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meeting of the Federal .eserve Board was held in the office of the
Pecleral

deserve 3ord on 2riday,
P.:1.
2;=T:

PA2SEITT

1928 at 3:00 p.m.

Governor Young
Blatt
:jr. Hamlin
1:r. Liner
::lcintosh
:r. ::3ddy, Secretary
::r. :cClelland,,i,sst. Secretary
. Iyatt, General Counsel
Li'. Vest, lisst. Counsel

At
tention was called to the fact tilat the Board has under consideration
tile
whether it should L,pprove the use of the word "federal" as part
°T the title of
any corporation organized. under Section 25 (a) of the federal
Iterl\re 41ct for tne purpose of enfraping in International or foreign banking.
'Yatt s'l-fre-ted that consideration should also be given to the propriety
°T4PProviiv,
the use of the words "united States" as part of the title of any
s4C11 cornoration and expressed the view that the use of the words "United States
rnuch more misleading that the use of the word. "Federal".
Upon motion, it was voted that the federal ,eserve
Board will not approve the use of the words "United States"
as part of the title of any coreoration organized under the
provisions of „Action 25 (a) of the Federal deserve ;,ct for
the !purpose of engaging in international or foreign banking
or La other international or foreign financial operations,
Oh the t;round that it would be misleading to persons doing
ollsiness with such corporations both in the United States
and abroad.
.

"ddtt then explained to the Board the present status of the case

1104 aistl ins
t the Board on behalf of the organizers of the proposed United
tates 2oreitn
financing Corporation, now pending in the Supreme Court of
trict
Of Columbia, and pre3ented to the Board an amended answer which
4a beeti
preoared by 1.:r. Baker and himself. :Al new portions of the amenied
kizwer
Ore

read to the Board and uiscussed.




5/18/28

hc„,,,`•

Upon motion, it was voted to approve the amended
answer as presented by 1..*.r. Wyatt and to authorize .;ounsel
to file same an behalf of the Board and an behalf of the
members of the Board.
1:1'..liVyatt then advised the Board of a suit which has been brought by de1°41t°1's of the insolvent Yeoga National Bank, NeoFa, Ill. against the directo r,
Of that bank and against the Federal Reserve Bank of Chicago, alleglag m;
-Lsmanaement by the directors and collusion by the Federal Reserve bank;
the. .
*3111t claiming that the Federal deserve bank has a duty to examine and
81.1pery.

Ise member banks and is presumed to know their condition, that the
hogEt

4atienal Bank was insolvent for more than a year before a receiver

Vila 4
PPO itted,

that during this time the Federal Reserve bank rediscounted

t° It and took excess collateral, thereby making itself a preferred creditor
411(Ith4t the Federal Reserve bank should have refused to rediscount when it
ew.

""e member bank to be insolvent and should have caused the bank to be
Jyatt stated that a judgment is soucilt to compel the Federal

e bank to share losses equally with the general creditors. He stated
that the suit
involves numerous questions of interest to the entire System,
°f which are now being studied by Honorable Newton D. Baker, at the
elll"t Of the Governors' Conference, and that the Federal Reserve Bank of
Chicago
has requested that all Federal Reserve banks join in retaining 1:r.
1111 to assist in the trial of the case.
After considerable discussion, upon motion, the Governor
was authorized to communicate with all Federal Reserve banks
ana ascertain whether or not they are willing to join in the
employment of Mr. Baker on a pro rata basis, and if so, to arrange for such employment with the understanding that the fee
subt° be paid lir. Baker for his services in the case will be
mitted to the Board for approval.




"essrs. ,:yatt and 'Test then withdrev: from the meting.
The minutes of the meetin

9oard held on ::.ay

of the"2-ederal

NI 17,.
re read and approved.
The minutes of the meetin-s of the ;xecutive Committee of the Federal
4eserve

Board held on Lay 14th ,.nd 17th were read and upon motion the actions

l'.rcled therein
wore ratified

nd. the recommendations made by the Committee

a pbroved.
Telegram dated 1.".ay 18th from the ,tcting Chairman of the Open Larket
.14/teetr
nent Committee advisin;;
- that the next meetino: of the Committee, ori-inally
lieduled for ::".ay 22nd, has been Postponed until Hay 25th.
I;oted.
he 3eeretclr

then *oresented an application on behalf of the Industrial

Iration,1
Bank and '.1rust iCompan:j of

ew York, i

Y. (orp;anizinr) for permission

to e,
4erCiS0

eneral fiduciary powers, effective if and wnen authorized by the

'1)tl'/311er of the Currency to commence business.

