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421 A meeting of the Federal Reserve Board was held in the office of the Peaerea Re se rve Board on r2uesclay, May 11, 1926 at 10:40 a.m. PEESENT: Governor Crissinger Mr. Platt Mr. Hamlin Mr. Miller Mr. James r. Noell, Asst. Secretary Mr. McClel land, Asst. Secret ary minutes of the meeting of the Federal :deserve Board held on 1::azr 7th read and. approved. Zeinorandum dated May 10th frpm the Division of 7,xamination referring to the action of the Board on March 9th in approving an application of the First Iratioriai B _ azl: Of -Jest Palm Beach, Fla.. for 180 shares of stock in the Federal '*(38erve B.aak. of 411c1 a Atlanta, on the basis of an authorized capital of .,.200,000 surplus of i;3100,000; the memorandum advising that the capital of the b4lik has been reduced to100,000 and surrlus to .50,000, and reciommending tl1 4t the a.-npl lc at ion approved by the Board on March 9th be cancelled and that the Boa.ra 'aow approve the bank's nevi ao-olication for 90 shares of stock. Approved. Of boa dated „lay 7th from the Gimirman of the Federal _deserve Bank 1 s 4- 1 advising that the board of directors on that day made no change the so allk's e:,:isting schedule of rates of discaInt and purcha.se. Noted. Teieerain and letter dated May 7th from the Secretary of the Federal e Barla of Cleveland, adv is Lug that the board of directors on that de „ , — onange in their schedule of rates of discaint and purchase .1413t to e stablish a minimum authorizea binc; rate for bankers acceptances 422 5/11/26 Of 3%, effective :lay 8th. No ted, with approval Liemorandum dated. May 7th from the Acting Director of the Division of ilesea,„ 11 and ' Statistics • Billir°110 13 Cluple x recommending the purchase for that Division of one adding and. listinr; machine at a cost of ,)586.50. Approved. Letter dated May 3rd from the Assistant Federal Reserve Agent at San —13co, advising that, in accordance with the Board's approval of April eth, tlle Pacific Southwest Tru.st and Savings Bank, Los Angeles, discartinued their branch at 727 North Broadway, Los Angeles, at the close of business ADril , -4- 17th aal on :lay 1st opened a branch at McCarthy Vista and Eulalia 47e1111.e. Noted. Letter dated Lay 8th from the Chairman of the Federal Reserve Bank Of 01_ IlvEllani, claY the advising that at the meeting of the board of directors on that resignation of Mr. A. ClifforT1 Shinkle ae dinctor of the Cincinnati raTv. -41 / 44 ' ViaS accepted. Noted. ' Iellort of Committee on Salaries and .I]xneniitures on letter dated May 7th -13ra the Chairman of the Federal Reserve Bank of Kansas City, advising that -Ir - • Charles T • Brooks, police officer at the bank, has been granted leave Of absence on account of illness of not to exceed 90 dvs, on half fective :,:ay 1st, subject to the approval of the Board; the Committee ng approval. Approved. 423 5/11/26 Report of C.lornmittee on Salaries and 2xper3.itures on letter dated. I.:Eg 7th fltiln the Secretary of the Federal ::ieserve Bank of Cleveland, advising that at the 1:fleeting of the board of directors on that day the salary of Fred. L. 81)11110Y, recently promoted to position of field representative in the Bank ellttions Department, was increased from .2700 to ,.e.3300 per annum, effective lst; the Committee recomrending approval. Approved. Report of Committee on District 46 on letters dated 2.7.a,y 6th from the 4cleral ileserve Agent at Atlanta, recommending tile designation of 1.1r. Fulton Sa113s as Assistant Federal Reserve Agent at the Jacksonville Branch and ::r. Oottrts P. 1 (end.all as alternate Assistant Federal Reserve Agent at the Branch - both a ppointees being directors of the Branch and to receive an annual salary (3e , with tee compensation of %e5 for each time called upon .to serve; the Corn- recommending approval. Upon motion, it was voted to approve the desigiation of 1.-_essrs. Saussy and Kendall as Assistant Federal Reserve Agent and, alternate, respectively. " - etort of Committee on salaries and Expenditures on letter dated _.ay 7th he Federal Reserve Agent at Boston, requesting approval of the following 4 • (1311s t, .ae rit 3 kke in alloviances for foreign service in connection with changes to be the porsonnel of t1 bank's Havana Agency, effective June 1st; the corn- kittee recommending approval: William C. Rich, salary .„;3600 per annum, to return to the he. office as Officers' Assistant and allowance for foreign service at the rate of :,1;2400 p3r annum to be discontinued. Albert 2. Tuscombe, salary /2160 -rer annum, to succeed Mr. Rich in charge of the Agency and allowance for foreigi service to be increased from .,,,1800 to „,24u0 per annum. 