Full text of Minutes of the Board of Governors of the Federal Reserve System : Meeting Minutes, November 20, 1923, Volume 10, Part 2

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A meeting of the Federal Reserve Board vas held in the office
Of the Federal Reserve Board on Tuesday, November 20th, at 12:30 o'clock.
PRESENT:

Vice Governor Platt
Br. Hamlin
Mx. Miller
Ur. James
Mr. Cunningham
Mr. Eddy, Secretary.

The minutes of the meeting of the Federal Reserve Board held on
November 14th were read and approved.
Letter dated November 15th, from the Comptroller of the Currency,
IseooMmending an increase in the salary of rational Bank Examiner Orville
4, Griffey from .:;4500 to 05500 per annum.
Approved.
Letter dated November 17th, from the Comptroller of the Currency,
lieea-acalding a salary of ,;,3600 per annum for rational Bank Examiner H. A.
801110tzhauer, assigned to the Ninth Federal Reserve District.
Approved.
Letter dated November 19th, from the Federal Reserve Agent at
P4i1ade1phia, requesting the Board's permission to purchase from the
Ileellatics National Bank of Trenton, New Jersey, ,402,000 of warrants
talked by Mercer County, New Jersey, the amount being in excess of 25-,,;
of the total outstanding warrants of Mercer County.
Upon motion of Mr. James, the purchase was
approved.
Memorandum dated Novamber 19th, from Counsel, submitting draft
Of 1etter to the Vice President
of the International Banking Corporation,




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New York City, replying to his letter of November 17th, and approving

the election of Mr. G. Edwin Gregory as a director of the Corporation.
Upon motion of Mx. Hamlin, the proposed letter
international Banking Corporation was approved.
the
to
Letter dated November 16th, from Mr. Kenzel, Chairman of the Peneicvn Committee, advising that at the recent Governors' Conference,
4overnors Fancher and McDougal and himself were appointed as a committee Of the Conference to wait upon the Federal Reserve Board and give

the Board any assistance desired with respect to the matter of the
Droposed pension plan and stating that the committee is at the service
of the Board.
Upon motion, the Secretary vas instructed to
communicate with the members of the committee and
inquire whether alesday, December 4th, will be a
convenient date for the Committee to meet with the
Board, for a discussion of the pension plan.
Letter dated November 17th, from Er. E. R. Ebnzel, Deputy Governor
Of the Federal Reserve Bank of New York, with reference to the circumstanc es mhich led to the withdrawal from membership of the Bridgeport
111.18t

Company, Bridgeport, Connecticut.
Noted,
Letter dated November 13th, from the Secretary of the Federal Ros-

elle Bank of Cleveland, requesting approval of the action taken by the
Beard Of Directors of that bank on November 9th, in voting the payment




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Of the regular semi-annual dividend; there being attached thereto a
rn:emorandum from the Board's Division of Bank Operations, advising that
the condition of the Federal Reserve Bank warrants said dividend pay-

Upon motion of :Ir. Hamlin, payment of the
dividend above referred to was approved.
The Committee on Cuba reported on the :atters referred to it at
the Meeting on November 14th;
(1) Letter, dated November 12th, from the Deputy
Governor of the Federal Reserve Bank of .iLtlanta, replying
to the Board's letter of rovember 5th, with reference to
unofficial advice received that the Cuban Treasury Department had inquired of that Bank's Cuban Agency Whether dr
not it would redeem United States currency.
(2) Letter, dated rovember 12th, from the Deputy
Governor of the Federal Reserve Bank of Atlanta, replying
to the Board's letter of November i)th, regarding the alleged action of the I4anager of the . Havana .Agency of th
Atlanta bank it 4uoting a rate of ;4.00 per thousand to
the Havana office of the 17itional City Bank for the sale
Of a cable transfer to be paid for in gold.
?he Committee reported that the matters in question had been adillated after conference between the Governors of the Federal Reserve
Baliks of Atlanta and Boston.
Upon motion, the report of the Committee on
Cuba v:as accepted.
Report of Committee on Examinations on matter referred to it at the
ITle°tillg on rovember 14th, namely, letter dated November 9th, from the
Ase•
istant Federal Reserve Agent at




