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169 A meeting of the Executive Committee of the Federal Reserve Board was held in the office of the Federal Reserve Board on :7 .Tednesday, June 1, 1927, at 10:45 a.m. PRESENT: Vice Governor Platt Mr. Hamlin Mr. Miller Mr. Cunningham Mr. Eddy, Secretary Mr. McClelland, Asst. Secretary Matter approved on initials on litxy 28th, namely, application of the Citizens National Bank, Olvia, Minn., for original stock (21 shares) in the Federal Reserve Bank of Minneapolis, effective if and when authorized by the Comptroller of the Currency to commence business. Formally approved. Matter approved on initials on ltLy 31st, namely, application of The First National Bank of Springfield, Ohio, for permission to exercise Eencra.1 fiduciary powers. Formally approved. Report of Committee on Examinations on letter dated May 28th from the Federal Reserve Agent at St. Louis, trananitting application of the 1-11" . of Maplewood, Maplewood, Mo., for permission to exercise trust powers Et b roadening of the bank's functions under the general condition of its Illssion to membership in the System; the Committee concurring in a " 1*ecoot1endation of the Federal Reserve Agent that the application be apPrey-, '=u upon condition that the Bank Commissioner of Missouri confers ricluelary powers on the institution. Upon motion, the application was approved in accordance with the recommendat ion of the Federal Reserve Agent. Memorandum from Counsel dated May 28th with reference to the appli- ft 6/1/27 cation of the Wright Banking Company of Bellevue, Ohio, for membership in the Federal Reserve System; Counsel submitting draft of a letter to the Federal Reserve Agent at Cleveland requesting: further information, supported by affidavits, with reference to the population of the town of Bellevue, in connection with the eligibility of the bank for membership under its Present capitalization of $50,000. Upon notion, the proposed letter was approved. Telegram dated June 1st from the Chairman of the Federal Reserve B4nk or Philadelphia, advising that the board of directors at their meetOn that date made no change in the bank's existing schedule of rates c)f discount and purchase. Noted. Telegram dated Hay 27th from the Chairman of the Federal Reserve Bank of Chicago, advising that the board of directors at their meeting °n that date made no change in the bank's existing schedule of rates of discount and purchase. Noted. Report of Executive Committee on letter dated May 31st from the C°14Ptroller of the Currency, recommending approval al a salary of .2,700 Per annum for National Bank Examiner Field F. Cunningham, assigned to the 21. Xth Federal Reserve District; the Committee recommending approval. Approved. Memorandum dated May 27th from the Chief Examiner advising that 1.1r. C. S. Barker, who under authority previously granted by the Board aPpointed Assistant Federal Reserve Examiner at a salary of .1,000 4:71 6/1/27 -3- Per annum, reported for duty ijay 16, 1927. Noted. Uemorandum dated June 1st from the Board's Chief Telegraph Operator, requesting authority for the eaployment of a vacation relief operator duri ng July and August Upon notion, the authority requested was granted. Letter dated 1ay 26th from the Federal Reserve Agent at New York, aavising of negotiations by the Merchants Trust Company of Newark for the merger of the Newark Trust Company, which is a nonmember bank; the ckgeIA stating that in his opinion the merger will not represent any change ln the general character of the assets of the ilex-chants Trust Company nor in the scope of its functions, such as will tend to affect materially the t'dard maintained at the time of its admission to the Federal Reserve SYstem. Noted, without objection. 14emorandua from the Secretary dated May 61st suggesting that a eir culilr letter be addressed to all Federal Reserve Agents, based upon the Board's letter of May 27th to the Federal Reserve Agent at Dallas, ; the that the Board is of the opinion that it still has power under 14cFadden Act to prescribe for a state bank admitted to membership e°ndition that the applicant bank shall eliminate certain losses or obr. i %s'°.able assets within a specified period. Upon notion, the suggestion of the SecretLry was approved. Letter dated Lily 26th from The Provident Eavings Bank and Trust 6/1/27 -4- 11 eciniPanY, Cincinnati, Ohio, requesting the names of all banks that have thdrawn from the Federal Reserve System since its organization. The secretary reported that a list such as is desired has never been prePared but could, of course, be worked up fram the data in the Board's 2iles. After discussion, the Secretary was directed to have prepared for submission to the Board a list of all banks which have withdrawn from the System and it was understood that the request of the Provident Savings Bank and Trust Company would be considered further after the data has been compiled. At this point, Mr. McIntosh joined the meeting and after discussion 11Pon motion by Mr. Hamlin the various actions taken by the Executive 0431111ttee were ratified. The Board then proceeded in regular session. Report of Committee on Examinations on letter dated May 17th from the Federal Reserve Agent at Minneapolis, with further reference to a ProPosed reduction in the capital of the Bank of Boulder, Boulder, lIcIltana, from $75,000 to 125,000 in connection with the reorganization "the institution wherein 0100,000 of bad assets would be charged off, 4rter $25,000 of new capital is paid in; the Committee submitting a rilelaorandum regarding the condition of the Bank of Boulder prepared by 142', Gilbert, Supervisor of Examinations, and recommending that the re4Letion in capital be approved by the Board. Upon motion, the recommendation of the Committee was adopted and the reduction was approved. 