He stated that the board

cill'ectors of the Federal eserve Bank of 4ea York recommend disapproval of
the
aPPl ication, feelinc_; that it v,ould be well to defer the (-ranting of trust
11(*ers until
the directors of the institution have demonstrated for at least
0
Year their ability to properly and profitably operate a bank at the pro1c)4'Ql lo
cation.

He state u that the Board's Law Committee is divided in its

l'e(3111Inerviatior., ressrs. Platt and Hamlin recommundin
11(qci

that the application be

£r, ,:cIntosh that it be approved, effective if and when the bank is

411.1°ri ed "a, him to commence business.
,,fter discussion, it :as voted to refer the acplication back to the Law Committee for further consideration.
Cla'jtcn ,ct application of Dunnin




ideout, involving the First 1:zAiona

5/18128
-4-

Of

arrsville,

1. and the Bank of Italy National Trust and ,avin;4s

48°°iation of san Francisco, which operates a branch in ::_arysville.

The

Sel'etal'Y stated that the Federal deserve ligent at an Francisco recommends
41)131'0
v4 of the application, beim; of the oeinion that the granting of the
Pellnit would not be incompatible with the public interest for the reason that
t113cslieles of both institutions are alrady directed by the same interests
411c1111's 4ideout'5 connection with either does not appear to be such that he

Nad.

any

°°1r2t1ttee,

way dominate these policies.

He stated that the Board's Law

weile recomrnend.ini approval of the application, suggested that it

bec°11siclered by the full 'ioard in view of previous discussions regarding
u applications involving br5nches of the Bank of Italy rational
a/ld Savings ,ssociation.
Discussion then ensued during which the secretary reported
that the 3ancitaly Jorporation owns over 5l of the stock of
.
t he First National Bank of LIarysville, and also a substantial
interest in the Bank of Italy T:ational ?rust and :avincrs ssociato, the policies of both institutions beimg directed by the
so-called Bank of Italy interests.
, Follow-ing the discussion, upon motion it was voted to refer
tne above application back to the Law Committee for the preparat on of a letter to the Federal deserve agent at 3an Francisco
actvisinp: that the lAari is not entirely satisfied with the reasons
stated by him in support of his favorable recommendation.
"
4 4-1,m from Counsel dated Lay 1(Ah with reference to the Clayton .,ct
"i°

Z-

Of hr. :,:arshall Hale, involving the jalifornia National Bank of

s;a1. and the Bank of Italy 1:ational ?rust and J.avin7s ,ssociation
'qt1

'
rancisco, which operates branches in sacrament°.
The secretary reported that while the Board's Law Committee
inclined to approve the application it sm -gested that the
Matter be considered by the full Board since it appears that two




5/1B/28
branches of the Bank of Italy Lational 2rust and Javings
xssociption in 3acramento are located just two or three
°locks from the California Lational Bank and the institutions
are in natural competition. He stated that the Federal deserve
itgent in recommending aoproval reported that hr. Hale owns
a small number of shares of stock in each bank and beinri: a director of the Bank of Italy Lational Crust and Javim-:s _ssociation head office, vary likely has no direct connection with the
':;
- acrumJnto branches of that bank.
,-fter discussion, it was voted to refer this application
back to the Law Committee for the preparation of a letter to
the federal deserve -s;ent at Ban francisco, auvisinc7 that the
Board is not entirely satisfied with the reasons reportea by
him in support of his favorable recommendation.
Ilatter
approved on initials on Lay 16th, namely, arsolication of the Inal National Bank of hew York, :C. Y. for orifjnal stool:
, (1650 shares)
the

Federal deserve Bank of hew York, effective if and when the Oomptrol-

ler
°f

the Currency issues a certificate of authority to commence business.
Formally approved.

Te

legram dated lay 18th from the assistant Federal :',eserve -gent at .tich-

tri°11c11 adv is
in

0

the

election of hr. Junius 2. I,ishburn of Roanoke, Va. as

"lass B Director of the federal :oeserve Bank of hiclimond. Or the unexpired
trin Ofr,

.jtru.dwick, deceased, ending December 01, 1930.

