Full text of Minutes of the Board of Governors of the Federal Reserve System : Meeting Minutes, November 10, 1925, Volume 12, Part 2

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A meeting of the Federal Reserve Board was held. in the office of
the Federal deserve Board on Tuesday, November 10, 1925, at 11:15 a.m.
PRESENT:

Governor Crissinger
Mr. Platt
Mr. Hamlin
Mr. Miller
Mr. James
Mr. Cunningham
Mr. Eddy, Secretary

The minutes of the meetings of the Federal Reserve Board held on
October 27, 28 and on November 4 were read and approved.
The minutes of the meeting of the Federal Reserve Board held on
November 6 were read and approved as amended.
Matter approved on initials on November 9th, namely, application
of the New First National Bank in Santa Paula, Cal., for original stock
(150 shares) in the Federal Reserve Bank of Si Francisco, effective if
414 when the Comptroller of the Currency issues a certificate of authority

to

cOmmence business.
Formally approved.
Matter approved on initials on November 9th, namely, application

Of the First National Bank in Sulphur Sprins.s, Texas, for original stock
(90 shares) in the Federal Reserve Bank of Dallas, effective if and when
the Comptroller of the Currency issues a certificate of authority to comInelace business.
Formally afproved.
Matter approved on initials on November 7th, namely, application of
Ilr e Harry C. Whitehead for permission to serve at the same time as director
°f the peoples Bank and Trust Company of Passaic, N.J. and as director of
The American National Bank of Passaic.




Formally approved.

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The Governor then presented a letter dated November 9th, from
the Governor of the Federal Reserve Bank of Cleveland, advising of the
action of the board of directors of that bank in voting to withdraw their
rec ommendation, transmitted to the Board under date of October 9th and
lati on the table by the Board at its meeting on October 10th, to establish a rediscount rate of 0 3/4 per cent on all classes of paper of all
Maturities, subject to the approval of the Board, and in voting to recommend
illstead the establishment of a flat rate of 4

per cent.

of
After discussion, during milich it was the concensus
on
e
opinion that the rate, if approved, should be effectiv
be
matter
Tuesday, November 17th, Mr. Hamlin moved that the
on
held
made special order of business for a meeting to be
Monday.
After further discussion, 11r. platt moved as a substitute,
that the recommendation of the board of directors of the
Federal Reserve Bank of Cleveland for an increase in the rediscount rate of that bank from 3 1/2 to 4 per cent on all
classes of paper of all maturities, be approved at this time
effective Tuesday, November 17, 1925 and that announcement of
the change be made at the close of business on Monday, November
16th.
Mr. Platt stated he offered this motion in view of the
fact that both Governor Crissinger and Mr. James expected to
leave Washington to be gone for a period of several days.
Mr. Miller stated that while he was in favor of the
increase, he did not believe it should be approved by the
Board so far in advance of the date on which it is to be
made effective, and that if Mr. Platt's motion was voted on
today, he would be compelled to vote against it.




Yr. Hamlin concurred in this statement.
Mr. Platt's substitute motion, being it by the
Chair, was carried, the members voting as follows:
Governor Crissinger, "aye"
Mr. Platt, "aye"
Mr. James, "aye"
Mr. Cunningham, "aye"
Mr. Hamlin, "no"
"no"
Mr.

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11/10/25
Bond of Richard L. Austin, Federal Reserve Agent at Philadelphia
in the amomt of ,100,000.
Approved.
3ond of Arthur E. Post, Assistant Federal Reserve Agent at
Philadelphia in the amount of :1,;50,000.
Approved.
Report of Committee on Salaries, Expenditures and Efficiency on
letter dated November 9th from the Comptroller of the Currency, recommending approval of a salary of ,;3,000 per aux= for National Bank Examiner
Leo Shapirer (Junior Grade), to be assigned to the Twelfth Federal Reserve
D istrict; the Committee also recommending approval.
Approved.
Letter dated November 4th from the Assistant Federal Reserve Agent
at San Francisco, advising that the Bank of Sausalito, Sausalito, California,
on October 24th opened the branch at Tiburon-Belvedere, approved by the
Beard on November 19, 1924.
Noted.
Report of Committee on Examinations on letter dated October 31st
fl'om the Assistant Federal Reserve Agent at Chicago, transmitting and
'
l ec ommending approval of an application of the Northwestern National
anks Milwaukee, Wis., for a reduction in its reserve requirements from
14V to 7/;
) on demand deposits; the Committee also recommending approval.
Approved.
Report of Committee on Examinations on letter dated October
3°th from the Assistant Federal Reserve Agent at San Francisco, transmitting