15 Memorandum dated Nay 26th from the Committee on Exmminations, sub- L3 6/1/27 laitting draft of letter to the Federal Reserve Agent at St. Louis regarding report of an examination of the Mound City Trust Company of St. Louis, Mc)163 made as at the close of business January 31, 1927; the letter calling attention to apparent criminal violations of the Federal Reserve Act by °ffieers and employees of the bank and requesting further information with regard to certain matters disclosed by the examination. Upon notion, the proposed letter was approved. Report of Committee on Examinations on the matter referred to it at the ;y 23rd, namely, letter dated ila.y 21st frail the Federal meeting on Reserve Agent at Chicago advising that the FirLt. State Bank of 1.1t. Carroll, ' Ill , has qualified for the exercise of trust powers under charter and Statutory authority; the Committee reporting that the bank was authorized t° exercise trust powers at the time of its admission to the Systan and exthe opinion that the case should not have been referred to the 130n.rd. After discussion, the Secretary was directed to prepare for submission to the Board a letter to the Federal Reserve Agent at Chicago along the lines of the discussion. Memorandum from Counsel dated May 3rd with reference to the action c)1' the directors of the Federal Reserve Bank of Atlanta in authorizing the officers of the bank to enter into an agreement by which the Federal Reserve bank will undertake to indemnify the Federal Reserve Agent, the C°1411tro1ler of the Currency and the Treasurer of the United States (14irlst any loss which may accrue to them or either of them in the handling " i5aed Federal Reserve notes at the Cuban Agency of the Atlanta bank; 6/1/27 -6- Cminsel expressing the opinion that a contract of the kind proposed is illegal or at least ineffective, pointing cut, that the statute provides that unissued Federal Reserve notes shall be held in the joint custody e'e the Federal Reserve Agent and the Federal Reserve bank and it is believed to be contrary to the intention of the statute for the Federal Reserve bank to asstune the entire responsitility. Mr. Hamlin referred to the action of the Poard at a recent meeting in appointing him and 1,1r. James as a special conunittee to confer with the Assistant Secretary of the Treasury regarding the proposal to carry unissued Federal Reserve notes at the Agency. It was thereupon voted that action regarding the agreement proposed by the Atlanta bank should be deferred for the time being. Report of Committee on Examinations on telegrams dated May 17th 8414 31st from the Federal Reserve Agent and Assistant Federal Reserve 443.ent at the Federal Reserve Bank of New York regarding a raergcr of the Peoples Bank of Buffalo vrith the lianufacturers and Traders Trust Company °I* Buffalo, which was effected on May 16th under the title "ranuracturers tInd Traders - Peoples Trust Company"; the telegram from the Assistant edera.1 Reserve Agent stating that the merger does not constitute any ebange in the general character of assets or in scope of functions 1-zoli.a.s would tend to affect materially the standard maintained at the ti of the admission to the Federal Reserve System of the Fidelity Tril t Company of Buffalo under whose charter the bank continues. Upon recommencktion of the Board's Committee on Examinations, the merger was noted without objection. The Secretary then presented copy of a letter addressed to the 6/1/27 -7- of the Federal Reserve Bank of Atlanta under date of May 31st bY Ilre A. D. Trowbridge, Consulting Architect, advising that he has careCone over the plans and specifications for the proposed vault for the Bavana Agency and that with certain exceptions noted in his letter he approves the plans and specifications. Ur. McIntosh again called attention to the recent acticn of the 44rd in appointing a special committee to caller with the Assistant Se etary of the Treasury regarding the proposal to carry unissued " ?ecleral Reserve notes at the Agency and expressed the opinion that tletion looking toward the wristruction of a vault at the Agency should be defer red until the results of this conference are made Lmoun to the 4Etrci, He moved that a letter be addressed to the Chairman of the Federal Reserve Bank of Atlanta advising of receipt by the Board of a copy of Mr. Trowbridge's report on the vault plans and specifications, and requesting that no action be Utken toward the letting of contracts for the construction of the vault pending receipt of further advice from the Board. Carried. The Secretary then presented letters dated !..y 26th and 28th from the , r ederal Reserve Agent at San Francisco, transmitting and commenting 1(41 1ln analysis of report of credit investigation of the Pacific SouthIreet Truut b4zik. a.8 and Savings Bank of Los Angeles made by the Federal Reserve of February 5th. He stated that the report in question in two 1 .