,
'slegrams dated ::ay 16th and 17th from the Chairmen of the Federal .,es%rite
13allks of it.
and ;an Francisco, advisinr, that their boards of di-

l'eQto

rs at maetin..s on the dates stated made no chaiv_7es in the banks' e:isting
,,equies
f rates of discount and purchase.
.ithout objection, noted with approval.

dated
'ttor
l
4%ly

17th from the Becretary of the "Federal 2Leserve Bank of

late
(31-1 advisin,,: that the ooard 01 directors at their meet1nc7 on that




r.."

5/1e/2.8
liotea

9

-6_

t,c, establish, effective with the change in the rediscount rate of the
a rate of 4 1/2;) for pumhases of government securities under resale
and the following schedules of minimum and effective rates for

-Q-s of acceptances:
Minimum rates for bankers acceptances:
1 to 30 days
31 to 120 days
121 to 180 days
.:epurchase

_
_

3 3/4
4;;
4 1/4,.;
4;

,
. ffective rates lor acceptances:
"
Bankers - 1 t;) 120 days
121 to 180 days
Repurchase
Trade

,
,

_
-

4p

4 1/4„)
4,,
4 1/2,:i

Without objection, noted with approval.
Telegram dated May 15th from the 4ssistant Federal deserve Agent at

111°114 ac1V
'

ich-

of the establishment on that day of the fo11owinc schedule of

tatez
I°r purchases of bankers acceptances:
1 to 120 days
121 to 180 days

4 1/b,)
4 3/8

- lithout objection, noted with approval.
:
TelA
--grams uated May 17th and 18th from the Ohaiiinen of the 'Federal deserve
131441,:a
, of the establishment, effective Yay
°f Ot. Louis and Chicago, advisinc
th,
Of the following schedule of rates for purchases of bankers accentances:
1 to 120 days
121 to 180 days
,:ithout objection, noted with approval.
Zeie

:111114iti

l'am dated May 13th from the Chairman of the Federal .eserve Bank of

P'lls, advising of the establishment on that day of the following




f-N

;

-7-

schedule

of rates for purchases of acceptances:
Bankers

1 to 120 days
121 to 180 days
_Lepurchase
41/2

Trude
iithout objection, noted with approval.

Liernorandum dated Lay 16th from the Director of the Division of ..esearch
.
414 3ta
tistics, recommending that the temporary appointments of Lrs. Julia
1411'jl and Lliss1sie Hanold, which expire on Lay 20th, be extended until
411

t 20

1928.
approved.

P°It of '2.:xeciltive ?)ommittee on letter dated 2,1ay 17th from the Jomptroller
or

the 0

4

rrency, recommendin7 approval of a salary of ,27(30 p,3r annum for
Bank Examinur Janiel J. Breen, assiyned to the Jevehth

eera1 des-

(*Ire ji
Strict; the 'oard's 3ommittee also recommendin-; approval.
lqoproved.
4erx)rt of ixecutive Jcymmittee oh letter iated Lay 17th from the Jomptroller'
or

the ,,
\,a rrency, recommendilv- approval of a sal3ry of ,i2500 per anatu

for

Oal Ballk :xaminer Theodore
as,3igned to the 2welfth zederal
4aarli
e Jistrict; the T'ox,rd's Jomlittee also recommenuLag auproval.
-Pproved.

IA
*-Port
of Jommittee on ;a1L,ries and ,:xpendit-Ares on letter dated Lay 14th
the

).9.1-lt- Governor of the Federal

eserve 3ank of Few York, recommend-

the Promot ion or LI'. Frank )(vie to a position where the grade is in exess

of
,,25°°

pr annum, effective Llay 1, 1928; the Aard's ',:ommittee also

aoproval.
._pproved.




Ot3L,

) 5/18/28

Letter dated May 10th from the Chairman of the ,:ederal

eserve Bank of

84112rancisco, advising that it has now been determined that the bank will
11()t lose the services of Mr. 2hamas H. Ramsay, Class L Director, and sugtihg that he proceed with a special election to fill the vacancy on the
4411 of Directors caused by the resit_mation of Mr. Howard ,:hipple, Class A
Dillector, whose term would have expired December 31, 1930; the Agent also
elle:Resting that the Board fix June 25, 1928 as the date for the opening of
the Polls in
the special election.
The Executive Committee on May 16th having approved
the holding of the special election and having fixed June
25th as the date for the opening of the polls, upon motion,
this action was formally approved.
The Governor stated that in accordance with the practice which has been
111°611t1
-Y

kat

adopted, on May 7th he wired the Chairman of the Federal deserve

°f Dallas requesting the reason or reasons for the action of the di-

40t0l.