an Francisco, transmitting and recom-

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Mending approval of the application of the Italian-Amrican Bank of
'
)
an Francisco to take over the Columbus 6avings and Loan'Society of
sA
-n Francisco, and to establish a branch in its premises; the Committee
liecommending ap-oroval following a discussion of the altter wlth the
Governor and Chairman of the Federal Reserve Bank of 3an Francisco,
The application having been approved on November 16th, by the initials of six members of the
Board, that action was,upon motion, ratified.
Letter dated November 16th, from the Chairman of the Federal
4eserve Bank of New York, reuuesting approval o

the action of the

hoard of Directors of that bank, taken on October 24th, in voting
that a special payment of salary be :.o.cle at Christmas time to all
ellIployees on the payroll of the bank on December 19, 19-3; payment
to be on the same basis as last year, namely, 5

on the actual salary

received during the year; no payment to exceed .‘,125 and no employee
lieeelvinc;a salary exceeding 5,000 to receive the payment; minimum
MY:riont to be „;15.00.
Referred to Committee on Salaries and 2xrenditures.
At this point, Lir. Jawes entered the meeting.
Telegram, dated November 19th, fram the

ssistant Federal 2eserve

42:e1t at San Francisco, advising that the Pacific Southwest Trust and
247illOs Bank has renewed and requests immediate consideration of its
41)Plioati,n to take over the Pioneer Bank of Porterville and to estLblish
13 aliches at ,
)orterville, .1,x,eter and Strathmore; calling attention to 2av-




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(I1ab1e reconnendation contained in the Federal Reserve Agent's letter
Of July 16th.
Referred to Committee on Examinations.
Telegram dated November 19th, from the Assistant Federal Reserve
4gent at San Francisco, with regard to the condition of the First National Bank of Parlier, California, and recommending the tentative approval
°f

the application of the Bank of Italy to take over the First National

138-11k of Parlier and establish a branch.
Referred to Comittee on "Examinations.
Telegrams dated Novatber 19th, exchanged by Governer Crissinger
wiV4 the Assistant Federal Reserve Agent at San Francisco, with regard
to the
applications of the Bank of Italy for permission to establish
branches at Long Beach, Watsonville and Santa Maria, said applications
having been withdrawn from consideration on October 3rd.
Referred to Committee on :&caminations.
Mr. Platt submitted letters dated November 9th, 13th and 14th,
addressed to the Federal Reserve Agent at Boston by the President of the
Industrial Trust Company, Providence, Rhode'Island, and by Congressmen
°Connell and Burdick of Rhode Island, with reference to the policy recent1Y
adopted by the Federal Reserve Board with respect to the extension of
141tnoh banking by members of the Federal Reserve System,
Ordered circulated and referred to the
Condittee on Examinations.
In accordance with the instructions of the Board at its meeting
Zovember 6th, Mr. Hamlin, in behalf of the Law Committee, submitted.



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a

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memorandum dated. Novanber 16th, from General Counsel containing a history

