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180 A meeting of the Executive Committee of the Federal Reserve Board was held in the office of the Federal Reserve Board on Tuesday, March 1, 1927 at 11:45 a.m. PRESENT: Vice Governor Platt Mr. Hamlin Mr. Miller Mr. Eddy, Secretary Mr. McClelland, Asst. Secretary Letter dated February 24th from the Secretary of the Federal Reserve Bank of New York, advising that the board of directors on that day made 210 change in the bank's existing schedule of rates of discount and purchase. Noted. Telegram dated February 26th from the Chairman of the Federal Reserve a./IIc of Chicago, advising that the board of directors on that day made 110 change in the bank's existing schedule of rates of discaant and purchase. Noted. Telegram dated February 24th from the Chairman of the Federal Reserve Bajlic of Kansas City, advising that the board of directors on that day made 210 change in the bank's oxistin schedule of rates of discount and purchase. Noted. Memorandum dated February 24th from the Chief of the Gold Settlement Division, recommending that the nano of Mr. Alan B. Dawson, extra relief man ill the Division,be droloped from the rolls and that authority be granted for the emoloyment of an additional extra man at the regular rate of :A.50 to 'n3 ' 00 per evening. Approved. 181 3/1/27 -2- Liemorandum from Counsel dated February 25th, suggesting that the Board authorize his office to prepare and have published a new edition Of the Federal'Reserve Act as amended up to and including the date of the arpraval of the so-called McFadden Bill. Approved. Report of Committee on Salaries and Expenditures on letter dated Pebruary 23rd from the Chairman of the Federal 2eserve Bank of Boston, aavising that the board of directors of that bank has voted, subject to the approval of the Board, to continue payment of salary to Miss Marion l'ineo who has been absent from her duties on account of illness since Januarw 19, 1927 and to Miss Ruth Warren who has been absent continuously silice October 18, 1926; the Committee recommending approval. Approved, ieport of Committee on Salaries and Expenditures on letter dated February rd from the Deputy Chairman of the Federal Reserve Bank of New York, advising of certain changes in the official personnel of the bank and le questing aoproval of an increase from .A700 to ,5500 per annum in the ' salary of I:1r. Robert F. McMurray, promoted to the position of Manager of the Collection Department, and a salary of .;7500 per annum for Mr. James 4, Ilitchell, employed as Chief of the Credit Division; the Committee recomMending approval. Approved. Report of Committee on Examinations on letter dated February transmitting 24th from the Assistant Federal Reserve Agent at New York, 4nd recommending approval of an application of the Utica Trust and Deposit 182 3/1/27 -3- CernPanY, Utica, N. Y. for permission to establish a branch at 214 James Street, Utica; the Committee also recommending approval. Approved. Report of Executive Committee on memorandum dated February 25th frionl the Comptroller of the Currency, recoranending approval of an a-oplica.tion of the Saco National Bank, 3aco, Maine, for permission to reduce its capital from „;100,000 to ..;50,000 on condition that any loans which are ILIds excessive by the reduction will be brought within lawful requirements; the Committee also recomending approval. Approved. The Vice Governor then submitted telegraphic correspondence with the Pederal Reserve Agent at San Francisco, regarding an application filed With him by the American Trust Company of San Francisco for permission to establish a branch in Redwood City. He explained that a telegram sent the Beal'd by the Federal Reserve Agent on February 18th recccamending approval cl the application was never received here and. the Federal 'fleserve Agent's letter of confirmation dated February 19th was received on the afternoon of 25th just after advice that the President had signed the McFadden 111* He presented a final telegram from the Federal Reserve Agent, dated l'ehrtlarY 26th, stating that the branch has been in physical operation since 41;2Dro1Ta1 was received from the State Superintendent of Banks a week before. After discussion, it was upon motion voted to request the Board's Counsel for an opinion as to 1.83 3/1/27 -4- whether there is any reason under the existing law why the Board should not validate the establishment of the Branch in question. Letter dated February 26th from the Assistant Federal eserve Agent at C leveland, advisin7 that the Union Trust Company of Cleveland at 8:30 a.m. on February 25th opened the branch at the cornar