Of that bank in votin': to establish the rediscount rate of 4 1/2/0

144elawas approved by the Board.

He presented the following telegrams ex-

114rIed With the Chairman of the Dallas bank under date of May 7th:
"Young - "fashington
Answering wire this date. In consideration question of change
in discount rate Saturday members our board here of the opinion
that the rate question is one primarily to be decided by local
uoard each district as conditions would seem to indicate at time
Of suggested change, that local board should not necessarily be
governed by change in rate in other districts unless system policy aould indicate that cooperation would be wise and salutary
unuar particular circumstances existing:. They also were of the
Opinion that a raise from 4 percent to 4 1/2 percent was not essential at this time in our district to preserve autonomy of
business as related to commerce industry and agriculture but
due to the fact that it was estimated that not less than one
call market
hundred millions of dollars is now being loaned on the
tend to
in New York from the Eleventh District such raise would




er.* e•-•

B/18/28

-9-

"curb speculation on New York market if the other eleven districts should increase their rates above New York and thus
be the means of requiring many call loans in this district
to be retired and returned for legitimate demands here. Recent raise from 3 1/2 percent to 4 percent in Board's opinion
served a good purpose here in forcing the group one member
banks into the mnrket for the greater amount of increase in
our loans made during April as they preferred to borrow from
us rather than call their loans in New York or sell United
States securities on a falling market. Conditions in this
district are perfectly sound and an increase of one half of
one percent in the rate will have little if any effect on
country member bank borrowings or increase their rate by
reason of the wide spread between 4 1/2 percent and 6 percent
Obtaining in country bank discounts. This increase however
Will cause larger banks which have surplus funds on call in
New York to withdraw those funds and use them here instead of
borrowing and to the extent they may withdraw such funds will
the supply of money be reduced as long as other Federal Reserve districts maintain higher rate than New York.
:;alsh."
"Walsh - Dallas
Very much interested in your wire. Is Board to assume from
its contents that you have specific cases of banks continuously
borrowing from yoil and simultaneously lending on call?
Young."
"Young - Washington
Answering your wire this afternoon did not intend to convey
Idea my wire this morning that we have specific cases of continuous borrowing and simultaneously lending these funds on
call. From discussions with others have good reason to feel
that some banks in this district have preferred to borrow
from us rather than sell goverment securities at low price
prevailing during past thirty or sixty days or to call loans
made previous to that time because call money rates were substantially higher than our discount rates. Undoubtedly many
call loans placed by banks in this district are from institutions
Which have not borrowed from us at all this year but by reason
of having heavy surplus funds for which there were no local demands felt they could be placed in that manner more advantageously than elsewhere.




jalsh."
Noted.

5/18/28

-10-

Matter approved on initials on May 12th, namely, letter prepared for
the signature of the Secretary of the Treasury, addressed to the Chairman
Of

the Committee on Banking and Currency of the Senate, advising of the

13()eta's approval of Senate Joint

esolution 14:, authorizing the erection

111 L0s Angeles of a building to house the Branch Federal Aeserve Bank at
that Point.
Upon motion, the letter was formally approved.
Memorandum from Counsel dated May 2nd nrepared in accordance with
the request of the Board at its meeting on hpril 27th, with respect to the
tY of the Board to disapprove the inclusion of the word "Federal"
14th0 titles of corporations organized under Section 25 (a) of the Federal
"re Act and as to the Board's authority to revoke permission already
'gtaxitecl. for the use of the word in the titles of corporations previously

Nem--eLL;
',

Counsel stating (1) that in his opinion in any case where the

Nal
feels that the use of the word "Federal" may be misleading to the
11111140 or otherwise detrimental to the public interest, it is vested A.th
the
'egal authority to disapprove the use of the word in the title of a
cert30
'
l ation organizing under Section 25 (a) of the Federal deserve 1,ct,
which
legal authority, however, should be exercised with a clue regard to
the
ID°1i0Y of Congress which is to be implied from the l'ct of May 24, 1926,

that

the use of the word "Federal" in the titles of corporations organized

1411Lcir the laws of the United States is in a general way proper and to be
-c2,4; and (2) that the title of a corporation previously organized,
Nch
4e been lawfully acquired and approved by the Board, is one of the
l'eated

