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488 A meeting of the Federal Reserve Board was held in the office of the hderai Reserve Board on Tuesday, June 7, 1927 at 11:15 a.m. PiESMT: Governor Crissinger Mr. Platt Er. Hamlin Mr. Miller Mr. Janes Mr. Cunningham Mr. Eddy, Secretary Mr. McClelland, Asst. Secretary The minutes of the meetings of the Federal Reserve Board held on June 3r1 and June 6th were read and approved. Memorandum dated June 6th addressed to the Secretary of the Board by the Chief of the Gold Settlement Division, requesting authority to notify night employees of the Division that they will receive one week's vacation With P4Y, on the basis of the number of nights regularly worked. Approved. At this point, Mr. McIntosh joined the meeting. Letter dated June 2nd from the Assistant Federal Reserve Agent at 844 Francisco, advising that the Pacific Southwest Trust and Savings Bank Or 148 Angeles on May 28th opened at 3123 *:est let Street, Los Angeles, the branch approved by the Board on April 27th for the vicinity of 1st and Vendome Streets. Noted. Letter dated June 3rd from the Comptroller of the Currency, advising that in connection with an application to organize tion lYi a national bank a ques- 'las been raised as to whether the location desired is within an "outp A , tistrict" as provided in Section 5138 of the :devised Statutes as amended bY the II0Padden Act; the Comptroller stating that the term "outlying district" 489 6/7/27 -2- is tot defined by the no Fadden Act and that it will be necessary for his "'flee to define the term for the guidance of those concerned with future °ases. The Comptroller referred to the use of the term "outlying districts Of a reserve city" in Section 19 (b) of the Federal Reserve Act and suggest- cooperation between his office and the Board in reaching some agreement °4 the term by means of a uniform definition. He suggested that the Board's General Counsel and the Deputy Comptroller of the Currency be designated as a committee to draft a uniform definition. Upon motion, the suggestion of the Comptroller was approved. Letter dated May 30th from 1:r. Robert F. Maddox, Chairman of the Atlanta 445 '143wrY National Bank, transmitting copy of resolutions on the subject Of the handling of non-cash collections by Federal Reserve banks adopted at 4 pleating in Atlanta attended by representatives of the clearing house bahl,„ Of Jacksonville, :Taw Orleans, :lashville, Birmingham and Atlanta. Ordered circulated. ilemorandum from Counsel dated June 3rd, submitting draft of reply to letter dated May 26th from the Federal Reserve Agent at Atlanta advising that the United States District Attorney has requested an affidavit of qert,. c"111 information furnished him with reference to an apparent violation ef Section 5209 of the Revised Statutes of the United States; the proposed ePlY stating that the Board knows of no legal reason why an affidavit of 11(1'rmation should not be made by the person within whose knowledge it lies 414 that since it appears that the Federal Reserve Agent's information in the ease under consideration is contained in a report made by a Federal 490 6/7/27 -3.. f, Reserve Bank -='xaminer, the Board agrees with the Agent's suggestion that the 4aminer is the proper person to make the affidavit. Upon motion, the proposed letter was approved. The Governor then referred to a conversation with Mr. Gilbert, Supervisor Of Examinations, with reference to certain apparent violations of law dis- Closed by the recent examination and credit investigation of the Pacific Southwest Trust and Savings Bank of Los Angeles. He stated that the Federal aElerve Agent at San Francisco evidently does not feel it to be his duty to report these matters to the United States District Attorney and that he Is of the opinion that a letter should be addressed to the Federal Reserve 4gent calling attention to the apparent violations and directing that they be reported. Upon motion by 1:r. Hamlin, it was voted that a letter to the Federal Reserve Agent should be prepared, as suggested by the Governor. Report of Committee on District 47 on the matter referred to the °°141zittee at the meeting on April 26th, namely, letter dated April 22nd tIlom the Chairman of the Federal Reserve Bank of Chicago submitting for the 1115131 ' aval of the Board action of the directors of that bank in voting: (1) '414t the office of Assistant Manager of the Detroit Branch be created; (2) That lir. H. J. Chalfont, now Assistant Cashier, be advanced to the position Of 435istant Manager with an increase in salary from 0,000 to y7,000 per I1 4.4/111111, effective when he assumes his new