of Madison Avenue and Hilliard :wad (16017 Madison Avenue) Lakewood, the establishment of %.hich was alproved by the board on February 23rd. Noted. Letter dated February 25th from the Deputy Governor of the Federal Re8erve Bank of New York, advising tht a meeting of the Open Market Ilavestmeat Committee has been called for Monday, March 7th at 10:30 a.m., at the Board's offices in Washington. Noted. The Vice Governor then presented a report of the recommendations inacie to the Board by the Federal Advisory Council at its meeting on Pebruary 18th. Thereupon ensiled a discussion of the recommendation of the Council that "The Federal Advisory Council does not believe that there is anything in the present business situation v-hich would warrant any reduction of existing discount rates, or necessitating any change in present open market policy. The Council feels, however, that should interest rates continue to decline the Federal aeserve banks should reduce their holdings of bills bouc-ht in the open market." Following a discussion, Mr. Miller moved that this recommendation be transmitted to the bo,Ird of directors of the Federal .leserve Ban:: of New York for an expression of their views and any recomnendations ther may care to make, and that the directors be advised that the Board thinks it pertinent in connect ien with consideration of the recommendation to take cognizance of gold imports 184 sh, 3/1/27 -5- since the first of the year, and the present state of the acceptance market and to consider whether there Should be any change in the volume of investments in the System's special investment account, estecially in view of llarch 15th maturities from the account. Carried. Ilemorandum from Counsel dated February 25th, approved by the Law Cornwith reference to the matter referred to the Committee at the rnseting on February 23rd, namely, telegram dated February 17th from the Chairman of the Federal _ieserve Bank of Kansas City, inquiring as to the Propriety of a director of that bank accepting an appointment to a racing commissioli provided for in a bill pending before the legislature of the State of Colorado; Counsel stating that this question was submitted to the Board under its ruling that directors of Federal Reserve banks and branches should not hold political office and calling attention to various decisions Inade by the Board under this ruling. After discussion, it was voted to interpose no objection to a director of the Kansas City bank accepting appointment to the commission in question. Draft of reply, prepared by the 'rice Governor to letter dated February 26th from the Chairman of the Federal Reserve Bank of St. Louis, transmitting a complaint from the Vice President of the First National Bank of Jefferson Mo. against the recent change in procedure at the Federal Reserve Bank of ilinneapolis with respect to the handling of city collections of non-cash iterns. After discussion, it was voted to refer the proposed reply back to the Vice Governor for revision. Letter dated February 17th from the Deruty Chairman of the Federal 185 3/1/27 aeserve Bank of ITew York, referring to the Board's letter of February 10th in connection with certain salary pazi-mmts made by that bank without prior approval of the Board, and commenting on the (iuestion of the relationship between the Federal Reserve Board and the local board of directors. Ordered circulated. Letter dated February 23rd from the Chairman of the Federal Reserve 84nk of Richmond., enclosing tentative report of the Committee of Federal lieserve Agents aopointed at the last Conference to prepare a report on the aubject of procedure in elections of Class A and B directors of Federal lisserve banks; the Chairman stating that the Committee believes it should discuss the matter with the 3oard before preparing a final report and that arranc aments are being made for a meeting of the committee in 7:ashinon 413°1-It llarch 7th or 8th. Upon motion, the tentative report was referred to the Law Committee. Draft of letter to the Chairman of the Board of Directors of the Federal Reserve Bank of Cleveland, prepared in accordance with the inst ructions of the Board at its meeting on February 23rd., regarding payment ' made to the widow of Mr. D. C. Wills, former Federal Reserve Agent, of his "'Lary from the date of his death to December 31, 1925. After discussion, the proposed letter was approved as amended. Matter ordered circulated at the meeting on February 23rd, namely, larriorandum from Counsel dated February 10th, with regard to the desire of first National Bank of Lawrence County, :Tew Castle, Pa. to surrender its authority to act in fiduciary