'ights of such corporation which




can not be taken away or imp:Aired

-11-

the Federal deserve 3w4rdwithout the consent of such corporation.
after discussion, upon motion the opinions expressed
by jounsel in the above memorandum were approved.
The 3ecretary then presented draft of reply to a letter dated
25th

'rom the Vice President of the First 'Federal iorein Investment Trust,

allrisings that the corporation is considerinc: the aav]sability of shortening
its t.
ltle to either 'First Federal Investment ?rust" or "Federal Investment
f

; the proposed reply setting out the procedure incident to a change

01
' .
itla and statinp, that while the Board would have no objection to the
4c101)ti°11 of the title "First Federal Investment Trust", it considers that
thew"ds 'Federal Investment Trust" are descriptive Fenerally of any corporati0
11 which may be organized under 3ection 25 (a) for the purpose of doincr7.411 ila

vestment

trust business and accordingly wou1,1 not be disposed to ap-

1)141
"a title consisting of these ,:ords only, and not having in addition
aorn
characteristic or distinguishinF7 word.
l',..fter discussion, upon motion it was voted to approve
the letter to the First Federal Foreign Investment Trust
above referred to, ::..r. Liner voting "no".
The secretary then submitted a letter (1,Ited tipril 25th from Messrs.
41
.44
°wer, Miller and Garrison of New York City, submitting an applition
13Proval and reservation of the title "Federal Discount and Investment
)
x
-or a corporation proposed to be organized under 3ection 25 (a) of
the 1,
eaeral deserve Let.
,.Lfter discussion of this application, in the li(Jit of the
memorandum from Counsel dated May 2nd and the letter to the
Vice President of the First Federal Foreign Investment Trust,
both of which were approved at this mootin, as set out above,




-12-

it Was voted to reconsider the action taken in approving
Counsel's memorandum of :lay 2nd and the letter to the
corporation and to refer them back to the Law Committee,
together with the application for reservation of the title
"Federal )iscount and Investment 2rust".

,
tiordndum
dated 2.lay 7th from Counsel, submitting draft of reply to letter
4ted

pri1tOth from the Federal

eserve ,Lgent at Dallas, requestin

a rulin7

O the

action of the Miners :;tate Bank of Clarendon, 2exas in carrying a loan
,
for
'4e of its customers in connection with which the President of the Bank is
Pel'acqi
allY holding shares of the bank's own stock, although the stock is not
14 the

custody of the bank and it disclaim- holding the stock as collateral,

41tho,

the ,,resident states that the stock will not be surrendered until

the lean is paid; the proposed reply stating that if the )resident of the
is holdincthis stock with the express or implied understanding that in
the
event the loan is not paid he is to deliver the stock to the hank or
e11

the stock and pay the amount of the customer's indebtedness out of the

Droce
the President is in reality acting as a trustee in the matter and

tt

is

clear that the loan has been made by the bank upon the security of its

tock
Statutes.

ter, tat,,,ht

in violation of the provisions of 3ection 5231 of the ,evised
In his memorandum, however, Counsel stated that conceivably the

may hav3 endorsed the note of the customer in order that the 1stobtain the loan from the bank and the customer may have rut up

stoek

With the president as personal security for his endorsement, in

h evellt the loan by the bank would be tion the security of the customer's
,
ItIto

tUr

and the President's endorsement, and the transaction if entered

goOd faith on this basis would not constitute a violation of law.




“fter discussion, it was voted not to forward the
letter to the Federal :eserve .-.P-ent at Dallas submitted
bY Counsel, but to address a communication to him requestmore definite advice re5-Ard]np the facts of the case.
1)raft of letter to the Chairman of the Committee on 3ankin- and Currency of
the

ouQ. , .
ot rAepresentatives, with reference to H.

• 16153 previdin7 that the

col- r of a nept;able instrument transferred to a national bank for

8fero

ii shall
the
in certain cases be a preferred cr-Aitor of such bank in
elellt Of its failure; the proposed reply stating that although the Board favors
the
accomplished, it believes
1311rises of the bill and the results which would be
that
the form of the bill could profitably be amended by one or two changes and
4'1c1
iti0n5 set

out in the letter.

