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543 A meeting of the Federal Reserve Board was held in the office of the Pecleral Reserve Board. on Thursday, June 16, 1927, at 10:30 a.m. PIESENT: PiaSENT ALSO: Governor Crissinger Mr. Hamlin Mr. Miller Llr. James Cunninglaam Eddy, Secretary McClelland, Asst. Secretary Governor Seay, of the Federal Reserve Bank of Richmond Hoxton, Chairman, Federal Reserve Bank of 'Richmond. Mr. Graham, Director, Federal Reserve Bank of _lichmond A. B. Trowbridge, Consulting Architect Sri°. ad, Chief, Division of Bank Operations The Governor stated. that the meeting had been called for the purpose n discussing with the Richmond Committee the report submitted to the Boa.rd under date of June 6th by 1:r. Trowbridge, Consulting Architect, with regard to the specifications and. drawings prepared by the Aichnond ballk's engineers covering vault to be erected in the building being con4tracted for the Baltimore Branch. The Governor pointed out that on the basis of these specifications and drawings bids were submitted by only t710 of the five firms invited to enter the competition, namely, the York 8ate and. Lock Company and tbe .Mosler safe Company, the basic bid. of the 'Y°111t Safe and. Lock Company being :214,800 and that of the 'Mosier Safe C"IPany, .188,652, while the 1.:osler Safe Company also quoted a price for 814bstituting proprietar,i metals - Donsteel in the doors and Donlite• for th elining - in place of the rxtals called for in the specifications, tileir alternate figure being ,„>204,499. He stated that the York Safe and L°Mr Company also had a proprietary metal, Infusite, on which they state 544 6/16/27 -.2-- they did not submit an alternate bid due to an indication in the srecifications that such material mint be put to test und,.:r direction of the bauk's engineers - The Hollar Company - whom the York Safe and Lock Company SlleSe favor the .:_osler safe Company. had also requested i/latin The Governor stated that the Board ?rawbridge to report uc,on the advisability of elim- the metal lining, securing added protection through an increase in tho thickness of the concrete walls of the vault, but that Li'. Trambridge had reported that due to lack of space for increasing the size of the walls tills procedure would be impossible and ary added Txotection desired would 1147e to be secured through the use of lining. He stated that the ouestion °Den for discussion was whether or not the bid of the Y.osler Safe Company should be accepted, and if their alternate bid is to be accepted, whether the proprietary mtals to be used should not be submitted to a test, to be 0/1d1icted nrefe.ably by the 6-nited States Bureau of Standards. A further Tlestion, he stated, was whether there was any irregularity in the plans or secifications on the basis of which new bids should be called for. At this point Platt mtered the room. detailed discussion ensued, during -;hich the Richmond Committee Savised the 3oard that no complaint against the plans and srecifications Ss dra,n by their engil_eers had been received by them, either before or 4inc'e the bids .,ere received, although said plans and spcifications were 14 the hands of all firms Lavited into the competition for some time prior tO the date the bids were filed. The Committee also stated that if the 8(lerd desired to have a test made of the proprietary metals owned by the 1 545 6/15/27 jafe Company, whose alternate bid the bank has voted to accept, slIch a test could be arranged. The Committee concurred in the belief tl.at any test to be conducted should be made at the Bureau of Standards. The Committee further advised that until this meeting they were not aware Of the Infusite metal made by the York Safe and Lock Company. 2rowbridge expressed the opinion that In reply to a question, a substitute bid by the. York 3afe and Lock Company, based upon the use Of 4nfus ite, mi;ht possibly be lower than their bid on the standard materials c411ad for in the specifications, and mieht even be lower than the bid of the ,osler eompanY• `11:41 This was possible, he explained, by the fact that a lame of copper plate, a very expensive material, is used in the standard ig soecified by the en:neers. Following the discussion, r. Trowbridge left the meeting. :.1r. James, as Chairman of the 3oard's Committee on Jalaries and 7eca1tures,-and a member of the Committee on District 5, then discussed the lachmond Committee various matters c)naocted 'ith the openinc7 of the Proposed branch at ,Charlotte. ie referred to certain provisions of the by-laws of the branch, particularly that providinie for a directorate Or -Lve members, and exnressed his individual opinion that a directorate Or seven would be preferable. He then referred to the arranemeats for 4°118111rS the branch, including the installation of a vault in quarters to be 'eased and submitted a comparison of the cost involved to the cost of (1114rtere for other branches. He stated that he considered