position; (3) That Mr. John G. 848kini now Assistant Federal Reserve Agent at the Branch, be appointed Ivitli°1at change in salary to the position of Cashier to succeed :r. J. B. Dew, l'e8igned; (4) That no appointment be made to succeed Mr. Chalfont as AssistShier of the Branch; and (5) That if the above recommendations are 491 aPproved, proper steps be taken to amend the By-laws of the Detroit Branch harmony therewith; the Committee stating that it conferred with the Pederal deserve Agent and Governor of the Federal _ieserve Bank of Chicago re garding the matter and recommends that the request for the creation of Ettiditional office and the employment of an Assistant Manager at the Detroit 4ench be disapproved.. Miller the above After discussion, upon motion by matter was referred back to the Committee for the preparation of a letter to the Chairman of the Chicago Bank along the lines of the Committee's report. Report of Committee on District 7/27 on the matter referred to it at the nieeting on April 15th, namely, letter dated April 11th from the Federal 1168erve Agent at Chicago, requesting authority to build up his field force 11/ 13ark aelations work to a total of at least five as soon as proper men °4111 be found and instructed as to their duties; the Committee's reDort reacling as follows: ell() "Your committee has given consideration to the request contained in the ve mentioned letter, and would recommend that Lir. Heath be advised that ew of the effort now under way by the Federal iieserve Joard to require thrir ,L ell -401 the Federal ileserve Bank in each district, a closer and more efficient ijervision of State Member Banks, the object of the Federal deserve Agent itele_aell bank should be to build up a very efficient Examination and Bark bans i‘'orce within his institution. 2his Force so far as possible should wor,. " 17aPosed of men who are experienced and efficient in bank examination per.":1 In the event it should become necessary to employ men who are not exexilaielleed bank examiners, they should be men who have had practical banking trZrienoe, who could act as assistant bank examiners until sufficiently kells/1 ,8c1 in the work to enable them to conduct examinations. In selecting o jer this work, the Federal .aeserve Agent should have in mind that part the ile ir duties will be in bank relations work, and therefore they must have thinapility, tact, and discretion necessary to perfoim such service. In 4 tn.- wa:i the Federal lieseive 4-,gent in each bank should be able to build up rtio4-,1;ce of qualified men to serve as bank examiners and also as bank relations 192 6/7/27 -5- After discussion, action on the above matter was deferred and the Secretary was instructed to prepare and submit to the Board a report with regard to the establishment and maintenance of bank relations departments at the several Federal Reserve banks. Liemorandam from Counsel dated June 1st submitting drafts of circular letters to the Chairmen of all Federal deserve banks, advising of the rerulings of the Board: (1) On the question whether a national bank le"Tied by the consolidation of a state bank having trust business and a 44tioaal bank without trust powers may proceed to exercise trust powers Witi° "applying for and receiving the p3rmission of the Board under the 1:14‘"ialone of Section 11 (k) of the Act; and (2) Interpretating the phrase beY°401 the limits of the city, town or village in which the parent bank Is s ituated" as used in Section 9 of the McFadden Act relating to the eat4b1ishment of branches by state member banks. Upon motion, the letters submitted by Counsel were approved, L.r. James voting "no". Zena0randum from Counsel dated JUMB 4th submitting letters addressed to the President of the Louisville Trust Company, Louisville, Ey. and the ?ea, " ' 1 41 xleserve Agent at St. Louis, advising of the action of the Board 'At it Meeting an June 3rd in granting permission to the Louisville Trust 0 111)4114r to sell its first mortgage collateral trust bonds upon condition that trust company's paid-in and unimpaired capital and surplus shall et 411 4 44(Alrit times be maintained at an amount not less than one-tenth of the °I. its total liability arising from the sale of such collateral trilat Obigat ions plus its aggregate liability to depositors. Upon motion, the letters submitted by Counsel were approved. 