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361 Board was held in the office of the meeting of the -Federal :2ederal _.ieserve Board on Wednesday, November 24, 1926 at 11:00 a.m. • Goverwr Crissinger • Platt • Hamlin :Cr. Ounninghaa :.:.r. Eddy, 6ecrJtary • L1cClelland, Asst. 3ecretary The minutes of the meetin,,s of the Federal ,eserve Board held on November 9th and the afternoon of November 10th were read and approved. The minutes of the meeting of the 1:xecutive Committee held on November 17th were read and uoon motion the actions recorded there in Were ratified. The minutes of the meeting of the Federal _teserve Board hold on November 19th were read and ayoroved, as amended. The minutes of the meetinF;s of the Federal ,eserve Board held on :rovember 22nd were read and approved. Telegram dated November 19th from the Chairman of the Federal :bserve Bank of Chicago, advising that the board of directors at their fleeting on that day made no change in the bank's existing schedule of rates of discount and purchase. Not ed. Telegrah-, dated November 20th flIDM the Secretary of the Federal :ieserve Bank of :Anneapolis, advsing that the board of directors at their meeting on that day made no change in the bank's existing schedule 01' rates of discount and purchase. Noted. 11/24/26 -2- Bond. of Ur. John G. Fry, Assistant Federal Reserve Agent at the Federal Reserve Bank of Richmond, dated November 20, 1926, in the amount c350 000• Approved. Memorandum from Counsel, dated November 22nd, on letter dated November 20th from the Cashier of the National City Bank of New York, requesting permission of the Federal Reserve Board under the last paragraph of Section 25 of the Federal Reserve Act for Mr. H. T. S. Green to serve at the same time as Vice President of the National City Bank and as President, General Manager and director of the International Banking CorPoration; Counsel stating that inasmuch as the National City Bank has invested in stock of the International Banking Corporation the requirements Qf Section 25 are complied with, and he knows of no legal reason why the 130ard should not grant the request made on behalf of Mr. Green. Upon motion, it was voted to permit Mr. Green to serve at the same time the two institutions referred to. At this point, Mr. Wyatt entered the meeting and stated that the Board today received from Messrs. Shearman and Sterling, attorneys for the National City Bank of New York, an application on behalf of that bank t°r permission to establish a branch in the Philippine Islands, with its office in Manila and with a sub-branch, agency or office in Cebu. lie discussed with the Board certain complications in the way of Philippine ) law and stated that there might be complications because of policies of the 11E1al Departnent of the United States, in view of which the Board might not 363 11/24/26 -3- Wish to comply with a request of the National City Bark for immediate action on its application. Following the discussion, Mr. Miller moved that before the Board acts on the application, the Governor address a letter to the Secretary of War advising of the receipt of the application, and stating that before acting upon it the Board requests that it be advised whether the establishment of a branch in the Philippine Islands by a national bank would in any way contravene the laws of the Philippine Islands, or whether he Imoras of any consideration of policy which would render the granting of such application inadvisable at this time. Mr. Miller's motion being put by the Chair was carried. The Governor then submitted draft of a reply to telegram dated November 24th from the Chairman of the Federal Reserve Bank of Chicago, advising that the First National Bark of Britt, Iowa, which cast a vote in the present election of directors, has since closed and inquiring whether this ballot should be counted.; the proposed reply stating that every ballot cast in accordance with the law by a member bank which was a going concern at the time the vote was cast must be counted, and no change in the status of the member baaak which takes place subsequent to the casting of the ballot can affect the legality of such ballot. Upon notion, the proposed reply was approved. Memorandum from Counsel dated November 18th submitting draft of reply to letter from Mr. W. D. 'iloolwine, with reference to his service upon the airectorates of the Merchants National Tru.st and Savings Bark, The California Dank, and the Security Trust and Savings Bank, all of Los Angeles, California; the proposed reply stating that if he desires to can.tinue upon these three 364 11/24/26 -4- directorates it will be necessary for him to MGM: a new application to the Federal Reserve Board. Upon motion, the proposed letter was approved. Letter dated November 22nd from the Assistant Federal Reserve Agent at Cleveland, transmitting request of the Union Trust Company of Cleveland for an additional extension of six months from November 17th in the period la Which it may open the branch at Altoona Avenue and Pearl Road, Cleveland, 4.13Proved by the Board on November 17, 1925. Thereupon ensued a discussion, during which certain members of the Board expressed the opinion that a further extension should not be granted the bank, but that when prepared to open the branch it should submit a new application for permission to do SO. Following the discussion, Mr. Platt moved that the Board grant the extension requested. Mr. Platt's motion, being put by the Chair, was lost, the members voting as follaas: Governor Crissinvr, "no" Mr. Miller, "no" Mr. Cunningham, "no" Mr. Platt, "aye" Mr. Hamlin, "aye" Report of Committee on Salaries and Expenditures on letter dated lIclember 18th from the Chairman of the Federal Reserve Bank of Atlanta, teclizesting approval of an increase in the salary of 11r. A. H. Alston, a letik in the Credit Department, from k?2,700 to $3,000 per annum, effective October. 