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40 A moot jug of the Federal Reserve Board was hold in the office of the Federal Reserve Board on Wednesday, July 30, 1924 at 11:15 a.m. PRESENT: Governor Crissinger Mr. Inner Mr. James Mr. Cunningham Mr. Koell, Lssistant Secretary. The minutes of the meeting held on July 29th were read and approved. Memorandum dated July 29th from the Board's Division of Examination With regard to letter dated July 24th from the Federal Reserve ::;ent at Chicago, recommending approval of the application of the Farmers State . Savings Bank of Milford, "Michigan, for remission to reduce its capital the Board's Division of Examination also 1 .25,000; stock from 050,000 to ' recommendin approval. Approved. Letter dated July 30th from the Comptroller of the Currency recoLanending approval of an increase from .,2700 to 03j00 per annum in the salary of National Bankaminer H. B. Gilbert. Lpproved. Telegram dated July 29th from the .Assistant Federal Reserve Lgont at Sun Francisco advising that the :acific Southwest Trust and Savings Bank of Los Lngeles, has filed application for permission to acquire the First National Bank of Fullerton and its affiliated institution, the Fullerton Commercial and Savings Bani;,and to establish branches in their preMiSOS• Oi Noted. Report of the Executive Committee on letter dated July 23rd from the Federal Reserve ;igent at Chicago with regard to the desire of 41 7/30/24 r% -2- the Commonwealth Federal '3avings Bank of Detroit, Michigan, that the condition of membership imposed upon it by the Board that losses aggregating 6 y104,475.23, be charged off within a reasonable time, be changed so as to Permit the losses to be eliminated by average annual payments of at least 6 y10,000; the Board's Committee expressing its agreement with the position taken by Mr. Heath that the condition referred to should not be broadened. Upon motion, the recommendation of Mr. Heath, concurred in by the acecut ive Committee, was approved. Memorandum dated July 25th from Mr. Platt, s'abmittinf3 draft of a reply to letter dated July 21st from the Cornissioner of Markets and 'Airehouse Department, ustin, Texas, with regard to the use of cotton ware- house receipts as security for rediscounts with Federal reserve banks. Upon motion, the form of letter proposed Platt was approved. Mr. by Report of Committee on Salaries, 'Expenditures and Efficiency on letter dated July 23rd from the Governor of the 'Federal Reserve Bank of LIinneapolis, requesting approval of a salary of `I4,000 per annum for Er. ,.„ A. G. hamoee, formerly Director of Sales of short time Government obligations and War 3avin3's Director at the Federal Reserve Bank of Minneapolis, at 3 Combined salary of C7,500 per annum; the Committee recommending that before the Board passes upon the matter, i,;overnur Young be requested to advise Whether the work of handling Government obligations for member banks to Which Mr. Kibbee will be assigned necessitates the employment of a special Man for this purpose, and also whether or not the character of the work in itsolf is justified. Lfter discussion, the matter was referred to Lir. James for investigation on his pending visit to Minneapolis. -3- 7/30/24 The Governor then presented a telegram dated July 24th from the Federal Reserve Agent at St. Louis with regard to the application of the Arkansas National Bank of Oayetteville, Lrkansas, for l'ernission to act as trustee for Street Improvement District bond issues, under Section 11(k) Of the Federal Reserve ;:ct, the Federal Reserve Lgent stating that he would not recommend that the bank be given permission to act as trustee generally, but that unless it is against the general policy, he sees no reason vily it should not be given permission in this particular instance. liter discussion, :Jr. James moved that the Lrkansas National Bank of Pa;,-etteville be granted general authority to act as trustee, with the understanding that the power will be exercised only in the particular instance mentioned in the application. Carried. liemorandum from Counsel dated July 10th with regard to the Ltime as Director cation of P. 1... Dinsmore for permission to serve at the same Of the College rational Bank of Berkeley, California, the first :7Ltional Bank concurring Of Oakland, California, and the loTierican Bank of Oakland; Counsel in the reconmend4.tion of the Lssistant Federal eserve at San Francisco that the application be approved as between the 2irst rational Bank of between Oakland and the College rational Bank of Berkeley, but refused as the American Bank of Oakland and the College rational Bank of Berkeley. Upon motion, the recommendations of the Lssistant Federal Reserve Lgent, concurred in by the Board's Counsel, were approved. lIbmorandum dated July 22nd from Counsel with regard to letter Now York, dated july 1Gth from the Governor of the Federal Reserve Bank of notarial outlining a new arrangement for the performance and payment of stating work required in connection with the bank's operations; Counsel 7/30/24 -4- that the plan is entirely consistent with the principles of law and of public policy relative to the payment of notary foes, since there is no agreement or understanding whereby the notary assigns his official fees or receives less for his notarial work than the ltw contemplates. Upon motion, it was voted to interpose no Objection to the new arrangement. In his memorandum above referred to, Counsel referred to the former practice at the Federal Reserve Bank of Kansas City whereby the notary assigned his fees, which practice the Board found improper and ordered discontinued. Upon motion, the Governor was requested to communicate with the Federal Reserve Bank of Kansas City and inquire