4_93 -6Mr. McIntosh stated that had he been present at the meeting on June 3rd he would have voted "no" on the matter referred to in the above letters. Llemorandam dated iJay 25th from the Chief Examiner, submitting report of exaMination of the Atlantic Corooration, Boston, Massachusetts, made as at the close of business February 4, 1927. Aeferred to the Committee on Examinations. Ilemorandum dated May 24th from the Chief ;xaminer, submitting report of (34z1.Yrl1nation of the Federal 'ieserve Bank of Dallas and its branches, made as t tis close of business January 4, 1927. eferred to the Committee on Examinations and Committee on District #'11. At this point Mr. 7,ryatt, the Board's Counsel was called into the meeting 8411i the Governor submitted a letter addressed to the Board by Yir. Albert transmitting a revision of the 3oard's .Aegulation Y, piepared bY bi4 471 in consultation with The Secretary then read to the ' 14 tile revised _iegalation, which included a complete redraft of Sections 11 ana 12, with minor amendments to other Sections. Following a discussion, :Ir. Hamlin moved that the 3oard adopt the revised helation H as submitted, and that it be promulgated immediately, superseding egulation K, 3eries of 1924. Mere followed a discussion during Which Mr. :Tiller suggested a revision of the language of the proposed Article A of Section 11. During the discussion Messrs. James and McIntosh left the meeting. hr. Hamlin then suggested that action on his motion be deferred until the next .meeting of the Board. The Governor stated. that hr. Hamlin's motion would be special order of business .for a meeting to be held tomorrow morning. 494 6/7/27 -7- REPO:VS OP STANDING ' Dated, June 3r1, 4th, Dated, June 3rd, 4th, 6th, Datecl, hay 31st, June 4th, kited., June 6th, batea, June 6th, b(ttea, June 6th, Recommending 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. Recommendations approved. Recommending approval of the application of Mr. W. H. Kaye for permission to serve at the same time as director of the Citizens Union National Bank, Louisville, Ky., as director of the Louisville Joint Stock Land Bank, Louisville, Ky. and as director of the Union Joint Stock Land Bank, Louisville, Ey. Recommendation approved. Recommending approval of the application of Mr. John W. Lushear for permission to serve at the same time as president of the North Ward National Balk, Newark, N. J. and as director of the Equitable Trust Company, Newark, N. J. Recommendation approved. Recommending approval of the applications of Messrs. H. J. Angermeier, John M. Atherton, Oscar E. Bloch, Anthony J. Carroll, Jams B. Brown,R. I. Callahan, S. E. Duncan, ';:m. W. Crawford, S. %I. Coons, T. K. Helm, James Garnett, E. L. Drummond., Saunders P. Jones, Alex P. Humphrey, Baylor O. Hickman, O. C. Hieatt, C. C. Mengel, S. C. Lyons, Brainard Lemon, Walter I. Kohn, H. D. Ormsby, Edward J. O'Brien, Jr., T. J. Minary, Wm. Short, Henry Vogt, William S. Speed, and Arthur M. Rutledge, for permission to serve at the some time as director of the National Bank of Kentucky, Louisville, Ky., and as director of the Louisville Trust Company, Louisville, Ky. Recommendations approved. Recommending approval of the applications of Messrs. John B. Pirtle, Angersau Gray, and Huston Quin, for permission to serve at the same time as director of the National Bank of Kentucky, Louisville, Ky. and as directorofficer of the Louisville ?rust Company, Louisville, Ky. Recommendations approved. Recommending approval of the application of Mr. Charles H. Bohmer for permission to serve at the same time as director of the National Bank of Kentucky, Louisville, Ky., as director of the Louisville Trust Company, Louisville, Ky. and as Chairman of the Board of Directors of the Security Bank, Louisville, Ky. ;lecormendation approved. 49.3 6/7/27 -8- 4aZ),..,.alLLOP STANDING COMMTTEES: (Cont'd) Dated Recommending approval of the application of Mr. Geo. M. Clark for pennission to serve at the same time as director of the National Bank of Kentucky, Louisville, F2y., as director of the Louisville Trust Company, Louisville, KY., and as director of the Second National Bank, New Albany, Ind. Recommendation approved. Dated.: June 6th, 2ecommending approval of the application of Yr. Milburn P. Kelley for permission to serve at the same time as director of the Louisville Trust Company, Louisville, Ky., as director of the National Bank of Kentucky, Louisville, KY. and as director of the Security Bank, Louisville, Ky. Recommendation approved. 1)ated, June 6th, liecommending approval of the application of Mr. a. C. Wilson for permission to serve at the same time as Cashier of the National Copper Bank, Salt Lake City, Utah, as director of the Yirst National Bank, Emmett, Idaho and as director of the Tirst rational Bank in Halley, Idaho. Recommendation approved. June 6th, The meeting adjourned at one o'clock. Secretary. 413/;1‘°Ired: (
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