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meetin7 of the Federal iIeserve .3oard was held. in the office of the Federal ..Ieserve 3oard on 7,_Thursda;.)-, July 2, 1925 at 11:15 a.m. : Governor Criss inr7er . 2lat t James int osh Mr. - ddy, Secretary. Mr. E The minutes of the meet in7 of the Fejeral lIeserve Board held. on June ;Ath were read. end. approved. r The E-overnor stated. that in accordance with the instruction7 of the Board he had consulted with honorable rewton D. Baker re-,ardin- the fee to se cuared the Board. in the event he was retained on behalf of the System as a whole to assist in the pre-oaration and trial of the aofe,a1 of the case brour•:ht against the Federal i.eserve 'Bank of Can 2railcisco by the Brookin-ss State Bank, Ilreo.•in7s, 3re:7o;a, on which an unsatisfactory verdict was rethiered by the District Court. The J-overnor stated. that Ba',cer had. exriressed a willin-ness to have lils fee fi::od at a f ir;ure c0n31iore61, reasonable oy the Board.. He also r000rted that :1r. Baker had, alread.y ,nse in connection with the cases brou-ht a -;ai:..ist the incurred_ some ex,)€-, Federal Jeserve Banks of .Ltlanta and. Cleveland, and. that he had. re-uested :k rker to submit a statement of his fee in connection with the Clevela.nA has been settled.. case -re also rc.)-oorted that ;:r. Baker had cy.roloyed . 1-jres of Clevelani as an o:-...9ert v:itaess in coanectio.t with the case bro :oula ha: lona]. the 2eaeral leserve Ban.: of ::.tlanta by the 7.)asca- ht a kct hr. ,,yres had also incurred travelin e:1:11e-nses, a statement of which would be submitted.. liemorandum dated, June 50th from the Division of :.:x.a-mination, recom- Ti 7/2/25 mendinz approval of an application of the Mt. Vernon 7Lational Bank and Trust Company, Mt. Vernon, Indiana, for oric7,inal stock (58 shares) in the Federal Reserve Bank of $t. Louis, effective if and when the Comotroller of the Currency authorizes the bank to commence business; the sae having been approved on June 30th on the initials of two members of the --]xecutive Committee. Formhlly approved. Telegram dated July 1st from the Federal _ieserve Ilgent at Minnea -oils, requesting the rodesignation of Mr. H. L. Zimmerman as Assistant Federal Reserve Agent at the Helena Branch, effective until October 1st. Upon motion by :Ir. James, Mr. Zimmerman was redesignated in accordance with the above request. 11) Telegram dated July 1st from Mr. C. C. 7a1sh, advising that on that uate he formally qualified as Federal Reserve ,ont and Chairman of the Board of Directors of the Federal ;:eservo Bank of Dallas. Noted. Telegram dated July 1st from the Federal deserve AL;ent at Dallas, advising of the election of Mr. J. H. :Tail of Fort Worth, Texas, as Class "B" Director of the Bank for the uner_Dired term of Mr. Marion 3ansom, resigned, ending December 31, 1925. roted. The Governor then reported that he had wired the former Federal Reserve Agent at Dallas in reply to his inquiry whether the Board wished to have a representative present at the time the assets in his custody were formally transferred to his successor, that it %.ould be satisfactory to the )1 -3- 7/2/25 of Board to have the transfer made in the presence of the C(eneral Auditor the bank and personal representatives of the outgoing and incominfr Letter dated June 30th from the Deputy Assistant Treasurer of bonds the United States, advising that no applications for the sale of under Section 18 of the Federal Aeserve Act were received from national banks durinr_: the quarter ending Juno 50, 1925. Meted. Telegram dated July 2nd from the Federal deserve Agent at Chicago, was 7,-iven advising that the Columbia State Savings Bank of Chicago, which System, until June 60th to complete its membership in the Federal aeserve J was unable to do so by that date but is prepared to qualify today. Upon notion, it was voted to interpose no objection to the bank's completing its membership. i.:emorandum from Counsel on letter dated June 22nd from the Federal Orangeburg Aeserve Agent at aichmond, submitting the application of the y National Bank of Orangeburg, S. S., which has been exercising fiduciar as "trustee, powers aithout the approval of the 3oard, for authority to act d under executor, administrator or guardian of estates as banks are permitte authority South Carolina laws"; Counsel pointin - out that the Board has no authorize the to grant its permit in these terms but may if it sees fit rator or guardian bank to exercise the powers of trustee, executor, administ of estates. Upon motion by Mr. Platt, it was voted to grant the bank authority to act as executor, administrator or guardian of estates. -4- 7/2/25 :deport of Committee on Examinations on