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539 A meeting of the Executive Conznittee of the Federal Reserve Board was held in the office of the Vice Governor on Thursday, June 24, 1926 at 10:30 PRESENT: Vice Governor Platt Mr. Hamlin Mr. Ja2nes Mr. Eddy, Secretary Mr. L.rcClel land, Asst. Secretary Mr. James stated that Mr. Jaw*, Chairnan of the Federal Reserve Bank cif New York, had called him over the telephone and. stated that he wished t° Illeet with the Board on Friday, with reference to some adjustments in salaries of employees of that bank. James stated he had advised Er. Jaq that a quorum of the Board would not be present tomorrow but that 1:r. Jar stated he desired to come to Washington regardless. The Vice Govenior then presented to the Board. the following telegram *0111 the Deputy Governor of the Federal Reserve Bank of Atlanta dated June 2211d: "Eddy Washington Receipt acknowledged your wire this date advising postponemnt of hearing. Campbell" Mr. Platt then presented. application of the Fanners State Bank of 1)141°112e, Palouse, Washington, for membership in the Federal Reserve System ' 16 shares of stock in the Federal Reserve Bank of San Franciwo. eoz He stated that as the only member of the Coranittee on Examinations present he e°11e12rred in the reccrnmendat ion of the Federal Reserve Bank and the Board's 540 6/24/26 -2- I. sub-committee that action on the application be deferred for at least six months. Upon motion by Mr. James, it was voted that action on the application be deferred for a period of six months. Letter dated. June 21st from Mr. J. H. Case, Acting uhairman of the Open Market Investment Committee, requesting approval by the Board of the action Of the uommittee at its recent meeting in voting to adopt a recommardation Of the uovernor of the rederal Reserve Bank of Chicago that the Federal Reserve banks extend the repurchase agreement practice with recognized dealers in government securities to include Ihird Liberty Loan Bonds, which nature September 15, 1928 and now have only a little more than two years ' to 1111-4. the letter stating that the volume of United States lireasui7 Certificates and notes outstanding has been greatly reduced and it would seem proper to increase the volume of short-term securities . - 7hich dealers can borrow on fr Ora .eederal 3serve banks by the addition of the Third Liberty Loan Jorris. After discussion, upon motion by Mr. James, it was voted that the Cornittee should reconnend to the .tederal Reserve Board approval of the action of the Open 'Market Investmsnt Committee and that the Acting chain= of the Committee should be advised accordingly. Letter dated June 22nd. from the Federal Reserve Agent at Atlanta, ennewspaper clippinf National Ban i with respect to the absorption by the City 3.nd Trust Company, Miami, Fla., of the CoLnercial Bank and. g-lrilest Company and the Miami Bank and Isrust Company, both of the same city. uot idemo.randum dated June 23rd from the Fiscal Agent, submitting an estimate 511 A 6124/26 -3 Of expenses of the Federal Reserve Board for the last six months of 1926, and recommending that an assessment of eleven hundredths of one -nercent (.0011) Of the total paid-in capital stock and surplus of the Federal Reserve banks, as of the close of business June 30, 1926, be levied. Upon motion, the following resolution was unanimously adopted.: "Whereas, under Section 10 of the act approved. December 23, 1913, and. known as the Federal Reserve Act, the Federal deserve Board is empowered to levy semi-annually upon the Federal reserve banks in proportion to their capital stock and surplus an assessment sufficient to asPay its estimated exoenses, including the salaries of its members, succeeding -year half the for employees sistants, attorneys, experts and. deficit carried forthe levying of such assessment, together with any and ward from the preceding half-year; ,ehereas, it appears from estimates submitted and considered that it per cent of is necessary that a fund. equal to eleven hundredths of one Federal banks reserve the of su.rplus the total paid-in capital stock and of the cost exclusive described, re hereinbefo be created for the purpose Now, therefore, notes; reserve Federal of engraving and printing of law, Be it resolved., i.hat pursuant to the authority vested. in it by several the upon assessment an levies the Federal Reserve Board. hereby Federal reserve banks of an amount equal to eleven hundredths of one per cent of the total paid-in capital