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meeting of the Federal
the
eserve Board was hdd in
the office of
2ederal Reserve Board on Tuesday, /:ay 2ald, at 10:40 a.m.
PRES TT:
Governor frissinger
l'r. llatt
rr.
l'r.
:r. James
Dawes
Roxton, Sccretary
The minutes of the meetings of the federal -Reserve Ponrd held on
riaZT 17th and 13th were read and on motion approved.
Letter dated ray 2,2nd, from the Railway Loan Advisory Committee of
the .Federal 'Reserve Board, recommending approval of the form of obligation
Ena
bmitted by the Seaboard Air Line Railway Company for a loan of
(1z1 seven parts, the carrier electing at
,759,000
s time to take over the first
13alit of the loan in the amount of c4,259,000) under the provisions of Section
210 of the Transportation .Act, 1920, as amended.
Lpproved.
Letter dated 1:ay 15th, from the Federal Reserve Agent at San Francisco,
tl
'
ailsrilittin, with favorable recommendation, the auplication of the Bank of
ItalY to purchase the Colma State Bank, Colma, ('alifornia, and to establish
a.
branch on its premises.
Approved, Governor crissinger voting "no".
Letter dated ray 16th, i'rom the Chairman of 'the Federal Reserve Bank
"Atlanta,
advi sing that the Atlanta bank building will be entirely completed
by
•T
tILL
1st;
that the Board of Directors proposes to have the formal opening
(34'
3111Y 12th and extending an invitation to the members of the Board to at-tell/I
thls opening.
roted.
5/22/23
--2-
•
TelePTam dated May 18th, from the Federal Reserve Agent at Dallas, ad•ising of the resignation of Mr. Floyd Ikard, Manager of the Houston branch
Of the
Federal Reserve Bank of Dallas.
Noted.
Letter dated May 17th, from the Chairman of the Federal Reserve Bank
of Boston, in the matter of a suggested appropriation of ''2500 by
that bank
to help
Carry on the work of the Treasury Savings Sales, the request for such
appropriation coming from
Mr. F. C. Ayres, local director of the Treasury
47ings Sales.
Referred to the Governor for consultation with the
Treasury Department.
Letter dated Ma.y 17th, from the Chairnetn of the Federal Reserve Bank
or
Boston, advising tln.t at the regular meeting; of the Board of Directors
Qf that
bank, held on May 17th, the following vote was regularly adopted:
"VOTED that the agreement .between the
Federal Reserve Banks of Atlanta and
Boston proposed by their respective
Governors in the joint letter to the
Federal Reserve Board dated May 15,
1923 and referring to the establishment of an agency of the Federal Reserve Bank of Boston in the City of
Havana, Cuba, be, and the same is,
hereby ratified."
Noted.
Letter dated May 21st, prepared for the signnture of the Assistant
Seorm,
and addressed to Mr. E. J. G. Baraba, Continental Bond and Mortgage
Coripo
ration, Detroit, Michigan, with reference to the request of Mr. Baraba
' to re
Print.from the April 1923 edition of the Federal Reserve
Bulletin, the
e Cntitled, "Finance Companies", said, letter being submitted by Mr.
•
'122/23
-3-
for the anproval of the Board.
Approved.
Draft of letter dated May 19th, prepared by General Counsel, for the
si gnature of the Governor addressed to the, Federal Reserve Agent at New York,
with reference to the bank affiliations of Class "B" Directors, said letter
bei
ng submitted with a favorable recommendat ion by Mr. Famlin and Mr. 7latt.
Approved..
Memorandum dated May 17th, from the Comptroller of the Currency, transWith favorable recommendation, the application of the First National
Of
Anthony, Kansas, for permission to reduce its capital stock from
000 to tb4.0,000.
Approved.
Letter dated May 21st, from the Deputy Comptroller of the Currency,
itting the resignation of Miss Bessie C. Kelly, Clerk-Counter, salary
.1020 Per
annum, effective vithout prejudice, at the close of business on
114Y 21, 1923.
Noted with approval.
Letter dated May 13th, from the Comptroller of the Currency, request14)
*I° approval of a salary of :";3300, for Yr. Arthur R. Chambers, a National Bank
assigned to the Tenth Federal Reserve District.
Approved.
The Governor submitted telegrams as follows:
"San Francisco, May 19
1205 p
Board, Washington
Have transmitted telegram from Superintendent of Banks
giving information about Security State Bank, Ontario a non
member bank. I am of the opinion that it would be of
advantage to Ontario to have bank failure avoided by
permitting Auxiliary Corporation ofmBank of Italy to
take over bank as requested by Superintendent of tanks.
Application has been filed and is being forwarded.
Perrin.”
"San Francisco, May 19
1210 p
Crissinger, Washington
In regard Security Bank, Ontario, deposit liability
one hundred seventy-six thousand stop. Bills payable and
rediscounts thirty thousand and eight hundred stop Deposits
include maturino; time certificates forty-six thousand which
bank unable to meet account exhaustion reserves stop Management incompetent and must be removed stop Liquidation inevitable unless sale can be made to Pank of Italy stop
consider that bank has sufficient assets to cover deposit
liability stop I consider it to be for the pUFlic convenience and advantage to save this community from shock
of enforced liquidation and hope you will favorable consider bank of Italy's application to make this purchase.
J. F. Johnson, Supt. of Banks."
"Los Angeles, Calif. ray 18
9 37 pm
G McAdoo
Care Shoreham Hotel, Washington
Per request Superintendent Banks stockholders Auxiliary
today closed contract subject examination for purchase
Security State Bank, Ontario, urgent case suggest you have
Federal Reserve grant branch permit immediately superintendent
Banks upon application can inform Board of Bank's condition
A. T. Giannini."
"El Centro, California, ray 22 1 19 am
D. R. Crissinger,
Governor of Fe.I.eral Reserve Poard, '"ashington
Advisable that Bank of Italy be permitted to take over
Security State Bank of Ontario, California, would urge
5/22/23
-5-
permi ss ion be wired innediat ely.
1. 2. Johnson,
Superintendent of State Banks of California."
tIr. 'Hamlin stated. that he had on April 10th, 1923, presented certain
re solutions sett ini7 forth the terms of a gen ral policy coverinc: the Federal 'Reserve Poard's attitude towards applications for branch, s by state
rneinber banks, and requested that his resolutions be recorded upon the minlites of that date, but laid_ aside for the present as Unfinished Business.
T-Tamlin further stated. that he now desired to amend the resolutions aforesai
- 4"
and to have them recorded ution these 'minutes as follows, with the re-
quest that the amended resolutions be treated at t is time as were the oririnal, and laid, aside for the present as Unfinished Business:
"Resolved:
That, in pa ssing upon the establishment of Branches
by 7,:errber State Banks - na Trust Conkpi.nies, w'iether
de nova or through voluntary purchase of existing
Banks, the Board will take into consideration the
need of the comrnunity for additional or improved
facilities and the effect of the establishment of
the proposed Branch on the condition of the Parent
Bank.
Resolved:
That, the Board will accept the decision of the
State Banking Department as to the nt,ed of the
corrnunity for additional or improved banking
ft!c il it ies.
?esolved:
That, the Board will not undertake to lay down any
general policy as to territorial limitations or
spheres .of influence, but will accept the policy
of* the State with regard thereto, as determined
by the State authorities."
t
)
5/22/23
-6-
Thereupon there e-nsued a discussion of the application of the Stockholders'
Auxiliary Cordoration of the Bank of Italy, to take over the SecuritS? State Bank of Ontario, California.
'Mr. Miller moved that the Board approve the application
of the Stockholders' Auxiliary Corporation of the Bank of Italy
to acquire the Security State Bank or Ontario but with definite
advice to the parties at interest that the Federal Reserve Board
if requested to approve the establishment of a branch at Ontario
will decline approval.
Mr. Hamlin moved as an amen.dment that the Board approve the
application of the Stockholders' Auxiliary Corporation of the
Bank of Italy to acquire the Security State Bank of Ontario, without prejixlice to any further action, the Federal Reserve Board may
wish to take if application is submitted to it by the Bank of Italy
for perinissi on to establish a branch at Ontario.
Mr. Hamlin's. motion being put by the chair was lost.
being called the members voted as follows:
roll
The
Mr. Platt, "aye"
Hamlin, "aye"
ss Inger, "no"
Governor
"no"
Miller,
Mr.
Mr. James, "no"
Mr. Dawes, "no"
"'he chair then put Mr. Miller's oriP;inal motion which
was lost. The roll being called, the members voted as follows:
Mr. Miller, "aye"
Mr, Hamlin, "aye"
Governor Cri ss Inger,"no"
Mr. Platt, "no"
Mr. James, "no"
Mr. Dawes, "no"
Mr. Hamlin thereupon moved the adoption of the following
"
80114 ion:
"In view of the critical situation existing at
Ontario, as attested by the Federal Reserve Agent at
San Fi.ancisco and the Superintendent of Banks of California,
the application of the Stockholders,' Auxiliary Corporation
of the Bank of Italy to, take over said Security State Bank
of Ontario, California, is hereby approved, it being under-
1
5/22/23
-7stood that this shall in no way interfere with
any future policy of the Board as to the acquisition
of branches which it nay lay down."
rr. Hamlin's motion being put b, the chair was lost on a tie vote,
the roll being celled, the members voted as follows:
Mr. Blatt, "aye"
ramlin, "aye"
rr. 'James, "aye"
qovernor rrissiner, "no"
Tr. Miller, "no" •
Mr. 17ares, "no"
At 11:45 o'clock, a recess was taken for the purpose of attending the
11."ting of the Federal Advisory Council.
At 3:00 o'clock the Board reassembled, those members being present who
0re Present at the morning Session.
AL30
7.7TTEIR PIt.EZT FOR A WEARITTG:
Mr. W. G. llicAdoo, and
]lliott, (Representing the Bank of Italy,
Mr. L.
San Francisco, California.)
1,1r. McAdoo present ed to the Board further argurne•nt s in, favor of a recoilsid e
ration by the Federal reserve Board of action previously taken, by which
the
aPplicati on of the B.n.k of Italy to establish branches at Yul a City and
S4el'alnento, California, were disapproved.
Mr. McAdoo also urged the
1311.rd• to take favorable action upon the application of the Stociv olders'
Qornoration of the Rank of' Italy to. acquire the Security State
11a-111-
Of Ontario, California, in view of the possible serious loss to the
)
I lib i
C
in Ontario, should the bank referred to be permitted tc, fail,.and this
McAdoo emphasized should be taken entirely aside from
any
V22/23
-0-
general policy which the Federal Reserve Board rirty adopt with a view to
governing and controlling the extension of branch banks by member state
banks in California.
After Yr. McAdoo and Mr. Elliott had withdrawn from the
room and full discussion of the matter had been held, Mr.
Dawes moved that the Board reconsider the action taken at
Hamlin's resolution
the morning session unuer which
morning session had
minutes
of
the
the
last referred to in
been lost on a tie vote.
Mr. Dawe's motion beng put by the chair was carried.
It was then, upon motion, voted that the following telegram be approved by the Board, and ordered transmitted to
Mr. Perrin at San Francisco:
"The Board is in receipt of your telegram of May 19th,
recommending a7praval of purchase of the Security State
Bank of Ontario by the Stockholders Auxiliary Corporation
of the Bank.of Italy, it being noted that your recommendation
and that of the State Superinten,lent of Banking is based
upon the need for prompt action of this character in order
to save disaster to the community through possible failure
of this bank. The 'Board would not wish to withhold its
consent to action thought necessary by you and the State
Superintendent of Banking to save a critical banking situation in Ontario, but at the same time I must in all frankness advise you that the Board has had some hesitation in
taking favorable action on your recommendation bece'ise it
might seem to imply a precedent permissive of extension of
the Bank of Italy into the Southern California territory.
Such extension raises questions of general policy with respect to branch banking in California which now are under
consideration by the Board but upon which conclusions have
not yet been reached. However, on full consideration of
your present recommendation and that of the State Superintenient of Banking the Board has decided to grant permission
to the Stockholders Auxiliary Corporation of the Bank of
Italy to purchase the Security State Bank of Ontario on the
distinct assent of the State Superintendent of Banking and
the Bank of Italy to an understanding with the Board that
this action on the part of the Board will not be used as a
precedent for applications for the extension of the Bank of
Italy into Southern California until the Board has settled
questions of general policy."
J
5/22/23
-9-
7'0. 1:
Dated May 17th,
13th,
19th,
Dated 1.7ay 17th, "
13th,
Dated ray 21st,
Dated ray 19th.
Dated ray 2:nd,
Dated
hay
2nd,
7ecorrnending changes in stock at Flederal eserve Prinks, as
setforth in the :_uxiliary -inute Pook of this date.
Appr oved
riecommendinP: action on applications for fiduciary powers as
date.
set forth in the 27.u):11ia.ry 7'1/lute 7,00k of
Approved.
7. P. 7)ins.17 ecommencling approval of the application of l'r.
?irst
the
of
director
more to serve at the same time as
7'atione1
-l_rst
the
of
and
772tional rank of Oakland, -al.,
Panic of .conr;ord,
2,pproved.
John 1. 'troves
1P,e,c(rinendin', approval of the application of Fr.
'Tational
T)rowrs
the
of
director
as
time
to serve at the crntme
City,
7ransr_s
To.
of
1)oth
rompany,
Trust
Panic, the Commerce
Approved.
I'ecomrnend ing approval of the application of Yr. John ..4 0 Carroll
to serve at the sar.f, time as Director and. president of the
ryde Park State Panic, the South Shore State 'rank, and the
Jackson .Park 7:ationaa Panic, all of f'hicago, Illincis.
Approved.
J.
eccrnmenclin, approval of the application of hr.
Jackson
the
of
T)irector
as
time
Pringle to serve at the same
'ark 'rational rank, the ITyd_e 'ark State Tank and of the South
3hure S`tate lank, all of rhica.go, Illinois.
Approved.
The meeting adjourned at 5:1b
Secret- ry.
@FedFRASER