The above letter haviw7 been circulated amon7 all members Of the Board was upon motion approved.
±ith
Of Law Committee on memorandum dated 2pril 21st from Counsel, refer
lath from the Chairman of the First Federal
ellc° to letter dated
Porei
consideration of
'
f .11 Investment Trust of New York City, submitting for
hct
a proposed amendment to dection 25 (a) of the Federal deserve
which
permit corporations organized thereunder to invest funds
operations
employed in international or foreign banking or financial
tile

that not more
8t clek or other securities of any cororation, provided

at any
triklorle-third of the capital and surplus of the corporation may be
the United
°11' tilne invested in corcorations !:enerally engaged in business in
St tes
subject to a
a‘id provided, further, that such investr:ents shall be
1114tLf .

iO

_f
in .1/1.y one corpratien
0 10,:, of capital and surplus on investments

(fa
the restriction
Pt banking corporations where l5 is the limit) and to
t rim
corporations in substantial
- slIch investment shall be made in other




-14-

•
°Q111Pet*ition
with the investing corporation.

In its report, the Law Oonittee

/)Thited out that at the nresent time there is a growinr: movement to permit the
°Nan*
lzation under Federal law of investment trusts doing business wholly or
Pally in "merican securities and stated that the Committee believes the
enact111-1
- of the proposed bill somewhat liberalizing the investment trust
teat11
S of
de corporations will do something toward postponement of such
1)11
s
01'i0sai5

After discussion, it was voted, to refer the file on
the above question to the directors and officers of the
Federal deserve Bank of 1Iew York for an exnression of
Opinion.
4 Port of Law Committee on memorandum dated April 21st from ::.;ounsel, refer141.; to

letter dated April 18th from the flee President of the First Federal

E7n Investment Trust, inquiring whethx a corporation orF7anized under
Se
tioll 2° (a) of the Federal ,leserve _Let may purchase bonds of domestic
%Iporations althow:411 the purchase of stock of such domestic corporations
111,ot a
uthorized by law; Jounsel stating that in his opinion 3ection 25 (a)
el44111Y authorizes cororations orgahized thereunder to buy aril sell or
holost in
bonds issued by any corporation including; bonds Of domestic corporaton
1-4 al
thoucia this porer must be exercised under such rules and. re-ulations
48
t4e.
Board may prescribe. In its report, t.,le Lou ',.;ommittee sul7ested the
N:*tr1114.tion of a reulation which would authorize corporations or:,:anized

1111-41*

3ecti0n 25 (a) to invest not to exceed 201 D of their capital and sarrlus

bozicis 01`

domest ic corporations.

discussion, it'as voted to re:mest an expression
of oninion from the officers and directors of the ederal
.;eserve Bank of :7ew York on the (,uestion raised in the above
file.




5118/2

Letter dated :_ay 8th from the 2ederal Aeserve ..gent at dichmond,
a4718ing thzit the _br.ecutive Committee of that bank recommends that proceeclin's be instituted by the Board to require surrender of membership
the .t'ederal

eserve System by the Palmetto Sank and ?rust Company,

?lorence,
the

The iecretary presented drafts of letters to the bank

Federal ;eserve

ad/isincf of a hearing to be Held by the

r3o3„
'LL at ',hich representatives of tne.falmetto Dank and 2rust Company
are cite"-z to appear to show cause why the bank should not be required
to surrender its stock in the :ederal eserve Bank of Hichmond and to
forf,,
7̀1t all rights and privileges of membership in the 'federal Reserve
Sy
; the proposed letter stating that if the Palmetto Bank and Trust
Cortn.
'
-11Y desires to waive its right to appear at the hearing before the
1104ra

.
9

It 1 3Y

present to the *2-ederal ueserve :,gent such evidence as it

'
- re to have presented to the Board, providel it gives reasonable
notice
Of

its intention to appJar before the 2ederal deserve
Upon motion, it was vote..1. to approve the recommendation of the :2xecutive Committee of the federal deserve
Bank of Aichmond and the letters to the member bank and
the 2ederal Aeserve dgent at aichmond, submitted by the
Secretary, were approved and ordered transmitted, after
June 19th had been fixed as the date for the hearing before the Board.