the proposed e:KIllee at the Charlotte Branch to be greatly out of line with similar 546 6/16/27 —4_ costs at other branches. He also comnented unfavorably upon the number of employees which it is proposed to assign and employ at the branch, which by comparison is greater than the number at certain existing branches which conduct as much or even more business than it is contemplated will be done at the Charlotte Branch. He also expressed the opinion that the salaries Proposed for the Manager and Cashier of the Branch are excessive. At 1:00 o'clock the meeting recessed, aid reconvened at 3:00 p.m., the following being present: Governor Crissinger Mr. Platt Mr. Hamlin Mr. Miller .Mr. James Mr. Trowbridge The Board then discussed further with Mr. Trowbridge the matter of the vault for the proposed Baltimore Branch, and Mr. Hamlin inquired of 411* Trowbridge whether, based upon analysis of the plans, specifications drawings prepared by The Hollar Company for the Baltimore vault, such Plans, specifications and drawinsp favor the :::osler 3afe Company, as against Other possible comotitors. Mr.:2rowbridc;e stated that he could not say 'illether the specifications were unfair, although there were suspicious circumstances which, however, would be difficult if not impossible to prove. After further discussion, Mr. Trcyabridge stated that he had about come to the conclusion, in view of the difficulties which would be involved in setting aside the present bids and the unfavorable results which might %Me from any tests conducted by the Board, that the best procedure for the Board to follow would be to approve the acceptance of the bid of the 547 -5_ 6/16/27 Zosler Safe Company based upon the standard metals set out in the specifica- tions, rather than the proprietary metals as recommended by the Richmond directors. Mr. Trowbridge then left the meeting. Miller moved that the Follaming a further discussion, Federal deserve Bank of Jichmond be advised that the Board has had under further consideration the letter of its Executive Committee, dated MT 4, 1927, regarding bids received on the vault to be installed in the Baltimore Branch bank building, and that the Board is not willing to approve the acceptance of alternate bia of the ::osler Company involving the substitution of Donsteel and Donlite metals as recommended, unless on test open to all companies interested in proprietary metals, and on terms to be fixed by the Board, it shall appear to be for the best interests of the Federal Aeserve bank. Miller's motion, being put by the Chair, was carried. The Governor then presented a telegram dated June 16th from the ChairIllan of the Federal Reserve Bank of Dallas, advising of the results of the Meeting of the stockholders of that bank held an June 15th, at which it Wes unanimously voted to form a permanent stockholders association to meet l'eCularly each year. "Toted. The Governor then left the meeting. Mr. Hamlin referred to the fact that the Board's Counsel has prepared 44a submitted to each member of the Board a new revision of the Board's 4ega1ations, and has also submitted a detailed memorandum commenting upon the lie various changes from the present regulations contained in the revision. suggested that in view of the fact that Mr. Platt is leaving tomorrow the Board might discuss some of the more controversial points involved in '48 6/16/27 -6- the new r_gulations. - oard's Counsel, vs then called into the meeting. Lr. ':iyatt, the B A discussion ensued as to the proposed new aegulation D, which provides that "deficiencies in reserve balances of all member banks will be oomouted on the basis of actual net deposit balances, the required reserve balance of each member bank at the close of business each day being based O n its net deposit balances at t:ie close of business on the preceding basiness day." Counsel stated that the provision as set out in the regu- lation was approved by four Federal .eserve banks, that certain practical objections raised by four others had been met, vile four banks did not approve. :Ir. James stated that in his opinion the reserves of member banks located in central reserve and reserve cities should be computed on a daily basis and reserves of country member banks on a weekly basis, and that each Federal -ieserve bank should be required to assess progressive penalties for reserve deficiencies on all member banks, computations in the case of banks in reserve and central reserve cities to be based on net deposit balances at the close of business on the preceding day. Subject to the casting of a vote by the 'overuor, he moved that the proposed aegulation D be amended in accordance with his suestion. The four members present voted in favor of the motion. Governor Crissinger then reentered the meeting Notion being read to him, stated that he was not p at James' ed to vote on it this time. The nrr, then ourned at 4 APproved: Secretary.
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