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321 A meeting of the Federal Reserve Board was held in the office of the Federal Reserve Board on Wednesday, November 3, 1926 at 11:15 a.m. PRESENT: Governor Crissinspr Mr. Platt Mr. Miller Mr. James Mr. Cunningham Yr. McIntosh Ur. Eddy, Secretary Mr. McClelland, Asst. Secretary The minutes of the meeting of the Executive Committee held on October 26th were read and upon motion the actions recorded therein were ratified. The minutes of the meetings of the Federal Reserve Board held on October 29th and 30th were read and approved. The minutes of the meting of the Federal Reserve Board held on November 2nd were read and approved as amended. Application of The Doylestown National Bank of Doylestown, Pa. for Permission to act as trustee, executor, administrator, registrar of stocks anC1 bonds, guardian of estates, assignee, receiver, committee of estates Of lunatics or in any other fiduciary capacity in which state banks, trust companies or other corporations which cone into competition with national ba/iks are permitted to act under the laws of the state of Pennsylvania; together with recommendation of the Law Committee that the application be aPproved, effective if and when the capital of the bank is increased to Ilot less than $195,000,as required by law. Upon motion, it was voted to aTprove the aoplication of The Doylestown National Bank, Doylestown, Pa. for permission to exercise general fiduciary powers, effective if and when its capital is increased to not less than cA25,000. 322 11/3/26 -2- Memorandum from Counsel dated October 29th, approved by the Law Committee, with regard to the matter referred to the Committee at the ?fleeting on October 20th, namely, letter dated October 11th from Mr. M. B. Angell, submitting a statement in the =aunt of „5,025.32 for his fee and expenses in connAction with the Pascagoula par clearance case; Counsel recommendtng approval of the statement and submitting draft of a letter to Mr. Angell advising of such approval and a letter to the Federal Reserve Bank of Atlanta, transmittind the statement for payment and requesting a final and complete statement of all reimbursable expenses arising out of this case in order that they may be pro-rated among all Federal Reserve banks. After discussion, 'Mr. James moved approval of the payment of the statement rendered by :Mr. Angell and of the letters submitted by Counsel. Carried.. Telegram dated November 3rd from the Assistant Federal Reserve Agent at Kansas City, advising of the death of .ir. H. W. Gibson, Class B Director of that bank whose term expires December 31, 1926, and advising that all nominations received so far in the regular election of a Class B Director to succeed. 21r. Gibson have been for him; the Assistant Federal eeerve Agent inquiring whether a special election should be held to fill La's Gtbson's unexpired term and requesting approval of the extension of both the date of closing nominations and the date for mailinr to membor ballks a list of candidates nominated in the regular election to November 13th. 323 11/3/26 -3- Upon motion by Mr. Janes, it was voted that the Federal Reserve Bank of Kansas City be advised that it will not be necessary to hold a special election to fill Mr. Gibson's unexpired term and further to approve the extensions requested in connection with the regular election of a Class B Director for a term of three years from January 1, 1927. The Governor then brought up the special order of business for this morning's meeting, namely, report of the Board's Committee on Examinations aated October 30th, as follows: "At a meeting of the Board held on November 21, 1924, the following l'esolution was introduced by Dr. A. C. Miller, member of the Board: 'That the Committee on Examinations of the Federal Reserve Board be requested to investigate and report to the Board on the advisability and practicability of coordinating all examining work in the Federal Reserve System under the supervision of the Board, acting through its Division of Examinations, in order to give fuller effect to the provisions of the Federal Reserve Act (Section 9) that "examinations made by direction of the Federal Reserve Board or of the Federal reserve bank" shall be made "by examiners selected or approved by the Federal Reserve Board".' a "Me above resolution was called up for consideration by Mr. Miller a meeting of the Board on September 17, 1925. The resolution was :Qopted and referred- to the Board's Committee on Examinations. The Board's ‘",.°Inmittee on Examinations later recommended that the resolution be refer' rn, -ea to the Federal Reserve Agents' Conference to be held in November, 1925. ',Ile Agents Conference held in November referred. the resolution to its stand.: 13 414g Committee on Examinations, who, in turn, reported. its findings to the arat a Committee. This report is hereto attached. 