•

Ilftorandum from Counsel dted

pril 24th, submitting urafts of let-

ters
() the /Ittorney General of the United 3tates, the Comptroller of the
ellcY una the Federal deserve ,,gent at Chicago, with reference to methods
Of 4,4

`vertising and sellin- securities beiriF:
, employed by the Iroquois Crust

QQ111,,
V44Y

Of

ivanston, Ill.

Upon motion, the letters submitted by Counsel were
approved and ordered transmitted.




-16-

Letter dated LIay 8th from the :_ssistant Secretary of Jtate, transIni tt ia,
F.., copy of dispatch from the Y,mbassy at Havana relatim- to a decree of
t''e President of Juba cre.,tinr' a Bankin- jommission for the purpose of re%q v,
'"g a proposed Cuban bank law, copy of which ;as transmitted to the
bY the State Department under date of June 7

1925; the Assistant

'
jecretary of
State requesting' any comment which the Board may consider ar.)1)11°Pr 1ate upon the subject.
Discussion ensued durinif which it was pointed out
that the original draft of the Cuban bankime law referred to was prepared by Averner Hardinp: of the Federal
deserve 3ank of Boston, and upon motion, it was voted
to refer the letter from the .2,,ssistant Secretary oi State
to Avernor Harding -, ith a request that he sun; est to the
Board a form of reply thereto.
11, ,
,-Ake Secretary then submitted the matter which was referred to the
't Without recommendation by the Executive Committee at its meeting on
Litiy 1

&tit, namely, application of the American State Bank, :Frankenmith, Lich.
f()1,

MeMbership in the Federal deserve system and for 24 shares of stock in
the

ederal _eserve Bank of Chicago, action on which was deferred by the

oaz,

(1 on

1928 due to the small ratio of the bank's capital to its

t liability.

The Secretary presented subsequent correspondence with

the Pecteral
deserve Agent at Chicago, including a letter from the applicant
14,11k
isinc. that at the next stockholders meeting it is proposed to in,ase

une bank's capital to „I35,000 and its surplus to ;;30,000 or „;35,000.

The
'eeretary also called attention to a recommendation of the Federal deserit that in view of the bank's intention to increase its capital
its annlication for membership be approved by the Board°




-

-17Uf,on motion, it was voted to approve the application
Of the American State Bank, Frankenmuth,
for stock
In the Federal Reserve Bank of Chicago, subject to the
regular conditions of membership set out in the Board's
Regulation H, Series of 1928 and to the following special
conditions:
(1) That the total credit based on stock of the Grand
River Investment Company be materially reduced as the paper
matures.
(2) That at the next stockholders' meeting, to be held
in January 1929, the bank's capital stock be increased to
at least .35,004 and its surplus to at least ,30,000.
STANDING 001 II.ITEE3:
atea, 1:ay

17th,
18th,

thlt;ea,
Lay 12th,
15th,
4tea
16th,
"
_ay 11th,

'4tea

.
Lay 14th,

e.tect,
1:ay 14th,

4teci,
15th,




Recommending changes in stock at Federal Reserve banks
as set forth in the Auxiliary Minute Book of this date.
aecommendations approved.
Recommending action on applications for fiduciary powers
as set forth in the Auxiliary 1,inute Book of this date.
1Wcoendations
approved.
mm
Recommending approval of the application of Mr. Victor
S. Fisher for permission to serve at the same time as
officer and director of the Pacific Avenue National Bank
of Atlantic City, N. J., and as director of the Atlantic
Safe Deposit and Trust Company, _tlantic City, Y. J.
aecommendation approved.
Recommending approval of the application of Mr. Charles
F. Stern for permission to serve as director of the Los
Angeles-First National Trust and Savings Bank, Los Angeles,
Cal., as director of the Pacific Coast Joint Stock Land
Bank, Los Angeles Cal., and as director of the Pacific
Coast Joint Stock Land Bank of San Francisco, Cal.
Recommendation approved.
Recommending approval of the application of Mr. H. C.
Carr for permission to serve as officer of the Bank of
Italy National Trust and Savings A.ssociation, San Francisco,
Cal., as officer of the California Joint Stock Land Bank,
San Francisco, Cal., and as officer and director of the
First National Bank, Porterville, Cal.
Recommendation approved.
Recommending approval of the application of Mr. 2idward
H. Geary for permission to serve as officer and director
of the Security Savings and Trust Company, Portland, Oreand as officer and director of the Pacific Coast
Joint stock Land Bank, Portland, Oregon.
Recommendation approved.