and surplus of such banks as of June 30, 1926, and the Fiscal Agent of the Federal deserve Board is hereby authorized to collect from said banks =ch. assessment and execute, in the name of the Board, receipts for payments made. Such assessments Will be collected in two inst3.11ments of one-half each; the first installment to be paid July 1„ 1926, and the second half on September 1, 1926." The vice-uovernor statet.. that the next order of business wculd be considerof the reports of the Committee on Salaries and. 1:;xpenditures on resolutions aclofted by eleven of the Federal Reserve banks authorizing the payment of divicles as of JUn0 30, 1926. he Secretary presented a statement of the estimated financial results of the operations of the Federal Reserve banks during the Year 19 26 and he reviewed the estimated oloerations at each Federal deserve bank as the report of the Coranittee covering same was considered. M2 6/24/26 -4.. Report of Committee on Salaries and Expenditures dated. June 22nd, °II the subject of dividend resolution of the Federal Reserve Bank of Boston as follows: "From available reports on file in the Division of Bank Operations it is estimated that current net earnings of the Federal Reserve Bank of Boston will amount to c>691,000 on June 30, or 427,000 in excess of accrued. dividends estimated at •;264,000. The Boston bank states that it holds under discount no paper of member banks which are considered to be in an unsafe condition or of bankB that have failed. The dividend resolution of the bank is in proper form, and. it is recomznended that the sani-s.nnual dividend, be authorized by the Board." Upon motion by Mr. Hamlin, it wa.s voted that the Federal Reserve Bank of Boston be authorized to ps.y the usual semi-annual dividends on June 30th. Report of Coninittee on Salaries and Expenditures dated June 21st, 021 the subject of dividend resolution of the Federal Reserve Bank of New Yoric as follows: "From available reports on file in the Division of Bank Operations it is estimated that current net earnings of the Federal. Reserve Bank of New York will amount to .44,750,000 on Jluie 30, or 725,000 in excess of accrued dividends estimated at .1,025,000. The New York bank states that it holds under disc cunt no Paper of member banks which are considered to be in an imsafe condition or of banks that have failed. The dividend resolution of the bank is in proper form, and it is recommended that the semi-annual dividend be authorized by the Board." Upon motion by Mr. Hamlin, it was voted that the Federal Reserve Barf..c of New York be authorized to pay the usual semi-annual dividends on June 30th. Report of Committee on Salaries and Expenditures dated June 21st, 04 the subject of dividend resolution of the Federal Reserve Bank of 'Ialladelphia as follows: 543 6/21/26 -.5- "From available reports on file in the Di/ision of Bank Operations it is estimated that current net earnings of the Federal Reserve Bank of Philadelphia will amount to $720,000 on June 30, or 355,000 in excess of accrued dividends estimated at 9365,000. The Philadelphia bank states that the unpaid indebtedness to it of failed banim ancants to 066,543.85, but that the bank is well secured and expects to sustain no loss on such paper. The bank's dividend resolution is in proper form and it is recommended that the semi-annual dividend be authorized by the Board." Upon motion by 11r. Hamlin, it was voted that the Federal Reserve Bank of Philadelphia be authorized to pay the usual semi-animal dividends an June 30th. Report of Committee on Salaries and Expenditures dated June 21st, on the allbject of dividend resolution of the Federal Reserve Bank of Cleveland as follows: "From available reports on file in the Division of Bank Operations it is estimated that current net earnings of the Federal Reserve Bank of Cleveland will amount to „X00,000 on June 30, or 398,000 in excess of accrued dividends estimated at v402,000. The Cleveland bank states that it holds under discount no paper of member banks Ahich are considered to be in an unsafe condition or of banks that have failed. Me bank's dividend resolution is in proper form and it is recommended that the semi-annual dividend be authorized by the Board." Upon motion by 1.1r. Hamlin, it was voted that the Federal Reserve Bank of Cleveland be althorized to pay the usual semi-annual dividends on June 30th. Report of Committee on Salaries and Expenditures dated June 21st, on the allbiect of dividend resolution of the Federal Reserve