what steps have been taken toward instituting a satisfactory arrangement in connection with their notarial work. The Governor then presented a memorandum dated July 24th from the Board's General Counsel, boarin/s the approval of 1::r. James, Member of the Committee on 1,1xaminations, with regard to the proposed absorption by the Lmericzn Bank of San Francisco of the First National Bank of San Leandro and the Bank of San Leandro; the Board's approval of the application to take over the Bank of San Leandro having been suspended and action on the application to take over the First rational Bank deferred, upon receirt by the Board on June 4th of telegraphic complaint from Counsel for the minority stockholders of the San Leandro banks as to the method by which stock control was being secured by the Lmerican Bank of San 2rancisco and its affiliated institutions, the First National Bali,: of Oakland and the American Bank of Oakland. Counsel in his memorandum recommended that the Board set a date for a hearing on the subject, at which all interested parties -5-- 7/30/24 might be present, and further that the Board's Chief Examiner, who is now in San Francisco, be requested to conduct an indapendent investigation of the entire affair as a rel)reseutaive of the Board and to be present at the suasested hearing, in order to advise and assist the Board in the conduct thereof. The Governor also submitted a memorandum, dated July 26th, from Platt, Chairman of the Committee on Examinations, stating that while he sees no reason why the Board should longer refuse to grant tho permit for the merger of the two banks at San Leandro and their conversion into a branch, he has no particular objection to further inquiry by the Board's Chief Examiner. After discussion, Mr. Liller moved that the Board approve the plan of the American Bank of Sun Francisco to acquire the First National Bank of San Leandro. Mr. Miller's motion being put by the chair was lost, the members voting as follows: Governor Crissin;or "no" Mr. James "no" 1.1. Cunningham "no" Mr. Manor "aye" After further discussion, Mr. James moved that the Federal Reserve ,:,..z;ent at San Francisco bo requested to explain to the Board why the examination of the American Bank of San Francisco and its affiliated instituA.ons, conducted by Examiner 1loore of the Federal Reserve Bank and the report thereon, transmitted to the Board under date of April 8th, failed to disclose certain facts later brought to the attention of the Board, among others, that cashier's checks of the First National Bank of Oakland were drawn under date of February 6th in favor of Messrs. Hale and Cary, officers of the San Leandro Banks, as a bonus for the sale of stock in the institutions. 1:r. James' motion being put by the chair was carried. 7/30/24 -6- Report of Corrgnittee on Salaries matter referred to it at the meetin Expenditures and Efficiency on yesterday, namely, letter dated July 25th from the Secretary of the Federal Reserve Bank of New York requesting approval of the action of the Executive Committee of that Bank in voting to grant to Deputy Governor George L. Harrison, leave of absence at full salary until September 1, 1924, on account of illness; the Committee recommending approval. Lpproved. The Committee on Salaries, Expenditures and Efficiency then submitted a report dated July 30th, concurred in by the Committee on Research and Statistics as follows: "WILED22.3, the Committee on Salaries, Expenditures and Efficiency has been, and is, making surveys of the salaries, expenditures and efficiency in the Federal Reserve Banks and in the Board's staff with a view of bringing about many reductions in expenses and more economical operation of the System, and W1ER4AS, the Committee is at the present time devoting its time and attention to the study of those activities coming directly under the Federal reserve agents' jurisdiction, which study is largely prompted by a sentiment seemingly prevalent among the banks that the Federal Reserve Board should put its own house in order prior to offering extensive criticisms of the expenditures, etc. in bank operations, and WHEREAS the Committee in its study finds there is a lack of a well-defined policy in the System with regard to the research, statistical and publication activities of both the Federal Reserve Board and of the Federal Reserve Banks, NOW Ti ORE, BE IT RESOLVED, - (a) That the research, statistical and publication activities of the Federal Reserve Banks and of the Federal Reserve Board be reorganized, co-ordinated and placed under unified direction and control. 46 -7- 7/30/24 "(b) That the Committee on Research and Statistics prepare a plan designed to secure such co-ordination and control. (c) That expenditures for research, statistical and publication activities shall be budgeted beginning with the year 1925 and that the Committees on Research and Statistics, and on Salaries, Expenditures and Efficiency shall jointly -prepare for the approval of the Board such budget. (Signed) Gee, R. James, Chairman E. H. Cunninitham Committee on Salaries, Expenditures and Efficiency. P.S. The Federal Reserve Board's Committee on Research and Statistics concurs with the Committee on Salaries, 'Expenditures and Efficiency in recommending that the Board adopt the above named resolution. (Signed) A, C. :1111er, Chairman E. H. Cunningham 11 Upon motion, the resolution recommended by the Committeeswas unanimously adopted. BEI:01123 OF C01LILLY2E1,;"3: "21..i7D Dated JUly 29th, Recommending changes in stock at Federal Reserve Banks, as set forth in the Auxiliary Innute Book of this date. Approved. 00 The meeting adjou Orat 1:00 p.m. Assistant Secre ary. Appro - l ge AaP Governor. /
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