5/18/28
-18t;70(11)

3?;,-DING

Datea,

I.:ay 15th,

Dated,
May 15th,

Llated,

May 15th,

4ted.
15th,

4te
I'LaY 15th,

te

"Iay 15th,

LlaY 15th,

(Cont'd)

.:ecommending approval of the application of :;:r. S. J.
-ldwell for pernission to serve as officer and director
of the Bank of Italy National Trust and Savings 1,ssociation, San Francisco, Cal., and as officer and director
of the California Joint Stock Land Bank, San Francisco,
Cal.
L',ecommendation approved.
ecommendinc; approval of the application of Mr. Z. ..
Birge for permission to serve as officer of the Bank
of Italy National Trust and Savings Association, San
Francisco, Cal., and as director and officer of the
:ancisco, Cal.
California Joint Stock Land Bank, San F,
Recommendation approved.
aecommending approval of the application of Mr. James A.
Bacigalupi, for permission to serve as director and officer of the Bank of Italy National Trust and Savings
4.ssociation, San Francisco, Cal., and as director and
officer of the California Joint Stock Land Bank, Jan
Francisco, Cal.
Recommend3tion approved.
Aecommenc'int, approval of the application of :;:r. C. F.
ente for permission to serve as officer of the Bank of
Italy National ?rust and Savings Association, San Francisco, Cal., and as director of the California Joint
Stock Land Bank, San Francisco, Cal.
,ecommendation approved*
Recommending approval of the application of hr. L.
Scatena for permission to serve as director and officer
of the Bank of Italy National Trust and Savings Association,
San Francisco, Cal., and as director of the California Joint
Stock Land Bank, San Francisco, Cal.
Recommendation approved.
aecommending approvalof the application of Mr. A. J.
:fount for permission to serve as director and officer
of the Bank of Italy National ?rust and Savings Association, San Francisco, Cal., and as director and officer
of the California Joint Stock Land Bank, San Francisco,
Cal.
:tecommendation approved.
Recommending approval of the application of Mr. Jos.A.
Ligliavacca for permission to serve as director of the
Bank of Italy National Trust and Savings Association,
Jan Francisco, Cal., and as director of the California
Joint Stock Land Bank, Jan Francisco, Cal,
Recommendation approved.




-4..

V18/28

-)C)

-19-

;41?
'
.
"9-L1L.OF STANDILIG CO:KIT2FAEJ: (Contld)
Dated., May
15th,

4teci
'Zay 15th,

bEttea, 1.:ay

15th,

114tea, /lay 16th,

13'48a, LlaY

16th,

1)11te(1".laY 16th,

Recommending approval of the application of Mr. W. W.
Hopper for permission to serve as officer of the Bank
of Italy National Trust and Savings Lssociation, San
Francisco, Cal., and as director of the California Joint
Stock Land Bank, San Francisco, Cal.
Recommendation approved.
Recommending approval of the application of Mr. . d.
Hendrick for permission to serve as officer of the Bank
of Italy National Trust and Savings Association, San
Francisco, Cal., and as director and officer of the California Joint Stock Land Bank, San Francisco, Cal.
Recommendation approved.
Recommending approval of the application of Mr. W. E.
Blaner for permission to serve as director and officer
of the Bank of Italy National Trust and Savings Association, San Francisco, Cal., and as director and officer
of the California Joint Stock Land Bank, San Francisco,
Cal.
Recommendation approved.
Recommending approval of the application of Mr. James I.
Cochran for permission to serve as director of the First
National Bank, Philadelphia, pa., and as director of the
Guarantee Trust & Safe Deposit Company, Philadelphia Pa.
Recommendation approved.
Recommending approval of the application of Mr. Robert
Killough for permission to serve as director of the Tenth
National Bank, Philadelphia, Pa., and as director of the
American Bank and Trust Company, Philadelphia, pa.
Recommendation approved.
Recommending approval of the application of Mr. B. D.
Phillips for permission to serve as officer and director
of the Citizens National Bank New Castle, Pa., and as
director of the Bank of Pitts argh National Association,
Pittsburgh, Pa,
Recommendation approve
The meeting adjourned at

,tirovect:
,




Governor.

ill

p.p.