Bank of Richmond as r°11ows: "From available reports on file in the Division of Bank Operations it is estimated that current net earnings of the Federal Reserve Bank of Richmond will amount to y;500,000 on Jane 30, or .317,000 in excess of accrued dividends estimated at ,183,000. The Richmond bank reports the unpaid indebtedness of failed banks as of June 1 as „;259,176.68, on which it estimates its loss as ci;85,300. The bank also holds nnder discount „;2,084,594.93 of 544 6/24/26 -6 "paper of banks considered to be in an unsafe condition, and estimates its loss on such paper at i,15,000. This makes a combined estimated loss of „0.60,300 as compared with ,A00,300 estimated last November. The bank has a reserve to take care of such losses amounting to ;300,000. The bank's dividend resolution is in proper form and it is recommended that the semi-annual dividend be authorized by the Board." Upon motion by Mr. Hamlin, it was voted that the Federal Reserve Bank of Richmond be authorized to pay the usual semi-annual dividends on JUMB 30th. Report of Committee on Salaries and Expenditures dated June 21st, on t4e subject of dividend resolution of the Federal Reserve Bank of. Atlanta ea follows: "From available reports on file. in the Division of Bank Operations it is estimated that current net earnings of the Federal Reserve Bank of Atlanta will amount to ,?760,000 on June 30, or ,614,000 in excess of accrued dividends estimated at ,446,000. The Atlanta bank reports the unpaid indebtedness of failed banks as of May 31 as 4945,040.11, on which it estimates a loss of .)100,000. No losses are anticipated by the bank on paper held under discount for member banks in an unsafe condition. Last November the Atlanta bank estimated its loss on unpaid indebtedness of failed banks and banks in an unsafe condition as .,4,296,629, and since that date has charged off losses amounting to •4,273,812. The bank has no reserve at the present time to take care of probable losses on paper of failed banks. The bank's dividend resolution is In proper form and it is recommended that the semi-annual dividend be authorized by the Board." Upon motion by Mr. Hamlin, it was voted that the Federal Reserve Bank of Atlanta be authorized to pay the usual semi-annual dividends on Juno 30th. .teport of Committee on Salaries and Expenditures dated JilnA 21st, on the subject of dividend resolution of the Federal Reserve Bank of St. Louis f011OwS: 545 "From available reports on file in the Division of Bank Operations it is estimated that current net earnings of the Federal Reserve Bank of St. Louis will amount to .,A04,000 on June 30, or y348,000 in excess of accrued dividends estiimted at ,,;156,000. The St. Louis bank reports the unpaid indebtedness of failed banks as of June 1, 19;L, including one bank which failed. on June 3, as ,;457,563.35, on which it estimates its loss as „a84,500. The bank also holds under discount y196,992.70 of paper for member banks considered to be in an unsafe condition and .,333,242 of paper for member banks considered to be in an unsatisfe.ctory condition. The bank does not anticipate any loss on such naper. The above estimated loss of .,184,500 is A5,869 in excess of the estimate furnished the Joarcl last November. .he bank's present reserve against losses if ..;250,000, or 4,165,500 in excess of estimated losses. The bank's dividend resolution is in proper form and it is recommended that the semi-annual dividend be authorized by the Board." Upon motion by Mr. Hamlin, it was voted that the Federal Reserve Bank of St. Louis be authorized to pay the usual semi-annual divide/As on June 30th. Report of Committee on Salaries and. Expenditures dated June 21st, on the 4.413ject of dividend resolution of the Federal Reserve Bank of Minneapolis as tollows: "From available reports on file in the Division of Bank Operations it is estimated that current net earnings of the Federal Reserve ',Rank of :.:inneapolis will amount to .;230,000 on June 30, or ..,1136,000 in excess of accrued dividends estimated at .94,000. The Minneapolis bank reports the unpaid indebtedness of failed banks as of 1.:azi 31, 1926, as y1,985,257.73, on ralich it estimates its loss as .313,950. The bank also holds 4944,049.80 Of paper under discount for member banks considered. in an unsafe or overextended condition, but estimates that it will not sustain any loss on such paper with the possible exception of the 2irst rational Bank, uonrad, Mont. The estimated. loss as of 1.1a,y 31 of .,)313,950 is c:350,650 less than the estimate submitted to the Board last i'Jovember. ].'he bank has a reserve to take care of losses on Paper of failed banks amounting to .