capacities. The Vice Governor also 186 3/1/27 -7- 11 Presented a letter dated February 23rd from the Federal. Reserve Agent at Atlanta with regard. to a similar desire of the City National Bank and '2rust C°1111:any of Miami, Fla. Following a discussion, it was voted that the Board's Counsel prepare for submission to the Board a letter to the Comptroller of the Currency requesting a report as to whether he knows of anything in the manner in which the banks involved, have handled their trust accounts, because of which they should not immediately be released from any liability incurred under their exercise of trust powers and suggesting that Mr. Collins, Deputy Comptroller of the Currency and the Board's General Counsel be appointed a special committee to work out a method of procedure in connection with the cancellation of authority for the exercise of such powers. Letter dated February 21st from Mr. Sidney J. Dillon of Des Moines, Iowa, l'equesting certain information with regard to recent and pending banking legislat ion. Referred to the Vice Governor with power. Memorandum from Counsel dated February 24th with regard to service 1)3T Mr. J. E. Fishburn as a director of the Merchants National Trust and 88;7111gs Bank of Los Angeles, The California Bank of Los Angeles and. the First liational Bank of Long Beach, Cal. and referring to a similar case involving 1111%* W. D. '.7oolwine, from whom a new application for the Board's approval of /Its service has been requested but not received; together with a memorandum rl'oni the Comptroller of the Currency stating that in his opinion Messrs. P iEhburn and Woolwine should be treated alike, and if Mr. .7oolwine is pertaitted to remain on his directorates it would appear inconsistent for the 13t/a rli to deal otherwise with Mr. Fishburn. 187 3/1/27 -8- After discussion, the above file was referred back to the Law Committee. The Vice Governor then stated that the Comptroller of the Currency this morning approved the conversion into a national bank of the Bank of Italy and its opening for business as a national bank, effective today, 'wader the title "Bank of Italy National Trust and Savings Association". ie stated that no application has been filed with the Board on behalf of the 44ticnal bank for permission to exercise trust powers, but that the matter has been the subject of telegraphic correspondence with the Federal Reserve Agent at San Francisco this morning, and advice of arplication is expected Following a discussion, upon motion, the Vice Governor was authorized to approve, when received with approval thereof recommended by the Federal Reserve Agent, an application for permission to exercise general fiduciary powers on behalf of the Bank of Italy National Trust and Savings Association, effective today. 114ZgARS OF STANDING COMITTEES: Dated, February 25th, 28th, March 1st, 1)4ted, February 24th, 1)ateat February 26th, 4ted, February 23rd, Recommending changes in stock at Federal Reserve banks as set forth in the Auxiliary Minute Book of this date. Approved. Recommending action on applications for fiduciary powers as set forth In the Auxiliary Minute Book of this date. Approved. Recommending action on application for admission of state bank, subject to the conditions stated in the Individual reports attached to the application as set forth in the Auxiliary Minute Book of this date. Approved. Recommending approval of the application of Mr. Fred H. Loehr for remission to serve at the same time as director of the Seneca National Bank, West Seneca, N. Y. and as director of the Community National Bank, Buffalo, N. Y. Approved. (Cont'd) Dated, February 23rd, Recommending approval of the application of 1:r. Edward A. Duerr for permission to serve at the same time as director of the Seneca National Bark., 7:est Seneca, N. Y., as director of the Community National Bank, Buffalo, N. Y., and as director of the Citizens National Bank, Lancaster, N. Y. Approved. Dated, February 26th, Recommending approval of the application of Mr. P. O. Sauthllick for permission to serve at the same time as officer and director of The First National Bank of Friend, Nebr. and as director of the National Bank of Commerce, Lincoln, Nebr. Approved. Dated, February 24th, Recommending approval of the application of 11:r. Sherman Armstrong for permission to serve at the same time as director of the National Copper Bank, Salt Lake City, Utah, as director of the First National Bank, Park City, Utah and as director of the First National Bank, Mountain Home, Idaho. Approved. The meeting adjourned at 1:15 p Secretary. Vice-Governor.
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