4 "The Board's Committee having given consideration to the report of the ,,fellte' Committee on Examinations, begs leave to make comment and recomllaations thereto. Bo "The Federal Reserve Agents' Committee in summarizing its report to the all's Committee makes the following statement: 'The Committee believes in maintaining and. improving the present examination practice. It does not favor the concentration of Federal Reserve examining responsibilities in the Board because it 324 11/426 "believes it should oe exercised. in cooperation with Stare Supervisors and. Chief ;_,ational Examiners, and. for effective cooperation ,.7ith those authorities, close personal relations are important; but the Board. should. satisfy itself that at all times the Federal Reserve Agents are satisfactorily discharging their responsibilities in this regard anci should require from them such current information as it desires. This is a fundamental feature of the program which the Committee recommends.' "The information before the Board's Committee at the present time is not sufficient to enable it to determine to what extent it 1113;/- Ulti— rnatoly become ni)cessary to centralize, un-ler the Board, certain features Of the examination work in order to more effectively coordinate the examination work of the system. In the main, however, the Committee finds Itself in hearty accord with the recommendations as above recited, and believes that for the present the Boan1 should hold the Federal eserve Agents responsible and should take such measures as may be necessary to satisfy itself that the Federal deserve Agents are 'satisfactorily discharging their responsibilit ies in this regard.' "In order to provide the Board. with all data necessary to enable it to determine the most practicable manner in which to proceed in the full discharge of its responsibilities with reference to the examination of member banks, the Board's Committee would recommend. the appointment of a man well qualified for the work, to make a survey, and report as to the efficiency and. thoroughness of the examinations and. credit investigations made by each Federal deserve Bank, and. as to the efficiency and thoroujiness of the examinations of State banking denartments - with particular reference to the question whether the State examinations, or Clearing House examinations, furnish the information to Federal reserve banks ul-)on which they may safely act when asked. to extend. credit. This survey should not only bring in additional information to the Board., but should result in recoranendations for such action or changes of policy as may be indicated so that the Board may at all times feel assured. of the competency Of the examination of member banks. "The Committee does not feel that it will be in a position to make a final recommend.at ion on the question submitted to it in the resolution 01 November 21, 1924, to wit; 'The advisability and. practicability of coordinating all examining work in the Federal lieserve System under the stlrervision of the Board,' until the data, information and recommendations Which will result from the survey recommended above, are available. "The Board's Committee believes that the ideal system for State bank members in many States would be to have one examination by State authorand one by Federal Jeserve authorities each year. This cannot be clone under State laws exceoting in a few States at the present time, but an effort should be made to obtain the necessary amendments to State laws so that it may be authorizei. Complete joint examinations by State and Federal _ieserve authorities are often also desirable and. an amendment to CI)( Federal deserve Act to i-nrmit such examinations should be recommended o))ortunity occurs." 325 11/3/26 -5- (Signed) Edmund Platt (Signed) E. H. Cunningham?' Mr. Platt moved approval of the report of the Committee. After discussion, Mr. James moved as a substitute for Mr. Platt's motion that the Board tentatively approve the recommendations of the Committee, and request the Committee to report back in detail the proposed duties of the examiner Whose employment it recommends, with the understanding that the Committee may, if it desires, confer in this matter with the Board's Chief 'iraminer, Mr. Herson, and with Mr. Stearns and. Mr. Pole of the Office of the Comptroller of the Currency. After further discussion, Mr. James' substitute motion was put by the Chair and unanimously carried.. ItElPoaTs OF STAII)LTG CO12.1ITTEES: Dated, November 2nd., ord, Dated, October 30th, Dated, October 30th, Dated, October 30th, F.) aecommendinr3 changes in stock at Federal Reserve Banks, as set forth in the Auxiliary Minute Book of this date. Approved. Recommending action on application for fiduciary powers as set forth in the Auxiliary Minute Book of this date. Approved. Recommanding approval of the application of Mr. C. B. Fox for permission to serve at the same time as director of the Union Trust Company, East St. Louis, Ill, and as director of the Security National Bank Savings & Trust Company, St. Louis, 1.1o. Approved.. Recommending approval of the application of hr. Jacob L. Kesner for permission to serve at the same time as director of the Guardian National Bank, Chicago, Ill. arTi as director of the Greenebaum Sons Bank & Trust Company, Chicago, Approved. ing ad4kAlti d at 1:15 :a APProved: Ar Govern 4111 Secret ary.
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