Of

the enrployment of Mr. James W. Cannalt as special counsel in connection

with the presentation to the Interstate Connerce Commission of the natter
Of

the revision of express rates on money and securities.
After discussion, Mr. Hamlin moved that the expenses of witness fees, etc., be not taken out of the
compensation for legal services aoproved for Mr. Carmalt;
stating that a lawyer can not properly agree to pay court
costs, including witness fees, etc., from money received
by him in payment of legal services.
Carried, Mr. Miller not voting.
With respect to the action of certain officers of
the Federal Reserve Bank of New York in arranging for the
employment of Mr. Carr-mit, it was,voted that the Secretary
be instructed to iftquire of Jr. Rounds, Secretary of the
Board's Committee on Economy and IlIfficiency, concerning the
accuracy of the following statement contained in the letter
of November 7th from Mr. Mason, Counsel of the Federal Reserve Bank of New York, to Board's General Counsel: "before
any negotiations were had with Mr. Carmalt, Mr. Rounds advised. us that the Board's Committee on Economy and .r;fficiency
had given authority at a meting held in July for the employment of special counsel to conduct this case before the cornmission***"; and fkirther, in the event that the statemeat
• contained in Mr. Mason's letter is found to be correct, the
Secretary be instructed to inquire of Mr. Rounds under what
or whose authorization the aforesaid statement was made.
Mr. James submitted a report of the Conmittee on Examinations, dated

17Clember 17th, as follows:
"71EREAS, it has come to the attention of the Committee
on Examinations that while in the Twelfth District applications
for admission to the Federal Reserve System made by state banks
are reviewed by a committee consisting of a Federal Reserve Agent,
the Governor, and one Class "A" Director, anplications for extensions by the establishment of branches, or for other modifications
in the conditions of membership, are not reviewed by that committee
or formally presented to the Directors for their consideration;
-.
"THEREVOIE, be it resolved, that the Committee on ..aminall
that
recomnrndation
a
make
ations recommends that the Board
of
memberconditions
of
applications for branches, modification




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-7"ship, etc., be submitted to the Board of Directors of
the Federal Reserve Bank of San Francisco or to the
committee which passes on original applications for
membership for their consideration and recoramenlation,
and that the views and recommendations of the Board or
such committee, as well as those of the Federal Reserve
Agent be comunicated to Federal Reserve Board in each
case".
qpon motion of Er. James, the report of the Committee
on htcaminations was adopted.

Mr. Hamlin, on behalf of the Committee on Branches, reported verbally
on a letter dated November 8th, from the Deputy Governor of the Federal Reserve Bank of Chicago, requesting to be advised whether the Board is now will-

ite

to allow Federal Reserve banks to proceed with plans for buildings which

have been deferred and thether they may have the Board's permission to take
the

necessary steps toward the erection of a suitable building for their

Detroit branch.
Mr. Hamlin moved that the matter be handled in
the same manner as several other recent applications,
and that the Federal Reserve Bank of Chicago be advised that the Board has ordered a complete and exhaustive study of Federal Reserve branch banks, in
order that it may determine whether the establishment
and continuance of said branches are justified, and
that pending this investigation the Board will decline
to pass on farther applications, either for buildings
or new branches.
Carried.
a/ZDT3_OF

Sr2._;.1-DETG COLILITT32S:

bat ea,

rovamber 14th, Recommending changes in stock at Federal Reserve
15th, Banks, as set forth in the _Auxiliary Minute Book
of this date. ,
Approved.
13ateal
approval of the application of Mr.
RecommendinL;
15th,
rovadber
George A. Kennedy to serve at the same time as
Vice President of the First rational Bank of San
Francisco, Cal., and as director of the First
rational Bank of Sausalito, Cal.
Approved.
batea, rovadber 16th, Recommending approval of the application of 1.1r.
7/. P. 77oodruff to serve at the same tim as directoi•
of the Rockford Eational Bank of Rockford, Ills., of
the Broadway Eational Bank, Chicago, Ills, and of the




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ORT' OF

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MING COEUITTEES: (Conttd)
Franklin Trust and Savings Bank, Chicago, Ills.
Approved,

Dated,

November 14th, Recommending ap,roval of the application of Lire
i. P. Vandiver to serve at the mule time as President and director of the Carolina National Bank
of Ariderson, South Carolina and as director of the
Norwood National Bank of Greenville, South Carolina.
Approved.

The meeting adjourned at 1:10

Secret ax'
APPrOved;




Vice Governor.