letter dated June 26th from the Federal deserve Agent at Boston, transmitting and recommending approval of an application of the Harvard Trust Company of Cambridge, L:assaohusetts, for remission to acquire and. hold not less than 75/, of the capital stock of the Lianufacturers National Bank in Cambridge; the Committee stating that it sees no reason why the Board Should object. Upon motion by 1.r. Platt, it was voted to interpose no objection to the purchase of the stock. Letter dated July 1st from the JIssistant Secretary of the Treasury, advising of the theft from the Bureau of 'Engraving ani Printing of eight incompleted %,;10 Federal deserve Notes, six of which have to date been presented to the Treasury for redemption and requesting that the Board give approval to the redemption of these notes by the Federal Ileserve banks, as was done in 1921 when the Board authorized the redemption of up to 20,000 of incomplete notes then believed to be in circulation. The Secretary reported that the Treasury Department had no appropriation against which to charge such redemptions and that the Board * in 1921 had authorized the Federal deserve banks to bear this expense in order to prevent possible discredit to the Federal deserve Note circulation. He further stated that it was understood that the .;20,000 authorization was intended to cover the redemption of incomplete notes already in circulation and not subsequent losses, and recommended that the Board take up the notes now presented for redemption at its awn expense, not assessing the Federal deserve banks proportionately -5- 7/2/25 11 as was done in 1921, hold them for payment by the Treasury at some future time, advising the Treasury Department that this rechamption is not made under the authority granted in 1921 and that all subsequent losses mould likewise be decided upon on their own merits. After discussion, upon motion by Mr. James, it was voted to approve the recommendations of the Secretary, :Ir. Platt voting "no". The Secretary then reported that the Treasury a year or so ao, at the instance of the Comptroller General, had changed its method of reimbursing the Board for he costs of telegrams sent by it over the Federal Reserve leased wires which had formerly been paid by the Treasury Department monthly In a lump sum on the basis of the actual cost of business handled during the previous year. Since that time the costs of telegeams sent by the Treasury have been charged monthly by the Board direct to the several Treasury Department appropriations. of the He stated that a month or so ago one appropriations of the Treasury became exhausted and that daring April and May telegrams chargeable to these appropriations had been transmitted over the leased wire, leaving a charge of approximately .?400 which the Treasury Department states it is not in a position to meet. He requested instructions from the Board as to the method of handling this matter. After discussion, upon motion by Mr. Platt, it was voted that hereafter Treasury telegrams chargeable to deficient approlviations sheuld not be transmitted over the Federal Reserve leased wires. Letter dated June 30th from the Vice President of the Lincoln Bank and Trust Company of Louisville, Kentucky, addressed to the Secretary of the 7/2/25 -6- Board, recuesting that an interview be arranged for him with those memJers Of the Board whose presence is considered desirable, at which a satisfactory agreement cculd be reached as to the handling by the bank of the business Of issuing bonds secured by real estate. mortgages and of guaranteeing the principal and interest of real estate loans sold to the public, under the Board's recent conditional authority. Upon motion, the Secretary was directed to prepare a reply for the signature of the Governor. ::.emorandum from Counsel dated July 1st, sabmitting drafts of a letter to the Federal deserve Agent at Boston and a circular letter to all other Federal At:serve _':gents, advising of the recent ruling of the Board that a person whose sole occupation is that of officer of an insurance company is not eligible for election as a Class "B" Director of a Federal Reserve bank. Upon motion, the proposed letters were approved. The Governor then presented the letter dated June 26th from the Federal ,deserve Agent at Boston, transmitting a cori?nunication from :!.r. William '7. 