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344 A meeting of the Federal Reserve Board was held in the office of the Governor on Friday, November 19, 1926 at 12:30 p.m. PMSENT: Governor Crissinger Mr. Platt Mr. Hamlin Mr. Miller Mr, Cunningham Mr. Eddy, Secretary The reading of the minutes of the meetings of the Federal Reserve Board held. on November 9th and 10th, and the meeting of the Executive Cominittee held on November 17th was dispensed with. Telegram dated November 17th from the Chairman of the Federal Reserve Bank of Boston, advising that the board of directors on that day made no change in the bank's existing schedule of rates of discount and purchase. Noted. Telegram dated. Novel-3par 17th from the Chairman of the Federal Reserve Bank of Philadelphia, advising that the board of directors on that day made no change in the bank's existing schedule of rates of discount and purchase. Noted. Telegram dated November 18th from the Secretary of the Federal Reserve 8411. 1c of San F;ancisco, advising that the board of directors on that clay made 11° °I-wage in the bank's existing schedule of rates of discoint and purchase. Noted. Letter dated November 18th from the Secretary of the Federal Reserve 1341311t of New York, advising that the board. of directors on that day made no °hate° in the ba:ak's existing schedule of rates of discount and purchase. Noted. 345 11/19/26 -2- Memorandum dated November 17th from the Acting Director of the Division Of Research and Statistics, recommending the permanent appointment as statisti- Cal clerks in the Division at salaries of 41560 per annum each, effective December 1, 1926, of Mrs. 2. Bess Hamilton and Mrs. Kathleen B. Perry, who have been engaged in temporary work with the Division since April 19, 1926. Approved. Bond of Mr. Curtis L. Mosher, Assistant Federal Reserve Agent at Llinneapolis, dated November 5, 1926 in the amount of i100,000. Approved. Letter dated November 18th from the Assistant Federal Reserve Agent at Philadelphia, requesting the designation of "Ir. Charles B. Flood of the Currency Department of the bank to assist examiners in a pending examination °f a large out-of-town state member bank. Approved. Letter dated November 10th from the Assistant Federal Reserve Agent at Cleveland, advising of a request of The Citizens Trust and Savings Bank, Columbus, Ohio, for an extension of six months in the period in which it 14aY open the branch approved by the Board on May 25, 1926 for the corner °f Main Street and Ohio Avenue, as well as for permission to change the location of the proposed branch to Main Street near Miller Street, about 84 blocks east of Ohio Avenue. Upon motion, it was voted to grant the extension requested and also to approve the change in the location of the proposed branch. Memorandum dated November 18th from the Chief Clerk advising that the Board has on hand approximately 850 copies of its index Digest of the 346 11/19/26 _3_ Federal Reserve Act (1924 Edition), for which there is a very limited demand, 404 suggesting that a satisfactory disposition of a good part of the supply might be effectel by forwarding a copy to each of the universities and colleges ,noy, on the Board's complimentary mailing list for the Federal Reserve Bulletin. After discussion, it was voted to approve the above suggestion. Memorandmn from Counsel dated November 13th, prepared in accordance with the action of the Board at its meeting on November 9th, with reference to the reserve requirements of member banks in the various boroughs of the city of New York. Ordered Circulated. Report of Committee on Examinations on letter dated November 11th from 1/ the Assistant Federal Reserve Agent at New York, transmitting an application Of The Americaa Exchange-Phcific National Bank, on behalf of The American P4Echange-Pacific Bank, a conversion of the former institution, for permission to accept drafts or bills of exchange drawn upon it up to 100,; of its paid-in capital and surplus; the Assistant Federal Reserve Agent stating that the "Aversion became effective at the close of business on November 8th and z ecortimending that the permission requested be made retro-active to the time ' Of conversion. Upon motion, it was voted to authorize The American Exchange-Pacific Bank to accept up to 100% of its paid-in and unimpaired capital and surplus, effective November 9, 1926. Memorandum from Counsel dated November 10th with reference to the apDlication of Mr. B. Volk, Jr. for permission to serve upon the directorates Of the Union National Bank and the Peoples City Bank, both of McKeesport, Pa.; 347 11/19/26 -4_ Counsel submitting draft of a letter to the Federal Reserve Agent at Clevelani advising that on the basis of all the evidence before the Board in connection With Mr. Volk's application, the banks involved are in substantial competition aId, the Board is, therefore, without authority under the law to grant the application, it accordingly being necessary for Mr. Volk to sever his connection with one of the banks. Upon motion, the proposed letter was approved. Memorandum from Counsel dated November 9th, mgarding a conference held on November 5th with reference to the Clayton Act applications of Mr. 8ruce F. 7ailey and certain other gentlemen, involving the Terre Haute Rational Bank and the United States Trust Company, both of Terre Haute, Illds; Counsel suomitting draft of a letter to the Federal Reserve Agent at Chicago advising that because of negotiations now pending for a consolidation °f the banks, and in view of certain other important information developed at the conference, the Board will not insist that Mr. Failey or the other gentlemen involved resign at once from one of the banks, but that it is Understood that the Board will be advised not later than the 4th of March, Ilext, as to what definite arrangements have been made for the consolidation, at which time it will take such action as appears proper under the circumstances to secure compliance with the law. Upon motion, the opposed. letter was approved. Letter dated November 16th from the Deputy Governor at the Federal allisrve Bank of New York, transmitting copy of a letter to the Governor 348 11/19/26 -5- of the Finlands Bank, advising of the appointment of that institution as agent and correspondent of the Federal Reserve Bank and setting forth terms and conditions under whiCh the Federal Reserve bank will handle transactions for its account. Ordered circulated. Letter dated September 21st, addressed to the Secretary of the Treasury bY the Secretary of State, with reference to the continuation and proposed consolidation of the branches in Havana, Cuba of the Federal Reserve banks Of Boston and Atlanta. Ordered circulated. Draft of reply to letter dated November 16th from the Postmaster Of the District of Columbia advising of a suggestion that Federal Reserve notes pouched at the Bureau of Engraving and Printing for dhipment through the mails be delivered direct to the main postoff ice in ":ashington instead Of to the branch postoff ice located in the Treasury Building as is now the Practice; the proposed reply stating that the suggestion seems to be a good °Ile and should work to the advantage of both the Postoffice Department and the Federal Reserve banks, in that the responsibility attaching to the Postand the risk incurred by the insurance companies through transportstiola of the currency through the streets of 77adhingtonwould be eliminated and the Board should be able to effect earlier dispatch of currency from Washington. After discussion, the proposed reply was referred to the Governor With power. Llemorandam from the Secretary dated November 12th, with reference to an , . 4quiry made by the Governor of the Federal Reserve Bank of Minneapolis, 349 11/19/26 -6- at a conference with certain mmbers of the Board on November 12th, as to Whether the Board would object to the Federal Reserve Bank of Minneapolis Making a charge in connection with its safekeeping function if the Board Of dir3ctors of the bank decides to take such action. Ordered circulated. Memorandum from Counsel dated November 5th, submitting draft of reply to letter dated October 30th from the Federal Reserve Agent at Atlanta, with reference to the inability of the Union Bank and Trust Comany of Baton Rouge, La., which has withdrawn from membership in the Federal Reserve System, to surrender its certificate of membership which has been lost; the proposed reply stating that since it appears that the certificate of the Union Balik 44a 12rust Company has been lost it will not be necessary for the Federal '..eserve Agent to take any further steps toward its surrender other than to request the bank to forward the certificate if it should be found. Upon motion, the proposed reply was approved. ordered circulated at the meeting on November 9th, namely, .latter Illemorandum from Counsel dated October 23rd with reference to the report °f the General Committee on Bankers Acceptances which the Governors' Conin March, 1926, voted be approved and recommended to the Board; the report consisting principally of a statement of the broad general prineiPles of correct practice in the granting of domestic bankers acceptance I °I'eclits, but recommending that the use of domestic acceptances be broadened, Particularly in two respects; 1. To permit the purchaser of goods under bankers acceptance credits to draw bills having a maturity con- 350 11/19/26 -7- sistent with the usual and customary credit time that obtains in the relative trade, instead of requiring the shipper to draw the bill if it has a maturity in excess of the actual transit time of the goods. 2. To permit the use of bankers acceptances secured by "independent converter's receipts" covering readily marketable staples to finance the carrying of certain staples during the time they are being converted into other forms of staples through a converter independent of the drawer, provided that the identity of the goods is not lost and the accepting bank remains secured by the independent converter's receipt. After discussion, it was voted to request the views of the Federal Advisory Council, which is now in session, on the two recommendations above referred to. Letter dated November 15th from the Deputy Governor of the Federal ileserve Bank of New York, stating he has been advised by the Chief of the Beard's Division of Bank Operations that if and when the Federal deserve b4alc first purchases bills under the credit recently extended the National 844k of Belgium, the Board might make some comment in the analysis of its %leeklY statement of condition of Federal ileserve banks, mentioning not only the fact that the National Bank of Belgium has sold the bills, but also the 4111°114t; the Deputy Governor setting forth certain reasons why it is not belie ved necessary or advisable to publish the fact that the National Bank of 11,''tum may have used its credit or to what extent, either in the analysis f the Board's weekly statement or in the Federal Reserve Bulletin. There- 11D°/1 ensued a discussion of the action of the Board at the meeting on October Eith • ln authorizing the incorporation in'the analysis of the weekly statement f°110win--; the first purchase of bills from the National Bank of Belgium of a 351 11/19/26 -8- statement that "The Federal Reserve banks made the first purchase of bills under the credit recently established for the 1Tat;ionaI Bank of Belgium on (date). The amount of the bills purchased, , is included with other 'Bills bought in open markett." Following the discussion, it was voted that the form of statement authorized by the Board on October 26tli be used, with. the elimination of the amount of bills purchased. REPT oF azii,NDING COMMITTEE,: Dated, November lath, Recommending changes in stock at Federal Reserve 19th, banks, as set forth in the Auxiliary ilinute Book of this date. Approved. Zhe meeting adjourned at 1:15 p.m.
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