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I/
and recommending approval of an application of the First National Bank,
Venice, Cal., for permission to continue to carry reserves of 7, instead
Of 10, on demand deposits when Venice is consolidated with the reserve

City of Los Angeles; the Committee also recommending approval.
Approved.
Report of Committee on Examinations on letter dated October 30th
from the Assistant Federal Reserve Agent at San Francisco, transmitting
and recommending approval of an application
of the Wilshire National
Ballk, Los Angeles, for a reduction in its reserve requirements from
107
0

o 7/0 on demand deposits; the Committee also recommending approval.

•

Approved.
The Governor then presented copy of a letter addressed to the

Director of the Budget, in the form approved by the Board at the meeting

°11 November 4th, with reference to the estimated expenditures of the
Board during the fiscal years 1926 and 1927.
Noted, with approval.
Memorandum from Counsel submitting draft of a letter to the Federal
"leserve Agent at Minneapolis, with reference to the question whether a
Person who has been nominated Class B director of the Federal Aeserve Bank
°f Minneapolis While serving as officer of a national bank may be validly
elected and take office as Class B director if he resigns his position
with the national bank prior to the time of election but his resignation
is not actually accepted by the bank until after the election; the pro'
po sed letter stating that technically a person who is ineligiole to serve
as Class B director at the time of his nomination or election because of his




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11

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11/10/25

connection with a bank, may, if he severs this bank connection before

his induction into office, validly assume the duties of Class B director
ani hold office for his regularly elected term.
After discussion, action on the opinion of
opinion
Counsel was held pending his rendering an
to the Board as to whether or not the Board has
power under the law to declare a candidate for
Class B directorship ineligible at the time
of his nomination if it appears from evidence
the
satisfactory to the Board that the intent of
y
specif
'provisions of the Federal deserve Act which
are
the qualifications for Class B directorship
being technically, but not in spirit, complied
with.
Liberty National
Letter dated November 9th from the President of The
Bank in New York, requesting approval by the Board of the application of
that bank for permission to exercise general fiduciary powers, which arpliMarch 19,
cation was rejected by the Board on October 7, 1924, and again on
institution
1925; the latter commenting on the general condition of the
an. action taken to meet the previous objection of the Board regarding
tr
usteeship of stock.
above
Upon motion, it was voted to refer the
York
New
at
Agent
e
Aeserv
l
letter to the Federa
should be
for his recommendation as to what action
taken by the Board.
meeting of
The Secretary then refereed to the fact that the next
ed
the Federal Advisory Council would be held on November 30th, and inquir
considered by the Council
48 to the topics which the Board wished to have
at that meeting.




the question
Upon motion, it was voted to refer
l to the
of topics for the Federal Advisory Counci
Board.
the
of
tee
Executive Commit

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Letter dated October 31st from the Chairman of the Committee on
Banking and Currency of the House of Representatives, quoting a letter
from a Pennsylvania banker suggesting the extension from 15 to 90 days of
the maturity of member bank collateral notes eligible for discount by
Federal Reserve banks.
After discussion, it was voted to refer
the above matter to the Law Committee for
the preparation of a form of amendment to the
Federal Reserve Act.
Mr. James stated that if he were not present
at the meeting at which this matter comes up he
wished to express his approval of the recommendation of the Governors and Federal Reserve Agents
that member banks be p3nmitted to discount their
own promissory notes at Federal Reserve banks
running for a period of not in excess of 90 days
secured by paper in itself eligible for rediscount. He also stated that he would be in favor
of vesting in the Federal Reserve Board authority
to regulate or limit the extent to which member
banks could use this method of borrowing from
reserve banks.
Memorandum from Counsel, submitting a letter dated November 3rd
from the Federal Reserve Agent at Boston, with reference to the application
Of 111r. E. B. Aldrich for permission to serve at the same time as director
Of the
Industrial Trust Company and the National Exchange Bank, both of
Providence, R. I. and stating that in his opinion there is no substantial
competition between the institutions involved.