1tu sell, ?reasurer of the National Life Insurance Company of Liontpelier, Vermont, who was nominated for election as Class "B" Director of the Federal Reserve Bank of 3oston, requesting that he be furnished with a copy of the opinion of the Board's Counsel that an officer of a life insurance company is not eligible for such election. Upon motion, it was voted that an extra copy of the circular letter to all Federal deserve J14ents, just approved by the 3oard, be sent to the Federal aeserve Agent at Boston for tranmittal to Mr. Russell. -7- 7/2/25 Memorandum dated June 9th from the Chief of the Division of Bank Operations, request inc approval of certain changes in the Board's weekly press statement showing the condition of the Federal deserve banks, which would reduce the size of the statenent without eliminating any information now reported. The Governor stated that he had considered the changes and approved them, and upon motion it was voted to approve the revision of the statement, subject to approval by Messrs. Platt and James after they have had an opportunity for detailed study. Letter dated June 29th from the Governor of the Federal deserve Bank of Cleveland, requesting that each member of the Board carefully study the recent report of the Committee on Voluntary Services with reference to the brief filed with the Board by the 'American Bankers Association Co;mitteo on the Collection of Non-cash Items by Federal deserve Banks. Noted. Llemo-andum dated July 1st from Mr. James, with regard to the recent report of the Committee on Voluntary Services on the subject of Non-cash Collections By Federal Aeserve banks as follows: "In regard to the "deport of Committee on Voluntary Services Assumed by Federal deserve Banks", I wish to offer as a motion: :1st. - That in accordance with previous action taken by the Board, a copy of the deport be sent to Chairman Barton and each of the other members of the A. B. A. Committee, with the request that, in the event said Committee desires a further hearing before the Board on this subject, a date for such h3aring be suggested. 7/2/25 "2nd. - Should the A. B. L. Committee, in response to this request, indicate a desire for further hearing and suggests a date for same, then the Federal Reserve Board shall arrange for such a hearing before its full membership, or not less than six Board members, and shall fix the date for such hearing. 3rd. - The Board shall then notify the A. 3. A. through the Barton Committee and. Mr. Montjoy, the Washington representative of the A. B. A., the members of the Federal teserve Committee on Voluntary Services and (through the Press) the nubile, of the date and purpose of the hearing in order that any one desiring to be heard on the subject may have the privilege of presenting their views." After discussion, it was voted to lay the above memorandum on the table pending a meeting attended by the full membership of the Board. Letter dated June 30th from the Federal Reserve Agent at Boston, who is Chairman of the Committee of Federal Reserve Agents on Member Bank. Reserves, submitting the final report of that Committee. Upon motion, copies of the report were ordered circulated among members of the Board. Letter dated June 30th from the Chairman of the Federal Reserve Bank Of Atlanta, requesting approval of the action of the Board of Directors of that bank in voting to grant Governor Wellborn a leave of absence of six weeks with nay. After discussion, Mr. James moved thLt the Board interpose no objection to the leave of absence with pay granted Governor Wellborn. Carried. Mr. James then moved that the question of vacation period, with pay, for officers of Federal deserve banks be made a topic for discussion at the Fall conferences of Governors and Federal deserve _9- 7/2/25 .;. gents, -with a view of formulating regulations overning or limiting such vacations. Carried. Letter dated July 1st from the Chairman of the Federal Reserve Bank of Cleveland, requestinr,. the redesignation of ar. aobert Wardrep as Assistant Federal Reserve Agent at the Pittsburgh Branch, for the six months" period ending December 31, 1925. Upon motion, ar. ';:ardrop was redesignated. a7,-poaTs OF TTDING COMIITTE3S: aecommsnding changes in stock at Federal eserve Banks, as set forth in the Auxiliary ataute 300k of this date. Approved. Dated, June 201.-h, aecommending action on applications for fiduciary pov,ers as set forth in the Auxiliary ainute Book of this date. Ayoroved. Dated, July 1st, Recommending action on applications for admission of state banks, subject to the conaitions stated in the individual reports attached to the applications, as set forth in the Auxiliary ninute Book of this date. Approved. Dated, June '00th, ecommending approval of the application of nr. Hugh Blair-amith to serve at the same time as director of the National Shawmut Bank, Boston, Mass., and as director of the Citizens /1:,tional Bank, 1:nc.,71ewood, N.J. Approved. Dated, July 1st, The meeting adjourned at 12:10 o'clo approved: Oecretary.
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