„;700,000. The bank's dividend resolution is in proper foxm and it is recormrended that the semi-annual dividend be authorized by the Board." a 6/24,6 546 -8-- Upon motion by Mr. Hamlin, it was voted that the ii'ederal Reserve tank of Minneapolis be authorized to pay the usual semi-annual dividends on June 30th. 2aport of Committee on Salaries and Expenditures dated June 22nd, on the subct of dividend resolution of the Federal Reserve Bank of Hansas City as follows: "From available reports on file in the Division of Bank Operations it is estimated that current net earnings of the .cederal _,teserve Bank of Kanqas City will amount to v530,000 on June 30, or 403,000 in excess of accrued dividends estimated at .)127,000. ie Kansas City bank reports the unpaid indebtedness of failed banks as of June 1 as „;300,091.42, on which it estimates its loss as v90,000. The bank also holds under discount ,.,2,167,218.06 of parer of banks considered to be in an unsafe condition, and estimates its loss on such paper at „216,700. .his makes a combined estimated If to this amount is added zu;26,216.08 charged loss of •.306,700. Off since last November, the present estimate is „?35,252.54 in excess of the November estimate. The bank now has a reserve of 296,060.35 available to take care of losses on paper of failed banks. The bank's dividend resolution is in proper form and it is recommended that the semi-annual dividend be tuthorized by the Board." Upon motion by Mr. Hamlin, it was voted that the Federal Reserve Bank of Kansas City be authorized to paw the usual semi-annual dividends on June 30th. I liePort of Committee on Salaries and cpeiiditures dated June 22nd, on the subject of dividend resolution of the Federal Reserve Bank of Dallas as follows: "From available reports on file in the Division of Bank Operations it is estimated that current net earnings of the Federal Reserve Bank of Dallas will amount to „)426,000 on June 30, or .„:297,000 in excess of accrued dividends estimated at „i129,000. The Dallas bank reports net unpaid indebtedness of failed ban1m as of June 1 as ,.101,363.63, but estimates that it will sustain no losses thereon, nor does it anticipate any loss on paper held under discount for banks considered in an unsafe condition. Last November the Dallas bank estimated its loss on caper of failed banks and banks in an umafe condition as V64.4,605.78 and since that time has charged off losses amounting to V586,250.77. It new has a balance of ,199,495.75 available as reserve to take care of losses on paper of failed banks. 547 1 6/24/26 -9r and it "The bank's dividend resolution is in prope form by rized be aatho end divid is recommended that the semi-annual the hoard." Upon motion by Mr. Hamlin, it was voted that the Federal Reserve Bank of Dallas be aathorized to pay the semi-annual dividends on JUDD 30th. dated June 21st, on the Report of Committee on Salaries and Expenditures of San Francisco subject of dividend resolution of the Federal Reserve Bank as follows: ion of Bank "Fran available reports on file in the Divis net earnings of the Operations it is estimated that current amount to „;929,000 Federal Reserve Bank of San Francisco will ated on June 30, or ,680,000 in excess of accrued dividends estim at .,;)249,000. ss of The San Francisco bank reports the unpaid indebtedne it on thich 75, ,774. .2008 as 1926, 29, failed banks as of Llay d losses are anticipate estimates its loss at „ia,697,000. No for banks which might unt disco under held by the bank on paper ated be considered in an unsatisfactory ccndition. The estim 00 ,85,0 less is banks d faile of paper loss of ,;1,697,000 on November. The than the estimate submitted by the bank last s amounting to losse ble proba of care bank has a reserve to take ,)1,252,000. r form and it The bank's dividend resolution is in prope rized by be aatho end divid l annua is recomrended that the semithe Board." voted that Upon motion by Mr.. Hamlin, it was isco be Franc San of the Federal Reserve Bank l dividends annua semiusual authorized to pay the on June 30th* :RpoaTs QF STANDING 00.12.1r2TTiE ; Datea, June 22nd, 23rd, Feder Recommending changes in stock at e Minut iary as set forth in the Auxil Approved. Reserve banks k of this date* The meting adjourned at 11:50 Secretary Vice-Governor.
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