Messrs. Hamlin and Platt, members of the Law
Committee reported verbally that in view of the
statement of the Federal Reserve Agent at Boston,
they were prepared to recommend approval of Mr.
Aldrich's application, without the necessity of
a further hearing on the subject.

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2.1r. Hamlin then moved approval of Mr.
Aldrich's application for permission to
serve at the same time as director of the
Industrial lrust Company and the National
Exchange Bank.
Unanimously carried.
Menorandum from Counsel submitting draft of a letter to the Federal
Reserve
Agent at Boston, approved by the Law Committee, with reference
to the

classification of the firm of Tucker, Anthony & Company as "private

banIters" within the meaninf7 of Section 11 (k) of the Federal Reserve Act,
ill connection with the application of Yr. W. H. Claflin, Jr., a member
Of that
firm, for panmission to serve at the same time as a director of

the Second National Bank of Boston; the proposed letter stating that the
firm does not come within the Board's definition of the term "private
bankers" and it will, therefore, be mmecessary for Mr. Claflin to obtain
13er11iss1on to serve the Second National Bank unless he is serving also
8°Me othEr bank or banks which would bring him within the prohibitions
Of the
Clayton Act.
Upon motion, the proposed letter was
approved.
Memorandum dated November 6th from Counsel, with reference to the
aPPlication filed with the Board by 1,:r. Paul Klopstock and others, re44esting reservation of the title "First Federal Foreign Investment Trust",
for use by a corporation which it is contemplated will be organized under
Section 25 (a) of the Federal deserve Act; the memorandum setting forth

the general character of the business which the corporation proposes to




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conduct and reasons which in the oninion of Counsel may actuate the
organizers in seeking a Federal instead of a State charter for the proposed organization.
Ordered circulated and docketed for a
future meeting of the Board.
Matter ordered circulated at the meeting on October 5th,

namely,

Memorandum dated September 29th from Counsel, with reference to an inquiry
made by the Federal Reserve Bank of Minneapolis whether eggs and dressed
Poultry when shipped in refrigerator cars may be considered non-perishable
rcaaily marketable staple agricultural products which may be made the basis
of sight drafts eligible for rediscount ar purchase at Federal Reserve banks
Under the provisions of.Section 13 of the Federal Reserve Act.
After discussion, Counsel was instructed to
confer with the Department of Agriculture and
obtain an expression of views from officials of
the Department as to the perishability of eggs
and dressed poultry in transit.
Counsel was also instructed to consult with
regarding the perishability of
Department
the
which the Board has already
storage,
potatoes in
within the meaning of Section
non-perishable
ruled
Act.
the
of
13
Upon motion, it was voted that the Board at its next meeting should
consider the report of the Chairman of the Open Market Investment Committee
for the Federal Reserve system, submitted at the time of the recent Governors'
Collference.
-1,11...9iT2s OF STANDING COnlITTEES:
Dated, November 9th,




Aecommending changes in stock at Federal 'Reserve Banks,
as set forth in the Auxiliary Minute Book of this date.
Approved.

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OaTS OF STANDING COMMI22M: (Conttd)
Dated, November 7th,
10th,

Dated, November 3rd,

Dated, November 9th,

ecommending action on applications for .fiduciary
pov.ers 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.
Ordered held.
Aecommendiag approval of the application of
J. H. Hillman for permission to serve at the same
time as Chairman of the Board and director of the
Peoples Savings and Trust Company of Pittsburgh, as
director of the First National Bank at Pittsburgh
and as director of the Colonial Trust Company of

Pittsburgh.
Approved.
Dated,
ing approval of the application of Mr.
Aecommend
9th,
November
C. C. Taylor for permission to serve at the same
time as Vice President-Cashier and director of the
First National Bank at Pittsburgh, as Vice President
and director of the Oakland savings and Trust Company
of Pittsburgh and as director of the Colonial Trust
Company of Pittsburgh.
Approved.
Dated, November 10th, Recommending approval of the application of 'Jr.
Henry H. Rolapp for permission to serve at the same
time as director of the Deseret National Bank of
Salt Lake City, Utah and as director of the First
Utah National Bank of Ogden, Utah.
Approved.
Dated, November 9th, /ecommendiag approval of the application of Mr.
N. B. Feagin for permission to serve at the sane
Bank of
time as director of the Security Nation
Am
the
of
'can
director
as
National
and
Okla.
"Allsa,
Okla.
Ardmore,
Bank of
Approved:

A
pproved: