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577 A meeting of the Federal deserve Board was held in the office of the Federal deserve Board on Tuesday, June 21, 1927 at 11:00 a.m. -D • Governor Crissinger Mr. Hamlin Mr. Miller Mr. James ,17. Cunningham hr. Didy, Secretary l'AcClellani, Asst. Secretary :emo.'andum from Counsel dated June 20th on the matter referred to the Law committee at the meetlac7 on June 10th, namely, letter dated Junv7th from the —anager of the finance Departry.,ent of the Chamber, of Commerce of the United states, transmitting copy of a letter addressed to the Chairman of the Committee on Banking and Currency of the House of _Iepresentatives, Suggesting a farther amendment to Section 9 of the Federal deserve :ct, as amended by the McFadden Act, so as to permit state member banks to establish branches in any foreign country or dependency or insular possession Of the United States; Counsel stating that there would seem to be no necessity for the 3oard taking action on the question at this time, although there is no reason why the :oard should be opposed to the amendment inasMuch as national banks are authorized by Section 25 of the Act to establish foreign branches. roted. Report of Committee on Salaries and Expenditures on letter dated Juno 16th from the Chairman of the Federal hose rye Bank of San Francisco, recommending approval of an increase from .0;350 to ,375 per month, effective July 1st, in the salary of Mr. John M. Osmer appointed Assistant Cashier Of the bank, and advising of the appointment of hr. "alph 2. Hardy as c2;) -2- 6/21/27 Auditor to succeed ::r. Osmer, without change In salary; the Ocx.Imittee recommending approval of the 1...crease in salary recoil-mended for Aoproved. Letter dated June 20th from the Federal ref.:rring to pirovious correspondence with the c, ,se,rve ,`,.,.ent at Achy:lona, oard wherein he Tas ad- vised that it is unlawful under the orovisions of iection 22 (a) of the Federal :es3rve ct, for a state ::c,,mber bank to make a loan to a bank apoointed by the state and charged with the examination of state ban_s; the ;:.gent inquiring whether the Board walld have any objection to his so notifying state member bani.s in the Fifth District, which in his opinio.1 are not aeiorally aware that such action on their part miit be a violation of 3deral law. fter discussion, it was voted that there should be published. in the federal _,eserve 2all_tin a cenerad ralinc: by the hoard. with respect to the to state member banks of the criminal provisions of the Federal deserve :.ct and the ..:evised 3tat-Ates. :I'emorandum dated tLishe 20th from the Chief of the Division of Operations, referring to the recent action of the :oanü in a.)proving recommendation that the 73oard teleraph to the Federal .;eserve Bank of Chicaso each week the consolidated 21,7ares showin3 the condition of all member banks as they appear in the - oara's weekly statement to the iress; the- memorandum recomending: that the )ivision also be authorized to include brokers' loans fiiures in the t.-Jlef-,Tam to be sent to Chieac:o each and that the telegram be not dispatched until the fi, ures are released in to fovernor's of:ice. Upon motion, the recommendations were approved. ) 579 6/21/27 .01. WW1 ::emorandue: dated June 20th :rom Counsel with reference to the appliLi. Grn er for 1.)ertniesion to serve at the same time as cation of director of the Pelaware County 1:ationnl Tyan-: and as director of the Delaware County 'cruet Company, both of Chaster, ?a; Counsel recommencing that the )oard temporarily refuse the a_plication and advise the applicant that on the evidence eefore it it can not permit him to serve the two institutions out that he rea-, ; ', if he wishes to do so, furnish the Board with additional information; the hoard's refusal to become final unless it is notified within twent-„, d.aps that it is the desire of the applicant to furnish such aeditional information in support of his application. Upon motion, the aTlication was temporarily refused in accordance with Counsel's recommendation. ::emoranium from Counsel dated June 16th, submittilK; draft of reply to letter dated :.lay 25th from the Federal .leserve .',e;ent at .oston, quoting certain instructions riven to the ,redit Department of that ban:,_ with reference to the administration of the requirement contained in the 3oard's e,egulation A roL7ardinz. financial statements of corporations or firms closely affiliated w;th or subsidiar: to the borrower. Upon motion, the eroosed reply was approved. Letter dated June 16th from the Federal ,ieserve AEent at :Anneapolis, With further reference to the membership in the Federal 2.eserve System of the First State Dank of Philipsburg, :.ontana; the Agent advisinf.7 that at the MOctinc of his board of directors held on June 13th it was t_e consensus of Opinion L;Let an effort should be made to h-ve the bank voluntarily ':ithdrav from the System, and. statin.7 that if this can not be accompLished within a 580 -4- 6/21/27 of memreasonable time proceedings should be instituted for the forfeiture bers_lip under Section 9 of the Act. Noted. Letter dated June 17th from the Federal aeserve Agent at Cleveland, referrinrs to the action of the Board at the beginning of the year in reappointing for a period of six nonths the Assistant FedeAll eserve Agents at the Cincinnati and Pittsburgh Branches; the Agent stating that it has been found practical to discentinue the position of Assistant Agent at the Cincinnati Branch but that it is the consensus of opinion that the retention Of the Assistant Agent at Pittsburgh is desirable. He