°114/ ee and a supplement thereto has also been received. After discussion, Mr. Cunningham moved that the report of the investigation made by the Federal Reserve Bank of San Francisco be referred to Mr. Gilbert, Supervisor of Examinations, for the prepara 176 6/1/27 -8- tion of an analysis to be submitted to the special committee appointed by the Board at the meeting on Nay 5th, to which committee was referred certain correspondence from the Federal Reserve Agent at San Francisco with regard to disclosures made by the investigation and the concurrent examination of the State Banking Department. Carried. The Vice Governor then reported that Mr. Castle, Vice President and 4elleral I;anager of the First Federal Foreign Investment Trust of Neu York d was in Washington yesterday to confer with the Board and that no IlleetinC being helc, it had been suggested that he remain over until today. Re stated that Mr. Castle wishes to see the Board regarding the proposed 1)° "issue of the First Federal Foreign Investment Trust. The Poard's Oo was called into the mefting And discussion ensued as to the action taken by the Board at the meetings on May 27th and 28th in considering the matter referred to by the Vice Governor. Mt. Hamlin then moved that an immediate report as to the revision of the Board's Regulation K be made by the Law Cormaittee. This motion being put by the Chair was carried, the members vOts'ng as follows: Mt. Platt, "aye" Mr. Hamlin, "aye" Idr. Miller, "aye" Mr. Cunningham,"no" Mr. McIntosh, "no" Mr. McIntosh then moved that action by the Board on the application of the First Federal Foreign Investment Trust be deferred until after report by the Law Committee on the revision of Regulation K. Mr. McIntosh's motion being put by the Chair was carried, 71r. Platt voting no . 177 -9- There was discussion regarding the revision of Regulation K, during which it was the consensus of opinion that there should be no delay in the preparation of a preliminary redraft of the regulation by Counsel ts office. The reading of the minutes of the meetings held on May 27th and 28th vras d isPensed with. STANDING COlEaTTEES: atted, tEtted, liitty 28th, 31st, June 1st, My 26th, 27th May 23rd, 27th, bated, 1)11ted, May 27th, hrttly 27th, be.ted, Iffe.y 31st, Latea, IlaY 31st, Reconmending changes in stock at Federal Reserve Banks, as set forth in the Auxiliary Minute Book of this date. Recommendations approved. Recommending action on applications for fiduciary powers as set forth in the Auxiliary Minute Book of this date. Recommendtttions approved. 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. Recoramendations approved. Recoending approval of the application of Mr. J. N. Peyton for permission to serve at the same time as officer and director of the Pioneer National Bank, Duluth, Minn., and as officer and director of the Minnesota National Bank, Duluth, Mimi. Recormendation approved. Recommending approvd1 of the application of Mr. 17a1ter B. Stewart for permission to serve at the same time as director of the Joliet National Bank, Joliet, Ill., and as Vice President and director of the First Nat iona I Bank, Ililmingt on, Recornwendation approved. Recomending approval of the application of Mr. Lewis Barnum for permission to serve at the same time as director of the First Nat ional Bank, Pueblo, Colo., as director of the First Nat ional Bank, Lamar, Colo., and as director of the First National Bank, Clarendon, Tex. Re cornmendat ion approved. Recommending approval of the application of Mr. M. T. Everhart for permission to serve at the same time as director of the First Naticnal Bank, Pueblo, Colo., and as director of the First National Bank, Florcnce, Colo. Recorizlendation approved. 173 6/1/27 -10- 21ZJZ OF STANDING Dated, M4y 31st, Dated, May 31st, CONDITTEES: (Conttd) Recommending approval of the application of Mr. C. B. Carina for permission to serve at the same timeas director and officer of the First National Bank, Pueblo, Colo., as director of the First National Bank, Lamar, Colo., and as director of the First National Bank, Silverton, Colo. Recommendation approved. Recommending approval of the application of Mr. George Q. Calderwood for permission to serve at the same time as director of the First National Bank, Kane, Pa., and as director aC the Peoples Bank and Trust Co., Erie, Pa. Recommendation approved. The meeting adjourned at 'clock noon. 411110101,Q, 1 Secretary 413131 ' 017ed: ............_...................... - Vice rnor
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