424 .5/11/26 -47,Talter V. Anderson, salary 24O0,; ,Tr annum, to be given allo',-ance for foreign service at the rate of ,;1800 pr annum. Approved. -LIG-ocrt of Committee on Salaries and Exoenditures on letter dated April 3(3th from the Governor of the Federal lieserve Bank of Chicago, advising of tile action of the board of directors of that bank in granting leave of absence 134,/ on account of illness, for a period of not to exceed 90 clAys fr°111 April 19th, to lir. William Barton and exoressing the oninion that the 4.68P°11s1bi1ity involved in dealing with such cases should be assumed by the directors of the bank; the Committee recommendin-; approval and sugesting that Governor I.IcDougal be advised that the Board's requirement that elctero 'ked leaves of absence for employees be submitted. to it was made only a.fter !mature cons ideration. Upon motion, recommendations or tile Committee were anp roved. Lleimorandum from Counsel on matter referred to him at the meeting on I4th t namely, letter dated April 13th from the Chairman of the Federal lieserv. e Baril: of Cleveland., recommending that the Board. revoke the authority to general fiduciary powers granted by it to the Old Hationa.1 City 411'4 at Li Which Ohio, on the ground that a recent examination discloses the bank, Ilac never qualified for the exercise of such powers, to be in an unaet c)r.i condition; Counsel in his memorandum stating reasons why, in Ilia 0.. Pallion the Board has no legal authority to revoke the fiduciary permit ot, balliz, but stating that if the bank, pursuant to the authority granted., 440-41, 'Undertake to exercise fiduciary powers and should then violate any 425 5/11/26 am.)goo 1)r°visien of 1= or regulation of the Board regarding the exercise of trust 13(3wers, the Board raijit revoke the authority granted to the bank. Ordered circulated and referred to the Law Committee. 1:einorandura from Counsel on the matter referred to the last Governors' e011ference, namely, certain ouestions raised by the Governor of the Federal ileserve Akof Cleveland with regard to the Board's ruling upon the it I or rediscount of notes of a corporation representing borrowings of fUnds t° be advanced to subsidiaries; Counsel submitting drafts of a letter to the 4crciellior of the Federal lieserve Bank of Clevelaxo. and a circular letter to 11 Federal J.eserve banks stating that nerrling recons iderat ion of these cillestions by the next Governors' Conference and. for the guidance of Federal 44eerv : e banks in the meantime, the Board holds that notes of a parent corporatiori representing borrowings of funds to be advanced to subsidiaries will not be ,„ `- 1C;sible for rediscount at a Federal lleserve bank unless they comply with ' 411 tale conditions laid dovm in the 13oard's circular letter of December 30, corpora192Z (X-4484) and. further, that, accordingly, the notes of a parent , tIl° proceeds of which have been advanced or loaned to its subsidiaries W"1 llot be eligible for redisccunt, if the parent corporation also makes 11411cee to other corporations than its ovn subsidiaries. Upon motion, the proposed letters were approved. Draft of letter to the Federal aeserve Agent at Chicago, prepared ac ec)raance with action taken at the meting on I,:asy 7th, ordering that the Federal 2.eserve Bank of Chicago refrain from any activity at the Dre e lit time in connection with the political situation in Iowa, which could 426 6be construed by anyone as political propaganda. Approved. Letter dated May 8th from the Division of Simplified Practice of the DePartraent of Commerce, requesting the approval and support of the Federal Reserve Board of an effort being made toward the simplification and standardOf commercial bank checks, notes, drafts and similar instruments. Referred to the Governor with power. Letter dated May 10th from the Chairman of the Committee on Banking ella Currency of the House of Representatives, submitting certain questions l'elative to the issuanze min circulation of Federal Reserve notes, their reclezDtion and the reserves held against same. Referred to Mr. Miller for preparation of a reply. Report of Committee on Examinations on the matter referred to it Itt tile meeting on May 5th, namely, memorand.vm dated May 1st from the Board's nine r, setting forth the status with respect to examinations of Chlet tile seve rai so-called foreign trade banks operating under agreement with the 1)(3arci; the Connittee noting that all such corporations are subjected to illation except the International Banking Corporation of New York City, \l'hieb* has some twenty branches most of which are located in the Far East, 1kt 4-eagree1ne; with the Chief Examiner in his position that to enter the liew '`clrit office of this bank would be the weakest sort of a gesture and lessen respect for examinations conducted by the Board. Mr. Herson eillte''ecl the meeting End discussed the subject of his memorandum with the kara t — reading letters exchanged with the Federal Reserve Agent at New York 427 5/11/26 On the subject. Following the discussion, Mr. Miller suggested that the Federal Reserve Agent at New York be requested to make suggestions as to villat could be done, short of an examination, to put the Board in possession Of information with respect to the organization, scope of operations, etc. of the International Banking Corporation and that he be advised that inasmuch as the Corporation is located in his District and his bank handles a large volume of its accentances, the Board is disposed to feel that the responsibility for its examination is a matter in which his bank must share. Upon motion, it vas voted that the Chief Exawiner prepare a letter to the Federal Reserve Agent at New York alonc; the lines of Miller's suggestion. " IL Jalnes then reportei info/many on behalf of the Special Committee 41/13°i/lte1 on :,:ay 1st