Guaranty State Dank of Longview, Texas, and the First State Dank and Trust Company of Hereford, Texas; Ceunsel submitting draft of a reply advising that the facts in each of these cases should be reported to the local United States Attorney and a full report in duplicate transmitted to the Board, but that if it is felt that recommendations of clemency are justified by the circumstances of the cases, the reports riay properly include such recommendations. 26 7/14/26 —10— Upon motion, the proposed reply was approved. Report of Connittee on Examinations on memorandum dated June 22nd from the Comptroller of the Currency, recommending approval of an application of the First National Bank of Englishtown, lieu Jersey, for permission to reduce its capital from g50,0o0 to ,225,000 on condition that no money be returned to and no assets be trusteed for the benefit of shareholders, that all bad and doubtful assets be written off or be written down and be retained by the bank, and that efforts be nade to salvage as much as Possible from these assets for the benefit of the bank; the Committee rec on ndta g approval Approved. Report of Committee on Salaries and Expenditures on letter dated jilly 7th from the Chairman of the Federal Reserve Bank of St. Louis, with reference to an inquiry made by the Board regarding an eamense allowance for Mr. . H. Glasgow, Assistant Cashier at the head office, Who is temporarily acting as Manager of the Men:nhis Branch. Mr. James moved approval of the continuation of the allowance. Carried. Mr. Platt then submitted a letter dated Jane 12th from Honorable Ilarry M. Wurzbach, Member of Congress from Texas, with reference to the Possibility of the establishment at an Antonio of a branch of the Federal laeserve Bank of Dallas. 1;11'. Platt suggested that a letter be written to Congressman ';;Urzbach stating that the Board appreciates his interest in the matter of a San Antonio Branch, but pointing out that the Federal Reserve Bank of Dallas , 4'4 0( 7/14/26 -11- is under heavy expense and. Vint branches are a liability and not an asset. -Limn mot ion, the above letter was referred to Mr. Platt for reply. Letter dated July 9th from the Federal Rese rve Agent at San Francisco, advising that for the past thirty-five years he has been connected as a director with certain building and. loan associations in Los Angeles, and. stating that while he would be reluctant to n)tire from those boards, he Will do so if the Board feels that necessity or propriety calls for such action. Referred to Counsel. The Secretary then submitted. a detailed, analysis made by Mr. Carter, Secretary to the Govern° r, of reports of e xamin at ions of trust departments Of all National banks in the twelve Federal reserve districts which have been granted fiduciary powers by the Federal .jeserve Board, together with a memorandum summarizing the fiduciary activities of the banks, to wit, the number authorized to exercise trust powers, the number actually exercising the powers, the number of trusts in these banks, total assets of tru.sts, number of banks criticized. by the examiners, total number of criticisms reported at time of last examinations, etc. The Secretary recommended to the Board that Mr. Carter be transferred from the Office of the Governor to his on, with an increase in salary from ,,;3,000 to „,3,600 per ayraum, to take charge of a continuous record. to be set up in the Secretary's Office, with reference to the exercise of trust pomrs by National banks. The Secretary stated. that he had discussed the matter with the Comptroller's Office, and. it was tent at ively agreed. that from the suggested record to be maintained by the hoard, adAnistrative correspondence should_ be carried on by the Comptroller's Office with the ITational banks e:r.ercising trust powers in an effort to eliminate the present frequent violations the Regulations of the :.3oar by these banks. 28 -12- 7/14/26 Upon motion, the recomendations of the Secretary vrere approved, including that for an increase in the salary of 1:r. Carter from 3.,000 to c3,6OO per anntra, effective July 16th. special Mr. _ =c Intoth then moved that committee, consisting of ",:r. Eddy, the Board's Secretary, r. Pole, Chief Examiner in the Office of the Comptroller of the Currency, and Mr. Carter, be appointed to go thoroughly into the method of granting fiduciary powers to National banks end the exercise of such pavers by the banks. Carried. REPORTS OF STAMING COTETITTEES: Dated, July 7th, 8th, 9th, 10th, 12th, Recommending changes in stock at Federal Reserve Banks as set forth in the Auxiliary Linute Book of this date. Approved. Dated, July 7th, 9th, 13th, Recommending action on applications for fiduciary povrers as set forth in the Auxiliary Linute Book of this date. Approved. Dated, July 9th, Recommending action on applications for admission of state banks, subject to the conditions stated in the individual reports attached to the applications, as set forth in the Auxiliary Minute Book of this date. Approved. Dated, July 8th, Recommending action on application for admission of a state bank, subject to the conditions stated in the individual report attached to the application, as set forth in the Auxiliary Minute Book ce this date. Refused. Dated, July 7th, Recommending approval of the application of Mr. S. B. Bechtel for permission to serve at the same time as Director of the Old National Bank, Fort Wayne, Ind., and as Director of the Citizens Trust Company, Fort Wayne, Ind. Approved. Recommending approval of the application of ?Ir. Frank H. Cutshall for permission to serve at the same tine as Director of the Old Hationtil Bank, Fort Wayne, Ind., and as Director of the Citizens Trust Company, Fort Wayne, Ind. Approved. Dated July 7th, _ 29 7/14/26 -13- Dated, July 7th, Recommending approval of the application of ir. Edward Wilson for permission to serve at the same time as Director of the Old National Bank, Fort Jayne, Ind., and as Director of the Citizens Trust Company, Fort Wayne, Ind. Approved. Dated, July 7th, Recommending approval of the application of flr. Albert C. Abbott for permission to serve at the same time as Vice President and Director of the First National Bank, Mays Landing, N.J., and as Director of the Chelsea National Bank, Atlantic City, N.J. Approved. Dated, July 7th, Recormending approval of the application of Ni. Reeve Schley for permission to serve at,the same time as Vice President and Director of the Chase National Bank, New York, N.Y., and as Director of the Commercial Trust Company, Jersey City, U.J. Approved. Dated, July 7th, Recommending approval of the application of Iii. Henry F. Moellering for permission to serve at the sane time as Director of the Old National Bank, Fort Wayne, Ind., and as Director of the Peoples Loan & Trust Company, Fort Wayne, Ind. Approved. Dated, July 9th, Recommending approval of the application al Jr. L. F. Southwick to serve at the same time as Director of the National Rank cif Commerce, Lincoln, Nebraska, as President and Director of the First National Bank, Friend, Nebraska, and as Vice President and Director of the Lincoln Joint Stock Land Bank, Lincoln, Nebraska. Approved. Dated, July 9th, Recommending approval of the application of Mr. George S. Silzer for permission to serve at the same -time as Director and Chairman of the Board of the Broad & Market National Blank, Newark, N.J., as Director and Chairman of the Perth Amboy Trust Company of Perth Amboy, N.J., and as Director and Chairman of the Board of the New Brunswick Trust Company of New Brunuwick, N.J. Approved. Dated, July 12th, Recommending refusal of the application of Mr. John F. Bruns for permission to serve at the same time as Director of the Stapleton National Bank, Stapleton, N.Y., and as Director al' the Staten Island National Bank & Trust Company, Port Richmond, N.Y. Refused. 30 7/14/26 -14- Dated, July lath, Recommending refusal of the application of 1,1r. John • Frederick Smith for permission to serve at the same time as Director of the Stapleton National Bank, Stapleton, N.Y., and as Director and Vice President of the Staten Island National Bank and Trust Company, Port Richmond, I.Y. Refused. The meeting adjourned at 12:30 p -M76 ,ary Approved:
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