recommended, there- fore, that Y.r. Thomas LI'. Jones be reappointed as Assistant Federal eserve agent at the Pittsburgh Branch for the balance of the year at his present salary, Thereupon ensued a discussion during which it was pointed out that in the event the Board should approve the recommendation of the Federal Reserve Agent, the Pittsburgh Branch after June 30th will be the only branch at which there will be an Assistant Federal Reserve Agent, with the exception of Jacksonville and New Orleans where the 3eard has approved three month extensions in the designation of assistants in order to afford time for a further study as to the advisability of carrying all currency at the Branches in the form of bank cash. It was the consensus of opinion that while the Board mifilt approve the continuance of an Assistant Federal Reserve Agent at Pittsburgh for the balance of the year arrangements should be made thereafter to discontinue the office, especially in view of the fact that such arrangements have been made at Detroit and other prominent branches. After discussion, the Secretary was requested to prepare a letter to the Federal Reserve Agent at Cleveland advising of the Board's approval of a six months' extension in the desination of the Assistant Federal 2eserve Agent there but stating, in line with the discussion at this meeting, that the Board believes that arrangements should be made to discontinue the position at the end of the year. 581 -5_ 6/21/27 Letter dated June 13th from the Federal _:eserve Ai-ent at Dallas, enclosing cony of resolution adopted by the :xecutive Board of the West Texas Chamber of Commerce in which the j'ederal deserve sioard is requested to adopt more flexible rules in dealing with member banks located in sections of the country where local conditions are unfavorable. 'Toted. 17,r. Hamlin then presented a letter from the Governor of the :federal leserve Bank of .tidhmond, dated June 20th, with regard to the installation of a vault at the 1-,altimore Branch; the Cloverilor transmittinr. copy of a litter on the subject addressed to him under date of August 12, 1926 by L.r....L. 5, 2raabridge. Ordered circulated. Draft of letter to the Governor of the Federal deserve Bank of :ea York, advising of the action taken by the Board at the meeting yesterday in voting to defer until not later than July 13th the separate publication in the Board's weekly statement of "Bills Payable in Dollars" and "Bills Payable in foleign Currencies". Upon motion, the proposed letter was anprovedo. The Governor then presented a letter dated June 20th from the Gove:nor of the Federal Heserve Bank of 1- :uvi York, to the expected receipt Of which reference was made at the meeting yesterday; the letter supplementing previous comrlunications addressed to the 'f.oard unier date of June 9th and 16th on the suject of the present position o' the money market and the possibility of further purchases of securities for system account. 582 6/21/27 -6- A detailed discussion ensued during which read to the Board the proposed letter to Governor Strang prepared by him on which action was deferred at the meeting yesterday. Ho also submitted to the Board certain suggestions for changes in the proposed letter in light of information contained in Governor 3trong's communication of June 20th. During the discussion which ensued, Governor Crissinger was called from the meeting and upon his return stated the call was from Governor Strong who suu_ested that if members of the Board desired more detailed information regarding present conditions than is contained in his letters, he would be j . lad to come to Washington tomorrow for an interview. At the request of the mombers of the Board, Governor Crissinger expressed to Governor Strong the desire of the members that he come to Waahington. Action by the Board was thereupon deferred. At this point, Mr. Wyatt, the 3oard's General Counsel, entered the room 44d in accordance with instructions at the meeting yesterday submitted draft °f a letter to the Governors and Chairmen of all Federal Mittin eserve banks trans- draft of the revision of the Board's Regulations, as tentatively ap- Proved by the Board, including the proposed new Hegulation on the subject clf non-cash collections, together with a copy of Counsel's memorandum exPlaining proposed changes from the old Regulations and various alternative Proposals which have been considered but not adopted by the Board; the letter atatin that the Board has set July 20th as the date upon which it will take action on these regulations and that in order to receive consideration U; will be necessary for sur7gestions and corx:.ents to be received not later tilan Jul, 15th. After discussion, Mr. Hamlin moved approval of the form of letter submitted by Counsel. : . ; put by the Chair was Mr. H 'nlin's motion beini carried. -7- G/21/27 ::r. Famlin then r‘.:,)oftc,,(1 that her-,ad Er. Janes had a f7-trtl-,er eonfero_ze with hr. Jowey, ssistant Jec2atal-,. of the 121..ea5 with regard to t.,e,uhai2,,-_;ency and that 11r. Dewey stated that from the point of view Of froasuj, although the matter t-.Lero is no r3 , oia -,7hy the the tas at preseit oard should not receive .L',Arther ahead with plal • to continue aii it is deemed advisable to zu....ran,-e for the carrt,-.11 - of a surp-)ly of unissued 1 ecieral ...wserve notes in 2-avanL. the Federal .eserve hoard held on June •211e minutes of the th were tiiela road and approved. 0 •'23 OF • 1)ated, June 21st, .:Lecom!aendi c1-1 -14 7.e in stock at a .ederal forth in the t:Lis date. ::Ocoria.%ienclat ion alTreved. eservo
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