to investigate the recent run on American and other 1)411zs it Havana, and other Parts of Cuba, including the assistance rendered 1)Y bilePederal Reserve Banks of Boston and Atlanta, through their respective in Havana, in meeting the situation and all circumstances connected Ag'1)1) w.th - the shiPment of currency by the Federal Reserve System to Havana. a4ries stated Mr. that the Committee had under preparation a formal detailed re- villich would be submitted in clue course for the record. Letter dated :.T.ay 10th from the Assistant Federal Reserve Agent at 01evel ezs:19 transmittin:; application of the ?earl Street Savings aril Trust O oraDathr Of Cleveland., for an extension of time in which to open the branch at Lor wa.z ain -A-venueand 2riskett Road, Cleveland, the establishment of which vl)relred by the Board on November 17, 1925. Upon motion, it was voted. to grant an extension of six months f10111 May 17th. 428 5/11/26 -8- Liemoranclum dated May 11th fivra the Acting Dimctor of the Division Of Ileseatth and Statistics, aPproved, by the Chairman of the Committee on °arch and. Statistics, recomend.ing the appointment to the Division of the f ollowing, persons: Lir. Oliver C. Lockhart, for three months beginning June 1st, to receive .,;1500 for the period, with the understanding that he is to deliver a completed. manuscript on inter-bank borraving under the Federal Reserve System. •',/alter R. Gardner, for three months beginning July 1st, at a salary of „,,200 a month, to make a complete study of ex-nansion of bank credit on a given basis of reserves under the Federal lieserve System, with the understanding that in case, at the end of three months, it is agreeable to Mr. Gardner and. to the Board, his appointrent may be made 1;ermanent. ,„. 444.r. J. Courtlarid .:11iott, for three months beginning June 1st, at a salary of ,,,200 a month, to make a study of the balance of pawments with Canada, with special reference to gold. movements. SS Merle Robinson, for three months beginning May 17th, as stenographer, at a salary of ,>14.40 per annum, her appointment, is satisfactory, to be made permanent. A.ryness Joy for a period of two months, beginning July 1st, at a salary of 4450 per month, for services in connection with the calculation of seasonal adjustments in the revised index of product ion. Approved. COMMITTRIL:15: 114teat May 8th, 10th, tj,„ lay 7th, Recommending changes in stock at Federal Reserve Banks, as set forth in the Auxiliary Minute Book of this date. Approved. Aecomending action on applications for fiduciary powers as set forth in the Auxiliary Minute Book of this date. Approved. 429 5/11/26 -9- 1-12143RTSOF STANDING CO::1IIMES: (Cont'd.) Dated, .lay 7th, Recctrimencling action on application for f iduci say -payers as set forth in the Auxiliary Minute Book of this date. 2.efused. Dated ay 10th, ...ecommenclinr ; approval of the application of Mr. Irving Hill for permission to serve at the same time as director and. pres id.ent of the Lawrence National Bank, Lawrence, Kansas, as director of the First :;at lanai Bank, Tonr,anoxie, Kansas, and as director of the Fidelity National Bank and Trust Comoany, Kansas City, Mo. Approved. Dated, L._ -4Y 8th, iieconnencling aoproval of the application of Mr. John W. Van Natta for permission to serve at the same time as director of the Fl rst-Merchants Nat ional Bank and as director of the Lafayette Joint Stock Land Bank, both of Lafayette, Incl. Approved. Dated ,L:3‘17. 8th, li.econraending approval of the application of Mr. Richard B. Sample for permission to serve at the same time as director of the First-Merchants National Bank and as director of the Lafayette Joint Stock Land Bank, both of Lafayette, Ind. Approved. a•teci, _ ,:e•U 8th, Recommending approval of the application Of Mr. Charles L. Murdock for permission to servo at the same time as director of the :First-Merchants National Bank and as director of the Lafayette Joint Stock Land Bank, both of Lafayette, Ind. Approved. Dated „ ay 8th, Recommending approval of the application of :Ir. Thomas Bauer for permission to serve at the same time as director of the First-Merchants National Bank and as director of the Lafayette Joint Stock Land Bank, both of Lafayette,, Ind. 1)ated, Approved. ia 8 th, :ecorrnendi ng approval of the appli cat ion of Mr. Julius Berlovitz for permission to serve at the same time as director of the First-Merchants National Bank and as director of the Lafayette Joint Stock Land. Bank, both of Lafayette, Ind.. bated. Approved. ay 8th, liecormending approval of the application of Mr. Robert B. Wallace for permission to serve at the same time as director of the First-Merchants National Bati2c1- and. as director of the Lafayette Joint Stock Land. Bank, both of Lafayette, Ind. Approved. If 430 -10OP STA/MING C CLIMITTE3S: (Cont Id) Dated, Llay 5th: Recommending approval of the application of Mr. L. F. Butler for pa re:ass ion to serve at the same t ime as director of the First National Bank, Boston, Mass. as director of the Amerlc an Exchange -Pacific National Bank, New York City ani as director of the Connecticut River Banking Company of Hartford, Conn. Approved. The meeting adjourned, at 12:45 p.m. Assistant Secretary.
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