15th, and in that of Mr. H. R. Donald, Clerk in charge of the bank's l'oat Office Station, from 62,400 to ,2,600 per anamm, effective November 1st; 365 11/24/26 the Committee recommending approval. Approved. Report of Committee on Salaries and Expenditures on letter dated of November 15th from the Federal Reserve Agent at Kansas City, advising the action of the Executive Committee of the bank in authorizing the Oklahoma 1, 1927, City Branch to retain on the payroll of the branch until January lir. A. M. Estes, who has been absent from his work since October 10th on account of illness; the Committee recommending approval. Upon motion, it was voted to approve the payment of full salary to Ex. Estes during the leave of absence granted him. Report of Committee an Salaries and Expenditures on letter dated g the November 15th from the Federal Reserve Agent at St. Louis, requestin Board's approval of the action of the Executive Committee of the bank in extension granting to Miss Stella Seaman, clerk in the Transit Departnent, an for thirty days from November 11, 1926, in the leave of absence granted her 04 account of illness; the Committee recommending approval. Upon motion, it was voted to approve the payment of full salary to Miss Seaman during the leave of absence granted her. November 16th Report of Committee on Examinations on memorandam dated from the Comptroller of the Currency, recommending approval of an application Of the First National Bank of Wibaux, Montana, for permission to reduce its capital from75,000 to ,50,000, on condition that other real estate owned, securities : together with certain other undesirable assets carried in bonds and account under the heading "Personal property", and the claim held against the 366 11/24/26 -6- Badking Corporation of Liontana, Helena, now closed, which is classified as doubtful, will be eliminated; the Committee also recommending approval subject to the conditions suggested by the Comptroller. Approved. Report af Committee on Examinations on memorandum dated November 15th from the Comptroller of the Currency, recommending approval of an application of the Stock Growers National Bank of Cheyenne, Wyoming, for permission to reduce its capital from ,;)400,000 to 0300,000; the Committee recommending that tile application be approved on condition that the present undivided profits account amounting to 4103,597.77, as set out in the memorandum of the Comptroller, be transferred to the surplus account of said bank, thereby giving it a capital account of'4407,097.77. Thereupon ensued a discussion of the condition recommended by the Board's committee, following which it was voted that the proposed condition be referred to the Comptroller of the Currency for comment. Report of Committee on Examinations dated November 24th,recommending approval of an application filed by the First National Bank of Albany, N. Y. 011 behalf of the First Bank of Albany, for membership in the Federal Reserve /stem and for 600 shares of stock in the Federal Reserve Bank of New York, 44c1 application on behalf of the First Bank of Albany, when organized, to absorb the Albany Trust Company, a non-member bank; the Committee recommending aPPraval of both applications; that for membership subject to the regular concontained in the Board's Regulation ”Hu and the further condition that immediately upon the incorporation of the First Bank of Albany, its board of directors shall pass a resolution ratifying the action of the First 367 11/206 -7- National Balk in applying on its behalf for membership in the System and for permission to absorb the Albany Trust Company, and. in accepting membership subject to the conditions imposed by the Board., a copy of such resolu.tion and. also of the bank's certificate of incorporation to be furnished, to the Board. Upon motion, it was voted to approve the application filed on behalf of the First Bank of Albany' for membership in the System subject to the conditions recommended, effective if and when the bank is duly incorporated under the laws of the State of New York, and also the application filed in its behalf for permission to abosrb the Albany Trust Company. Memorandum from Counsel dated November 10th, submitting draft of reply to letter dated October 22nd from the Federal Reserve Agent at Philadelphia, enclosing copy of a "mortgage trust certificate" vhich the Penn National 138alk of Reading, Pa., proposes to issue, and inquiring as to whether the bank is authorized to issue such certificate under its authority to exercise fiduciary powers; the proposed reply stating that the Board is of the °Pinion that the issuance of such certificates is not the exercise of a fichIciary power within the meaning of Section 11 (k) of the Federal Reserve Act: and that, therefore, the Penn National Bank is not authorized to issue these "mortgage trust certificates" TInder its authority to exercise 'fiduciary Powers, Upon motion, the proposed reply was approved. Memorandum from Counsel dated November 5th, submitting draft of reply to letters dated September 18th and October 20th from the Federal Reserve 368 1 11/24/26 -8- Agent at .iichmond, inquiring whether the Orangeburg National Bank, Orangeburg, South Carolina, should be required to deposit United States bonds or other. securities in its trust department to secure trust funds deposited in its capacity as executor in its savings department, under a will which expresslY provides that funds belonging to the estate may be invested in the savings department of the bank at 4 ner cent per annum; the proposed reply stating that the Board is of the opinion that the Orangeburg National Bank is not required to deposit United States bonds or other securities in its trust dePartment to secure the funds referred to. Upon motion, the proposed reply was approved. L:emorandam from Counsel dated November 17th submitting, in accordance with action taken at the meeting on November 9th, a formal ruling authorizing national banks to accept drafts drawn upon them by other banks against the security of import and export bills of exchange previously discounted Of such other ben'c.s, there the underlying import and export transactions have not been completed at the time such drafts are drawn. Ordered circulated. Llemorandam from the Secretary dated November 18th, submitting the l'esults of the survey, conducted in accordance with the Board's directions September 22nd, of business handled over the two leased, telephone circuits °Izt of Washington, one between Washington and New York, and the other conllecting Washington, Philadelphia, New York and. Boston; the Secretary setting forth in detail the number of calls made over these wires during the month c)f October and recommending that the division of expense of this service, 369 11/24/26 -9- aggregating ,,12,612 per month, between the Board. and. the Federal Reserve Banks of Boston, Philadelphia and New York, be changed, effective January 11 1927, so as to be pro rated on the basis of the extent to which it was used. by each bank and 7/ashin3ton during the month of October. Mr. Cunningham moved approval of the recommendation of the Secretary. Mr. Miller moved as a substitute that the service supplied by the circuit wire connecting Washington, Philadelphia, New York and. Boston be suspended,, and. that the Federal reserve banks involved. be advised that all transfer business hereafter be conductad over the telegraph wires and not by telephone as is now the general practice between thase banks. After discussion, Mr. Miller's substitute motion, being put by the Chair, was lost, Mr. Miller voting "aye. • Mr. Cunningham's original motion wad then put by the Chair and unanimously carried. Letter addressed. under date of November 16, to the Comptroller of the Currency by Mr. 1,7. H. Wood, President of the American Tru.st Company, Charlotte, N. C., inquiring as to the interpretation of the Board's regulations governing the establishment of branches by state member banks; the letter inquiring specifically whether the approval of the Federal Reserve Board would be necessary before the establishment by a state member ba)ak of a branch in another city Nthere the branch was established through the purchase by the member bank of the capital stock of another institution. Referred to the Law Committee for preparation of a reply. Memorandum from the Secretary advising that the Building Committee of the Federal Reserve Bank of Chicago, together with their architects and. Mr. 3'70 11/24/26 A. B. Trowbrtige, who represents both the Board and the bank, desires to come to Washington and meet with the Board next Wednesday to go over specifications and estimates of cost of the various items entering into the construction of the proposed building to house the branch Federal Reserve bank at Detroit. Noted. The Governor than presented a letter dated November 23rd fram the Secretary of the Governors, Conference setting forth recommendations made and action taken at the recent Conference of Governors, relating to matters litiCh the Conference submits to the Board for its advice or approval and to matters upon Which the Board has asked for the opinion or recommendation Of the Conference. After discussion, consideration of the letter would be made a meeting to be held the Governor announced that matters set forth in the above special order of Vastness for on Friday. REPORTS OF STANDING CO2IIITTM5: Dated., November 22nd, Dated, November 23rd, Bated, Nevamber 18th, Recommending changes in stock at Federal reserve banks as set forth in the Auxiliary Minute Book of this date. Approved. Recommending admission of a state institution, subject to the conditions set out in the individual report attached to the application, as set forth in the Auxiliary Minute Book of this date. ApprOved. Recommending approval of the application of Mr. William H. Pearsall for permission to serve at the same time as Director of the Flatbush National Bank of Brooklyn, N. Y., and as employee of the Mechanics Bank of Brooklyn, N. Y. Approved. If ii
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